-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RA7iCYXban6CplL17NOHearPzDqKfHrsFFJSlumPlwGtbbjgWl9Z99jA1plVoZl/ InVcHhOuF8cKPgLBktO6UA== 0000950123-09-058955.txt : 20091106 0000950123-09-058955.hdr.sgml : 20091106 20091106102216 ACCESSION NUMBER: 0000950123-09-058955 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20090831 FILED AS OF DATE: 20091106 DATE AS OF CHANGE: 20091106 EFFECTIVENESS DATE: 20091106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIM COUNSELOR SERIES TRUST CENTRAL INDEX KEY: 0001112996 IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-09913 FILM NUMBER: 091163120 BUSINESS ADDRESS: STREET 1: 11 GREENWAY PLAZA STREET 2: SUITE 100 CITY: HOUSTON STATE: TX ZIP: 77046 BUSINESS PHONE: 713-626-1919 MAIL ADDRESS: STREET 1: 11 GREENWAY PLAZA STREET 2: SUITE 100 CITY: HOUSTON STATE: TX ZIP: 77046 FORMER COMPANY: FORMER CONFORMED NAME: AIM COUNSELOR SERIES FUNDS DATE OF NAME CHANGE: 20031126 FORMER COMPANY: FORMER CONFORMED NAME: AIM COUNSELOR SERIES FUNDS INC DATE OF NAME CHANGE: 20031001 FORMER COMPANY: FORMER CONFORMED NAME: INVESCO COUNSELOR SERIES FUNDS INC DATE OF NAME CHANGE: 20001121 0001112996 S000000153 AIM Multi-Sector Fund C000000333 Class A IAMSX C000000334 Class B IBMSX C000000335 Class C ICMSX C000021889 Institutional Class IIMSX C000071344 Class Y IAMYX 0001112996 S000008062 AIM Structured Value Fund C000021874 Class A ASAVX C000021875 Class B ASBVX C000021876 Class C SBCVX C000021877 Class R ASRVX C000021878 Institutional Class ASIVX C000071345 Class Y ASAYX 0001112996 S000008063 AIM Structured Core Fund C000021879 Class A SCAUX C000021880 Class B SBCUX C000021881 Class C SCCUX C000021882 Class R SCRUX C000021883 Institutional Class SCIUX C000057286 INVESTOR SCNUX C000071346 Class Y SCAYX 0001112996 S000008064 AIM Structured Growth Fund C000021884 Class A AASGX C000021885 Class B BASGX C000021886 Class C CASGX C000021887 Class R RASGX C000021888 Institutional Class IASGX C000071347 Class Y AASYX 0001112996 S000011801 AIM Floating Rate Fund C000032264 Class A AFRAX C000032266 Class C AFRCX C000032267 Class R AFRRX C000032268 Institutional Class AFRIX C000071348 Class Y 0001112996 S000014560 AIM SELECT REAL ESTATE INCOME FUND C000039690 CLASS A ASRAX C000039691 CLASS B ASRBX C000039692 CLASS C ASRCX C000039693 INSTITUTIONAL CLASS C000071349 Class Y ASRYX 0001112996 S000025657 AIM CORE PLUS BOND FUND C000076854 CLASS A C000076855 CLASS B C000076856 CLASS C C000076857 CLASS R C000076858 CLASS Y C000076859 INSTITUTIONAL CLASS N-CSR 1 h68105nvcsr.txt FORM N-CSR ------------------------ OMB APPROVAL ------------------------ OMB Number: 3235-0570 Expires: August 31, 2011 Estimated average burden hours per response: 18.9 ------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-09913 AIM Counselor Series Trust (Exact name of registrant as specified in charter) 11 Greenway Plaza, Suite 100 Houston, Texas 77046 (Address of principal executive offices) (Zip code) Philip A. Taylor 11 Greenway Plaza, Suite 100 Houston, Texas 77046 (Name and address of agent for service) Registrant's telephone number, including area code: (713) 626-1919 Date of fiscal year end: 8/31 Date of reporting period: 8/31/09 Item 1. Reports to Stockholders. [INVESCO AIM LOGO] ANNUAL REPORT TO SHAREHOLDERS AUGUST 31, 2009 - SERVICE MARK - AIM CORE PLUS BOND FUND [GRAPHIC] 2 Letters to Shareholders 4 Performance Summary 4 Management Discussion 6 Fund Performance 7 Supplemental Information 8 Schedule of Investments 13 Financial Statements 15 Notes to Financial Statements 23 Financial Highlights 24 Auditor's Report 25 Fund Expenses 26 Approval of Investment Advisory and Sub-Advisory Agreements 28 Tax Information T-1 Trustees and Officers
Dear Shareholders: While the year covered by this report was difficult -- for long-time investors and veteran investment professionals alike -- economic conditions and market trends appeared much more favorable at the close of the fiscal year than at its start. [TAYLOR PHOTO] The 12 months ended August 31, 2009, included a sharp market sell-off that occurred in the second half of 2008. That downturn affected virtually all sectors, markets and investors. The decline had a number of causes, the most immediate being unprecedented turmoil in credit markets. Economic uncertainty prompted banks to hoard cash and reduce lending, and caused Philip Taylor investors to shun short-term corporate debt. As a result, businesses found it difficult to fund their day-to-day operations, and the U.S. economy -- as well as economies around the globe -- virtually froze briefly. INCREASED COMMUNICATION These developments prompted a greater-than-usual number of shareholders to contact me. Some of you took the time to write a letter while others of you emailed me at phil@invescoaim.com. Many of you sought explanations for the decline in the value of your accounts, while others asked more general questions about when the economy might improve. Your questions, comments and suggestions gave me better insight into what was on your minds, and I was pleased that so many of you took the time to share your thoughts with me. As a result, Invesco Aim's investment professionals and I have increased our efforts to stay in touch with and share our views with you. We increased the number of "Investment Perspectives" articles on our website, invescoaim.com. Through these articles, we've tried to provide timely market commentary, general investor education information and sector updates. I hope you'll take a moment to read them and let me know if you find them useful. To access your Fund's latest quarterly commentary, click on "Products and Performance" at the top of our website; next, select "Mutual Funds"; and then click on "Quarterly Commentary." I also hope you've stayed in touch with your financial advisor. An experienced financial advisor who is familiar with your individual investment goals, time horizon and risk tolerance can be a source of comfort and information during uncertain times. He or she can monitor your investments to ensure they're on track and can prevent you from making impulsive short-term decisions that may have adverse long-term consequences. REASONS FOR OPTIMISM The economy and equity markets reacted to a barrage of negative news during the year. Consumer spending -- which accounts for more than two-thirds(1) of the U.S. economy -- was sluggish as unemployment rose; more workers worried about their job security; home and portfolio values declined; and credit became more difficult to obtain. In his semiannual monetary policy report to Congress in late July, U.S. Federal Reserve Board Chairman Ben Bernanke summarized the stresses and strains the U.S. and global economies suffered in late 2008 and early 2009. Importantly, he suggested that the aggressive, coordinated actions taken by governments and central banks around the world finally may be yielding results. He testified that: o The pace of overall economic decline appears to have slowed significantly. o Credit availability, for consumers and businesses, has improved noticeably. o Investors' extreme risk aversion has eased somewhat. o The decline in housing activity appears to have moderated. While these and other trends offer encouragement, uncertainties remain. Chairman Bernanke testified that he anticipates a gradual recovery in 2010 with some acceleration in economic growth in 2011, together with subdued inflation over the next two years. His considered judgment appears to be shared by investors who have begun to return, cautiously, to the equities market, causing major U.S. stock-market indexes to bounce off their March lows. A SINGLE FOCUS I believe Invesco Aim is uniquely positioned to serve our clients. Our parent company, Invesco Ltd., is one of the largest(2) and most diversified global asset managers. It provides clients with diversified investment strategies and a range of investment products managed by distinct management teams around the world. We believe we can serve you best by focusing on one thing and doing it well: managing your money. Our investment professionals have managed clients' money in up markets and down markets. All of us here recognize that market conditions change often; what will not change is our commitment to putting our clients first, helping you achieve your financial goals and providing excellent customer service. If you have questions about this report or your account, please contact one of our client services representatives at 800 959 4246. If you have comments for me, I encourage you to email me at phil@invescoaim.com. Thank you for investing with us. All of us at Invesco Aim look forward to serving you. Sincerely, /S/ PHILIP TAYLOR Philip Taylor Senior Managing Director, Invesco Ltd. CEO, Invesco Aim (1) Reuters; (2) Pensions & Investments 2 AIM CORE PLUS BOND FUND
Dear Fellow Shareholders: Although the economy and financial markets have shown some signs of hope, investors remain [CROCKETT rightfully cautious. Staying with an appropriately diversified investment program focused on PHOTO] your individual long-term goals can be a wise course in such uncertain times. We believe the route to financial success is more like a marathon than a sprint. Please be assured that your Board continues to oversee the AIM Funds with a strong sense of responsibility for your money and your trust. As always, we seek to manage costs and enhance Bruce Crockett performance in ways that put your interests first. We are near the end of a busy 2009 proxy season, during which Invesco Aim Advisors, Inc.'s proxy committee votes on your behalf on issues put to a shareholder vote by the companies whose stock the Funds hold. This year, after careful case-by-case analysis by committee members and portfolio managers, the proxy committee voted with corporate management less often than in previous years, focusing on the issues of board independence, Say-On-Pay initiatives, and stock option re-pricing in light of the market's decline. The committee remained committed to supporting non-binding Say-on-Pay proposals and abstaining from voting on social issues. At its June meeting, your Board reviewed and renewed the investment advisory contracts between the AIM Funds and Invesco Aim Advisors, Inc. You can find the results of this rigorous annual process at invescoaim.com. Go to "Products & Performance" and click on "Investment Advisory Agreement Renewals." The website also contains news and market information, investment education and planning information and current reports and prospectuses for all the AIM Funds and I highly recommend it to you. You are always welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving you in the coming months. Sincerely, /S/ BRUCE L. CROCKETT Bruce L. Crockett Independent Chair AIM Funds Board of Trustees 3 AIM CORE PLUS BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------ MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE PERFORMANCE SUMMARY well as the risk parameters for the Fund. Investments are evaluated for liquidity From the Fund's inception on June 3, 2009, to the close of the fiscal year on August and risk versus relative value. Working 31, 2009, Class A shares of AIM Core Plus Bond Fund, at net asset value (NAV), closely with sector specialists and outperformed the Fund's broad market and style-specific index, the Barclays Capital traders, we determine the timing and U.S. Aggregate Index.(triangle) The Fund outperformed mainly due to its out-of-index amount of each alpha decision to use in allocation to high-yield corporate bonds and its underweight allocation to U.S. the portfolio. government securities. Sell decisions are based on: Additional performance information appears later in this report. o Changes in security or issuer credit - --------------------------------------------------------------------------------------- quality. FUND VS. INDEXES o Changes in the perceived relative Cumulative total returns, 6/3/09 to 8/31/09, at net asset value (NAV). Performance value of a security leading the team shown does not include applicable contingent deferred sales charges (CDSC) or front-end to seek better alternative sales charges, which would have reduced performance. opportunities. Class A Shares 3.58% o Changes in economic or market outlook Class B Shares 3.39 that warrant a modification of the Class C Shares 3.39 Fund's duration. Class R Shares 3.51 Class Y Shares 3.64 o Changes in yield curve shape that Barclays Capital U.S. Aggregate Index(triangle)(Broad Market/ alter positioning strategies. Style-Specific Index) 3.27 Lipper Intermediate Investment Grade Debt Funds Index(triangle) o Changes in specific sector outlooks (Peer Group Index) 5.29 or sectors falling out of favor. (triangle)Lipper Inc. ------------------------------------------ MARKET CONDITIONS AND YOUR FUND See page 7 for a detailed explanation of Fund performance. Bond market volatility waned - ------------------------------------------ significantly in 2009, despite persistent HOW WE INVEST economic uncertainty and escalating opportunities for investors that are best inflation fears. Government intervention We invest primarily in investment grade captured by independent specialist and attractive valuations spurred fixed-income securities represented by the decision makers interconnected as a global investors' risk appetite across sector categories within the Barclays team. We use this philosophy in an effort non-government securities. Spread premiums Capital U.S. Aggregate Index. We may also to produce total return for our compressed to comparable Treasuries which invest in derivative instruments such as shareholders. boosted returns for these riskier assets. futures contracts and swap agreements The U.S. Federal Reserve left its federal (including, but not limited to, credit Our security selection is supported by funds target rate in a range of zero to default swaps) and engage in mortgage a team of independent specialists. Team 0.25% even as the outlook for the economy dollar roll transactions, a form of members conduct top-down macroeconomic and the markets remained uncertain.(1) repurchase agreement activity in the analysis as well as bottom-up analysis on to-be-announced market for agency individual securities. Recommendations are In this environment, the Barclays mortgage-backed securities. Out-of-index communicated to portfolio managers through Capital U.S. Aggregate Index returned alpha sources may make up to 30% of the proprietary technology that allows all 4.62% year to date through August 31, overall portfolio and can include foreign investment professionals to communicate in 2009.(2) Many weak asset classes last year government or corporate bonds, emerging a timely manner. have been among the strongest performers market debt, non-dollar denominated in 2009, as a rally in credit-related securities and high yield (below Portfolio construction begins with a fixed income assets, which began during investment grade) bonds. well-defined Fund design that establishes the first quarter, carried over and the target investment vehicles for spreads continued to tighten through the We believe dynamic and complex generating the desired "alpha" (the extra end of the fiscal year. fixed-income markets may create return above a specific benchmark) as - ------------------------------------------ ------------------------------------------ ------------------------------------------ PORTFOLIO COMPOSITION TOP 10 FIXED INCOME ISSUERS* Total Net Assets $3.6 million By security type, based on net assets Total Number of Holdings* 102 Bonds and Notes 35.7% 1. U.S. Treasury 19.9% U.S. Government Sponsored 2. Federal Home Loan Mortgage The Fund's holdings are subject to change, Mortgage Backed Securities 35.1 Corp. 18.1 and there is no assurance that the Fund U.S. Treasury Securities 19.9 3. Federal National Mortgage will continue to hold any particular Asset-Backed Securities 9.5 Association 17.0 security. Money Market Funds 4. Bear Stearns Commercial Plus Other Assets Less Liabilities -0.2 Mortgage Securities 2.1 * Excluding money market fund holdings. 5. Morgan Stanley Capital I 2.1 6. GS Mortgage Securities Corp. II 1.4 7. BA Credit Card Trust 1.1 8. Citigroup Mortgage Loan Trust Inc. 1.1 9. Wachovia Corp. 1.0 10. British Sky Broadcasting Group PLC 0.9 4 AIM CORE PLUS BOND FUND
A shrinking economy and rising The Fund targets a portfolio duration CHUCK BURGE unemployment are elements of a challenging within a band of plus or minus one year of Senior portfolio manager, is fundamental backdrop for many the benchmark's duration. Duration [BURGE manager of AIM Core Plus Bond consumer-related fixed-income securities, measures a portfolio's price sensitivity PHOTO] Fund. Mr. Burge joined but their strong rebound of late to interest rate changes; a shorter Invesco in 2002 and assumed demonstrates that their valuations had duration portfolio tends to be less his fund management been pushed below levels warranted even by sensitive to these changes. We maintained responsibilities in 2009. He earned a B.S. poor fundamentals. U.S. investment grade a shorter-than-benchmark duration since in economics from Texas A&M University and corporate credit, represented by the the Fund's inception, and therefore did an M.B.A. in finance and accounting from Barclays Capital U.S. Credit Index, posted not fully benefit from the fall in Rice University. a 16.08% excess return over comparable general market yields during July and Treasuries on a year-to-date basis through August. The Fund's yield curve posture CINDY BRIEN August 31, 2009.(3) For the same period, over the period was neutral to the Chartered Financial Analyst, the Barclays Capital U.S. Corporate High benchmark; therefore its impact on the [BRIEN portfolio manager, is manager Yield Index posted a 42.24% excess return, Fund's relative performance was PHOTO] of AIM Core Plus Bond Fund. the Barclays Capital Asset-Backed negligible. Ms. Brien joined Invesco Aim Securities Index posted a 21.15% excess in 1996. She earned a B.B.A. return, the Barclays Capital Thank you for investing in AIM Core from The University of Texas at Austin. Mortgage-Backed Securities Index posted a Plus Bond Fund and for sharing our Ms. Brien is a director and a former 3.75% excess return, and the Barclays long-term investment horizon. president of the CFA Society of Houston. Capital CMBS ERISA-Eligible Index posted a 23.06% excess return.(3) (1) U.S. Federal Reserve CLAUDIA CALICH Senior portfolio manager, is In the improving bond market (2) Lipper Inc. [CALICH manager of AIM Core Plus Bond environment that characterized the 89-day PHOTO] Fund. Ms. Calich joined period between the Fund's inception on (3) Barclays Capital Invesco Worldwide Fixed June 3, 2009, and the end of the fiscal Income in 2004 and leads its year on August 31, 2009, sector allocation The views and opinions expressed in Emerging Markets Team. She earned a B.A. and security selection were primary management's discussion of Fund with honors from Susquehanna University factors affecting the Fund's relative and performance are those of Invesco Aim and an M.A. in international economics absolute performance. Our emphasis on Advisors, Inc. These views and opinions from the International University of Japan investment grade credit, and our nearly are subject to change at any time based on in Niigata. 15% allocation to out-of-index high yield factors such as market and economic bonds, drove the Fund's outperformance conditions. These views and opinions may PETER EHRET relative to its benchmark. For the period, not be relied upon as investment advice or Chartered Financial Analyst, U.S. investment grade credit and high recommendations, or as an offer for a [EHERT senior portfolio manager, is yield were among the best performing bond particular security. The information is PHOTO] manager of AIM Core Plus Bond market sectors, returning 8.11% and not a complete analysis of every aspect of Fund. He joined Invesco 9.02%(3), respectively, while the Barclays any market, country, industry, security or World-wide Fixed Income in Capital U.S. Aggregate Index returned the Fund. Statements of fact are from 2001. Mr. Ehret graduated cum laude with a 3.27%.(2) sources considered reliable, but Invesco B.S. in economics and statistics from the Aim Advisors, Inc. makes no representation University of Minnesota. He also earned an Security selection that favored or warranty as to their completeness or M.S. in real estate appraisal and industrial investment grade corporates accuracy. Although historical performance investment analysis from the University of over financials and utilities bonds is no guarantee of future results, these Wisconsin-Madison. proved a mild detractor from relative insights may help you understand our performance, but on an absolute basis was investment management philosophy. still beneficial to the Fund. At the same time, the Fund benefited from underweight See important Fund and index disclosures positions in U.S. government securities, later in this report. relative to its benchmark.(3) The Barclays Capital U.S. Government Index returned only 1.45% from June 3, 2009, to August 31, 2009.(3) While the Fund maintained investment grade average credit quality overall, it benefited from its tactical allocation to lower quality, high yield bonds as that segment of the U.S. bond market generally outperformed the highest quality bonds during the period. 5 AIM CORE PLUS BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------ FUND PERFORMANCE - ------------------------------------------ ------------------------------------------ CUMULATIVE TOTAL RETURNS CUMULATIVE TOTAL RETURNS CLASS A SHARE PERFORMANCE REFLECTS THE As of 8/31/09, including maximum As of 6/30/09, the most recent calendar MAXIMUM 4.75% SALES CHARGE, AND CLASS B applicable sales charges quarter-end, including maximum applicable AND CLASS C SHARE PERFORMANCE REFLECTS THE sales charges APPLICABLE CONTINGENT DEFERRED SALES CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE CLASS A SHARES CLASS A SHARES CDSC ON CLASS B SHARES DECLINES FROM 5% Inception (6/3/09) -1.36% Inception (6/3/09) -4.69% BEGINNING AT THE TIME OF PURCHASE TO 0% AT THE BEGINNING OF THE SEVENTH YEAR. THE CLASS B SHARES CLASS B SHARES CDSC ON CLASS C SHARES IS 1% FOR THE FIRST Inception (6/3/09) -1.61% Inception (6/3/09) -4.98% YEAR AFTER PURCHASE. CLASS R SHARES DO NOT HAVE A FRONT-END SALES CHARGE; RETURNS CLASS C SHARES CLASS C SHARES SHOWN ARE AT NET ASSET VALUE AND DO NOT Inception (6/3/09) 2.39% Inception (6/3/09) -0.98% REFLECT A 0.75% CDSC THAT MAY BE IMPOSED ON A TOTAL REDEMPTION OF RETIREMENT PLAN CLASS R SHARES CLASS R SHARES ASSETS WITHIN THE FIRST YEAR. CLASS Y Inception (6/3/09) 3.51% Inception (6/3/09) 0.06% SHARES DO NOT HAVE A FRONT-END SALES CHARGE OR A CDSC; THEREFORE, PERFORMANCE CLASS Y SHARES CLASS Y SHARES IS AT NET ASSET VALUE. Inception (6/3/09) 3.64% Inception (6/3/09) 0.10% THE PERFORMANCE OF THE FUND'S SHARE THE PERFORMANCE DATA QUOTED REPRESENT PAST OF THIS REPORT FOR CLASS A, CLASS B, CLASS CLASSES WILL DIFFER PRIMARILY DUE TO PERFORMANCE AND CANNOT GUARANTEE C, CLASS R AND CLASS Y SHARES WAS 0.90%, DIFFERENT SALES CHARGE STRUCTURES AND COMPARABLE FUTURE RESULTS; CURRENT 1.65%, 1.65%, 1.15% AND 0.65%, CLASS EXPENSES. PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE RESPECTIVELY.(1) THE TOTAL ANNUAL FUND VISIT INVESCOAIM.COM FOR THE MOST RECENT OPERATING EXPENSE RATIO SET FORTH IN THE HAD THE ADVISOR NOT WAIVED FEES MONTH-END PERFORMANCE. PERFORMANCE FIGURES MOST RECENT FUND PROSPECTUS AS OF THE DATE AND/OR REIMBURSED EXPENSES, PERFORMANCE REFLECT REINVESTED DISTRIBUTIONS, CHANGES OF THIS REPORT FOR CLASS A, CLASS B, CLASS WOULD HAVE BEEN LOWER. IN NET ASSET VALUE AND THE EFFECT OF THE C, CLASS R AND CLASS Y SHARES WAS 2.67%, MAXIMUM SALES CHARGE UNLESS OTHERWISE 3.42%, 3.42%, 2.92% AND 2.42%, (1) Total annual operating expenses less STATED. INVESTMENT RETURN AND PRINCIPAL RESPECTIVELY. THE EXPENSE RATIOS PRESENTED any contractual fee waivers and/or VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE ABOVE MAY VARY FROM THE EXPENSE RATIOS expense reimbursements by the advisor A GAIN OR LOSS WHEN YOU SELL SHARES. PRESENTED IN OTHER SECTIONS OF THIS REPORT in effect through at least June 30, THAT ARE BASED ON EXPENSES INCURRED DURING 2010. See current prospectus for more THE NET ANNUAL FUND OPERATING EXPENSE THE PERIOD COVERED BY THIS REPORT. information. RATIO SET FORTH IN THE MOST RECENT FUND PROSPECTUS AS OF THE DATE - ------------------------------------------------------------------------------------------------------------------------------------ continued from page 7 ------------------------------------------ excluded, but Canadian and global bonds o The BARCLAYS CAPITAL U.S. GOVERNMENT OTHER INFORMATION (SEC-registered) of issuers in INDEX consists of securities issued by non-emerging countries are included. the U.S. government including public o The Chartered Financial Analyst (R) obligations of the U.S. Treasury with a (CFA(R)) designation is globally o The BARCLAYS CAPITAL ASSET-BACKED remaining maturity of one year or more recognized and attests to a SECURITIES INDEX is a subset of the or publicly issued debt of U.S. charter-holder's success in a rigorous Barclays Capital U.S. Aggregate Index government agencies, quasi-federal and comprehensive study program in the that focuses on credit cards, auto corporations and corporate or foreign field of investment management and loans and home equity loans. The index debt guaranteed by the U.S. government. research analysis. includes only the senior class and ERISA-eligible B and C tranches of each o The Fund is not managed to track the o Industry classifications used in this ABS issue. performance of any particular index, report are generally according to the including the indexes defined here, and Global Industry Classification o The BARCLAYS CAPITAL MORTGAGE-BACKED consequently, the performance of the Standard, which was developed by and is SECURITIES INDEX is an unmanaged index Fund may deviate significantly from the the exclusive property and a service composed of all fixed securities performance of the indexes. mark of MSCI Inc. and Standard & mortgage pools by GNMA, FNMA and the Poor's. FHLMC, including GNMA Graduated Payment o A direct investment cannot be made in Mortgages. an index. Unless otherwise indicated, o The returns shown in management's index results include reinvested discussion of Fund performance are o The BARCLAYS CAPITAL CMBS dividends, and they do not reflect based on net asset values calculated ERISA-ELIGIBLE INDEX is the sales charges. Performance of an index for shareholder transactions. Generally ERISA-eligible component of the of funds reflects fund expenses; accepted accounting principles require Barclays Capital CMBS Index, which performance of a market index does not. adjustments to be made to the net measures the performance of the assets of the Fund at period end for commercial mortgage-backed securities financial reporting purposes, and as (CMBS) market. The index includes such, the net asset values for investment grade securities that are shareholder transactions and the ERISA eligible under the underwriter's returns based on those net asset values exemption. may differ from the net asset values and returns reported in the Financial Highlights. 6 AIM CORE PLUS BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------ AIM CORE PLUS BOND FUND'S INVESTMENT OBJECTIVE IS TOTAL RETURN. o Unless otherwise stated, information presented in this report is as of August 31, 2009, and is based on total net assets. o Unless otherwise noted, all data provided by Invesco Aim. - ------------------------------------------ ABOUT SHARE CLASSES inflation or sharply devalued changes in the rate at which the currencies against the U.S. dollar. underlying loans are prepaid. o Effective September 30, 2003, for Transaction costs are often higher, and qualified plans only, those previously there may be delays in settlement o Nondiversification increases the risk established are eligible to purchase procedures. that the value of the Fund's shares may Class B shares of any AIM fund. Please vary more widely, and the Fund may be see the prospectus for more o Foreign securities have additional subject to greater investment and information. risks, including exchange rate changes, credit risk than if it invested more political and economic upheaval, broadly. o Class R shares are available only to relative lack of information, certain retirement plans. Please see relatively low market liquidity, and o Reinvestment risk is the risk that a the prospectus for more information. the potential lack of strict financial bond's cash flows will be reinvested at and accounting controls and standards. an interest rate below that of the o Class Y shares are available to only original bond. certain investors. Please see the o Lower rated securities may be more prospectus for more information. susceptible to real or perceived o The Fund may invest in obligations adverse economic and competitive issued by agencies and - ------------------------------------------ industry conditions, and the secondary instrumentalities of the U.S. PRINCIPAL RISKS OF INVESTING IN THE FUND markets in which lower rated securities government that may vary in the level are traded may be less liquid than of support they receive from the U.S. o The Fund may engage in active and higher grade securities. The loans in government. The U.S. government may frequent trading of portfolio which the Fund may invest are typically choose not to provide financial support securities to achieve its investment noninvestment-grade and involve a to U.S.-government- sponsored agencies objective. If a fund does trade in this greater risk of default on interest and or instrumentalities if it is not way, it may incur increased costs, principal payments and of price changes legally obligated to do so. In this which can lower the actual return of due to the changes in the credit case, if the issuer defaulted, the fund the fund. Active trading may also quality of the issuer. holding securities of such an issuer increase short term gains and losses, might not be able to recover its which may affect taxes that must be o Interest rate risk refers to the risk investment from the U.S. government. paid. that bond prices generally fall as interest rates rise and vice versa. ABOUT INDEXES USED IN THIS REPORT o Individually negotiated, or over-the-counter, derivatives are also o Leveraging entails risks such as o The BARCLAYS CAPITAL U.S. AGGREGATE subject to counterparty risk -- the magnifying changes in the value of the INDEX covers U.S. investment-grade risk that the other party to the portfolio's securities. fixed-rate bonds with components for contract will not fulfill its government and corporate securities, contractual obligation to complete the o Since a large percentage of the Fund's mortgage pass-throughs, and transaction of an underlying fund. assets may be invested in securities of asset-backed securities. a limited number of companies, each o Credit risk is the risk of loss on an investment has a greater effect on the o The LIPPER INTERMEDIATE INVESTMENT investment due to the deterioration of Fund's overall performance, and any GRADE DEBT FUNDS INDEX is an equally an issuer's financial health. Such a change in the value of those securities weighted representation of the largest deterioration of financial health may could significantly affect the value of funds in the Lipper Intermediate result in a reduction of the credit your investment in the Fund. Investment Grade Debt Funds category. rating of the issuer's securities and These funds invest at least 65% of may lead to the issuer's inability to o A majority of the Fund's assets are assets in investment-grade debt issues honor its contractual obligations, likely to be invested in loans and (rated in the top four grades) with including making timely payment of securities that are less liquid than dollar-weighted average maturities of interest and principal. those rated on national exchanges. five to 10 years. o The Fund is subject to currency/ o There is no guarantee that the invest o The BARCLAYS CAPITAL U.S. CREDIT INDEX exchange rate risk because it may buy -ment techniques and risk analysis used is an unmanaged index that consists of or sell currencies other than the U.S. by the Fund's portfolio managers will publicly issued, SEC-registered U.S. dollar. produce the desired results. corporate and specified foreign debentures and secured notes that meet o The Fund may use enhanced investment o The prices of securities held by the the specified maturity, liquidity techniques such as derivatives. The Fund may decline in response to market and quality requirements. principal risk of derivatives is that risks. the fluctuations in their values may o The BARCLAYS CAPITAL U.S. CORPORATE not correlate perfectly with the o The Fund may invest in mortgage and HIGH YIELD INDEX covers the universe of overall securities markets. Derivatives asset-backed securities. These fixed rate, non-investment grade debt. are subject to counterparty risk -- the securities are subject to prepayment or Pay-in-kind bonds, Eurobonds, and debt risk that the other party will not call risk, which is the risk that issues from countries designated as complete the transaction with the Fund. payments from the borrower may be emerging markets are received earlier or later than expected o Investing in developing countries can due to continued on page 6 add additional risk, such as high rates of ------------------------------------------ THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. Class A Shares ACPSX INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class B Shares CPBBX Class C Shares CPCFX - --------------------------------------------------------------------------------------- Class R Shares CPBRX NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE Class Y Shares CPBYX 7 AIM CORE PLUS BOND FUND
SCHEDULE OF INVESTMENTS(a) August 31, 2009
PRINCIPAL AMOUNT VALUE - ----------------------------------------------------------------------------- BONDS & NOTES-35.71% AEROSPACE & DEFENSE-1.25% Alliant Techsystems Inc., Sr. Unsec. Gtd. Sub. Notes, 6.75%, 04/01/16 $ 10,000 $ 9,625 - ----------------------------------------------------------------------------- BE Aerospace, Inc., Sr. Unsec. Unsub. Notes, 8.50%, 07/01/18 10,000 9,950 - ----------------------------------------------------------------------------- Northrop Grumman Corp., Sr. Unsec. Unsub. Notes, 5.05%, 08/01/19 25,000 25,877 ============================================================================= 45,452 ============================================================================= AGRICULTURAL PRODUCTS-0.63% Bunge Limited Finance Corp., Sr. Unsec. Gtd. Notes, 8.50%, 06/15/19 20,000 22,990 ============================================================================= AIRLINES-1.86% American Airlines Pass Through Trust, Series 2001-2, Class A-1, Sec. Global Pass Through Ctfs., 6.98%, 04/01/11 13,053 12,714 - ----------------------------------------------------------------------------- Series 2009-1A, Sec. Pass Through Ctfs., 10.38%, 07/02/19 20,000 21,075 - ----------------------------------------------------------------------------- Continental Airlines Inc., Pass Through Ctfs., 9.00%, 07/08/16 30,000 30,919 - ----------------------------------------------------------------------------- Delta Air Lines, Inc., Series 2002-1, Class C, Sec. Pass Through Ctfs., 7.78%, 01/02/12 3,108 2,975 ============================================================================= 67,683 ============================================================================= APPAREL RETAIL-0.70% Limited Brands, Inc., Sr. Notes, 8.50%, 06/15/19(b) 25,000 25,375 ============================================================================= AUTO PARTS & EQUIPMENT-0.38% Affinia Group Inc., Sr. Sec. Notes, 10.75%, 08/15/16(b) 5,000 5,219 - ----------------------------------------------------------------------------- Allison Transmission Inc., Sr. Unsec. Gtd. Toggle Notes, 11.25%, 11/01/15(b) 10,000 8,550 ============================================================================= 13,769 ============================================================================= AUTOMOBILE MANUFACTURERS-0.60% Case New Holland Inc., Sr. Gtd. Notes, 7.75%, 09/01/13(b) 5,000 4,963 - ----------------------------------------------------------------------------- Ford Motor Co., Sr. Unsec. Unsub. Global Notes, 7.45%, 07/16/31 10,000 7,725 - ----------------------------------------------------------------------------- Ford Motor Credit Co. LLC, Sr. Unsec. Unsub. Global Notes, 7.50%, 08/01/12 10,000 9,200 ============================================================================= 21,888 ============================================================================= AUTOMOTIVE RETAIL-0.72% AutoZone Inc., Sr. Unsec. Notes, 5.75%, 01/15/15 25,000 26,380 ============================================================================= BIOTECHNOLOGY-0.79% Amgen Inc., Sr. Unsec. Global Notes, 6.40%, 02/01/39 25,000 28,653 ============================================================================= BREWERS-0.64% Anheuser-Busch InBev Worldwide Inc., Sr. Unsec. Gtd. Unsub. Notes, 7.75%, 01/15/19(b) 20,000 23,491 ============================================================================= BROADCASTING-0.87% COX Communications Inc., Sr. Unsec. Notes, 9.38%, 01/15/19(b) 25,000 31,581 ============================================================================= BUILDING PRODUCTS-0.26% Ply Gem Industries Inc., Sr. Sec. Gtd. First & Second Lien Global Notes, 11.75%, 06/15/13 5,000 4,250 - ----------------------------------------------------------------------------- USG Corp., Sr. Unsec. Gtd. Notes, 9.75%, 08/01/14(b) 5,000 5,150 ============================================================================= 9,400 ============================================================================= CABLE & SATELLITE-1.89% British Sky Broadcasting Group PLC (United Kingdom), Sr. Unsec. Gtd. Unsub. Yankee Notes, 9.50%, 11/15/18(b) 25,000 32,232 - ----------------------------------------------------------------------------- Mediacom LLC/Mediacom Capital Corp., Sr. Notes, 9.13%, 08/15/19(b) 5,000 4,913 - ----------------------------------------------------------------------------- Sirius XM Radio Inc., Sr. Sec. Notes, 9.75%, 09/01/15(b) 5,000 5,037 - -----------------------------------------------------------------------------
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 8 AIM CORE PLUS BOND FUND
PRINCIPAL AMOUNT VALUE - ----------------------------------------------------------------------------- CABLE & SATELLITE-(CONTINUED) Time Warner Cable Inc., Sr. Unsec. Gtd. Unsub. Deb., 6.75%, 06/15/39 $ 20,000 $ 21,433 - ----------------------------------------------------------------------------- XM Satellite Radio Inc., Sr. Sec. Notes, 11.25%, 06/15/13(b) 5,000 5,219 ============================================================================= 68,834 ============================================================================= CASINOS & GAMING-0.41% MGM Mirage Inc., Sr. Unsec. Gtd. Unsub. Notes, 8.50%, 09/15/10 15,000 14,794 ============================================================================= COMMUNICATIONS EQUIPMENT-0.74% Corning Inc., Sr. Unsec. Unsub. Notes, 6.63%, 05/15/19 25,000 26,986 ============================================================================= DATA PROCESSING & OUTSOURCED SERVICES-0.12% First Data Corp., Sr. Unsec. Gtd. Global Notes, 9.88%, 09/24/15 5,000 4,325 ============================================================================= DIVERSIFIED BANKS-1.03% Wachovia Corp., Series G, Sr. Unsec. Medium-Term Notes, 5.50%, 05/01/13 35,000 37,415 ============================================================================= DIVERSIFIED CHEMICALS-0.14% Olin Corp., Sr. Unsec. Unsub. Notes, 8.88%, 08/15/19 5,000 5,190 ============================================================================= DIVERSIFIED SUPPORT SERVICES-0.26% Iron Mountain Inc., Sr. Unsec. Gtd. Sub. Notes, 6.63%, 01/01/16 10,000 9,463 ============================================================================= DRUG RETAIL-0.73% Rite Aid Corp., Sr. Sec. Notes, 9.75%, 06/12/16(b) 25,000 26,500 ============================================================================= ELECTRIC UTILITIES-1.98% DCP Midstream LLC, Notes, 9.70%, 12/01/13(b) 20,000 22,999 - ----------------------------------------------------------------------------- Indiana Michigan Power Co., Sr. Notes, 7.00%, 03/15/19 25,000 28,642 - ----------------------------------------------------------------------------- Virginia Electric & Power Co., Sr. Unsec. Notes, 5.00%, 06/30/19 20,000 20,698 ============================================================================= 72,339 ============================================================================= ELECTRICAL COMPONENTS & EQUIPMENT-0.70% Belden Inc., Sr. Gtd. Sub. Notes, 9.25%, 06/15/19(b) 25,000 25,375 ============================================================================= ELECTRONIC MANUFACTURING SERVICES-0.13% Jabil Circuit, Inc., Sr. Notes, 7.75%, 07/15/16 5,000 4,938 ============================================================================= ENVIRONMENTAL & FACILITIES SERVICES-0.14% Clean Harbors Inc., Sr. Sec. Notes, 7.63%, 08/15/16(b) 5,000 5,013 ============================================================================= HEALTH CARE EQUIPMENT-1.45% Covidien International Finance S.A. (Luxembourg), Sr. Unsec. Gtd. Unsub. Global Yankee Notes, 6.00%, 10/15/17 25,000 27,512 - ----------------------------------------------------------------------------- St. Jude Medical Inc., Sr. Unsec. Notes, 3.75%, 07/15/14 25,000 25,473 ============================================================================= 52,985 ============================================================================= HEALTH CARE FACILITIES-0.94% HCA, Inc., Sr. Sec. Gtd. Global Notes, 9.25%, 11/15/16 15,000 15,262 - ----------------------------------------------------------------------------- Sr. Sec. Gtd. Notes, 7.88%, 02/15/20(b) 10,000 9,800 - ----------------------------------------------------------------------------- Tenet Healthcare Corp., Sr. Unsec. Notes, 7.38%, 02/01/13 10,000 9,250 ============================================================================= 34,312 ============================================================================= HEALTH CARE SERVICES-1.04% Express Scripts Inc., Sr. Unsec. Global Notes, 6.25%, 06/15/14 25,000 27,510 - ----------------------------------------------------------------------------- US Oncology Inc., Sr. Sec. Notes, 9.13%, 08/15/17(b) 10,000 10,375 ============================================================================= 37,885 ============================================================================= HOTELS, RESORTS & CRUISE LINES-0.56% Hyatt Hotels Corp., Sr. Unsec. Unsub. Notes, 5.75%, 08/15/15(b) 20,000 20,374 ============================================================================= HOUSEHOLD PRODUCTS-0.57% Procter & Gamble Co. (The), Sr. Unsec. Global Notes, 3.50%, 02/15/15 20,000 20,725 =============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 9 AIM CORE PLUS BOND FUND
PRINCIPAL AMOUNT VALUE - ----------------------------------------------------------------------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS-0.79% NRG Energy, Inc., Sr. Unsec. Gtd. Notes, 7.38%, 02/01/16 $ 15,000 $ 14,400 - ----------------------------------------------------------------------------- Sr. Unsec. Gtd. Unsub. Notes, 7.38%, 01/15/17 15,000 14,362 ============================================================================= 28,762 ============================================================================= INTEGRATED TELECOMMUNICATION SERVICES-1.21% AT&T Inc., Sr. Unsec. Unsub. Global Notes, 6.70%, 11/15/13 20,000 22,753 - ----------------------------------------------------------------------------- France Telecom S.A. (France), Sr. Unsec. Unsub. Global Yankee Notes, 5.38%, 07/08/19 20,000 21,239 ============================================================================= 43,992 ============================================================================= MOVIES & ENTERTAINMENT-0.70% Cinemark USA Inc., Sr. Gtd. Notes, 8.63%, 06/15/19(b) 25,000 25,406 ============================================================================= MULTI-LINE INSURANCE-0.58% American Financial Group Inc., Sr. Notes, 9.88%, 06/15/19 20,000 21,174 ============================================================================= OIL & GAS EQUIPMENT & SERVICES-0.13% Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17 5,000 4,775 ============================================================================= OIL & GAS EXPLORATION & PRODUCTION-2.20% Anadarko Petroleum Corp., Sr. Unsec. Unsub. Global Notes, 5.75%, 06/15/14 25,000 26,690 - ----------------------------------------------------------------------------- Chesapeake Energy Corp., Sr. Unsec. Gtd. Global Notes, 6.38%, 06/15/15 5,000 4,562 - ----------------------------------------------------------------------------- Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17 25,000 23,375 - ----------------------------------------------------------------------------- McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14 5,000 4,875 - ----------------------------------------------------------------------------- Quicksilver Resources Inc., Sr. Notes, 11.75%, 01/01/16 10,000 10,700 - ----------------------------------------------------------------------------- Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 7.50%, 10/01/17 10,000 9,850 ============================================================================= 80,052 ============================================================================= OIL & GAS REFINING & MARKETING-0.22% United Refining Co., Series 2, Sr. Unsec. Gtd. Global Notes, 10.50%, 08/15/12 10,000 8,063 ============================================================================= OIL & GAS STORAGE & TRANSPORTATION-1.10% Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 5.65%, 03/01/20 20,000 20,389 - ----------------------------------------------------------------------------- Williams Partners L.P./Williams Partners Finance Corp., Sr. Unsec. Global Notes, 7.25%, 02/01/17 20,000 19,550 ============================================================================= 39,939 ============================================================================= OTHER DIVERSIFIED FINANCIAL SERVICES-1.60% Bank of America Corp., Sr. Unsec. Unsub. Global Notes, 6.50%, 08/01/16 20,000 20,771 - ----------------------------------------------------------------------------- Citigroup Inc., Sr. Unsec. Global Notes, 8.50%, 05/22/19 10,000 10,940 - ----------------------------------------------------------------------------- General Electric Capital Corp., Sr. Unsec. Unsub. Global Notes, 5.90%, 05/13/14 25,000 26,800 ============================================================================= 58,511 ============================================================================= PACKAGED FOODS & MEATS-1.67% H.J. Heinz Finance Co., Sr. Unsec. Gtd. Notes, 7.13%, 08/01/39(b) 20,000 23,106 - ----------------------------------------------------------------------------- Kraft Foods Inc., Sr. Unsec. Global Notes, 6.13%, 08/23/18 25,000 27,486 - ----------------------------------------------------------------------------- Smithfield Foods Inc., Sr. Sec. Gtd. Notes, 10.00%, 07/15/14(b) 10,000 10,250 ============================================================================= 60,842 ============================================================================= PAPER PACKAGING-0.15% Sealed Air Corp., Sr. Notes, 7.88%, 06/15/17(b) 5,000 5,363 ============================================================================= PAPER PRODUCTS-1.00% Clearwater Paper Corp., Sr. Unsec. Notes, 10.63%, 06/15/16(b) 25,000 27,250 - ----------------------------------------------------------------------------- Domtar Corp., Sr. Unsec. Gtd. Global Notes, 5.38%, 12/01/13 10,000 9,350 ============================================================================= 36,600 ============================================================================= PHARMACEUTICALS-0.75% GlaxoSmithKline Capital Inc., Sr. Unsec. Gtd. Global Notes, 5.65%, 05/15/18 25,000 27,383 =============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 10 AIM CORE PLUS BOND FUND
PRINCIPAL AMOUNT VALUE - ----------------------------------------------------------------------------- PUBLISHING-0.10% Nielsen Finance LLC/Co., Sr. Unsec. Gtd. Sub. Disc. Global Notes, 12.50%, 08/01/16(c) $ 5,000 $ 3,575 ============================================================================= RESEARCH & CONSULTING SERVICES-0.67% Erac USA Finance Co., Unsec. Gtd. Notes, 5.80%, 10/15/12(b) 25,000 24,396 ============================================================================= TRADING COMPANIES & DISTRIBUTORS-0.14% RSC Equipment Rental Inc., Sr. Sec. Notes, 10.00%, 07/15/17(b) 5,000 5,225 ============================================================================= TRUCKING-0.26% Hertz Corp. (The), Sr. Unsec. Gtd. Global Notes, 8.88%, 01/01/14 10,000 9,625 ============================================================================= WIRELESS TELECOMMUNICATION SERVICES-0.91% SBA Telecommunications Inc., Sr. Gtd. Notes, 8.25%, 08/15/19(b) 10,000 10,175 - ----------------------------------------------------------------------------- Sprint Capital Corp., Sr. Unsec. Gtd. Unsub. Global Notes, 6.88%, 11/15/28 25,000 18,375 - ----------------------------------------------------------------------------- Sprint Nextel Corp., Sr. Notes, 8.38%, 08/15/17 5,000 4,800 ============================================================================= 33,350 ============================================================================= Total Bonds & Notes (Cost $1,237,201) 1,301,148 ============================================================================= U.S. GOVERNMENT SPONSORED MORTGAGE-BACKED SECURITIES-35.12% FEDERAL HOME LOAN MORTGAGE CORP. (FHLMC)-18.14% Pass Through Ctfs., 5.50%, 01/01/34 299,358 313,514 - ----------------------------------------------------------------------------- Pass Through Ctfs., TBA, 5.00%, 10/01/39(d) 340,000 347,597 ============================================================================= 661,111 ============================================================================= FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA)-16.98% Pass Through Ctfs., TBA, 4.50%, 09/01/24 to 09/01/39(d) 350,000 356,531 - ----------------------------------------------------------------------------- 5.00%, 09/01/24(d) 100,000 104,234 - ----------------------------------------------------------------------------- 6.00%, 09/01/39(d) 150,000 157,852 ============================================================================= 618,617 ============================================================================= Total U.S. Government Sponsored Mortgage- Backed Securities (Cost $1,269,750) 1,279,728 ============================================================================= U.S. TREASURY SECURITIES-19.87% U.S. TREASURY BILLS-0.82% 0.21%, 12/17/09(c)(e) 30,000 29,987 ============================================================================= U.S. TREASURY NOTES-14.39% 4.50%, 04/30/12 300,000 324,797 - ----------------------------------------------------------------------------- 2.25%, 05/31/14 200,000 199,531 ============================================================================= 524,328 ============================================================================= U.S. TREASURY BONDS-4.66% 5.38%, 02/15/31 145,000 169,673 ============================================================================= Total U.S. Treasury Securities (Cost $713,892) 723,988 ============================================================================= ASSET-BACKED SECURITIES-9.52% BA Credit Card Trust, Series 2006-B4, Class B4, Floating Rate Pass Through Ctfs., 0.35%, 03/15/12(f) 40,000 39,911 - ----------------------------------------------------------------------------- Bear Stearns Commercial Mortgage Securities, Series 2004-PWR6, Class A4, Pass Through Ctfs., 4.52%, 11/11/41(f) 25,000 24,028 - ----------------------------------------------------------------------------- Series 2004-PWR6, Class A6, Pass Through Ctfs., 4.83%, 11/11/41(f) 25,000 24,084 - ----------------------------------------------------------------------------- Series 2006-T22, Class A2, Pass Through Ctfs., 5.63%, 04/12/38 30,000 30,195 - ----------------------------------------------------------------------------- Citigroup Mortgage Loan Trust Inc., Series 2004-UST1, Class A4, Pass Through Ctfs., 3.38%, 08/25/34 40,276 38,879 - ----------------------------------------------------------------------------- GS Mortgage Securities Corp. II, Series 2005 GG4, Class A4A, Pass Through Ctfs., 4.75%, 07/10/39 55,000 51,064 - ----------------------------------------------------------------------------- Morgan Stanley Capital I, Series 2005-HQ7, Class A4, Pass Through Ctfs., 5.38%, 11/14/42(f) 20,000 19,369 - ----------------------------------------------------------------------------- Series 2005-T17, Class A4, Pass Through Ctfs., 4.52%, 12/13/41 30,000 29,834 - ----------------------------------------------------------------------------- Series 2005-T19, Class A4A, Pass Through Ctfs., 4.89%, 06/12/47 30,000 28,731 - ----------------------------------------------------------------------------- TIAA Seasoned Commercial Mortgage Trust, Series 2007-C4, Class A2, 5.79%, 08/15/39(f) 25,000 25,340 - ----------------------------------------------------------------------------- Wachovia Bank Commercial Mortgage Trust, Series 2005-C21, Class A4, Pass Through Ctfs., 5.38%, 10/15/44(f) 20,000 19,751 - ----------------------------------------------------------------------------- Wells Fargo Mortgage Backed Securities Trust, Series 2004-K, Class 1A2, Floating Rate Pass Through Ctfs., 4.47%, 07/25/34(f) 16,992 15,839 ============================================================================= Total Asset-Backed Securities (Cost $338,947) 347,025 ============================================================================= MONEY MARKET FUNDS-32.88% Liquid Assets Portfolio-Institutional Class(g) 599,182 599,182 - ----------------------------------------------------------------------------- Premier Portfolio-Institutional Class(g) 599,182 599,182 ============================================================================= Total Money Market Funds (Cost $1,198,364) 1,198,364 ============================================================================= TOTAL INVESTMENTS-133.10% (Cost $4,758,154) 4,850,253 ============================================================================= OTHER ASSETS LESS LIABILITIES-(33.10)% (1,206,175) ============================================================================= NET ASSETS-100.00% $ 3,644,078 _____________________________________________________________________________ =============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 11 AIM CORE PLUS BOND FUND Investment Abbreviations: Ctfs. - Certificates Deb. - Debentures Disc. - Discounted Gtd. - Guaranteed Sec. - Secured Sr. - Senior Sub. - Subordinated TBA - To Be Announced Unsec. - Unsecured Unsub. - Unsubordinated
Notes to Schedule of Investments: (a) Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor's. (b) Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at August 31, 2009 was $403,337, which represented 11.07% of the Fund's Net Assets. (c) Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. (d) Security purchased on forward commitment basis. This security is subject to dollar roll transactions. See Note 1J. (e) All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1K and Note 4. (f) Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on August 31, 2009. (g) The money market fund and the Fund are affiliated by having the same investment advisor. See accompanying Notes to Financial Statements which are an integral part of the financial statements. 12 AIM CORE PLUS BOND FUND STATEMENT OF ASSETS AND LIABILITIES August 31, 2009 ASSETS: Investments, at value (Cost $3,559,790) $3,651,889 - ------------------------------------------------------------------------------ Investments in affiliated money market funds, at value and cost 1,198,364 ============================================================================== Total investments, at value (Cost $4,758,154) 4,850,253 ============================================================================== Receivables for: Investments sold 655,632 - ------------------------------------------------------------------------------ Fund shares sold 42,900 - ------------------------------------------------------------------------------ Dividends and interest 28,608 - ------------------------------------------------------------------------------ Other assets 66,039 ============================================================================== Total assets 5,643,432 ______________________________________________________________________________ ============================================================================== LIABILITIES: Payables for: Investments purchased 1,925,639 - ------------------------------------------------------------------------------ Fund shares reacquired 32 - ------------------------------------------------------------------------------ Dividends 125 - ------------------------------------------------------------------------------ Variation margin 1,484 - ------------------------------------------------------------------------------ Accrued fees to affiliates 16,456 - ------------------------------------------------------------------------------ Accrued other operating expenses 55,618 ============================================================================== Total liabilities 1,999,354 ============================================================================== Net assets applicable to shares outstanding $3,644,078 ______________________________________________________________________________ ============================================================================== NET ASSETS CONSIST OF: Shares of beneficial interest $3,513,804 - ------------------------------------------------------------------------------ Undistributed net investment income 42,860 - ------------------------------------------------------------------------------ Undistributed net realized gain 5,646 - ------------------------------------------------------------------------------ Unrealized appreciation 81,768 ============================================================================== $3,644,078 ______________________________________________________________________________ ============================================================================== NET ASSETS: Class A $2,881,515 ______________________________________________________________________________ ============================================================================== Class B $ 205,455 ______________________________________________________________________________ ============================================================================== Class C $ 222,552 ______________________________________________________________________________ ============================================================================== Class R $ 105,418 ______________________________________________________________________________ ============================================================================== Class Y $ 125,520 ______________________________________________________________________________ ============================================================================== Institutional Class $ 103,618 ______________________________________________________________________________ ============================================================================== SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 280,114 ______________________________________________________________________________ ============================================================================== Class B 19,973 ______________________________________________________________________________ ============================================================================== Class C 21,633 ______________________________________________________________________________ ============================================================================== Class R 10,248 ______________________________________________________________________________ ============================================================================== Class Y 12,201 ______________________________________________________________________________ ============================================================================== Institutional Class 10,073 ______________________________________________________________________________ ============================================================================== Class A: Net asset value per share $ 10.29 - ------------------------------------------------------------------------------ Maximum offering price per share (Net asset value of $10.29 divided by 95.25%) $ 10.80 ______________________________________________________________________________ ============================================================================== Class B: Net asset value and offering price per share $ 10.29 ______________________________________________________________________________ ============================================================================== Class C: Net asset value and offering price per share $ 10.29 ______________________________________________________________________________ ============================================================================== Class R: Net asset value and offering price per share $ 10.29 ______________________________________________________________________________ ============================================================================== Class Y: Net asset value and offering price per share $ 10.29 ______________________________________________________________________________ ============================================================================== Institutional Class: Net asset value and offering price per share $ 10.29 ______________________________________________________________________________ ==============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 13 AIM CORE PLUS BOND FUND STATEMENT OF OPERATIONS For the period June 3, 2009 (commencement date) through August 31, 2009 INVESTMENT INCOME: Interest $ 32,330 - ---------------------------------------------------------------------------------------------- Dividends from affiliated money market funds 1,669 ============================================================================================== Total investment income 33,999 ============================================================================================== EXPENSES: Advisory fees 3,547 - ---------------------------------------------------------------------------------------------- Administrative services fees 12,329 - ---------------------------------------------------------------------------------------------- Custodian fees 9 - ---------------------------------------------------------------------------------------------- Distribution fees: Class A 1,592 - ---------------------------------------------------------------------------------------------- Class B 359 - ---------------------------------------------------------------------------------------------- Class C 360 - ---------------------------------------------------------------------------------------------- Class R 125 - ---------------------------------------------------------------------------------------------- Transfer agent fees -- A, B, C, R and Y 475 - ---------------------------------------------------------------------------------------------- Transfer agent fees -- Institutional 24 - ---------------------------------------------------------------------------------------------- Registration and filing fees 20,650 - ---------------------------------------------------------------------------------------------- Reports to shareholders 7,750 - ---------------------------------------------------------------------------------------------- Professional services fees 52,886 - ---------------------------------------------------------------------------------------------- Other 1,999 ============================================================================================== Total expenses 102,105 ============================================================================================== Less: Fees waived and expenses reimbursed (94,996) ============================================================================================== Net expenses 7,109 ============================================================================================== Net investment income 26,890 ============================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) FROM: Net realized gain (loss) from: Investment securities 22,358 - ---------------------------------------------------------------------------------------------- Futures contracts (16,957) ============================================================================================== 5,401 ============================================================================================== Change in net unrealized appreciation (depreciation) of: Investment securities 92,099 - ---------------------------------------------------------------------------------------------- Futures contracts (10,331) ============================================================================================== 81,768 ============================================================================================== Net realized and unrealized gain 87,169 ============================================================================================== Net increase in net assets resulting from operations $114,059 ______________________________________________________________________________________________ ==============================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 14 AIM CORE PLUS BOND FUND STATEMENT OF CHANGES IN NET ASSETS For the period June 3, 2009 (commencement date) through August 31, 2009
2009 - ----------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 26,890 - ----------------------------------------------------------------------------------------------- Net realized gain 5,401 - ----------------------------------------------------------------------------------------------- Change in net unrealized appreciation 81,768 =============================================================================================== Net increase in net assets resulting from operations 114,059 =============================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A (17,512) - ----------------------------------------------------------------------------------------------- Class B (887) - ----------------------------------------------------------------------------------------------- Class C (934) - ----------------------------------------------------------------------------------------------- Class R (616) - ----------------------------------------------------------------------------------------------- Class Y (885) - ----------------------------------------------------------------------------------------------- Institutional Class (736) =============================================================================================== Total distributions from net investment income (21,570) =============================================================================================== SHARE TRANSACTIONS-NET: Class A 2,807,678 - ----------------------------------------------------------------------------------------------- Class B 200,964 - ----------------------------------------------------------------------------------------------- Class C 217,869 - ----------------------------------------------------------------------------------------------- Class R 102,542 - ----------------------------------------------------------------------------------------------- Class Y 121,790 - ----------------------------------------------------------------------------------------------- Institutional Class 100,746 =============================================================================================== Net increase in net assets resulting from share transactions 3,551,589 =============================================================================================== Net increase in net assets 3,644,078 =============================================================================================== NET ASSETS: Beginning of year -- =============================================================================================== End of year (includes undistributed net investment income of $42,860) $3,644,078 _______________________________________________________________________________________________ ===============================================================================================
NOTES TO FINANCIAL STATEMENTS August 31, 2009 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Core Plus Bond Fund (the "Fund") is a series portfolio of AIM Counselor Series Trust (the "Trust"). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of seven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The Fund's investment objective is total return. The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Institutional Class. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waiver shares may be subject to contingent deferred sales charges ("CDSC"). Class B shares and Class C shares are sold with a CDSC. Class R, Class Y and Institutional Class shares are sold at net asset value. Under certain circumstances, Class R shares are subject to a CDSC. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase. 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. Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as 15 AIM CORE PLUS BOND FUND institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance. Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans. Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security's fair value. Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer's assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. 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. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. 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 periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held. Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund's net asset value and, accordingly, they reduce the Fund's total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the advisor. The Fund allocates realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares of each class. C. COUNTRY DETERMINATION -- For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment advisor may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer's securities, as well as other criteria. Among the other criteria that may be 16 AIM CORE PLUS BOND FUND evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. D. DISTRIBUTIONS -- Distributions from income are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund's taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period. F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to the Institutional Class are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date. H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund's servicing agreements, that contain a variety of indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. I. OTHER RISKS -- The Funds may invest in obligations issued by agencies and instrumentalities of the U.S. Government that may vary in the level of support they receive from the government. The government may choose not to provide financial support to government sponsored agencies or instrumentalities if it is not legally obligated to do so. In this case, if the issuer defaulted, the underlying fund holding securities of such issuer might not be able to recover its investment from the U.S. Government. Many securities purchased by the Fund are not guaranteed by the U.S. Government. J. DOLLAR ROLL AND FORWARD COMMITMENT TRANSACTIONS -- The Fund may engage in dollar roll and forward commitment transactions with respect to mortgage- backed securities issued by GNMA, FNMA and FHLMC. These transactions are often conducted on a to be announced ("TBA") basis. In a TBA mortgage- backed transaction, the seller does not specify the particular securities to be delivered. Rather, a Fund agrees to accept any security that meets specified terms, such as an agreed upon issuer, coupon rate and terms of the underlying mortgages. TBA mortgage-backed transactions generally settle once a month on a specific date. 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 purchase a substantially similar security (same type, coupon and maturity) from the institution at an agreed upon price and future date. The mortgage-backed securities to be purchased will bear the same coupon as those sold, but generally will be collateralized by different pools of mortgages with different prepayment histories. Based on the typical structure of dollar roll transactions by the Fund, the dollar roll transactions are accounted for as financing transactions in which the Fund receives compensation as either a "fee" or a "drop". "Fee" income which is agreed upon amongst the parties at the commencement of the dollar roll and the "drop" which is the difference between the selling price and the repurchase price of the mortgage-backed securities are amortized to income. During the period between the sale and purchase settlement dates, the Fund will not be entitled to receive interest and principal payments on securities purchased and not yet settled. Proceeds of the sale may 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 are considered borrowings under the 1940 Act. Forward commitment transactions involve commitments by the Fund to acquire or sell TBA mortgage-backed securities from/to a financial institution, such as a bank or broker-dealer at a specified future date and amount. The TBA mortgage-backed security is marked to market until settlement and the unrealized appreciation or depreciation is recorded in the statement of operations. At the time the Fund enters into the dollar roll or forward commitment transaction, mortgage-backed securities or other liquid assets held by the Fund having a dollar value equal to the purchase price or in an amount sufficient to honor the forward commitment will be segregated. 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 purchase under the agreement. In the event that 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 purchase the securities. The return earned by the Fund with the proceeds of the dollar roll transaction may not exceed the return on the securities sold. Forward commitment transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Settlement dates of forward commitment transactions may be a month 17 AIM CORE PLUS BOND FUND or more after entering into these transactions and as a result the market values of the securities may vary from the purchase or sale prices. Therefore, forward commitment transactions may increase the Fund's overall interest rate exposure. K. FUTURES CONTRACTS -- The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, 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. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. L. COLLATERAL -- To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund's practice to replace such collateral no later than the next business day. NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with Invesco Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Advisor based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE - ------------------------------------------------------------------- First $500 million 0.45% - ------------------------------------------------------------------- Next $500 million 0.425% - ------------------------------------------------------------------- Next $1.5 billion 0.40% - ------------------------------------------------------------------- Next $2.5 billion 0.375% - ------------------------------------------------------------------- Over $5 billion 0.35% ___________________________________________________________________ ===================================================================
Under the terms of a master sub-advisory agreement approved by shareholders of the Fund between the Advisor and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-Advisor(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Advisor(s). The Advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y and Institutional Class shares to 0.90%, 1.65%, 1.65%, 1.15%, 0.65% and 0.65% of average daily net assets, respectively, through at least June 30, 2010. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items or non-routine items; (v) expenses related to a merger or reorganization, as approved by the Fund's Board of Trustees; and (vi) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, in addition to the expense reimbursement arrangement with Invesco Ltd. ("Invesco") described more fully below, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the Fund. Further, the Advisor has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Advisor receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds. For the period June 3, 2009 (commencement date) to August 31, 2009, the Advisor waived advisory fees and reimbursed Fund level expenses of $94,496 and reimbursed class level expenses of $397, $22, $22, $16, $19 and $24 for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares in proportion to the relative net assets of such classes. The Trust has entered into a master administrative services agreement with Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain administrative costs incurred in providing accounting services to the Fund. For the period June 3, 2009 (commencement date) to August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees. The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. IAIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IAIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust's Board of Trustees. For the period June 3, 2009 (commencement date) to August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees. 18 AIM CORE PLUS BOND FUND The Trust has entered into master distribution agreements with Invesco Aim Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class B, Class C, Class R, Class Y and Institutional Class 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, Class B, Class C and Class R shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI compensation at the annual rate of 0.25% of the Fund's average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority ("FINRA") impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. For the period June 3, 2009 (commencement date) to August 31, 2009, expenses incurred under the Plans are shown in the Statement of Operations as distribution fees. Front-end sales commissions and CDSC (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the period June 3, 2009 (commencement date) to August 31, 2009, IADI advised the Fund that IADI retained $145 in front-end sales commissions from the sale of Class A shares and $0 from Class A, Class B, Class C and Class R shares, respectively, for CDSC imposed on redemptions by shareholders. Certain officers and trustees of the Trust are officers and directors of Invesco Aim, IAIS and/or IADI. NOTE 3--ADDITIONAL VALUATION INFORMATION Generally Accepted Accounting Principles (GAAP) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level: Level 1 -- Prices are determined using quoted prices in an active market for identical assets. Level 2 -- Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. Level 3 -- Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. The following is a summary of the tiered valuation input levels, as of the end of the reporting period, August 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL - ------------------------------------------------------------------------------------------------------------------------- Equity Securities $1,198,364 $ -- $-- $1,198,364 - ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Debt Securities -- 723,988 -- 723,988 - ------------------------------------------------------------------------------------------------------------------------- U.S. Government Sponsored Mortgage-Backed Debt Securities -- 1,279,728 -- 1,279,728 - ------------------------------------------------------------------------------------------------------------------------- Corporate Debt Securities -- 1,301,148 -- 1,301,148 - ------------------------------------------------------------------------------------------------------------------------- Asset-Backed Securities -- 347,025 -- 347,025 ========================================================================================================================= $4,850,253 ========================================================================================================================= Other Investments* (10,331) -- -- (10,331) ========================================================================================================================= Total Investments $1,188,033 $3,651,889 $-- $4,839,922 _________________________________________________________________________________________________________________________ =========================================================================================================================
* Other Investments include futures which are included at unrealized appreciation/(depreciation). NOTE 4--DERIVATIVE INVESTMENTS Effective June 3, 2009 (commencement date), the Fund has adopted the provisions of FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities. The standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position and financial performance. The adoption of this provision has no impact on the results of operations reported in the financial statements. 19 AIM CORE PLUS BOND FUND VALUE OF DERIVATIVE INSTRUMENTS AT PERIOD-END The Table below summarizes the value of the Fund's derivative instruments, detailed by primary risk exposure, held as of August 31, 2009:
VALUE ------------------------ RISK EXPOSURE/ DERIVATIVE TYPE ASSETS LIABILITIES - ------------------------------------------------------------------------------------------------------ Interest rate risk Futures contracts(a) $230,500 $(476,578) ______________________________________________________________________________________________________ ======================================================================================================
(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day's variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. EFFECT OF DERIVATIVE INSTRUMENTS FOR THE PERIOD JUNE 3, 2009 (COMMENCEMENT DATE) TO AUGUST 31, 2009 The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
LOCATION OF GAIN (LOSS) ON STATEMENT OF OPERATIONS FUTURES* - ------------------------------------------------------------------------------------------------------ Realized Gain (Loss) Interest rate risk $(16,957) ====================================================================================================== Change in Unrealized Appreciation (Depreciation) Interest rate risk (10,331) ====================================================================================================== Total $(27,288) ______________________________________________________________________________________________________ ======================================================================================================
* The average value of outstanding futures contracts during the period was $(202,654).
UNREALIZED NUMBER OF MONTH/ APPRECIATION CONTRACT CONTRACTS COMMITMENT VALUE (DEPRECIATION) - -------------------------------------------------------------------------------------------------------------------------- U.S. Treasury 5 Year Notes 2 December-2009/Long $ 230,500 $ 925 ========================================================================================================================== U.S. Treasury 10 Year Notes 3 September-2009/Short (355,641) (6,850) - -------------------------------------------------------------------------------------------------------------------------- U.S. Long Bonds 1 September-2009/Short (120,937) (4,406) ========================================================================================================================== (476,578) (11,256) ========================================================================================================================== Total $(246,078) $(10,331) __________________________________________________________________________________________________________________________ ==========================================================================================================================
NOTE 5--TRUSTEES' AND OFFICERS' FEES AND BENEFITS "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officers' Fees and Benefits" also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund. During the period June 3, 2009 (commencement date) to August 31, 2009, the Fund paid legal fees of $89 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. NOTE 6--CASH BALANCES The Fund may borrow for leveraging in an amount up to 5% of the Fund's total assets (excluding the amount borrowed) at the time the borrowing is made. In doing so, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco Aim, not to exceed the contractually agreed upon rate. A Fund may not purchase additional securities when any borrowings from banks exceeds 5% of the Fund's total assets. 20 AIM CORE PLUS BOND FUND NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE PERIOD JUNE 3, 2009 (COMMENCEMENT DATE) TO AUGUST 31, 2009:
2009 - --------------------------------------------------------------------------------------------- Ordinary income $21,570 _____________________________________________________________________________________________ =============================================================================================
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
2009 - ----------------------------------------------------------------------------------------------- Undistributed ordinary income $ 42,859 - ----------------------------------------------------------------------------------------------- Net unrealized appreciation -- investments 89,775 - ----------------------------------------------------------------------------------------------- Capital loss carryforward (2,360) - ----------------------------------------------------------------------------------------------- Shares of beneficial interest 3,513,804 =============================================================================================== Total net assets $3,644,078 _______________________________________________________________________________________________ ===============================================================================================
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's net unrealized appreciation (depreciation) difference is attributable primarily to futures contracts and dollar roll transactions. Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. The Fund has a capital loss carryforward as of August 31, 2009 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* - ----------------------------------------------------------------------------------------------- August 31, 2017 $2,360 _______________________________________________________________________________________________ ===============================================================================================
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. NOTE 8--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the period June 3, 2009 (commencement date) to August 31, 2009 was $3,226,711 and $675,157, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - --------------------------------------------------------------------------------------------- Aggregate unrealized appreciation of investment securities $92,286 - --------------------------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (2,511) ============================================================================================= Net unrealized appreciation of investment securities $89,775 _____________________________________________________________________________________________ ============================================================================================= Cost of investments for tax purposes is $4,760,478.
NOTE 9--RECLASSIFICATION OF PERMANENT DIFFERENCES Primarily as a result of differing book/tax treatment of stock issuance cost, dollar rolls and paydowns, on August 31, 2009, undistributed net investment income was increased by $37,540, undistributed net realized gain was increased by $245 and shares of beneficial interest decreased by $37,785. This reclassification had no effect on the net assets of the Fund. 21 AIM CORE PLUS BOND FUND NOTE 10--SHARE INFORMATION
SUMMARY OF SHARE ACTIVITY - --------------------------------------------------------------------------------------------------------- JUNE 3, 2009 (COMMENCEMENT DATE) TO AUGUST 31, 2009 -------------------------------- SHARES AMOUNT - --------------------------------------------------------------------------------------------------------- Sold: Class A 278,669 $2,792,778 - --------------------------------------------------------------------------------------------------------- Class B 19,908 200,294 - --------------------------------------------------------------------------------------------------------- Class C 21,543 216,941 - --------------------------------------------------------------------------------------------------------- Class R 10,188 101,926 - --------------------------------------------------------------------------------------------------------- Class Y 12,115 120,905 - --------------------------------------------------------------------------------------------------------- Institutional Class 10,001 100,010 ========================================================================================================= Issued as reinvestment of dividends: Class A 1,708 17,512 - --------------------------------------------------------------------------------------------------------- Class B 75 774 - --------------------------------------------------------------------------------------------------------- Class C 91 933 - --------------------------------------------------------------------------------------------------------- Class R 60 616 - --------------------------------------------------------------------------------------------------------- Class Y 86 885 - --------------------------------------------------------------------------------------------------------- Institutional Class 72 736 ========================================================================================================= Automatic conversion of Class B shares to Class A shares: Class A 10 104 - --------------------------------------------------------------------------------------------------------- Class B (10) (104) ========================================================================================================= Reacquired: Class A (273) (2,716) - --------------------------------------------------------------------------------------------------------- Class B - - - --------------------------------------------------------------------------------------------------------- Class C (1) (5) - --------------------------------------------------------------------------------------------------------- Class R - - - --------------------------------------------------------------------------------------------------------- Class Y - - - --------------------------------------------------------------------------------------------------------- Institutional Class - - ========================================================================================================= Net increase in share activity 354,242 $3,551,589 _________________________________________________________________________________________________________ =========================================================================================================
22 AIM CORE PLUS BOND FUND NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding for the period.
NET GAINS NET ASSET ON SECURITIES DIVIDENDS VALUE, NET (BOTH TOTAL FROM FROM NET NET ASSET BEGINNING INVESTMENT REALIZED AND INVESTMENT INVESTMENT VALUE, END TOTAL OF PERIOD INCOME(a) UNREALIZED) OPERATIONS INCOME OF PERIOD RETURN(b) - ------------------------------------------------------------------------------------------------------------------------------- CLASS A Three months ended 08/31/09(d) $10.00 $0.09 $0.27 $0.36 $(0.07) $10.29 3.58% - ------------------------------------------------------------------------------------------------------------------------------- CLASS B Three months ended 08/31/09(d) 10.00 0.07 0.27 0.34 (0.05) 10.29 3.39 - ------------------------------------------------------------------------------------------------------------------------------- CLASS C Three months ended 08/31/09(d) 10.00 0.07 0.27 0.34 (0.05) 10.29 3.39 - ------------------------------------------------------------------------------------------------------------------------------- CLASS R Three months ended 08/31/09(d) 10.00 0.08 0.27 0.35 (0.06) 10.29 3.51 - ------------------------------------------------------------------------------------------------------------------------------- CLASS Y Three months ended 08/31/09(d) 10.00 0.09 0.27 0.36 (0.07) 10.29 3.64 - ------------------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL CLASS Three months ended 08/31/09(d) 10.00 0.09 0.27 0.36 (0.07) 10.29 3.64 _______________________________________________________________________________________________________________________________ =============================================================================================================================== RATIO OF RATIO OF EXPENSES EXPENSES TO AVERAGE TO AVERAGE NET RATIO OF NET NET ASSETS ASSETS WITHOUT INVESTMENT NET ASSETS, WITH FEE WAIVERS FEE WAIVERS INCOME END OF PERIOD AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO (000S OMITTED) ABSORBED ABSORBED NET ASSETS TURNOVER(c) - ------------------------------------------------------------------------------------------------------------------------- CLASS A Three months ended 08/31/09(d) $2,882 0.84%(e) 12.89%(e) 3.47%(e) 140% - ------------------------------------------------------------------------------------------------------------------------- CLASS B Three months ended 08/31/09(d) 205 1.59(e) 13.64(e) 2.72(e) 140 - ------------------------------------------------------------------------------------------------------------------------- CLASS C Three months ended 08/31/09(d) 223 1.59(e) 13.64(e) 2.72(e) 140 - ------------------------------------------------------------------------------------------------------------------------- CLASS R Three months ended 08/31/09(d) 105 1.09(e) 13.14(e) 3.22(e) 140 - ------------------------------------------------------------------------------------------------------------------------- CLASS Y Three months ended 08/31/09(d) 126 0.59(e) 12.64(e) 3.72(e) 140 - ------------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL CLASS Three months ended 08/31/09(d) 104 0.59(e) 12.68(e) 3.72(e) 140 _________________________________________________________________________________________________________________________ =========================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges, if applicable and is not annualized for periods less than one year. (c) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. (d) Commencement date of June 3, 2009. (e) Ratios are annualized and based on average daily net assets (000's omitted) of $2,582, $146, $146, $101, $121 and $101 for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares, respectively. 23 AIM CORE PLUS BOND FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees of AIM Counselor Series Trust and Shareholders of AIM Core Plus Bond 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 AIM Core Plus Bond Fund (one of the funds constituting AIM Counselor Series Trust, hereafter referred to as the "Fund") at August 31, 2009, the results of its operations, the changes in its net assets and the financial highlights for the period June 3, 2009 (commencement date) through August 31, 2009, 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 August 31, 2009 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. PRICEWATERHOUSECOOPERS LLP October 16, 2009 Houston, Texas 24 AIM CORE PLUS BOND FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The actual ending account value and expenses of Class A, Class B, Class C, Class R and Class Y shares in the below example are based on an investment of $1,000 invested on June 3, 2009 (commencement date) and held through August 31, 2009. The hypothetical ending account value and expenses in the below example are based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period, June 3, 2009 (commencement date) through August 31, 2009. Because the actual ending account value and expense information in the example is not based upon a six month period, the ending account value and expense information may not provide a meaningful comparison to mutual funds that provide such information for a full six month period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(3) RATIO - --------------------------------------------------------------------------------------------------- A $1,000.00 $1,035.80 $2.11 $1,020.97 $4.28 0.84% - --------------------------------------------------------------------------------------------------- B 1,000.00 1,033.90 3.99 1,017.19 8.08 1.59 - --------------------------------------------------------------------------------------------------- C 1,000.00 1,033.90 3.99 1,017.19 8.08 1.59 - --------------------------------------------------------------------------------------------------- R 1,000.00 1,035.10 2.73 1,019.71 5.55 1.09 - --------------------------------------------------------------------------------------------------- Y 1,000.00 1,036.40 1.48 1,022.23 3.01 0.59 - ---------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period June 3, 2009 (commencement date) through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 90 (June 3, 2009 (commencement date) through August 31, 2009)/365. Because Class A, Class B, Class C, Class R and Class Y shares have not been in existence for a full six month period, the actual ending account value and expense information shown may not provide a meaningful comparison to fund expense information of classes that show such data for a full six month period and, because the actual ending account value and expense information in the expense example covers a short time period, return and expense data may not be indicative of return and expense data for longer time periods. (3) Hypothetical expenses are equal to the annualized expense ratio indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect a one-half year period. The hypothetical ending account value and expenses may be used to compare ongoing costs of investing in Class A, Class B, Class C, Class R and Class Y shares of the Fund and other funds because such data is based on a full six month period. 25 AIM CORE PLUS BOND FUND Supplement to Annual Report dated 8/31/09 AIM CORE PLUS BOND FUND INSTITUTIONAL CLASS SHARES ------------------------------------------ Please note that past performance is AVERAGE CUMULATIVE TOTAL RETURNS not indicative of future results. More The following information has been For periods ended 8/31/09 recent returns may be more or less than prepared to provide Institutional Class those shown. All returns assume shareholders with a performance overview Inception (6/3/09) 3.64% reinvestment of distributions at NAV. specific to their holdings. Institutional ------------------------------------------ Investment return and principal value will Class shares are offered exclusively to fluctuate so your shares, when redeemed, institutional investors, including defined ------------------------------------------ may be worth more or less than their contribution plans that meet certain AVERAGE CUMULATIVE TOTAL RETURNS original cost. See full report for criteria. information on comparative benchmarks. For periods ended 6/30/09, the most recent Please consult your Fund prospectus for calendar quarter-end more information. For the most current month-end performance, please call Inception (6/3/09) 0.10% 800 451 4246 or visit invescoaim.com. ------------------------------------------ (1) Total annual operating expenses less Institutional Class shares have no sales any contractual fee waivers and/or charge; therefore, performance is at net expense reimbursements by the advisor asset value (NAV). Performance of in effect through at least June 30, Institutional Class shares will differ 2010. See current prospectus for more from performance of other share classes information. primarily due to differing sales charges and class expenses. The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 0.65%.(1) The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 2.30%. The expense ratios presented above may vary from the expense ratios presented in other sections of the actual report that are based on expenses incurred during the period covered by the report. Had the advisor not waived fees and/or reimbursed expenses, performance would have been lower. - ------------------------------------------ NASDAQ SYMBOL CPIIX Over for information on your Fund's expenses. - --------------------------------------------------------------------------------------- THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FOR INSTITUTIONAL INVESTOR USE ONLY -- NOT FOR USE WITH THE PUBLIC THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED, SHOWN TO THE PUBLIC [INVESCO AIM LOGO] OR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. - service mark - invescoaim.com CPB-INS-1 Invesco Aim Distributors, Inc.
CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The actual ending account value and expenses of Institutional Class shares in the below example are based on an investment of $1,000 invested on June 3, 2009 (commencement date) and held through August 31, 2009. The hypothetical ending account value and expenses in the below example are based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period, June 3, 2009 (commencement date) through August 31, 2009. Because the actual ending account value and expense information in the example is not based upon a six month period, the ending account value and expense information may not provide a meaningful comparison to mutual funds that provide such information for a full six month period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
- ----------------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(3) RATIO - ----------------------------------------------------------------------------------------------------------- Institutional $1,000.00 $1,036.40 $1.48 $1,022.23 $3.01 0.59% - -----------------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period June 3, 2009 (commencement date) through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 90 (June 3, 2009 (commencement date) through August 31, 2009)/365. Because Institutional Class shares have not been in existence for a full six month period, the actual ending account value and expense information shown may not provide a meaningful comparison to fund expense information of classes that show such data for a full six month period and, because the actual ending account value and expense information in the expense example covers a short time period, return and expense data may not be indicative of return and expense data for longer time periods. (3) Hypothetical expenses are equal to the annualized expense ratio indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect a one-half year period. The hypothetical ending account value and expenses may be used to compare ongoing costs of investing in Institutional Class shares of the Fund and other funds because such data is based on a full six month period. AIM CORE PLUS BOND FUND - ------------------------------------------------------------------------------------------------------------------------------------ INITIAL APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS The Board of Trustees (the Board) of AIM considered the factors discussed below in are appropriate. The Board noted that the Counselor Series Trust is required under evaluating the fairness and reasonableness Affiliated Sub-Advisers, which have the Investment Company Act of 1940 to of the Fund's investment advisory offices and personnel that are approve the AIM Core Plus Bond Fund (the agreement and sub-advisory contracts. The geographically dispersed in financial Fund) investment advisory agreement with discussion serves as a summary of the centers around the world, have been formed Invesco Aim Advisors, Inc. (Invesco Aim) discussion of the material factors and in part for the purpose of researching and and the Master Intergroup Sub-Advisory related conclusions that formed the basis compiling information and making Contract for Mutual Funds (the for the Board's approval of the Fund's recommendations on the markets and sub-advisory contracts) with Invesco Asset investment advisory agreement and economies of various countries and Management Deutschland GmbH, Invesco Asset sub-advisory contracts. The Board securities of companies located in such Management Limited, Invesco Asset considered all of the information provided countries or on various types of Management (Japan) Limited, Invesco to them and did not identify any investments and investment techniques, and Australia Limited, Invesco Global Asset particular factor that was controlling. providing investment advisory services. Management (N.A.), Inc., Invesco Hong Kong Each Trustee may have evaluated the The Board noted that investment decisions Limited, Invesco Institutional (N.A.), information provided differently from for the Fund will be made by IINA. The Inc. (IINA), Invesco Senior Secured another Trustee and attributed different Board concluded that the sub-advisory Management, Inc. and Invesco Trimark Ltd. weight to the various factors. contracts will benefit the Fund and its (collectively, the Affiliated shareholders by permitting Invesco Aim to Sub-Advisers). During meetings held on FACTORS AND CONCLUSIONS AND SUMMARY OF utilize the additional resources and April 28-29, 2009, the Board as a whole EVALUATION OF INVESTMENT ADVISORY talent of the Affiliated Sub-Advisers in and the disinterested or "independent" AGREEMENT AND SUB-ADVISORY CONTRACTS managing the Fund. Trustees, voting separately, approved an amendment to the Fund's investment A. Nature, Extent and Quality of C. Fund Performance advisory agreement and an amendment to the Services Provided by Invesco Aim sub-advisory contracts to add the Fund. In The Board did not consider the performance doing so, the Board determined that the The Board reviewed the advisory services of the Fund because the Fund is new and Fund's investment advisory agreement and to be provided to the Fund by Invesco Aim has no performance history. the sub-advisory contracts are in the best under the Fund's investment advisory interests of the Fund and its shareholders agreement and the credentials and D. Advisory and Sub-Advisory Fees and and that the compensation to Invesco Aim experience of the officers and employees Fee Waivers and the Affiliated Sub-Advisers under the of Invesco Aim who will provide these Fund's investment advisory agreement and services. The Board's review of the The Board considered the contractual sub-advisory contracts is fair and qualifications of Invesco Aim to provide advisory fee rate and the proposed fee reasonable. these services included the Board's waivers and expense limitations that will consideration of Invesco Aim's portfolio be in place for the fund through June 30, THE BOARD'S EVALUATION PROCESS and product review process, various back 2010. The Board also considered the office support functions provided by services to be provided by the Affiliated The Board's Investments Committee has Invesco Aim and its affiliates, and Sub-Advisers pursuant to the sub-advisory established three Sub-Committees that are Invesco Aim's global trading operations. contracts and the services to be provided responsible for overseeing the management The Board concluded that the nature, by Invesco Aim pursuant to the Fund's of a number of the series portfolios of extent and quality of the advisory investment advisory agreement, as well as the AIM Funds. The Fund will be assigned services to be provided to the Fund by the allocation of fees between Invesco Aim to one of the Sub-Committees. This Invesco Aim are appropriate. and the Affiliated Sub-Advisers pursuant Sub-Committee structure permits the to the sub-advisory contracts. The Board Trustees to focus on the performance of In determining whether to approve the noted that the sub-advisory fees have no the AIM Funds that have been assigned to Fund's investment advisory agreement, the direct effect on the Fund or its them. The Sub-Committees meet throughout Board considered the prior relationship shareholders, as they are paid by Invesco the year to review the performance of between Invesco Aim and the AIM Funds, as Aim to the Affiliated Sub-Advisers, and their assigned funds, and the well as the Board's knowledge of Invesco that Invesco Aim and the Affiliated Sub-Committees review monthly and Aim's operations, and concluded that it Sub-Advisers are affiliates. quarterly comparative performance was beneficial to maintain the information and periodic asset flow data relationship for the Fund, in part, After taking account of the Fund's for their assigned funds. Over the course because of such knowledge. contractual advisory fee rate, the of each year, the Sub-Committees meet with contractual sub-advisory fee rate, the portfolio managers for their assigned B. Nature, Extent and Quality of underlying funds fees and expenses and funds and other members of management and Services Provided by Affiliated other relevant factors, the Board review with these individuals the Sub-Advisors concluded that the Fund's advisory and performance, investment objective(s), sub-advisory fees were fair and policies, strategies and limitations of The Board reviewed the services to be reasonable. these funds. provided by the Affiliated Sub-Advisers under the sub-advisory contracts and the E. Economies of Scale and Breakpoints In determining to approve the Fund's credentials and experience of the officers investment advisory agreement and and employees of the Affiliated The Board considered the extent to which sub-advisory contracts, the Board Sub-Advisers who will provide these there are economies of scale in Invesco services. The Board concluded that the Aim's provision of advisory services to nature, extent and quality of the services the Fund. The Board also considered to be provided by the Affiliated whether the Fund benefits from such Sub-Advisers economies of scale through contractual breakpoints in the Fund's advisory fee schedule. The 26 AIM CORE PLUS BOND FUND continued
Board noted that the Fund's contractual other AIM Funds and the organizational advisory fee schedule provides for structure employed by Invesco Aim and its breakpoints, but that the Fund is being affiliates to provide these services. The newly launched and has not reached a size Board also considered that these services for the breakpoints to have any effect. will be provided to the Fund pursuant to The Board noted that the Fund shares written contracts that are reviewed and directly in economies of scale through approved on an annual basis by the Board. lower fees charged by third party service The Board concluded that Invesco Aim and providers based on the combined size of its affiliates were providing these all of the AIM Funds and affiliates. services in a satisfactory manner and in accordance with the terms of their F. Profitability and Financial contracts, and were qualified to provide Resources these services to the Fund. The Board reviewed information from The Board considered the benefits Invesco Aim concerning the costs of the realized by Invesco Aim and the Affiliated advisory and other services that Invesco Sub-Advisers as a result of portfolio Aim and its affiliates provide to the Fund brokerage transactions executed through and the profitability of Invesco Aim and "soft dollar" arrangements. The Board its affiliates in providing these noted that soft dollar arrangements shift services. The Board also reviewed the payment obligation for research and information concerning the financial execution services from Invesco Aim and condition of Invesco Aim and its the Affiliated Sub-Advisers to the funds affiliates. The Board considered the and therefore may reduce Invesco Aim's and overall profitability of Invesco Aim, as the Affiliated Sub-Advisers' expenses. The well as the profitability of Invesco Aim Board concluded that Invesco Aim's and the in connection with managing the Fund. The Affiliated Sub-Advisers' soft dollar Board noted that Invesco Aim continues to arrangements are appropriate. The Board operate at a net profit, although recent also concluded that, based on their review economic factors have reduced the and representations made by the Chief profitability of Invesco Aim and its Compliance Officer of Invesco Aim, these affiliates. The Board concluded that the arrangements are consistent with Fund's fees were fair and reasonable, and regulatory requirements. that the level of profits realized by Invesco Aim and its affiliates from The Board considered the fact that the providing services to the Fund are not Fund's uninvested cash and cash collateral anticipated to be excessive in light of from any securities lending arrangements the nature, quality and extent of the may be invested in money market funds services provided. The Board considered advised by Invesco Aim pursuant to whether Invesco Aim is financially sound procedures approved by the Board. The and has the resources necessary to perform Board noted that Invesco Aim will receive its obligations under the Fund's advisory fees from these affiliated money investment advisory agreement, and market funds attributable to such concluded that Invesco Aim has the investments, although Invesco Aim has financial resources necessary to fulfill contractually agreed to waive through at these obligations. The Board also least June 30, 2010, the advisory fees considered whether each Affiliated payable by the Fund in an amount equal to Sub-Adviser is financially sound and has 100% of the net advisory fee Invesco Aim the resources necessary to perform its receives from the affiliated money market obligations under its respective funds with respect to the Fund's sub-advisory contract, and concluded that investment in the affiliated money market each Affiliated Sub-Adviser has the funds of uninvested cash, but not cash financial resources necessary to fulfill collateral. The Board concluded that the these obligations. Fund's investment of uninvested cash and cash collateral from any securities G. Collateral Benefits to Invesco Aim lending arrangements in the affiliated and its Affiliates money market funds is in the best interests of the Fund and its The Board considered various other shareholders. benefits received by Invesco Aim and its affiliates resulting from Invesco Aim's relationship with the Fund, including the fees received by Invesco Aim and its affiliates for their provision of administrative, transfer agency and distribution services to the Fund. The Board considered the performance of Invesco Aim and its affiliates in providing these services to 27 AIM CORE PLUS BOND FUND
TAX INFORMATION Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors. The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement. The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for period June 3, 2009 (commencement date) through August 31, 2009:
FEDERAL AND STATE INCOME TAX ---------------------------- Qualified Dividend Income* 0.00% Corporate Dividends Received Deduction* 0.00% U.S. Treasury Obligations* 6.39%
* The above percentages are based on ordinary income dividends paid to shareholders during the period. 28 AIM CORE PLUS BOND FUND TRUSTEES AND OFFICERS The address of each trustee and officer of AIM Counselor Series Trust (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------------ Martin L. Flanagan(1) -- 1960 2007 Executive Director, Chief Executive Officer and President, None Trustee Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Chairman, Invesco Aim Advisors, Inc. (registered investment advisor); Trustee, The AIM Family of Funds(R); Vice Chairman, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd. and Chairman, Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and Principal Executive Officer President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company) and Invesco Aim Capital Management, Inc. (registered investment advisor); Director and President, INVESCO Funds Group, Inc. (registered investment advisor and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltee (registered investment advisor and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: President, Invesco Trimark Dealer Inc.; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Director and President, Invesco Trimark Ltd./Invesco Trimark Ltee; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited (insurance Trustee and Chair consulting company) company); Captaris, Inc. (unified messaging provider); and Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Bob R. Baker -- 1936 1983 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Bayley -- 1939 2003 Retired None Trustee Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Board of Governors, Trustee firm) Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association - ------------------------------------------------------------------------------------------------------------------------------------ Albert R. Dowden -- 1941 2003 Director of a number of public and private business Board of Nature's Trustee corporations, including the Boss Group Ltd. (private Sunshine Products, Inc. investment and management); Continental Energy Services, LLC (oil and gas pipeline service); Reich & Tang Funds (registered investment company), and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, CompuDyne Corporation (provider of product and services to the public security market); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Senior Vice President, AB Volvo; Director of various public and private corporations - ------------------------------------------------------------------------------------------------------------------------------------ Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff Trustee (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) - ------------------------------------------------------------------------------------------------------------------------------------ Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich & Tang Trustee Funds (16 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ Prema Mathai-Davis -- 1950 2003 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Larry Soll -- 1942 1997 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Raymond Stickel, Jr. -- 1944 2005 Retired None Trustee Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Flanagan is considered an interested person of the Trust because he is an officer of the advisor to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the advisor to the Trust. (2) Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. T-1 TRUSTEES AND OFFICERS - (CONTINUED)
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family N/A Senior Vice President and of Funds(R) Formerly: Director of Compliance and Assistant Senior Officer General Counsel, ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General Counsel and Director of Compliance, ALPS Mutual Funds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General N/A Senior Vice President, Chief Counsel, Invesco Aim Management Group, Inc., Invesco Aim Legal Officer and Secretary Advisors, Inc. and Invesco Aim Capital Management, Inc.; Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); and Manager, Invesco PowerShares Capital Management LLC Formerly: Director, Vice President and Secretary, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company); Vice President and Secretary, PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator); General Counsel and Secretary, Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company) - ------------------------------------------------------------------------------------------------------------------------------------ Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice N/A Vice President President, The AIM Family of Funds(R) Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R); Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company - ------------------------------------------------------------------------------------------------------------------------------------ Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, N/A Vice President Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; and Vice President, The AIM Family of Funds(R) Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Sheri Morris -- 1964 2003 Vice President, Treasurer and Principal Financial Officer, N/A Vice President, Treasurer and The AIM Family of Funds(R); and Vice President, Invesco Aim Principal Financial Officer Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management Inc. Formerly: Assistant Vice President and Assistant Treasurer, The AIM Family of Funds(R) and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash N/A Vice President Management Group; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only) Formerly: President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer and Managing Director, Invesco Aim Capital Management, Inc.; and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only) - ------------------------------------------------------------------------------------------------------------------------------------ Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim N/A Anti-Money Laundering Advisors, Inc., Invesco Aim Capital Management, Inc., Compliance Officer Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., Invesco Aim Private Asset Management, Inc. and The AIM Family of Funds(R) Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company; and Manager of the Fraud Prevention Department, Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; N/A Chief Compliance Officer Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, The AIM Family of Funds(R), Invesco Global Asset Management (N.A.), Inc. (registered investment advisor), Invesco Institutional (N.A.), Inc., (registered investment advisor), INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment advisor) and Invesco Senior Secured Management, Inc. (registered investment advisor); and Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company; and Global Head of Product Development, AIG-Global Investment Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------
The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund's prospectus for information on the Fund's sub-advisors. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street Houston, TX 77046-1173 Suite 100 Suite 100 Suite 2900 Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678 COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN Stradley Ronon Stevens & INDEPENDENT TRUSTEES Invesco Aim Investment Services, Inc. State Street Bank and Young, LLP Kramer, Levin, Naftalis & Frankel LLP P.O. Box 4739 Trust Company 2600 One Commerce Square 1177 Avenue of the Americas Houston, TX 77210-4739 225 Franklin Philadelphia, PA 19103 New York, NY 10036-2714 Boston, MA 02110-2801
T-2 [GO PAPERLESS GRAPHIC] - ------------------------------------------------------------------------------------------------------------------------------------ GO PAPERLESS WITH EDELIVERY Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all about eeees: o ENVIRONMENTALLY FRIENDLY. Go green by reducing the number of o EFFICIENT. Stop waiting for regular mail. Your documents will trees used to produce paper. be sent via email as soon as they're available. o ECONOMICAL. Help reduce your fund's printing and delivery o EASY. Download, save and print files using your home computer expenses and put more capital back in your fund's returns. with a few clicks of your mouse. This service is provided by Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Aim Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within thirty days after receiving your request. - ------------------------------------------------------------------------------------------------------------------------------------ FUND HOLDINGS AND PROXY VOTING INFORMATION The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-09913 and 333-36074. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov. If used after January 20, 2010, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for the most recent quarter-end. Invesco Aim- SERVICE MARK - is a service mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for the products and services represented by Invesco Aim; they each provide investment advisory services to individual and institutional clients and do not sell securities. Please refer to each fund's prospectus for information on the fund's subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the retail mutual funds, exchange-traded funds and institutional money market funds and the subdistributor for the STIC Global Funds represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd. It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco Global Asset [INVESCO AIM LOGO] Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the consolidated adviser - SERVICE MARK - firm will be renamed Invesco Advisers, Inc. Additional information will be posted at invescoaim.com on or about the end of the fourth quarter of 2009. invescoaim.com CPB-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] ANNUAL REPORT TO SHAREHOLDERS AUGUST 31, 2009 - service mark - AIM FLOATING RATE FUND [GRAPHIC] 2 Letters to Shareholders 4 Performance Summary 4 Management Discussion 6 Long-Term Fund Performance 8 Supplemental Information 9 Schedule of Investments 26 Financial Statements 29 Notes to Financial Statements 37 Financial Highlights 38 Auditor's Report 39 Fund Expenses 40 Approval of Investment Advisory and Sub-Advisory Agreements 43 Tax Information T-1 Trustees and Officers
Dear Shareholders: While the year covered by this report was difficult -- for long-time investors and veteran investment professionals alike -- economic conditions and market trends appeared much more favorable at the close of the fiscal year than at its start. [TAYLOR PHOTO] The 12 months ended August 31, 2009, included a sharp market sell-off that occurred in the second half of 2008. That downturn affected virtually all sectors, markets and investors. The decline had a number of causes, the most immediate being unprecedented turmoil in credit markets. Economic uncertainty prompted banks to hoard cash and reduce lending, and caused investors to shun short-term corporate debt. As a result, businesses found it difficult to fund Philip Taylor their day-to-day operations, and the U.S. economy -- as well as economies around the globe -- virtually froze briefly. INCREASED COMMUNICATION These developments prompted a greater-than-usual number of shareholders to contact me. Some of you took the time to write a letter while others of you emailed me at phil@invescoaim.com. Many of you sought explanations for the decline in the value of your accounts, while others asked more general questions about when the economy might improve. Your questions, comments and suggestions gave me better insight into what was on your minds, and I was pleased that so many of you took the time to share your thoughts with me. As a result, Invesco Aim's investment professionals and I have increased our efforts to stay in touch with and share our views with you. We increased the number of "Investment Perspectives" articles on our website, invescoaim.com. Through these articles, we've tried to provide timely market commentary, general investor education information and sector updates. I hope you'll take a moment to read them and let me know if you find them useful. To access your Fund's latest quarterly commentary, click on "Products and Performance" at the top of our website; next, select "Mutual Funds"; and then click on "Quarterly Commentary." I also hope you've stayed in touch with your financial advisor. An experienced financial advisor who is familiar with your individual investment goals, time horizon and risk tolerance can be a source of comfort and information during uncertain times. He or she can monitor your investments to ensure they're on track and can prevent you from making impulsive short-term decisions that may have adverse long-term consequences. REASONS FOR OPTIMISM The economy and equity markets reacted to a barrage of negative news during the year. Consumer spending -- which accounts for more than two-thirds(1) of the U.S. economy -- was sluggish as unemployment rose; more workers worried about their job security; home and portfolio values declined; and credit became more difficult to obtain. In his semiannual monetary policy report to Congress in late July, U.S. Federal Reserve Board Chairman Ben Bernanke summarized the stresses and strains the U.S. and global economies suffered in late 2008 and early 2009. Importantly, he suggested that the aggressive, coordinated actions taken by governments and central banks around the world finally may be yielding results. He testified that: o The pace of overall economic decline appears to have slowed significantly. o Credit availability, for consumers and businesses, has improved noticeably. o Investors' extreme risk aversion has eased somewhat. o The decline in housing activity appears to have moderated. While these and other trends offer encouragement, uncertainties remain. Chairman Bernanke testified that he anticipates a gradual recovery in 2010 with some acceleration in economic growth in 2011, together with subdued inflation over the next two years. His considered judgment appears to be shared by investors who have begun to return, cautiously, to the equities market, causing major U.S. stock-market indexes to bounce off their March lows. A SINGLE FOCUS I believe Invesco Aim is uniquely positioned to serve our clients. Our parent company, Invesco Ltd., is one of the largest(2) and most diversified global asset managers. It provides clients with diversified investment strategies and a range of investment products managed by distinct management teams around the world. We believe we can serve you best by focusing on one thing and doing it well: managing your money. Our investment professionals have managed clients' money in up markets and down markets. All of us here recognize that market conditions change often; what will not change is our commitment to putting our clients first, helping you achieve your financial goals and providing excellent customer service. If you have questions about this report or your account, please contact one of our client services representatives at 800 959 4246. If you have comments for me, I encourage you to email me at phil@invescoaim.com. Thank you for investing with us. All of us at Invesco Aim look forward to serving you. Sincerely, /s/ PHILIP TAYLOR Philip Taylor Senior Managing Director, Invesco Ltd. CEO, Invesco Aim 1 Reuters; 2 Pensions & Investments 2 AIM FLOATING RATE FUND
Dear Fellow Shareholders: Although the economy and financial markets have shown some signs of hope, investors remain rightfully cautious. Staying with an appropriately diversified investment program focused on your individual long-term goals can be a wise course in such uncertain times. We believe the route to financial success is more like a marathon than a sprint. [CROCKETT PHOTO] Please be assured that your Board continues to oversee the AIM Funds with a strong sense of responsibility for your money and your trust. As always, we seek to manage costs and enhance performance in ways that put your interests first. Bruce Crockett We are near the end of a busy 2009 proxy season, during which Invesco Aim Advisors, Inc.'s proxy committee votes on your behalf on issues put to a shareholder vote by the companies whose stock the Funds hold. This year, after careful case-by-case analysis by committee members and portfolio managers, the proxy committee voted with corporate management less often than in previous years, focusing on the issues of board independence, Say-On-Pay initiatives, and stock option re-pricing in light of the market's decline. The committee remained committed to supporting non-binding Say-on-Pay proposals and abstaining from voting on social issues. At its June meeting, your Board reviewed and renewed the investment advisory contracts between the AIM Funds and Invesco Aim Advisors, Inc. You can find the results of this rigorous annual process at invescoaim.com. Go to "Products & Performance" and click on "Investment Advisory Agreement Renewals." The website also contains news and market information, investment education and planning information and current reports and prospectuses for all the AIM Funds and I highly recommend it to you. You are always welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving you in the coming months. Sincerely, /s/ BRUCE L. CROCKETT Bruce L. Crockett Independent Chair AIM Funds Board of Trustees 3 AIM FLOATING RATE FUND
- ------------------------------------------------------------------------------------------------------------------------------------ MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE PERFORMANCE SUMMARY the predictability of corporate earnings and the cash requirement of For the fiscal year ended August 31, 2009, Class A Shares of AIM Floating Rate Fund, at the business and conduct an examination net asset value (NAV), underperformed the Fund's broad market and style-specific of the business cycles, seasonality, indexes. The Fund invests in lower rated fixed-income instruments, primarily senior international pressures and so forth. secured corporate loans, and this asset class generally underperformed investment-grade bonds, as represented by the Barclays Capital U.S. Aggregate Index. The Fund also o Recovery and loan-to-value. These underperformed its style-specific index due to its overweight in lower quality credits, factors focus on further examination of including second-lien loans. the default probability and the rate of recovery associated with loans. Your Fund's long-term performance appears later in this report. The portfolio is constructed using a FUND VS. INDEXES conservative bias to help limit credit risk, while focusing on optimization of Total returns, 8/31/08 to 8/31/09, at net asset value (NAV). Performance shown does not return relative to appropriate benchmarks. include applicable contingent deferred sales charges (CDSC) or front-end sales charges, We constantly monitor the holdings in the which would have reduced performance. portfolio and conduct daily, weekly and monthly meetings with portfolio managers Class A Shares -4.97% and analysts, as well as with firms and Class C Shares -5.61 loan sponsors. Class R Shares -5.19 Class Y Shares* -4.94 Our proprietary systems generate "alert Barclays Capital U.S. Aggregate Index(triangle) (Broad Market Index) 7.94 lists" that trigger immediate reviews of S&P/LSTA Leveraged Loan Index(square) (Style-Specific Index) 2.40 credits when they fall below price Lipper Loan Participation Funds Category Average(triangle) (Peer Group) -1.54 targets, are rated BB or lower or are performing off plan. The active sell (triangle)Lipper Inc.; (square)Standard & Poor's, Invesco Aim discipline considers two key factors for each portfolio position: * Share class incepted during the fiscal year. See page 7 for a detailed explanation of Fund performance. o Company objective. Will unfavorable industry trends, poor performance or HOW WE INVEST try, barriers to entry and current lack of access to capital cause the industry capacity and utilization. company to underperform? We believe a highly diversified pool of bank loans from the broadest spectrum of o Asset quality. Considerations may o Investment objective. Has the earnings issuers and consisting of the highest include valuations of hard and potential or price potential been met credit quality available in line with intangible assets, how easily those or exceeded, or do better relative portfolio objectives may provide an assets can be converted to cash and valuation opportunities exist in the attractive return with limited risk to appropriateness to leverage those market? principal. assets. MARKET CONDITIONS AND YOUR FUND Our credit analysts review all holdings o Divisibility. This factor focuses on and prospective holdings. operating and corporate structures, Weakness in U.S. housing, manufacturing, ability to divide easily and retail and finance sectors, as well as the Key consideration is given to the efficiently, examination of non-core absence of properly functioning credit following: assets and valuation of multiple brand markets, all contributed to general names. economic weakness over the past year. o Management. Factors include direct Gross domestic product (GDP), the broadest operating experience in managing this o Sponsors. Considerations include the measure of overall U.S. economic activity, business, management depth and firm's track record of quality reflected a shrinking economy during each incentives and track record operating transactions, access to additional of the calendar quarters covered by this in a leveraged environment. capital and control or ownership of the report.(1) Shaken sponsoring firm. o Industry position and dynamics. Factors include the company's industry o Cash flow. We examine the firm's sales position, life cycle phase of the and earnings breakdown by product, indus- divisions and subsidiaries. We look at - ------------------------------------------ ------------------------------------------ ------------------------------------------ PORTFOLIO COMPOSITION+ TOP 10 FIXED INCOME ISSUERS* The Fund's holdings are subject to change, By credit quality rating based on total and there is no assurance that the Fund investments 1. First Data 2.7% will continue to hold any particular 2. Texas Competitive Electric 2.4 security. B 0.5% Holdings Co. Baa2 0.3 3. Lyondell Basell 2.2 + Source: S&P, Moody's, Fitch. This table Baa3 1.9 4. Charter Refinance 2.0 is calculated based on the highest Ba1 6.2 5. Georgia Pacific 2.0 rating assigned by one of these Ba2 16.6 6. Hexion Specialty Chemicals, Inc. 1.9 agencies to an individual security. A Ba3 29.5 7. Cequel Communication/Cebridge 1.8 credit rating is an assessment provided B1 19.1 8. Calpine Corp. 1.7 by a nationally recognized statistical B2 9.8 9. Dole Foods 1.7 rating organization (NRSRO) of the B3 1.4 10. Ashland Inc. 1.4 creditworthiness of an issuer with Caa1 2.0 ----------------------------------------- respect to debt obligations, including Caa2 1.1 Total Net Assets $381.7 million specific securities, money market Ca or lower 0.1 Total Number of Holdings* 654 instruments or other debts. Ratings are NR 3.4 measured on a scale that generally Equity 1.0 ranges from AAA (highest) to D Money Market Funds 7.1 (lowest); ratings are subject to change without notice. NR indicates the debtor was not rated, and should not be interpreted as indicating low quality. * Excluding money market fund holdings. 4 AIM FLOATING RATE FUND
investor confidence, volatility and During 2008, credit quality positioning TOM EWALD impaired liquidity characterized credit detracted from the Fund's performance markets over the period. relative to the benchmark. In addition, Portfolio manager, is the pace of redemptions resulted in a lead manager of AIM The U.S. Federal Reserve Board (the slight leveraging of the Fund as we were Floating Rate Fund. Mr. Fed) moved aggressively throughout the forced to borrow to meet immediate [EWALD Ewald joined Invesco in Fund's fiscal year to attempt to stimulate liquidity needs while waiting for the sale PHOTO] 2000 as a credit economic growth and enhance market of loans to close. In 2009, management's analyst and was liquidity. Between October and December commitment to remaining fully invested, as promoted to portfolio 2008, the federal funds target rate was well as a continued discipline of manager in 2001. lowered from 2.00% to the current range of investing in loans that we felt offered Prior to joining Invesco, Mr. Ewald was a zero to 0.25%.(2) In doing so, the Fed the best relative value, contributed portfolio manager at another firm. Mr. hoped to stimulate an economic recovery by positively to the Fund's relative Ewald earned an A.B. from Harvard College making money more available to consumers performance. and an M.B.A. from the Darden School of and businesses. Business at the University of Virginia. Having said that, there were some areas For bank loans, the 12 months ended where we made mistakes. While the Fund GREG STOECKLE August 31, 2009, was a tale of two benefited from its under-exposure to the markets. The bank loan market suffered auto sector in the second half of 2008, we Portfolio manager, is significant losses in the second half of failed to take advantage of the low prices manager of AIM Floating 2008 as credit markets remained frozen of these loans in 2009. In addition, our [STOECKLE Rate Fund. Mr. Stoeckle despite initiatives from the Fed, the U.S. investments in advertising-supported print PHOTO] joined Invesco in 1999 Treasury and governments around the world media companies continued to be and has held several to make financial markets function more challenging. At the same time, the Fund senior management normally again. Tremendous pressure on continued to add to some deeply discounted positions within the bank loan prices continued through the end positions in the chemical, broadcasting bank loan group. He began his investment of 2008 due to forced selling, hedge fund and travel sectors that have enjoyed career in 1987 as a credit analyst for redemptions and total return swaps and strong price appreciation of late. another firm. Mr. Stoeckle earned a B.S. collateral loan obligations unraveling. from Ursinus College and an M.B.A. from According to Standard and Poor's, the As always, we appreciate your continued Saint Joseph's University. average secondary bank loan price dropped participation in AIM Floating Rate Fund. to historical lows in December.(3) New loan issuance slowed considerably during (1) Bureau of Economic Analysis 2008, coming to a standstill in the fourth quarter as credit conditions worsened. (2) U.S. Federal Reserve As 2009 began, economic indicators (3) Standard and Poor's continued to deteriorate, but there was some evidence that the pace of the (4) J.P. Morgan economic downturn was slowing by early spring. Steadily improving technical The views and opinions expressed in indicators drove most of the financial management's discussion of Fund market gains, but heightened investor performance are those of Invesco Aim confidence in markets and speculation that Advisors, Inc. These views and opinions the economy may have hit bottom during the are subject to change at any time based on fourth quarter of 2008 provided further factors such as market and economic momentum to the rally. Liquidity improved conditions. These views and opinions may significantly in the later part of the not be relied upon as investment advice or first quarter of 2009, as asset flows into recommendations, or as an offer for a high yield bond and loan mutual funds particular security. The information is remained positive for 14 consecutive not a complete analysis of every aspect of weeks.(4) any market, country, industry, security or the Fund. Statements of fact are from This influx of cash was driven by the sources considered reliable, but Invesco prevailing view among investors that bank Aim Advisors, Inc. makes no representation loans were trading well below fair value. or warranty as to their completeness or In addition, a reduction in bank loan accuracy. Although historical performance supply was another key contributor to is no guarantee of future results, these performance within this asset class insights may help you understand our because the pace of loan prepayments investment management philosophy. accelerated. The prepayments primarily came from high yield bond takeouts, which See important Fund and index disclosures are used to refinance loans, as companies later in this report. replaced bank loans with high yield bonds. 5 AIM FLOATING RATE FUND
YOUR FUND'S LONG-TERM PERFORMANCE RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITH SALES CHARGES SINCE INCEPTION Index data from 4/30/97, Fund data from 5/1/97 [PERFORMANCE CHART]
AIM FLOATING BARCLAYS LIPPER LOAN RATE FUND- S&P/LSTA CAPITAL PARTICIPATION CLASS A LEVERAGED U.S. AGGREGATE FUNDS CATEGORY SHARES LOAN INDEX(2) INDEX(1) AVERAGE(1) ---------- ------------- -------------- -------------- 04/30/97 10000 10000 10000 05/97 9812 10060 10095 10070 06/97 9872 10142 10214 10133 07/97 9935 10195 10490 10198 08/97 10009 10258 10400 10260 09/97 10070 10298 10554 10322 10/97 10143 10333 10707 10392 11/97 10202 10377 10756 10452 12/97 10266 10456 10864 10532 01/98 10330 10524 11004 10597 02/98 10386 10596 10996 10650 03/98 10437 10682 11033 10708 04/98 10495 10759 11091 10769 05/98 10545 10827 11196 10840 06/98 10605 10879 11291 10906 07/98 10672 10891 11315 10969 08/98 10737 10850 11499 11020 09/98 10680 10769 11769 11050 10/98 10699 10844 11706 11103 11/98 10725 10950 11773 11160 12/98 10806 11005 11808 11239 01/99 10878 11043 11892 11308 02/99 10909 11026 11685 11366 03/99 10969 10954 11750 11435 04/99 11018 11022 11787 11507 05/99 11083 11159 11684 11565 06/99 11146 11247 11646 11633 07/99 11215 11317 11597 11698 08/99 11238 11320 11591 11738 09/99 11270 11231 11725 11795 10/99 11315 11248 11769 11845 11/99 11346 11319 11768 11913 12/99 11401 11407 11711 11977 01/00 11474 11505 11673 12052 02/00 11531 11558 11814 12136 03/00 11557 11496 11970 12157 04/00 11605 11533 11935 12217 05/00 11652 11627 11930 12299 06/00 11732 11712 12178 12386 07/00 11781 11806 12289 12473 08/00 11852 11842 12467 12543 09/00 11883 11874 12545 12596 10/00 11903 11871 12628 12614 11/00 11934 11914 12835 12617 12/00 11973 11976 13073 12678 01/01 12000 12105 13286 12756 02/01 12112 12225 13402 12816 03/01 12075 12229 13469 12801 04/01 12031 12211 13414 12750 05/01 12022 12350 13494 12842 06/01 12059 12363 13545 12854 07/01 12045 12458 13848 12921 08/01 12069 12550 14007 12995 09/01 12022 12342 14170 12847 10/01 11834 12221 14467 12718 11/01 11802 12371 14267 12825 12/01 11794 12476 14177 12918 01/02 11904 12539 14291 13007 02/02 11927 12502 14430 12970 03/02 12067 12651 14190 13102 04/02 12166 12798 14465 13204 05/02 12213 12811 14588 13233 06/02 12245 12685 14714 13126 07/02 12151 12571 14891 12943 08/02 12098 12530 15143 12876 09/02 12115 12538 15388 12849 10/02 12005 12390 15318 12712 11/02 12003 12564 15314 12864 12/02 12118 12714 15630 13019 01/03 12220 12869 15644 13130 02/03 12256 12925 15860 13175 03/03 12258 12976 15848 13269 04/03 12404 13129 15979 13488 05/03 12524 13272 16277 13673 06/03 12640 13433 16244 13843 07/03 12715 13523 15698 13920 08/03 12725 13553 15802 13970 09/03 12805 13682 16221 14109 10/03 12858 13807 16069 14242 11/03 12939 13896 16108 14348 12/03 12974 13982 16272 14449 01/04 13090 14103 16403 14607 02/04 13159 14147 16580 14635 03/04 13181 14198 16704 14686 04/04 13260 14267 16270 14755 05/04 13279 14284 16205 14754 06/04 13349 14372 16296 14850 07/04 13396 14419 16458 14904 08/04 13434 14445 16772 14937 09/04 13596 14505 16817 14991 10/04 13668 14578 16958 15070 11/04 13754 14643 16823 15157 12/04 13799 14704 16978 15230 01/05 13861 14764 17084 15286 02/05 13967 14843 16984 15383 03/05 14002 14905 16896 15412 04/05 14006 14894 17125 15398 05/05 13983 14903 17310 15409 06/05 14069 14999 17405 15516 07/05 14173 15113 17246 15636 08/05 14275 15204 17467 15724 09/05 14315 15265 17287 15785 10/05 14361 15312 17151 15810 11/05 14407 15370 17226 15871 12/05 14489 15451 17390 15954 01/06 14573 15558 17391 16070 02/06 14682 15656 17449 16179 03/06 14786 15751 17278 16279 04/06 14876 15828 17246 16373 05/06 14936 15868 17228 16401 06/06 14946 15912 17264 16435 07/06 15032 16002 17498 16525 08/06 15116 16101 17766 16643 09/06 15179 16187 17922 16725 10/06 15298 16295 18040 16849 11/06 15399 16381 18250 16953 12/06 15505 16497 18144 17082 01/07 15629 16641 18136 17236 02/07 15741 16756 18416 17368 03/07 15792 16823 18417 17440 04/07 15877 16923 18516 17547 05/07 15987 17026 18376 17661 06/07 16001 17064 18321 17668 07/07 15419 16492 18474 17034 08/07 15440 16531 18700 17047 09/07 15697 16854 18842 17357 10/07 15847 17015 19012 17495 11/07 15611 16779 19353 17192 12/07 15652 16831 19408 17216 01/08 15051 16288 19734 16652 02/08 14542 15880 19761 16176 03/08 14533 15865 19829 16134 04/08 15048 16452 19787 16732 05/08 15322 16607 19642 16912 06/08 15366 16648 19626 16897 07/08 15205 16521 19610 16724 08/08 15180 16500 19796 16689 09/08 14224 15485 19530 15795 10/08 12079 13438 19069 13673 11/08 11049 12295 19690 12735 12/08 10357 11933 20425 12372 01/09 11188 12817 20245 13208 02/09 11263 12917 20168 13341 03/09 11408 13103 20448 13468 04/09 12328 14242 20546 14428 05/09 13026 15111 20695 15074 06/09 13610 15774 20813 15605 07/09 14119 16521 21149 16195 08/09 14422 16895 21368 16447
(1) Lipper Inc. (2) Invesco Aim, Standard & Poor's Past performance cannot guarantee shown in the chart and table(s) does not one that indicates the dollar value of an comparable future results. reflect deduction of taxes a shareholder investment, is constructed with each would pay on Fund distributions or sale of segment representing a percent change in The data shown in the chart include Fund shares. the value of the investment. In this reinvested distributions, applicable sales chart, each segment represents a doubling, charges and Fund expenses including This chart, which is a logarithmic or 100% change, in the value of the management fees. Index results include chart, presents the fluctuations in the investment. In other words, the space reinvested dividends, but they do not value of the Fund and its indexes. We between $5,000 and $10,000 is the same reflect sales charges. Performance of the believe that a logarithmic chart is more size as the space between $10,000 and peer group reflects fund expenses and effective than other types of charts in $20,000, and so on. management fees; performance of a market illustrating changes in value during the index does not. Performance early years shown in the chart. The vertical axis, the 6 AIM FLOATING RATE FUND
AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS 1.74%, 1.49% AND 0.99%, RESPECTIVELY.(1) As of 8/31/09, including maximum As of 6/30/09, the most recent calendar THE TOTAL ANNUAL FUND OPERATING EXPENSE applicable sales charges quarter-end, including maximum applicable RATIO SET FORTH IN THE MOST RECENT FUND sales charges PROSPECTUS AS OF THE DATE OF THIS REPORT CLASS A SHARES FOR CLASS A, CLASS C, CLASS R AND CLASS Y Inception (5/1/97) 3.01% CLASS A SHARES SHARES WAS 1.25%, 1.75%, 1.50% AND 1.00%. 10 Years 2.27 Inception (5/1/97) 2.56% THE EXPENSE RATIOS PRESENTED ABOVE MAY 5 Years 0.92 10 Years 1.76 VARY FROM THE EXPENSE RATIOS PRESENTED IN 1 Year -7.29 5 Years -0.13 OTHER SECTIONS OF THIS REPORT THAT ARE 1 Year -13.67 BASED ON EXPENSES INCURRED DURING THE CLASS C SHARES PERIOD COVERED BY THIS REPORT. Inception (3/31/00) 2.00% CLASS C SHARES 5 Years 1.00 Inception (3/31/00) 1.40% CLASS A SHARE PERFORMANCE REFLECTS THE 1 Year -6.49 5 Years -0.05 MAXIMUM 2.50% SALES CHARGE AND CLASS C 1 Year -12.90 SHARE PERFORMANCE REFLECTS THE APPLICABLE CLASS R SHARES CONTINGENT DEFERRED SALES CHARGE (CDSC) 10 Years 2.46% CLASS R SHARES FOR THE PERIOD INVOLVED. THE CDSC ON CLASS 5 Years 1.29 10 Years 1.98% C SHARES IS 1% FOR THE FIRST YEAR AFTER 1 Year -5.19 5 Years 0.31 PURCHASE. CLASS R SHARES DO NOT HAVE A 1 Year -11.39 FRONT-END SALES CHARGE; RETURNS ARE SHOWN CLASS Y SHARES AT NET ASSET VALUE AND DO NOT REFLECT A 10 Years 2.54% CLASS Y SHARES 0.75% CDSC WHICH MAY BE IMPOSED ON A TOTAL 5 Years 1.44 10 Years 2.02% REDEMPTION OF RETIREMENT PLAN ASSETS 1 Year -4.94 5 Years 0.38 WITHIN THE FIRST YEAR. CLASS Y SHARES DO 1 Year -11.47 NOT HAVE A FRONT-END SALES CHARGE OR A AS OF THE CLOSE OF BUSINESS ON APRIL 13, CDSC; THEREFORE, PERFORMANCE IS AT NET 2006, THE FUND REORGANIZED FROM A ED CLASS A SHARE PERFORMANCE (FOR PERIODS ASSET VALUE. CLOSED-END FUND TO AN OPEN-END FUND. PRIOR TO THE INCEPTION DATE OF CLASS Y SHARES) AT NET ASSET VALUE. THE RESTATED THE PERFORMANCE OF THE FUND'S SHARE CLASS A AND C SHARE RETURNS PRIOR TO CLASS A SHARE PERFORMANCE REFLECTS THE CLASSES WILL DIFFER PRIMARILY DUE TO APRIL 13, 2006, ARE THE HISTORICAL RULE 12b-1 FEES APPLICABLE TO CLASS A DIFFERENT SALES CHARGE STRUCTURES AND PERFORMANCE OF THE CLOSED-END FUND'S CLASS SHARES AS WELL AS ANY FEE WAIVERS OR CLASS EXPENSES. B AND C SHARES, RESPECTIVELY. EXPENSE REIMBURSEMENTS RECEIVED BY CLASS A SHARES. CLASS A SHARES INCEPTION DATE IS A REDEMPTION FEE OF 2% WILL BE IMPOSED THE INCEPTION DATE FOR CLASS R SHARES MAY 1, 1997. ON CERTAIN REDEMPTIONS OR EXCHANGES OUT OF IS APRIL 13, 2006; RETURNS SINCE THAT DATE THE FUND WITHIN 31 DAYS OF PURCHASE. ARE HISTORICAL RETURNS. ALL OTHER RETURNS THE PERFORMANCE DATA QUOTED REPRESENT EXCEPTIONS TO THE REDEMPTION FEE ARE ARE BLENDED RETURNS OF HISTORICAL CLASS R PAST PERFORMANCE AND CANNOT GUARANTEE LISTED IN THE FUND'S PROSPECTUS. SHARES AND RESTATED PERFORMANCE OF THE COMPARABLE FUTURE RESULTS; CURRENT CLOSED-END FUND'S CLASS B SHARES (FOR THE PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE HAD THE ADVISOR NOT WAIVED FEES AND/ OR PERIODS PRIOR TO THE INCEPTION DATE OF THE VISIT INVESCOAIM.COM FOR THE MOST RECENT REIMBURSED EXPENSES IN THE PAST, OPEN-END FUND'S CLASS R SHARES) AT NAV AND MONTH-END PERFORMANCE. PERFORMANCE FIGURES PERFORMANCE WOULD HAVE BEEN LOWER. REFLECT THE HIGHER ANNUAL MANAGEMENT FEES REFLECT FUND EXPENSES, THE REINVESTMENT OF AND 0.25% ANNUAL 12b-1 FEES APPLICABLE TO DISTRIBUTIONS, AND CHANGES IN NET ASSET (1) Total annual operating expenses less THE CLOSED-END FUND'S CLASS B SHARES. THE VALUE. INVESTMENT RETURN AND PRINCIPAL any contractual fee waivers and/or CLOSED-END FUND'S CLASS B SHARE INCEPTION WILL FLUCTUATE SO THAT YOU MAY HAVE A GAIN expense reimbursements by the advisor DATE IS MAY 1, 1997. OR LOSS WHEN YOU SELL SHARES. in effect through at least June 30, 2010. See current prospectus for more CLASS Y SHARES' INCEPTION DATE IS THE NET ANNUAL FUND OPERATING EXPENSE information. OCTOBER 3, 2008; RETURNS SINCE THAT DATE RATIO SET FORTH IN THE MOST RECENT FUND ARE ACTUAL RETURNS. ALL OTHER RETURNS ARE PROSPECTUS AS OF THE DATE OF THIS REPORT BLENDED RETURNS OF ACTUAL CLASS Y SHARE FOR CLASS A, CLASS C, CLASS R AND CLASS Y PERFORMANCE AND RESTAT- SHARES WAS 1.24%, 7 AIM FLOATING RATE FUND
AIM FLOATING RATE FUND'S INVESTMENT OBJECTIVES ARE TO PROVIDE A HIGH LEVEL OF CURRENT INCOME AND, SECONDARILY, PRESERVATION OF CAPITAL. o Unless otherwise stated, information presented in this report is as of August 31, 2009, and is based on total net assets. o Unless otherwise noted, all data provided by Invesco Aim. ABOUT SHARE CLASSES subject to counterparty risk -- the o The LIPPER LOAN PARTICIPATION FUNDS risk that the other party will not CATEGORY AVERAGE represents an average o As of the close of business on April complete the transaction with the Fund. of all of the funds in the Lipper Loan 13, 2006, AIM Floating Rate Fund Participation Funds category. These reorganized from a Closed-End Fund to o Leveraging entails risks such as funds invest primarily in participation an Open-End Fund. Information presented magnifying changes in the value of the interests in collateralized senior for Class A shares prior to the portfolio's securities. corporate loans that have floating or reorganization includes financial data variable rates. for Class B shares of the Closed-End o A majority of the Fund's assets are Fund. Information presented for Class C likely to be invested in loans and o The Fund is not managed to track the shares prior to the reorganization securities that are less liquid than performance of any particular index, includes financial data for Class C those rated on national exchanges. including the indexes defined here, and shares of the Closed-End Fund. consequently, the performance of the o There is no guarantee that the Fund may deviate significantly from the o On July 27, 2006, all Class B1 shares investment techniques and risk analysis performance of the indexes. converted into Class A shares. used by the Fund's portfolio managers will produce the desired results. o A direct investment cannot be made in o Class R shares are available only to an index. Unless otherwise indicated, certain retirement plans. Please see o The prices of securities held by the index results include reinvested the prospectus for more information. Fund may decline in response to market dividends, and they do not reflect risks. sales charges or fund expenses. o Class Y shares are available only to certain investors. Please see the o Non-diversification increases the risk OTHER INFORMATION prospectus for more information. that the value of the Fund's shares may vary more widely, and the Fund may be o The returns shown in management's PRINCIPAL RISKS OF INVESTING IN THE FUND subject to greater investment and discussion of Fund performance are credit risk than if it invested more based on net asset values calculated o Credit risk is the risk of loss on an broadly. for shareholder transactions. Generally investment due to the deterioration of accepted accounting principles require an issuer's financial health. Such a o The ability of an issuer of a floating adjustments to be made to the net deterioration of financial health may rate loan or debt security to repay assets of the Fund at period end for result in a reduction of the credit principal prior to maturity can limit financial reporting purposes, and as rating of the issuer's securities and the potential for gains by the Fund. such, the net asset values for may lead to the issuer's inability to shareholder transactions and the honor its contractual obligations, o To the extent that the Fund is returns based on those net asset values including making timely payment of concentrated in securities of issuers may differ from the net asset values interest and principal. in the banking and financial services and returns reported in the Financial industries, the Fund's performance will Highlights. o Foreign securities have additional depend to a greater extent on the risks including exchange rate changes, overall condition of those industries. o Industry classifications used in this political and economic upheaval, the The value of these securities can be report are generally according to the relative lack of information, sensitive to changes in government Global Industry Classification relatively low market liquidity and the regulation, interest rates and economic Standard, which was developed by and is potential lack of strict financial and downturns in the U.S. and abroad. the exclusive property and a service accounting controls and standards. mark of MSCI Inc. and Standard & ABOUT INDEXES USED IN THIS REPORT Poor's. o Interest rate risk refers to the risk that bond prices generally fall as o The BARCLAYS CAPITAL U.S. AGGREGATE interest rates rise and vice versa. INDEX covers U.S. investment-grade fixed-rate bonds with components for o The Fund may use enhanced investment government and corporate securities, techniques such as derivatives. The mortgage pass-throughs and asset-backed principal risk of derivatives is that securities. the fluctuations in their values may not correlate perfectly with the o The S&P/LSTA LEVERAGED LOAN INDEX overall securities markets. Derivatives tracks the current outstanding balance are and spread over the London Interbank Offered Rate (Libor) for fully funded term loans. THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class A Shares AFRAX Class C Shares AFRCX NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE Class R Shares AFRRX Class Y Shares AFRYX 8 AIM FLOATING RATE FUND
SCHEDULE OF INVESTMENTS(a) August 31, 2009
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ---------------------------------------------------------------------------------------- SENIOR SECURED FLOATING RATE INTERESTS-97.23%(b)(c) ADVERTISING-0.07% Valassis Communications, Inc. Delay Draw Term Loan 2.02% 03/02/14 $ 69,240 $ 65,605 - ---------------------------------------------------------------------------------------- Term Loan B 2.02% 03/02/14 208,796 197,834 ======================================================================================== 263,439 ======================================================================================== AEROSPACE & DEFENSE-2.55% Aero Technology Supply, Term Loan(d) 7.37% 10/16/14 827,872 173,853 - ---------------------------------------------------------------------------------------- Alion Science & Technology Corp., Term Loan 9.50% 02/06/13 1,710,865 1,467,067 - ---------------------------------------------------------------------------------------- Dubai Aerospace Enterprise Term Loan B1 4.24% 07/31/14 270,718 224,696 - ---------------------------------------------------------------------------------------- Term Loan B2 4.09-4.24% 07/31/14 265,522 220,383 - ---------------------------------------------------------------------------------------- Hawker Beechcraft Corp. Syn LOC 2.60% 03/26/14 280,694 206,622 - ---------------------------------------------------------------------------------------- Term Loan 2.26-2.60% 03/26/14 4,689,422 3,451,931 - ---------------------------------------------------------------------------------------- McKechnie Aerospace First Lien Term Loan 2.27% 05/11/14 544,323 488,078 - ---------------------------------------------------------------------------------------- Second Lien Term Loan 5.27% 05/11/15 141,300 86,193 - ---------------------------------------------------------------------------------------- Sequa Corp., Term Loan B 3.65-3.88% 12/03/14 313,552 265,475 - ---------------------------------------------------------------------------------------- Spirit Aerosystems, Inc., Term Loan B1 2.26% 09/30/13 2,538,928 2,450,065 - ---------------------------------------------------------------------------------------- Vought Aircraft Industries, Inc., Incremental Term Loan 7.50% 12/22/11 320,923 316,109 - ---------------------------------------------------------------------------------------- Wesco Aircraft Hardware Corp., Term Loan 2.52% 09/29/13 413,329 378,712 ======================================================================================== 9,729,184 ======================================================================================== ALTERNATIVE CARRIERS-1.43% Iridium LLC/Capital Corp. First Lien Term Loan A 5.50% 06/30/10 495,543 490,588 - ---------------------------------------------------------------------------------------- Second Lien Term Loan 9.50% 07/31/12 149,800 134,820 - ---------------------------------------------------------------------------------------- Level 3 Communications, Inc. Add On Term Loan B 11.50% 03/13/14 204,533 210,286 - ---------------------------------------------------------------------------------------- Term Loan 2.52-2.76% 03/13/14 5,403,226 4,629,916 ======================================================================================== 5,465,610 ======================================================================================== ALUMINUM-0.12% Noranda Aluminum, Inc., Term Loan B 2.27% 05/18/14 625,149 460,735 ======================================================================================== APPAREL RETAIL-0.04% Mothers Work Inc., Term Loan B 2.77-3.01% 03/13/13 157,268 139,182 ======================================================================================== AUTO PARTS & EQUIPMENT-2.19% Dana Holding Corp., Term Loan(e) -- 01/30/15 2,000,000 1,532,500 - ---------------------------------------------------------------------------------------- Term Loan 7.25% 01/30/15 1,000,000 766,250 - ---------------------------------------------------------------------------------------- Dayco Products LLC Second Lien Term Loan(d) 9.02-10.35% 12/31/11 1,269,223 12,692 - ---------------------------------------------------------------------------------------- Term Loan B(d) 6.06-8.75% 06/21/11 301,405 124,580 - ----------------------------------------------------------------------------------------
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 9 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ---------------------------------------------------------------------------------------- AUTO PARTS & EQUIPMENT-(CONTINUED) Federal-Mogul Corp. Delay Draw Term Loan C 2.22% 12/27/15 $1,094,500 $ 820,196 - ---------------------------------------------------------------------------------------- Term Loan B 2.19-2.22% 12/27/14 3,908,982 2,929,315 - ---------------------------------------------------------------------------------------- Term Loan C2 2.21-2.22% 12/27/15 342,751 256,850 - ---------------------------------------------------------------------------------------- Goodyear Tire & Rubber Co. (The), Second Lien Term Loan 2.02% 04/30/10 1,400,000 1,299,900 - ---------------------------------------------------------------------------------------- Pep Boys-Manny, Moe & Jack (The), Term Loan 2.67% 10/27/13 40,757 37,088 - ---------------------------------------------------------------------------------------- Veyance Technologies, Inc. First Lien Delay Draw Term Loan 2.53% 07/31/14 107,957 505,518 - ---------------------------------------------------------------------------------------- First Lien Term Loan 2.53% 07/31/14 716,406 76,178 ======================================================================================== 8,361,067 ======================================================================================== AUTOMOBILE MANUFACTURERS-0.78% TRW Automotive Holdings Corp. Term Loan B1(e) -- 02/09/14 1,000,000 994,290 - ---------------------------------------------------------------------------------------- Term Loan B1 6.31% 02/09/14 2,000,000 1,988,580 ======================================================================================== 2,982,870 ======================================================================================== AUTOMOTIVE RETAIL-0.26% KAR Holdings, Inc., Term Loan B 2.52% 10/21/13 1,078,516 1,012,457 ======================================================================================== BROADCASTING-9.81% Cequel Communications, LLC First Lien Term Loan 2.27-4.25% 11/05/13 2,707,505 2,558,592 - ---------------------------------------------------------------------------------------- Second Lien PIK Term Loan B 6.27-6.28% 05/05/14 1,183,810 1,087,129 - ---------------------------------------------------------------------------------------- Second Lien Term Loan A 4.78% 05/05/14 3,630,067 3,279,765 - ---------------------------------------------------------------------------------------- Charter Communications, Inc., Term Loan Refinance 6.25% 03/06/14 8,347,882 7,746,167 - ---------------------------------------------------------------------------------------- Citadel Communication Corp., Term Loan B 2.33-2.35% 06/12/14 967,286 546,168 - ---------------------------------------------------------------------------------------- CSC Holdings Incremental Term Loan B 2.02-2.07% 03/29/13 680,857 656,659 - ---------------------------------------------------------------------------------------- Incremental Term Loan B2 2.02-2.07% 03/29/16 1,482,630 1,460,079 - ---------------------------------------------------------------------------------------- CW Media Holdings, Term Loan B 3.85% 02/16/15 592,094 510,314 - ---------------------------------------------------------------------------------------- Discovery (The), Term Loan C 5.25% 05/14/14 1,488,587 1,507,194 - ---------------------------------------------------------------------------------------- Gray Television Inc., Term Loan B 3.78% 12/31/14 174,356 126,263 - ---------------------------------------------------------------------------------------- Hargray Communications Group, Inc., Term Loan B 2.72% 06/27/14 152,368 140,178 - ---------------------------------------------------------------------------------------- Insight Communications Co., Inc., Term Loan B 2.28% 04/06/14 1,164,360 1,117,786 - ---------------------------------------------------------------------------------------- Intelsat, Ltd. Term Loan B2-A 2.78% 01/03/14 734,857 696,740 - ---------------------------------------------------------------------------------------- Term Loan B2-B 2.78% 01/03/14 734,633 696,528 - ---------------------------------------------------------------------------------------- Term Loan B2-C 2.78% 01/03/14 734,633 696,528 - ---------------------------------------------------------------------------------------- Ion Media Networks, Inc. (Paxson Communications) DIP Term Loan(f) 0% 02/28/10 124,027 136,430 - ---------------------------------------------------------------------------------------- DIP Term Loan 15.00% 02/28/10 248,054 272,860 - ---------------------------------------------------------------------------------------- Term Loan(d) 4.38% 01/15/12 2,801,171 485,527 - ---------------------------------------------------------------------------------------- Local TV LLC, Term Loan B 2.27% 05/07/13 914,538 612,741 - ----------------------------------------------------------------------------------------
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 10 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ---------------------------------------------------------------------------------------- BROADCASTING-(CONTINUED) Mediacom Communications Corp. Add on Term Loan(f) 0% 09/30/12 $3,206,561 $3,026,192 - ---------------------------------------------------------------------------------------- Term Loan A 1.76% 03/31/10 51,042 50,149 - ---------------------------------------------------------------------------------------- Term Loan D1 2.01% 01/31/15 2,022,970 1,909,178 - ---------------------------------------------------------------------------------------- Term Loan D2 2.01% 01/31/15 279,791 264,053 - ---------------------------------------------------------------------------------------- Term Loan E 6.50% 01/03/16 1,086,980 1,087,882 - ---------------------------------------------------------------------------------------- New Vision Television DIP Term Loan(f) 0% 02/28/10 161,467 159,853 - ---------------------------------------------------------------------------------------- DIP Term Loan 13.00% 02/28/10 215,290 213,137 - ---------------------------------------------------------------------------------------- First Lien Term Loan B(d) 5.25% 11/01/13 163,883 40,971 - ---------------------------------------------------------------------------------------- Second Lien Term Loan(d) 8.75% 11/01/14 450,000 4,500 - ---------------------------------------------------------------------------------------- Term Loan(d) 5.25% 11/01/13 33,617 8,404 - ---------------------------------------------------------------------------------------- NextMedia Operating, Inc. Delay Draw Term Loan 8.25% 11/15/12 177,265 125,858 - ---------------------------------------------------------------------------------------- Second Lien Term Loan(d) 1.00% 11/15/13 223,907 21,271 - ---------------------------------------------------------------------------------------- Term Loan 8.25% 11/15/12 431,410 306,301 - ---------------------------------------------------------------------------------------- NTL Investment Holding Ltd., Term Loan B-4 2.46% 09/03/12 131,327 124,104 - ---------------------------------------------------------------------------------------- Univision Communications Inc., Term Loan 2.51% 09/29/14 6,968,800 5,445,351 - ---------------------------------------------------------------------------------------- WaveDivision Holdings, LLC, Term Loan B 2.95% 06/30/14 381,392 347,067 ======================================================================================== 37,467,919 ======================================================================================== BUILDING PRODUCTS-0.71% Building Materials Corp. of America, Term Loan B 3.06% 02/22/14 2,626,091 2,399,591 - ---------------------------------------------------------------------------------------- Champion Window Manufacturing Inc., Term Loan 4.24% 05/11/13 478,926 232,279 - ---------------------------------------------------------------------------------------- United Subcontractors, Inc., Term Loan 2.10% 06/30/15 107,421 91,308 ======================================================================================== 2,723,178 ======================================================================================== CASINOS & GAMING-2.58% BLB Investors, LLC, First Lien Term Loan 4.75% 07/18/11 887,867 506,084 - ---------------------------------------------------------------------------------------- Cannery Casino Delay Draw Term Loan 2.53% 05/18/13 913,749 815,521 - ---------------------------------------------------------------------------------------- Second Lien Term Loan 4.52% 05/18/14 84,000 62,790 - ---------------------------------------------------------------------------------------- Term Loan B 2.52% 05/18/13 557,161 497,266 - ---------------------------------------------------------------------------------------- Green Valley Ranch First Lien Term Loan B 2.54-4.00% 02/16/14 218,580 154,372 - ---------------------------------------------------------------------------------------- Second Lien Term Loan 3.88% 08/16/14 369,000 71,033 - ---------------------------------------------------------------------------------------- Harrah's Operating Co., Inc. Term Loan B1 3.50% 01/28/15 2,645,205 2,127,273 - ---------------------------------------------------------------------------------------- Term Loan B2 3.50% 01/28/15 2,636,103 2,127,546 - ---------------------------------------------------------------------------------------- Term Loan B3 3.50-3.60% 01/28/15 299,627 241,388 - ---------------------------------------------------------------------------------------- Las Vegas Sands Corp. Delay Draw Term Loan 1 2.09% 05/23/14 685,695 533,985 - ---------------------------------------------------------------------------------------- Delay Draw Term Loan 2 2.09% 05/23/13 464,291 361,567 - ---------------------------------------------------------------------------------------- Term Loan B 2.09% 05/23/14 3,035,901 2,364,208 ======================================================================================== 9,863,033 ========================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 11 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- COAL & CONSUMABLE FUELS-0.26% Oxbow Carbon LLC Delay Draw Term Loan 2.26% 05/08/14 $ 155,682 $ 144,006 - ------------------------------------------------------------------------------------------- Term Loan B 2.26-2.60% 05/08/14 901,151 833,564 =========================================================================================== 977,570 =========================================================================================== COMMERCIAL PRINTING-1.22% Aster Sr. Flint Inc. Term Loan B5 4.01% 12/31/12 795,787 551,584 - ------------------------------------------------------------------------------------------- Term Loan C5 4.01% 12/31/13 813,772 567,102 - ------------------------------------------------------------------------------------------- Cenveo, Inc. Delay Draw Term Loan 5.11% 06/21/13 111,924 108,147 - ------------------------------------------------------------------------------------------- Term Loan C 5.11% 06/21/13 3,571,207 3,450,679 =========================================================================================== 4,677,512 =========================================================================================== COMMODITY CHEMICALS-3.75% Ashland Inc., Term Loan B 7.65% 05/13/14 5,370,284 5,473,233 - ------------------------------------------------------------------------------------------- LyondellBasell Industries Credit Linked Notes (Acquired 12/20/05; Cost $2,200,000) 3.31% 12/20/09 2,200,000 1,790,318 - ------------------------------------------------------------------------------------------- DIP Roll-Up(e) -- 12/15/09 2,262,378 2,104,962 - ------------------------------------------------------------------------------------------- DIP Roll-Up 5.80-6.56% 12/15/09 1,130,420 1,051,766 - ------------------------------------------------------------------------------------------- DIP NM Term Loan(f) 0% 12/15/09 218,583 226,917 - ------------------------------------------------------------------------------------------- DIP NM Term Loan 13.00% 12/15/09 437,367 454,044 - ------------------------------------------------------------------------------------------- Dutch Revolving Credit Loan(e) -- 12/22/14 66,409 32,042 - ------------------------------------------------------------------------------------------- Dutch Revolving Credit Loan 3.77% 12/22/14 29,504 14,236 - ------------------------------------------------------------------------------------------- Dutch Term Loan A(e) -- 12/22/14 154,263 74,432 - ------------------------------------------------------------------------------------------- Dutch Term Loan A 3.77% 12/22/14 68,536 33,069 - ------------------------------------------------------------------------------------------- Germany Term Loan B1(e) -- 12/22/14 190,653 91,990 - ------------------------------------------------------------------------------------------- Germany Term Loan B1 4.02% 12/22/14 84,703 40,869 - ------------------------------------------------------------------------------------------- Germany Term Loan B2(e) -- 12/22/14 190,653 91,990 - ------------------------------------------------------------------------------------------- Germany Term Loan B2 4.02% 12/22/14 84,703 40,869 - ------------------------------------------------------------------------------------------- Germany Term Loan B3(e) -- 12/22/14 190,653 91,990 - ------------------------------------------------------------------------------------------- Germany Term Loan B3 4.02% 12/22/14 84,703 40,869 - ------------------------------------------------------------------------------------------- U.S. Revolving Credit Loan(e) -- 12/22/14 249,032 120,158 - ------------------------------------------------------------------------------------------- U.S. Revolving Credit Loan 3.77% 12/22/14 110,640 53,384 - ------------------------------------------------------------------------------------------- U.S. Term Loan A(e) -- 12/22/14 474,477 228,935 - ------------------------------------------------------------------------------------------- U.S. Term Loan A 3.77% 12/22/14 210,801 101,712 - ------------------------------------------------------------------------------------------- U.S. Term Loan B1(e) -- 12/22/14 827,296 399,170 - ------------------------------------------------------------------------------------------- U.S. Term Loan B1 7.00% 12/22/14 367,552 177,344 - ------------------------------------------------------------------------------------------- U.S. Term Loan B2(e) -- 12/22/14 827,296 399,170 - ------------------------------------------------------------------------------------------- U.S. Term Loan B2 7.00% 12/22/14 367,552 177,344 - ------------------------------------------------------------------------------------------- U.S. Term Loan B3(e) -- 12/22/14 827,296 399,170 - ------------------------------------------------------------------------------------------- U.S. Term Loan B3 7.00% 12/22/14 367,552 177,344 - ------------------------------------------------------------------------------------------- Univar Corp., Term Loan B 3.26% 10/10/14 453,575 414,114 =========================================================================================== 14,301,441 ===========================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 12 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT-1.86% Consolidated Communications, Inc., Term Loan B 2.77% 12/31/14 $ 1,500,000 $ 1,376,250 - ------------------------------------------------------------------------------------------- General Communication Inc., Term Loan 4.52% 08/31/12 419,439 402,662 - ------------------------------------------------------------------------------------------- NTELOS Holdings Corporations, Term Loan B 5.75% 08/07/15 5,063,881 5,053,753 - ------------------------------------------------------------------------------------------- One Communications Corp., First Lien Term Loan 4.31-6.25% 06/30/12 313,545 279,055 =========================================================================================== 7,111,720 =========================================================================================== COMPUTER HARDWARE-0.04% Quantum Corp., Term Loan B 4.10% 07/12/14 187,479 165,684 =========================================================================================== CONSTRUCTION & AGRICULTURAL MACHINERY-0.71% Manitowoc Company, Inc. (The), Term Loan B 7.50% 11/06/14 2,993,137 2,713,278 =========================================================================================== CONSTRUCTION MATERIALS-0.05% Hillman Group (The), Term Loan B-2 4.91% 03/31/12 187,402 183,419 =========================================================================================== DATA PROCESSING & OUTSOURCED SERVICES-2.85% Affiliated Computer Services, Inc. Delay Draw Term Loan 2.26-2.28% 03/20/13 199,871 195,500 - ------------------------------------------------------------------------------------------- Term Loan B 2.26% 03/20/13 44,014 43,052 - ------------------------------------------------------------------------------------------- First Data Corp. Term Loan B2 3.01-3.02% 09/24/14 11,128,623 9,266,025 - ------------------------------------------------------------------------------------------- Term Loan B3 3.01-3.02% 09/24/14 960,671 797,684 - ------------------------------------------------------------------------------------------- Metavante Technologies, Inc., Term Loan B 2.23% 11/01/14 603,047 596,516 =========================================================================================== 10,898,777 =========================================================================================== DIVERSIFIED CHEMICALS-0.22% Celanese US Holdings LLC Prefunded LOC 0.28% 04/02/13 365,939 348,729 - ------------------------------------------------------------------------------------------- Term Loan 2.35% 04/02/14 351,844 335,297 - ------------------------------------------------------------------------------------------- Texas Petrochemicals L.P. Incremental Term Loan B 2.81% 06/27/13 55,273 39,797 - ------------------------------------------------------------------------------------------- Term Loan B 2.81% 06/27/13 163,757 117,905 =========================================================================================== 841,728 =========================================================================================== DIVERSIFIED METALS & MINING-0.44% Novelis Inc. Canada Term Loan 2.27% 07/06/14 406,681 368,217 - ------------------------------------------------------------------------------------------- U.S. Term Loan 2.27-2.60% 07/06/14 1,442,526 1,306,092 =========================================================================================== 1,674,309 =========================================================================================== DIVERSIFIED REAL ESTATE ACTIVITIES-1.15% Lake Las Vegas Resort DIP Facilities Loan 9.76% 12/31/09 664,569 332,285 - ------------------------------------------------------------------------------------------- Mezzanine Loan(d) 20.00% 10/01/09 4,598 155 - ------------------------------------------------------------------------------------------- Tranche(d) 14.35% 12/22/12 268,336 7,379 - ------------------------------------------------------------------------------------------- Tranches 1 & 2(d) 14.35% 12/22/12 2,704,553 74,375 - ------------------------------------------------------------------------------------------- RE/MAX International, Inc., Term Loan B1 3.78-4.01% 12/17/12 561,983 542,314 - -------------------------------------------------------------------------------------------
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 13 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- DIVERSIFIED REAL ESTATE ACTIVITIES-(CONTINUED) Realogy Corporation Credit Link Term Loan(e) -- 10/10/13 $ 312,340 $ 238,356 - ------------------------------------------------------------------------------------------- Credit Link Term Loan 0.11% 10/10/13 423,165 322,930 - ------------------------------------------------------------------------------------------- Delay Draw Term Loan(e) -- 10/10/13 500,000 381,565 - ------------------------------------------------------------------------------------------- Delay Draw Term Loan 3.28-3.53% 10/10/13 493,144 376,333 - ------------------------------------------------------------------------------------------- Term Loan B(e) -- 10/10/13 1,160,120 885,322 - ------------------------------------------------------------------------------------------- Term Loan B 3.28% 10/10/13 1,571,749 1,199,449 - ------------------------------------------------------------------------------------------- Yellowstone Mountain Club, LLC, Term Loan 6.00% 07/16/14 53,333 37,200 =========================================================================================== 4,397,663 =========================================================================================== DIVERSIFIED REITS-0.15% Capital Automotive REIT, Term Loan B 2.04% 12/16/10 687,106 568,580 =========================================================================================== DIVERSIFIED SUPPORT SERVICES-1.41% Aspect Software, Inc., First Lien Term Loan 3.31% 07/11/11 213,751 190,238 - ------------------------------------------------------------------------------------------- Bankruptcy Management Solutions, Inc. First Lien Term Loan 4.27% 07/28/12 60,496 34,483 - ------------------------------------------------------------------------------------------- Second Lien Term Loan 6.51% 07/28/13 35,658 7,399 - ------------------------------------------------------------------------------------------- Brock Holdings III, Inc., Term Loan B 2.85-4.50% 02/26/14 424,067 335,013 - ------------------------------------------------------------------------------------------- Central Parking Corp. Second Lien Term Loan 4.81% 11/22/14 25,522 12,506 - ------------------------------------------------------------------------------------------- Syn LOC 0.23% 05/22/14 63,036 47,277 - ------------------------------------------------------------------------------------------- Term Loan B 2.56% 05/22/14 140,849 104,228 - ------------------------------------------------------------------------------------------- Merrill Corp., Term Loan 8.50% 05/15/11 2,270,040 1,679,829 - ------------------------------------------------------------------------------------------- N.E.W. Customer Service, Term Loan B 2.76-2.78% 05/22/14 1,847,578 1,722,867 - ------------------------------------------------------------------------------------------- Nuance Communications, Inc. Revolver Loan(f) 0% 04/01/12 121,000 111,922 - ------------------------------------------------------------------------------------------- Term Loan B 2.27% 04/01/13 394,194 376,948 - ------------------------------------------------------------------------------------------- Production Resources, Inc., Term Loan B 3.81% 08/15/14 1,007,762 775,977 =========================================================================================== 5,398,687 =========================================================================================== DRUG RETAIL-0.34% General Nutrition Centers, Inc., Term Loan B 2.52-2.85% 09/16/13 1,248,035 1,152,872 - ------------------------------------------------------------------------------------------- MAPCO Express, Inc., Term Loan 5.75% 04/28/11 83,053 74,748 - ------------------------------------------------------------------------------------------- Pantry, Inc. (The) Delay Draw Term Loan 1.77% 05/15/14 21,261 19,879 - ------------------------------------------------------------------------------------------- Term Loan B 1.77% 05/15/14 74,287 69,458 =========================================================================================== 1,316,957 =========================================================================================== EDUCATION SERVICES-0.06% Bright Horizons Family Solutions, Inc., Term Loan B 7.50% 05/28/15 247,252 239,217 =========================================================================================== ELECTRIC UTILITIES-5.87% AES Corp. Syn LOC 6.52% 03/29/10 583,091 569,679 - ------------------------------------------------------------------------------------------- Syn LOC Term Loan B 6.52% 03/29/10 20,344 19,876 - ------------------------------------------------------------------------------------------- Bicent Power LLC, Second Lien Term Loan 4.60% 07/10/14 250,400 150,240 - ------------------------------------------------------------------------------------------- Calpine Corp., First Priority Term Loan 3.48% 03/29/14 7,197,841 6,609,130 - -------------------------------------------------------------------------------------------
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 14 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- DIVERSIFIED REAL ESTATE ACTIVITIES-(CONTINUED) Dynegy Holdings Inc. Loan C 4.02% 04/02/13 $ 834,122 $ 804,669 - ------------------------------------------------------------------------------------------- Term Loan B 4.02% 04/02/13 172,914 166,809 - ------------------------------------------------------------------------------------------- Energy Investor Funds (USPF Holdings), Term Loan 2.02% 04/11/14 213,500 198,555 - ------------------------------------------------------------------------------------------- Kelson Finance LLC, Term Loan 3.85% 03/08/13 322,326 282,197 - ------------------------------------------------------------------------------------------- NE Energy, Inc. Second Lien Term Loan 5.13% 05/01/14 315,000 244,125 - ------------------------------------------------------------------------------------------- Syn LOC 0.48% 11/01/13 92,351 85,039 - ------------------------------------------------------------------------------------------- Term Loan B 3.13% 11/01/13 675,754 622,254 - ------------------------------------------------------------------------------------------- NRG Energy, Inc. Syn LOC 0.50% 02/01/13 1,025,718 967,919 - ------------------------------------------------------------------------------------------- Term Loan B 2.01-2.35% 02/01/13 1,903,828 1,796,548 - ------------------------------------------------------------------------------------------- NSG Holdings II, LLC Syn LOC 2.13% 06/15/14 38,265 35,587 - ------------------------------------------------------------------------------------------- Term Loan 2.13% 06/15/14 183,019 170,207 - ------------------------------------------------------------------------------------------- Texas Competitive Electric Holdings Co. LLC Delay Draw Term Loan 3.78% 10/10/14 8,096,866 6,094,187 - ------------------------------------------------------------------------------------------- Term Loan B2 3.78-3.79% 10/10/14 3,929,455 2,980,727 - ------------------------------------------------------------------------------------------- TPF Generation Holdings, LLC First Lien Term Loan 0.50% 12/15/11 30,618 28,858 - ------------------------------------------------------------------------------------------- Second Lien Term Loan 4.51% 12/15/14 267,000 225,116 - ------------------------------------------------------------------------------------------- Syn LOC D 0.50% 12/15/13 97,672 92,126 - ------------------------------------------------------------------------------------------- Term Loan 2.26% 12/15/13 278,076 262,485 =========================================================================================== 22,406,333 =========================================================================================== ELECTRICAL COMPONENTS & EQUIPMENT-0.14% Aeroflex Inc., Term Loan B1 3.56-3.75% 08/15/14 316,935 287,882 - ------------------------------------------------------------------------------------------- Crown Castle International Corp., Term Loan B 1.76% 03/06/14 282,693 267,772 =========================================================================================== 555,654 =========================================================================================== ELECTRONIC MANUFACTURING SERVICES-0.06% Sorenson Communications, Inc., First Lien Term Loan 2.76% 08/16/13 224,761 212,961 =========================================================================================== ENVIRONMENTAL & FACILITIES SERVICES-0.05% Covanta Holding Corp. Syn LOC 0.50% 02/09/14 84,652 81,224 - ------------------------------------------------------------------------------------------- Term Loan B 1.81% 02/09/14 129,677 124,425 =========================================================================================== 205,649 =========================================================================================== FOOD DISTRIBUTORS-3.28% Advanced Food Company, Inc. Delay Draw Term Loan 2.02% 03/16/14 86,280 81,103 - ------------------------------------------------------------------------------------------- Second Lien Term Loan 4.52% 09/16/14 1,233,357 925,018 - ------------------------------------------------------------------------------------------- Term Loan B 2.02% 03/16/14 998,970 939,032 - ------------------------------------------------------------------------------------------- Bolthouse Farms (Wm.), Inc., Term Loan 2.66% 12/17/12 95,816 92,942 - ------------------------------------------------------------------------------------------- Dean Foods Co. Term Loan A 0.90-1.23% 04/02/12 288,750 276,117 - ------------------------------------------------------------------------------------------- Term Loan B 1.65-1.98% 04/02/14 806,365 770,079 - -------------------------------------------------------------------------------------------
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 15 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- DIVERSIFIED REAL ESTATE ACTIVITIES-(CONTINUED) Pinnacle Foods Group, Inc. (Aurora Foods) Revolver Loan 3.03% 04/02/13 $ 45,600 $ 29,640 - ------------------------------------------------------------------------------------------- Revolver Loan(f) 0% 04/02/13 930,400 604,760 - ------------------------------------------------------------------------------------------- Revolver Term Loan 3.03% 04/02/13 24,000 15,600 - ------------------------------------------------------------------------------------------- Term Loan B 3.01-3.03% 04/02/14 4,410,051 4,068,271 - ------------------------------------------------------------------------------------------- Wrigley Jr. (Wm.) Co., Term Loan B 6.50% 10/06/14 4,671,877 4,728,920 =========================================================================================== 12,531,482 =========================================================================================== FOOD RETAIL-0.00% Quizno's Corp. (The), First Lien Term Loan B 2.88% 05/05/13 13,469 10,034 =========================================================================================== FOREST PRODUCTS-2.55% Boise Cascade Holdings, LLC Second Lien Term Loan 9.25% 02/22/15 189,000 159,389 - ------------------------------------------------------------------------------------------- Term Loan B 5.75% 02/22/14 2,007,269 2,009,357 - ------------------------------------------------------------------------------------------- Georgia-Pacific Corp. Add On Term Loan B 2.34-2.46% 12/29/12 29,077 28,085 - ------------------------------------------------------------------------------------------- Term Loan A 2.34-2.46% 12/21/10 1,475,591 1,442,390 - ------------------------------------------------------------------------------------------- Term Loan B 2.34-2.65% 12/21/12 4,016,667 3,879,658 - ------------------------------------------------------------------------------------------- Term Loan C 3.59-3.90% 12/23/14 2,228,133 2,212,313 =========================================================================================== 9,731,192 =========================================================================================== HEALTH CARE DISTRIBUTORS-1.23% Warner Chilcott PLC Term Loan B 2.26-2.60% 01/18/12 3,531,256 3,498,168 - ------------------------------------------------------------------------------------------- Term Loan C 2.26% 01/18/12 1,200,181 1,188,936 =========================================================================================== 4,687,104 =========================================================================================== HEALTH CARE EQUIPMENT-0.71% CONMED Corp., Term Loan 1.76% 04/13/13 212,012 195,051 - ------------------------------------------------------------------------------------------- DJO Finance LLC, Term Loan 3.26-3.60% 05/20/14 2,057,543 1,975,879 - ------------------------------------------------------------------------------------------- Orthofix International N.V., Term Loan B 6.75-7.50% 09/22/13 546,556 536,308 =========================================================================================== 2,707,238 =========================================================================================== HEALTH CARE FACILITIES-2.91% Community Health Systems Delay Draw Term Loan 2.51% 07/25/14 182,668 170,261 - ------------------------------------------------------------------------------------------- Term Loan B 2.51-5.62% 07/25/14 3,108,421 2,896,831 - ------------------------------------------------------------------------------------------- DaVita Inc., Term Loan B1 1.77-2.10% 10/05/12 3,685,140 3,534,971 - ------------------------------------------------------------------------------------------- HCA, Inc. Term Loan B(e) -- 11/07/12 1,500,000 1,263,750 - ------------------------------------------------------------------------------------------- Term Loan B 2.85% 11/18/13 321,174 302,212 - ------------------------------------------------------------------------------------------- IASIS Healthcare Corp. Delay Draw Term Loan 2.26% 03/14/14 708,267 667,244 - ------------------------------------------------------------------------------------------- LOC 0.16% 03/14/14 381,558 359,458 - ------------------------------------------------------------------------------------------- Term Loan B 2.26% 03/14/14 2,046,689 1,928,145 =========================================================================================== 11,122,872 ===========================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 16 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- AUTO PARTS & EQUIPMENT-(CONTINUED) HEALTH CARE SERVICES-2.71% Biomet, Inc., Term Loan 3.26-3.61% 03/25/15 $ 5,636,356 $ 5,431,249 - ------------------------------------------------------------------------------------------- Genoa Healthcare LLC Second Lien Term Loan 10.75% 02/10/13 132,000 79,200 - ------------------------------------------------------------------------------------------- Term Loan B 5.75% 08/10/12 88,793 79,026 - ------------------------------------------------------------------------------------------- inVentiv Health, Inc., Term Loan B 2.35% 07/06/14 380,209 361,199 - ------------------------------------------------------------------------------------------- Royalty Pharma AG Term Loan 2.85% 04/16/13 545,958 534,188 - ------------------------------------------------------------------------------------------- Term Loan B 2.85% 04/16/13 546,921 535,130 - ------------------------------------------------------------------------------------------- Skilled Healthcare LLC, Term Loan 2.26-2.49% 06/15/12 360,000 329,400 - ------------------------------------------------------------------------------------------- Sun Healthcare Group, Inc. Syn LOC 0.50% 04/19/14 89,827 82,042 - ------------------------------------------------------------------------------------------- Term Loan B 2.50-3.31% 04/19/14 460,101 420,224 - ------------------------------------------------------------------------------------------- Trizetto Group, Inc., Term Loan B 7.50% 08/04/15 753,307 743,891 - ------------------------------------------------------------------------------------------- Viant, Inc., Term Loan B 2.85% 06/25/14 1,787,143 1,733,529 =========================================================================================== 10,329,078 =========================================================================================== HEALTH CARE SUPPLIES-0.84% Accellent Corp., Term Loan B 2.87% 11/22/12 2,969,809 2,620,856 - ------------------------------------------------------------------------------------------- Fresenius Medical Care AG & Co. KGaA, Term Loan B 1.89-1.99% 03/31/13 168,869 164,563 - ------------------------------------------------------------------------------------------- Mylan Laboratories, Term Loan B 3.56-3.88% 10/02/14 434,938 421,529 =========================================================================================== 3,206,948 =========================================================================================== HOMEBUILDING-0.09% Headwaters, Inc., First Lien Term Loan B1 9.75% 04/30/11 349,740 338,083 =========================================================================================== HOTELS, RESORTS & CRUISE LINES-0.79% American Gaming Systems Delay Draw Term Loan 3.27% 05/14/13 529,171 338,669 - ------------------------------------------------------------------------------------------- Term Loan B 3.27% 05/14/13 3,782,274 2,420,655 - ------------------------------------------------------------------------------------------- Centaur Gaming First Lien Term Loan B 9.25% 10/30/12 242,296 205,952 - ------------------------------------------------------------------------------------------- Second Lien Term Loan 14.25% 10/30/13 121,115 36,335 - ------------------------------------------------------------------------------------------- Ginn Club & Resort First Lien Term Loan B(d) 9.50% 06/08/11 105,289 7,370 - ------------------------------------------------------------------------------------------- Revolving Credit Loan(d) 5.87-9.50% 06/08/11 49,078 3,435 - ------------------------------------------------------------------------------------------- Second Lien Term Loan(d) 13.50% 06/08/12 127,556 1,276 =========================================================================================== 3,013,692 =========================================================================================== HOUSEHOLD PRODUCTS-1.34% Jarden Corp. Term Loan B2 2.35% 01/24/12 52,661 51,169 - ------------------------------------------------------------------------------------------- Term Loan B4 3.85% 01/26/15 56,084 55,944 - ------------------------------------------------------------------------------------------- Nice-Pak Products Inc., Term Loan 3.60% 06/18/14 402,780 300,071 - ------------------------------------------------------------------------------------------- Prestige Brands International, Inc., Term Loan B 2.51% 04/06/11 27,605 27,329 - ------------------------------------------------------------------------------------------- Rent-A-Center, Term Loan B 2.02-2.03% 06/30/12 143,621 139,312 - -------------------------------------------------------------------------------------------
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 17 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS-(CONTINUED) Spectrum Brands, Inc. LOC(e) -- 06/30/12 $ 97,809 $ 91,370 - ------------------------------------------------------------------------------------------- LOC 0.13-8.75% 06/30/12 141,430 132,119 - ------------------------------------------------------------------------------------------- Term Loan B(e) -- 06/30/12 1,901,838 1,776,640 - ------------------------------------------------------------------------------------------- Term Loan B 8.75% 06/30/12 2,709,959 2,531,562 =========================================================================================== 5,105,516 =========================================================================================== HUMAN RESOURCE & EMPLOYMENT SERVICES-0.32% Koosharem Corp. Second Lien Term Loan 6.58% 12/31/14 298,800 52,290 - ------------------------------------------------------------------------------------------- Term Loan 3.28-3.32% 06/30/14 727,663 446,298 - ------------------------------------------------------------------------------------------- Kronos Inc., First Lien Term Loan 2.60% 06/11/14 781,735 722,620 =========================================================================================== 1,221,208 =========================================================================================== INDUSTRIAL CONGLOMERATES-0.35% CONTECH Construction Products, Inc., Term Loan B 2.28% 01/31/13 1,337,273 1,123,309 - ------------------------------------------------------------------------------------------- Dresser Inc., Term Loan B 2.68% 05/04/14 240,984 224,718 =========================================================================================== 1,348,027 =========================================================================================== INDUSTRIAL MACHINERY-1.04% Gleason Corp., First Lien Term Loan 2.00-2.38% 06/30/13 123,749 117,561 - ------------------------------------------------------------------------------------------- Itron Inc., Term Loan 4.02% 04/18/14 116,064 115,230 - ------------------------------------------------------------------------------------------- Pro Mach, Inc., Term Loan 2.52% 12/14/11 558,914 497,433 - ------------------------------------------------------------------------------------------- Rexnord Corp. Add on Term Loan B2 2.56% 07/19/13 94,861 84,901 - ------------------------------------------------------------------------------------------- Sr. Unsec. Term Loan 7.67% 03/01/13 2,546,215 1,276,290 - ------------------------------------------------------------------------------------------- Term Loan B 2.81-3.06% 07/19/13 2,082,062 1,899,882 =========================================================================================== 3,991,297 =========================================================================================== INSURANCE BROKERS-0.15% Swett & Crawford Group, Inc. (The) First Lien Term Loan 2.51% 04/03/14 382,203 256,076 - ------------------------------------------------------------------------------------------- Second Lien Term Loan 5.76% 10/03/14 105,200 44,710 - ------------------------------------------------------------------------------------------- USI Holdings Corp., Term Loan B 3.35% 05/05/14 319,349 276,770 =========================================================================================== 577,556 =========================================================================================== INTEGRATED TELECOMMUNICATION SERVICES-0.37% Cavalier Telephone Inc., Term Loan B 10.50% 12/31/12 930,928 535,284 - ------------------------------------------------------------------------------------------- Integra Telecom, Inc., Term Loan B 10.50% 08/31/13 302,610 296,558 - ------------------------------------------------------------------------------------------- PAETEC Communications, Inc. Incremental Add On Term Loan 2.76% 02/28/13 155,092 146,174 - ------------------------------------------------------------------------------------------- Term Loan 2.76% 02/28/13 454,043 427,936 =========================================================================================== 1,405,952 =========================================================================================== INTERNET SOFTWARE & SERVICES-0.38% Language Line LLC, Term Loan B1 3.85% 06/10/11 727,895 716,977 - ------------------------------------------------------------------------------------------- Network Solutions, LLC, Term Loan B 2.77-3.10% 03/07/14 827,863 720,244 =========================================================================================== 1,437,221 ===========================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 18 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- INVESTMENT BANKING & BROKERAGE-0.15% Gartmore Investment Ltd., U.S. Term Loan 2.50% 05/11/14 $ 859,799 $ 554,571 =========================================================================================== IT CONSULTING & OTHER SERVICES-1.88% Brocade Communications Systems, Inc., Term Loan 7.00% 10/07/13 4,131,943 4,128,513 - ------------------------------------------------------------------------------------------- SunGuard Data Systems Inc. U.S. Term Loan A 2.03% 02/28/14 38,840 36,370 - ------------------------------------------------------------------------------------------- U.S. Term Loan B 3.95-4.09% 02/28/16 1,041,698 1,005,895 - ------------------------------------------------------------------------------------------- U.S. Term Loan C 6.75% 02/28/14 2,000,000 1,990,000 =========================================================================================== 7,160,778 =========================================================================================== LEISURE FACILITIES-3.10% 24 Hour Fitness Worldwide Inc., Term Loan B 2.77-3.08% 06/08/12 1,257,750 1,094,243 - ------------------------------------------------------------------------------------------- AMF Group First Lien Term Loan B 2.76-3.15% 06/08/13 1,423,969 1,176,198 - ------------------------------------------------------------------------------------------- Second Lien Term Loan 6.53% 12/08/13 177,143 92,114 - ------------------------------------------------------------------------------------------- Greektown Casino LLC DIP Delay Draw Term Loan A 16.75% 12/31/09 1,856,306 1,860,947 - ------------------------------------------------------------------------------------------- DIP Revolving Credit Loan 16.75% 12/31/09 234,909 230,211 - ------------------------------------------------------------------------------------------- DIP Term Loan A1(f) 0% 12/31/09 272,472 272,472 - ------------------------------------------------------------------------------------------- DIP Term Loan A1 9.75% 12/31/09 195,116 195,116 - ------------------------------------------------------------------------------------------- DIP Term Loan B1(f) 0% 12/31/09 251,779 252,408 - ------------------------------------------------------------------------------------------- DIP Term Loan B1 9.75% 12/31/09 103,955 104,215 - ------------------------------------------------------------------------------------------- Six Flags Inc., Term Loan 2.60-2.85% 04/30/15 2,810,438 2,719,099 - ------------------------------------------------------------------------------------------- Regal Entertainment Group, Term Loan B 4.35% 10/27/13 2,256,567 2,237,521 - ------------------------------------------------------------------------------------------- Universal City Development Partners, Term Loan B 6.00% 06/09/11 1,636,132 1,599,319 =========================================================================================== 11,833,863 =========================================================================================== LEISURE PRODUCTS-2.64% Cinemark USA, Inc., Term Loan 2.02-2.21% 10/05/13 1,704,438 1,637,163 - ------------------------------------------------------------------------------------------- Golden Nugget, Inc., Second Lien Term Loan 3.52% 12/31/14 214,000 89,880 - ------------------------------------------------------------------------------------------- Panavision Inc., Second Lien Term Loan 7.85-7.99% 03/30/12 9,500 5,938 - ------------------------------------------------------------------------------------------- Sabre Holdings Corp., Term Loan 2.53-2.74% 09/30/14 5,120,742 4,188,511 - ------------------------------------------------------------------------------------------- Travelport Ltd. U.S. Syn LOC 3.10% 08/23/13 307,354 275,466 - ------------------------------------------------------------------------------------------- U.S. Term Loan B 2.76-3.10% 08/23/13 1,692,646 1,517,034 - ------------------------------------------------------------------------------------------- True Temper Sports Inc. Add On Term Loan(d) 8.00% 06/30/11 104,000 20,800 - ------------------------------------------------------------------------------------------- Term Loan 7.50% 03/15/11 3,137,259 2,352,944 =========================================================================================== 10,087,736 =========================================================================================== MARINE-0.08% US Shipping LLC, Term Loan(d) 4.50% 08/06/12 571,757 291,596 =========================================================================================== MARINE PORTS & SERVICES-0.08% Fleetcor Technologies, Inc. Tranche 1 2.55% 04/30/13 187,969 173,401 - ------------------------------------------------------------------------------------------- Tranche 2 2.55% 04/30/13 154,221 142,269 =========================================================================================== 315,670 ===========================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 19 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- METAL & GLASS CONTAINERS-1.68% Berry Plastics Corp., Term Loan C 2.27% 04/03/15 $ 3,275,265 $ 2,766,845 - ------------------------------------------------------------------------------------------- Graham Packaging Company, L.P. Term Loan B 2.56% 10/07/11 267,734 260,908 - ------------------------------------------------------------------------------------------- Term Loan C 6.75% 04/05/14 2,724,752 2,724,752 - ------------------------------------------------------------------------------------------- MAUSER Corp. Term Loan B2 2.64% 06/13/15 500,000 332,500 - ------------------------------------------------------------------------------------------- Term Loan C2 2.89% 06/13/16 500,000 331,250 =========================================================================================== 6,416,255 =========================================================================================== MOVIES & ENTERTAINMENT-1.59% Alpha III Term Loan B1 2.51% 12/31/13 2,240,571 1,884,880 - ------------------------------------------------------------------------------------------- Term Loan B2 2.51% 12/31/13 1,513,442 1,273,183 - ------------------------------------------------------------------------------------------- LodgeNet Entertainment Corp., Term Loan 2.27-2.60% 04/04/14 1,195,653 1,031,251 - ------------------------------------------------------------------------------------------- NEP II, Inc., Term Loan B 2.51% 02/16/14 408,198 380,645 - ------------------------------------------------------------------------------------------- Zuffa LLC, Term Loan 2.31% 06/19/15 1,670,197 1,489,816 =========================================================================================== 6,059,775 =========================================================================================== OIL & GAS DRILLING-1.09% Niska Gas Storage Canada ULC Canada Term Loan 2.02% 05/13/13 276,799 262,037 - ------------------------------------------------------------------------------------------- Delay Draw Term Loan 2.02% 05/13/13 19,307 18,277 - ------------------------------------------------------------------------------------------- U.S. Term Loan 2.02% 05/13/13 28,502 26,982 - ------------------------------------------------------------------------------------------- Ram Energy Inc., Term Loan 12.75% 11/28/12 731,325 592,373 - ------------------------------------------------------------------------------------------- Resolute Aneth, LLC, Second Lien Term Loan 5.75% 06/26/13 541,176 460,000 - ------------------------------------------------------------------------------------------- Venoco, Inc., Second Lien Term Loan 4.31% 05/08/14 3,578,798 2,791,463 =========================================================================================== 4,151,132 =========================================================================================== OIL & GAS EQUIPMENT & SERVICES-0.42% CCS Corp. Delay Draw Term Loan(f) 0% 11/14/14 971,617 738,429 - ------------------------------------------------------------------------------------------- Term Loan B 3.26% 11/14/14 771,549 586,377 - ------------------------------------------------------------------------------------------- Sem Group L.P., U.S. Term Loan B2(d) 4.90% 03/16/11 333,621 211,849 - ------------------------------------------------------------------------------------------- Targa Resources, Inc. Syn LOC 0.47% 10/31/12 26,247 25,779 - ------------------------------------------------------------------------------------------- Term Loan 2.26-2.60% 10/31/12 28,928 28,411 =========================================================================================== 1,590,845 =========================================================================================== OIL & GAS REFINING & MARKETING-0.66% Western Refining, Inc., LOC 10.75% 06/15/14 2,750,000 2,536,875 =========================================================================================== OIL & GAS STORAGE & TRANSPORTATION-0.47% Energy Transfer Equity, L.P., Term Loan B 2.21% 02/08/12 1,849,584 1,802,420 =========================================================================================== OTHER DIVERSIFIED FINANCIAL SERVICES-0.03% Conseco, Inc., Term Loan 6.50% 10/10/13 163,992 123,609 ===========================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 20 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- PACKAGED FOODS & MEATS-1.76% Birds Eye Foods Inc., Term Loan B 2.04-2.35% 03/22/13 $ 171,647 $ 167,356 - ------------------------------------------------------------------------------------------- Dole Foods Co., Inc. Prefunded LOC 0.51% 04/12/13 683,477 686,573 - ------------------------------------------------------------------------------------------- Term Loan B 8.00% 04/12/13 1,231,666 1,237,246 - ------------------------------------------------------------------------------------------- Term Loan C 8.00% 04/12/13 4,615,203 4,636,110 =========================================================================================== 6,727,285 =========================================================================================== PAPER PACKAGING-0.87% Smurfit-Stone Container Corp. Canadian Revolver Credit Loan(e) -- 11/01/09 285,715 271,252 - ------------------------------------------------------------------------------------------- DIP Revolver Credit Loan(f) 0% 01/28/10 1,050,000 1,029,872 - ------------------------------------------------------------------------------------------- DIP Revolver Credit Loan 10.00% 01/28/10 386,767 388,700 - ------------------------------------------------------------------------------------------- LOC(e) -- 11/01/10 172,907 164,154 - ------------------------------------------------------------------------------------------- Term Loan B(e) -- 11/01/11 196,772 186,812 - ------------------------------------------------------------------------------------------- Term Loan C(e) -- 11/01/11 370,884 352,110 - ------------------------------------------------------------------------------------------- Term Loan C1(e) -- 11/01/11 112,135 106,458 - ------------------------------------------------------------------------------------------- U.S. Revolver Credit Loan(e) -- 11/01/09 861,587 817,974 =========================================================================================== 3,317,332 =========================================================================================== PAPER PRODUCTS-0.02% Xerium S.A., U.S. Term Loan 6.10% 05/18/12 87,157 59,267 =========================================================================================== PERSONAL PRODUCTS-1.54% American Safety Razor Co. Second Lien Term Loan 6.52% 01/31/14 183,000 142,740 - ------------------------------------------------------------------------------------------- Term Loan 2.52-2.74% 07/31/13 200,538 186,500 - ------------------------------------------------------------------------------------------- Hanesbrands Inc. First Lien Term Loan B(e) -- 09/05/13 3,000,000 3,006,750 - ------------------------------------------------------------------------------------------- First Lien Term Loan B 5.02-5.25% 09/05/13 1,090,747 1,093,201 - ------------------------------------------------------------------------------------------- Second Lien Term Loan 4.25% 03/05/14 91,787 87,504 - ------------------------------------------------------------------------------------------- HVHC, Inc., Term Loan B 2.85% 08/01/13 1,009,124 958,668 - ------------------------------------------------------------------------------------------- Topps Company Inc. (The), Term Loan B 3.03% 10/12/14 553,542 387,479 =========================================================================================== 5,862,842 =========================================================================================== PHARMACEUTICALS-1.36% Nycomed US Inc. Term Loan B2 2.85% 12/29/14 2,750,000 2,506,240 - ------------------------------------------------------------------------------------------- Term Loan C2 3.60% 12/29/15 2,750,000 2,519,385 - ------------------------------------------------------------------------------------------- Quintiles Transnational Corp. Second Lien Term Loan 4.26% 03/31/14 74,764 70,278 - ------------------------------------------------------------------------------------------- Term Loan B 2.26-2.60% 03/31/13 103,253 97,212 =========================================================================================== 5,193,115 =========================================================================================== PUBLISHING-5.50% American Media, Inc., Term Loan B 10.00% 01/30/13 3,962,240 3,372,856 - ------------------------------------------------------------------------------------------- CanWest MediaWorks Inc., Term Loan B 4.75% 07/13/14 112,167 59,449 - ------------------------------------------------------------------------------------------- Caribe Information Investment Inc., Term Loan 2.52-2.53% 03/31/13 73,850 44,310 - ------------------------------------------------------------------------------------------- Dex Media West LLC, Term Loan B 7.00% 10/24/14 2,389,761 2,048,623 - -------------------------------------------------------------------------------------------
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 21 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- PUBLISHING-(CONTINUED) Endurance Business Media, Inc. Second Lien Term Loan(d) 9.25% 01/26/14 $ 59,090 $ 17,875 - ------------------------------------------------------------------------------------------- Term Loan(d) 4.75% 07/26/13 114,191 85,643 - ------------------------------------------------------------------------------------------- F & W Publications, Inc., Second Lien Term Loan(d) 6.50% 08/05/13 357,143 17,857 - ------------------------------------------------------------------------------------------- Gatehouse Media, Inc. Delay Draw Term Loan 2.27-2.28% 08/28/14 1,070,528 290,381 - ------------------------------------------------------------------------------------------- Term Loan 2.53% 08/28/14 24,385 6,614 - ------------------------------------------------------------------------------------------- Term Loan B 2.27% 08/28/14 4,147,009 1,124,876 - ------------------------------------------------------------------------------------------- Getty Images, Inc. Acquisition Term Loan(e) -- 07/02/15 988,127 991,833 - ------------------------------------------------------------------------------------------- Acquisition Term Loan 6.25% 07/02/15 2,223,569 2,231,908 - ------------------------------------------------------------------------------------------- Hanley Wood LLC, Term Loan 2.52-2.54% 03/08/14 325,050 132,052 - ------------------------------------------------------------------------------------------- Idearc, Inc. (Verizon), Term Loan B(d) 6.25% 11/17/14 5,820,268 2,620,750 - ------------------------------------------------------------------------------------------- Local Insight Regatta Holdings, Inc., Term Loan 7.75% 04/23/15 3,155,324 2,271,833 - ------------------------------------------------------------------------------------------- MediaNews Group, Term Loan B 4.76% 12/30/10 1,144,980 228,996 - ------------------------------------------------------------------------------------------- Reader's Digest Association Inc., Term Loan B 4.52-7.00% 03/02/14 1,361,871 539,982 - ------------------------------------------------------------------------------------------- R.H. Donnelley Corp., Term Loan 6.75% 06/30/11 1,994,792 1,627,750 - ------------------------------------------------------------------------------------------- Tribune Company DIP Revolver Credit Loan(f) 0% 04/10/10 733,333 711,333 - ------------------------------------------------------------------------------------------- DIP Revolver Credit Loan 9.00% 04/10/10 266,667 258,667 - ------------------------------------------------------------------------------------------- DIP Term Loan 9.00% 04/10/10 2,000,000 2,010,000 - ------------------------------------------------------------------------------------------- Yell Group Ltd., Term Loan B1 3.26% 10/27/12 429,750 286,704 =========================================================================================== 20,980,292 =========================================================================================== SEMICONDUCTORS-1.21% Freescale Semiconductor, Inc., Term Loan B 2.03% 12/02/13 6,158,556 4,606,600 =========================================================================================== SPECIALIZED CONSUMER SERVICES-1.26% Jacobson Corp., Term Loan B 2.76% 06/19/14 322,420 266,802 - ------------------------------------------------------------------------------------------- LPL Holdings Inc., Term Loan D 2.01-2.35% 06/28/13 309,129 286,330 - ------------------------------------------------------------------------------------------- ServiceMaster Company (The) Delay Draw Term Loan 2.77% 07/24/14 483,277 413,419 - ------------------------------------------------------------------------------------------- Term Loan B 2.77-3.15% 07/24/14 4,490,744 3,841,607 =========================================================================================== 4,808,158 =========================================================================================== SPECIALIZED FINANCE-0.29% Citco Group Ltd. (The), Term Loan B 2.85% 06/30/14 137,289 96,789 - ------------------------------------------------------------------------------------------- E.A.Viner International Co., First Lien Term Loan B 5.10% 07/31/13 28,393 22,715 - ------------------------------------------------------------------------------------------- Harland Clarke Holdings Corp., Term Loan B 2.76-3.10% 06/30/14 1,049,363 855,892 - ------------------------------------------------------------------------------------------- Nuveen Investments, LLC, Term Loan 3.49-3.50% 11/13/14 154,186 124,968 =========================================================================================== 1,100,364 ===========================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 22 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- SPECIALTY CHEMICALS-3.29% Cognis Deutschland, Term Loan C 2.62% 09/15/13 $ 799,515 $ 678,589 - ------------------------------------------------------------------------------------------- Hexion Specialty Chemicals, Inc. Credit Linked Deposit 0.21% 05/05/13 89,838 65,919 - ------------------------------------------------------------------------------------------- Revolver Credit 2.88% 05/31/11 381,000 263,987 - ------------------------------------------------------------------------------------------- Term Loan C1(e) -- 05/05/13 1,810,015 1,645,290 - ------------------------------------------------------------------------------------------- Term Loan C1 2.88% 05/05/13 3,997,509 2,766,802 - ------------------------------------------------------------------------------------------- Term Loan C2(e) -- 05/05/13 470,441 357,404 - ------------------------------------------------------------------------------------------- Term Loan C2 2.88% 05/05/13 791,118 601,028 - ------------------------------------------------------------------------------------------- Term Loan C4 2.63-2.75% 05/05/13 628,715 476,252 - ------------------------------------------------------------------------------------------- Term Loan C5 2.88% 05/05/13 113,761 83,472 - ------------------------------------------------------------------------------------------- Term Loan C7 2.88% 05/05/13 1,223,040 897,406 - ------------------------------------------------------------------------------------------- Huntsman ICI Chemicals LLC, Term Loan B 2.01% 04/21/14 4,931,707 4,584,712 - ------------------------------------------------------------------------------------------- MacDermid Inc., Term Loan B 2.26% 04/12/14 182,516 151,488 =========================================================================================== 12,572,349 =========================================================================================== SPECIALTY STORES-0.36% Eye Care Centers of America, Inc., Term Loan 2.77-3.16% 03/01/12 260,977 241,404 - ------------------------------------------------------------------------------------------- Mattress Firm, Term Loan B 2.52% 01/18/14 307,602 180,461 - ------------------------------------------------------------------------------------------- Michaels Stores, Inc., Term Loan 2.56% 10/31/13 997,436 879,409 - ------------------------------------------------------------------------------------------- Savers, Inc. Canada Term Loan 3.03% 08/11/12 37,060 35,393 - ------------------------------------------------------------------------------------------- U.S. Term Loan B1 3.03% 08/11/12 40,549 38,724 =========================================================================================== 1,375,391 =========================================================================================== SYSTEMS SOFTWARE-1.63% Dealer Comp-rey First Lien Term Loan 2.26% 10/26/12 3,790,857 3,304,376 - ------------------------------------------------------------------------------------------- Second Lien Term Loan 5.76% 10/26/13 1,687,408 1,223,371 - ------------------------------------------------------------------------------------------- SkillSoft PLC, Term Loan B 4.10% 05/14/13 141,382 132,634 - ------------------------------------------------------------------------------------------- Verint Systems, Inc., Term Loan 3.52% 05/25/14 1,729,871 1,542,474 =========================================================================================== 6,202,855 =========================================================================================== TECHNOLOGY DISTRIBUTORS-0.06% Macrovision Corp., Term Loan B 6.00% 05/02/13 220,298 219,747 =========================================================================================== TEXTILES-0.10% Gold ToeMoretz, LLC, First Lien Term Loan 8.50% 10/30/13 498,713 375,281 =========================================================================================== TRADING COMPANIES & DISTRIBUTORS-0.01% Brenntag AG Term Loan B2 2.27% 01/20/14 19,297 18,188 - ------------------------------------------------------------------------------------------- U.S. Acquired Term Loan 2.27-2.99% 01/20/14 1,543 1,443 =========================================================================================== 19,631 =========================================================================================== WIRELESS TELECOMMUNICATION SERVICES-3.87% Asurion Corp., First Lien Term Loan 3.28% 07/03/14 5,466,667 5,223,345 - ------------------------------------------------------------------------------------------- FairPoint Communications, Inc., Term Loan B 5.00% 03/31/15 2,922,715 2,211,209 - -------------------------------------------------------------------------------------------
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 23 AIM FLOATING RATE FUND
INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE - ------------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES-(CONTINUED) Global Tel*Link Acquisition Syn Deposit Commitment 2.90% 02/14/13 $ 100,347 $ 97,337 - ------------------------------------------------------------------------------------------- Acquisition Term Loan 9.00% 02/14/13 131,055 127,123 - ------------------------------------------------------------------------------------------- Syn LOC 2.90% 02/14/13 25,086 24,334 - ------------------------------------------------------------------------------------------- Term Loan 9.00% 02/14/13 257,415 249,692 - ------------------------------------------------------------------------------------------- MetroPCS Communications, Inc., Term Loan B 2.56-2.75% 11/03/13 1,791,799 1,686,155 - ------------------------------------------------------------------------------------------- NuVox, Inc., Term Loan 3.56% 05/31/14 1,701,011 1,590,445 - ------------------------------------------------------------------------------------------- RCN Corp. Add on Term Loan 2.88% 05/25/14 1,486,962 1,390,309 - ------------------------------------------------------------------------------------------- Add on Term Loan B 2.88% 05/25/14 1,672,766 1,564,036 - ------------------------------------------------------------------------------------------- Virgin Mobile USA, Term Loan 6.10% 12/14/10 611,556 598,560 =========================================================================================== 14,762,545 =========================================================================================== Total Senior Secured Floating Rate Interests (Cost $393,676,880) 371,188,492 =========================================================================================== FLOATING RATE NOTES-1.36% COMMUNICATION EQUIPMENT-1.03% Qwest Corp., Sr. Unsec. Unsub. Floating Rate Global Notes(g) 3.88% 06/15/13 4,250,000 3,937,625 =========================================================================================== HEAVY ELECTRICAL EQUIPMENT-0.11% Sanmina-SCI Corp., Sr. Unsec. Gtd. Floating Rate Notes(g)(h) 3.38% 06/15/10 437,000 428,260 =========================================================================================== METAL & GLASS CONTAINERS-0.19% Berry Plastics Holding Corp., Sr. Sec. Gtd. Sub. Floating Rate Global Notes(g) 4.50% 09/15/14 996,000 727,080 =========================================================================================== PAPER PACKAGING-0.03% Verso Paper Holdings, LLC Series B, Sr. Sec. Gtd. Floating Rate Global Notes(g) 4.23% 08/01/14 228,000 125,400 =========================================================================================== Total Floating Rate Notes (Cost $5,673,123) 5,218,365 =========================================================================================== SHARES DOMESTIC COMMON STOCKS-1.04% BUILDING PRODUCTS-0.56% Masonite Worldwide Holdings (Canada)(j) 53,093 2,147,612 - ------------------------------------------------------------------------------------------- United Subcontractors, Inc.(j) 4,583 0 =========================================================================================== 2,147,612 =========================================================================================== ENVIRONMENTAL & FACILITIES SERVICES-0.48% Safety-Kleen Holdco, Inc. (Acquired 12/24/03; Cost $2,062,077)(h)(i)(j) 150,812 1,809,744 =========================================================================================== Total Domestic Common Stocks (Cost $4,953,488) 3,957,356 =========================================================================================== MONEY MARKET FUNDS-7.63% Liquid Assets Portfolio-Institutional Class(k) 14,552,463 14,552,463 - ------------------------------------------------------------------------------------------- Premier Portfolio-Institutional Class(k) 14,552,463 14,552,463 =========================================================================================== Total Money Market Funds (Cost $29,104,926) 29,104,926 =========================================================================================== TOTAL INVESTMENTS-107.26% (Cost $433,408,417) 409,469,139 =========================================================================================== OTHER ASSETS LESS LIABILITIES-(7.26)% (27,723,251) =========================================================================================== NET ASSETS-100.00% $381,745,888 ___________________________________________________________________________________________ ===========================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 24 AIM FLOATING RATE FUND Investment Abbreviations: DIP - Debtor-in-possession Gtd. - Guaranteed LOC - Letter of Credit NM - New Money PIK - Payment in Kind REIT - Real Estate Investment Trust Sec. - Secured Sr. - Senior Sub. - Subordinated Syn LOC - Synthetic Letter of Credit Unsec. - Unsecured Unsub. - Unsubordinated
Notes to Schedule of Investments: (a) Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor's. (b) Senior secured corporate loans and senior secured debt securities are, at present, may not be readily marketable, not registered under the Securities Act of 1933, as amended and may be subject to contractual and legal restrictions on sale. Senior secured corporate loans and senior secured debt securities in the Fund's portfolio generally have variable rates which adjust to a base, such as the London Inter-Bank Offered Rate ("LIBOR"), on set dates, typically every 30 days but not greater than one year; and/or have interest rates that float at a margin above a widely recognized base lending rate such as the Prime Rate of a designated U.S. bank. (c) Senior secured floating rate interests often require prepayments from excess cash flow or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. However, it is anticipated that the senior secured floating rate interests will have an expected average life of three to five years. (d) Defaulted security. Currently, the issuer is in default with respect to interest payments. The aggregate value of these securities at August 31, 2009 was $4,285,448 which represented 1.12% of the Fund's Net Assets. (e) This floating rate interest will settle after August 31, 2009, at which time the interest rate will be determined. (f) All or a portion of this holding is subject to unfunded loan commitments. See Note 7. (g) Interest rate is redetermined periodically. Rate shown is the rate in effect on August 31, 2009. (h) Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at August 31, 2009 was $2,238,004 which represented 0.59% of the Fund's Net Assets. (i) Acquired as a part of a bankruptcy restructuring. (j) Non-income producing security. (k) The money market fund and the Fund are affiliated by having the same investment advisor. See accompanying Notes to Financial Statements which are an integral part of the financial statements. 25 AIM FLOATING RATE FUND STATEMENT OF ASSETS AND LIABILITIES August 31, 2009 ASSETS: Investments, at value (Cost $404,303,491) $380,364,213 - -------------------------------------------------------------------------------- Investments in affiliated money market funds, at value and cost 29,104,926 ================================================================================ Total investments, at value (Cost $433,408,417) 409,469,139 ================================================================================ Cash 12,336 - -------------------------------------------------------------------------------- Receivables for: Investments sold 5,338,851 - -------------------------------------------------------------------------------- Fund shares sold 1,617,497 - -------------------------------------------------------------------------------- Dividends and interest 1,543,989 - -------------------------------------------------------------------------------- Investment for trustee deferred compensation and retirement plans 14,385 - -------------------------------------------------------------------------------- Other assets 64,088 ================================================================================ Total assets 418,060,285 ________________________________________________________________________________ ================================================================================ LIABILITIES: Payables for: Investments purchased 34,831,355 - -------------------------------------------------------------------------------- Fund shares reacquired 715,906 - -------------------------------------------------------------------------------- Dividends 414,493 - -------------------------------------------------------------------------------- Accrued fees to affiliates 156,149 - -------------------------------------------------------------------------------- Accrued other operating expenses 156,775 - -------------------------------------------------------------------------------- Trustee deferred compensation and retirement plans 39,719 ================================================================================ Total liabilities 36,314,397 ================================================================================ Net assets applicable to shares outstanding $381,745,888 ________________________________________________________________________________ ================================================================================ NET ASSETS CONSIST OF: Shares of beneficial interest $471,474,938 - -------------------------------------------------------------------------------- Undistributed net investment income 209,754 - -------------------------------------------------------------------------------- Undistributed net realized gain (loss) (65,999,526) - -------------------------------------------------------------------------------- Unrealized appreciation (depreciation) (23,939,278) ================================================================================ $381,745,888 ________________________________________________________________________________ ================================================================================ NET ASSETS: Class A $218,448,468 ________________________________________________________________________________ ================================================================================ Class C $103,974,985 ________________________________________________________________________________ ================================================================================ Class R $ 426,622 ________________________________________________________________________________ ================================================================================ Class Y $ 20,176,273 ________________________________________________________________________________ ================================================================================ Institutional Class $ 38,719,540 ________________________________________________________________________________ ================================================================================ SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 30,827,050 ________________________________________________________________________________ ================================================================================ Class C 14,737,421 ________________________________________________________________________________ ================================================================================ Class R 60,090 ________________________________________________________________________________ ================================================================================ Class Y 2,852,640 ________________________________________________________________________________ ================================================================================ Institutional Class 5,462,379 ________________________________________________________________________________ ================================================================================ Class A: Net asset value per share $ 7.09 - -------------------------------------------------------------------------------- Maximum offering price per share (Net asset value of $7.09 divided by 97.50%) $ 7.27 ________________________________________________________________________________ ================================================================================ Class C: Net asset value and offering price per share $ 7.06 ________________________________________________________________________________ ================================================================================ Class R: Net asset value and offering price per share $ 7.10 ________________________________________________________________________________ ================================================================================ Class Y: Net asset value and offering price per share $ 7.07 ________________________________________________________________________________ ================================================================================ Institutional Class: Net asset value and offering price per share $ 7.09 ________________________________________________________________________________ ================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 26 AIM FLOATING RATE FUND STATEMENT OF OPERATIONS For the year ended August 31, 2009 INVESTMENT INCOME: Interest $ 18,924,514 - ------------------------------------------------------------------------------------------------ Dividends from affiliated money market funds 170,490 ================================================================================================ Total investment income 19,095,004 ================================================================================================ EXPENSES: Advisory fees 1,603,455 - ------------------------------------------------------------------------------------------------ Administrative services fees 95,779 - ------------------------------------------------------------------------------------------------ Custodian fees 36,578 - ------------------------------------------------------------------------------------------------ Distribution fees: Class A 356,123 - ------------------------------------------------------------------------------------------------ Class C 470,738 - ------------------------------------------------------------------------------------------------ Class R 1,574 - ------------------------------------------------------------------------------------------------ Line of credit expenses 39,576 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- A, C, R and Y 259,928 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- Institutional 4,066 - ------------------------------------------------------------------------------------------------ Trustees' and officers' fees and benefits 24,918 - ------------------------------------------------------------------------------------------------ Other 362,101 ================================================================================================ Total expenses 3,254,836 ================================================================================================ Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (32,746) ================================================================================================ Net expenses 3,222,090 ================================================================================================ Net investment income 15,872,914 ================================================================================================ REALIZED AND UNREALIZED GAIN (LOSS) FROM: Net realized gain (loss) from: Investment securities (13,290,881) - ------------------------------------------------------------------------------------------------ Foreign currencies 76 ================================================================================================ (13,290,805) ================================================================================================ Change in net unrealized appreciation of investment securities 6,213,894 ================================================================================================ Net realized and unrealized gain (loss) (7,076,911) ================================================================================================ Net increase in net assets resulting from operations $ 8,796,003 ________________________________________________________________________________________________ ================================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 27 AIM FLOATING RATE FUND STATEMENT OF CHANGES IN NET ASSETS For the years ended August 31, 2009 and 2008
2009 2008 - -------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 15,872,914 $ 17,822,527 - -------------------------------------------------------------------------------------------------------- Net realized gain (loss) (13,290,805) (8,789,508) - -------------------------------------------------------------------------------------------------------- Change in net unrealized appreciation (depreciation) 6,213,894 (15,023,407) ======================================================================================================== Net increase (decrease) in net assets resulting from operations 8,796,003 (5,990,388) ======================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A (9,200,242) (10,276,946) - -------------------------------------------------------------------------------------------------------- Class C (3,733,419) (4,417,057) - -------------------------------------------------------------------------------------------------------- Class R (20,258) (15,598) - -------------------------------------------------------------------------------------------------------- Class Y (334,392) -- - -------------------------------------------------------------------------------------------------------- Institutional Class (2,509,144) (3,265,088) ======================================================================================================== Total distributions from net investment income (15,797,455) (17,974,689) ======================================================================================================== SHARE TRANSACTIONS-NET: Class A 77,804,579 (45,207,351) - -------------------------------------------------------------------------------------------------------- Class C 37,224,086 (6,368,997) - -------------------------------------------------------------------------------------------------------- Class R 128,603 68,270 - -------------------------------------------------------------------------------------------------------- Class Y 18,275,977 -- - -------------------------------------------------------------------------------------------------------- Institutional Class (6,056,700) 6,499,785 ======================================================================================================== Net increase (decrease) in net assets resulting from share transactions 127,376,545 (45,008,293) ======================================================================================================== Net increase (decrease) in net assets 120,375,093 (68,973,370) ======================================================================================================== NET ASSETS: Beginning of year 261,370,795 330,344,165 ======================================================================================================== End of year (includes undistributed net investment income of $209,754 and $130,711, respectively) $381,745,888 $261,370,795 ________________________________________________________________________________________________________ ========================================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 28 AIM FLOATING RATE FUND STATEMENT OF CASH FLOWS For the year ended August 31, 2009 CASH PROVIDED BY OPERATING ACTIVITIES: Net increase in net assets resulting from operations $ 8,796,003 ================================================================================================ ADJUSTMENTS TO RECONCILE NET INCREASE (DECREASE) IN NET ASSETS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: Purchases of investments (242,064,249) - ------------------------------------------------------------------------------------------------ Proceeds from disposition of investments and principal payments 131,379,777 - ------------------------------------------------------------------------------------------------ Increase in receivables and other assets 295,778 - ------------------------------------------------------------------------------------------------ Amortization of premiums and accretion of discounts on investment securities (3,660,682) - ------------------------------------------------------------------------------------------------ Increase in accrued expenses and other payables 9,809 - ------------------------------------------------------------------------------------------------ Unrealized appreciation on investment securities (6,213,894) - ------------------------------------------------------------------------------------------------ Net realized gain (loss) from investment securities 13,290,881 ================================================================================================ Net cash provided by (used in) operating activities (98,166,577) ================================================================================================ CASH PROVIDED BY FINANCING ACTIVITIES: Dividends paid to shareholders (4,095,842) - ------------------------------------------------------------------------------------------------ Proceeds from shares of beneficial interest sold 220,665,366 - ------------------------------------------------------------------------------------------------ Disbursements from shares of beneficial interest reacquired (105,922,991) ================================================================================================ Net cash provided by financing activities 110,646,533 ================================================================================================ Net increase in cash and cash equivalents 12,479,956 ================================================================================================ Cash and cash equivalents at beginning of period 16,637,306 ================================================================================================ Cash and cash equivalents at end of period $ 29,117,262 ================================================================================================ NON-CASH FINANCING ACTIVITIES: Value of shares of beneficial interest issued in reinvestment of dividends paid to shareholders 11,586,022 ________________________________________________________________________________________________ ================================================================================================ Supplemental disclosure of cash flow information: Cash paid during the year for line of credit expenses was $37,801.
NOTES TO FINANCIAL STATEMENTS August 31, 2009 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Floating Rate Fund (the "Fund") is a series portfolio of AIM Counselor Series Trust (the "Trust"). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of seven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The Fund's investment objectives are to provide a high level of current income and, secondarily, preservation of capital. The Fund currently consists of five different classes of shares: Class A, Class C, Class R, Class Y and Institutional Class. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waiver shares may be subject to contingent deferred sales charges ("CDSC"). Class C shares are sold with a CDSC. Class R, Class Y and Institutional Class shares are sold at net asset value. Under certain circumstances, Class R shares are subject to a CDSC. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. A. SECURITY VALUATIONS -- Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data. 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 may be valued at the closing bid price on that day. Securities traded in the over-the-counter market (but not securities reported on the NASDAQ Stock Exchange) are valued based on the prices furnished by independent pricing services, in which case the securities 29 AIM FLOATING RATE FUND may be considered fair valued, or by market makers. Each security reported on the NASDAQ Stock Exchange is valued at the NASDAQ Official Closing Price ("NOCP") as of the close of the customary trading session on the valuation date or absent a NOCP, at the closing bid price. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and the ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes 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 specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans. Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security's fair value. Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer's assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transaction 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 the settlement date. Facility fees received may be amortized over the life of the loan. 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 periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held. Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund's net asset value and, accordingly, they reduce the Fund's total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the advisor. The Fund allocates realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares of each class. C. COUNTRY DETERMINATION -- For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment advisor may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer's securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees 30 AIM FLOATING RATE FUND and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. D. DISTRIBUTIONS -- Distributions from income are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund's taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period. F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to the Institutional Class are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period end date and before the date the financial statements are released to print, which is generally 45 days from the period end date. H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund's servicing agreements, that contain a variety of indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. I. OTHER RISKS -- The Fund may invest all or substantially of its assets in senior secured floating rate loans, senior secured debt securities or other securities rated below investment grade. These securities are generally considered to have speculative characteristics and are subject to greater risk of loss of principal and interest than higher rated securities. The value of lower quality debt securities and floating rate loans can be more volatile due to increased sensitivity to adverse issuer, political, regulatory, market or economic developments. The Fund invests in Corporate Loans from U.S. or non-U.S. companies (the "Borrowers"). The investment of the Fund in a Corporate Loan may take the form of participation interests or assignments. If the Fund purchases a participation interest from a syndicate of lenders ("Lenders") or one of the participants in the syndicate ("Participant"), one or more of which administers the loan on behalf of all the Lenders (the "Agent Bank"), the Fund would be required to rely on the Lender that sold the participation interest not only for the enforcement of the Fund's rights against the Borrower but also for the receipt and processing of payments due to the Fund under the Corporate Loans. As such, the Fund is subject to the credit risk of the Borrower and the Participant. Lenders and Participants interposed between the Fund and a Borrower, together with Agent Banks, are referred to as "Intermediate Participants". J. REDEMPTION FEES -- The Fund has a 2% redemption fee that is to be retained by the Fund to offset transaction costs and other expenses associated with short-term redemptions and exchanges. The fee, subject to certain exceptions, is imposed on certain redemptions or exchanges of shares within 31 days of purchase. The redemption fee is recorded as an increase in shareholder capital and is allocated among the share classes based on the relative net assets of each class. K. CASH AND CASH EQUIVALENTS -- For the purposes of the Statement of Cash Flows the Fund defines Cash and Cash Equivalents as cash (including foreign currency), money market funds and other investments held in lieu of cash and excludes investments made with cash collateral received. L. SECURITIES PURCHASED ON A WHEN-ISSUED AND DELAYED DELIVERY BASIS -- The Fund may purchase and sell interests in Corporate Loans and Corporate Debt Securities and other portfolio securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Fund on such interests or securities in connection with such transactions prior to the date the Fund actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of acquiring such securities, they may sell such securities prior to the settlement date. 31 AIM FLOATING RATE FUND NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with Invesco Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Advisor based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE - ------------------------------------------------------------------- First $500 million 0.65% - ------------------------------------------------------------------- Next $4.5 billion 0.60% - ------------------------------------------------------------------- Next $5 billion 0.575% - ------------------------------------------------------------------- Over $10 billion 0.55% ___________________________________________________________________ ===================================================================
Under the terms of a master sub-advisory agreement approved by shareholders of the Fund between the Advisor and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-Advisor(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Advisor(s). The Advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class C, Class R, Class Y and Institutional Class shares to 1.50%, 2.00%, 1.75%, 1.25% and 1.25% of average daily net assets, respectively at least through June 30, 2010. In determining the Advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary or non-routine items; and (v) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, in addition to the expense reimbursement arrangement with Invesco Ltd. ("Invesco") described more fully below, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. These credits are used to pay certain expenses incurred by the Fund. The Advisor did not waive fees and/or reimburse expenses during the period under this expense limitation. Further, the Advisor has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Advisor receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds. For the year ended August 31, 2009, the Advisor waived advisory fees of $30,264. At the request of the Trustees of the Trust, Invesco agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. These expenses along with the related expense reimbursement are included in the Statement of Operations. For the year ended August 31, 2009, Invesco reimbursed expenses of the Fund in the amount of $228. The Trust has entered into a master administrative services agreement with Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain administrative costs incurred in providing accounting services to the Fund. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees. The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. IAIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IAIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust's Board of Trustees. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees. The Trust has entered into master distribution agreements with Invesco Aim Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class C, Class R, Class Y and Institutional Class 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, Class C and Class R shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI compensation at the annual rate of 0.25% of the Fund's average daily net assets of Class A shares, 0.75% of the average daily net assets of Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority ("FINRA") impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. For the year ended August 31, 2009, expenses incurred under the Plans are shown in the Statement of Operations as distribution fees. Front-end sales commissions and CDSC (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the year ended August 31, 2009, IADI advised the Fund that IADI retained $57,809 in front-end sales commissions from the sale of Class A shares and $3,867, $21,011 and $0 from Class A, Class C and Class R shares, respectively, for CDSC imposed upon redemptions by shareholders. Certain officers and trustees of the Trust are officers and directors of Invesco Aim, IAIS and/or IADI. 32 AIM FLOATING RATE FUND NOTE 3--ADDITIONAL VALUATION INFORMATION Generally Accepted Accounting Principles (GAAP) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level: Level 1 -- Prices are determined using quoted prices in an active market for identical assets. Level 2 -- Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. Level 3 -- Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. The following is a summary of the tiered valuation input levels, as of the end of the reporting period, August 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL - ----------------------------------------------------------------------------------------------------------------------------- Equity Securities $31,252,538 $ -- $1,809,744 $ 33,062,282 - ----------------------------------------------------------------------------------------------------------------------------- Corporate Debt Securities -- 374,616,539 1,790,318 376,406,857 ============================================================================================================================= Total Investments $31,252,538 $374,616,539 $3,600,062 $409,469,139 _____________________________________________________________________________________________________________________________ =============================================================================================================================
NOTE 4--EXPENSE OFFSET ARRANGEMENT(S) The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the year ended August 31, 2009, the Fund received credits from this arrangement, which resulted in the reduction of the Fund's total expenses of $2,254. NOTE 5--TRUSTEES' AND OFFICERS' FEES AND BENEFITS "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officers' Fees and Benefits" also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund. During the year ended August 31, 2009, the Fund paid legal fees of $3,698 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. NOTE 6--BORROWINGS The Fund is a party to a committed line of credit facility with a syndicate administered by JPMorgan Chase Bank. The Fund may borrow up to the lesser of (i) $10,000,000, or (ii) the limits set by its prospectus for borrowings. The Fund is charged a commitment fee of 0.07% on the unused balance of the committed line. Prior to October 27, 2008, the maximum amount available was $50,000,000 and the commitment fee was 0.05%. During the year ended August 31, 2009, the Fund had average borrowings for the 57 days the borrowings were outstanding of $2,789,474, with a weighted average interest rate of 1.37% and interest expense of $5,988. The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco Aim, not to exceed the contractually agreed upon rate. 33 AIM FLOATING RATE FUND NOTE 7--UNFUNDED LOAN COMMITMENTS As of August 31, 2009, the Fund had unfunded loan commitments of $7,270,588, which could be extended at the option of the borrower, pursuant to the following loan agreements with the following borrowers:
UNFUNDED BORROWER COMMITMENTS - -------------------------------------------------------------------------------------------------------- CCS Corp. Delay Draw Term Loan $ 738,429 - -------------------------------------------------------------------------------------------------------- Greektown Casino LLC Term Loan 252,408 - -------------------------------------------------------------------------------------------------------- Greektown Casino LLC Term Loan 272,472 - -------------------------------------------------------------------------------------------------------- Ion Media Networks, Inc. Term Loan 136,430 - -------------------------------------------------------------------------------------------------------- LyondellBasell Industries Term Loan 226,917 - -------------------------------------------------------------------------------------------------------- Mediacom Communications Corp. Term Loan 3,026,192 - -------------------------------------------------------------------------------------------------------- New Vision Television Term Loan 159,853 - -------------------------------------------------------------------------------------------------------- Nuance Communications, Inc. Revolver Loan 111,922 - -------------------------------------------------------------------------------------------------------- Pinnacle Foods Group, Inc. (Aurora Foods) Revolver Loan 604,760 - -------------------------------------------------------------------------------------------------------- Stone Container Corp. Term Loan 1,029,872 - -------------------------------------------------------------------------------------------------------- Tribune Company Revolver Loan 711,333 ======================================================================================================== $7,270,588 ________________________________________________________________________________________________________ ========================================================================================================
NOTE 8--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED AUGUST 31, 2009 AND 2008:
2009 2008 - -------------------------------------------------------------------------------------------------------- Ordinary income $15,797,455 $17,974,689 ________________________________________________________________________________________________________ ========================================================================================================
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
2009 - ------------------------------------------------------------------------------------------------ Undistributed ordinary income $ 251,083 - ------------------------------------------------------------------------------------------------ Net unrealized appreciation (depreciation) -- investments (25,351,405) - ------------------------------------------------------------------------------------------------ Temporary book/tax differences (42,102) - ------------------------------------------------------------------------------------------------ Capital loss carryforward (57,467,146) - ------------------------------------------------------------------------------------------------ Post-October deferrals (7,119,480) - ------------------------------------------------------------------------------------------------ Shares of beneficial interest 471,474,938 ================================================================================================ Total net assets $381,745,888 ________________________________________________________________________________________________ ================================================================================================
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's net unrealized appreciation (depreciation) difference is attributable primarily to wash sales. The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits. Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. 34 AIM FLOATING RATE FUND The Fund has a capital loss carryforward as of August 31, 2009 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* - ----------------------------------------------------------------------------------------------- August 31, 2010 $21,273,718 - ----------------------------------------------------------------------------------------------- August 31, 2011 10,298,295 - ----------------------------------------------------------------------------------------------- August 31, 2012 2,745,717 - ----------------------------------------------------------------------------------------------- August 31, 2013 5,482,284 - ----------------------------------------------------------------------------------------------- August 31, 2014 2,498,917 - ----------------------------------------------------------------------------------------------- August 31, 2016 1,685,685 - ----------------------------------------------------------------------------------------------- August 31, 2017 13,482,530 =============================================================================================== Total capital loss carryforward $57,467,146 _______________________________________________________________________________________________ ===============================================================================================
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. NOTE 9--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended August 31, 2009 was $253,058,811 and $128,220,702, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ------------------------------------------------------------------------------------------------ Aggregate unrealized appreciation of investment securities $ 16,198,640 - ------------------------------------------------------------------------------------------------ Aggregate unrealized (depreciation) of investment securities (41,550,045) ================================================================================================ Net unrealized appreciation (depreciation) of investment securities $(25,351,405) ________________________________________________________________________________________________ ================================================================================================ Cost of investments for tax purposes is $434,820,544.
NOTE 10--RECLASSIFICATION OF PERMANENT DIFFERENCES Primarily as a result of differing book/tax treatment of expired capital loss carryforward on August 31, 2009, undistributed net investment income was increased by $3,584, undistributed net realized gain (loss) was increased by $10,187,980 and shares of beneficial interest decreased by $10,191,564. This reclassification had no effect on the net assets of the Fund. 35 AIM FLOATING RATE FUND NOTE 11--SHARE INFORMATION
SUMMARY OF SHARE ACTIVITY - -------------------------------------------------------------------------------------------------------------------------- YEAR ENDED AUGUST 31, -------------------------------------------------------------- 2009(a) 2008 ---------------------------- ----------------------------- SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------------------------------- Sold: Class A 22,788,600 $140,448,419 5,930,178 $ 49,487,900 - -------------------------------------------------------------------------------------------------------------------------- Class C 9,058,544 56,396,083 3,459,058 28,780,327 - -------------------------------------------------------------------------------------------------------------------------- Class R 23,993 160,476 8,867 66,178 - -------------------------------------------------------------------------------------------------------------------------- Class Y(b) 3,086,832 19,854,491 -- -- - -------------------------------------------------------------------------------------------------------------------------- Institutional Class 779,815 4,913,124 1,731,143 14,334,499 ========================================================================================================================== Issued as reinvestment of dividends: Class A 1,023,849 6,419,451 815,548 6,773,699 - -------------------------------------------------------------------------------------------------------------------------- Class C 398,007 2,493,435 379,132 3,166,936 - -------------------------------------------------------------------------------------------------------------------------- Class R 3,234 20,088 1,581 12,804 - -------------------------------------------------------------------------------------------------------------------------- Class Y 22,822 151,664 -- -- - -------------------------------------------------------------------------------------------------------------------------- Institutional Class 403,283 2,501,384 381,534 3,151,695 ========================================================================================================================== Reacquired:(c) Class A(b) (10,735,224) (69,063,291) (12,128,519) (101,468,950) - -------------------------------------------------------------------------------------------------------------------------- Class C (3,310,738) (21,665,432) (4,669,761) (38,316,260) - -------------------------------------------------------------------------------------------------------------------------- Class R (8,333) (51,961) (1,339) (10,712) - -------------------------------------------------------------------------------------------------------------------------- Class Y (257,014) (1,730,178) -- -- - -------------------------------------------------------------------------------------------------------------------------- Institutional Class (2,076,229) (13,471,208) (1,311,463) (10,986,409) ========================================================================================================================== Net increase (decrease) in share activity 21,201,441 $127,376,545 (5,404,041) $ (45,008,293) __________________________________________________________________________________________________________________________ ==========================================================================================================================
(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 37% of the outstanding shares of the Fund. IADI has an agreement with these entities to sell Fund shares. The Fund, Invesco Aim and/or Invesco Aim affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco Aim and/or Invesco Aim affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. In addition, 9% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco Aim. (b) Effective upon the commencement date of Class Y shares, October 3, 2008, the following shares were converted from Class A into Class Y shares of the Fund:
CLASS SHARES AMOUNT -------------------------------------------------------------------------------------------------- Class Y 34,580 $ 252,087 -------------------------------------------------------------------------------------------------- Class A (34,580) (252,087) __________________________________________________________________________________________________ ==================================================================================================
(c) Net of redemption fees of $27,580 and $18,720 allocated among the classes based on relative net assets of each class for the years ended August 31, 2009 and 2008, respectively. 36 AIM FLOATING RATE FUND NOTE 12--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
NET GAINS NET ASSET (LOSSES) ON DIVIDENDS DISTRIBUTIONS VALUE, NET SECURITIES (BOTH TOTAL FROM FROM NET FROM NET BEGINNING INVESTMENT REALIZED AND INVESTMENT INVESTMENT REALIZED TOTAL OF PERIOD INCOME UNREALIZED) OPERATIONS INCOME GAINS DISTRIBUTIONS - --------------------------------------------------------------------------------------------------------------------------- CLASS A Year ended 08/31/09 $7.99 $0.41(d) $(0.89) $(0.48) $(0.42) $ -- $(0.42) Year ended 08/31/08 8.67 0.53(d) (0.68) (0.15) (0.53) -- (0.53) Year ended 08/31/07 9.06 0.60(d) (0.39) 0.21 (0.60) -- (0.60) Eight months ended 08/31/06 9.04 0.37(d) 0.02 0.39 (0.37) -- (0.37) Year ended 12/31/05 9.02 0.43 0.01 0.44 (0.42) -- (0.42) Year ended 12/31/04 8.77 0.30 0.25 0.55 (0.29) (0.01) (0.30) - --------------------------------------------------------------------------------------------------------------------------- CLASS C Year ended 08/31/09 7.97 0.38(d) (0.90) (0.52) (0.39) -- (0.39) Year ended 08/31/08 8.65 0.48(d) (0.68) (0.20) (0.48) -- (0.48) Year ended 08/31/07 9.04 0.56(d) (0.39) 0.17 (0.56) -- (0.56) Eight months ended 08/31/06 9.02 0.34(d) 0.02 0.36 (0.34) -- (0.34) Year ended 12/31/05 8.99 0.40 0.03 0.43 (0.40) -- (0.40) Year ended 12/31/04 8.75 0.27 0.25 0.52 (0.27) (0.01) (0.28) - --------------------------------------------------------------------------------------------------------------------------- CLASS R Year ended 08/31/09 8.00 0.40(d) (0.89) (0.49) (0.41) -- (0.41) Year ended 08/31/08 8.66 0.51(d) (0.66) (0.15) (0.51) -- (0.51) Year ended 08/31/07 9.06 0.58(d) (0.40) 0.18 (0.58) -- (0.58) Year ended 08/31/06(h) 9.11 0.21(d) (0.05) 0.16 (0.21) -- (0.21) - --------------------------------------------------------------------------------------------------------------------------- CLASS Y Year ended 08/31/09(h) 7.29 0.41(d) (0.24) 0.17 (0.39) -- (0.39) - --------------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL CLASS Year ended 08/31/09 7.99 0.44(d) (0.89) (0.45) (0.45) -- (0.45) Year ended 08/31/08 8.67 0.56(d) (0.68) (0.12) (0.56) -- (0.56) Year ended 08/31/07 9.06 0.63(d) (0.39) 0.24 (0.63) -- (0.63) Year ended 08/31/06(h) 9.11 0.23(d) (0.05) 0.18 (0.23) -- (0.23) ___________________________________________________________________________________________________________________________ =========================================================================================================================== RATIO OF RATIO OF EXPENSES EXPENSES TO AVERAGE TO AVERAGE NET RATIO OF NET NET ASSETS ASSETS WITHOUT INVESTMENT NET ASSET NET ASSETS, WITH FEE WAIVERS FEE WAIVERS INCOME VALUE, END TOTAL END OF PERIOD AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO OF PERIOD(a) RETURN(b) (000S OMITTED) ABSORBED ABSORBED NET ASSETS TURNOVER(c) - ----------------------------------------------------------------------------------------------------------------------------------- CLASS A Year ended 08/31/09 $7.09 (4.97)% $218,448 1.24%(e)(f) 1.25%(e)(f) 6.50%(e) 52% Year ended 08/31/08 7.99 (1.80) 141,803 1.36(f) 1.37(f) 6.36 66 Year ended 08/31/07 8.67 2.28 220,449 1.29(f) 1.30(f) 6.65 117 Eight months ended 08/31/06 9.06 4.32 155,953 1.58(f)(g) 1.86(f)(g) 6.06(g) 54 Year ended 12/31/05 9.04 5.00 159,206 2.04(f) 2.17(f) 4.69 56 Year ended 12/31/04 9.02 6.36 190,814 1.65(f) 1.69(f) 3.31 82 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS C Year ended 08/31/09 7.06 (5.61) 103,975 1.74(e)(f) 1.75(e)(f) 6.00(e)(f) 52 Year ended 08/31/08 7.97 (2.31) 68,452 1.86(f) 1.87(f) 5.86 66 Year ended 08/31/07 8.65 1.76 81,479 1.79(f) 1.80(f) 6.15 117 Eight months ended 08/31/06 9.04 4.05 44,853 1.97(f)(g) 2.36(f)(g) 5.67(g) 54 Year ended 12/31/05 9.02 4.85 47,624 2.29(f) 2.67(f) 4.44 56 Year ended 12/31/04 8.99 5.98 34,518 1.89(f) 2.19(f) 3.07 82 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS R Year ended 08/31/09 7.10 (5.19) 427 1.49(e)(i) 1.50(e)(i) 6.25(e)(i) 52 Year ended 08/31/08 8.00 (1.81) 330 1.61(i) 1.62(i) 6.11 66 Year ended 08/31/07 8.66 1.91 278 1.54(i) 1.55(i) 6.40 117 Year ended 08/31/06(h) 9.06 1.80 78 1.53(g)(i) 1.53(g)(i) 6.11(g) 54 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS Y Year ended 08/31/09(h) 7.07 3.48 20,176 1.00(e)(g)(i) 1.01(e)(g)(i) 6.74(e)(g) 52 - ----------------------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL CLASS Year ended 08/31/09 7.09 (4.62) 38,720 0.88(e)(i) 0.89(e)(i) 6.86(e) 52 Year ended 08/31/08 7.99 (1.46) 50,786 1.01(i) 1.02(i) 6.71 66 Year ended 08/31/07 8.67 2.62 48,138 0.95(i) 0.96(i) 6.99 117 Year ended 08/31/06(h) 9.06 2.00 24,335 0.98(g)(i) 0.98(g)(i) 6.66(g) 54 ___________________________________________________________________________________________________________________________________ ===================================================================================================================================
(a) Includes redemption fees added to shares of beneficial interest which were less than $0.005 per share. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. (c) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. (d) Calculated using average shares outstanding. (e) Ratios are based on average daily net assets (000's omitted) of $142,449, $62,765, $315, $6,376 and $35,391 for Class A, Class C, Class R, Class Y and Institutional Class shares, respectively. (f) Ratio includes line of credit expenses of 0.02%, 0.06%, 0.02% and 0.21% (annualized), 0.54% and 0.15% for the years ended August 31, 2009, August 31, 2008, August 31, 2007, the eight months ended August 31, 2006, and the years ended December 31, 2005 and December 31, 2004, respectively. (g) Annualized. (h) Commencement date of April 13, 2006 for Class R and Institutional Class shares and October 3, 2008 for Class Y shares. (i) Ratio includes line of credit expenses of 0.02%, 0.06%, 0.02% and 0.01% (annualized) for the years ended August 31, 2009, August 31, 2008, August 31, 2007 and the eight months ended August 31, 2006, respectively. 37 AIM FLOATING RATE FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees of AIM Counselor Series Trust and Shareholders of AIM Floating Rate 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 AIM Floating Rate Fund (one of the funds constituting AIM Counselor Series Trust, hereafter referred to as the "Fund") at August 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, its cash flows for the year then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian and intermediate participants, provide a reasonable basis for our opinion. PRICEWATERHOUSECOOPERS LLP October 16, 2009 Houston, Texas 38 AIM FLOATING RATE FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(2) RATIO - --------------------------------------------------------------------------------------------------- A $1,000.00 $1,281.10 $6.90 $1,019.16 $6.11 1.20% - --------------------------------------------------------------------------------------------------- C 1,000.00 1,277.00 9.76 1,016.64 8.64 1.70 - --------------------------------------------------------------------------------------------------- R 1,000.00 1,276.80 8.32 1,017.90 7.38 1.45 - --------------------------------------------------------------------------------------------------- Y 1,000.00 1,280.80 5.46 1,020.42 4.84 0.95 - ---------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009 through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. 39 AIM FLOATING RATE FUND Supplement to Annual Report dated 8/31/09 AIM FLOATING RATE FUND INSTITUTIONAL CLASS SHARES ------------------------------------------ Fund operating expense ratio set forth in AVERAGE ANNUAL TOTAL RETURNS the most recent Fund prospectus as of the The following information has been For periods ended 8/31/09 date of this supplement for Institutional prepared to provide Institutional Class Class shares was 0.90%. The expense ratios shareholders with a performance overview 10 Years 2.65% presented above may vary from the expense specific to their holdings. Institutional ------------------------------------------ ratios presented in other sections of the Class shares are offered exclusively to 5 Years 1.67 actual report that are based on expenses institutional investors, including defined ------------------------------------------ incurred during the period covered by the contribution plans that meet certain 1 Year -4.62 report. criteria. ------------------------------------------ Had the advisor not waived fees and/or ------------------------------------------ reimbursed expenses in the past, AVERAGE ANNUAL TOTAL RETURNS performance would have been lower. For periods ended 6/30/09, the most recent calendar quarter-end Please note that past performance is not indicative of future results. More 10 Years 2.16% recent returns may be more or less than ------------------------------------------ those shown. All returns assume 5 Years 0.66 reinvestment of distributions at NAV. ------------------------------------------ Investment return and principal value will 1 Year -10.97 fluctuate so your shares, when redeemed, ------------------------------------------ may be worth more or less than their original cost. See full report for Institutional Class shares' inception date information on comparative benchmarks. is April 13, 2006. Returns since that date Please consult your Fund prospectus for are historical returns. All other returns more information. For the most current are blended returns of historical month-end performance, please call Institutional Class share performance and 800 451 4246 or visit invescoaim.com. restated Class A share performance (for periods prior to the inception date of A redemption fee of 2% will be imposed Institutional Class shares) at net asset on certain redemptions or exchanges out of value (NAV) and reflect the Rule 12b-1 the Fund within 31 days of purchase. fees applicable to Class A shares. Class A Exceptions to the redemption fee are shares' inception date is May 1, 1997. listed in the Fund's prospectus. Institutional Class shares have no (1) Total annual operating expenses less sales charge; therefore, performance is at any contractual fee waivers and/or NAV. Performance of Institutional Class expense reimbursements by the advisor shares will differ from performance of in effect through at least June 30, other share classes primarily due to 2010. See current prospectus for more differing sales charges and class information. expenses. The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 0.89%.(1) The total annual - ------------------------------------------ NASDAQ SYMBOL AFRIX Over for information on your Fund's expenses. - --------------------------------------------------------------------------------------- THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FOR INSTITUTIONAL INVESTOR USE ONLY -- NOT FOR USE WITH THE PUBLIC THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED, SHOWN TO THE PUBLIC [INVESCO AIM LOGO] OR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. - SERVICE MARK - invescoaim.com FLR-INS-1 Invesco Aim Distributors, Inc.
CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
- ----------------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(2) RATIO - ----------------------------------------------------------------------------------------------------------- Institutional $1,000.00 $1,281.10 $4.89 $1,020.92 $4.33 0.85% - -----------------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009, through August 31, 2009 after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. AIM FLOATING RATE FUND APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS The Board of Trustees (the Board) of AIM strategies and limitations of these funds. the year as part of their ongoing Counselor Series Trust is required under oversight of the Fund, and did not the Investment Company Act of 1940 to In addition to their meetings identify any particular factor that was approve annually the renewal of the AIM throughout the year, the Sub-Committees controlling. Each Trustee may have Floating Rate Fund (the Fund) investment meet at designated contract renewal evaluated the information provided advisory agreement with Invesco Aim meetings each year to conduct an in-depth differently from another Trustee and Advisors, Inc. (Invesco Aim) and the review of the performance, fees, expenses, attributed different weight to the various Master Intergroup Sub-Advisory Contract and other matters related to their factors. The Trustees recognized that the for Mutual Funds (the sub-advisory assigned funds. During the contract advisory arrangements and resulting contracts) with Invesco Asset Management renewal process, the Trustees receive advisory fees for the Fund and the other Deutschland GmbH, Invesco Asset Management comparative performance and fee data AIM Funds are the result of years of Limited, Invesco Asset Management (Japan) regarding the AIM Funds prepared by an review and negotiation between the Limited, Invesco Australia Limited, independent company, Lipper, Inc. Trustees and Invesco Aim, that the Invesco Global Asset Management (N.A.), (Lipper), under the direction and Trustees may focus to a greater extent on Inc., Invesco Hong Kong Limited, Invesco supervision of the Senior Officer who also certain aspects of these arrangements in Institutional (N.A.), Inc., Invesco Senior prepares a separate analysis of this some years than in others, and that the Secured Management, Inc. and Invesco information for the Trustees. Each Trustees' deliberations and conclusions in Trimark Ltd. (collectively, the Affiliated Sub-Committee then makes recommendations a particular year may be based in part on Sub-Advisers). During contract renewal to the Investments Committee regarding the their deliberations and conclusions meetings held on June 16-17, 2009, the fees and expenses of their assigned funds. regarding these same arrangements Board as a whole, and the disinterested or The Investments Committee considers each throughout the year and in prior years. "independent" Trustees voting separately, Sub-Committee's recommendations and makes approved the continuance of the Fund's its own recommendations regarding the fees The discussion below serves as a investment advisory agreement and the and expenses of the AIM Funds to the full summary of the Senior Officer's sub-advisory contracts for another year, Board. The Investments Committee also independent written evaluation with effective July 1, 2009. In doing so, the considers each Sub-Committee's respect to the Fund's investment advisory Board determined that the Fund's recommendations in making its annual agreement as well as a discussion of the investment advisory agreement and the recommendation to the Board whether to material factors and related conclusions sub-advisory contracts are in the best approve the continuance of each AIM Fund's that formed the basis for the Board's interests of the Fund and its shareholders investment advisory agreement and approval of the Fund's investment advisory and that the compensation to Invesco Aim sub-advisory contracts for another year. agreement and sub-advisory contracts. and the Affiliated Sub-Advisers under the Unless otherwise stated, information set Fund's investment advisory agreement and The independent Trustees met separately forth below is as of June 17, 2009, and sub-advisory contracts is fair and during their evaluation of the Fund's does not reflect any changes that may have reasonable. investment advisory agreement and occurred since that date, including but sub-advisory contracts with independent not limited to changes to the Fund's THE BOARD'S FUND EVALUATION PROCESS legal counsel. The independent Trustees performance, advisory fees, expense were also assisted in their annual limitations and/or fee waivers. The Board's Investments Committee has evaluation of the Fund's investment established three Sub-Committees that are advisory agreement by the Senior Officer. FACTORS AND CONCLUSIONS AND SUMMARY OF responsible for overseeing the management One responsibility of the Senior Officer INDEPENDENT WRITTEN FEE EVALUATION of a number of the series portfolios of is to manage the process by which the AIM the AIM Funds. This Sub-Committee structure Funds' proposed management fees are A. Nature, Extent and Quality of permits the Trustees to focus on the negotiated during the annual contract Services Provided by Invesco Aim performance of the AIM Funds that have renewal process to ensure that they are been assigned to them. The Sub-Committees negotiated in a manner that is at arms' The Board reviewed the advisory services meet throughout the year to review the length and reasonable. Accordingly, the provided to the Fund by Invesco Aim under performance of their assigned funds, and Senior Officer must either supervise a the Fund's investment advisory agreement, the Sub-Committees review monthly and competitive bidding process or prepare an the performance of Invesco Aim in quarterly comparative performance independent written evaluation. The Senior providing these services, and the information and periodic asset flow data Officer recommended that an independent credentials and experience of the officers for their assigned funds. These materials written evaluation be provided and, at the and employees of Invesco Aim who provide are prepared under the direction and direction of the Board, prepared an these services. The Board's review of the supervision of the independent Senior independent written evaluation. qualifications of Invesco Aim to provide Officer, an officer of the AIM Funds who these services included the Board's reports directly to the independent During the annual contract renewal consideration of Invesco Aim's portfolio Trustees. Over the course of each year, process, the Board considered the factors and product review process, various back the Sub-Committees meet with portfolio discussed below in evaluating the fairness office support functions provided by managers for their assigned funds and and reasonableness of the Fund's Invesco Aim and its affiliates, and other members of management and review investment advisory agreement and Invesco Aim's equity and fixed income with these individuals the performance, sub-advisory contracts. The Board trading operations. The Board concluded investment objective(s), policies, considered all of the information provided that the nature, extent and quality of the to them, including information provided at advisory services provided to the Fund by their meetings throughout Invesco Aim are appropriate and that Invesco Aim 40 AIM FLOATING RATE FUND continued
currently is providing satisfactory shareholders by permitting Invesco Aim to financial data from the most recent annual advisory services in accordance with the utilize the additional resources and report of each fund in the expense group terms of the Fund's investment advisory talent of the Affiliated Sub-Advisers in that was publicly available as of the end agreement. In addition, based on their managing the Fund. of the past calendar year. The Board noted ongoing meetings throughout the year with that some comparative data was at least the Fund's portfolio manager or managers, C. Fund Performance one year old and that other data did not the Board concluded that these individuals reflect the market downturn that occurred are competent and able to continue to The Board considered Fund performance as a in the fourth quarter of 2008. carry out their responsibilities under the relevant factor in considering whether to Fund's investment advisory agreement. approve the investment advisory agreement The Board also compared the Fund's as well as the sub-advisory contracts for sub-advisory fee rate to the effective fee In determining whether to continue the the Fund, as Invesco Senior Secured rate (the advisory fee after any advisory Fund's investment advisory agreement, the currently manages assets of the Fund. fee waivers and before any expense Board considered the prior relationship limitations/waivers) of one separately between Invesco Aim and the Fund, as well The Board compared the Fund's managed account/wrap account advised by as the Board's knowledge of Invesco Aim's performance during the past one, three and Invesco Senior Secured. The Board noted operations, and concluded that it is five calendar years to the performance of that the Fund's sub-advisory fee rate beneficial to maintain the current all funds in the Lipper performance below the rate for the separately managed relationship, in part, because of such universe that are not managed by Invesco account/wrap account. The Board considered knowledge. The Board also considered the Aim or an Affiliated Sub-Adviser, and that management of the separately managed steps that Invesco Aim and its affiliates against the S&P/LSTA Leveraged Loan Index. account/wrap account by Invesco Senior continue to take to improve the quality The Board noted that the Fund's Secured involves different levels of and efficiency of the services they performance was in the fifth quintile for services and different operational and provide to the AIM Funds in the areas of the one and three year periods and fourth regulatory requirements than Invesco investment performance, product line quintile of its performance universe for Senior Secured's management of the Fund. diversification, distribution, fund the five year period and (the first The Board concluded that these differences operations, shareholder services and quintile being the best performing funds are appropriately reflected in the fee compliance. The Board concluded that the and the fifth quintile being the worst structure for the Fund. quality and efficiency of the services performing funds). The Board noted that Invesco Aim and its affiliates provide to the Fund's performance was below the The Board noted that Invesco Aim the AIM Funds in each of these areas performance of the Index for the one, contractually agreed to waive fees and/or support the Board's approval of the three and five year periods. Invesco Aim limit expenses of the Fund through at continuance of the Fund's investment advised the Board that underperformance is least June 30, 2010 in an amount necessary advisory agreement. due to the purchase of larger more liquid to limit total annual operating expenses loans and 2nd tier loans, and that Invesco to a specified percentage of average daily B. Nature, Extent and Quality of Aim will continue to monitor performance net assets for each class of the Fund. The Services Provided by Affiliated of the Fund. Although the independent Board noted that at the current expense Sub-Advisers written evaluation of the Fund's Senior ratio for the Fund, this expense waiver Officer only considered Fund performance does not have any impact. The Board also The Board reviewed the services through the most recent calendar year, the noted that Invesco Aim has agreed to provided by the Affiliated Sub-Advisers Board also reviewed more recent Fund reduce the per account transfer agent fee under the sub-advisory contracts and the performance and this review did not change for all the retail funds, including the credentials and experience of the officers their conclusions. The Board noted that, Fund, effective July 1, 2009. and employees of the Affiliated in response to the Board's focus on fund Sub-Advisers who provide these services. performance, Invesco Aim has taken a The Board also considered the services The Board concluded that the nature, number of actions intended to improve the provided by the Affiliated Sub-Advisers extent and quality of the services investment process for the funds. pursuant to the sub-advisory contracts and provided by the Affiliated Sub-Advisers the services provided by Invesco Aim are appropriate. The Board noted that the D. Advisory and Sub-Advisory Fees and pursuant to the Fund's advisory agreement, Affiliated Sub-Advisers, which have Fee Waivers as well as the allocation of fees between offices and personnel that are Invesco Aim and the Affiliated geographically dispersed in financial The Board compared the Fund's Sub-Advisers pursuant to the sub-advisory centers around the world, can provide contractual advisory fee rate to the contracts. The Board noted that the research and other information and make contractual advisory fee rates of funds in sub-advisory fees have no direct effect on recommendations on the markets and the Fund's Lipper expense group that are the Fund or its shareholders, as they are economies of various countries and not managed by Invesco Aim or an paid by Invesco Aim to the Affiliated securities of companies located in such Affiliated Sub-Adviser, at a common asset Sub-Advisers, and that Invesco Aim and the countries or on various types of level. The Board noted that the Fund's Affiliated Sub-Advisers are affiliates. investments and investment techniques. The contractual advisory fee rate was below Board noted that investment decisions for the median contractual advisory fee rate After taking account of the Fund's the Fund are made by Invesco Senior of funds in its expense group. The Board contractual advisory fee rate, the Secured Management, Inc. (Invesco Senior also reviewed the methodology used by contractual sub-advisory fee rate, the Secured). The Board concluded that the Lipper in determining contractual fee comparative advisory fee information sub-advisory contracts benefit the Fund rates, which includes using audited discussed above and other relevant and its factors, the Board concluded that the 41 AIM FLOATING RATE FUND continued
Fund's advisory and sub-advisory fees are necessary to fulfill these obligations. investments, although Invesco Aim has fair and reasonable. The Board also considered whether each contractually agreed to waive through at Affiliated Sub-Adviser is financially least June 30, 2010, the advisory fees E. Economies of Scale and Breakpoints sound and has the resources necessary to payable by the Fund in an amount equal to perform its obligations under the 100% of the net advisory fees Invesco Aim The Board considered the extent to which sub-advisory contracts, and concluded that receives from the affiliated money market there are economies of scale in the each Affiliated Sub-Adviser has the funds with respect to the Fund's provision of advisory services to the financial resources necessary to fulfill investment in the affiliated money market Fund. The Board also considered whether these obligations. funds of uninvested cash, but not cash the Fund benefits from such economies of collateral. The Board concluded that the scale through contractual breakpoints in G. Collateral Benefits to Invesco Aim Fund's investment of uninvested cash and the Fund's advisory fee schedule. The and its Affiliates cash collateral from any securities Board noted that the Fund's contractual lending arrangements in the affiliated advisory fee schedule includes three The Board considered various other money market funds is in the best breakpoints but that, due to the Fund's benefits received by Invesco Aim and its interests of the Fund and its asset level at the end of the past affiliates resulting from Invesco Aim's shareholders. calendar year, the Fund has yet to benefit relationship with the Fund, including the from the breakpoints. Based on this fees received by Invesco Aim and its information, the Board concluded that the affiliates for their provision of Fund's advisory fees would reflect administrative, transfer agency and economies of scale at higher asset levels. distribution services to the Fund. The The Board also noted that the Fund shares Board considered the performance of directly in economies of scale through Invesco Aim and its affiliates in lower fees charged by third party service providing these services and the providers based on the combined size of organizational structure employed by all of the AIM Funds and affiliates. Invesco Aim and its affiliates to provide these services. The Board also considered F. Profitability and Financial that these services are provided to the Resources Fund pursuant to written contracts that are reviewed and approved on an annual The Board reviewed information from basis by the Board. The Board concluded Invesco Aim concerning the costs of the that Invesco Aim and its affiliates are advisory and other services that Invesco providing these services in a satisfactory Aim and its affiliates provide to the Fund manner and in accordance with the terms of and the profitability of Invesco Aim and their contracts, and are qualified to its affiliates in providing these continue to provide these services to the services. The Board also reviewed Fund. information concerning the financial condition of Invesco Aim and its The Board considered the benefits affiliates. The Board reviewed with realized by Invesco Aim and the Affiliated Invesco Aim the methodology used to Sub-Advisers as a result of portfolio prepare the profitability information. The brokerage transactions executed through Board considered the overall profitability "soft dollar" arrangements. The Board of Invesco Ltd., the ultimate parent of noted that soft dollar arrangements shift Invesco Aim and the Affiliated the payment obligation for research and Sub-Advisers, and of Invesco Aim, as well execution services from Invesco Aim and as the profitability of Invesco Aim in the Affiliated Sub-Advisers to the funds connection with managing the Fund. The and therefore may reduce Invesco Aim's and Board noted that Invesco Aim continues to the Affiliated Sub-Advisers' expenses. The operate at a net profit, although the Board concluded that Invesco Aim's and the reduction of assets under management as a Affiliated Sub-Advisers' soft dollar result of market movements and the arrangements are appropriate. The Board increase in voluntary fee waivers for also concluded that, based on their review affiliated money market funds have reduced and representations made by the Chief the profitability of Invesco Aim and its Compliance Officer of Invesco Aim, these affiliates. The Board concluded that the arrangements are consistent with Fund's fees are fair and reasonable, and regulatory requirements. that the level of profits realized by Invesco Aim and its affiliates from The Board considered the fact that the providing services to the Fund is not Fund's uninvested cash and cash collateral excessive in light of the nature, quality from any securities lending arrangements and extent of the services provided. The may be invested in money market funds Board considered whether Invesco Aim is advised by Invesco Aim pursuant to financially sound and has the resources procedures approved by the Board. The necessary to perform its obligations under Board noted that Invesco Aim will receive the Fund's investment advisory agreement, advisory fees from these affiliated money and concluded that Invesco Aim has the market funds attributable to such financial resources 42 AIM FLOATING RATE FUND
TAX INFORMATION Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors. The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement. The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended August 31, 2009:
FEDERAL AND STATE INCOME TAX ---------------------------- Qualified Dividend Income* 0% Corporate Dividends Received Deduction* 0%
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year. 43 AIM FLOATING RATE FUND TRUSTEES AND OFFICERS The address of each trustee and officer of AIM Counselor Series Trust (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------------ Martin L. Flanagan(1) -- 2007 Executive Director, Chief Executive Officer and President, None 1960 Invesco Ltd. (ultimate parent of Invesco Aim and a global Trustee investment management firm); Chairman, Invesco Aim Advisors, Inc. (registered investment advisor); Trustee, The AIM Family of Funds(R); Vice Chairman, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd. and Chairman, Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Philip A. Taylor(2) -- 2006 Head of North American Retail and Senior Managing Director, None 1954 Invesco Ltd.; Director, Chief Executive Officer and Trustee, President and President, Invesco Aim Advisors, Inc. and 1371 Preferred Principal Executive Inc. (holding company); Director, Chairman, Chief Executive Officer Officer and President, Invesco Aim Management Group, Inc. (financial services holding company) and Invesco Aim Capital Management, Inc. (registered investment advisor); Director and President, INVESCO Funds Group, Inc. (registered investment advisor and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltee (registered investment advisor and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: President, Invesco Trimark Dealer Inc.; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Director and President, Invesco Trimark Ltd./Invesco Trimark Ltee; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited Trustee and Chair consulting company) (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Bob R. Baker -- 1936 1983 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Bayley -- 1939 2003 Retired None Trustee Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Board of Governors, Trustee firm) Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association - ------------------------------------------------------------------------------------------------------------------------------------ Albert R. Dowden -- 1941 2003 Director of a number of public and private business Board of Nature's Trustee corporations, including the Boss Group Ltd. (private Sunshine Products, investment and management); Continental Energy Services, LLC (oil and as pipeline service); Inc. Reich & Tang Funds (registered investment company), and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, CompuDyne Corporation (provider of product and services to the public security market); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Senior Vice President, AB Volvo; Director of various public and private corporations - ------------------------------------------------------------------------------------------------------------------------------------ Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff Trustee (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate ' entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) - ------------------------------------------------------------------------------------------------------------------------------------ Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich & Trustee Tang Funds (16 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ Prema Mathai-Davis -- 1950 2003 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Larry Soll -- 1942 1997 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Raymond Stickel, Jr. -- 2005 Retired None 1944 Trustee Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Flanagan is considered an interested person of the Trust because he is an officer of the advisor to the Trust, and an oficer and a director of Invesco Ltd., ultimate parent of the advisor to the Trust. (2) Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. T-1 Trustees and Officers - (continued)
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family N/A Senior Vice President and of Funds(R) Senior Officer Formerly: Director of Compliance and Assistant General Counsel, ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General Counsel and Director of Compliance, ALPS Mutual Funds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General N/A Senior Vice President, Counsel, Invesco Aim Management Group, Inc., Invesco Aim Chief Legal Officer and Advisors, Inc. and Invesco Aim Capital Management, Inc.; Secretary Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); and Manager, Invesco PowerShares Capital Management LLC Formerly: Director, Vice President and Secretary, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company); Vice President and Secretary, PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator); General Counsel and Secretary, Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company) - ------------------------------------------------------------------------------------------------------------------------------------ Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice N/A Vice President President, The AIM Family of Funds(R) Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R); Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company - ------------------------------------------------------------------------------------------------------------------------------------ Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, N/A Vice President Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., .Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; and Vice President, The AIM Family of Funds(R) Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Sheri Morris -- 1964 2003 Vice President, Treasurer and Principal Financial Officer, N/A Vice President, Treasurer The AIM Family of Funds(R); and Vice President, Invesco Aim and Advisors, Inc., Invesco Aim Capital Management, Inc. and Principal Financial Invesco Aim Private Asset Management Inc. Officer Formerly: Assistant Vice President and Assistant Treasurer, The AIM Family of Funds(R) and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash N/A Vice President Management Group; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only) Formerly: President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer and Managing Director, Invesco Aim Capital Management, Inc.; and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only) - ------------------------------------------------------------------------------------------------------------------------------------ Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim N/A Anti-Money Laundering Advisors, Inc., Invesco Aim Capital Management, Inc., Compliance Officer Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., Invesco Aim Private Asset Management, Inc. and The AIM Family of Funds(R) Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company; and Manager of the Fraud Prevention Department, Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; N/A Chief Compliance Officer Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, The AIM Family of Funds(R), Invesco Global Asset Management (N.A.), Inc. (registered investment advisor), Invesco Institutional (N.A.), Inc., (registered investment advisor), INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment advisor) and Invesco Senior Secured Management, Inc. (registered investment advisor); and Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company; and Global Head of Product Development, AIG-Global Investment Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------
The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund's prospectus for information on the Fund's sub-advisors. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street Houston, TX 77046-1173 Suite 100 Suite 100 Suite 2900 Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678 COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN Stradley Ronon Stevens & INDEPENDENT TRUSTEES Invesco Aim Investment Services, Inc. State Street Bank and Trust Young, LLP Kramer, Levin, Naftalis & Frankel LLP P.O. Box 4739 Company 2600 One Commerce Square 1177 Avenue of the Americas Houston, TX 77210-4739 225 Franklin Philadelphia, PA 19103 New York, NY 10036-2714 Boston, MA 02110-2801
T-2 [GRAPHIC] GO PAPERLESS WITH EDELIVERY Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all about eeees: - - ENVIRONMENTALLY FRIENDLY. Go green by reducing the number of - EFFICIENT. Stop waiting for regular mail. Your documents trees used to produce paper. will be sent via email as soon as they're available. - - ECONOMICAL. Help reduce your fund's printing and delivery - EASY. Download, save and print files using your home expenses and put more capital back in your fund's returns. computer with a few clicks of your mouse. - ------------------------------------------------------------------------------------------------------------------------------------ IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Aim Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within thirty days after receiving your request. - ------------------------------------------------------------------------------------------------------------------------------------ FUND HOLDINGS AND PROXY VOTING INFORMATION The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-09913 and 333-36074. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov. If used after January 20, 2010, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for the most recent quarter-end. Invesco Aim - service mark - is a service mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for the products and services represented by Invesco Aim; they each provide investment advisory services to individual and institutional clients and do not sell securities. Please refer to each fund's prospectus for information on the fund's subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the retail mutual funds, exchange-traded funds and institutional money market funds and the subdistributor for the STIC Global Funds represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd. It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco Global Asset [INVESCO AIM LOGO] Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the consolidated adviser - SERVICE MARK - firm will be renamed Invesco Advisers, Inc. Additional information will be posted at invescoaim.com on or about the end of the fourth quarter of 2009. invescoaim.com FLR-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] AIM MULTI-SECTOR FUND AUGUST 31, 2009 - -- service mark -- ANNUAL REPORT TO SHAREHOLDERS (GRAPHIC) 2 Letters to Shareholders 4 Performance Summary 4 Management Discussion 6 Long-Term Fund Performance 8 Supplemental Information 9 Schedule of Investments 12 Financial Statements 14 Notes to Financial Statements 21 Financial Highlights 22 Auditor's Report 23 Fund Expenses 24 Approval of Investment Advisory and Sub-Advisory Agreements 27 Tax Information T-1 Trustees and Officers
Dear Shareholders: While the year covered by this report was difficult -- for long-time investors and veteran investment professionals alike -- economic conditions and market trends appeared much more [TAYLOR favorable at the close of the fiscal year than at its start. PHOTO] The 12 months ended August 31, 2009, included a sharp market sell-off that occurred in the second half of 2008. That downturn affected virtually all sectors, markets and investors. The decline had a number of causes, the most immediate being unprecedented turmoil in credit markets. Economic uncertainty prompted banks to hoard cash and reduce lending, and caused Philip Taylor investors to shun short-term corporate debt. As a result, businesses found it difficult to fund their day-to-day operations, and the U.S. economy -- as well as economies around the globe -- virtually froze briefly. INCREASED COMMUNICATION These developments prompted a greater-than-usual number of shareholders to contact me. Some of you took the time to write a letter while others of you emailed me at phil@invescoaim.com. Many of you sought explanations for the decline in the value of your accounts, while others asked more general questions about when the economy might improve. Your questions, comments and suggestions gave me better insight into what was on your minds, and I was pleased that so many of you took the time to share your thoughts with me. As a result, Invesco Aim's investment professionals and I have increased our efforts to stay in touch with and share our views with you. We increased the number of "Investment Perspectives" articles on our website, invescoaim.com. Through these articles, we've tried to provide timely market commentary, general investor education information and sector updates. I hope you'll take a moment to read them and let me know if you find them useful. To access your Fund's latest quarterly commentary, click on "Products and Performance" at the top of our website; next, select "Mutual Funds"; and then click on "Quarterly Commentary." I also hope you've stayed in touch with your financial advisor. An experienced financial advisor who is familiar with your individual investment goals, time horizon and risk tolerance can be a source of comfort and information during uncertain times. He or she can monitor your investments to ensure they're on track and can prevent you from making impulsive short-term decisions that may have adverse long-term consequences. REASONS FOR OPTIMISM The economy and equity markets reacted to a barrage of negative news during the year. Consumer spending -- which accounts for more than two-thirds(1) of the U.S. economy -- was sluggish as unemployment rose; more workers worried about their job security; home and portfolio values declined; and credit became more difficult to obtain. In his semiannual monetary policy report to Congress in late July, U.S. Federal Reserve Board Chairman Ben Bernanke summarized the stresses and strains the U.S. and global economies suffered in late 2008 and early 2009. Importantly, he suggested that the aggressive, coordinated actions taken by governments and central banks around the world finally may be yielding results. He testified that: - The pace of overall economic decline appears to have slowed significantly. - Credit availability, for consumers and businesses, has improved noticeably. - Investors' extreme risk aversion has eased somewhat. - The decline in housing activity appears to have moderated. While these and other trends offer encouragement, uncertainties remain. Chairman Bernanke testified that he anticipates a gradual recovery in 2010 with some acceleration in economic growth in 2011, together with subdued inflation over the next two years. His considered judgment appears to be shared by investors who have begun to return, cautiously, to the equities market, causing major U.S. stock-market indexes to bounce off their March lows. A SINGLE FOCUS I believe Invesco Aim is uniquely positioned to serve our clients. Our parent company, Invesco Ltd., is one of the largest(2) and most diversified global asset managers. It provides clients with diversified investment strategies and a range of investment products managed by distinct management teams around the world. We believe we can serve you best by focusing on one thing and doing it well: managing your money. Our investment professionals have managed clients' money in up markets and down markets. All of us here recognize that market conditions change often; what will not change is our commitment to putting our clients first, helping you achieve your financial goals and providing excellent customer service. If you have questions about this report or your account, please contact one of our client services representatives at 800 959 4246. If you have comments for me, I encourage you to email me at phil@invescoaim.com. Thank you for investing with us. All of us at Invesco Aim look forward to serving you. Sincerely, /S/ PHILIP TAYLOR Philip Taylor Senior Managing Director, Invesco Ltd. CEO, Invesco Aim (1) Reuters; (2) Pensions & Investments 2 AIM MULTI-SECTOR FUND
Dear Fellow Shareholders: Although the economy and financial markets have shown some signs of hope, investors remain rightfully cautious. Staying with an appropriately diversified investment program focused on [CROCKETT your individual long-term goals can be a wise course in such uncertain times. We believe the PHOTO] route to financial success is more like a marathon than a sprint. Please be assured that your Board continues to oversee the AIM Funds with a strong sense of responsibility for your money and your trust. As always, we seek to manage costs and enhance performance in ways that put your interests first. Bruce Crockett We are near the end of a busy 2009 proxy season, during which Invesco Aim Advisors, Inc.'s proxy committee votes on your behalf on issues put to a shareholder vote by the companies whose stock the Funds hold. This year, after careful case-by-case analysis by committee members and portfolio managers, the proxy committee voted with corporate management less often than in previous years, focusing on the issues of board independence, Say-On-Pay initiatives, and stock option re-pricing in light of the market's decline. The committee remained committed to supporting non-binding Say-on-Pay proposals and abstaining from voting on social issues. At its June meeting, your Board reviewed and renewed the investment advisory contracts between the AIM Funds and Invesco Aim Advisors, Inc. You can find the results of this rigorous annual process at invescoaim.com. Go to "Products & Performance" and click on "Investment Advisory Agreement Renewals." The website also contains news and market information, investment education and planning information and current reports and prospectuses for all the AIM Funds and I highly recommend it to you. You are always welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving you in the coming months. Sincerely, /S/ BRUCE L. CROCKETT Bruce L. Crockett Independent Chair AIM Funds Board of Trustees 3 AIM MULTI-SECTOR FUND
- --------------------------------------------------------------------------------------- MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE - --------------------------------------------------------------------------------------- PERFORMANCE SUMMARY Fund managers consider selling a stock when they see: While a severe global economic slowdown persisted during the fiscal year ended August 31, 2009, a significant stock market rally began late in the period on - Fundamental deterioration in the March 9, 2009. Despite improvements in the equity markets, domestic equities, as company. measured by the S&P 500 Index, delivered double-digit negative returns for the fiscal year. AIM Multi-Sector Fund underperformed the S&P 500 Index, the Fund's - More attractive investment broad market and style-specific index, during the reporting period.(triangle) opportunities. The S&P 500 Index has exposure to all 10 sectors of the market. The Fund, on the other hand, invests at least 80% of its assets approximately equally in only - Inability of the company to capitalize five of these 10 market sectors and is overweight in these sectors relative to on market opportunity. the index. The five sectors include energy, financial services, health care, information technology (IT) and "leisure" (represented by the consumer - A questionable change in management's discretionary sector). strategic direction. The Fund's underperformance relative to its benchmark was predominately due to its MARKET CONDITIONS AND YOUR FUND overweight exposure in the financials and energy sectors. Security selection in the consumer discretionary sector also hurt relative performance. Though much of the fiscal year was marked by headlines claiming economic Your Fund's long-term performance appears later in this report. "Armageddon," the U.S. economy began to show signs that the economic contraction FUND VS. INDEXES was moderating toward the end of the - --------------------------------------------------------------------------------------- period. Economic data, while poor in absolute terms, indicated that the rampant Total returns, 8/31/08 to 8/31/09, at net asset value (NAV). Performance shown does not decline in business spending and include applicable contingent deferred sales charges (CDSC) or front-end sales charges, consumption that occurred at the end of which would have reduced performance. 2008 and the beginning of 2009 may have eased. Despite this, there were few signs Class A Shares -22.34% of a broad-based economic recovery. Class B Shares -22.93 Nevertheless, given signs that the Class C Shares -22.94 economic downturn may be moderating, Class Y Shares* -22.14 equity and credit markets improved. In S&P 500 Index(triangle) (Broad Market/Style-Specific Index) -18.25 addition, financial markets benefited from Lipper Multi-Cap Core Funds Index(triangle) (Peer Group Index) -17.03 the various government programs introduced to improve bank balance sheets and reduce (triangle)Lipper Inc. credit spreads. * Share class incepted during the fiscal year. See page 7 for a detailed During the fiscal year, the U.S. explanation of Fund performance. Federal Reserve Board lowered the federal funds target rate from 2.00% to a range of - ------------------------------------------ between zero and 0.25%.(1) Real gross HOW WE INVEST domestic product (GDP), although still Managers use fundamental and experiencing negative growth, showed signs Your Fund invests the bulk of its assets quantitative analysis to identify market of recovery.(2) Indeed, GDP decreased at in stocks from five market sectors: leading companies with competitive an annual rate of 1.0% for the second energy, financial services, health care, positioning and strong anticipated growth quarter of 2009, which was an improvement IT and "leisure" (represented by the relative to their peers. They focus on from the 6.4% decrease in the first consumer discretionary sector). To provide companies that exhibit strong return on quarter of 2009.2 Inflation, measured by a diversification, Fund assets are divided capital, cash flow, sustainable growth and seasonally-adjusted Consumer Price Index, more or less equally among securities of superior business strategies that make was relatively benign following a companies from each sector in which the them market leaders. significant decline in crude oil prices Fund invests. Fund managers act from their all-time high reached in July independently within sectors. At any given In the resulting portfolio, each sector 2008.(3) time, 20% of the Fund's assets can be has approximately 20 to 25 holdings. The invested outside of the five previously Fund is rebalanced annually near fiscal mentioned sectors. year-end to return the sectors to their approximate equal weightings. - ------------------------------------------ ------------------------------------------ ------------------------------------------ PORTFOLIO COMPOSITION TOP FIVE INDUSTRIES* TOP 10 EQUITY HOLDINGS* By sector 1. Biotechnology 7.5% 1. Google Inc.- Class A 2.9% Information Technology 23.7% 2. Oil & Gas Exploration & Production 6.0 2. Apple Inc. 2.0 Health Care 21.2 3. Integrated Oil & Gas 5.9 3. Amgen Inc. 1.9 Consumer Discretionary 17.4 4. Life Sciences Tools & Services 4.2 4. Hewlett-Packard Co. 1.8 Energy 16.7 5. Computer Hardware 3.8 5. DaVita, Inc. 1.7 Financials 14.7 6. Microsoft Corp. 1.7 Consumer Staples 4.5 ------------------------------------------ 7. Thermo Fisher Scientific, Inc. 1.6 Money Market Funds Plus Total Net Assets $383.2 million 8. Life Technologies Corp. 1.6 Other Assets Less Liabilities 1.8 Total Number of Holdings* 100 9. Walt Disney Co. (The) 1.6 10. UnitedHealth Group Inc. 1.5 The Fund's holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security. * Excluding money market fund holdings. 4 AIM MULTI-SECTOR FUND
Unemployment, however, trended higher Consumer spending remained weak in the WARREN TENNANT during the fiscal year and ultimately midst of the global economic recession ended August 2009 at a rate of 9.7% during the fiscal year. As a result, NEWS Chartered Financial nationwide.(3) CORP., a diversified media company with Analyst, portfolio resources in filmed entertainment, the [TENNANT manager, is lead Against this backdrop, financial Internet, television and newspapers, also PHOTO] manager of AIM services, energy, industrials and detracted from Fund performance. Shares of Multi-Sector Fund with materials were among the weakest News Corp. were sold during the fiscal respect to the performing sectors of the S&P 500 Index. year. Within consumer discretionary, new Fund's investments in the information Conversely, consumer staples, information portfolio additions included FAMILY DOLLAR technology sector. He has been associated technology and health care were the best STORES and TARGET as we believed consumers with Invesco Aim and/or its affiliates performing sectors. The Fund's overweight would be driven to the price point general since 2000.Mr. Tennant earned both a to the five primary sectors it invests in merchandise stores. B.B.A. in finance and an M.B.A. from The relative to the S&P 500 Index affected University of Texas at Austin. relative performance. The Fund's lack of LIFE TECHNOLOGIES was the top exposure in the industrials and materials contributor to absolute Fund performance JUAN HARTSFIELD sectors benefited our benchmark-relative during the fiscal year. Life Technologies performance. manufactures tools used in basic research Chartered Financial at pharmaceutical firms and is expected to Analyst, portfolio As is customary, the Fund held a small benefit from spending increases by the [HARTSFIELD manager, is lead amount of cash which also benefited National Institutes of Health. Therefore, PHOTO] manager of AIM relative performance due to volatility in we believed this company may have Multi-Sector Fund with the stock market. On the other hand, defensive growth characteristics. respect to the overweight exposure in the financials and Fund's investments in the leisure sector. energy sectors and security selection in Also among top contributors to Fund He began his investment career in 2000 and the consumer discretionary sector hurt performance was WEATHERFORD INTERNATIONAL, joined Invesco Aim in 2004. Mr. Hartsfield Fund performance relative to the S&P 500 a diversified energy service provider. earned a B.S. in petroleum engineering Index. Energy service stocks experienced a from The University of Texas at Austin and significant sell-off in the second half of an M.B.A. from the University of Michigan. The largest single detractor from 2008 but benefited from the rally that Fund performance was CITIGROUP, which began in March. struggled with credit-related losses ANDREW LEES during the fiscal year and lacked an The Fund continues to offer exposure excess capital cushion to absorb the to five dynamic sectors we believe Portfolio manager, is sizable losses. In an effort to restore offer the best growth potential, lead manager of AIM market confidence, the company received yet with relatively low correlation to [LEES Multi-Sector Fund with capital infusions under government each other. Additionally, the Fund's PHOTO] respect to the Fund's programs twice during 2008. Then in structure provides potentially lower investments in the February 2009, the company took the volatility than a single sector given our energy sector. dramatic step of recapitalizing via a annual rebalancing and correlation He began his investment career in 1994 and preferred stock for common stock exchange. considerations. The result, in our opinion, bolstered joined Invesco Aim in 2005. Mr. Lees Citigroup's capital position to among the earned a B.A. in economics from the strongest in the world, but diluted our As always, we thank you for your University of Western Ontario and an estimate of intrinsic value -- a value continued investment in AIM Multi-Sector M.B.A. with concentrations in finance and that is based on the estimated future cash Fund. accounting from McGill University. flows generated by the business. The Fund continued to own shares of Citigroup at (1) U.S. Federal Reserve MICHAEL SIMON fiscal year-end. (2) Bureau of Economic Analysis Chartered Financial S&P 500 INDEX WEIGHTINGS AND RETURNS Analyst, senior By sector, 8/31/08-8/31/09 (3) Bureau of Labor Statistics portfolio manager, is [SIMON lead manager of AIM WEIGHTING(1) The views and opinions expressed in PHOTO] Multi-Sector Fund with SECTOR as of 8/31/09 RETURN(2) management's discussion of Fund respect to the Fund's Consumer performance are those of Invesco Aim investments in the Discretionary Advisors, Inc. These views and opinions financial ("Leisure") 9.08% -12.49% are subject to change at any time based on services sector. He began his investment Consumer Staples 11.48 -9.22 factors such as market and economic career in 1989 and joined Invesco Aim in Energy 11.65 -28.01 conditions. These views and opinions may 2001. Mr. Simon earned a B.B.A. in finance Financials 15.37 -28.72 not be relied upon as investment advice or from Texas Christian University and an Health Care 13.51 -10.52 recommendations, or as an offer for a M.B.A. from the University of Chicago. Industrials 10.02 -27.95 particular security. The information is Information not a complete analysis of every aspect of DEREK TANER Technology 18.47 -9.38 any market, country, industry, security or Materials 3.40 -24.28 the Fund. Statements of fact are from Chartered Financial Telecommunication sources considered reliable, but Invesco Analyst, portfolio Services 3.20 -15.12 Aim Advisors, Inc. makes no representation manager, is lead Utilities 3.81 -18.79 or warranty as to their completeness or [TANER manager of AIM Sources: accuracy. Although historical performance PHOTO] Multi-Sector Fund with is no guarantee of future results, these respect to the Fund's (1) Invesco Aim, Standard & Poor's insights may help you understand our investments in the investment management philosophy. health care (2) Lipper Inc. sector. He began his investment career in See important Fund and index disclosures 1993 and joined Invesco Aim in 2005. Mr. later in this report. Taner earned a B.S. in business administration with an emphasis in accounting and finance and an M.B.A. from the Haas School of Business at the University of California (Berkeley). 5 AIM MULTI-SECTOR FUND
- ------------------------------------------------------------------------------------------------------------------------------------ YOUR FUND'S LONG-TERM PERFORMANCE RESULTS OF A $10,000 INVESTMENT - OLDEST SHARE CLASSES WITH SALES CHARGES SINCE INCEPTION Index data from 8/31/02, Fund data from 9/3/02 (PERFORMANCE GRAPH) AIM MULTI- AIM MULTI- AIM MULTI- LIPPER SECTOR FUND- SECTOR FUND- SECTOR FUND- MULTI-CAP CLASS A CLASS B CLASS C S&P 500 CORE FUNDS SHARES SHARES SHARES INDEX(1) INDEX(1) ------------ ------------ ------------ -------- ----------- 8/31/2002 10000 10000 09/02 9160 9687 9687 8914 9080 10/02 9727 10281 10281 9698 9655 11/02 10155 10728 10728 10268 10243 12/02 9701 10247 10247 9665 9655 01/03 9657 10194 10194 9413 9492 02/03 9563 10087 10087 9271 9328 03/03 9638 10167 10167 9361 9358 04/03 10274 10827 10827 10132 10086 05/03 11093 11686 11673 10665 10768 06/03 11143 11733 11727 10801 10929 07/03 11281 11867 11854 10992 11140 08/03 11533 12127 12113 11206 11482 09/03 11300 11867 11860 11087 11330 10/03 11917 12507 12500 11714 12004 11/03 12087 12681 12674 11817 12192 12/03 12665 13279 13272 12436 12678 01/04 12998 13618 13611 12664 12976 02/04 13246 13867 13867 12840 13177 03/04 13128 13742 13735 12647 13028 04/04 12828 13418 13411 12448 12753 05/04 12887 13473 13473 12619 12906 06/04 13245 13839 13832 12864 13192 07/04 12691 13253 13246 12438 12651 08/04 12633 13184 13184 12488 12642 09/04 13167 13736 13729 12624 12912 10/04 13422 13991 13992 12816 13107 11/04 14106 14695 14688 13335 13765 12/04 14511 15110 15104 13788 14249 01/05 14229 14812 14806 13452 13924 02/05 14898 15499 15495 13735 14206 03/05 14536 15116 15112 13492 13983 04/05 14202 14755 14757 13237 13602 05/05 14891 15471 15467 13657 14159 06/05 15226 15805 15801 13677 14315 07/05 15922 16521 16517 14185 14922 08/05 16168 16762 16758 14056 14854 09/05 16262 16854 16850 14170 14987 10/05 15895 16457 16461 13933 14677 11/05 16530 17108 17106 14460 15242 12/05 16787 17365 17363 14465 15420 01/06 17708 18304 18304 14848 15993 02/06 17388 17964 17963 14888 15929 03/06 17640 18210 18209 15074 16284 04/06 18090 18665 18665 15276 16486 05/06 17400 17943 17941 14837 15915 06/06 17393 17928 17926 14856 15868 07/06 17230 17740 17738 14948 15678 08/06 17421 17928 17926 15303 16049 09/06 17749 18255 18252 15697 16393 10/06 18185 18696 18694 16208 17003 11/06 18778 19289 19287 16516 17406 12/06 18926 19432 19429 16748 17601 01/07 19135 19636 19633 17001 17984 02/07 18878 19357 19354 16669 17747 03/07 19107 19578 19575 16855 17934 04/07 19840 20325 20315 17602 18632 05/07 20630 21116 21113 18215 19329 06/07 20380 20846 20843 17913 19162 07/07 19950 20400 20395 17358 18549 08/07 20054 20487 20483 17618 18669 09/07 20983 21440 21435 18276 19319 10/07 21614 22055 22050 18567 19709 11/07 20380 20789 20776 17790 18823 12/07 20337 20729 20724 17667 18651 01/08 19052 19407 19402 16608 17604 02/08 18863 19199 19194 16069 17140 03/08 18486 18807 18803 15999 16899 04/08 19699 20030 20027 16778 17748 05/08 20512 20845 20842 16995 18183 06/08 19154 19453 19449 15564 16733 07/08 18158 18429 18426 15433 16489 08/08 18405 18667 18666 15656 16646 09/08 16152 16367 16364 14263 14790 10/08 13218 13390 13388 11868 11996 11/08 11620 11767 11764 11016 10949 12/08 11693 11828 11833 11132 11294 01/09 10836 10954 10959 10195 10495 02/09 9894 9991 9995 9113 9524 03/09 10667 10768 10764 9910 10293 04/09 11853 11965 11962 10857 11627 05/09 12802 12912 12910 11464 12344 06/09 12749 12855 12853 11487 12333 07/09 13789 13891 13889 12354 13356 08/09 14303 14384 14377 12800 13811 (1) Lipper Inc. Past performance cannot guarantee an index of funds reflects fund expenses shown in the chart. The vertical axis, the comparable future results. and management fees; performance of a one that indicates the dollar value of an market index does not. Performance shown investment, is constructed with each The data shown in the chart include in the chart and table(s) does not reflect segment representing a percent change in reinvested distributions, applicable sales deduction of taxes a shareholder would pay the value of the investment. In this charges, Fund expenses and management on Fund distributions or sale of Fund chart, each segment represents a doubling, fees. Results for Class B shares are shares. or 100% change, in the value of the calculated as if a hypothetical investment. In other words, the space shareholder had liquidated his entire This chart, which is a logarithmic between $5,000 and $10,000 is the same investment in the Fund at the close of the chart, presents the fluctuations in the size as the space between $10,000 and reporting period and paid the applicable value of the Fund and its indexes. We $20,000, and so on. contingent deferred sales charges. Index believe that a logarithmic chart is more results include reinvested dividends, but effective than other types of charts in they do not reflect sales charges. illustrating changes in value during the Performance of early years 6 AIM MULTI-SECTOR FUND
- ------------------------------------------ ------------------------------------------ AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS EXPENSE RATIO SET FORTH IN THE MOST RECENT FUND PROSPECTUS AS OF THE DATE OF THIS As of 8/31/09, including maximum As of 6/30/09, the most recent calendar REPORT FOR CLASS A, CLASS B, CLASS C AND applicable sales charges quarter-end, including maximum applicable CLASS Y SHARES WAS 1.22%, 1.97%, 1.97% AND sales charges 0.97%, RESPECTIVELY. THE EXPENSE RATIOS CLASS A SHARES PRESENTED ABOVE MAY VARY FROM THE EXPENSE Inception (9/3/02) 5.25% CLASS A SHARES RATIOS PRESENTED IN OTHER SECTIONS OF THIS 5 Years 1.35 Inception (9/3/02) 3.63% REPORT THAT ARE BASED ON EXPENSES INCURRED 1 Year -26.60 5 Years -1.87 DURING THE PERIOD COVERED BY THIS CLASS B SHARES 1 Year -37.09 REPORT. Inception (9/3/02) 5.34% CLASS B SHARES 5 Years 1.41 Inception (9/3/02) 3.75% CLASS A SHARE PERFORMANCE REFLECTS THE 1 Year -26.60 5 Years -1.80 MAXIMUM 5.50% SALES CHARGE, AND CLASS B CLASS C SHARES 1 Year -37.05 AND CLASS C SHARE PERFORMANCE REFLECTS THE Inception (9/3/02) 5.33% CLASS C SHARES APPLICABLE CONTINGENT DEFERRED SALES 5 Years 1.75 Inception (9/3/02) 3.74% CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE 1 Year -23.68 5 Years -1.46 CDSC ON CLASS B SHARES DECLINES FROM 5% CLASS Y SHARES 1 Year -34.55 BEGINNING AT THE TIME OF PURCHASE TO 0% AT Inception 6.14% CLASS Y SHARES THE BEGINNING OF THE SEVENTH YEAR. THE 5 Years 2.56 Inception 4.53% CDSC ON CLASS C SHARES IS 1% FOR THE FIRST 1 Year -22.14 5 Years -0.71 YEAR AFTER PURCHASE. CLASS Y SHARES DO NOT 1 Year -33.30 HAVE A FRONT-END SALES CHARGE OR A CDSC; THEREFORE, PERFORMANCE IS AT NET ASSET VALUE. CLASS Y SHARES' INCEPTION DATE IS OCTOBER 3, 2008; RETURNS SINCE THAT DATE ARE RESULTS; CURRENT PERFORMANCE MAY BE LOWER THE PERFORMANCE OF THE FUND'S SHARE ACTUAL RETURNS. ALL OTHER RETURNS ARE OR HIGHER. PLEASE VISIT INVESCOAIM.COM FOR CLASSES WILL DIFFER PRIMARILY DUE TO BLENDED RETURNS OF ACTUAL CLASS Y SHARE THE MOST RECENT MONTH-END PERFORMANCE. DIFFERENT SALES CHARGE STRUCTURES AND PERFORMANCE AND RESTATED CLASS A SHARE PERFORMANCE FIGURES REFLECT REINVESTED CLASS EXPENSES. PERFORMANCE (FOR PERIODS PRIOR TO THE DISTRIBUTIONS, CHANGES IN NET ASSET VALUE INCEPTION DATE OF CLASS Y SHARES) AT NET AND THE EFFECT OF THE MAXIMUM SALES CHARGE HAD THE ADVISOR NOT WAIVED FEES AND/OR ASSET VALUE. THE RESTATED CLASS A SHARE UNLESS OTHERWISE STATED. INVESTMENT RETURN REIMBURSED EXPENSES IN THE PAST, PERFORMANCE REFLECTS THE RULE 12B-1 FEES AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT PERFORMANCE WOULD HAVE BEEN LOWER. APPLICABLE TO CLASS A SHARES AS WELL AS YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL ANY FEE WAIVERS OR EXPENSE REIMBURSEMENTS SHARES. (1) Total annual operating expenses less RECEIVED BY CLASS A SHARES. CLASS A any contractual fee waivers and/or SHARES' INCEPTION DATE IS SEPTEMBER 3, THE NET ANNUAL FUND OPERATING EXPENSE expense reimbursements by the advisor 2002. RATIO SET FORTH IN THE MOST RECENT FUND in effect through at least June 30, PROSPECTUS AS OF THE DATE OF THIS REPORT 2010. See current prospectus for more THE PERFORMANCE DATA QUOTED REPRESENT FOR CLASS A, CLASS B, CLASS C AND CLASS Y information. PAST PERFORMANCE AND CANNOT GUARANTEE SHARES WAS 1.21%, 1.96%, 1.96% AND 0.96%, COMPARABLE FUTURE RESPECTIVELY.(1) THE TOTAL ANNUAL FUND OPERATING - ------------------------------------------------------------------------------------------------------------------------------------ continued from page 8 ------------------------------------------ - - The Fund is not managed to track the OTHER INFORMATION assets of the Fund at period end for performance of any particular index, financial reporting purposes, and as including the indexes defined here, and - The Chartered Financial Analysts(R) such, the net asset values for consequently, the performance of the (CFA(R)) designation is globally shareholder transactions and the Fund may deviate significantly from the recognized and attests to a returns based on those net asset values performance of the indexes. charterholder's success in a rigorous may differ from the net asset values and comprehensive study program in the and returns reported in the Financial - - A direct investment cannot be made in field of investment management and Highlights. an index. Unless otherwise indicated, research analysis. index results include reinvested - Industry classifications used in this dividends, and they do not reflect - The returns shown in management's report are generally according to the sales recharges. Performance of an discussion of Fund performance are Global Industry Classification index of funds reflects fund expenses; based on net asset values calculated Standard, which was developed by and is performance of a market index does not. for shareholder transactions. Generally the exclusive property and a service accepted accounting principles require mark of MSCI Inc. and Standard & adjustments to be made to the net Poor's. 7 AIM MULTI-SECTOR FUND
- ------------------------------------------------------------------------------------------------------------------------------------ AIM MULTI-SECTOR FUND'S INVESTMENT OBJECTIVE IS CAPITAL GROWTH. - - Unless otherwise stated, information presented in this report is as of August 31, 2009, and is based on total net assets. - - Unless otherwise noted, all data provided by Invesco Aim. ABOUT SHARE CLASSES services offered by health care can cause significant price volatility. companies. Also, the products and The securities of small and mid-sized - - Effective September 30, 2003, for services offered by health care companies may be illiquid, restricted qualified plans only, those previously companies may be subject to rapid as to resale, or may trade less established are eligible to purchase obsolescence caused by scientific frequently and in smaller volume than Class B shares of any AIM fund. Please advances and technological innovations, more widely held securities, which may see the prospectus for more which can cause Fund shares to rise and make it difficult for fund to establish information. fall more than the value of shares of or close out a position in these funds that invest more broadly. securities at prevailing market prices. - - Class Y shares are available to only certain investors. Please see the - The Fund's investments in different - The prices of securities held by the prospectus for more information. independently managed sectors create Fund may decline in response to market allocation risk, which is the risk that risks. PRINCIPAL RISKS OF INVESTING IN THE FUND the allocation of investments among the sectors may have a more significant - The Fund's investments are concentrated - - The businesses in which the Fund effect on the Fund's net asset value in a comparatively narrow segment of invests may be adversely affected by when one of the sectors is performing the economy. Consequently, the Fund may foreign government, federal or state more poorly than the other(s). Active tend to be more volatile than other regulations on energy production, rebalancing of the Fund among the mutual funds, and the value of the distribution and sale. Short-term sectors may result in increased Fund's investments may tend to rise and fluctuations in commodity prices may transaction costs. fall more rapidly. influence Fund returns and increase price fluctuations of the Fund's - The leisure sector depends on consumer - Many of the products and services shares. discretionary spending, which generally offered in technology-related falls during economic downturns. industries are subject to rapid - - Prices of equity securities change in obsolescence, which may lower the value response to many factors, including the - There is no guarantee that the of securities of companies in this historical and prospective earnings of investment techniques and risk analysis sector. the issuer, the value of its assets, used by the Fund's portfolio managers general economic conditions, interest will produce the desired results. - Start-up or early stage companies, such rates, investor perceptions and market as venture capital companies, generally liquidity. - Stocks fall into three broad market have limited operating histories, no capitalization categories -- large, present market for their technologies - - The financial services sector is medium, and small. Investing primarily or products, and no history of earnings subject to extensive government in one category carries the risk that, or financial services. regulation, which may change due to current market conditions, that frequently. The profitability of category may be out of favor with ------------------------------------------ businesses in this sector depends investors. Small and mid-sized ABOUT INDEXES USED IN THIS REPORT heavily on the availability and cost of companies may tend to be more money and may fluctuate significantly vulnerable to adverse developments and - The S&P 500(R) INDEX is a market in response to changes to interest more volatile than larger companies. capitalization-weighted index covering rates and general economic conditions. Investments in small and mid-sized all major areas of the U.S. economy. It companies may involve special risks, is not the 500 largest companies, but - - Foreign securities have additional including those associated with rather the most widely held 500 risks, including exchange rate changes, dependence on a small management group, companies chosen with respect to market political and economic upheaval, little of no operating history, little size, liquidity and their industry. relative lack of information, or no track record of success, and relatively low market liquidity, and limited product lines, market and - The LIPPER MULTI-CAP CORE FUNDS INDEX the potential lack of strict financial financial resources. Also, there may be is an equally weighted representation and accounting controls and standards. less publicly available information of the largest funds in the Lipper about the issuers of the securities or Multi-Cap Core Funds category. These - - The value of the Fund's shares is less market interest in such securities funds typically have an average particularly vulnerable to factors than in the case of larger companies, price-to-earnings ratio, price-to-book affecting the health care industry, each of which ratio, and three-year sales-per-share such as substantial government growth value, compared to the S&P regulation that may affect the demand Composite 1500 Index. for products and continued on page 7 ------------------------------------------ FUND NASDAQ SYMBOLS THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, Class A Shares IAMSX WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. Class B Shares IBMSX INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class C Shares ICMSX Class Y Shares IAMYX - --------------------------------------------------------------------------------------- NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE 8 AIM MULTI-SECTOR FUND
SCHEDULE OF INVESTMENTS(a) August 31, 2009
SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCKS & OTHER EQUITY INTERESTS-98.19% ADVERTISING-1.21% Omnicom Group Inc. 127,116 $ 4,616,853 =============================================================================== APPAREL RETAIL-0.89% TJX Cos., Inc. (The) 94,929 3,412,698 =============================================================================== APPAREL, ACCESSORIES & LUXURY GOODS-0.97% Polo Ralph Lauren Corp. 56,010 3,717,944 =============================================================================== APPLICATION SOFTWARE-0.69% Adobe Systems Inc.(b) 84,031 2,640,254 =============================================================================== ASSET MANAGEMENT & CUSTODY BANKS-1.41% Federated Investors, Inc.-Class B 79,594 2,089,342 - ------------------------------------------------------------------------------- State Street Corp. 63,395 3,326,970 =============================================================================== 5,416,312 =============================================================================== BIOTECHNOLOGY-7.47% Amgen Inc.(b) 120,895 7,222,267 - ------------------------------------------------------------------------------- BioMarin Pharmaceutical Inc.(b) 160,004 2,635,266 - ------------------------------------------------------------------------------- Celgene Corp.(b) 98,351 5,130,972 - ------------------------------------------------------------------------------- Genzyme Corp.(b) 76,033 4,235,799 - ------------------------------------------------------------------------------- Gilead Sciences, Inc.(b) 128,119 5,773,042 - ------------------------------------------------------------------------------- United Therapeutics Corp.(b) 39,561 3,620,227 =============================================================================== 28,617,573 =============================================================================== BREWERS-2.11% Anheuser-Busch InBev N.V. (Belgium) 98,374 4,247,487 - ------------------------------------------------------------------------------- Heineken N.V. (Netherlands)(c) 91,284 3,853,675 =============================================================================== 8,101,162 =============================================================================== CABLE & SATELLITE-0.98% Comcast Corp.-Class A 245,150 3,755,698 - ------------------------------------------------------------------------------- Time Warner Cable, Inc. -- 0 =============================================================================== 3,755,698 =============================================================================== CASINOS & GAMING-2.24% International Game Technology 240,945 5,040,569 - ------------------------------------------------------------------------------- Penn National Gaming, Inc.(b) 120,903 3,531,577 =============================================================================== 8,572,146 =============================================================================== COMMUNICATIONS EQUIPMENT-3.35% Cisco Systems, Inc.(b) 198,299 4,283,259 - ------------------------------------------------------------------------------- QUALCOMM Inc. 117,672 5,462,334 - ------------------------------------------------------------------------------- Research In Motion Ltd. (Canada)(b) 42,133 3,078,237 =============================================================================== 12,823,830 =============================================================================== COMPUTER HARDWARE-3.79% Apple Inc.(b) 46,397 7,804,440 - ------------------------------------------------------------------------------- Hewlett-Packard Co. 149,516 6,711,773 =============================================================================== 14,516,213 =============================================================================== COMPUTER STORAGE & PERIPHERALS-1.82% EMC Corp.(b) 295,686 4,701,407 - ------------------------------------------------------------------------------- Western Digital Corp.(b) 66,332 2,273,861 =============================================================================== 6,975,268 =============================================================================== CONSUMER FINANCE-2.64% American Express Co. 129,757 4,388,382 - ------------------------------------------------------------------------------- Capital One Financial Corp. 153,721 5,732,256 =============================================================================== 10,120,638 =============================================================================== DATA PROCESSING & OUTSOURCED SERVICES-0.69% MasterCard, Inc.-Class A 8,277 1,677,168 - ------------------------------------------------------------------------------- Western Union Co. 54,094 975,856 =============================================================================== 2,653,024 =============================================================================== DEPARTMENT STORES-2.07% Kohl's Corp.(b) 87,994 4,539,610 - ------------------------------------------------------------------------------- Nordstrom, Inc.(c) 121,274 3,400,523 =============================================================================== 7,940,133 =============================================================================== DIVERSIFIED CAPITAL MARKETS-0.96% UBS AG (Switzerland)(b) 201,038 3,683,016 =============================================================================== DRUG RETAIL-1.23% CVS Caremark Corp. 126,049 4,729,358 =============================================================================== ELECTRONIC COMPONENTS-1.01% Corning Inc. 256,445 3,867,191 =============================================================================== ELECTRONIC MANUFACTURING SERVICES-0.12% Flextronics International Ltd. (Singapore)(b) 76,324 452,601 =============================================================================== GENERAL MERCHANDISE STORES-2.03% Family Dollar Stores, Inc. 106,356 3,220,460 - ------------------------------------------------------------------------------- Target Corp. 96,939 4,556,133 =============================================================================== 7,776,593 =============================================================================== HEALTH CARE EQUIPMENT-1.35% Medtronic, Inc. 135,106 5,174,560 =============================================================================== HEALTH CARE FACILITIES-0.71% Rhoen-Klinikum AG (Germany) 121,643 2,734,652 ===============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 9 AIM MULTI-SECTOR FUND
SHARES VALUE - ------------------------------------------------------------------------------- HEALTH CARE SERVICES-3.04% DaVita, Inc.(b) 124,901 $ 6,458,631 - ------------------------------------------------------------------------------- Express Scripts, Inc.(b) 71,790 5,184,674 =============================================================================== 11,643,305 =============================================================================== HOME ENTERTAINMENT SOFTWARE-0.29% Nintendo Co., Ltd. (Japan) 4,100 1,105,612 =============================================================================== HOTELS, RESORTS & CRUISE LINES-1.19% Marriott International, Inc.-Class A 190,813 4,560,441 =============================================================================== INSURANCE BROKERS-0.73% Marsh & McLennan Cos., Inc. 119,010 2,801,495 =============================================================================== INTEGRATED OIL & GAS-5.93% BP PLC-ADR (United Kingdom) 45,000 2,315,250 - ------------------------------------------------------------------------------- Exxon Mobil Corp. 47,000 3,250,050 - ------------------------------------------------------------------------------- Hess Corp. 38,000 1,922,420 - ------------------------------------------------------------------------------- Marathon Oil Corp. 84,000 2,593,080 - ------------------------------------------------------------------------------- Occidental Petroleum Corp. 70,000 5,117,000 - ------------------------------------------------------------------------------- Petroleo Brasileiro S.A.-ADR (Brazil) 93,000 3,686,520 - ------------------------------------------------------------------------------- Total S.A.-ADR (France) 67,000 3,837,090 =============================================================================== 22,721,410 =============================================================================== INTERNET SOFTWARE & SERVICES-2.85% Google Inc.-Class A(b) 23,659 10,922,651 =============================================================================== INVESTMENT BANKING & BROKERAGE-0.59% Morgan Stanley 78,514 2,273,765 =============================================================================== IT CONSULTING & OTHER SERVICES-0.92% Amdocs Ltd.(b) 144,351 3,510,616 =============================================================================== LIFE & HEALTH INSURANCE-0.59% StanCorp Financial Group, Inc. 59,753 2,261,651 =============================================================================== LIFE SCIENCES TOOLS & SERVICES-4.22% Life Technologies Corp.(b) 137,255 6,111,965 - ------------------------------------------------------------------------------- Pharmaceutical Product Development, Inc. 187,190 3,764,391 - ------------------------------------------------------------------------------- Thermo Fisher Scientific, Inc.(b) 139,004 6,284,371 =============================================================================== 16,160,727 =============================================================================== MANAGED HEALTH CARE-1.53% UnitedHealth Group Inc. 209,998 5,879,944 =============================================================================== MOVIES & ENTERTAINMENT-2.53% Time Warner Inc. 131,045 3,657,466 - ------------------------------------------------------------------------------- Walt Disney Co. (The) 232,406 6,051,852 =============================================================================== 9,709,318 =============================================================================== OIL & GAS DRILLING-1.93% ENSCO International Inc. 70,000 2,583,000 - ------------------------------------------------------------------------------- Noble Corp. 59,000 2,066,770 - ------------------------------------------------------------------------------- Transocean Ltd.(b) 36,000 2,730,240 =============================================================================== 7,380,010 =============================================================================== OIL & GAS EQUIPMENT & SERVICES-2.82% Halliburton Co. 149,000 3,532,790 - ------------------------------------------------------------------------------- National-Oilwell Varco Inc.(b) 80,000 2,908,000 - ------------------------------------------------------------------------------- Weatherford International Ltd.(b) 219,000 4,369,050 =============================================================================== 10,809,840 =============================================================================== OIL & GAS EXPLORATION & PRODUCTION-6.03% Apache Corp. 51,000 4,332,450 - ------------------------------------------------------------------------------- Chesapeake Energy Corp. 89,000 2,032,760 - ------------------------------------------------------------------------------- Continental Resources, Inc.(b)(c) 105,000 3,706,500 - ------------------------------------------------------------------------------- Devon Energy Corp. 34,000 2,086,920 - ------------------------------------------------------------------------------- EOG Resources, Inc. 37,000 2,664,000 - ------------------------------------------------------------------------------- Range Resources Corp. 91,000 4,401,670 - ------------------------------------------------------------------------------- Southwestern Energy Co.(b) 105,000 3,870,300 =============================================================================== 23,094,600 =============================================================================== OTHER DIVERSIFIED FINANCIAL SERVICES-3.07% Bank of America Corp. 268,170 4,717,110 - ------------------------------------------------------------------------------- Citigroup Inc. 516,697 2,583,485 - ------------------------------------------------------------------------------- JPMorgan Chase & Co. 102,253 4,443,916 =============================================================================== 11,744,511 =============================================================================== PHARMACEUTICALS-2.88% Novartis AG-ADR (Switzerland) 74,659 3,469,404 - ------------------------------------------------------------------------------- Roche Holding AG (Switzerland) 36,716 5,842,367 - ------------------------------------------------------------------------------- Wyeth 36,173 1,730,878 =============================================================================== 11,042,649 =============================================================================== PROPERTY & CASUALTY INSURANCE-1.44% XL Capital Ltd.-Class A 318,434 5,524,830 =============================================================================== REGIONAL BANKS-2.64% Fifth Third Bancorp 416,726 4,558,983 - ------------------------------------------------------------------------------- SunTrust Banks, Inc. 124,001 2,897,903 - ------------------------------------------------------------------------------- Zions Bancorp.(c) 150,720 2,663,222 =============================================================================== 10,120,108 =============================================================================== RESTAURANTS-2.09% Darden Restaurants, Inc. 131,144 4,318,572 - ------------------------------------------------------------------------------- McDonald's Corp. 65,864 3,704,191 =============================================================================== 8,022,763 ===============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 10 AIM MULTI-SECTOR FUND
SHARES VALUE - ------------------------------------------------------------------------------- SEMICONDUCTOR EQUIPMENT-1.26% ASML Holding N.V.-New York Shares (Netherlands)(c) 96,430 $ 2,648,932 - ------------------------------------------------------------------------------- Cymer, Inc.(b) 62,397 2,195,127 =============================================================================== 4,844,059 =============================================================================== SEMICONDUCTORS-3.09% Avago Technologies Ltd. (Singapore)(b) 72,553 1,320,465 - ------------------------------------------------------------------------------- Intel Corp. 277,133 5,631,342 - ------------------------------------------------------------------------------- Taiwan Semiconductor Manufacturing Co. Ltd.-ADR (Taiwan)(c) 252,121 2,697,695 - ------------------------------------------------------------------------------- Xilinx, Inc. 98,098 2,181,699 =============================================================================== 11,831,201 =============================================================================== SOFT DRINKS-1.12% PepsiCo, Inc. 75,712 4,290,599 =============================================================================== SPECIALIZED CONSUMER SERVICES-0.36% H&R Block, Inc. 79,389 1,371,842 =============================================================================== SPECIALIZED FINANCE-0.60% Moody's Corp. 83,844 2,283,911 =============================================================================== SPECIALTY STORES-0.82% PetSmart, Inc. 150,902 3,155,361 =============================================================================== SYSTEMS SOFTWARE-3.35% Ariba Inc.(b) 278,489 3,191,484 - ------------------------------------------------------------------------------- Microsoft Corp. 257,541 6,348,386 - ------------------------------------------------------------------------------- Oracle Corp. 150,935 3,300,948 =============================================================================== 12,840,818 =============================================================================== TECHNOLOGY DISTRIBUTORS-0.54% Anixter International Inc.(b) 58,919 2,066,879 =============================================================================== Total Common Stocks & Other Equity Interests (Cost $407,130,343) 376,272,633 =============================================================================== MONEY MARKET FUNDS-1.80% Liquid Assets Portfolio-Institutional Class(d) 3,447,963 3,447,963 - ------------------------------------------------------------------------------- Premier Portfolio-Institutional Class(d) 3,447,964 3,447,964 =============================================================================== Total Money Market Funds (Cost $6,895,927) 6,895,927 =============================================================================== TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)-99.99% (Cost $414,026,270) 383,168,560 =============================================================================== INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES ON LOAN MONEY MARKET FUNDS-3.20% Liquid Assets Portfolio-Institutional Class (Cost $12,278,327)(d)(e) 12,278,327 12,278,327 =============================================================================== TOTAL INVESTMENTS-103.19% (Cost $426,304,597) 395,446,887 =============================================================================== OTHER ASSETS LESS LIABILITIES-(3.19)% (12,240,817) =============================================================================== NET ASSETS-100.00% $383,206,070 _______________________________________________________________________________ ===============================================================================
Investment Abbreviations: ADR - American Depositary Receipt
Notes to Schedule of Investments: (a) Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor's. (b) Non-income producing security. (c) All or a portion of this security was out on loan at August 31, 2009. (d) The money market fund and the Fund are affiliated by having the same investment advisor. (e) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 1I. See accompanying Notes to Financial Statements which are an integral part of the financial statements. 11 AIM MULTI-SECTOR FUND STATEMENT OF ASSETS AND LIABILITIES August 31, 2009 ASSETS: Investments, at value (Cost $407,130,343)* $ 376,272,633 - --------------------------------------------------------------------------------- Investments in affiliated money market funds, at value and cost 19,174,254 ================================================================================= Total investments, at value (Cost $426,304,597) 395,446,887 ================================================================================= Receivables for: Investments sold 2,363,869 - --------------------------------------------------------------------------------- Fund shares sold 233,720 - --------------------------------------------------------------------------------- Dividends 409,317 - --------------------------------------------------------------------------------- Investment for trustee deferred compensation and retirement plans 10,154 - --------------------------------------------------------------------------------- Other assets 26,070 ================================================================================= Total assets 398,490,017 _________________________________________________________________________________ ================================================================================= LIABILITIES: Payables for: Investments purchased 1,814,505 - --------------------------------------------------------------------------------- Fund shares reacquired 764,388 - --------------------------------------------------------------------------------- Collateral upon return of securities loaned 12,278,327 - --------------------------------------------------------------------------------- Accrued fees to affiliates 278,469 - --------------------------------------------------------------------------------- Accrued other operating expenses 101,965 - --------------------------------------------------------------------------------- Trustee deferred compensation and retirement plans 46,293 ================================================================================= Total liabilities 15,283,947 ================================================================================= Net assets applicable to shares outstanding $ 383,206,070 _________________________________________________________________________________ ================================================================================= NET ASSETS CONSIST OF: Shares of beneficial interest $ 572,850,303 - --------------------------------------------------------------------------------- Undistributed net investment income 1,406,338 - --------------------------------------------------------------------------------- Undistributed net realized gain (loss) (160,193,675) - --------------------------------------------------------------------------------- Unrealized appreciation (depreciation) (30,856,896) ================================================================================= $ 383,206,070 _________________________________________________________________________________ ================================================================================= NET ASSETS: Class A $ 218,771,544 _________________________________________________________________________________ ================================================================================= Class B $ 37,205,571 _________________________________________________________________________________ ================================================================================= Class C $ 44,022,967 _________________________________________________________________________________ ================================================================================= Class Y $ 1,071,826 _________________________________________________________________________________ ================================================================================= Institutional Class $ 82,134,162 _________________________________________________________________________________ ================================================================================= SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 11,713,859 _________________________________________________________________________________ ================================================================================= Class B 2,092,368 _________________________________________________________________________________ ================================================================================= Class C 2,477,276 _________________________________________________________________________________ ================================================================================= Class Y 57,270 _________________________________________________________________________________ ================================================================================= Institutional Class 4,307,052 _________________________________________________________________________________ ================================================================================= Class A: Net asset value per share $ 18.68 - --------------------------------------------------------------------------------- Maximum offering price per share (Net asset value of $18.68 divided by 94.50%) $ 19.77 _________________________________________________________________________________ ================================================================================= Class B: Net asset value and offering price per share $ 17.78 _________________________________________________________________________________ ================================================================================= Class C: Net asset value and offering price per share $ 17.77 _________________________________________________________________________________ ================================================================================= Class Y: Net asset value and offering price per share $ 18.72 _________________________________________________________________________________ ================================================================================= Institutional Class: Net asset value and offering price per share $ 19.07 _________________________________________________________________________________ =================================================================================
* At August 31, 2009, securities with an aggregate value of $11,725,470 were on loan to brokers. See accompanying Notes to Financial Statements which are an integral part of the financial statements. 12 AIM MULTI-SECTOR FUND STATEMENT OF OPERATIONS For the year ended August 31, 2009 INVESTMENT INCOME: Dividends (net of foreign withholding taxes of $159,327) $ 6,586,766 - ------------------------------------------------------------------------------------------------ Dividends from affiliated money market funds (includes securities lending income of $589,656) 807,610 ================================================================================================ Total investment income 7,394,376 ================================================================================================ EXPENSES: Advisory fees 2,791,827 - ------------------------------------------------------------------------------------------------ Administrative services fees 132,734 - ------------------------------------------------------------------------------------------------ Custodian fees 31,134 - ------------------------------------------------------------------------------------------------ Distribution fees: Class A 580,709 - ------------------------------------------------------------------------------------------------ Class B 393,988 - ------------------------------------------------------------------------------------------------ Class C 442,826 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- A, B, C and Y 1,056,760 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- Institutional 2,783 - ------------------------------------------------------------------------------------------------ Trustees' and officers' fees and benefits 31,912 - ------------------------------------------------------------------------------------------------ Other 321,837 ================================================================================================ Total expenses 5,786,510 ================================================================================================ Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (29,446) ================================================================================================ Net expenses 5,757,064 ================================================================================================ Net investment income 1,637,312 ================================================================================================ REALIZED AND UNREALIZED GAIN (LOSS) FROM: Net realized gain (loss) from: Investment securities (includes net gains (losses) from securities sold to affiliates of $(1,740,945)) (156,992,407) - ------------------------------------------------------------------------------------------------ Foreign currencies 93,118 - ------------------------------------------------------------------------------------------------ Futures contracts (71,987) ================================================================================================ (156,971,276) ================================================================================================ Change in net unrealized appreciation (depreciation) of: Investment securities (33,915,692) - ------------------------------------------------------------------------------------------------ Foreign currencies (395) - ------------------------------------------------------------------------------------------------ Futures contracts (81,408) ================================================================================================ (33,997,495) ================================================================================================ Net realized and unrealized gain (loss) (190,968,771) ================================================================================================ Net increase (decrease) in net assets resulting from operations $(189,331,459) ________________________________________________________________________________________________ ================================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 13 AIM MULTI-SECTOR FUND STATEMENT OF CHANGES IN NET ASSETS For the years ended August 31, 2009 and 2008
2009 2008 - --------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 1,637,312 $ 1,466,684 - --------------------------------------------------------------------------------------------------------- Net realized gain (loss) (156,971,276) 29,652,453 - --------------------------------------------------------------------------------------------------------- Change in net unrealized appreciation (depreciation) (33,997,495) (100,287,883) ========================================================================================================= Net increase (decrease) in net assets resulting from operations (189,331,459) (69,168,746) ========================================================================================================= DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A (721,996) -- - --------------------------------------------------------------------------------------------------------- Class Y (1,333) -- - --------------------------------------------------------------------------------------------------------- Institutional Class (682,511) (152,613) ========================================================================================================= Total distributions from net investment income (1,405,840) (152,613) ========================================================================================================= DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS: Class A (10,704,183) (22,809,049) - --------------------------------------------------------------------------------------------------------- Class B (1,933,014) (4,051,667) - --------------------------------------------------------------------------------------------------------- Class C (2,101,270) (4,556,738) - --------------------------------------------------------------------------------------------------------- Class Y (17,388) -- - --------------------------------------------------------------------------------------------------------- Institutional Class (4,031,180) (7,701,731) ========================================================================================================= Total distributions from net realized gains (18,787,035) (39,119,185) ========================================================================================================= SHARE TRANSACTIONS-NET: Class A (76,767,968) (27,022,573) - --------------------------------------------------------------------------------------------------------- Class B (11,082,703) (7,727,099) - --------------------------------------------------------------------------------------------------------- Class C (13,265,760) (1,401,455) - --------------------------------------------------------------------------------------------------------- Class Y 1,005,711 -- - --------------------------------------------------------------------------------------------------------- Institutional Class (31,483,048) 13,901,069 ========================================================================================================= Net increase (decrease) in net assets resulting from share transactions (131,593,768) (22,250,058) ========================================================================================================= Net increase (decrease) in net assets (341,118,102) (130,690,602) ========================================================================================================= NET ASSETS: Beginning of year 724,324,172 855,014,774 ========================================================================================================= End of year (includes undistributed net investment income of $1,406,338 and $1,077,999, respectively) $ 383,206,070 $ 724,324,172 _________________________________________________________________________________________________________ =========================================================================================================
NOTES TO FINANCIAL STATEMENTS August 31, 2009 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Multi-Sector Fund (the "Fund") is a series portfolio of AIM Counselor Series Trust (the "Trust"). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of seven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The Fund's investment objective is capital growth. The Fund currently consists of five different classes of shares: Class A, Class B, Class C, Class Y and Institutional Class. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waiver shares may be subject to contingent deferred sales charges ("CDSC"). Class B shares and Class C shares are sold with a CDSC. Class Y and Institutional Class shares are sold at net asset value. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. 14 AIM MULTI-SECTOR FUND 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 or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes 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 specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans. Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security's fair value. Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer's assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. 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 periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held. Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund's net asset value and, accordingly, they reduce the Fund's total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the advisor. The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class. C. COUNTRY DETERMINATION -- For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment advisor may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer's securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees 15 AIM MULTI-SECTOR FUND and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. D. DISTRIBUTIONS -- Distributions from income and net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund's taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period. F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to the Institutional Class are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period end date and before the date the financial statements are released to print, which is generally 45 days from the period end date. H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund's servicing agreements, that contain a variety of indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. I. SECURITIES LENDING -- The Fund may lend portfolio securities having a market value up to one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. 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, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. 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. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. J. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. 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 (net of foreign taxes withheld on disposition) 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. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. K. FOREIGN CURRENCY CONTRACTS -- The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts 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. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks 16 AIM MULTI-SECTOR FUND associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. L. FUTURES CONTRACTS -- The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, 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. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with Invesco Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Advisor based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE - ------------------------------------------------------------------- First $250 million 0.695% - ------------------------------------------------------------------- Next $250 million 0.67% - ------------------------------------------------------------------- Next $500 million 0.645% - ------------------------------------------------------------------- Next $1.5 billion 0.62% - ------------------------------------------------------------------- Next $2.5 billion 0.595% - ------------------------------------------------------------------- Next $2.5 billion 0.57% - ------------------------------------------------------------------- Next $2.5 billion 0.545% - ------------------------------------------------------------------- Over $10 billion 0.52% ___________________________________________________________________ ===================================================================
Under the terms of a master sub-advisory agreement approved by shareholders of the Fund between the Advisor and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-Advisor(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Advisor(s). Effective July 1, 2009, the Advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C, Class Y and Institutional Class shares to 2.00%, 2.75%, 2.75%, 1.75% and 1.75% of average daily net assets, respectively, through at least June 30, 2010. In determining the Advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary or non-routine items; and (v) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, in addition to the expense reimbursement arrangement with Invesco Ltd. ("Invesco") described more fully below, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. These credits are used to pay certain expenses incurred by the Fund. The Advisor did not waive fees and/or reimburse expenses during the period under this expense limitation. Further, the Advisor has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Advisor receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds. For the year ended August 31, 2009, the Advisor waived advisory fees of $21,799. At the request of the Trustees of the Trust, Invesco agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. These expenses along with the related expense reimbursement are included in the Statement of Operations. For the year ended August 31, 2009, Invesco reimbursed expenses of the Fund in the amount of $1,144. The Trust has entered into a master administrative services agreement with Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain administrative costs incurred in providing accounting services to the Fund. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees. 17 AIM MULTI-SECTOR FUND The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. IAIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IAIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust's Board of Trustees. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees. The Trust has entered into master distribution agreements with Invesco Aim Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class B, Class C, Class Y and Institutional Class 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, Class B and Class C shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI 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 Class C shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority ("FINRA") impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. For the year ended August 31, 2009, expenses incurred under the Plans are shown in the Statement of Operations as distribution fees. Front-end sales commissions and CDSC (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the year ended August 31, 2009, IADI advised the Fund that IADI retained $36,961 in front-end sales commissions from the sale of Class A shares and $4,384, $91,007 and $4,130 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders. Certain officers and trustees of the Trust are officers and directors of Invesco Aim, IAIS and/or IADI. NOTE 3--ADDITIONAL VALUATION INFORMATION Generally Accepted Accounting Principles (GAAP) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level: Level 1 -- Prices are determined using quoted prices in an active market for identical assets. Level 2 -- Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. Level 3 -- Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. The following is a summary of the tiered valuation input levels, as of the end of the reporting period, August 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL - --------------------------------------------------------------------------------------------------------------------------- Equity Securities $388,498,908 $6,947,979 $-- $395,446,887 ___________________________________________________________________________________________________________________________ ===========================================================================================================================
NOTE 4--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment advisor (or affiliated investment advisors), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended August 31, 2009, the Fund engaged in securities purchases of $76,564 and securities sales of $5,839,924, which resulted in net realized gains (losses) of $(1,740,945). NOTE 5--EXPENSE OFFSET ARRANGEMENT(S) The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the year ended August 31, 2009, the Fund received credits from this arrangement, which resulted in the reduction of the Fund's total expenses of $6,503. 18 AIM MULTI-SECTOR FUND NOTE 6--TRUSTEES' AND OFFICERS' FEES AND BENEFITS "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officers' Fees and Benefits" also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund. During the year ended August 31, 2009, the Fund paid legal fees of $4,431 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. NOTE 7--CASH BALANCES The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco Aim, not to exceed the contractually agreed upon rate. NOTE 8--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED AUGUST 31, 2009 AND 2008:
2009 2008 - -------------------------------------------------------------------------------------------------------- Ordinary income $ 1,409,975 $ 6,513,488 - -------------------------------------------------------------------------------------------------------- Long-term capital gain 18,782,900 32,758,310 ======================================================================================================== Total distributions $20,192,875 $39,271,798 ________________________________________________________________________________________________________ ========================================================================================================
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
2009 - ------------------------------------------------------------------------------------------------ Undistributed ordinary income $ 1,454,193 - ------------------------------------------------------------------------------------------------ Net unrealized appreciation (depreciation) -- investments (31,709,780) - ------------------------------------------------------------------------------------------------ Net unrealized appreciation -- other investments 814 - ------------------------------------------------------------------------------------------------ Temporary book/tax differences (47,855) - ------------------------------------------------------------------------------------------------ Post-October deferrals (103,541,251) - ------------------------------------------------------------------------------------------------ Capital loss carryforward (55,800,354) - ------------------------------------------------------------------------------------------------ Shares of beneficial interest 572,850,303 ================================================================================================ Total net assets $ 383,206,070 ________________________________________________________________________________________________ ================================================================================================
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's net unrealized appreciation (depreciation) difference is attributable primarily to wash sales. The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits. Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. The Fund has a capital loss carryforward as of August 31, 2009 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* - ----------------------------------------------------------------------------------------------- August 31, 2017 $55,800,354 _______________________________________________________________________________________________ ===============================================================================================
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. 19 AIM MULTI-SECTOR FUND NOTE 9--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended August 31, 2009 was $127,463,040 and $266,583,073, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ------------------------------------------------------------------------------------------------ Aggregate unrealized appreciation of investment securities $ 46,027,516 - ------------------------------------------------------------------------------------------------ Aggregate unrealized (depreciation) of investment securities (77,737,296) ================================================================================================ Net unrealized appreciation (depreciation) of investment securities $(31,709,780) ________________________________________________________________________________________________ ================================================================================================ Cost of investments for tax purposes is $427,156,667.
NOTE 10--RECLASSIFICATION OF PERMANENT DIFFERENCES Primarily as a result of differing book/tax treatment of foreign currency transactions on August 31, 2009, undistributed net investment income was increased by $96,867, undistributed net realized gain (loss) was decreased by $88,984 and shares of beneficial interest decreased by $7,883. This reclassification had no effect on the net assets of the Fund. NOTE 11--SHARE INFORMATION
SUMMARY OF SHARE ACTIVITY - ------------------------------------------------------------------------------------------------------------------------- YEAR ENDED AUGUST 31, ------------------------------------------------------------- 2009(a) 2008 ---------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------------------------------------- Sold: Class A 2,430,932 $ 42,223,567 3,807,565 $ 104,448,073 - ------------------------------------------------------------------------------------------------------------------------- Class B 338,897 5,569,903 616,606 16,114,652 - ------------------------------------------------------------------------------------------------------------------------- Class C 422,586 6,640,016 558,328 14,810,636 - ------------------------------------------------------------------------------------------------------------------------- Class Y(b) 71,812 1,243,553 -- -- - ------------------------------------------------------------------------------------------------------------------------- Institutional Class 263,613 4,423,162 614,220 17,320,624 ========================================================================================================================= Issued as reinvestment of dividends: Class A 716,046 10,626,125 781,183 21,599,713 - ------------------------------------------------------------------------------------------------------------------------- Class B 122,794 1,744,905 140,981 3,755,744 - ------------------------------------------------------------------------------------------------------------------------- Class C 138,864 1,971,869 161,954 4,312,829 - ------------------------------------------------------------------------------------------------------------------------- Class Y 1,261 18,721 -- -- - ------------------------------------------------------------------------------------------------------------------------- Institutional Class 312,372 4,713,691 278,854 7,833,000 ========================================================================================================================= Automatic conversion of Class B shares to Class A shares: Class A 258,699 4,216,415 339,068 9,189,273 - ------------------------------------------------------------------------------------------------------------------------- Class B (270,776) (4,216,415) (352,600) (9,189,273) ========================================================================================================================= Reacquired: Class A(b) (8,230,046) (133,834,075) (5,981,685) (162,259,632) - ------------------------------------------------------------------------------------------------------------------------- Class B (922,382) (14,181,096) (708,031) (18,408,222) - ------------------------------------------------------------------------------------------------------------------------- Class C (1,400,392) (21,877,645) (793,160) (20,524,920) - ------------------------------------------------------------------------------------------------------------------------- Class Y (15,803) (256,563) -- -- - ------------------------------------------------------------------------------------------------------------------------- Institutional Class (2,332,008) (40,619,901) (414,377) (11,252,555) ========================================================================================================================= Net increase (decrease) in share activity (8,093,531) $(131,593,768) (951,094) $ (22,250,058) _________________________________________________________________________________________________________________________ =========================================================================================================================
(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 27% of the outstanding shares of the Fund. IADI has an agreement with these entities to sell Fund shares. The Fund, Invesco Aim and/or Invesco Aim affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco Aim and/or Invesco Aim affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. In addition, 19% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco Aim. (b) Effective upon the commencement date of Class Y shares, October 3, 2008, the following shares were converted from Class A into Class Y shares of the Fund:
CLASS SHARES AMOUNT -------------------------------------------------------------------------------------------------- Class Y 23,026 $ 475,716 -------------------------------------------------------------------------------------------------- Class A (23,026) (475,716) __________________________________________________________________________________________________ ==================================================================================================
20 AIM MULTI-SECTOR FUND NOTE 12--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
NET GAINS NET ASSET NET (LOSSES) ON DIVIDENDS DISTRIBUTIONS VALUE, INVESTMENT SECURITIES (BOTH TOTAL FROM FROM NET FROM NET BEGINNING INCOME REALIZED AND INVESTMENT INVESTMENT REALIZED TOTAL OF PERIOD (LOSS)(a) UNREALIZED) OPERATIONS INCOME GAINS DISTRIBUTIONS - ------------------------------------------------------------------------------------------------------------------------ CLASS A Year ended 08/31/09 $25.33 $ 0.07 $(5.93) $(5.86) $(0.05) $(0.74) $(0.79) Year ended 08/31/08 28.93 0.07 (2.34) (2.27) -- (1.33) (1.33) Year ended 08/31/07 25.53 (0.04) 3.88 3.84 (0.12) (0.32) (0.44) Year ended 08/31/06 24.16 0.17 1.69 1.86 -- (0.49) (0.49) Year ended 08/31/05 19.37 (0.05)(e) 5.40 5.35 -- (0.56) (0.56) - ------------------------------------------------------------------------------------------------------------------------ CLASS B Year ended 08/31/09 24.27 (0.05) (5.70) (5.75) -- (0.74) (0.74) Year ended 08/31/08 27.97 (0.13) (2.24) (2.37) -- (1.33) (1.33) Year ended 08/31/07 24.79 (0.24) 3.76 3.52 (0.02) (0.32) (0.34) Year ended 08/31/06 23.64 (0.02) 1.66 1.64 -- (0.49) (0.49) Year ended 08/31/05 19.09 (0.20)(e) 5.31 5.11 -- (0.56) (0.56) - ------------------------------------------------------------------------------------------------------------------------ CLASS C Year ended 08/31/09 24.26 (0.05) (5.70) (5.75) -- (0.74) (0.74) Year ended 08/31/08 27.96 (0.13) (2.24) (2.37) -- (1.33) (1.33) Year ended 08/31/07 24.78 (0.24) 3.76 3.52 (0.02) (0.32) (0.34) Year ended 08/31/06 23.63 (0.02) 1.66 1.64 -- (0.49) (0.49) Year ended 08/31/05 19.09 (0.20)(e) 5.30 5.10 -- (0.56) (0.56) - ------------------------------------------------------------------------------------------------------------------------ CLASS Y Year ended 08/31/09(f) 20.66 0.10 (1.24) (1.14) (0.06) (0.74) (0.80) - ------------------------------------------------------------------------------------------------------------------------ INSTITUTIONAL CLASS Year ended 08/31/09 25.81 0.17 (6.05) (5.88) (0.12) (0.74) (0.86) Year ended 08/31/08 29.35 0.19 (2.37) (2.18) (0.03) (1.33) (1.36) Year ended 08/31/07 25.83 0.09 3.93 4.02 (0.18) (0.32) (0.50) Year ended 08/31/06 24.33 0.29 1.70 1.99 -- (0.49) (0.49) Year ended 08/31/05 19.41 0.06(e) 5.42 5.48 -- (0.56) (0.56) ________________________________________________________________________________________________________________________ ======================================================================================================================== RATIO OF RATIO OF EXPENSES EXPENSES TO AVERAGE TO AVERAGE NET RATIO OF NET NET ASSETS ASSETS WITHOUT INVESTMENT NET ASSET NET ASSETS, WITH FEE WAIVERS FEE WAIVERS INCOME (LOSS) VALUE, END TOTAL END OF PERIOD AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO OF PERIOD RETURN(b) (000S OMITTED) ABSORBED ABSORBED NET ASSETS TURNOVER(c) - ------------------------------------------------------------------------------------------------------------------------------- CLASS A Year ended 08/31/09 $18.68 (22.34)% $218,772 1.39%(d) 1.40%(d) 0.43%(d) 31% Year ended 08/31/08 25.33 (8.22) 418,874 1.21 1.22 0.24 58 Year ended 08/31/07 28.93 15.13 508,895 1.23 1.29 (0.15) 44 Year ended 08/31/06 25.53 7.74 311,492 1.30 1.37 0.67 66 Year ended 08/31/05 24.16 28.01 99,721 1.53 1.59 (0.25)(e) 63 - ------------------------------------------------------------------------------------------------------------------------------- CLASS B Year ended 08/31/09 17.78 (22.93) 37,206 2.14(d) 2.15(d) (0.32)(d) 31 Year ended 08/31/08 24.27 (8.89) 68,526 1.96 1.97 (0.51) 58 Year ended 08/31/07 27.97 14.26 87,469 1.98 2.04 (0.90) 44 Year ended 08/31/06 24.79 6.97 73,997 2.05 2.12 (0.08) 66 Year ended 08/31/05 23.64 27.15 24,953 2.20 2.26 (0.92)(e) 63 - ------------------------------------------------------------------------------------------------------------------------------- CLASS C Year ended 08/31/09 17.77 (22.94) 44,023 2.14(d) 2.15(d) (0.32)(d) 31 Year ended 08/31/08 24.26 (8.89) 80,439 1.96 1.97 (0.51) 58 Year ended 08/31/07 27.96 14.27 94,760 1.98 2.04 (0.90) 44 Year ended 08/31/06 24.78 6.97 69,604 2.05 2.12 (0.08) 66 Year ended 08/31/05 23.63 27.10 29,981 2.20 2.26 (0.92)(e) 63 - ------------------------------------------------------------------------------------------------------------------------------- CLASS Y Year ended 08/31/09(f) 18.72 (4.54) 1,072 1.17(d)(g) 1.18(d)(g) 0.65(d)(g) 31 - ------------------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL CLASS Year ended 08/31/09 19.07 (21.89) 82,134 0.81(d) 0.82(d) 1.01(d) 31 Year ended 08/31/08 25.81 (7.81) 156,486 0.75 0.76 0.70 58 Year ended 08/31/07 29.35 15.67 163,891 0.77 0.83 0.31 44 Year ended 08/31/06 25.83 8.23 87,147 0.83 0.90 1.14 66 Year ended 08/31/05 24.33 28.64 45,628 1.02 1.08 0.26(e) 63 _______________________________________________________________________________________________________________________________ ===============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. (c) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. (d) Ratios are based on average daily net assets (000's omitted) of $232,284, $39,399, $44,283, $638 and $90,821 for Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class shares, respectively. (e) Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include a special cash dividend received of $3.00 per share owned of Microsoft Corp. on December 2, 2004. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the special dividend are $(0.06) and (0.30)%; $(0.21) and (0.97)%; $(0.21) and (0.97)%; $0.05 and 0.21% for Class A, Class B, Class C and Institutional Class shares, respectively. (f) Commencement date of October 3, 2008. (g) Annualized. 21 AIM MULTI-SECTOR FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees of AIM Counselor Series Trust and Shareholders of AIM Multi-Sector 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 AIM Multi-Sector Fund (one of the funds constituting AIM Counselor Series Trust, hereafter referred to as the "Fund") at August 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PRICEWATERHOUSECOOPERS LLP October 16, 2009 Houston, Texas 22 AIM MULTI-SECTOR FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(2) RATIO - --------------------------------------------------------------------------------------------------- A $1,000.00 $1,444.70 $ 8.87 $1,017.95 $ 7.32 1.44% - --------------------------------------------------------------------------------------------------- B 1,000.00 1,439.70 13.47 1,014.17 11.12 2.19 - --------------------------------------------------------------------------------------------------- C 1,000.00 1,438.90 13.46 1,014.17 11.12 2.19 - --------------------------------------------------------------------------------------------------- Y 1,000.00 1,446.70 7.34 1,019.21 6.06 1.19 - ---------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009 through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. 23 AIM MULTI-SECTOR FUND Supplement to Annual Report dated 8/31/09 AIM MULTI-SECTOR FUND INSTITUTIONAL CLASS SHARES ------------------------------------------ Please note that past performance is AVERAGE ANNUAL TOTAL RETURNS not indicative of future results. More The following information has been For periods ended 8/31/09 recent returns may be more or less than prepared to provide Institutional Class those shown. All returns assume shareholders with a performance overview Inception (5/3/04) 2.30% reinvestment of distributions at NAV. specific to their holdings. Institutional ------------------------------------------ Investment return and principal value will Class shares are offered exclusively to 5 Years 3.01 fluctuate so your shares, when redeemed, institutional investors, including defined ------------------------------------------ may be worth more or less than their contribution plans that meet certain 1 Year -21.89 original cost. See full report for criteria. ------------------------------------------ information on comparative benchmarks. Please consult your Fund prospectus for ------------------------------------------ more information. For the most current AVERAGE ANNUAL TOTAL RETURNS month-end performance, please call For periods ended 6/30/09, the most recent 800 451 4246 or visit invescoaim.com. calendar quarter-end (1) Total annual operating expenses less Inception (5/3/04) 0.12% any contractual fee waivers and/or ------------------------------------------ expense reimbursements by the advisor 5 Years -0.25 in effect through at least June 30, ------------------------------------------ 2010. See current prospectus for more 1 Year -33.04 information. ------------------------------------------ Institutional Class shares have no sales charge; therefore, performance is at net asset value (NAV). Performance of Institutional Class shares will differ from performance of other share classes primarily due to differing sales charges and class expenses. The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 0.75%.(1) The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 0.76%. The expense ratios presented above may vary from the expense ratios presented in other sections of the actual report that are based on expenses incurred during the period covered by the report. Had the advisor not waived fees and/or reimbursed expenses in the past, performance would have been lower. - ------------------------------------------ NASDAQ SYMBOL IIMSX Over for information on your Fund's expenses. - --------------------------------------------------------------------------------------- THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FOR INSTITUTIONAL INVESTOR USE ONLY -- NOT FOR USE WITH THE PUBLIC THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED, SHOWN TO THE PUBLIC [INVESCO AIM LOGO] OR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. - service mark - invescoaim.com I-MSE-INS-1 Invesco Aim Distributors, Inc.
CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
- ----------------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(2) RATIO - ----------------------------------------------------------------------------------------------------------- Institutional $1,000.00 $1,449.10 $5.19 $1,020.97 $4.28 0.84% - -----------------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009 through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. AIM MULTI-SECTOR FUND - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS The Board of Trustees (the Board) of AIM strategies and limitations of these the year as part of their ongoing Counselor Series Trust is required under funds. oversight of the Fund, and did not the Investment Company Act of 1940 to identify any particular factor that was approve annually the renewal of the AIM In addition to their meetings controlling. Each Trustee may have Multi-Sector Fund (the Fund) investment throughout the year, the Sub-Committees evaluated the information provided advisory agreement with Invesco Aim meet at designated contract renewal differently from another Trustee and Advisors, Inc. (Invesco Aim) and the meetings each year to conduct an in-depth attributed different weight to the various Master Intergroup Sub-Advisory Contract review of the performance, fees, expenses factors. The Trustees recognized that the for Mutual Funds (the sub-advisory and other matters related to their advisory arrangements and resulting contracts) with Invesco Asset Management assigned funds. During the contract advisory fees for the Fund and the other Deutschland GmbH, Invesco Asset Management renewal process, the Trustees receive AIM Funds are the result of years of Limited, Invesco Asset Management (Japan) comparative performance and fee data review and negotiation between the Limited, Invesco Australia Limited, regarding the AIM Funds prepared by an Trustees and Invesco Aim, that the Invesco Global Asset Management (N.A.), independent company, Lipper, Inc. Trustees may focus to a greater extent on Inc., Invesco Hong Kong Limited, Invesco (Lipper), under the direction and certain aspects of these arrangements in Institutional (N.A.), Inc., Invesco Senior supervision of the Senior Officer who also some years than in others, and that the Secured Management, Inc. and Invesco prepares a separate analysis of this Trustees' deliberations and conclusions in Trimark Ltd. (collectively, the Affiliated information for the Trustees. Each a particular year may be based in part on Sub-Advisers). During contract renewal Sub-Committee then makes recommendations their deliberations and conclusions meetings held on June 16-17, 2009, the to the Investments Committee regarding the regarding these same arrangements Board as a whole, and the disinterested or fees and expenses of their assigned funds. throughout the year and in prior years. "independent" Trustees voting separately, The Investments Committee considers each approved the continuance of the Fund's Sub-Committee's recommendations and makes The discussion below serves as a investment advisory agreement and the its own recommendations regarding the fees summary of the Senior Officer's sub-advisory contracts for another year, and expenses of the AIM Funds to the full independent written evaluation with effective July 1, 2009. In doing so, the Board. The Investments Committee also respect to the Fund's investment advisory Board determined that the Fund's considers each Sub-Committee's agreement as well as a discussion of the investment advisory agreement and the recommendations in making its annual material factors and related conclusions sub-advisory contracts are in the best recommendation to the Board whether to that formed the basis for the Board's interests of the Fund and its shareholders approve the continuance of each AIM Fund's approval of the Fund's investment advisory and that the compensation to Invesco Aim investment advisory agreement and agreement and sub-advisory contracts. and the Affiliated Sub-Advisers under the sub-advisory contracts for another year. Unless otherwise stated, information set Fund's investment advisory agreement and forth below is as of June 17, 2009, and sub-advisory contracts is fair and The independent Trustees met separately does not reflect any changes that may have reasonable. during their evaluation of the Fund's occurred since that date, including but investment advisory agreement and not limited to changes to the Fund's THE BOARD'S FUND EVALUATION PROCESS sub-advisory contracts with independent performance, advisory fees, expense legal counsel. The independent Trustees limitations and/or fee waivers. The Board's Investments Committee has were also assisted in their annual established three Sub-Committees that are evaluation of the Fund's investment FACTORS AND CONCLUSIONS AND SUMMARY OF responsible for overseeing the management advisory agreement by the Senior Officer. INDEPENDENT WRITTEN FEE EVALUATION of a number of the series portfolios of One responsibility of the Senior Officer the AIM Funds. This Sub-Committee is to manage the process by which the AIM A. Nature, Extent and Quality of structure permits the Trustees to focus on Funds' proposed management fees are Services Provided by Invesco Aim the performance of the AIM Funds that have negotiated during the annual contract been assigned to them. The Sub-Committees renewal process to ensure that they are The Board reviewed the advisory services meet throughout the year to review the negotiated in a manner that is at arms' provided to the Fund by Invesco Aim under performance of their assigned funds, and length and reasonable. Accordingly, the the Fund's investment advisory agreement, the Sub-Committees review monthly and Senior Officer must either supervise a the performance of Invesco Aim in quarterly comparative performance competitive bidding process or prepare an providing these services, and the information and periodic asset flow data independent written evaluation. The Senior credentials and experience of the officers for their assigned funds. These materials Officer recommended that an independent and employees of Invesco Aim who provide are prepared under the direction and written evaluation be provided and, at the these services. The Board's review of the supervision of the independent Senior direction of the Board, prepared an qualifications of Invesco Aim to provide Officer, an officer of the AIM Funds who independent written evaluation. these services included the Board's reports directly to the independent consideration of Invesco Aim's portfolio Trustees. Over the course of each year, During the annual contract renewal and product review process, various back the Sub-Committees meet with portfolio process, the Board considered the factors office support functions provided by managers for their assigned funds and discussed below in evaluating the fairness Invesco Aim and its affiliates, and other members of management and review and reasonableness of the Fund's Invesco Aim's equity and fixed income with these individuals the performance, investment advisory agreement and trading operations. The Board concluded investment objective(s), policies, sub-advisory contracts. The Board that the nature, extent and quality of the considered all of the information provided advisory services provided to the Fund by to them, including information provided at Invesco Aim are appropriate and that their meetings throughout Invesco Aim 24 AIM MULTI-SECTOR FUND continued
currently is providing satisfactory The Board considered Fund performance as a rates, which includes using audited advisory services in accordance with the relevant factor in considering whether to financial data from the most recent annual terms of the Fund's investment advisory approve the investment advisory agreement. report of each fund in the expense group agreement. In addition, based on their The Board did not view Fund performance as that was publicly available as of the end ongoing meetings throughout the year with a relevant factor in considering whether of the past calendar year. The Board noted the Fund's portfolio manager or managers, to approve the sub-advisory contracts for that some comparative data was at least the Board concluded that these individuals the Fund, as no Affiliated Sub-Adviser one year old and that other data did not are competent and able to continue to currently manages assets of the Fund. reflect the market downturn that occurred carry out their responsibilities under the in the fourth quarter of 2008. Fund's investment advisory agreement. The Board compared the Fund's performance during the past one, three and The Board also compared the Fund's In determining whether to continue the five calendar years to the performance of effective fee rate (the advisory fee after Fund's investment advisory agreement, the all funds in the Lipper performance any advisory fee waivers and before any Board considered the prior relationship universe that are not managed by Invesco expense limitations/waivers) to the between Invesco Aim and the Fund, as well Aim or an Affiliated Sub-Adviser and advisory fee rates of other domestic as the Board's knowledge of Invesco Aim's against the Lipper Multi-Cap Core Funds clients of Invesco Aim and its affiliates operations, and concluded that it is Index. The Board noted that the Fund's with investment strategies comparable to beneficial to maintain the current performance was in the fifth quintile of those of the Fund, including two mutual relationship, in part, because of such its performance universe for the one year funds advised by Invesco Aim. The Board knowledge. The Board also considered the period, in the fourth quintile for the noted that the Fund's rate was below the steps that Invesco Aim and its affiliates three year period and in the second effective fee rate for one mutual fund and continue to take to improve the quality quintile for the five year period (the that the other mutual fund is an asset and efficiency of the services they first quintile being the best performing allocation fund that is not charged any provide to the AIM Funds in the areas of funds and the fifth quintile being the advisory fees by Invesco Aim pursuant to investment performance, product line worst performing funds). The Board noted that fund's advisory agreement. diversification, distribution, fund that the Fund's performance was below the operations, shareholder services and performance of the Index for the one and The Board noted that Invesco Aim has compliance. The Board concluded that the three year periods and above the agreed to reduce the per account transfer quality and efficiency of the services performance of the Index for the five year agent fee for all the retail funds, Invesco Aim and its affiliates provide to period. Invesco Aim advised the Board that including the Fund, effective July 1, the AIM Funds in each of these areas the Fund's prospectus limits the Fund to 2009. The Board also noted that Invesco support the Board's approval of the investment in five sectors, two of which Aim has contractually agreed to waive fees continuance of the Fund's investment have been the worst performing sectors and/or limit expenses of the Fund through advisory agreement. since the onset of the bear market in at least June 30, 2010 in an amount 2007. Invesco Aim noted that some of the necessary to limit total annual operating B. Nature, Extent and Quality of underlying lead sector managers were expenses to a specified percentage of Services Provided by Affiliated changed in 2009. Although the independent average daily net assets for each class of Sub-Advisers written evaluation of the Fund's Senior the Fund. The Board noted that at the Officer only considered Fund performance current expense ratio for the Fund, this The Board reviewed the services provided through the most recent calendar year, the expense waiver does not have any impact. by the Affiliated Sub-Advisers under the Board also reviewed more recent Fund sub-advisory contracts and the credentials performance and this review did not change The Board also considered the services and experience of the officers and their conclusions. The Board noted that, provided by the Affiliated Sub-Advisers employees of the Affiliated Sub-Advisers in response to the Board's focus on fund pursuant to the sub-advisory contracts and who provide these services. The Board performance, Invesco Aim has taken a the services provided by Invesco Aim concluded that the nature, extent and number of actions intended to improve the pursuant to the Fund's advisory agreement, quality of the services provided by the investment process for the funds. as well as the allocation of fees between Affiliated Sub-Advisers are appropriate. Invesco Aim and the Affiliated The Board noted that the Affiliated D. Advisory and Sub-Advisory Fees and Sub-Advisers pursuant to the sub-advisory Sub-Advisers, which have offices and Fee Waivers contracts. The Board noted that the personnel that are geographically sub-advisory fees have no direct effect on dispersed in financial centers around the The Board compared the Fund's contractual the Fund or its shareholders, as they are world, can provide research and other advisory fee rate to the contractual paid by Invesco Aim to the Affiliated information and make recommendations on advisory fee rates of funds in the Fund's Sub-Advisers, and that Invesco Aim and the the markets and economies of various Lipper expense group that are not managed Affiliated Sub-Advisers are affiliates. countries and securities of companies by Invesco Aim or an Affiliated located in such countries or on various Sub-Adviser, at a common asset level. The After taking account of the Fund's types of investments and investment Board noted that the Fund's contractual contractual advisory fee rate, the techniques. The Board concluded that the advisory fee rate was below the median contractual sub-advisory fee rate, the sub-advisory contracts benefit the Fund contractual advisory fee rate of funds in comparative advisory fee information and its shareholders by permitting Invesco its expense group. The Board also reviewed discussed above and other relevant Aim to utilize the additional resources the methodology used by Lipper in factors, the Board concluded that the and talent of the Affiliated Sub-Advisers determining contractual fee Fund's advisory and sub-advisory fees are in managing the Fund. fair and reasonable. C. Fund Performance 25 AIM MULTI-SECTOR FUND continued
E. Economies of Scale and Breakpoints Board also considered whether each contractually agreed to waive through at Affiliated Sub-Adviser is financially least June 30, 2010, the advisory fees The Board considered the extent to which sound and has the resources necessary to payable by the Fund in an amount equal to there are economies of scale in the perform its obligations under the 100% of the net advisory fee Invesco Aim provision of advisory services to the sub-advisory contracts, and concluded that receives from the affiliated money market Fund. The Board also considered whether each Affiliated Sub-Adviser has the funds with respect to the Fund's the Fund benefits from such economies of financial resources necessary to fulfill investment in the affiliated money market scale through contractual breakpoints in these obligations. funds of uninvested cash, but not cash the Fund's advisory fee schedule. The collateral. The Board concluded that the Board noted that the Fund's contractual G. Collateral Benefits to Invesco Aim Fund's investment of uninvested cash and advisory fee schedule includes seven and its Affiliates cash collateral from any securities breakpoints and that the level of the lending arrangements in the affiliated Fund's advisory fees, as a percentage of The Board considered various other money market funds is in the best the Fund's net assets, has decreased as benefits received by Invesco Aim and its interests of the Fund and its net assets increased because of the affiliates resulting from Invesco Aim's shareholders. breakpoints. The Board concluded that the relationship with the Fund, including the Fund's advisory fees appropriately reflect fees received by Invesco Aim and its economies of scale at current asset affiliates for their provision of levels. The Board also noted that the Fund administrative, transfer agency and shares directly in economies of scale distribution services to the Fund. The through lower fees charged by third party Board considered the performance of service providers based on the combined Invesco Aim and its affiliates in size of all of the AIM Funds and providing these services and the affiliates. organizational structure employed by Invesco Aim and its affiliates to provide F. Profitability and Financial these services. The Board also considered Resources that these services are provided to the Fund pursuant to written contracts that The Board reviewed information from are reviewed and approved on an annual Invesco Aim concerning the costs of the basis by the Board. The Board concluded advisory and other services that Invesco that Invesco Aim and its affiliates are Aim and its affiliates provide to the Fund providing these services in a satisfactory and the profitability of Invesco Aim and manner and in accordance with the terms of its affiliates in providing these their contracts, and are qualified to services. The Board also reviewed continue to provide these services to the information concerning the financial Fund. condition of Invesco Aim and its affiliates. The Board reviewed with The Board considered the benefits Invesco Aim the methodology used to realized by Invesco Aim and the Affiliated prepare the profitability information. The Sub-Advisers as a result of portfolio Board considered the overall profitability brokerage transactions executed through of Invesco Ltd., the ultimate parent of "soft dollar" arrangements. The Board Invesco Aim and the Affiliated noted that soft dollar arrangements shift Sub-Advisers, and of Invesco Aim, as well the payment obligation for research and as the profitability of Invesco Aim in execution services from Invesco Aim and connection with managing the Fund. The the Affiliated Sub-Advisers to the funds Board noted that Invesco Aim continues to and therefore may reduce Invesco Aim's and operate at a net profit, although the the Affiliated Sub-Advisers' expenses. The reduction of assets under management as a Board concluded that Invesco Aim's and the result of market movements and the Affiliated Sub-Advisers' soft dollar increase in voluntary fee waivers for arrangements are appropriate. The Board affiliated money market funds have reduced also concluded that, based on their review the profitability of Invesco Aim and its and representations made by the Chief affiliates. The Board concluded that the Compliance Officer of Invesco Aim, these Fund's fees are fair and reasonable, and arrangements are consistent with that the level of profits realized by regulatory requirements. Invesco Aim and its affiliates from providing services to the Fund is not The Board considered the fact that the excessive in light of the nature, quality Fund's uninvested cash and cash collateral and extent of the services provided. The from any securities lending arrangements Board considered whether Invesco Aim is may be invested in money market funds financially sound and has the resources advised by Invesco Aim pursuant to necessary to perform its obligations under procedures approved by the Board. The the Fund's investment advisory agreement, Board noted that Invesco Aim will receive and concluded that Invesco Aim has the advisory fees from these affiliated money financial resources necessary to fulfill market funds attributable to such these obligations. The investments, although Invesco Aim has 26 AIM MULTI-SECTOR FUND
TAX INFORMATION Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors. The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement. The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended August 31, 2009:
FEDERAL AND STATE INCOME TAX ---------------------------- Long-Term Capital Gain Dividends $18,792,900 Qualified Dividend Income* 100.00% Corporate Dividends Received Deduction* 100.00%
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year. 27 AIM MULTI-SECTOR FUND TRUSTEES AND OFFICERS The address of each trustee and officer of AIM Counselor Series Trust (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------------ Martin L. Flanagan(1) -- 1960 2007 Executive Director, Chief Executive Officer and President, None Trustee Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Chairman, Invesco Aim Advisors, Inc. (registered investment advisor); Trustee, The AIM Family of Funds(R); Vice Chairman, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd. and Chairman, Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and Principal Executive Officer President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company) and Invesco Aim Capital Management, Inc. (registered investment advisor); Director and President, INVESCO Funds Group, Inc. (registered investment advisor and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltee (registered investment advisor and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: President, Invesco Trimark Dealer Inc.; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Director and President, Invesco Trimark Ltd./Invesco Trimark Ltee; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited (insurance Trustee and Chair consulting company) company); Captaris, Inc. (unified messaging provider); and Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Bob R. Baker -- 1936 1983 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Bayley -- 1939 2003 Retired None Trustee Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Board of Governors, Trustee firm) Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association - ------------------------------------------------------------------------------------------------------------------------------------ Albert R. Dowden -- 1941 2003 Director of a number of public and private business Board of Nature's Trustee corporations, including the Boss Group Ltd. (private Sunshine Products, Inc. investment and management); Continental Energy Services, LLC (oil and gas pipeline service); Reich & Tang Funds (registered investment company), and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, CompuDyne Corporation (provider of product and services to the public security market); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Senior Vice President, AB Volvo; Director of various public and private corporations - ------------------------------------------------------------------------------------------------------------------------------------ Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff Trustee (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) - ------------------------------------------------------------------------------------------------------------------------------------ Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich & Tang Trustee Funds (16 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ Prema Mathai-Davis -- 1950 2003 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Larry Soll -- 1942 1997 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Raymond Stickel, Jr. -- 1944 2005 Retired None Trustee Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Flanagan is considered an interested person of the Trust because he is an officer of the advisor to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the advisor to the Trust. (2) Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. T-1 Trustees and Officers - (continued)
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family N/A Senior Vice President and of Funds(R) Senior Officer Formerly: Director of Compliance and Assistant General Counsel, ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General Counsel and Director of Compliance, ALPS Mutual Funds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General N/A Senior Vice President, Chief Counsel, Invesco Aim Management Group, Inc., Invesco Aim Legal Officer and Secretary Advisors, Inc. and Invesco Aim Capital Management, Inc.; Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); and Manager, Invesco PowerShares Capital Management LLC Formerly: Director, Vice President and Secretary, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company); Vice President and Secretary, PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator); General Counsel and Secretary, Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company) - ------------------------------------------------------------------------------------------------------------------------------------ Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice N/A Vice President President, The AIM Family of Funds(R) Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R); Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company - ------------------------------------------------------------------------------------------------------------------------------------ Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, N/A Vice President Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc.,. Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; and Vice President, The AIM Family of Funds(R) Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Sheri Morris -- 1964 2003 Vice President, Treasurer and Principal Financial Officer, N/A Vice President, Treasurer and The AIM Family of Funds(R); and Vice President, Invesco Aim Principal Financial Officer Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management Inc. Formerly: Assistant Vice President and Assistant Treasurer, The AIM Family of Funds(R) and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash N/A Vice President Management Group; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only) Formerly: President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer and Managing Director, Invesco Aim Capital Management, Inc.; and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only) - ------------------------------------------------------------------------------------------------------------------------------------ Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim N/A Anti-Money Laundering Advisors, Inc., Invesco Aim Capital Management, Inc., Compliance Officer Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., Invesco Aim Private Asset Management, Inc. and The AIM Family of Funds(R) Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company; and Manager of the Fraud Prevention Department, Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; N/A Chief Compliance Officer Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, The AIM Family of Funds(R), Invesco Global Asset Management (N.A.), Inc. (registered investment advisor), Invesco Institutional (N.A.), Inc., (registered investment advisor), INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment advisor) and Invesco Senior Secured Management, Inc. (registered investment advisor); and Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company; and Global Head of Product Development, AIG-Global Investment Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund's prospectus for information on the Fund's sub-advisors. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street Houston, TX 77046-1173 Suite 100 Suite 100 Suite 2900 Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678 COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN Stradley Ronon Stevens & INDEPENDENT TRUSTEES Invesco Aim Investment Services, Inc. State Street Bank and Trust Young, LLP Kramer, Levin, Naftalis & Frankel LLP P.O. Box 4739 Company 2600 One Commerce Square 1177 Avenue of the Americas Houston, TX 77210-4739 225 Franklin Philadelphia, PA 19103 New York, NY 10036-2714 Boston, MA 02110-2801
T-2 [GRAPHIC] - ------------------------------------------------------------------------------------------------------------------------------------ GO PAPERLESS WITH EDELIVERY Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all about eeees: - - ENVIRONMENTALLY FRIENDLY. Go green by reducing the number of - EFFICIENT. Stop waiting for regular mail. Your documents will trees used to produce paper. be sent via email as soon as they're available. - - ECONOMICAL. Help reduce your fund's printing and delivery - EASY. Download, save and print files using your home computer expenses and put more capital back in your fund's returns. with a few clicks of your mouse. This service is provided by Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Aim Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within thirty days after receiving your request. - ------------------------------------------------------------------------------------------------------------------------------------ FUND HOLDINGS AND PROXY VOTING INFORMATION The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-09913 and 333-36074. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website, invescoaim. com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov. If used after January 20, 2010, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for the most recent quarter-end. Invesco Aim - SERVICE MARK - is a service mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for the products and services represented by Invesco Aim; they each provide investment advisory services to individual and institutional clients and do not sell securities. Please refer to each fund's prospectus for information on the fund's subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the retail mutual funds, exchange-traded funds and institutional money market funds and the subdistributor for the STIC Global Funds represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd. It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco Global Asset [INVESCO AIM LOGO] Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the consolidated adviser -- SERVICE MARK -- firm will be renamed Invesco Advisers, Inc. Additional information will be posted at invescoaim.com on or about the end of the fourth quarter of 2009. invescoaim.com I-MSE-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] AIM SELECT REAL ESTATE INCOME FUND - service mark - ANNUAL REPORT TO SHAREHOLDERS AUGUST 31, 2009 2 Letters to Shareholders 4 Performance Summary 4 Management Discussion 6 Long-Term Fund Performance 8 Supplemental Information 9 Schedule of Investments 12 Financial Statements 14 Notes to Financial Statements 21 Financial Highlights 23 Auditor's Report 24 Fund Expenses 25 Approval of Investment Advisory and Sub-Advisory Agreements 28 Tax Information T-1 Trustees and Officers
Dear Shareholders: While the year covered by this report was difficult -- for long-time investors and veteran investment professionals alike -- economic conditions and market trends appeared much more [TAYLOR favorable at the close of the fiscal year than at its start. PHOTO] The 12 months ended August 31, 2009, included a sharp market sell-off that occurred in the second half of 2008. That downturn affected virtually all sectors, markets and investors. The decline had a number of causes, the most immediate being unprecedented turmoil in credit markets. Economic uncertainty prompted banks to hoard cash and reduce lending, and caused Philip Taylor investors to shun short-term corporate debt. As a result, businesses found it difficult to fund their day-to-day operations, and the U.S. economy -- as well as economies around the globe -- virtually froze briefly. INCREASED COMMUNICATION These developments prompted a greater-than-usual number of shareholders to contact me. Some of you took the time to write a letter while others of you emailed me at phil@invescoaim.com. Many of you sought explanations for the decline in the value of your accounts, while others asked more general questions about when the economy might improve. Your questions, comments and suggestions gave me better insight into what was on your minds, and I was pleased that so many of you took the time to share your thoughts with me. As a result, Invesco Aim's investment professionals and I have increased our efforts to stay in touch with and share our views with you. We increased the number of "Investment Perspectives" articles on our website, invescoaim.com. Through these articles, we've tried to provide timely market commentary, general investor education information and sector updates. I hope you'll take a moment to read them and let me know if you find them useful. To access your Fund's latest quarterly commentary, click on "Products and Performance" at the top of our website; next, select "Mutual Funds"; and then click on "Quarterly Commentary." I also hope you've stayed in touch with your financial advisor. An experienced financial advisor who is familiar with your individual investment goals, time horizon and risk tolerance can be a source of comfort and information during uncertain times. He or she can monitor your investments to ensure they're on track and can prevent you from making impulsive short-term decisions that may have adverse long-term consequences. REASONS FOR OPTIMISM The economy and equity markets reacted to a barrage of negative news during the year. Consumer spending -- which accounts for more than two-thirds(1) of the U.S. economy -- was sluggish as unemployment rose; more workers worried about their job security; home and portfolio values declined; and credit became more difficult to obtain. In his semiannual monetary policy report to Congress in late July, U.S. Federal Reserve Board Chairman Ben Bernanke summarized the stresses and strains the U.S. and global economies suffered in late 2008 and early 2009. Importantly, he suggested that the aggressive, coordinated actions taken by governments and central banks around the world finally may be yielding results. He testified that: o The pace of overall economic decline appears to have slowed significantly. o Credit availability, for consumers and businesses, has improved noticeably. o Investors' extreme risk aversion has eased somewhat. o The decline in housing activity appears to have moderated. While these and other trends offer encouragement, uncertainties remain. Chairman Bernanke testified that he anticipates a gradual recovery in 2010 with some acceleration in economic growth in 2011, together with subdued inflation over the next two years. His considered judgment appears to be shared by investors who have begun to return, cautiously, to the equities market, causing major U.S. stock-market indexes to bounce off their March lows. A SINGLE FOCUS I believe Invesco Aim is uniquely positioned to serve our clients. Our parent company, Invesco Ltd., is one of the largest(2) and most diversified global asset managers. It provides clients with diversified investment strategies and a range of investment products managed by distinct management teams around the world. We believe we can serve you best by focusing on one thing and doing it well: managing your money. Our investment professionals have managed clients' money in up markets and down markets. All of us here recognize that market conditions change often; what will not change is our commitment to putting our clients first, helping you achieve your financial goals and providing excellent customer service. If you have questions about this report or your account, please contact one of our client services representatives at 800 959 4246. If you have comments for me, I encourage you to email me at phil@invescoaim.com. Thank you for investing with us. All of us at Invesco Aim look forward to serving you. Sincerely, /S/ PHILIP TAYLOR Philip Taylor Senior Managing Director, Invesco Ltd. CEO, Invesco Aim (1) Reuters; (2) Pensions & Investments 2 AIM SELECT REAL ESTATE INCOME FUND
Dear Fellow Shareholders: Although the economy and financial markets have shown some signs of hope, investors remain [CROCKETT rightfully cautious. Staying with an appropriately diversified investment program focused on PHOTO] your individual long-term goals can be a wise course in such uncertain times. We believe the route to financial success is more like a marathon than a sprint. Please be assured that your Board continues to oversee the AIM Funds with a strong sense of responsibility for your money and your trust. As always, we seek to manage costs and enhance performance in ways that put your interests first. Bruce Crockett We are near the end of a busy 2009 proxy season, during which Invesco Aim Advisors, Inc.'s proxy committee votes on your behalf on issues put to a shareholder vote by the companies whose stock the Funds hold. This year, after careful case-by-case analysis by committee members and portfolio managers, the proxy committee voted with corporate management less often than in previous years, focusing on the issues of board independence, Say-On-Pay initiatives, and stock option re-pricing in light of the market's decline. The committee remained committed to supporting non-binding Say-on-Pay proposals and abstaining from voting on social issues. At its June meeting, your Board reviewed and renewed the investment advisory contracts between the AIM Funds and Invesco Aim Advisors, Inc. You can find the results of this rigorous annual process at invescoaim.com. Go to "Products & Performance" and click on "Investment Advisory Agreement Renewals." The website also contains news and market information, investment education and planning information and current reports and prospectuses for all the AIM Funds and I highly recommend it to you. You are always welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving you in the coming months. Sincerely, /S/ BRUCE L. CROCKETT Bruce L. Crockett Independent Chair AIM Funds Board of Trustees 3 AIM SELECT REAL ESTATE INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------------ MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE PERFORMANCE SUMMARY o Company fundamentals change (property type, geography or management changes). While a severe global economic slowdown persisted during the fiscal year ended August 31, 2009, a significant stock market rally began late in the period. Strained credit o A more attractive investment markets materially affected real estate markets, which resulted in slower property opportunity is identified. sales and lower property valuations. Toward the end of the reporting period, modest improvements in credit markets and increased access to capital through debt refinancing MARKET CONDITIONS AND YOUR FUND and secondary equity offerings benefited the U.S. real estate investment trust (REIT) market. In this volatile environment, AIM Select Real Estate Income Fund had negative Though much of the fiscal year was marked returns. At net asset value (NAV), the Fund fared better than the broad market, as by headlines claiming economic measured by the S&P 500 Index, as well as its peer group, the Lipper Real Estate Funds "Armageddon," the U.S. economy began to Index. However, the Fund underperformed the Custom Select Real Estate Income Index, its show signs that the economic contraction style-specific benchmark, due primarily to an underweight exposure in preferred stocks, was moderating toward the end of the which exhibit fixed income-like characteristics.(triangle)(square) period. Economic data, while poor in absolute terms, indicated that the rampant Your Fund's long-term performance appears later in this report. decline in business spending and consumption that occurred at the end of FUND VS. INDEXES 2008 and the beginning of 2009 may have eased. Despite these trends, there were Total returns, 8/31/08 to 8/31/09, at net asset value (NAV). Performance shown does not few signs of a broad-based economic include applicable contingent deferred sales charges (CDSC) or front-end sales charges, recovery. Nevertheless, given signs that which would have reduced performance. the economic downturn may be moderating, equity and credit markets improved. In Class A Shares -17.22% addition, financial markets benefited from Class B Shares -17.81 the various government programs introduced Class C Shares -17.90 to improve bank balance sheets and reduce Class Y Shares* -17.32 credit spreads.. S&P 500 Index(triangle) (Broad Market Index) -18.25 Custom Select Real Estate Income Index(square) (Style-Specific Index) -12.52 During the fiscal year, the U.S. Lipper Real Estate Funds Index(triangle) (Peer Group Index) -32.35 Federal Reserve Board (the Fed) lowered the federal funds target rate from 2% to a (triangle)Lipper Inc.; (square)Invesco Aim, Lipper Inc., Bloomberg L.P. range of zero and 0.25%.(1) Real gross domestic product (GDP), although still * Share class incepted during the fiscal year. See page 7 for a detailed explanation negative, showed signs of recovery. of Fund performance. Indeed, the annualized rate of GDP was -1.0% for the second quarter of 2009, HOW WE INVEST o Favorable property market outlook. which was an improvement from the -6.4% rate for the first quarter of 2009.(2) Your Fund holds primarily real o Reasonable valuations relative to peer Inflation, measured by a seasonally estate-oriented securities. We focus on investment alternatives. adjusted Consumer Price Index, was public companies whose value is driven by relatively benign following a significant tangible assets. Our goal is to create a We attempt to control risk by decline in crude oil prices from their all fund that will provide attractive current allocating between property related common time highs reached in July 2008.(3) income. We use a fundamentals-driven stocks and fixed income as well as Unemployment, however, trended higher investment process, including property diversifying by property types and during the fiscal year and ultimately market cycle analysis, property evaluation geographic location and also limiting the and management and structure review to size of any one holding. identify securities with: We will consider selling a holding o Attractive relative dividend yields. when: o Relative yields and/or valuation falls below desired levels. o Risk/return relationships change significantly. - ------------------------------------------ ------------------------------------------ ------------------------------------------ PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* Total Net Assets $136.5 million By property type Total Number of Holdings* 94 1. Simon Property Group Inc. 7.1% Health Care 17.1% 2. Ventas, Inc. 4.4 The Fund's holdings are subject to change, Asset-Backed Securities 12.4 3. Senior Housing Properties Trust 4.4 and there is no assurance that the Fund Apartments 10.1 4. Liberty Property Trust 3.7 will continue to hold any particular Regional Malls 9.8 5. Mack-Cali Realty Corp. 3.3 security. Industrial/Office: Mixed 8.4 6. Essex Property Trust, Inc. 3.1 Office 7.3 7. Mid America Apartment * Excluding money market fund holdings. Diversified 6.9 Communities, Inc. 3.0 Self Storage Facilities 5.6 8. Vornado Realty Trust 2.9 Freestanding 4.8 9. Health Care REIT, Inc. 2.8 Industrial 4.2 10. National Retail Properties Inc. 2.6 Shopping Centers 3.9 Specialty Properties 2.9 Lodging-Resorts 0.2 Market Money Funds Plus Other Assets Less Liabilities 6.4 4 AIM SELECT REAL ESTATE INCOME FUND
ended August 2009 at a rate of 9.7% SL GREEN, an office REIT focused on JOE RODRIGUEZ, JR. nationwide.(3) commercial office properties in Manhattan, was among detractors from Fund Senior portfolio Given this environment, the U.S. REIT performance. SL Green suffered as layoffs manager, is lead market, as measured by the FTSE NAREIT in New York's financial sector [RODRIGUE manager of AIM Select Equity REITs Index, produced a loss for accelerated, creating added rental market PHOTO] Real Estate Income the period.(4) Our relatively defensive and occupancy risks. Given the security's Fund. He is head of posture proved beneficial given the relatively low yield, we sold our holdings real estate securities volatility of the fiscal year. We were in SL Green during the fiscal year. for Invesco Real Estate, where he oversees active in trading during the period to all phases of the unit, including take advantage of differences in relative PROLOGIS, a global provider of securities research and administration. value among domestic REITs. Fund distribution facilities across North Mr. Rodriguez began his investment career performance varied noticeably by sector, America, Europe and Asia, also detracted in 1983 and joined Invesco in 1990. He with apartment REITs and health care REITs from Fund performance during the fiscal earned a B.B.A. in economics and finance contributing the most to absolute year. Toward the end of 2008, we became as well as an M.B.A. in finance from performance. Regional malls and office increasingly concerned about potential Baylor University. REITs, on the other hand, detracted from earnings risk from lower profit margins on the Fund's absolute performance during the the firm's global development projects and MARK BLACKBURN fiscal year. began to reduce our exposure to ProLogis. However, the combination of discounted Chartered Financial Relative to the FTSE NAREIT Equity valuation and steps the company took to Analyst, portfolio REITs Index, our security selection and improve its balance sheet caused us to [BLACKBURN manager, is manager of overweight exposure in health care REITs, increase our exposure toward the end of PHOTO] AIM Select Real Estate mixed-use industrial/office REITs and self the fiscal year. Income Fund. Mr. storage facilities benefited Fund Blackburn joined performance. Alternatively, a lack of We remained committed to owning quality Invesco in 1998. He earned a B.S. in exposure to manufactured homes hurt the real estate companies that we believe may accounting from Louisiana State University Fund's performance during the fiscal year. benefit from relatively better sector and an M.B.A. from Southern Methodist We have avoided single family housing trends. We continued to manage risk by University. Mr. Blackburn is a Certified since 2005. holding a portfolio diversified by Public Accountant. property type and geographic location. In Health care, generally a defensive the common stock portion of the Fund, PAUL CURBO sector less directly linked to the overall lower leveraged companies with above economy, outperformed during the fiscal average levels of dividend coverage Chartered Financial year. VENTAS, a health care REIT with remained favored in the portfolio. [CURBO Analyst, portfolio exposure to a wide array of health care PHOTO] manager, is manager of related real estate, including senior We thank you for your continued AIM Select Real Estate housing facilities, long-term care investment in AIM Select Real Estate Income Fund. He joined Invesco in 1998. facilities and hospitals, was the top Income Fund. Mr. Curbo earned a B.B.A. in finance from contributor to Fund performance. We added The University of Texas at Austin. to our position in Ventas during the 1 U.S. Federal Reserve fiscal year to take advantage of JAMES TROWBRIDGE differences in relative value and as a 2 Bureau of Economic Analysis means of becoming more defensive in Portfolio manager, is anticipation of market volatility. 3 Bureau of Labor Statistics [TROWBRIDGE manager of AIM Select PHOTO] Real Estate Income Apartment REITs CAMDEN and MID-AMERICA 4 Lipper Inc. Fund. He joined Invesco APARTMENT COMMUNITIES were also among the in 1989. Mr. Trowbridge earned his B.A. in Fund's top contributing holdings. We The views and opinions expressed in finance from Indiana University. increased our exposure to apartment REITs management's discussion of Fund during the fiscal year to take advantage performance are those of Invesco Aim Assisted by the Real Estate Team of relative value opportunities and Advisors, Inc. These views and opinions because we anticipated the peak-to-trough are subject to change at any time based on fundamental decline in apartments would be factors such as market and economic less severe than in other sectors. conditions. These views and opinions may Additionally, we believed increases in not be relied upon as investment advice or U.S. home prices and short-term interest recommendations, or as an offer for a rates could cause apartment occupancies particular security. The information is and rents to rebound. Mid-America not a complete analysis of every aspect of Apartment Communities in particular had any market, country, industry, security or lower capital demands and few expected the Fund. Statements of fact are from write-downs due to this REIT's limited sources considered reliable, but Invesco development pipeline. Aim Advisors, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy. See important Fund and index disclosures later in this report. 5 AIM SELECT REAL ESTATE INCOME FUND
YOUR FUND'S LONG-TERM PERFORMANCE RESULTS OF A $10,000 INVESTMENT - OLDEST SHARE CLASS WITH SALES CHARGES SINCE INCEPTION Fund and Index data from 05/31/02 (PERFORMANCE CHART)
AIM CUSTOM SELECT REAL SELECT REAL ESTATE FUND- ESTATE LIPPER CLASS A INCOME S&P 500 REAL ESTATE SHARES INDEX(2) INDEX(1) FUNDS INDEX(1) ------------ ----------- -------- -------------- 5/31/2002 9430 10000 10000 10000 06/02 9661 10198 9288 10220 07/02 9259 9905.3 8564 9635 08/02 9226 9998.3 8620 9656 09/02 8874 9846.2 7684 9312 10/02 8334 9524.8 8360 8902 11/02 8775 9836.6 8851 9262 12/02 8799 9994.4 8332 9361 01/03 8622 9891.7 8114 9116 02/03 8802 9967.3 7992 9257 03/03 8977 10097 8069 9470 04/03 9561 10441 8734 9882 05/03 10222 10853 9193 10465 06/03 10704 11075 9311 10713 07/03 11298 11310 9475 11204 08/03 11187 11368 9660 11325 09/03 11689 11675 9557 11687 10/03 12128 11851 10098 11947 11/03 12704 12169 10186 12470 12/03 13320 12482 10720 12844 01/04 14024 12797 10917 13303 02/04 14306 12946 11069 13595 03/04 15036 13387 10902 14337 04/04 12606 12097 10731 12452 05/04 13316 12538 10878 13185 06/04 13585 12773 11089 13590 07/04 13683 12939 10722 13647 08/04 14657 13610 10765 14597 09/04 14798 13677 10882 14678 10/04 15477 14104 11048 15353 11/04 15986 14465 11495 16037 12/04 16577 14892 11886 16971 01/05 15390 14291 11596 15847 02/05 15746 14556 11840 16311 03/05 15234 14324 11631 16011 04/05 15894 14816 11410 16656 05/05 16515 15147 11773 17216 06/05 17277 15614 11790 18017 07/05 18189 16210 12228 19177 08/05 17483 15954 12117 18513 09/05 17721 15998 12215 18568 10/05 17126 15713 12011 18136 11/05 17466 16028 12465 18921 12/05 17314 16094 12469 19053 01/06 18563 16768 12799 20248 02/06 18802 17009 12834 20553 03/06 19396 17457 12994 21500 04/06 18659 17054 13168 20940 05/06 17958 16848 12790 20359 06/06 18820 17343 12806 21242 07/06 19486 17757 12885 21736 08/06 20581 18229 13192 22480 09/06 20888 18509 13531 22908 10/06 21771 19192 13972 24215 11/06 22329 19726 14237 25316 12/06 22362 19656 14437 25047 01/07 23163 20526 14655 26849 02/07 22838 20306 14369 26317 03/07 22957 20087 14530 25874 04/07 23049 20111 15173 25983 05/07 22984 20096 15702 26184 06/07 22182 19136 15441 24069 07/07 20805 17945 14963 22454 08/07 21560 18425 15187 23383 09/07 22149 18916 15754 24425 10/07 22310 18928 16005 24927 11/07 20780 17506 15336 22737 12/07 19955 16691 15230 21665 01/08 20677 17419 14316 21390 02/08 20257 17019 13852 20693 03/08 20399 17315 13792 21604 04/08 21433 18109 14463 22857 05/08 21693 18325 14650 22929 06/08 20142 16837 13416 21111 07/08 19737 16775 13304 21646 08/08 19976 17161 13496 21907 09/08 18523 15745 12295 21240 10/08 14398 12229 10230 14860 11/08 12011 10251 9496 11562 12/08 13569 11860 9596 13178 01/09 12416 10972 8788 11138 02/09 10772 8985 7855 9007 03/09 11282 9453 8542 9279 04/09 13564 11810 9359 11992 05/09 13911 12425 9882 12335 06/09 13812 12465 9902 11945 07/09 15261 13683 10650 13092 08/09 16535 15013 11034 14820
(1) Lipper Inc. (2) Invesco Aim, Lipper Inc., Bloomberg L.P. Past performance cannot guarantee shown in the chart and table(s) does not one that indicates the dollar value of an comparable future results. reflect deduction of taxes a shareholder investment, is constructed with each would pay on Fund distributions or sale of segment representing a percent change in The data shown in the chart include Fund shares. the value of the investment. In this reinvested distributions, applicable sales chart, each segment represents a doubling, charges and Fund expenses including This chart, which is a logarithmic or 100% change, in the value of the management fees. Index results include chart, presents the fluctuations in the investment. In other words, the space reinvested dividends, but they do not value of the Fund and its indexes. We between $5,000 and $10,000 is the same reflect sales charges. Performance of the believe that a logarithmic chart is more size as the space between $10,000 and peer group reflects fund expenses and effective than other types of charts in $20,000, and so on. management fees; performance of a market illustrating changes in value during the index does not. Performance early years shown in the chart. The vertical axis, the continued from page 8 o Property type classifications used in o The Chartered Financial Analysts (R) o CPA (R) and Certified Public this report are generally according to (CFA(R)) designation is globally Accountant(R) are trademarks owned by the FTSE National Association of Real recognized and attests to a the American Institute of Certified Estate Investment Trusts (NAREIT) charterholder's success in a rigorous Public Accountants. Equity REITs Index, which is and comprehensive study program in the exclusively owned by NAREIT. field of investment management and research analysis. 6 AIM SELECT REAL ESTATE INCOME FUND
AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS THE NET ANNUAL FUND OPERATING EXPENSE RATIO SET FORTH IN THE MOST RECENT FUND As of 8/31/09, including maximum applicable As of 6/30/09, the most recent calendar PROSPECTUS AS OF THE DATE OF THIS REPORT quarter-end, including maximum applicable FOR CLASS A, CLASS B AND CLASS C AND CLASS sales charges sales charges Y SHARES WAS 1.34%, 2.09%, 2.09% AND 1.09%, RESPECTIVELY.(1) THE TOTAL ANNUAL CLASS A SHARES CLASS A SHARES FUND OPERATING EXPENSE RATIO SET FORTH IN THE MOST RECENT FUND PROSPECTUS AS OF THE Inception(5/31/02) 7.18% Inception(5/31/02) 4.66% DATE OF THIS REPORT FOR CLASS A, CLASS B, 5 Years 1.29 5 Years -0.80 CLASS C AND CLASS Y SHARES WAS 1.35%, 1 Year -21.79 1 Year -35.18 2.10%, 2.10% AND 1.10%, RESPECTIVELY. THE CLASS B SHARES CLASS B SHARES EXPENSE RATIOS PRESENTED ABOVE MAY VARY Inception 6.95% Inception 4.45% FROM THE EXPENSE RATIOS PRESENTED IN OTHER 5 Years 1.33 5 Years -0.77 SECTIONS OF THIS REPORT THAT ARE BASED ON 1 Year -21.75 1 Year -35.18 EXPENSES INCURRED DURING THE PERIOD CLASS C SHARES CLASS C SHARES COVERED BY THIS REPORT. Inception 6.95% Inception 4.45% 5 Years 1.46 5 Years -0.64 CLASS A SHARE PERFORMANCE REFLECTS THE 1 Year -18.69 1 Year -32.56 MAXIMUM 5.50% SALES CHARGE, AND CLASS B CLASS Y SHARES CLASS Y SHARES AND CLASS C SHARE PERFORMANCE REFLECTS THE Inception 7.99% Inception 5.47% APPLICABLE CONTINGENT DEFERRED SALES 5 Years 2.41 5 Years 0.29 CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE 1 Year -17.32 1 Year -31.55 CDSC ON CLASS B SHARES DECLINES FROM 5% BEGINNING AT THE TIME OF PURCHASE TO 0% AT ON MARCH 12, 2007, THE FUND REORGANIZED CLASS Y SHARES' INCEPTION DATE IS THE BEGINNING OF THE SEVENTH YEAR. THE FROM A CLOSED-END FUND TO AN OPEN-END OCTOBER 3, 2008; RETURNS SINCE THAT DATE CDSC ON CLASS C SHARES IS 1% FOR THE FIRST FUND. CLASS A SHARE RETURNS PRIOR TO MARCH ARE ACTUAL RETURNS. ALL OTHER RETURNS ARE YEAR AFTER PURCHASE. CLASS Y SHARES DO NOT 12, 2007, ARE THE HISTORICAL RETURNS OF BLENDED RETURNS OF ACTUAL CLASS Y SHARE HAVE A FRONT-END SALES CHARGE OR A CDSC; THE CLOSED-END FUND'S COMMON SHARES WHICH PERFORMANCE AND RESTATED CLASS A SHARE THEREFORE, PERFORMANCE IS AT NET ASSET INCEPTED MAY 31, 2002 AND WHICH HAD NO PERFORMANCE (FOR PERIODS PRIOR TO THE VALUE. 12B-1 FEE. THE CLASS A SHARE RETURNS PRIOR INCEPTION DATE OF CLASS Y SHARES) AT NET TO MARCH 12, 2007 DO NOT REFLECT THE 0.25% ASSET VALUE. THE RESTATED CLASS A SHARE THE PERFORMANCE OF THE FUND'S SHARE ANNUAL 12B-1 FEE APPLICABLE TO THE FUNDS' PERFORMANCE REFLECTS THE RULE 12B-1 FEES CLASSES WILL DIFFER PRIMARILY DUE TO CLASS A SHARES OR THE ANNUAL OTHER APPLICABLE TO CLASS A SHARES AS WELL AS DIFFERENT SALES CHARGE STRUCTURES AND EXPENSES OF SUCH CLASS A SHARES WHICH ARE ANY FEE WAIVERS OR EXPENSE REIMBURSEMENTS CLASS EXPENSES. ESTIMATED TO BE 0.10% HIGHER THAN THOSE OF RECEIVED BY CLASS A SHARES. CLASS A SHARES THE CLOSED-END FUND. IF THE 12B-1 FEE AND INCEPTION DATE IS MAY 31, 2002. HAD THE ADVISOR NOT WAIVED FEES AND/OR OTHER EXPENSES OF THE FUND'S CLASS A REIMBURSED EXPENSES IN THE PAST, SHARES WERE REFLECTED, RETURNS PRIOR TO THE PERFORMANCE DATA QUOTED REPRESENT PERFORMANCE WOULD HAVE BEEN LOWER. MARCH 12, 2007 MAY BE LOWER THAN THOSE PAST PERFORMANCE AND CANNOT GUARANTEE SHARES FOR THAT PERIOD. COMPARABLE FUTURE RESULTS; CURRENT FUND PERFORMANCE WAS POSITIVELY PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE IMPACTED BY A TEMPORARY 2% FEE ON THE INCEPTION DATE FOR THE OPEN-END VISIT INVESCOAIM.COM FOR THE MOST RECENT REDEMPTIONS THAT WAS IN EFFECT FROM MARCH FUND'S CLASS B AND CLASS C SHARES IS MARCH MONTH-END PERFORMANCE. PERFORMANCE FIGURES 12, 2007 TO MARCH 12, 2008. WITHOUT INCOME 9, 2007; RETURNS SINCE THAT DATE ARE REFLECT REINVESTED DISTRIBUTIONS FROM THIS TEMPORARY FEE, RETURNS WOULD HISTORICAL RETURNS. ALL OTHER RETURNS ARE (REINVESTED AT NET ASSET VALUE, EXCEPT FOR HAVE BEEN LOWER. BLENDED RETURNS OF HISTORICAL CLASS B AND PERIODS PRIOR TO MARCH 12, 2007, WHERE CLASS C SHARES AND THE HISTORICAL REINVESTMENTS WERE MADE AT THE LOWER OF 1 Total annual operating expenses less PERFORMANCE OF THE CLOSED-END FUND'S THE CLOSED-END FUND'S NET ASSET VALUE OR any contractual fee waivers and/or COMMON SHARES AT NET ASSET VALUE, RESTATED MARKET PRICE), CHANGES IN NET ASSET VALUE expense reimbursements by the advisor TO REFLECT THE 1.00% ANNUAL 12B-1 FEE AND THE EFFECT OF THE MAXIMUM SALES CHARGE in effect through at least June 30, APPLICABLE TO THE FUND'S CLASS B AND CLASS UNLESS OTHERWISE STATED. INVESTMENT RETURN 2010. See current prospectus for more C SHARES AND THE ANNUAL OTHER EXPENSES OF AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT information. SUCH CLASS B AND CLASS C SHARES, WHICH ARE YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL ESTIMATED TO BE 0.10% HIGHER THAN THOSE OF SHARES. THE CLOSED-END FUND.
7 AIM SELECT REAL ESTATE INCOME FUND AIM SELECT REAL ESTATE INCOME FUND'S INVESTMENT OBJECTIVES ARE HIGH CURRENT INCOME AND, SECONDARILY, CAPITAL APPRECIATION. o Unless otherwise stated, information presented in this report is as of August 31, 2009, and is based on total net assets. o Unless otherwise noted, all data provided by Invesco Aim. ABOUT SHARE CLASSES o On March 12, 2007, AIM Select Real change in the value of those securities o The CUSTOM SELECT REAL ESTATE INCOME Estate Income Fund was reorganized from could significantly affect the value of INDEX is an index created by Invesco a Closed-End Fund to an Open-End Fund. your investment in the Fund. Aim to benchmark the fund. The index Information presented for Class A consists of the following indices: 50% shares prior to the reorganization o A majority of the Fund's assets are FTSE NAREIT Equity REIT Index and 50% included financial data for the likely to be invested in loans and Wachovia Hybrid and Preferred Closed-End Fund's Common Shares. securities that are less liquid than Securities REIT Index. The FTSE NAREIT those rated on national exchanges. Equity REIT Index is a market-cap o Effective September 30, 2003, for weighted index of all equity REITs qualified plans only, those previously o Lower rated securities may be more traded on the NYSE, NASDAQ National established are eligible to purchase susceptible to real or perceived Market System, and the American Stock Class B shares of any AIM fund. Please adverse economic and competitive Exchange. The Wachovia Hybrid and - see the prospectus for more industry conditions. Preferred Securities REIT Index is a information. capitalization weighted unmanaged index o There is no guarantee that the invest of exchange listed perpetual REIT o Class Y shares are available to only -ment techniques and risk analysis used preferred stocks and depository shares. certain investors. Please see the by the Fund's portfolio managers will prospectus for more information. produce the desired results. o The LIPPER REAL ESTATE FUNDS INDEX is an equally weighted representation of PRINCIPAL RISKS OF INVESTING IN THE FUND o The prices of securities held by the the largest funds in the Lipper Real Fund may decline in response to market Estate Funds category. These funds o Credit risk is the risk of loss on an risks. invest their equity portfolio primarily investment due to the deterioration of in shares of domestic companies engaged an issuer's financial health. Such a o The Fund may invest in mortgage and in the real estate industry. deterioration of financial health may asset-backed securities. These result in a reduction of the credit securities are subject to prepayment or o The Fund is not managed to track the rating of the issuer's securities and call risk, which is the risk that performance of any particular index, may lead to the issuer's inability to payments from the borrower may be including the indexes defined here, and honor its contractual obligations, received earlier or later than expected consequently, the performance of the including making timely payment of due to changes in the rate at which the Fund may deviate significantly from the interest and principal. underlying loans are prepaid. performance of the indexes. o Prices of equity securities change in o Non-diversification increases the risk o A direct investment cannot be made in response to many factors including the that the value of the Fund's shares may an index. Unless otherwise indicated, historical and prospective earnings of vary more widely, and the Fund may be index results include reinvested the issuer, the value of its assets, subject to greater investment and dividends, and they do not reflect general economic conditions, interest credit risk than if it invested more sales charges or fund expenses. rates, investor perceptions and market broadly. liquidity. OTHER INFORMATION o Because the Fund concentrates its o Foreign securities have additional assets in the real estate industry, an o The returns shown in management's risks including exchange rate changes, investment in the fund will be closely discussion of Fund performance are political and economic upheaval, the linked to the performance of the real based on net asset values calculated relative lack of information, estate markets. for shareholder transactions. Generally relatively low market liquidity and the accepted accounting principles require potential lack of strict financial and o The Fund may use enhanced invest -ment adjustments to be made to the net accounting controls and standards. techniques such as short sales. Short assets of the Fund at period end for sales carry the risk of buying a financial reporting purposes, and as o Interest rate risk refers to the risk security back at a higher price at such, the net asset values for that bond prices generally fall as which the Fund's exposure is unlimited. shareholder transactions and the interest rates rise and vice versa. returns based on those net asset values ABOUT INDEXES USED IN THIS REPORT may differ from the net asset values o Since a large percentage of the Fund's and returns reported in the Financial assets may be invested in securities of o The S&P 500(R) INDEX is a market Highlights. a limited number of companies, each capitalization-weighted index covering investment has a greater effect on the all major areas of the U.S. economy. It continued on page 6 Fund's overall performance, and any is not the 500 largest companies, but rather the most widely held 500 companies chosen with respect to market size, liquidity, and their industry. THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, ------------------------------------------ WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. FUND NASDAQ SYMBOLS INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class A Shares ASRAX - --------------------------------------------------------------------------------------- Class B Shares SARBX NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE Class C Shares ASRCX Class Y Shares ASRYX
8 AIM SELECT REAL ESTATE INCOME FUND SCHEDULE OF INVESTMENTS(a) August 31, 2009
SHARES VALUE - ------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS, COMMON STOCKS & OTHER EQUITY INTERESTS-59.84% APARTMENTS-8.17% Camden Property Trust 74,100 $ 2,719,470 - ------------------------------------------------------------------------------- Essex Property Trust, Inc. 57,200 4,267,692 - ------------------------------------------------------------------------------- Mid-America Apartment Communities, Inc. 94,900 4,154,722 =============================================================================== 11,141,884 =============================================================================== DIVERSIFIED-5.40% Vornado Realty Trust 69,448 3,994,649 - ------------------------------------------------------------------------------- Washington REIT 125,391 3,380,541 =============================================================================== 7,375,190 =============================================================================== FREESTANDING-3.55% National Retail Properties Inc. 174,900 3,588,948 - ------------------------------------------------------------------------------- Realty Income Corp. 48,900 1,249,395 =============================================================================== 4,838,343 =============================================================================== HEALTHCARE-14.21% HCP, Inc. 38,900 1,107,872 - ------------------------------------------------------------------------------- Health Care REIT, Inc. 88,873 3,795,766 - ------------------------------------------------------------------------------- LTC Properties, Inc. 23,400 595,998 - ------------------------------------------------------------------------------- OMEGA Healthcare Investors, Inc. 115,500 1,953,105 - ------------------------------------------------------------------------------- Senior Housing Properties Trust 296,600 5,949,796 - ------------------------------------------------------------------------------- Ventas, Inc. 152,600 5,983,446 =============================================================================== 19,385,983 =============================================================================== INDUSTRIAL-4.19% DCT Industrial Trust Inc. 341,700 1,804,176 - ------------------------------------------------------------------------------- EastGroup Properties, Inc. 45,900 1,727,676 - ------------------------------------------------------------------------------- ProLogis 196,900 2,189,528 =============================================================================== 5,721,380 =============================================================================== INDUSTRIAL/OFFICE: MIXED-3.72% Liberty Property Trust 154,900 5,076,073 =============================================================================== OFFICE-4.68% Corporate Office Properties Trust 20,800 766,688 - ------------------------------------------------------------------------------- Kilroy Realty Corp. 41,900 1,161,049 - ------------------------------------------------------------------------------- Mack-Cali Realty Corp. 139,400 4,464,982 =============================================================================== 6,392,719 =============================================================================== REGIONAL MALLS-8.47% Macerich Co. (The) 66,559 1,907,567 - ------------------------------------------------------------------------------- Simon Property Group, Inc. 151,667 9,649,055 =============================================================================== 11,556,622 =============================================================================== SELF STORAGE FACILITIES-2.31% Public Storage-Series A Dep. Shares 124,800 3,156,192 =============================================================================== SHOPPING CENTERS-3.37% Equity One, Inc. 42,100 663,075 - ------------------------------------------------------------------------------- Federal Realty Investment Trust 11,400 711,018 - ------------------------------------------------------------------------------- Inland Real Estate Corp. 204,600 1,714,548 - ------------------------------------------------------------------------------- Regency Centers Corp. 28,000 939,400 - ------------------------------------------------------------------------------- Tanger Factory Outlet Centers, Inc. 15,300 575,586 =============================================================================== 4,603,627 =============================================================================== SPECIALTY PROPERTIES-1.77% Digital Realty Trust, Inc. 38,800 1,690,904 - ------------------------------------------------------------------------------- Government Properties Income Trust(b) 33,900 723,087 =============================================================================== 2,413,991 =============================================================================== Total Real Estate Investment Trusts, Common Stocks & Other Equity Interests (Cost $71,228,442) 81,662,004 =============================================================================== PREFERRED STOCKS-17.03% APARTMENTS-1.66% Mid-America Apartment Communities, Inc.- Series H, 8.30% Pfd. 90,600 2,262,282 =============================================================================== DIVERSIFIED-1.52% Vornado Realty Trust, Series E, 7.00% Pfd. 47,200 1,044,064 - ------------------------------------------------------------------------------- Series I, 6.63% Pfd. 50,200 1,034,120 =============================================================================== 2,078,184 =============================================================================== FREESTANDING-1.21% National Retail Properties Inc.-Series C, 7.38% Pfd. 73,450 1,656,298 =============================================================================== HEALTHCARE-1.65% Health Care REIT, Inc.-Series F, 7.63% Pfd. 11,100 261,072 - ------------------------------------------------------------------------------- Omega Healthcare Investors, Inc.-Series D, 8.38% Pfd. 82,500 1,984,125 =============================================================================== 2,245,197 =============================================================================== INDUSTRIAL-0.03% ProLogis-Series C, 8.54% Pfd. 950 42,750 =============================================================================== INDUSTRIAL/OFFICE: MIXED-3.57% PS Business Parks, Inc., Series K, 7.95% Pfd. 11,000 255,200 - ------------------------------------------------------------------------------- Series L, 7.60% Pfd. 19,500 443,625 - ------------------------------------------------------------------------------- Series M, 7.20% Pfd. 92,800 2,062,944 - ------------------------------------------------------------------------------- Series O, 7.38% Pfd. 92,200 2,106,770 =============================================================================== 4,868,539 ===============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 9 AIM SELECT REAL ESTATE INCOME FUND
SHARES VALUE - ------------------------------------------------------------------------------- LODGING-RESORTS-0.17% Eagle Hospitality Properties Trust Inc.-Series A, 8.25% Pfd. 195,800 $ 68,530 - ------------------------------------------------------------------------------- LaSalle Hotel Properties, Series D, 7.50% Pfd. 1,773 34,130 - ------------------------------------------------------------------------------- Series G, 7.25% Pfd. 6,809 128,009 =============================================================================== 230,669 =============================================================================== OFFICE-1.54% Corporate Office Properties Trust,-Series J, 7.63% Pfd. 584 13,193 - ------------------------------------------------------------------------------- Kilroy Realty Corp.-Series F, 7.50% Pfd. 88,800 1,799,976 - ------------------------------------------------------------------------------- SL Green Realty Corp.-Series C, 7.63% Pfd. 14,500 295,075 =============================================================================== 2,108,244 =============================================================================== REGIONAL MALLS-1.33% Realty Income Corp.-Series E, 6.75% Pfd. 80,792 1,817,012 =============================================================================== SELF STORAGE FACILITIES-3.18% Public Storage, Series I, 7.25% Pfd. 74,000 1,813,000 - ------------------------------------------------------------------------------- Series L, 6.75% Pfd. 44,800 991,424 - ------------------------------------------------------------------------------- Series M, 6.63% Pfd. 70,200 1,528,956 =============================================================================== 4,333,380 =============================================================================== SPECIALTY PROPERTIES-1.17% Digital Realty Trust, Inc., Series A, 8.50% Pfd. 34,000 836,740 - ------------------------------------------------------------------------------- Series B, 7.88% Pfd. 32,200 759,598 =============================================================================== 1,596,338 =============================================================================== Total Preferred Stocks (Cost $26,927,606) 23,238,893 =============================================================================== PRINCIPAL AMOUNT ASSET-BACKED SECURITIES-12.42% Bear Stearns Commercial Mortgage Securities, Series 2005-PWR8, Class A4, Pass Through Ctfs., 4.67%, 06/11/41 $1,696,000 1,645,027 - ------------------------------------------------------------------------------- Series 2005-T18, Class A3, Pass Through Ctfs., 4.77%, 02/13/42 175,000 173,156 - ------------------------------------------------------------------------------- Series 2005-T18, Class A4, Pass Through Ctfs., 4.93%, 02/13/42 995,000 951,034 - ------------------------------------------------------------------------------- Series 2005-T18, Class AJ, Pass Through Ctfs., 5.01%, 02/13/42 350,000 222,406 - ------------------------------------------------------------------------------- Series 2006-PW11, Class A4, Pass Through Ctfs., 5.62%, 03/11/39 1,940,000 1,825,777 - ------------------------------------------------------------------------------- Series 2006-T22, Class A4, Pass Through Ctfs., 5.63%, 04/12/38 1,053,000 1,000,953 - ------------------------------------------------------------------------------- Credit Suisse First Boston Mortgage Securities Corp., Series 2003-C3, Class G, Pass Through Ctfs., 4.62%, 05/15/38(c) 25,000 9,063 - ------------------------------------------------------------------------------- Series 2005-TFLA, Class J, Floating Rate Pass Through Ctfs., 1.22%, 02/15/20 (Acquired 04/17/09; Cost $118,175)(c)(d) 145,000 129,216 - ------------------------------------------------------------------------------- DLJ Commercial Mortgage Corp.,-Series 1998-CG1, Class B4, Pass Through Ctfs., 7.46%, 06/10/31(c) 340,000 342,371 - ------------------------------------------------------------------------------- Greenwich Capital Commercial Funding Corp.,-Series 2005-GG3, Class AJ, Pass Through Ctfs., 4.86%, 08/10/42 400,000 262,948 - ------------------------------------------------------------------------------- GS Mortgage Securities Corp. II,, Series 2005 GG4, Class A4A, Pass Through Ctfs., 4.75%, 07/10/39 220,000 204,254 - ------------------------------------------------------------------------------- Series 2001-LIBA, Class C, Pass Through Ctfs., 6.73%, 02/14/16 (Acquired 05/08/09; Cost $673,682)(c) 627,000 673,147 - ------------------------------------------------------------------------------- JP Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP5, Class AJ, Pass Through Ctfs., 5.47%, 12/15/44 2,000,000 1,191,976 - ------------------------------------------------------------------------------- LB-UBS Commercial Mortgage Trust, Series 2002-C7, Class B, Pass Through Ctfs., 5.08%, 01/15/36 96,000 95,782 - ------------------------------------------------------------------------------- Series 2005-C1, Class A3, Pass Through Ctfs., 4.55%, 02/15/30 480,000 472,714 - ------------------------------------------------------------------------------- Series 2005-C1, Class A4, Pass Through Ctfs., 4.74%, 02/15/30 1,680,000 1,602,109 - ------------------------------------------------------------------------------- Series 2005-C3, Class A5, Pass Through Ctfs., 4.74%, 07/15/30 1,895,000 1,820,423 - ------------------------------------------------------------------------------- Merrill Lynch Mortgage Trust, Series 2004-MKB1, Class B, Pass Through Ctfs., 5.28%, 02/12/42 25,000 24,201 - ------------------------------------------------------------------------------- Morgan Stanley Capital I, Series 2005-HQ7, Class A4, Pass Through Ctfs., 5.38%, 11/14/42 1,540,000 1,491,419 - ------------------------------------------------------------------------------- Series 2005-T19, Class A4A, Pass Through Ctfs., 4.89%, 06/12/47 1,000,000 957,708 - ------------------------------------------------------------------------------- Series 2005-HQ5, Class A4, Pass Through Ctfs., 5.17%, 01/14/42 250,000 245,146 - ------------------------------------------------------------------------------- Series 2005-HQ7, Class AJ, Pass Through Ctfs., 5.38%, 11/14/42 120,000 71,780 - ------------------------------------------------------------------------------- Series 2006-IQ11, Class B, Floating Rate, Pass Through Ctfs., 5.95%, 10/15/42 270,000 69,274 - ------------------------------------------------------------------------------- Park Square Mortgage Trust,Series 2000-CB50, Class B1, Pass Through Ctfs., 7.57%, 11/05/33 (Acquired 05/05/09; Cost $540,938)(c) 500,000 533,925 - ------------------------------------------------------------------------------- Wachovia Bank Commercial Mortgage Trust, Series 2005-C18, Class A4, Pass Through Ctfs., 4.94%, 04/15/42 275,000 263,689 - ------------------------------------------------------------------------------- Series 2005-C21, Class A4, Pass Through Ctfs., 5.38%, 10/15/44 447,000 441,442 - ------------------------------------------------------------------------------- Series 2005-C21, Class AM, Pass Through Ctfs., 5.38%, 10/15/44 275,000 230,488 =============================================================================== Total Asset-Backed Securities (Cost $16,572,596) 16,951,428 =============================================================================== BONDS & NOTES-4.32% APARTMENTS-0.31% Camden Property Trust, Sr. Unsec. Unsub. Notes, 7.63%, 02/15/11 420,000 429,991 ===============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 10 AIM SELECT REAL ESTATE INCOME FUND
PRINCIPAL AMOUNT VALUE - ------------------------------------------------------------------------------- HEALTHCARE-1.20% HCP Inc., Sr. Unsec. Notes, 6.45%, 06/25/12 $ 120,000 $ 122,654 - ------------------------------------------------------------------------------- Health Care REIT Inc., Sr. Unsec. Notes, 8.00%, 09/12/12 500,000 532,524 - ------------------------------------------------------------------------------- Nationwide Health Properties, Inc., Sr. Unsec. Notes, 6.50%, 07/15/11 330,000 336,306 - ------------------------------------------------------------------------------- Sr. Unsec. Unsub. Notes, 6.25%, 02/01/13 650,000 645,689 =============================================================================== 1,637,173 =============================================================================== INDUSTRIAL/OFFICE: MIXED-1.06% Liberty Property, L.P., Sr. Unsec. Unsub. Global Notes, 6.63%, 10/01/17 750,000 684,964 - ------------------------------------------------------------------------------- Sr. Unsec. Unsub. Notes, 7.25%, 03/15/11 300,000 312,570 - ------------------------------------------------------------------------------- 5.65%, 08/15/14 485,000 449,977 =============================================================================== 1,447,511 =============================================================================== OFFICE-1.08% Mack-Cali Realty, Corp., Sr. Unsec., 7.75%, 08/15/19 900,000 914,857 - ------------------------------------------------------------------------------- Mack-Cali Realty, L.P., Sr. Unsec. Notes, 5.05%, 04/15/10 78,000 78,410 - ------------------------------------------------------------------------------- 7.75%, 02/15/11 450,000 474,576 =============================================================================== 1,467,843 =============================================================================== SELF STORAGE-0.12% Self Storage Shurgard Storage Centers LLC, Sr. Unsec. Notes, 7.75%, 02/22/11 154,000 160,838 =============================================================================== SHOPPING CENTERS-0.55% Federal Realty Investment Trust, Sr. Unsec. Notes, 5.40%, 12/01/13 244,000 242,010 - ------------------------------------------------------------------------------- Sr. Unsec. Unsub. Notes, 6.00%, 07/15/12 497,000 502,349 =============================================================================== 744,359 =============================================================================== Total Bonds & Notes (Cost $5,482,134) 5,887,715 =============================================================================== SHARES MONEY MARKET FUNDS-12.54% Liquid Assets Portfolio-Institutional Class(e) 8,555,959 8,555,959 - ------------------------------------------------------------------------------- Premier Portfolio-Institutional Class(e) 8,555,959 8,555,959 =============================================================================== Total Money Market Funds (Cost $17,111,918) 17,111,918 =============================================================================== TOTAL INVESTMENTS-106.15% (Cost $137,322,696) 144,851,958 =============================================================================== OTHER ASSETS LESS LIABILITIES-(6.15)% (8,389,122) =============================================================================== NET ASSETS-100.00% $136,462,836 _______________________________________________________________________________ ===============================================================================
Investment Abbreviations: Ctfs. - Certificates Dep - Depositary Pfd. - Preferred REIT - Real Estate Investment Trust Sr. - Senior Unsec. - Unsecured Unsub. - Unsubordinated
Notes to Schedule of Investments: (a) Property type classifications used in this report are generally according to FSTE National Association of Real Estate Investment Trusts ("NAREIT") Equity REITs Index, which is exclusively owned by NAREIT. (b) Non-income producing security. (c) Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at August 31, 2009 was $1,687,722, which represented 1.24% of the Fund's Net Assets. (d) Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on August 31, 2009. (e) The money market fund and the Fund are affiliated by having the same investment advisor. See accompanying Notes to Financial Statements which are an integral part of the financial statements. 11 AIM SELECT REAL ESTATE INCOME FUND STATEMENT OF ASSETS AND LIABILITIES August 31, 2009 ASSETS: Investments, at value (Cost $120,210,778) $127,740,040 - -------------------------------------------------------------------------------- Investments in affiliated money market funds, at value and cost 17,111,918 ================================================================================ Total investments, at value (Cost $137,322,696) 144,851,958 ================================================================================ Receivables for: Fund shares sold 907,211 - -------------------------------------------------------------------------------- Dividends and interest 393,002 - -------------------------------------------------------------------------------- Investment for trustee deferred compensation and retirement plans 17,396 - -------------------------------------------------------------------------------- Other assets 17,796 ================================================================================ Total assets 146,187,363 ________________________________________________________________________________ ================================================================================ LIABILITIES: Payables for: Investments purchased 9,291,248 - -------------------------------------------------------------------------------- Fund shares reacquired 219,221 - -------------------------------------------------------------------------------- Amount due custodian 7,687 - -------------------------------------------------------------------------------- Accrued fees to affiliates 73,728 - -------------------------------------------------------------------------------- Accrued other operating expenses 60,413 - -------------------------------------------------------------------------------- Trustee deferred compensation and retirement plans 72,230 ================================================================================ Total liabilities 9,724,527 ================================================================================ Net assets applicable to shares outstanding $136,462,836 ________________________________________________________________________________ ================================================================================ NET ASSETS CONSIST OF: Shares of beneficial interest $178,532,752 - -------------------------------------------------------------------------------- Undistributed net investment income 554,808 - -------------------------------------------------------------------------------- Undistributed net realized gain (loss) (50,153,986) - -------------------------------------------------------------------------------- Unrealized appreciation 7,529,262 ================================================================================ $136,462,836 ________________________________________________________________________________ ================================================================================ NET ASSETS: Class A $ 94,979,144 ________________________________________________________________________________ ================================================================================ Class B $ 679,675 ________________________________________________________________________________ ================================================================================ Class C $ 4,296,338 ________________________________________________________________________________ ================================================================================ Class Y $ 2,755,019 ________________________________________________________________________________ ================================================================================ Institutional Class $ 33,752,660 ________________________________________________________________________________ ================================================================================ SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 14,347,626 ________________________________________________________________________________ ================================================================================ Class B 102,918 ________________________________________________________________________________ ================================================================================ Class C 650,620 ________________________________________________________________________________ ================================================================================ Class Y 417,237 ________________________________________________________________________________ ================================================================================ Institutional Class 5,102,200 ________________________________________________________________________________ ================================================================================ Class A: Net asset value per share $ 6.62 - -------------------------------------------------------------------------------- Maximum offering price per share (Net asset value of $6.62 divided by 94.50%) $ 7.01 ________________________________________________________________________________ ================================================================================ Class B: Net asset value and offering price per share $ 6.60 ________________________________________________________________________________ ================================================================================ Class C: Net asset value and offering price per share $ 6.60 ________________________________________________________________________________ ================================================================================ Class Y: Net asset value and offering price per share $ 6.60 ________________________________________________________________________________ ================================================================================ Institutional Class: Net asset value and offering price per share $ 6.62 ________________________________________________________________________________ ================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 12 AIM SELECT REAL ESTATE INCOME FUND STATEMENT OF OPERATIONS For the year ended August 31, 2009 INVESTMENT INCOME: Dividends $ 4,398,133 - ------------------------------------------------------------------------------------------------ Dividends from affiliated money market funds (includes securities lending income of $126,568) 165,627 - ------------------------------------------------------------------------------------------------ Interest 887,884 ================================================================================================ Total investment income 5,451,644 ================================================================================================ EXPENSES: Advisory fees 623,818 - ------------------------------------------------------------------------------------------------ Administrative services fees 50,000 - ------------------------------------------------------------------------------------------------ Custodian fees 13,576 - ------------------------------------------------------------------------------------------------ Distribution fees: Class A 176,219 - ------------------------------------------------------------------------------------------------ Class B 5,871 - ------------------------------------------------------------------------------------------------ Class C 17,243 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- A, B, C and Y 304,006 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- Institutional 3,783 - ------------------------------------------------------------------------------------------------ Trustees' and officers' fees and benefits 19,921 - ------------------------------------------------------------------------------------------------ Other 186,847 ================================================================================================ Total expenses 1,401,284 ================================================================================================ Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (7,076) ================================================================================================ Net expenses 1,394,208 ================================================================================================ Net investment income 4,057,436 ================================================================================================ REALIZED AND UNREALIZED GAIN (LOSS) FROM: Net realized gain (loss) from investment securities (41,566,429) ================================================================================================ Change in net unrealized appreciation of investment securities 18,227,028 ================================================================================================ Net realized and unrealized gain (loss) (23,339,401) ================================================================================================ Net increase (decrease) in net assets resulting from operations $(19,281,965) ________________________________________________________________________________________________ ================================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 13 AIM SELECT REAL ESTATE INCOME FUND STATEMENT OF CHANGES IN NET ASSETS For the years ended August 31, 2009 and 2008
2009 2008 - -------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 4,057,436 $ 5,992,308 - -------------------------------------------------------------------------------------------------------- Net realized gain (loss) (41,566,429) (2,427,114) - -------------------------------------------------------------------------------------------------------- Change in net unrealized appreciation (depreciation) 18,227,028 (19,290,644) ======================================================================================================== Net increase (decrease) in net assets resulting from operations (19,281,965) (15,725,450) ======================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A (3,432,938) (8,565,347) - -------------------------------------------------------------------------------------------------------- Class B (25,447) (19,825) - -------------------------------------------------------------------------------------------------------- Class C (56,307) (32,369) - -------------------------------------------------------------------------------------------------------- Class Y (20,142) -- - -------------------------------------------------------------------------------------------------------- Institutional Class (471,968) (166,047) ======================================================================================================== Total distributions from net investment income (4,006,802) (8,783,588) ======================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS: Class A -- (76,417,808) - -------------------------------------------------------------------------------------------------------- Class B -- (83,959) - -------------------------------------------------------------------------------------------------------- Class C -- (140,190) - -------------------------------------------------------------------------------------------------------- Institutional Class -- (3,700) ======================================================================================================== Total distributions from net realized gains -- (76,645,657) ======================================================================================================== SHARE TRANSACTIONS-NET: Class A 4,766,853 (13,067,864) - -------------------------------------------------------------------------------------------------------- Class B (193,923) 1,152,702 - -------------------------------------------------------------------------------------------------------- Class C 2,443,803 1,875,071 - -------------------------------------------------------------------------------------------------------- Class Y 2,356,933 -- - -------------------------------------------------------------------------------------------------------- Institutional Class 23,093,975 13,951,263 ======================================================================================================== Net increase in net assets resulting from share transactions 32,467,641 3,911,172 ======================================================================================================== Net increase (decrease) in net assets 9,178,874 (97,243,523) ======================================================================================================== NET ASSETS: Beginning of year 127,283,962 224,527,485 ======================================================================================================== End of year (includes undistributed net investment income of $554,808 and $497,244, respectively) $136,462,836 $127,283,962 ________________________________________________________________________________________________________ ========================================================================================================
NOTES TO FINANCIAL STATEMENTS August 31, 2009 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Select Real Estate Income Fund (the "Fund") is a series portfolio of AIM Counselor Series Trust (the "Trust"). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of seven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. Prior to March 12, 2007, the Fund operated as AIM Select Real Estate Income Fund (the "Closed-End Fund"). The Closed-End Fund was reorganized as an open-end fund at which time the Fund became a new series portfolio of the Trust. The Closed-End Fund was reorganized as an open-end fund on March 12, 2007 (the "Reorganization Date") through the transfer of all its assets and liabilities to the Fund (the "Reorganization"). Prior to the Reorganization, the Closed-End Fund redeemed Preferred Shares in their entirety. As part of the Reorganization, the Closed-End Fund was restructured from a sole series of AIM Select Real Estate Income Fund to a new series portfolio of the Trust. Upon the closing of the Reorganization, holders of the Closed-End Fund Common Shares received Class A shares of the Fund. Information for the Common Shares of the Closed-End Fund, prior to the Reorganization is included with Class A shares throughout this report. 14 AIM SELECT REAL ESTATE INCOME FUND The Fund's investment objectives are high current income and secondarily, capital appreciation. The Fund currently consists of five different classes of shares: Class A, Class B, Class C, Class Y and Institutional Class. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waiver shares may be subject to contingent deferred sales charges ("CDSC"). Class B shares and Class C shares are sold with a CDSC. Class Y and Institutional Class shares are sold at net asset value. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase. 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 or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes 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 specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans. Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security's fair value. Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer's assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. 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. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. 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 periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held. Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund's net asset value and, accordingly, they reduce the Fund's total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in 15 AIM SELECT REAL ESTATE INCOME FUND the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the advisor. The Fund recharacterizes distributions received from REIT investments based on information provided by the REIT into the following categories: ordinary income, long-term and short-term capital gains, and return of capital. If information is not available timely from the REIT, the recharacterization will be based on available information which may include the previous year's allocation. If new or additional information becomes available from the REIT at a later date, a recharacterization will be made in the following year. The Fund records as dividend income the amount recharacterized as ordinary income and as realized gain the amount recharacterized as capital gain in the Statement of Operations, and the amount recharacterized as return of capital in the Statement of Changes in Net Assets. These recharacterizations are reflected in the accompanying financial statements. C. COUNTRY DETERMINATION -- For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment advisor may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer's securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. D. DISTRIBUTIONS -- Distributions from income are declared and paid quarterly and are recorded on ex-dividend date. Distributions from net realized capital gain, if any, are generally paid annually and recorded on ex- dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund's taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period. F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to the Institutional Class are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period end date and before the date the financial statements are released to print, which is generally 45 days from the period end date. H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund's servicing agreements, that contain a variety of indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. I. OTHER RISKS -- The Fund's investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund's investments may tend to rise and fall more rapidly. The Fund concentrates its assets in the real estate industry, an investment in the fund will be closely linked to the performance of the real estate markets. Property values may fall due to increasing vacancies or declining rents resulting from economic, legal, cultural or technological developments. J. SECURITIES LENDING -- The Fund may lend portfolio securities having a market value up to one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. 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, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. 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. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. 16 AIM SELECT REAL ESTATE INCOME FUND NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with Invesco Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Advisor based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE - ------------------------------------------------------------------- First $250 million 0.75% - ------------------------------------------------------------------- Next $250 million 0.74% - ------------------------------------------------------------------- Next $500 million 0.73% - ------------------------------------------------------------------- Next $1.5 billion 0.72% - ------------------------------------------------------------------- Next $2.5 billion 0.71% - ------------------------------------------------------------------- Next $2.5 billion 0.70% - ------------------------------------------------------------------- Next $2.5 billion 0.69% - ------------------------------------------------------------------- Over $10 billion 0.68% ___________________________________________________________________ ===================================================================
Under the terms of a master sub-advisory agreement approved by shareholders of the Fund between the Advisor and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-Advisor(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Advisor(s). Effective July 1, 2009, the Advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C, Class Y and Institutional Class shares to 2.00%, 2.75%, 2.75%, 1.75% and 1.75% of average daily net assets, respectively, through at least June 30, 2010. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items or non-routine items; (v) expenses related to a merger or reorganization, as approved by the Fund's Board of Trustees; (vi) expenses of the underlying funds that are paid indirectly as a result of share ownership of the underlying funds; and (vii) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, in addition to the expense reimbursement arrangement with Invesco Ltd. ("Invesco") described more fully below, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the Fund. The Advisor did not waive fees and/or reimburse expenses during the period under this expense limitation. Further, the Advisor has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Advisor receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds. For the year ended August 31, 2009, the Advisor waived advisory fees of $3,912. At the request of the Trustees of the Trust, Invesco agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. These expenses along with the related expense reimbursement are included in the Statement of Operations. For the year ended August 31, 2009, Invesco reimbursed expenses of the Fund in the amount of $314. The Trust has entered into a master administrative services agreement with Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain administrative costs incurred in providing accounting services to the Fund. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees. The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. IAIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IAIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust's Board of Trustees. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees. The Trust has entered into master distribution agreements with Invesco Aim Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class B, Class C, Class Y and Institutional Class 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, Class B and Class C shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI 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 Class C shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority ("FINRA") impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. For the year ended August 31, 2009, expenses incurred under the Plans are shown in the Statement of Operations as distribution fees. Front-end sales commissions and CDSC (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance 17 AIM SELECT REAL ESTATE INCOME FUND to the shareholder. During the year ended August 31, 2009, IADI advised the Fund that IADI retained $18,147 in front-end sales commissions from the sale of Class A shares and $37, $786 and $2,122 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders. Certain officers and Trustees of the Trust are officers and directors of Invesco Aim, IAIS and/or IADI. NOTE 3--ADDITIONAL VALUATION INFORMATION Generally Accepted Accounting Principles (GAAP) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level: Level 1 -- Prices are determined using quoted prices in an active market for identical assets. Level 2 -- Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. Level 3 -- Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. The following is a summary of the tiered valuation input levels, as of the end of the reporting period, August 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL - --------------------------------------------------------------------------------------------------------------------------- Equity Securities $122,012,815 $ -- $-- $122,012,815 - --------------------------------------------------------------------------------------------------------------------------- Corporate Debt Securities -- 5,887,715 -- 5,887,715 - --------------------------------------------------------------------------------------------------------------------------- Asset-Backed Securities -- 16,951,428 -- 16,951,428 =========================================================================================================================== Total Investments $122,012,815 $22,839,143 $-- $144,851,958 ___________________________________________________________________________________________________________________________ ===========================================================================================================================
NOTE 4--EXPENSE OFFSET ARRANGEMENT(S) The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the year ended August 31, 2009, the Fund received credits from this arrangement, which resulted in the reduction of the Fund's total expenses of $2,850. NOTE 5--TRUSTEES' AND OFFICERS' FEES AND BENEFITS "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officers' Fees and Benefits" also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund. During the year ended August 31, 2009, the Fund paid legal fees of $3,349 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. NOTE 6--CASH BALANCES The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco Aim, not to exceed the contractually agreed upon rate. 18 AIM SELECT REAL ESTATE INCOME FUND NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED AUGUST 31, 2009 AND 2008:
2009 2008 - ------------------------------------------------------------------------------------------------------- Ordinary income $4,006,802 $10,440,892 - ------------------------------------------------------------------------------------------------------- Long-term capital gain -- 74,988,353 ======================================================================================================= Total distributions $4,006,802 $85,429,245 _______________________________________________________________________________________________________ =======================================================================================================
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
2009 - ------------------------------------------------------------------------------------------------ Undistributed ordinary income $ 629,919 - ------------------------------------------------------------------------------------------------ Net unrealized appreciation -- investments 4,637,036 - ------------------------------------------------------------------------------------------------ Temporary book/tax differences (75,111) - ------------------------------------------------------------------------------------------------ Post-October deferrals (28,230,072) - ------------------------------------------------------------------------------------------------ Capital loss carryforward (19,031,688) - ------------------------------------------------------------------------------------------------ Shares of beneficial interest 178,532,752 ================================================================================================ Total net assets $136,462,836 ________________________________________________________________________________________________ ================================================================================================
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's net unrealized appreciation difference is attributable primarily to wash sales. The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits. Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions The Fund has a capital loss carryforward as of August 31, 2009 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* - ----------------------------------------------------------------------------------------------- August 31, 2017 19,031,688 _______________________________________________________________________________________________ ===============================================================================================
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. NOTE 8--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended August 31, 2009 was $78,465,685 and $49,948,874, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ----------------------------------------------------------------------------------------------- Aggregate unrealized appreciation of investment securities $10,736,374 - ----------------------------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (6,099,338) =============================================================================================== Net unrealized appreciation of investment securities $ 4,637,036 _______________________________________________________________________________________________ =============================================================================================== Cost of investments for tax purposes is $140,214,922.
NOTE 9--RECLASSIFICATION OF PERMANENT DIFFERENCES Primarily as a result of differing book/tax treatment of proxy costs, on August 31, 2009, undistributed net investment income was increased by $6,930 and shares of beneficial interest decreased by $6,930. This reclassification had no effect on the net assets of the Fund. 19 AIM SELECT REAL ESTATE INCOME FUND NOTE 10--SHARE INFORMATION
SUMMARY OF SHARE ACTIVITY - ------------------------------------------------------------------------------------------------------------------------ YEAR ENDED AUGUST 31, ----------------------------------------------------------- 2009(a) 2008 --------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------------------------------------ Sold: Class A 6,297,362 $ 34,744,449 1,839,980 $ 16,558,591 - ------------------------------------------------------------------------------------------------------------------------ Class B 57,532 329,420 159,313 1,442,997 - ------------------------------------------------------------------------------------------------------------------------ Class C 560,262 3,230,335 246,055 2,240,917 - ------------------------------------------------------------------------------------------------------------------------ Class Y(b) 1,186,116 6,557,609 -- -- - ------------------------------------------------------------------------------------------------------------------------ Institutional Class 3,944,022 25,122,675 1,546,029 14,211,127 ======================================================================================================================== Issued as reinvestment of dividends: Class A 377,291 2,179,083 4,159,275 37,122,833 - ------------------------------------------------------------------------------------------------------------------------ Class B 4,076 23,964 11,708 103,040 - ------------------------------------------------------------------------------------------------------------------------ Class C 8,753 49,216 16,374 144,890 - ------------------------------------------------------------------------------------------------------------------------ Class Y 2,841 13,740 -- -- - ------------------------------------------------------------------------------------------------------------------------ Institutional Class 82,199 471,968 19,351 169,747 ======================================================================================================================== Automatic conversion of Class B shares to Class A shares: Class A 3,793 21,265 6,502 54,878 - ------------------------------------------------------------------------------------------------------------------------ Class B (3,803) (21,265) (6,516) (54,878) ======================================================================================================================== Reacquired: Class A(b) (5,633,762) (32,177,944) (6,467,883) (66,804,166) - ------------------------------------------------------------------------------------------------------------------------ Class B (89,390) (526,042) (40,000) (338,457) - ------------------------------------------------------------------------------------------------------------------------ Class C (149,028) (835,748) (53,711) (510,736) - ------------------------------------------------------------------------------------------------------------------------ Class Y (771,720) (4,214,416) -- -- - ------------------------------------------------------------------------------------------------------------------------ Institutional Class (437,953) (2,500,668) (52,039) (429,611) ======================================================================================================================== Net increase in share activity 5,438,591 $ 32,467,641 1,384,438 $ 3,911,172 ________________________________________________________________________________________________________________________ ========================================================================================================================
(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 45% of the outstanding shares of the Fund. IADI has an agreement with these entities to sell Fund shares. The Fund, Invesco Aim and/or Invesco Aim affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco Aim and/or Invesco Aim affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. In addition, 9% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco Aim. (b) Effective upon the commencement date of Class Y shares, October 3, 2008, the following shares were converted from Class A into Class Y shares of the Fund:
CLASS SHARES AMOUNT ------------------------------------------------------------------------------------------------- Class Y 6,791 $ 48,556 ------------------------------------------------------------------------------------------------- Class A (6,791) (48,556) _________________________________________________________________________________________________ =================================================================================================
20 AIM SELECT REAL ESTATE INCOME FUND NOTE 11--FINANCIAL HIGHLIGHTS The following schedules present financial highlights for a share of the Fund outstanding throughout the periods indicated. Information presented prior to March 12, 2007 includes financial data for the common shares of the Closed-End Fund.
CLASS A* ---------------------------------------------------------------------------------- YEAR ENDED AUGUST 31, EIGHT MONTHS ENDED YEAR ENDED DECEMBER 31, -------------------- AUGUST 31, ---------------------------------- 2009 2008 2007 2006 2005 2004 - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 8.38 $ 16.27 $ 17.35 $ 17.49 $ 20.02 $ 17.83 - ------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income 0.27(a) 0.42(a) 0.44(a) 0.86 0.90 0.85 - ------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) (1.75) (1.54) (1.54) 3.88 (0.36) 3.16 - ------------------------------------------------------------------------------------------------------------------------------- Less distributions to auction rate preferred shareholders of Closed-End Fund from net investment income(b) N/A N/A N/A (0.20) (0.17) (0.08) =============================================================================================================================== Total from investment operations (1.48) (1.12) (1.10) 4.54 0.37 3.93 =============================================================================================================================== Less distributions: Dividends from net investment income (0.28) (0.65) (0.38) (0.89) (1.24) (1.24) - ------------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains -- (6.18) (0.09) (3.84) (1.66) (0.50) =============================================================================================================================== Total distributions (0.28) (6.83) (0.47) (4.73) (2.90) (1.74) =============================================================================================================================== Increase from common shares of Closed-End Fund repurchased N/A N/A -- 0.05 -- -- - ------------------------------------------------------------------------------------------------------------------------------- Redemption fees added to shares of beneficial interest -- 0.06 0.49 N/A N/A N/A =============================================================================================================================== Net asset value, end of period $ 6.62 $ 8.38 $ 16.27 $ 17.35 $ 17.49 20.02 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Market value per common share of Closed- End Fund at period-end $ N/A $ N/A $ N/A $ 16.67 $ 14.98 17.50 =============================================================================================================================== Total return at net asset value (17.12)%(c) (7.47)%(c)(d) (3.59)%(c)(d) 29.15%(e) 4.44%(e) 24.43%(e) =============================================================================================================================== Market value return N/A N/A N/A 44.88% 2.33% 16.89% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $94,979 $111,529 $224,000 $678,394 $698,380 $799,358 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.73%(f) 1.32% 1.08%(g) 0.96%(h) 0.95%(h) 0.93%(h) - ------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.74%(f) 1.33% 1.23%(g) 1.33%(h) 1.33%(h) 1.32%(h) =============================================================================================================================== Ratio of net investment income to average net assets 4.83%(f) 3.91% 3.82%(g) 4.59%(h) 4.70%(h) 4.64%(h) =============================================================================================================================== Ratio of distributions to auction rate preferred shareholders of Closed-End Fund to average net attributable to common shares of Closed-End Fund N/A N/A N/A 1.30%(g) 0.86% 0.42% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Portfolio turnover rate(i) 59% 73% 24% 23% 17% 19% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Auction rate preferred shares of Closed- End Fund: Liquidation value, end of period (000s omitted) N/A N/A N/A -- $205,000 $205,000 =============================================================================================================================== Total shares outstanding N/A N/A N/A -- 8,200 8,200 =============================================================================================================================== Asset coverage per share N/A N/A N/A -- $110,168 $122,483 =============================================================================================================================== Liquidation and market value per share N/A N/A N/A -- $ 25,000 $ 25,000 _______________________________________________________________________________________________________________________________ ===============================================================================================================================
* Prior to March 12, 2007 the Fund operated as a Closed-End Fund. On such date, holders of common shares of Closed-End Fund received Class A shares of the Fund equal to the number of Closed-End Fund common shares they owned prior to the Reorganization. (a) Calculated using average shares outstanding. (b) Based on average number of common shares outstanding of Closed-End Fund. (c) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year. (d) Includes the impact of the temporary 2% redemption fee which was effective March 12, 2007 through March 11, 2008. (e) Net asset value return includes adjustments in accordance with accounting principles generally accepted in the United States of America and measures the changes in common shares' value of Closed-End over the period indicated, taking into account dividends as reinvested. Market value return is computed based upon the New York Stock Exchange market price of the Closed-End Fund's common shares and excludes the effects of brokerage commissions. Dividends and distributions, if any, are assumed for purposes of this calculation, to be reinvested at prices obtained under the Closed- End Fund's dividend reinvestment plan. (f) Ratios are based on average daily net assets (000s omitted) of $70,488. (g) Annualized. (h) Ratios do not reflect the effect of dividend payments to auction rate preferred shareholders; income ratios reflect income earned on investments made with assets attributable to auction rate preferred shares of Closed- End Fund. (i) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. 21 AIM SELECT REAL ESTATE INCOME FUND NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
NET GAINS (LOSSES) NET ASSET ON SECURITIES DIVIDENDS DISTRIBUTIONS VALUE, NET (BOTH TOTAL FROM FROM NET FROM NET NET ASSET BEGINNING INVESTMENT REALIZED AND INVESTMENT INVESTMENT REALIZED TOTAL VALUE, END OF PERIOD INCOME(a) UNREALIZED) OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD - --------------------------------------------------------------------------------------------------------------------------------- CLASS B Year ended 08/31/09 $ 8.37 $0.23 $(1.77) $(1.54) $(0.23) $ -- $(0.23) $ 6.60 Year ended 08/31/08 16.23 0.28 (1.40)(e) (1.12) (0.56) (6.18) (6.74) 8.37 Year ended 08/31/07(f) 17.34 0.22 (1.09)(e) (0.87) (0.24) -- (0.24) 16.23 - --------------------------------------------------------------------------------------------------------------------------------- CLASS C Year ended 08/31/09 8.38 0.23 (1.78) (1.55) (0.23) -- (0.23) 6.60 Year ended 08/31/08 16.23 0.29 (1.40)(e) (1.11) (0.56) (6.18) (6.74) 8.38 Year ended 08/31/07(f) 17.34 0.22 (1.09)(e) (0.87) (0.24) -- (0.24) 16.23 - --------------------------------------------------------------------------------------------------------------------------------- CLASS Y Year ended 08/31/09(f) 7.15 0.26 (0.63) (0.37) (0.18) -- (0.18) 6.60 - --------------------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL CLASS Year ended 08/31/09 8.39 0.31 (1.77) (1.46) (0.31) -- (0.31) 6.62 Year ended 08/31/08 16.27 0.37 (1.37)(e) (1.00) (0.70) (6.18) (6.88) 8.39 Year ended 08/31/07(f) 17.34 0.32 (1.09)(e) (0.77) (0.30) -- (0.30) 16.27 _________________________________________________________________________________________________________________________________ ================================================================================================================================= RATIO OF RATIO OF EXPENSES EXPENSES TO AVERAGE TO AVERAGE NET RATIO OF NET NET ASSETS ASSETS WITHOUT INVESTMENT NET ASSETS, WITH FEE WAIVERS FEE WAIVERS INCOME TOTAL END OF PERIOD AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO RETURN(b) (000S OMITTED) ABSORBED ABSORBED NET ASSETS TURNOVER(c) - ------------------------------------------------------------------------------------------------------------------ CLASS B Year ended 08/31/09 (17.91)% $ 680 2.48%(d) 2.49%(d) 4.08%(d) 59% Year ended 08/31/08 (8.01) 1,126 2.07 2.08 3.16 73 Year ended 08/31/07(f) (5.10) 162 2.04(g) 2.04(g) 2.86(g) 24 - ------------------------------------------------------------------------------------------------------------------ CLASS C Year ended 08/31/09 (18.00) 4,296 2.48(d) 2.49(d) 4.08(d) 59 Year ended 08/31/08 (7.90) 1,932 2.07 2.08 3.16 73 Year ended 08/31/07(f) (5.10) 356 2.04(g) 2.04(g) 2.86(g) 24 - ------------------------------------------------------------------------------------------------------------------ CLASS Y Year ended 08/31/09(f) (4.23) 2,755 1.53(d)(g) 1.53(d)(g) 5.03(d)(g) 59 - ------------------------------------------------------------------------------------------------------------------ INSTITUTIONAL CLASS Year ended 08/31/09 (16.75) 33,753 1.11(d) 1.12(d) 5.45(d) 59 Year ended 08/31/08 (6.91) 12,696 0.88 0.89 4.35 73 Year ended 08/31/07(f) (4.53) 10 0.89(g) 0.89(g) 4.01(g) 24 __________________________________________________________________________________________________________________ ==================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. (c) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. (d) Ratios are based on average daily net assets (000's omitted) of $587, $1,724, $869 and $9,591 for Class B, Class C, Class Y and Institutional Class shares, respectively. (e) Includes the impact of the temporary 2% redemption fee which was effective March 12, 2007 through March 11, 2008. Redemption fees added to shares of beneficial interest for Class B, Class C and Institutional Class shares were $0.05, $0.05 and $0.04 per share and $0.47, $0.47 and $0.48 per share for the year ended August 31, 2008 and the eight months ended August 31, 2007, respectively. (f) Commencement date of March 9, 2007 for Class B, Class C and Institutional Class shares and October 3, 2008 for Class Y shares. (g) Annualized. 22 AIM SELECT REAL ESTATE INCOME FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees and Shareholders of AIM Select Real Estate Income 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 AIM Select Real Estate Income Fund (one of the funds constituting AIM Counselor Series Trust, hereafter referred to as the "Fund") at August 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PRICEWATERHOUSECOOPERS LLP October 16, 2009 Houston, Texas 23 AIM SELECT REAL ESTATE INCOME FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(2) RATIO - --------------------------------------------------------------------------------------------------- A $1,000.00 $1,534.90 $11.12 $1,016.43 $ 8.84 1.74% - --------------------------------------------------------------------------------------------------- B 1,000.00 1,528.00 15.87 1,012.65 12.63 2.49 - --------------------------------------------------------------------------------------------------- C 1,000.00 1,528.00 15.87 1,012.65 12.63 2.49 - --------------------------------------------------------------------------------------------------- Y 1,000.00 1,535.70 9.52 1,017.69 7.58 1.49 - ---------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009 through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. 24 AIM SELECT REAL ESTATE INCOME FUND Supplement to Annual Report dated 8/31/09 AIM SELECT REAL ESTATE INCOME FUND INSTITUTIONAL CLASS SHARES ------------------------------------------ the most recent Fund prospectus as of the AVERAGE ANNUAL TOTAL RETURNS date of this supplement for Institutional The following information has been For periods ended 8/31/09 Class shares was 0.91%. The expense ratios prepared to provide Institutional Class presented above may vary from the expense shareholders with a performance overview Inception 8.14% ratios presented in other sections of the specific to their holdings. Institutional ------------------------------------------ actual report that are based on expenses Class shares are offered exclusively to 5 Years 2.62 incurred during the period covered by the institutional investors, including defined ------------------------------------------ report. contribution plans that meet certain 1 Year -16.68 criteria. ------------------------------------------ Fund performance was positively impacted by a temporary 2% fee on ------------------------------------------ redemptions that was in effect from March AVERAGE ANNUAL TOTAL RETURNS 12, 2007 to March 12, 2008. Without income For periods ended 6/30/09, the most recent from this temporary fee, returns would calendar quarter-end have been lower. Inception 5.62% Had the advisor not waived fees and/or ------------------------------------------ reimbursed expenses in the past, 5 Years 0.50 performance would have been lower. ------------------------------------------ 1 Year -30.99 Please note that past performance is ------------------------------------------ not indicative of future results. More recent returns may be more or less than Institutional Class shares' inception date those shown. All returns assume is March 9, 2007. Returns since that date reinvestment of distributions at NAV. are historical returns. All other returns Investment return and principal value will are blended returns of historical fluctuate so your shares, when redeemed, Institutional Class share performance and may be worth more or less than their restated Class A share performance (for original cost. See full report for periods prior to the inception date of information on comparative benchmarks. Institutional Class shares) at net asset Please consult your Fund prospectus for value (NAV) and reflect the Rule 12b-1 more information. For the most current fees applicable to Class A shares. Class A month-end performance, please call shares' inception date is May 31, 2002. 800 451 4246 or visit invescoaim.com. Institutional Class shares have no (1) Total annual operating expenses less sales charge; therefore, performance is at any contractual fee waivers and/or NAV. Performance of Institutional Class expense reimbursements by the advisor shares will differ from performance of in effect through at least June 30, other share classes primarily due to 2010. See current prospectus for more differing sales charges and class information. expenses. The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 0.90%.(1) The total annual Fund operating expense ratio set forth in - ------------------------------------------ NASDAQ SYMBOL ASRIX Over for information on your Fund's expenses. - --------------------------------------------------------------------------------------- THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FOR INSTITUTIONAL INVESTOR USE ONLY -- NOT FOR USE WITH THE PUBLIC THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED, SHOWN TO THE PUBLIC [INVESCO AIM LOGO] OR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. - service mark - invescoaim.com SREI-INS-1 Invesco Aim Distributors, Inc.
CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
- ----------------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(2) RATIO - ----------------------------------------------------------------------------------------------------------- Institutional $1,000.00 $1,537.30 $7.10 $1,019.61 $5.65 1.11% - -----------------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009 through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. AIM SELECT REAL ESTATE INCOME FUND - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS The Board of Trustees (the Board) of AIM strategies and limitations of these funds. the year as part of their ongoing Counselor Series Trust is required under oversight of the Fund, and did not the Investment Company Act of 1940 to In addition to their meetings identify any particular factor that was approve annually the renewal of the AIM throughout the year, the Sub-Committees controlling. Each Trustee may have Select Real Estate Income Fund (the Fund) meet at designated contract renewal evaluated the information provided investment advisory agreement with Invesco meetings each year to conduct an in-depth differently from another Trustee and Aim Advisors, Inc. (Invesco Aim) and the review of the performance, fees, expenses attributed different weight to the various Master Intergroup Sub-Advisory Contract and other matters related to their factors. The Trustees recognized that the for Mutual Funds (the sub-advisory assigned funds. During the contract advisory arrangements and resulting contracts) with Invesco Asset Management renewal process, the Trustees receive advisory fees for the Fund and the other Deutschland GmbH, Invesco Asset Management comparative performance and fee data AIM Funds are the result of years of Limited, Invesco Asset Management (Japan) regarding the AIM Funds prepared by an review and negotiation between the Limited, Invesco Australia Limited, independent company, Lipper, Inc. Trustees and Invesco Aim, that the Invesco Global Asset Management (N.A.), (Lipper), under the direction and Trustees may focus to a greater extent on Inc., Invesco Hong Kong Limited, Invesco supervision of the Senior Officer who also certain aspects of these arrangements in Institutional (N.A.), Inc., Invesco Senior prepares a separate analysis of this some years than in others, and that the Secured Management, Inc. and Invesco information for the Trustees. Each Trustees' deliberations and conclusions in Trimark Ltd. (collectively, the Affiliated Sub-Committee then makes recommendations a particular year may be based in part on Sub-Advisers). During contract renewal to the Investments Committee regarding the their deliberations and conclusions meetings held on June 16-17, 2009, the fees and expenses of their assigned funds. regarding these same arrangements Board as a whole, and the disinterested or The Investments Committee considers each throughout the year and in prior years. "independent" Trustees voting separately, Sub-Committee's recommendations and makes approved the continuance of the Fund's its own recommendations regarding the fees The discussion below serves as a investment advisory agreement and the and expenses of the AIM Funds to the full summary of the Senior Officer's sub-advisory contracts for another year, Board. The Investments Committee also independent written evaluation with effective July 1, 2009. In doing so, the considers each Sub-Committee's respect to the Fund's investment advisory Board determined that the Fund's recommendations in making its annual agreement as well as a discussion of the investment advisory agreement and the recommendation to the Board whether to material factors and related conclusions sub-advisory contracts are in the best approve the continuance of each AIM Fund's that formed the basis for the Board's interests of the Fund and its shareholders investment advisory agreement and approval of the Fund's investment advisory and that the compensation to Invesco Aim sub-advisory contracts for another year. agreement and sub-advisory contracts. and the Affiliated Sub-Advisers under the Unless otherwise stated, information set Fund's investment advisory agreement and The independent Trustees met separately forth below is as of June 17, 2009, and sub-advisory contracts is fair and during their evaluation of the Fund's does not reflect any changes that may have reasonable. investment advisory agreement and occurred since that date, including but sub-advisory contracts with independent not limited to changes to the Fund's THE BOARD'S FUND EVALUATION PROCESS legal counsel. The independent Trustees performance, advisory fees, expense were also assisted in their annual limitations and/ or fee waivers. The Board's Investments Committee has evaluation of the Fund's investment established three Sub-Committees that are advisory agreement by the Senior Officer. FACTORS AND CONCLUSIONS AND SUMMARY OF responsible for overseeing the management One responsibility of the Senior Officer INDEPENDENT WRITTEN FEE EVALUATION of a number of the series portfolios of is to manage the process by which the AIM the AIM Funds. This Sub-Committee Funds' proposed management fees are A. Nature, Extent and Quality of structure permits the Trustees to focus on negotiated during the annual contract Services Provided by Invesco Aim the performance of the AIM Funds that have renewal process to ensure that they are been assigned to them. The Sub-Committees negotiated in a manner that is at arms' The Board reviewed the advisory services meet throughout the year to review the length and reasonable. Accordingly, the provided to the Fund by Invesco Aim under performance of their assigned funds, and Senior Officer must either supervise a the Fund's investment advisory agreement, the Sub-Committees review monthly and competitive bidding process or prepare an the performance of Invesco Aim in quarterly comparative performance independent written evaluation. The Senior providing these services, and the information and periodic asset flow data Officer recommended that an independent credentials and experience of the officers for their assigned funds. These materials written evaluation be provided and, at the and employees of Invesco Aim who provide are prepared under the direction and direction of the Board, prepared an these services. The Board's review of the supervision of the independent Senior independent written evaluation. qualifications of Invesco Aim to provide Officer, an officer of the AIM Funds who these services included the Board's reports directly to the independent During the annual contract renewal consideration of Invesco Aim's portfolio Trustees. Over the course of each year, process, the Board considered the factors and product review process, various back the Sub-Committees meet with portfolio discussed below in evaluating the fairness office support functions provided by managers for their assigned funds and and reasonableness of the Fund's Invesco Aim and its affiliates, and other members of management and review investment advisory agreement and Invesco Aim's equity and fixed income with these individuals the performance, sub-advisory contracts. The Board trading operations. The Board concluded investment objective(s), policies, considered all of the information provided that the nature, extent and quality of the to them, including information provided at advisory services provided to the Fund by their meetings throughout Invesco Aim are appropriate and that Invesco Aim 25 AIM SELECT REAL ESTATE INCOME FUND continued
currently is providing satisfactory ers by permitting Invesco Aim to utilize least one year old and that other data did advisory services in accordance with the the additional resources and talent of the not reflect the market downturn that terms of the Fund's investment advisory Affiliated Sub-Advisers in managing the occurred in the fourth quarter of 2008. agreement. In addition, based on their Fund. ongoing meetings throughout the year with The Board also compared the Fund's the Fund's portfolio manager or managers, C. Fund Performance effective fee rate (the advisory fee after the Board concluded that these individuals any advisory fee waivers and before any are competent and able to continue to The Board considered Fund performance as a expense limitations/ waivers) to the carry out their responsibilities under the relevant factor in considering whether to effective fee rates of other clients of Fund's investment advisory agreement. approve the investment advisory agreement Invesco Aim and its affiliates with as well as the sub-advisory contracts for investment strategies comparable to those In determining whether to continue the the Fund, as Invesco Institutional of the Fund, including an offshore fund Fund's investment advisory agreement, the currently manages assets of the Fund. sub-advised by Invesco Institutional. The Board considered the prior relationship Board noted that the Fund's rate was below between Invesco Aim and the Fund, as well The Board compared the Fund's the effective fee rate for the offshore as the Board's knowledge of Invesco Aim's performance during the past one, three and fund. operations, and concluded that it is five calendar years to the performance of beneficial to maintain the current all funds in the Lipper performance Additionally, the Board compared the relationship, in part, because of such universe that are not managed by Invesco Fund's effective fee rate to the effective knowledge. The Board also considered the AIM or an Affiliated Sub-Adviser and fee rates paid by several separately steps that Invesco Aim and its affiliates against the Lipper Real Estate Funds managed accounts/wrap accounts advised by continue to take to improve the quality Index. The Board noted that the Fund's Invesco Institutional. The Board noted and efficiency of the services they performance was in the first quintile of that the Fund's sub-advisory fee rate was provide to the AIM Funds in the areas of its Lipper performance universe for the below the rates for the separately managed investment performance, product line one and three year periods, and the fourth accounts/ wrap accounts. The Board diversification, distribution, fund quintile for the five year period (the considered that management of the operations, shareholder services and first quintile being the best performing separately managed accounts/wrap accounts compliance. The Board concluded that the funds and the fifth quintile being the by the Invesco Institutional involves quality and efficiency of the services worst performing funds). The Board noted different levels of services and different Invesco Aim and its affiliates provide to that the Fund's performance was above the operational and regulatory requirements the AIM Funds in each of these areas performance of the Index for the one and than Invesco Aim's and Invesco support the Board's approval of the three year periods and below the Index for Institutional's management of the Fund. continuance of the Fund's investment the five year period. Although the The Board concluded that these differences advisory agreement. independent written evaluation of the are appropriately reflected in the fee Fund's Senior Officer only considered Fund structure for the Fund. B. Nature, Extent and Quality of performance through the most recent Services Provided by Affiliated calendar year, the Board also reviewed The Board noted that Invesco Aim has Sub-Advisers more recent Fund performance and this agreed to reduce the per account transfer review did not change their conclusions. agent fee for all the retail funds, The Board reviewed the services provided The Board noted that, in response to the including the Fund, effective July 1, by the Affiliated Sub-Advisers under the Board's focus on fund performance, Invesco 2009. The Board also noted that Invesco sub-advisory contracts and the credentials Aim has taken a number of actions intended Aim has contractually agreed to waive fees and experience of the officers and to improve the investment process for the and/or limit expenses of the Fund through employees of the Affiliated Sub-Advisers funds. at least June 30, 2010 in an amount who provide these services. The Board necessary to limit total annual operating concluded that the nature, extent and D. Advisory and Sub-Advisory Fees and expenses to a specified percentage of quality of the services provided by the Fee Waivers average daily net assets for each class of Affiliated Sub-Advisers are appropriate. the Fund. The Board noted that at the The Board noted that the Affiliated The Board compared the Fund's contractual current expense ratio for the Fund, this Sub-Advisers, which have offices and advisory fee rate to the contractual expense waiver does not have any impact. personnel that are geographically advisory fee rates of funds in the Fund's dispersed in financial centers around the Lipper expense group that are not managed The Board also considered the services world, can provide research and other by Invesco Aim or an Affiliated provided by the Affiliated Sub-Advisers information and make recommendations on Sub-Adviser, at a common asset level. The pursuant to the sub-advisory contracts the markets and economies of various Board noted that the Fund's contractual and the services provided by Invesco Aim countries and securities of companies advisory fee rate was below the median pursuant to the Fund's advisory agreement, located in such countries or on various contractual advisory fee rate of funds in as well as the allocation of fees between types of investments and investment tech- its expense group. The Board also reviewed Invesco Aim and the Affiliated niques. The Board noted that investment the methodology used by Lipper in Sub-Advisers pursuant to the sub-advisory decisions for the Fund are made by Invesco determining contractual fee rates, which contracts. The Board noted that the Institutional (N.A.), Inc. (Invesco includes using audited financial data from sub-advisory fees have no direct effect on Institutional). The Board concluded that the most recent annual report of each fund the Fund or its shareholders, as they are the sub-advisory contracts benefit the in the expense group that was publicly paid by Invesco Aim to the Affiliated Fund and its sharehold- available as of the end of the past Sub-Advisers, and that Invesco Aim and the calendar year. The Board noted that some Affiliated Sub-Advisers are affiliates. comparative data was at 26 AIM SELECT REAL ESTATE INCOME FUND continued
After taking account of the Fund's provided. The Board considered whether ements may be invested in money market contractual advisory fee rate, the Invesco Aim is financially sound and has funds advised by Invesco Aim pursuant to contractual sub-advisory fee rate, the the resources necessary to perform its procedures approved by the Board. The comparative advisory fee information obligations under the Fund's investment Board noted that Invesco Aim will receive discussed above and other relevant advisory agreement, and concluded that advisory fees from these affiliated money factors, the Board concluded that the Invesco Aim has the financial resources market funds attributable to such Fund's advisory and sub-advisory fees are necessary to fulfill these obligations. investments, although Invesco Aim has fair and reasonable. The Board considered whether each contractually agreed to waive through at Affiliated Sub-Adviser is financially least June 30, 2010, the advisory fees E. Economies of Scale and Breakpoints sound and has the resources necessary to payable by the Fund in an amount equal to perform its obligations under the 100% of the net advisory fee Invesco Aim The Board considered the extent to which sub-advisory contracts, and concluded that receives from the affiliated money market there are economies of scale in the each Affiliated Sub-Adviser has the funds with respect to the Fund's provision of advisory services to the financial resources necessary to fulfill investment in the affiliated money market Fund. The Board also considered whether these obligations. funds of uninvested cash, but not cash the Fund benefits from such economies of collateral. The Board concluded that the scale through contractual breakpoints in G. Collateral Benefits to Invesco Aim Fund's investment of uninvested cash and the Fund's advisory fee schedule. The and its Affiliates cash collateral from any securities Board noted that the Fund's contractual lending arrangements in the affiliated advisory fee schedule includes seven The Board considered various other money market funds is in the best breakpoints, but that due to the Fund's benefits received by Invesco Aim and its interests of the Fund and its asset level at the end of the past affiliates resulting from Invesco Aim's shareholders. calendar year, the Fund is not currently relationship with the Fund, including the benefiting from the breakpoints. The Board fees received by Invesco Aim and its concluded that the Fund's advisory fees affiliates for their provision of appropriately reflect economies of scale administrative, transfer agency and at current asset levels. The Board also distribution services to the Fund. The noted that the Fund shares directly in Board considered the performance of economies of scale through lower fees Invesco Aim and its affiliates in charged by third party service providers providing these services and the based on the combined size of all of the organizational structure employed by AIM Funds and affiliates. Invesco Aim and its affiliates to provide these services. The Board also considered F. Profitability and Financial that these services are provided to the Resources Fund pursuant to written contracts that are reviewed and approved on an annual The Board reviewed information from basis by the Board. The Board concluded Invesco Aim concerning the costs of the that Invesco Aim and its affiliates are advisory and other services that Invesco providing these services in a satisfactory Aim and its affiliates provide to the Fund manner and in accordance with the terms of and the profitability of Invesco Aim and their contracts, and are qualified to its affiliates in providing these continue to provide these services to the services. The Board also reviewed Fund. information concerning the financial condition of Invesco Aim and its The Board considered the benefits affiliates. The Board reviewed with realized by Invesco Aim and the Affiliated Invesco Aim the methodology used to Sub-Advisers as a result of portfolio prepare the profitability information. The brokerage transactions executed through Board considered the overall profitability "soft dollar" arrangements. The Board of Invesco Ltd., the ultimate parent of noted that soft dollar arrangements shift Invesco Aim and the Affiliated the payment obligation for research and Sub-Advisers, and of Invesco Aim, as well execution services from Invesco Aim and as the profitability of Invesco Aim in the Affiliated Sub-Advisers to the funds connection with managing the Fund. The and therefore may reduce Invesco Aim's and Board noted that Invesco Aim continues to the Affiliated Sub-Advisers' expenses. The operate at a net profit, although the Board concluded that Invesco Aim's and the reduction of assets under management as a Affiliated Sub-Advisers' soft dollar result of market movements and the arrangements are appropriate. The Board increase in voluntary fee waivers for also concluded that, based on their review affiliated money market funds have reduced and representations made by the Chief the profitability of Invesco Aim and its Compliance Officer of Invesco Aim, these affiliates. The Board concluded that the arrangements are consistent with Fund's fees are fair and reasonable, and regulatory requirements. that the level of profits realized by Invesco Aim and its affiliates from The Board considered the fact that the providing services to the Fund is not Fund's uninvested cash and cash collateral excessive in light of the nature, quality from any securities lending arrang- and extent of the services 27 AIM SELECT REAL ESTATE INCOME FUND
TAX INFORMATION Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors. The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement. The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended August 31, 2009:
FEDERAL AND STATE INCOME TAX ---------------------------- Qualified Dividend Income* 0.04% Corporate Dividends Received Deduction* 0%
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year. 28 AIM SELECT REAL ESTATE INCOME FUND TRUSTEES AND OFFICERS The address of each trustee and officer of AIM Counselor Series Trust (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------------ Martin L. Flanagan(1) -- 1960 2007 Executive Director, Chief Executive Officer and President, None Trustee Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Chairman, Invesco Aim Advisors, Inc. (registered investment advisor); Trustee, The AIM Family of Funds(R); Vice Chairman, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd. and Chairman, Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and Principal Executive Officer President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company) and Invesco Aim Capital Management, Inc. (registered investment advisor); Director and President, INVESCO Funds Group, Inc. (registered investment advisor and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltee (registered investment advisor and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: President, Invesco Trimark Dealer Inc.; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Director and President, Invesco Trimark Ltd./Invesco Trimark Ltee; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited (insurance Trustee and Chair consulting company) company); Captaris, Inc. (unified messaging provider); and Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Bob R. Baker -- 1936 1983 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Bayley -- 1939 2003 Retired None Trustee Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Board of Governors, Trustee firm) Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association - ------------------------------------------------------------------------------------------------------------------------------------ Albert R. Dowden -- 1941 2003 Director of a number of public and private business Board of Nature's Trustee corporations, including the Boss Group Ltd. (private Sunshine Products, Inc. investment and management); Continental Energy Services, LLC (oil and gas pipeline service); Reich & Tang Funds (registered investment company), and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, CompuDyne Corporation (provider of product and services to the public security market); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Senior Vice President, AB Volvo; Director of various public and private corporations - ------------------------------------------------------------------------------------------------------------------------------------ Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff Trustee (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) - ------------------------------------------------------------------------------------------------------------------------------------ Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich & Tang Trustee Funds (16 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ Prema Mathai-Davis -- 1950 2003 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Larry Soll -- 1942 1997 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Raymond Stickel, Jr. -- 1944 2005 Retired None Trustee Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Flanagan is considered an interested person of the Trust because he is an officer of the advisor to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the advisor to the Trust. (2) Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. T-1 Trustees and Officers - (continued)
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family N/A Senior Vice President and of Funds(R) Senior Officer Formerly: Director of Compliance and Assistant General Counsel, ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General Counsel and Director of Compliance, ALPS Mutual Funds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General N/A Senior Vice President, Chief Counsel, Invesco Aim Management Group, Inc., Invesco Aim Legal Officer and Secretary Advisors, Inc. and Invesco Aim Capital Management, Inc.; Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); and Manager, Invesco PowerShares Capital Management LLC Formerly: Director, Vice President and Secretary, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company); Vice President and Secretary, PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator); General Counsel and Secretary, Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company) - ------------------------------------------------------------------------------------------------------------------------------------ Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice N/A Vice President President, The AIM Family of Funds(R) Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R); Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company - ------------------------------------------------------------------------------------------------------------------------------------ Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, N/A Vice President Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; and Vice President, The AIM Family of Funds(R) Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Sheri Morris -- 1964 2003 Vice President, Treasurer and Principal Financial Officer, N/A Vice President, Treasurer and The AIM Family of Funds(R); and Vice President, Invesco Aim Principal Financial Officer Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management Inc. Formerly: Assistant Vice President and Assistant Treasurer, The AIM Family of Funds(R) and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash N/A Vice President Management Group; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only) Formerly: President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer and Managing Director, Invesco Aim Capital Management, Inc.; and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only) - ------------------------------------------------------------------------------------------------------------------------------------ Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim N/A Anti-Money Laundering Advisors, Inc., Invesco Aim Capital Management, Inc., Compliance Officer Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., Invesco Aim Private Asset Management, Inc. and The AIM Family of Funds(R) Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company; and Manager of the Fraud Prevention Department, Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; N/A Chief Compliance Officer Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, The AIM Family of Funds(R), Invesco Global Asset Management (N.A.), Inc. (registered investment advisor), Invesco Institutional (N.A.), Inc., (registered investment advisor), INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment advisor) and Invesco Senior Secured Management, Inc. (registered investment advisor); and Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company; and Global Head of Product Development, AIG-Global Investment Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------
The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund's prospectus for information on the Fund's sub-advisors. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR 11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. AUDITORS Suite 100 11 Greenway Plaza 11 Greenway Plaza PricewaterhouseCoopers LLP Houston, TX 77046-1173 Suite 100 Suite 100 1201 Louisiana Street Houston, TX 77046-1173 Houston, TX 77046-1173 Suite 2900 Houston, TX 77002-5678 COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT Stradley Ronon Stevens & INDEPENDENT TRUSTEES Invesco Aim Investment Services, Inc. CUSTODIAN Young, LLP Kramer, Levin, Naftalis & Frankel LLP P.O. Box 4739 State Street Bank and Trust 2600 One Commerce Square 1177 Avenue of the Americas Houston, TX 77210-4739 Company Philadelphia, PA 19103 New York, NY 10036-2714 225 Franklin Boston, MA 02110-2801
T-2 [GRAPHIC] - ------------------------------------------------------------------------------------------------------------------------------------ GO PAPERLESS WITH EDELIVERY Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all about eeees: - - ENVIRONMENTALLY FRIENDLY. Go green by reducing the number of - EFFICIENT. Stop waiting for regular mail. Your documents trees used to produce paper. will be sent via email as soon as they're available. - - ECONOMICAL. Help reduce your fund's printing and delivery - EASY. Download, save and print files using your home expenses and put more capital back in your fund's returns. computer with a few clicks of your mouse. This service is provided by Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Aim Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within thirty days after receiving your request. - ------------------------------------------------------------------------------------------------------------------------------------ FUND HOLDINGS AND PROXY VOTING INFORMATION The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-09913 and 333-36074. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov. If used after January 20, 2010, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for the most recent quarter-end. Invesco Aim - service mark - is a service mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for the products and services represented by Invesco Aim; they each provide investment advisory services to individual and institutional clients and do not sell securities. Please refer to each fund's prospectus for information on the fund's subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the retail mutual funds, exchange-traded funds and institutional money market funds and the subdistributor for the STIC Global Funds represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd. It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco Global Asset [INVESCO AIM LOGO] Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the consolidated adviser - SERVICE MARK - firm will be renamed Invesco Advisers, Inc. Additional information will be posted at invescoaim.com on or about the end of the fourth quarter of 2009. invescoaim.com SREI-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] ANNUAL REPORT TO SHAREHOLDERS AUGUST 31, 2009 - -- service mark -- AIM STRUCTURED CORE FUND [GRAPHIC] 2 Letters to Shareholders 4 Performance Summary 4 Management Discussion 6 Long-Term Fund Performance 8 Supplemental Information 9 Schedule of Investments 12 Financial Statements 15 Notes to Financial Statements 22 Financial Highlights 23 Auditor's Report 24 Fund Expenses 25 Approval of Investment Advisory and Sub-Advisory Agreements 28 Tax Information T-1 Trustees and Officers
Dear Shareholders: While the year covered by this report was difficult -- for long-time investors and veteran investment professionals alike -- economic conditions and market trends appeared much more favorable at the close of the fiscal year than at its start. [TAYLOR PHOTO] The 12 months ended August 31, 2009, included a sharp market sell-off that occurred in the second half of 2008. That downturn affected virtually all sectors, markets and investors. The decline had a number of causes, the most immediate being unprecedented turmoil in credit markets. Economic uncertainty prompted banks to hoard cash and reduce lending, and caused investors to shun short-term corporate debt. As a result, businesses found it difficult to fund Philip Taylor their day-to-day operations, and the U.S. economy -- as well as economies around the globe -- virtually froze briefly. INCREASED COMMUNICATION These developments prompted a greater-than-usual number of shareholders to contact me. Some of you took the time to write a letter while others of you emailed me at phil@invescoaim.com. Many of you sought explanations for the decline in the value of your accounts, while others asked more general questions about when the economy might improve. Your questions, comments and suggestions gave me better insight into what was on your minds, and I was pleased that so many of you took the time to share your thoughts with me. As a result, Invesco Aim's investment professionals and I have increased our efforts to stay in touch with and share our views with you. We increased the number of "Investment Perspectives" articles on our website, invescoaim.com. Through these articles, we've tried to provide timely market commentary, general investor education information and sector updates. I hope you'll take a moment to read them and let me know if you find them useful. To access your Fund's latest quarterly commentary, click on "Products and Performance" at the top of our website; next, select "Mutual Funds"; and then click on "Quarterly Commentary." I also hope you've stayed in touch with your financial advisor. An experienced financial advisor who is familiar with your individual investment goals, time horizon and risk tolerance can be a source of comfort and information during uncertain times. He or she can monitor your investments to ensure they're on track and can prevent you from making impulsive short-term decisions that may have adverse long-term consequences. REASONS FOR OPTIMISM The economy and equity markets reacted to a barrage of negative news during the year. Consumer spending -- which accounts for more than two-thirds(1) of the U.S. economy -- was sluggish as unemployment rose; more workers worried about their job security; home and portfolio values declined; and credit became more difficult to obtain. In his semiannual monetary policy report to Congress in late July, U.S. Federal Reserve Board Chairman Ben Bernanke summarized the stresses and strains the U.S. and global economies suffered in late 2008 and early 2009. Importantly, he suggested that the aggressive, coordinated actions taken by governments and central banks around the world finally may be yielding results. He testified that: o The pace of overall economic decline appears to have slowed significantly. o Credit availability, for consumers and businesses, has improved noticeably. o Investors' extreme risk aversion has eased somewhat. o The decline in housing activity appears to have moderated. While these and other trends offer encouragement, uncertainties remain. Chairman Bernanke testified that he anticipates a gradual recovery in 2010 with some acceleration in economic growth in 2011, together with subdued inflation over the next two years. His considered judgment appears to be shared by investors who have begun to return, cautiously, to the equities market, causing major U.S. stock-market indexes to bounce off their March lows. A SINGLE FOCUS I believe Invesco Aim is uniquely positioned to serve our clients. Our parent company, Invesco Ltd., is one of the largest(2) and most diversified global asset managers. It provides clients with diversified investment strategies and a range of investment products managed by distinct management teams around the world. We believe we can serve you best by focusing on one thing and doing it well: managing your money. Our investment professionals have managed clients' money in up markets and down markets. All of us here recognize that market conditions change often; what will not change is our commitment to putting our clients first, helping you achieve your financial goals and providing excellent customer service. If you have questions about this report or your account, please contact one of our client services representatives at 800 959 4246. If you have comments for me, I encourage you to email me at phil@invescoaim.com. Thank you for investing with us. All of us at Invesco Aim look forward to serving you. Sincerely, Sincerely, /s/ PHILIP TAYLOR Philip Taylor Senior Managing Director, Invesco Ltd. CEO, Invesco Aim (1) Reuters; (2) Pensions & Investments 2 AIM STRUCTURED CORE FUND
Dear Fellow Shareholders: Although the economy and financial markets have shown some signs of hope, investors remain rightfully cautious. Staying with an appropriately diversified investment program focused on your individual long-term goals can be a wise course in such uncertain times. We believe the route to financial success is more like a marathon than a sprint. [CROCKETT PHOTO] Please be assured that your Board continues to oversee the AIM Funds with a strong sense of responsibility for your money and your trust. As always, we seek to manage costs and enhance performance in ways that put your interests first. Bruce Crockett We are near the end of a busy 2009 proxy season, during which Invesco Aim Advisors, Inc.'s proxy committee votes on your behalf on issues put to a shareholder vote by the companies whose stock the Funds hold. This year, after careful case-by-case analysis by committee members and portfolio managers, the proxy committee voted with corporate management less often than in previous years, focusing on the issues of board independence, Say-On-Pay initiatives, and stock option re-pricing in light of the market's decline. The committee remained committed to supporting non-binding Say-on-Pay proposals and abstaining from voting on social issues. At its June meeting, your Board reviewed and renewed the investment advisory contracts between the AIM Funds and Invesco Aim Advisors, Inc. You can find the results of this rigorous annual process at invescoaim.com. Go to "Products & Performance" and click on "Investment Advisory Agreement Renewals." The website also contains news and market information, investment education and planning information and current reports and prospectuses for all the AIM Funds and I highly recommend it to you. You are always welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving you in the coming months. Sincerely, /s/ BRUCE L. CROCKETT Bruce L. Crockett Independent Chair AIM Funds Board of Trustees 3 AIM STRUCTURED CORE FUND
- ------------------------------------------------------------------------------------------------------------------------------------ MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE - --------------------------------------------------------------------------------------- PERFORMANCE SUMMARY volatility remain within the Fund strategy's guidelines. We continually For the fiscal year ended August 31, 2009, AIM Structured Core Fund, at net asset value monitor the portfolio and the overall (NAV), slightly underperformed its style-specific benchmark, the S&P 500 investment process is repeated on a Index.(triangle) The strongest contributions over the last year came from stock monthly basis to determine which companies selection in the financials and consumer discretionary sectors -- two areas highly should be bought or sold in the portfolio. affected by the ongoing economic recession. ------------------------------------------ Your Fund's long-term performance appears later in this report. MARKET CONDITIONS AND YOUR FUND - --------------------------------------------------------------------------------------- The fiscal year ended August 31, 2009, FUND VS. INDEXES included the worst U.S. economic downturn since the Great Depression.(1) An Total returns, 8/31/08 to 8/31/09, at net asset value (NAV). Performance shown does not overheated housing market was the primary include applicable contingent deferred sales charges (CDSC) or front-end sales charges, cause of the recession. When home prices which would have reduced performance. fell, financial instruments linked to that market declined in value, causing Class A Shares -18.66% significant pressures in other areas of Class B Shares -19.10 the economy. Beginning in the first Class C Shares -19.10 quarter of 2008, gross domestic product Class R Shares -18.70 (the total output of goods and services in Class Y Shares* -18.28 the U.S. economy) contracted in five out Investor Class Shares -18.43 of six subsequent quarters.(1) S&P 500 Index(triangle) (Broad Market/Style-Specific Index) -18.25 Unemployment, which stood at 4.9% in Lipper Large-Cap Core Funds Index (triangle) (Peer Group Index) -17.07 January 2008, nearly doubled to 9.7% in August 2009, as economic distress (triangle)Lipper Inc. reverberated throughout the economy.(2) * Share class incepted during the fiscal year. See page 7 for a detailed With this backdrop of dire economic explanation of Fund performance. news, the large cap equity market -- as measured by the S&P 500 Index -- - ------------------------------------------ experienced two extremes over the last HOW WE INVEST also may be considered. Each stock in the year, creating a "tale of two markets." universe is evaluated on four factors: From August 31, 2008 to the market's We manage your Fund to provide exposure to company earnings momentum, price trend, bottom on March 9, 2009, the S&P 500 Index large cap core equity stocks. The management action and relative valuation. fell 46.4%.(3) From March 9th through portfolio strives to outperform the S&P The scores from these four factors are August 31, 2009, however, the S&P 500 500 Index while minimizing the amount of combined to arrive at an overall alpha Index rebounded sharply, gaining 52.6%.(3) additional risk relative to the benchmark. score (excess return forecast) for each The Fund can be used as a long-term stock. Each alpha score is relative to the Until the market low, market allocation to large cap stocks that other securities within the same industry. participants largely shunned investment complements other style-specific Stocks also are evaluated on a multitude risk. Company fundamentals were subject to strategies within a diversified asset of other factors to develop a intense scrutiny; perceived instability in allocation strategy. stock-specific risk forecast and a company caused its security price to transaction cost forecast. decline. Leverage was shunned; cash and Our investment process integrates the income were embraced. After March, following key steps: We then incorporate the alpha forecast, however, investors gradually became risk risk forecast and transaction cost consumers again and market leadership o Universe development forecast using an optimizer (a software changed abruptly. tool) to build a portfolio that we believe o Stock rankings is an optimal balance of the stocks' potential return and risk. This portfolio o Risk assessment is constructed according to certain constraints to increase the probability o Portfolio construction that the Fund's relative performance and o Trading While the companies included in the S&P 500 Index are used as a general guide for developing the Fund's investable universe, non-benchmark stocks - ------------------------------------------ ------------------------------------------ ------------------------------------------ PORTFOLIO COMPOSITION TOP FIVE INDUSTRIES* TOP 10 EQUITY HOLDINGS* By sector Information Technology 19.3% 1. Integrated Oil & Gas 11.1% 1. Exxon Mobil Corp. 5.4% Consumer Discretionary 18.3 2. Pharmaceuticals 8.7 2. Microsoft Corp. 3.8 Health Care 16.1 3. Computer Hardware 7.1 3. International Business Machines Financials 12.3 4. Integrated Telecommunication Corp. 3.6 Energy 11.1 Services 5.7 4. Apple Inc. 3.5 Telecommunication Services 7.2 5. Systems Software 5.4 5. AT&T Inc. 3.1 Consumer Staples 6.0 ----------------------------------------- 6. Wal-Mart Stores, Inc. 2.8 Industrials 4.2 Total Net Assets $113.2 million 7. Chevron Corp. 2.5 Utilities 0.9 Total Number of Holdings* 86 8. Occidental Petroleum Corp. 2.5 Materials 0.8 9. Goldman Sachs Group, Inc. (The) 2.4 U.S. Treasury Bills, Money Market 10. Verizon Communications Inc. 2.3 Funds Plus Other Assets Less Liabilities 3.8 The Fund's holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security. * Excluding money market fund holdings. 4 AIM STRUCTURED CORE FUND
As large cap stocks began to recover, stocks. These sectors, along with JEREMY LEFKOWITZ they were led by low-quality stocks, many financials, comprised three of the four of which were the hardest-hit during the worst-performing sectors for the benchmark Portfolio manager, is lead manager of AIM collapse. Our review of the data for the during the fiscal year. From an individual Structured Core Fund. He began his March through August 2009 time period stock perspective, technology companies investment career in 1968 and has been showed stocks that outperformed their APPLE and INTERNATIONAL BUSINESS MACHINES associated with Invesco Institutional industry peers tended to be smaller, were two of the biggest contributors to and/or its affiliates since 1982. Mr. lower-priced, and more illiquid. Fund performance. Conversely, over weights Lefkowitz earned a B.S. in industrial Perversely, stocks that outperformed their in industrial giant GENERAL ELECTRIC and engineering and an M.B.A. in finance from industry peers also tended to exhibit real oil and gas refiner CONOCOPHILLIPS Columbia University. fundamental weakness. For example, detracted from returns. companies that outperformed tended to be MAUREEN DONNELLAN those that were expected to lose money In terms of risk management, we seek to over the coming fiscal year, had negative minimize any style biases in the Portfolio manager, is manager of AIM cash flow coming into this period, had portfolio. Active managers typically add Structured Core Fund. She has been their earnings forecasts slashed by 50% or value in one of or a combination of four associated with Invesco Institutional more by analysts, were highly levered, and areas: beta bias (relative volatility), and/or its affiliates since 1974. saw their prices decline dramatically over style bias, sector/industry over/under the prior six months. These are not the weight and stock selection. We attempt to LAWSON MCWHORTER type of stocks we seek to include in your add value through our stock selection Fund because our research found that such decisions. Consequently, our risk Portfolio manager, is manager of AIM stocks tend to lead to long-term investing management process seeks to neutralize the Structured Core Fund. He has been failure. Fund's exposure relative to the benchmark associated with Invesco Institutional with regard to beta, style and and/or its affiliates since 2005. Mr. Regarding the results of AIM Structured sector/industry exposures. McWhorter earned a B.A. with cum laude Core Fund, it is important to understand honors from Davidson College. He is a our investment process to better evaluate We thank you for your continued Chartered Market Technician. the drivers of our relative performance investment in AIM Structured Core Fund. versus the benchmark. We generally WILLIAM MERSON evaluate performance based on the impact (1) Bureau of Economic Analysis of our stock selection and risk Portfolio manager, is manager of AIM management. (2) Bureau of Labor Statistics Structured Core Fund. He has been associated with Invesco Institutional Our stock selection model, based on the (3) Lipper Inc. and/or its affiliates since 1984. Mr. four factors (company earnings momentum, Merson earned a B.B.A. from Manhattan price trend, management action and The views and opinions expressed in College and an M.B.A. from New York relative value) that make up our alpha management's discussion of Fund University. (excess return) forecast for stocks in our performance are those of Invesco Aim investment universe, was a detractor from Advisors, Inc. These views and opinions DANIEL TSAI Fund performance. However, in selecting are subject to change at any time based on holdings for the Fund, we also take into factors such as market and economic Chartered Financial Analyst, portfolio account our risk and transaction cost conditions. These views and opinions may manager, is manager of AIM Structured Core forecasts. We use our optimization not be relied upon as investment advice or Fund. He has been associated with Invesco software to assist in making investment recommendations, or as an offer for a Institutional and/or its affiliates since decisions, based on risk and transaction particular security. The information is 2000. Mr. Tsai earned a B.S. in mechanical cost forecasts, as well as our alpha not a complete analysis of every aspect of engineering from National Taiwan forecast. Consequently, while our stock any market, country, industry, security or University and an M.S. in mechanical selection model may identify a stock with the Fund. Statements of fact are from engineering from the University of an attractive alpha forecast, the sources considered reliable, but Invesco Michigan. He also earned an M.S. in optimizer may indicate that its Aim Advisors, Inc. makes no representation computer science at Wayne State transaction costs are too high and/or its or warranty as to their completeness or University. risk level is unacceptable. Placing more accuracy. Although historical performance of an emphasis on transaction costs and is no guarantee of future results, these ANNE UNFLAT potential risk in making stock selections insights may help you understand our can benefit or detract from Fund investment management philosophy. Portfolio manager, is manager of AIM performance. For the fiscal year, it Structured Core Fund. She has been augmented our results. See important Fund and index disclosures associated with Invesco Institutional later in this report. and/or its affiliates since 1988. Ms. Our stock selection was strongest in Unflat graduated magna cum laude from financials during the fiscal year -- an Queens College with a B.A. in economics. attractive result, considering it was the She earned her M.B.A. in finance from St. worst-performing sector in the S&P 500 John's University. Index. A slight underweight in financials versus the S&P 500 Index also helped Fund Assisted by the Global Quantitative Equity performance. The portfolio had more Research Team difficulty identifying rewarding investments in industrials and materials 5 AIM STRUCTURED CORE FUND
- ------------------------------------------------------------------------------------------------------------------------------------ YOUR FUND'S LONG-TERM PERFORMANCE RESULTS OF A $10,000 INVESTMENT - OLDEST SHARE CLASSES WITH SALES CHARGES SINCE INCEPTION Fund and Index Data from 3/31/06 [PERFORMANCE CHART] AIM AIM AIM AIM STRUCTURED STRUCTURED STRUCTURED STRUCTURED LIPPER CORE FUND- CORE FUND- CORE FUND- CORE FUND- LARGE-CAP CLASS A CLASS B CLASS C CLASS R S&P 500 CORE FUNDS SHARES SHARES SHARES SHARES INDEX(1) INDEX(1) ---------- ---------- ---------- ---------- -------- ---------- 3/31/2006 9450 10000 10000 10000 10000 10000 04/06 9554 10100 10100 10100 10134 10104 05/06 9261 9790 9790 9800 9843 9798 06/06 9337 9859 9859 9870 9856 9806 07/06 9412 9939 9939 9959 9917 9772 08/06 9630 10159 10159 10180 10152 10015 09/06 9866 10399 10399 10430 10414 10226 10/06 10272 10819 10819 10860 10753 10567 11/06 10423 10969 10969 11010 10957 10774 12/06 10487 11028 11028 11070 11111 10883 01/07 10697 11250 11250 11304 11279 11059 02/07 10419 10947 10947 11000 11059 10868 03/07 10583 11109 11109 11162 11182 10977 04/07 10986 11524 11524 11589 11677 11434 05/07 11361 11918 11918 11994 12084 11824 06/07 11063 11595 11595 11669 11884 11681 07/07 10583 11089 11089 11162 11516 11352 08/07 10746 11251 11251 11335 11688 11482 09/07 11178 11696 11696 11781 12125 11897 10/07 11533 12060 12060 12157 12318 12154 11/07 10967 11464 11453 11558 11802 11671 12/07 11089 11578 11578 11683 11721 11604 01/08 10064 10503 10502 10602 11018 10925 02/08 9716 10137 10137 10235 10660 10642 03/08 9755 10168 10167 10266 10614 10503 04/08 10286 10726 10725 10837 11131 11020 05/08 10412 10837 10837 10948 11275 11220 06/08 9609 10005 10005 10113 10325 10351 07/08 9474 9853 9853 9970 10239 10204 08/08 9561 9934 9933 10052 10387 10335 09/08 8604 8940 8939 9043 9462 9381 10/08 7193 7468 7468 7564 7873 7791 11/08 6796 7063 7062 7157 7308 7175 12/08 6996 7267 7267 7361 7385 7302 01/09 6358 6586 6585 6690 6763 6736 02/09 5673 5892 5891 5967 6046 6084 03/09 6250 6484 6484 6576 6574 6599 04/09 6875 7115 7115 7234 7203 7270 05/09 7031 7279 7278 7399 7605 7702 06/09 7007 7253 7253 7374 7621 7693 07/09 7548 7808 7808 7932 8196 8283 08/09 7778 7846 8037 8172 8492 8571 (1) Lipper Inc. Past performance cannot guarantee shareholder had liquidated his entire fund expenses and management fees; comparable future results. investment in the Fund at the close of the performance of a market index does not. reporting period and paid the applicable Performance shown in the chart and The data shown in the chart include contingent deferred sales charges. Index table(s) does not reflect deduction of reinvested distributions, applicable sales results include reinvested dividends, but taxes a shareholder would pay on Fund charges and Fund expenses including they do not reflect sales charges. distributions or sale of Fund shares. management fees. Results for Class B Performance of the peer group reflects shares are calculated as if a hypothetical 6 AIM STRUCTURED CORE FUND
- ------------------------------------------ ------------------------------------------ AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS As of 8/31/09, including maximum As of 6/30/09, the most recent calendar applicable sales charges quarter-end, including maximum applicable sales charges CLASS A SHARES Inception (3/31/06) -7.08% CLASS A SHARES 1 Year -23.17 Inception (3/31/06) -10.36% CLASS B SHARES 1 Year -31.10 Inception (3/31/06) -6.85% CLASS B SHARES 1 Year -22.35 Inception (3/31/06) -10.07% CLASS C SHARES 1 Year -30.41 Inception (3/31/06) -6.19% CLASS C SHARES 1 Year -19.75 Inception (3/31/06) -9.41% CLASS R SHARES 1 Year -28.07 Inception (3/31/06) -5.73% CLASS R SHARES 1 Year -18.70 Inception (3/31/06) -8.95% CLASS Y SHARES 1 Year -27.08 Inception -5.41% CLASS Y SHARES 1 Year -18.28 Inception -8.69% INVESTOR CLASS SHARES 1 Year -26.82 Inception -5.46% INVESTOR CLASS SHARES 1 Year -18.43 Inception -8.74% 1 Year -26.95 CLASS Y SHARES' INCEPTION DATE IS OCTOBER FIGURES REFLECT REINVESTED DISTRIBUTIONS, CDSC ON CLASS C SHARES IS 1% FOR THE FIRST 3, 2008; RETURNS SINCE THAT DATE ARE CHANGES IN NET ASSET VALUE AND THE EFFECT YEAR AFTER PURCHASE. CLASS R SHARES DO NOT ACTUAL RETURNS. ALL OTHER RETURNS ARE OF THE MAXIMUM SALES CHARGE UNLESS HAVE A FRONT-END SALES CHARGE; RETURNS BLENDED RETURNS OF ACTUAL CLASS Y SHARE OTHERWISE STATED. INVESTMENT RETURN AND SHOWN ARE AT NET ASSET VALUE AND DO NOT PERFORMANCE AND RESTATED CLASS A SHARE PRINCIPAL VALUE WILL FLUCTUATE SO THAT YOU REFLECT A 0.75% CDSC THAT MAY BE IMPOSED PERFORMANCE (FOR PERIODS PRIOR TO THE MAY HAVE A GAIN OR LOSS WHEN YOU SELL ON A TOTAL REDEMPTION OF RETIREMENT PLAN INCEPTION DATE OF CLASS Y SHARES) AT NET SHARES. ASSETS WITHIN THE FIRST YEAR. CLASS Y AND ASSET VALUE. THE RESTATED CLASS A SHARE INVESTOR CLASS SHARES DO NOT HAVE A PERFORMANCE REFLECTS THE RULE 12B-1 FEES THE NET ANNUAL FUND OPERATING EXPENSE FRONT-END SALES CHARGE OR A CDSC; APPLICABLE TO CLASS A SHARES AS WELL AS RATIO SET FORTH IN THE MOST RECENT FUND THEREFORE, PERFORMANCE IS AT NET ASSET ANY FEE WAIVERS OR EXPENSE REIMBURSEMENTS PROSPECTUS AS OF THE DATE OF THIS REPORT VALUE. RECEIVED BY CLASS A SHARES. CLASS A FOR CLASS A, CLASS B, CLASS C, CLASS R, SHARES' INCEPTION DATE IS MARCH 31, 2006. CLASS Y AND INVESTOR CLASS SHARES WAS THE PERFORMANCE OF THE FUND'S SHARE 1.01%, 1.76%, 1.76%, 1.26%, 0.76%, AND CLASSES WILL DIFFER PRIMARILY DUE TO INVESTOR CLASS SHARES' INCEPTION DATE 1.01%, RESPECTIVELY.(1) THE TOTAL ANNUAL DIFFERENT SALES CHARGE STRUCTURES AND IS APRIL 25, 2008. RETURNS SINCE THAT DATE FUND OPERATING EXPENSE RATIO SET FORTH IN CLASS EXPENSES. ARE HISTORICAL RETURNS. ALL OTHER RETURNS THE MOST RECENT FUND PROSPECTUS AS OF THE ARE BLENDED RETURNS OF HISTORICAL INVESTOR DATE OF THIS REPORT FOR CLASS A, CLASS B, HAD THE ADVISOR NOT WAIVED FEES AND/OR CLASS SHARE PERFORMANCE AND RESTATED CLASS CLASS C, CLASS R, CLASS Y AND INVESTOR REIMBURSED EXPENSES, PERFORMANCE WOULD A SHARE PERFORMANCE (FOR PERIODS PRIOR TO CLASS SHARES WAS 1.20%, 1.95%, 1.95%, HAVE BEEN LOWER. THE INCEPTION DATE OF INVESTOR CLASS 1.45%, 0.95% AND 1.20%, RESPECTIVELY. THE SHARES) AT NET ASSET VALUE, WHICH RESTATED EXPENSE RATIOS PRESENTED ABOVE MAY VARY (1) Total annual operating expenses less PERFORMANCE WILL REFLECT THE RULE 12B-1 FROM THE EXPENSE RATIOS PRESENTED IN OTHER any contractual fee waivers and/or FEES APPLICABLE TO CLASS A SHARES FOR THE SECTIONS OF THIS REPORT THAT ARE BASED ON expense reimbursements by the advisor PERIOD USING BLENDED RETURNS. CLASS A EXPENSES INCURRED DURING THE PERIOD in effect through at least June 30, SHARES' INCEPTION DATE IS MARCH 31, 2006. COVERED BY THIS REPORT. 2010. See current prospectus for more information. THE PERFORMANCE DATA QUOTED REPRESENT CLASS A SHARE PERFORMANCE REFLECTS THE PAST PERFORMANCE AND CANNOT GUARANTEE MAXIMUM 5.50% SALES CHARGE, AND CLASS B COMPARABLE FUTURE RESULTS; CURRENT AND CLASS C SHARE PERFORMANCE REFLECTS THE PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE APPLICABLE CONTINGENT DEFERRED SALES VISIT INVESCOAIM.COM FOR THE MOST RECENT CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE MONTH-END PERFORMANCE. PERFORMANCE CDSC ON CLASS B SHARES DECLINES FROM 5% BEGINNING AT THE TIME OF PURCHASE TO 0% AT THE BEGINNING OF THE SEVENTH YEAR. THE 7 AIM STRUCTURED CORE FUND
- ------------------------------------------------------------------------------------------------------------------------------------ AIM STRUCTURED CORE FUND'S INVESTMENT OBJECTIVE IS LONG-TERM GROWTH OF CAPITAL. o Unless otherwise stated, information presented in this report is as of August 31, 2009, and is based on total net assets. o Unless otherwise noted, all data provided by Invesco Aim. - ------------------------------------------ ABOUT SHARE CLASSES bond prices generally fall as interest funds reflects fund expenses; rates rise and vice versa. performance of a market index does not. o Effective September 30, 2003, for qualified plans only, those previously o Leveraging entails risks such as ------------------------------------------ established are eligible to purchase magnifying changes in the value of the OTHER INFORMATION Class B shares of any AIM fund. Please portfolio's securities. see the prospectus for more o The Chartered Financial Analysts(R) information. o Since a large percentage of the Fund's (CFA(R)) designation is globally assets may be invested in securities of recognized and attests to a o Class R shares are available only to a limited number of companies, each charterholder's success in a rigorous certain retirement plans. Please see investment has a greater effect on the and comprehensive study program in the the prospectus for more information. Fund's overall performance, and any field of investment management and change in the value of those securities research analysis. o Class Y shares are available to only could significantly affect the value of certain investors. Please see the your investment in the Fund. o The returns shown in management's prospectus for more information. discussion of Fund performance are o There is no guarantee that the based on net asset values calculated - ------------------------------------------ investment techniques and risk analysis for shareholder transactions. Generally PRINCIPAL RISKS OF INVESTING IN THE FUND used by the Fund's portfolio managers accepted accounting principles require will produce the desired results. adjustments to be made to the net o Credit risk is the risk of loss on an assets of the Fund at period end for investment due to the deterioration of o The prices of securities held by the financial reporting purposes, and as an issuer's financial health. Such a Fund may decline in response to market such, the net asset values for deterioration of financial health may risks. shareholder transactions and the result in a reduction of the credit returns based on those net asset values rating of the issuer's securities and ------------------------------------------ may differ from the net asset values may lead to the issuer's inability to ABOUT INDEXES USED IN THIS REPORT and returns reported in the Financial honor its contractual obligations, Highlights. including making timely payment of o The S&P 500(R) INDEX is a market interest and principal. capitalization-weighted index covering o Industry classifications used in this all major areas of the U.S. economy. It report are generally according to the o The Fund may use enhanced investment is not the 500 largest companies, but Global Industry Classification techniques such as derivatives. The rather the most widely held 500 Standard, which was developed by and is principal risk of derivatives is that companies chosen with respect to market the exclusive property and a service the fluctuations in their values may size, liquidity and their industry. mark of MSCI Inc. and Standard & not correlate perfectly with the Poor's. overall securities markets. Derivatives o The LIPPER LARGE-CAP CORE FUNDS INDEX are subject to counterparty risk -- the is an equally weighted representation risk that the other party will not of the largest funds in the Lipper complete the transaction with the Fund. Large-Cap Core Funds category. These funds typically have an average o Prices of equity securities change in price-to-earnings ratio, price-to-book response to many factors, including the ratio, and three-year sales-per-share historical and prospective earnings of growth value, compared to the S&P 500 the issuer, the value of its assets, Index. general economic conditions, interest rates, investor perceptions and market o The Fund is not managed to track the liquidity. performance of any particular index, including the indexes defined here, and o Foreign securities have additional consequently, the performance of the risks, including exchange rate changes, Fund may deviate significantly from the political and economic upheaval, performance of the indexes. relative lack of information, relatively low market liquidity, and o A direct investment cannot be made in the potential lack of strict financial an index. Unless otherwise indicated, and accounting controls and standards. index results include reinvested dividends, and they do not reflect o Interest rate risk refers to the risk sales charges. Performance of an index that of ------------------------------------------ THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. Class A Shares SCAUX INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class B Shares SBCUX Class C Shares SCCUX - --------------------------------------------------------------------------------------- Class R Shares SCRUX NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE Class Y Shares SCAYX Investor Class Shares SCNUX 8 AIM STRUCTURED CORE FUND
SCHEDULE OF INVESTMENTS(a) August 31, 2009
SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCKS & OTHER EQUITY INTERESTS-96.22% AEROSPACE & DEFENSE-1.27% United Technologies Corp. 24,300 $ 1,442,448 =============================================================================== AGRICULTURAL PRODUCTS-1.27% Archer-Daniels-Midland Co. 49,900 1,438,617 =============================================================================== AIR FREIGHT & LOGISTICS-0.39% United Parcel Service, Inc.-Class B 8,300 443,718 =============================================================================== APPAREL RETAIL-2.97% Chico's FAS, Inc.(b) 19,200 244,416 - ------------------------------------------------------------------------------- Gap, Inc. (The) 117,900 2,316,735 - ------------------------------------------------------------------------------- Ross Stores, Inc. 17,200 802,208 =============================================================================== 3,363,359 =============================================================================== APPLICATION SOFTWARE-0.09% Compuware Corp.(b) 13,700 98,777 =============================================================================== AUTOMOBILE MANUFACTURERS-1.74% Ford Motor Co.(b) 259,200 1,969,920 =============================================================================== AUTOMOTIVE RETAIL-0.85% AutoNation, Inc.(b) 19,600 372,008 - ------------------------------------------------------------------------------- AutoZone, Inc.(b) 4,000 589,000 =============================================================================== 961,008 =============================================================================== BIOTECHNOLOGY-3.92% Amgen Inc.(b) 42,800 2,556,872 - ------------------------------------------------------------------------------- Biogen Idec Inc.(b) 37,500 1,882,875 =============================================================================== 4,439,747 =============================================================================== COAL & CONSUMABLE FUELS-0.00% Patriot Coal Corp.(b) 1 7 =============================================================================== COMMUNICATIONS EQUIPMENT-0.13% Harris Stratex Networks, Inc.-Class A(b) 23,900 144,834 =============================================================================== COMPUTER & ELECTRONICS RETAIL-1.92% RadioShack Corp. 143,300 2,168,129 =============================================================================== COMPUTER HARDWARE-7.07% Apple Inc.(b) 23,600 3,969,756 - ------------------------------------------------------------------------------- International Business Machines Corp. 34,100 4,025,505 =============================================================================== 7,995,261 =============================================================================== COMPUTER STORAGE & PERIPHERALS-2.33% EMC Corp.(b) 71,300 1,133,670 - ------------------------------------------------------------------------------- QLogic Corp.(b) 5,000 79,050 - ------------------------------------------------------------------------------- Western Digital Corp.(b) 41,500 1,422,620 =============================================================================== 2,635,340 =============================================================================== CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS-0.14% Oshkosh Corp. 4,700 157,920 =============================================================================== DATA PROCESSING & OUTSOURCED SERVICES-0.52% Broadridge Financial Solutions Inc. 17,100 356,022 - ------------------------------------------------------------------------------- Visa Inc.-Class A 3,300 234,630 =============================================================================== 590,652 =============================================================================== DEPARTMENT STORES-0.24% Sears Holdings Corp.(b) 4,200 266,490 =============================================================================== EDUCATION SERVICES-1.73% Apollo Group, Inc.-Class A(b) 26,600 1,724,212 - ------------------------------------------------------------------------------- Career Education Corp.(b) 10,000 237,500 =============================================================================== 1,961,712 =============================================================================== ELECTRONIC MANUFACTURING SERVICES-0.10% Flextronics International Ltd. (Singapore)(b) 18,800 111,484 =============================================================================== GENERAL MERCHANDISE STORES-2.42% Big Lots, Inc.(b) 62,400 1,586,208 - ------------------------------------------------------------------------------- Family Dollar Stores, Inc. 38,200 1,156,696 =============================================================================== 2,742,904 =============================================================================== GOLD-0.70% Barrick Gold Corp. (Canada) 22,900 794,630 =============================================================================== HEALTH CARE EQUIPMENT-0.93% Boston Scientific Corp.(b) 89,100 1,046,925 =============================================================================== HEALTH CARE SERVICES-0.59% Omnicare, Inc. 29,400 672,966 =============================================================================== HOME IMPROVEMENT RETAIL-2.05% Home Depot, Inc. (The) 84,800 2,314,192 =============================================================================== HOMEBUILDING-3.94% D.R. Horton, Inc. 162,000 2,172,420 - ------------------------------------------------------------------------------- KB Home 105,700 1,924,797 - ------------------------------------------------------------------------------- NVR, Inc.(b) 540 364,635 =============================================================================== 4,461,852 =============================================================================== HOUSEHOLD PRODUCTS-1.84% Procter & Gamble Co. (The) 38,500 2,083,235 =============================================================================== HYPERMARKETS & SUPER CENTERS-2.77% Wal-Mart Stores, Inc. 61,600 3,133,592 =============================================================================== INDEPENDENT POWER PRODUCERS & ENERGY TRADERS-0.90% Mirant Corp.(b) 60,700 1,022,795 ===============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 9 AIM STRUCTURED CORE FUND
SHARES VALUE - ------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES-2.39% 3M Co. 5,800 $ 418,180 - ------------------------------------------------------------------------------- General Electric Co. 164,800 2,290,720 =============================================================================== 2,708,900 =============================================================================== INTEGRATED OIL & GAS-11.12% Chevron Corp. 40,900 2,860,546 - ------------------------------------------------------------------------------- ConocoPhillips 18,700 842,061 - ------------------------------------------------------------------------------- Exxon Mobil Corp. 87,600 6,057,540 - ------------------------------------------------------------------------------- Occidental Petroleum Corp. 38,700 2,828,970 =============================================================================== 12,589,117 =============================================================================== INTEGRATED TELECOMMUNICATION SERVICES-5.72% AT&T Inc. 135,700 3,534,985 - ------------------------------------------------------------------------------- BCE Inc. (Canada) 2,400 58,968 - ------------------------------------------------------------------------------- Qwest Communications International Inc. 66,600 239,094 - ------------------------------------------------------------------------------- Verizon Communications Inc. 85,100 2,641,504 =============================================================================== 6,474,551 =============================================================================== INTERNET SOFTWARE & SERVICES-1.35% eBay Inc.(b) 68,900 1,525,446 =============================================================================== INVESTMENT BANKING & BROKERAGE-2.41% Goldman Sachs Group, Inc. (The) 16,100 2,663,906 - ------------------------------------------------------------------------------- Jefferies Group, Inc.(b) 2,500 59,150 =============================================================================== 2,723,056 =============================================================================== LIFE & HEALTH INSURANCE-2.66% Aflac, Inc. 58,400 2,372,208 - ------------------------------------------------------------------------------- Unum Group 28,500 642,105 =============================================================================== 3,014,313 =============================================================================== MANAGED HEALTH CARE-1.93% UnitedHealth Group Inc. 78,100 2,186,800 =============================================================================== MORTGAGE REIT'S-0.26% Annaly Capital Management Inc. 16,800 291,312 =============================================================================== MOVIES & ENTERTAINMENT-0.39% Time Warner Inc. 15,800 440,978 =============================================================================== MULTI-LINE INSURANCE-0.05% Fairfax Financial Holdings Ltd. (Canada) 160 54,210 =============================================================================== OTHER DIVERSIFIED FINANCIAL SERVICES-0.51% Bank of America Corp. 10,100 177,659 - ------------------------------------------------------------------------------- JPMorgan Chase & Co. 9,100 395,486 =============================================================================== 573,145 =============================================================================== PACKAGED FOODS & MEATS-0.08% Dean Foods Co.(b) 5,100 92,514 =============================================================================== PHARMACEUTICALS-8.72% Abbott Laboratories 5,200 235,196 - ------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 41,600 920,608 - ------------------------------------------------------------------------------- Eli Lilly and Co. 59,100 1,977,486 - ------------------------------------------------------------------------------- Forest Laboratories, Inc.(b) 37,400 1,094,698 - ------------------------------------------------------------------------------- Johnson & Johnson 33,800 2,042,872 - ------------------------------------------------------------------------------- King Pharmaceuticals, Inc.(b) 9,200 95,496 - ------------------------------------------------------------------------------- Merck & Co., Inc. 25,400 823,722 - ------------------------------------------------------------------------------- Pfizer Inc. 81,400 1,359,380 - ------------------------------------------------------------------------------- Schering-Plough Corp. 19,600 552,328 - ------------------------------------------------------------------------------- Wyeth 16,100 770,385 =============================================================================== 9,872,171 =============================================================================== PROPERTY & CASUALTY INSURANCE-5.35% ACE Ltd. (Switzerland) 17,300 902,714 - ------------------------------------------------------------------------------- Chubb Corp. (The) 23,000 1,135,970 - ------------------------------------------------------------------------------- Progressive Corp. (The)(b) 6,800 112,336 - ------------------------------------------------------------------------------- Travelers Cos., Inc. (The) 52,000 2,621,840 - ------------------------------------------------------------------------------- XL Capital Ltd.-Class A 74,000 1,283,900 =============================================================================== 6,056,760 =============================================================================== PUBLISHING-0.06% Gannett Co., Inc. 8,300 71,712 =============================================================================== SEMICONDUCTORS-2.31% Cypress Semiconductor Corp.(b) 56,700 573,804 - ------------------------------------------------------------------------------- Texas Instruments Inc. 82,800 2,036,052 =============================================================================== 2,609,856 =============================================================================== SOFT DRINKS-0.05% Dr. Pepper Snapple Group, Inc.(b) 2,000 52,880 =============================================================================== SPECIALIZED REIT'S-1.04% Public Storage 16,700 1,178,185 =============================================================================== STEEL-0.07% Reliance Steel & Aluminum Co. 2,100 77,574 =============================================================================== SYSTEMS SOFTWARE-5.44% Microsoft Corp. 175,600 4,328,540 - ------------------------------------------------------------------------------- Symantec Corp.(b) 120,900 1,828,008 =============================================================================== 6,156,548 =============================================================================== WIRELESS TELECOMMUNICATION SERVICES-1.49% Sprint Nextel Corp.(b) 461,000 1,687,260 =============================================================================== Total Common Stocks & Other Equity Interests (Cost $104,418,640) 108,899,802 =============================================================================== PRINCIPAL AMOUNT U.S. TREASURY BILLS-0.71% 0.16%, 09/17/09 (Cost $799,943)(c)(d) $ 800,000 799,943 ===============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 10 AIM STRUCTURED CORE FUND
SHARES VALUE - ------------------------------------------------------------------------------- MONEY MARKET FUNDS-2.99% Liquid Assets Portfolio-Institutional Class(e) 1,689,252 $ 1,689,252 - ------------------------------------------------------------------------------- Premier Portfolio-Institutional Class(e) 1,689,252 1,689,252 =============================================================================== Total Money Market Funds (Cost $3,378,504) 3,378,504 =============================================================================== TOTAL INVESTMENTS-99.92% (Cost $108,597,087) 113,078,249 =============================================================================== OTHER ASSETS LESS LIABILITIES-0.08% 94,223 =============================================================================== NET ASSETS-100.00% $113,172,472 _______________________________________________________________________________ ===============================================================================
Investment Abbreviations: REIT - Real Estate Investment Trust
Notes to Schedule of Investments: (a) Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor's. (b) Non-income producing security. (c) Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. (d) All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1J and Note 4. (e) The money market fund and the Fund are affiliated by having the same investment advisor. See accompanying Notes to Financial Statements which are an integral part of the financial statements. 11 AIM STRUCTURED CORE FUND STATEMENT OF ASSETS AND LIABILITIES August 31, 2009 ASSETS: Investments, at value (Cost $105,218,583) $109,699,745 - -------------------------------------------------------------------------------- Investments in affiliated money market funds, at value and cost 3,378,504 ================================================================================ Total investments, at value (Cost $108,597,087) 113,078,249 ================================================================================ Receivables for: Investments sold 1,314 - -------------------------------------------------------------------------------- Fund shares sold 13,946 - -------------------------------------------------------------------------------- Dividends 262,579 - -------------------------------------------------------------------------------- Investment for trustee deferred compensation and retirement plans 14,204 - -------------------------------------------------------------------------------- Other assets 26,599 ================================================================================ Total assets 113,396,891 ________________________________________________________________________________ ================================================================================ LIABILITIES: Payables for: Fund shares reacquired 55,364 - -------------------------------------------------------------------------------- Variation margin 30,800 - -------------------------------------------------------------------------------- Accrued fees to affiliates 57,327 - -------------------------------------------------------------------------------- Accrued other operating expenses 48,968 - -------------------------------------------------------------------------------- Trustee deferred compensation and retirement plans 31,960 ================================================================================ Total liabilities 224,419 ================================================================================ Net assets applicable to shares outstanding $113,172,472 ________________________________________________________________________________ ================================================================================ NET ASSETS CONSIST OF: Shares of beneficial interest $145,255,706 - -------------------------------------------------------------------------------- Undistributed net investment income 2,006,339 - -------------------------------------------------------------------------------- Undistributed net realized gain (loss) (38,826,396) - -------------------------------------------------------------------------------- Unrealized appreciation 4,736,823 ================================================================================ $113,172,472 ________________________________________________________________________________ ================================================================================ NET ASSETS: Class A $ 1,617,754 ________________________________________________________________________________ ================================================================================ Class B $ 211,043 ________________________________________________________________________________ ================================================================================ Class C $ 253,719 ________________________________________________________________________________ ================================================================================ Class R $ 77,109 ________________________________________________________________________________ ================================================================================ Class Y $ 211,047 ________________________________________________________________________________ ================================================================================ Investor Class $ 88,674,205 ________________________________________________________________________________ ================================================================================ Institutional Class $ 22,127,595 ________________________________________________________________________________ ================================================================================ SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 249,924 ________________________________________________________________________________ ================================================================================ Class B 33,118 ________________________________________________________________________________ ================================================================================ Class C 39,799 ________________________________________________________________________________ ================================================================================ Class R 11,947 ________________________________________________________________________________ ================================================================================ Class Y 32,476 ________________________________________________________________________________ ================================================================================ Investor Class 13,650,703 ________________________________________________________________________________ ================================================================================ Institutional Class 3,402,754 ________________________________________________________________________________ ================================================================================ Class A: Net asset value per share $ 6.47 - -------------------------------------------------------------------------------- Maximum offering price per share (Net asset value of $6.47 divided by 94.50%) $ 6.85 ________________________________________________________________________________ ================================================================================ Class B: Net asset value and offering price per share $ 6.37 ________________________________________________________________________________ ================================================================================ Class C: Net asset value and offering price per share $ 6.37 ________________________________________________________________________________ ================================================================================ Class R: Net asset value and offering price per share $ 6.45 ________________________________________________________________________________ ================================================================================ Class Y: Net asset value and offering price per share $ 6.50 ________________________________________________________________________________ ================================================================================ Investor Class: Net asset value and offering price per share $ 6.50 ________________________________________________________________________________ ================================================================================ Institutional Class: Net asset value and offering price per share $ 6.50 ________________________________________________________________________________ ================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 12 AIM STRUCTURED CORE FUND STATEMENT OF OPERATIONS For the year ended August 31, 2009 INVESTMENT INCOME: Dividends (net of foreign withholding taxes of $6,031) $ 2,620,046 - ------------------------------------------------------------------------------------------------ Dividends from affiliated money market funds (includes securities lending income of $63,910) 115,513 - ------------------------------------------------------------------------------------------------ Interest 2,857 ================================================================================================ Total investment income 2,738,416 ================================================================================================ EXPENSES: Advisory fees 655,360 - ------------------------------------------------------------------------------------------------ Administrative services fees 50,000 - ------------------------------------------------------------------------------------------------ Custodian fees 13,372 - ------------------------------------------------------------------------------------------------ Distribution fees: Class A 4,256 - ------------------------------------------------------------------------------------------------ Class B 2,472 - ------------------------------------------------------------------------------------------------ Class C 8,872 - ------------------------------------------------------------------------------------------------ Class R 292 - ------------------------------------------------------------------------------------------------ Investor Class 215,474 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- A, B, C, R, Y and Investor 199,792 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- Institutional 13,885 - ------------------------------------------------------------------------------------------------ Trustees' and officers' fees and benefits 21,773 - ------------------------------------------------------------------------------------------------ Registration and filing fees 84,205 - ------------------------------------------------------------------------------------------------ Other 71,572 ================================================================================================ Total expenses 1,341,325 ================================================================================================ Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (659,637) ================================================================================================ Net expenses 681,688 ================================================================================================ Net investment income 2,056,728 ================================================================================================ REALIZED AND UNREALIZED GAIN (LOSS) FROM: Net realized gain (loss) from: Investment securities (34,042,660) - ------------------------------------------------------------------------------------------------ Futures contracts (2,050,471) ================================================================================================ (36,093,131) ================================================================================================ Change in net unrealized appreciation of: Investment securities 1,332,184 - ------------------------------------------------------------------------------------------------ Futures contracts 243,361 ================================================================================================ 1,575,545 ================================================================================================ Net realized and unrealized gain (loss) (34,517,586) ================================================================================================ Net increase (decrease) in net assets resulting from operations $(32,460,858) ________________________________________________________________________________________________ ================================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 13 AIM STRUCTURED CORE FUND STATEMENT OF CHANGES IN NET ASSETS For the years ended August 31, 2009 and 2008
2009 2008 - -------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 2,056,728 $ 1,094,905 - -------------------------------------------------------------------------------------------------------- Net realized gain (loss) (36,093,131) 24,571,721 - -------------------------------------------------------------------------------------------------------- Change in net unrealized appreciation (depreciation) 1,575,545 (41,756,816) ======================================================================================================== Net increase (decrease) in net assets resulting from operations (32,460,858) (16,090,190) ======================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A (19,375) (3,257) - -------------------------------------------------------------------------------------------------------- Class B (2,573) -- - -------------------------------------------------------------------------------------------------------- Class C (12,547) -- - -------------------------------------------------------------------------------------------------------- Class R (451) -- - -------------------------------------------------------------------------------------------------------- Class Y (2,630) -- - -------------------------------------------------------------------------------------------------------- Investor Class (824,995) -- - -------------------------------------------------------------------------------------------------------- Institutional Class (224,782) (51,149) ======================================================================================================== Total distributions from net investment income (1,087,353) (54,406) ======================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS: Class A (370,361) (7,487) - -------------------------------------------------------------------------------------------------------- Class B (62,258) (3,837) - -------------------------------------------------------------------------------------------------------- Class C (303,605) (4,882) - -------------------------------------------------------------------------------------------------------- Class R (9,308) (3,252) - -------------------------------------------------------------------------------------------------------- Class Y (47,948) -- - -------------------------------------------------------------------------------------------------------- Investor Class (15,770,612) -- - -------------------------------------------------------------------------------------------------------- Institutional Class (3,572,911) (53,151) ======================================================================================================== Total distributions from net realized gains (20,137,003) (72,609) ======================================================================================================== SHARE TRANSACTIONS-NET: Class A 1,091,808 (400,725) - -------------------------------------------------------------------------------------------------------- Class B 127,039 (577,108) - -------------------------------------------------------------------------------------------------------- Class C 369,562 (706,858) - -------------------------------------------------------------------------------------------------------- Class R 37,691 (544,118) - -------------------------------------------------------------------------------------------------------- Class Y 283,846 -- - -------------------------------------------------------------------------------------------------------- Investor Class (4,831,505) 149,467,214 - -------------------------------------------------------------------------------------------------------- Institutional Class 2,149,035 31,561,248 ======================================================================================================== Net increase (decrease) in net assets resulting from share transactions (772,524) 178,799,653 ======================================================================================================== Net increase (decrease) in net assets (54,457,738) 162,582,448 ======================================================================================================== NET ASSETS: Beginning of year 167,630,210 5,047,762 ======================================================================================================== End of year (includes undistributed net investment income of $2,006,339 and $1,043,496, respectively) $113,172,472 $167,630,210 ________________________________________________________________________________________________________ ========================================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 14 AIM STRUCTURED CORE FUND NOTES TO FINANCIAL STATEMENTS August 31, 2009 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Structured Core Fund (the "Fund") is a series portfolio of AIM Counselor Series Trust (the "Trust"). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of seven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The Fund's investment objective is long-term growth of capital. The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class. Investor Class shares of the Fund are offered only to certain grandfathered investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waiver shares may be subject to contingent deferred sales charges ("CDSC"). Class B shares and Class C shares are sold with a CDSC. Class R, Class Y, Investor Class and Institutional Class shares are sold at net asset value. Under certain circumstances, Class R shares are subject to a CDSC. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase. 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 or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes 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 specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans. Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security's fair value. Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer's assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. 15 AIM STRUCTURED CORE FUND 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 periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held. Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund's net asset value and, accordingly, they reduce the Fund's total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the advisor. The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class. C. COUNTRY DETERMINATION -- For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment advisor may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer's securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. D. DISTRIBUTIONS -- Distributions from income and net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund's taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period. F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to the Institutional Class are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period end date and before the date the financial statements are released to print, which is generally 45 days from the period end date. H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund's servicing agreements, that contain a variety of indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. I. SECURITIES LENDING -- The Fund may lend portfolio securities having a market value up to one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. 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, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. 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. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. J. FUTURES CONTRACTS -- The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or 16 AIM STRUCTURED CORE FUND delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange- traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, 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. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. K. COLLATERAL -- To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund's practice to replace such collateral no later than the next business day. NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with Invesco Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Advisor based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE - ------------------------------------------------------------------- First $250 million 0.60% - ------------------------------------------------------------------- Next $250 million 0.575% - ------------------------------------------------------------------- Next $500 million 0.55% - ------------------------------------------------------------------- Next $1.5 billion 0.525% - ------------------------------------------------------------------- Next $2.5 billion 0.50% - ------------------------------------------------------------------- Next $2.5 billion 0.475% - ------------------------------------------------------------------- Next $2.5 billion 0.45% - ------------------------------------------------------------------- Over $10 billion 0.425% ___________________________________________________________________ ===================================================================
Under the terms of a master sub-advisory agreement approved by shareholders of the Fund between the Advisor and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-Advisor(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Advisor(s). Effective July 1, 2009, the Advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class shares to 1.00%, 1.75%, 1.75%, 1.25%, 0.75%, 1.00% and 0.75% of average daily net assets, respectively, through at least June 30, 2010. Prior to July 1, 2009, the Advisor had contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class shares to 0.60%, 1.35%, 1.35%, 0.85%, 0.35%, 0.60%, and 0.35% of average daily net assets, respectively. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items or non- routine items; (v) expenses related to a merger or reorganization, as approved by the Fund's Board of Trustees; (vi) expenses of the underlying funds that are paid indirectly as a result of share ownership of the underlying funds; and (vii) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, in addition to the expense reimbursement arrangement with Invesco Ltd. ("Invesco") described more fully below, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the Fund. Further, the Advisor has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Advisor receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds. For the year ended August 31, 2009, the Advisor waived advisory fees of $445,282 and reimbursed class level expenses of $3,769, $547, $1,964, $129, $462, $190,808 and $13,885 of Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class shares, respectively. At the request of the Trustees of the Trust, Invesco agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. These expenses along with the related expense reimbursement are included in the Statement of Operations. For the year ended August 31, 2009, Invesco reimbursed expenses of the Fund in the amount of $232. 17 AIM STRUCTURED CORE FUND The Trust has entered into a master administrative services agreement with Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain administrative costs incurred in providing accounting services to the Fund. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees. The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. IAIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IAIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust's Board of Trustees. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees. The Trust has entered into master distribution agreements with Invesco Aim Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class 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, Class B, Class C, Class R and Investor Class shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI compensation at the annual rate of 0.25% of the Fund's average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares, 0.50% of the average daily net assets of Class R shares and 0.25% of the average daily net assets of Investor Class shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority ("FINRA") impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. For the year ended August 31, 2009, expenses incurred under the Plans are shown in the Statement of Operations as distribution fees. Front-end sales commissions and CDSC (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the year ended August 31, 2009, IADI advised the Fund that IADI retained $1,580 in front-end sales commissions from the sale of Class A shares and $0, $1,831, $34 and $0 from Class A, Class B, Class C and Class R shares, respectively, for CDSC imposed on redemptions by shareholders. Certain officers and trustees of the Trust are officers and directors of Invesco Aim, IAIS and/or IADI. NOTE 3--ADDITIONAL VALUATION INFORMATION Generally Accepted Accounting Principles (GAAP) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level: Level 1 -- Prices are determined using quoted prices in an active market for identical assets. Level 2 -- Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. Level 3 -- Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. The following is a summary of the tiered valuation input levels, as of the end of the reporting period, August 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL - ------------------------------------------------------------------------------------------------------------------------- Equity Securities $112,278,306 $ -- $-- $112,278,306 - ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Securities -- 799,943 -- 799,943 - ------------------------------------------------------------------------------------------------------------------------- $113,078,249 ========================================================================================================================= Other Investments* 255,661 -- -- 255,661 ========================================================================================================================= Total Investments $112,533,967 $799,943 $-- $113,333,910 _________________________________________________________________________________________________________________________ =========================================================================================================================
* Other Investments include futures which are included at unrealized appreciation. NOTE 4--DERIVATIVE INVESTMENTS Effective March 1, 2009, the Fund has adopted the provisions of FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities. The standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position and financial performance. The adoption of this provision has no impact on the results of operations reported in the financial statements. 18 AIM STRUCTURED CORE FUND VALUE OF DERIVATIVE INSTRUMENTS AT PERIOD-END The Table below summarizes the value of the Fund's derivative instruments, detailed by primary risk exposure, held as of August 31, 2009:
VALUE ------------------------ RISK EXPOSURE/ DERIVATIVE TYPE ASSETS LIABILITIES - ------------------------------------------------------------------------------------------------------ Market risk Futures contracts(a) $260,474 $(4,813) ______________________________________________________________________________________________________ ======================================================================================================
(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day's variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. EFFECT OF DERIVATIVE INSTRUMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2009 The table below summarizes the gains on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
LOCATION OF GAIN ON STATEMENT OF OPERATIONS ----------------------- FUTURES* - ---------------------------------------------------------------------------------------------------- Realized Gain Market risk $ 622,501 ==================================================================================================== Change in Unrealized Appreciation Market risk 875,112 ==================================================================================================== Total $1,497,613 ____________________________________________________________________________________________________ ====================================================================================================
* The average value of outstanding futures during the period was $4,569,375.
OPEN FUTURES CONTRACTS - ------------------------------------------------------------------------------------------------------------------------ NUMBER OF MONTH/ UNREALIZED CONTRACT CONTRACTS COMMITMENT VALUE APPRECIATION - ------------------------------------------------------------------------------------------------------------------------ Chicago Mercantile Exchange S&P 500 Index 16 September-09/Long $4,078,800 $255,661 ________________________________________________________________________________________________________________________ ========================================================================================================================
NOTE 5--EXPENSE OFFSET ARRANGEMENT(S) The expense offset arrangements are comprised of (i) transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions, (ii) custodian credits which result from periodic overnight cash balances at the custodian and (iii) a one time custodian fee credit used to offset custodian fees. For the year ended August 31, 2009, the Fund received credits from these arrangements, which resulted in the reduction of the Fund's total expenses of $2,559. NOTE 6--TRUSTEES' AND OFFICERS' FEES AND BENEFITS "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officers' Fees and Benefits" also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund. During the year ended August 31, 2009, the Fund paid legal fees of $3,419 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. NOTE 7--CASH BALANCES The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco Aim, not to exceed the contractually agreed upon rate. 19 AIM STRUCTURED CORE FUND NOTE 8--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED AUGUST 31, 2009 AND 2008:
2009 2008 - ------------------------------------------------------------------------------------------------------ Ordinary income $ 1,093,885 $ 54,406 - ------------------------------------------------------------------------------------------------------ Long-term capital gain 20,130,471 72,609 ====================================================================================================== Total distributions $21,224,356 $127,015 ______________________________________________________________________________________________________ ======================================================================================================
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
2009 - ------------------------------------------------------------------------------------------------ Undistributed ordinary income $ 2,038,751 - ------------------------------------------------------------------------------------------------ Net unrealized appreciation -- investments 2,684,972 - ------------------------------------------------------------------------------------------------ Temporary book/tax differences (32,412) - ------------------------------------------------------------------------------------------------ Post-October deferrals (26,902,793) - ------------------------------------------------------------------------------------------------ Capital loss carryforward (9,871,752) - ------------------------------------------------------------------------------------------------ Shares of beneficial interest 145,255,706 ================================================================================================ Total net assets $113,172,472 ________________________________________________________________________________________________ ================================================================================================
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's net unrealized appreciation (depreciation) difference is attributable primarily to wash sales. The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits. Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. The Fund has a capital loss carryforward as of August 31, 2009 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* - ----------------------------------------------------------------------------------------------- August 31, 2017 $9,871,752 _______________________________________________________________________________________________ ===============================================================================================
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. NOTE 9--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended August 31, 2009 was $83,478,711 and $108,484,598, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ----------------------------------------------------------------------------------------------- Aggregate unrealized appreciation of investment securities $10,693,337 - ----------------------------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (8,008,365) =============================================================================================== Net unrealized appreciation of investment securities $ 2,684,972 _______________________________________________________________________________________________ =============================================================================================== Cost of investments for tax purposes is $110,393,277.
NOTE 10--RECLASSIFICATION OF PERMANENT DIFFERENCES Primarily as a result of differing book/tax treatment of distributions on August 31, 2009, undistributed net investment income was decreased by $6,532 and undistributed net realized gain (loss) was increased by $6,532. This reclassification had no effect on the net assets of the Fund. 20 AIM STRUCTURED CORE FUND NOTE 11--SHARE INFORMATION
SUMMARY OF SHARE ACTIVITY - ------------------------------------------------------------------------------------------------------------------------ YEAR ENDED AUGUST 31, ----------------------------------------------------------- 2009(a) 2008 --------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------------------------------------ Sold: Class A 441,071 $ 2,793,780 52,645 $ 550,487 - ------------------------------------------------------------------------------------------------------------------------ Class B 50,732 325,326 10,713 113,741 - ------------------------------------------------------------------------------------------------------------------------ Class C 311,615 2,058,767 100,723 1,010,754 - ------------------------------------------------------------------------------------------------------------------------ Class R 7,372 43,440 5,587 57,004 - ------------------------------------------------------------------------------------------------------------------------ Class Y(b) 38,159 313,750 -- -- - ------------------------------------------------------------------------------------------------------------------------ Investor Class(c) 1,882,307 11,430,231 878,241 9,098,926 - ------------------------------------------------------------------------------------------------------------------------ Institutional Class 627,262 3,748,959 1,946,816 21,051,375 ======================================================================================================================== Issued as reinvestment of dividends: Class A 68,237 384,176 931 10,620 - ------------------------------------------------------------------------------------------------------------------------ Class B 11,638 64,826 338 3,837 - ------------------------------------------------------------------------------------------------------------------------ Class C 56,301 313,598 424 4,818 - ------------------------------------------------------------------------------------------------------------------------ Class R 1,736 9,759 285 3,252 - ------------------------------------------------------------------------------------------------------------------------ Class Y 8,968 50,578 -- -- - ------------------------------------------------------------------------------------------------------------------------ Investor Class(c) 2,840,248 16,047,399 -- -- - ------------------------------------------------------------------------------------------------------------------------ Institutional Class 673,350 3,797,693 9,141 104,300 ======================================================================================================================== Issued in connection with acquisitions:(d) Investor Class -- -- 17,521,866 188,037,074 - ------------------------------------------------------------------------------------------------------------------------ Institutional Class -- -- 1,777,178 19,072,533 ======================================================================================================================== Automatic conversion of Class B shares to Class A shares: Class A 5,525 31,109 4,681 51,224 - ------------------------------------------------------------------------------------------------------------------------ Class B (5,596) (31,109) (4,713) (51,224) ======================================================================================================================== Reacquired: Class A(b) (361,111) (2,117,257) (98,908) (1,013,056) - ------------------------------------------------------------------------------------------------------------------------ Class B (40,515) (232,004) (65,478) (643,462) - ------------------------------------------------------------------------------------------------------------------------ Class C (353,556) (2,002,803) (169,375) (1,722,430) - ------------------------------------------------------------------------------------------------------------------------ Class R (2,550) (15,508) (61,725) (604,374) - ------------------------------------------------------------------------------------------------------------------------ Class Y (14,651) (80,482) -- -- - ------------------------------------------------------------------------------------------------------------------------ Investor Class(b)(c) (4,899,493) (32,309,135) (4,572,466) (47,668,786) - ------------------------------------------------------------------------------------------------------------------------ Institutional Class (863,365) (5,397,617) (851,641) (8,666,960) ======================================================================================================================== Net increase (decrease) in share activity 483,684 $ (772,524) 16,485,263 $178,799,653 ________________________________________________________________________________________________________________________ ========================================================================================================================
(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 20% of the outstanding shares of the Fund. IADI has an agreement with these entities to sell Fund shares. The Fund, Invesco Aim and/or Invesco Aim affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco Aim and/or Invesco Aim affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. (b) Effective upon the commencement date of Class Y shares, October 3, 2008, the following shares were converted from Class A and Investor Class into Class Y shares of the Fund:
CLASS SHARES AMOUNT -------------------------------------------------------------------------------------------------- Class Y 35,513 $ 294,403 -------------------------------------------------------------------------------------------------- Class A (2,881) (23,882) -------------------------------------------------------------------------------------------------- Investor Class (32,593) (270,521) __________________________________________________________________________________________________ ==================================================================================================
(c) Investor Class shares commenced on April 25, 2008. (d) As of the open of business on April 28, 2008, the Fund acquired all the net assets of AIM S&P 500 Index Fund pursuant to a plan of reorganization approved by the Trustees of the Fund on October 30, 2007 and by the shareholders of AIM S&P 500 Index Fund on March 28, 2008. The acquisition was accomplished by a tax-free exchange of 19,299,044 shares of the Fund for 14,941,286 shares outstanding of AIM S&P 500 Index Fund as of the close of business on April 25, 2008. Each class of AIM S&P 500 Index Fund was exchanged for the like class of shares of the Fund based on the relative net asset value of AIM S&P 500 Index Fund to the net asset value of the Fund on the close of business, April 25, 2008. AIM S&P 500 Index Fund's net assets at that date of $207,109,606 including $44,541,884 of unrealized appreciation, was combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $15,694,957. The net assets of the Fund immediately following the acquisition were $222,804,563. 21 AIM STRUCTURED CORE FUND NOTE 12--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
NET GAINS (LOSSES) NET ASSET NET ON SECURITIES DIVIDENDS DISTRIBUTIONS VALUE, INVESTMENT (BOTH TOTAL FROM FROM NET FROM NET NET ASSET BEGINNING INCOME REALIZED AND INVESTMENT INVESTMENT REALIZED TOTAL VALUE, END OF PERIOD (LOSS) UNREALIZED) OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Year ended 08/31/09 $ 9.89 $ 0.11(c) $(2.16) $(2.05) $(0.07) $(1.30) $(1.37) $ 6.47 Year ended 08/31/08 11.19 0.14(c) (1.37) (1.23) (0.02) (0.05) (0.07) 9.89 Year ended 08/31/07 10.19 0.08(c) 1.10 1.18 (0.18) -- (0.18) 11.19 Year ended 08/31/06(e) 10.00 0.04 0.15 0.19 -- -- -- 10.19 - --------------------------------------------------------------------------------------------------------------------------------- CLASS B Year ended 08/31/09 9.79 0.06(c) (2.13) (2.07) (0.05) (1.30) (1.35) 6.37 Year ended 08/31/08 11.14 0.06(c) (1.36) (1.30) -- (0.05) (0.05) 9.79 Year ended 08/31/07 10.16 (0.01)(c) 1.10 1.09 (0.11) -- (0.11) 11.14 Year ended 08/31/06(e) 10.00 0.01 0.15 0.16 -- -- -- 10.16 - --------------------------------------------------------------------------------------------------------------------------------- CLASS C Year ended 08/31/09 9.79 0.06(c) (2.13) (2.07) (0.05) (1.30) (1.35) 6.37 Year ended 08/31/08 11.14 0.06(c) (1.36) (1.30) -- (0.05) (0.05) 9.79 Year ended 08/31/07 10.16 (0.01)(c) 1.10 1.09 (0.11) -- (0.11) 11.14 Year ended 08/31/06(e) 10.00 0.01 0.15 0.16 -- -- -- 10.16 - --------------------------------------------------------------------------------------------------------------------------------- CLASS R Year ended 08/31/09 9.86 0.10(c) (2.15) (2.05) (0.06) (1.30) (1.36) 6.45 Year ended 08/31/08 11.17 0.11(c) (1.37) (1.26) -- (0.05) (0.05) 9.86 Year ended 08/31/07 10.18 0.05(c) 1.10 1.15 (0.16) -- (0.16) 11.17 Year ended 08/31/06(e) 10.00 0.03 0.15 0.18 -- -- -- 10.18 - --------------------------------------------------------------------------------------------------------------------------------- CLASS Y Year ended 08/31/09(e) 8.29 0.12(c) (0.54) (0.42) (0.07) (1.30) (1.37) 6.50 - --------------------------------------------------------------------------------------------------------------------------------- INVESTOR CLASS Year ended 08/31/09 9.90 0.12(c) (2.15) (2.03) (0.07) (1.30) (1.37) 6.50 Year ended 08/31/08(e) 10.73 0.05(c) (0.88) (0.83) -- -- -- 9.90 - --------------------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL CLASS Year ended 08/31/09 9.91 0.13(c) (2.16) (2.03) (0.08) (1.30) (1.38) 6.50 Year ended 08/31/08 11.21 0.16(c) (1.36) (1.20) (0.05) (0.05) (0.10) 9.91 Year ended 08/31/07 10.20 0.10(c) 1.10 1.20 (0.19) -- (0.19) 11.21 Year ended 08/31/06(e) 10.00 0.05 0.15 0.20 -- -- -- 10.20 _________________________________________________________________________________________________________________________________ ================================================================================================================================= RATIO OF RATIO OF EXPENSES EXPENSES TO AVERAGE TO AVERAGE NET RATIO OF NET NET ASSETS ASSETS WITHOUT INVESTMENT NET ASSETS, WITH FEE WAIVERS FEE WAIVERS INCOME (LOSS) TOTAL END OF PERIOD AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO RETURN(a) (000S OMITTED) ABSORBED ABSORBED NET ASSETS TURNOVER(b) - ------------------------------------------------------------------------------------------------------------------- CLASS A Year ended 08/31/09 (18.66)% $ 1,618 0.66%(d) 1.29%(d) 1.85%(d) 77% Year ended 08/31/08 (11.03) 951 0.75 1.93 1.34 118 Year ended 08/31/07 11.60 1,532 1.02 6.88 0.67 79 Year ended 08/31/06(e) 1.90 985 1.06(f) 10.44(f) 0.95(f) 25 - ------------------------------------------------------------------------------------------------------------------- CLASS B Year ended 08/31/09 (19.10) 211 1.41(d) 2.04(d) 1.10(d) 77 Year ended 08/31/08 (11.71) 165 1.50 2.68 0.59 118 Year ended 08/31/07 10.74 847 1.77 7.63 (0.08) 79 Year ended 08/31/06(e) 1.60 640 1.81(f) 11.19(f) 0.20(f) 25 - ------------------------------------------------------------------------------------------------------------------- CLASS C Year ended 08/31/09 (19.10) 254 1.41(d) 2.04(d) 1.10(d) 77 Year ended 08/31/08 (11.71) 249 1.50 2.68 0.59 118 Year ended 08/31/07 10.74 1,043 1.77 7.63 (0.08) 79 Year ended 08/31/06(e) 1.60 625 1.81(f) 11.19(f) 0.20(f) 25 - ------------------------------------------------------------------------------------------------------------------- CLASS R Year ended 08/31/09 (18.70) 77 0.91(d) 1.54(d) 1.60(d) 77 Year ended 08/31/08 (11.32) 53 1.00 2.18 1.09 118 Year ended 08/31/07 11.33 684 1.27 7.13 0.42 79 Year ended 08/31/06(e) 1.80 611 1.31(f) 10.69(f) 0.70(f) 25 - ------------------------------------------------------------------------------------------------------------------- CLASS Y Year ended 08/31/09(e) (2.50) 211 0.43(d)(f) 1.07(d)(f) 2.08(d)(f) 77 - ------------------------------------------------------------------------------------------------------------------- INVESTOR CLASS Year ended 08/31/09 (18.43) 88,674 0.66(d) 1.29(d) 1.85(d) 77 Year ended 08/31/08(e) (7.73) 136,838 0.60(f) 1.10(f) 1.49(f) 118 - ------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL CLASS Year ended 08/31/09 (18.32) 22,128 0.41(d) 0.89(d) 2.10(d) 77 Year ended 08/31/08 (10.79) 29,374 0.50 1.57 1.59 118 Year ended 08/31/07 11.85 942 0.77 6.55 0.92 79 Year ended 08/31/06(e) 2.00 612 0.80(f) 10.14(f) 1.21(f) 25 ___________________________________________________________________________________________________________________ ===================================================================================================================
(a) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. (b) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ending August 31, 2008, the portfolio turnover calculation excludes the value of securities purchased of $152,787,103 and sold of $149,849,402 in effort to realign the Fund's portfolio holdings after the reorganization of AIM S&P 500 Index Fund into the Fund. (c) Calculated using average shares outstanding. (d) Ratios are based on average daily net assets (000's omitted) of $1,702, $247, $887, $58, $221, $86,189 and $19,943 for Class A, Class B, Class C, Class R, Class Y, Investor Class and Institutional Class shares, respectively. (e) Commencement date of March 31, 2006 for Class A, Class B, Class C and Institutional Class shares. Commencement date of October 3, 2008 and April 25, 2008 for Class Y and Investor Class shares, respectively. (f) Annualized. 22 AIM STRUCTURED CORE FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees of AIM Counselor Series Trust and Shareholders of AIM Structured Core 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 AIM Structured Core Fund (one of the funds constituting AIM Counselor Series Trust, hereafter referred to as the "Fund") at August 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PRICEWATERHOUSECOOPERS LLP October 16, 2009 Houston, Texas 23 AIM STRUCTURED CORE FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2,4) (08/31/09) PERIOD(2,5) RATIO(3) - --------------------------------------------------------------------------------------------------- A $1,000.00 $1,370.80 $4.36 $1,021.53 $3.72 0.73% - --------------------------------------------------------------------------------------------------- B 1,000.00 1,364.00 8.82 1,017.74 7.53 1.48 - --------------------------------------------------------------------------------------------------- C 1,000.00 1,364.00 8.82 1,017.74 7.53 1.48 - --------------------------------------------------------------------------------------------------- R 1,000.00 1,369.40 5.85 1,020.27 4.99 0.98 - --------------------------------------------------------------------------------------------------- Y 1,000.00 1,371.30 2.87 1,022.79 2.45 0.48 - --------------------------------------------------------------------------------------------------- Investor 1,000.00 1,371.30 4.36 1,021.53 3.72 0.73 - ---------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009 through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. (3) Effective July 1, 2009, the fund's advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit Total Annual Fund Operating Expenses of Class A, Class B, Class C, Class R, Class Y, and Investor Class shares to 1.00%, 1.75%, 1.75%, 1.25%, 0.75% and 1.00% of the average daily net assets, respectively. The annualized expense ratios restated as if these agreements had been in effect throughout the entire most recent fiscal half year are 1.00%, 1.75%, 1.75%, 1.25%, 0.75% and 1.00% for Class A, Class B, Class C, Class R, Class Y and Investor Class, respectively. (4) The actual expenses paid restated if the changes discussed above had been in effect throughout the entire most recent fiscal half year are $5.98, $10.43, $10.43, $7.47, $4.48 and $5.98 for Class A, Class B, Class C, Class R, Class Y and Investor Class shares, respectively. (5) Hypothetical expenses are equal to the annualized expense ratio indicated above multiplied by the average account value over the period multiplied by 184/365 to reflect a one-half year period. The hypothetical expenses paid restated as if the changes discussed above in footnote 3 had been in effect throughout the most recent fiscal half year are $5.09, $8.89, $8.89, $6.36, $3.82 and $5.09 for Class A, Class B, Class C, Class R, Class Y and Investor Class shares, respectively. 24 AIM STRUCTURED CORE FUND Supplement to Annual Report dated 8/31/09 AIM STRUCTURED CORE FUND INSTITUTIONAL CLASS SHARES ------------------------------------------ Please note that past performance is AVERAGE ANNUAL TOTAL RETURNS not indicative of future results. More The following information has been For periods ended 8/31/09 recent returns may be more or less than prepared to provide Institutional Class those shown. All returns assume shareholders with a performance overview Inception (3/31/06) -5.26% reinvestment of distributions at NAV. specific to their holdings. Institutional ------------------------------------------ Investment return and principal value will Class shares are offered exclusively to 1 Year -18.32 fluctuate so your shares, when redeemed, institutional investors, including defined ------------------------------------------ may be worth more or less than their contribution plans that meet certain original cost. See full report for criteria. ------------------------------------------ information on comparative benchmarks. AVERAGE ANNUAL TOTAL RETURNS Please consult your Fund prospectus for more information. For the most current For periods ended 6/30/09, the most recent month-end performance, please call calendar quarter-end 800 451 4246 or visit invescoaim.com. Inception (3/31/06) -8.49% (1) Total annual operating expenses less ------------------------------------------ any contractual fee waivers and/or 1 Year -26.73 expense reimbursements by the advisor ------------------------------------------ in effect through at least June 30, 2010. See current prospectus for more Institutional Class shares have no sales information. charge; therefore, performance is at net asset value (NAV). Performance of Institutional Class shares will differ from performance of other share classes primarily due to differing sales charges and class expenses. The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 0.75%.(1) The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 0.86%. The expense ratios presented above may vary from the expense ratios presented in other sections of the actual report that are based on expenses incurred during the period covered by the report. Had the advisor not waived fees and/or reimbursed expenses, performance would have been lower. - ------------------------------------------ NASDAQ SYMBOL SCIUX Over for information on your Fund's expenses. - --------------------------------------------------------------------------------------- THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FOR INSTITUTIONAL INVESTOR USE ONLY -- NOT FOR USE WITH THE PUBLIC THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED, SHOWN TO THE PUBLIC [INVESCO AIM LOGO] OR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. - service mark - invescoaim.com SCOR-INS-1 Invesco Aim Distributors, Inc.
Supplement to Annual Report dated 8/31/09 AIM STRUCTURED CORE FUND RESULTS OF A $10,000 INVESTMENT -- INSTITUTIONAL CLASS SHARES SINCE INCEPTION Fund and index data from 3/31/06 [PERFORMANCE CHART] AIM STRUCTURED CORE FUND- LIPPER INSTITUTIONAL LARGE-CAP CLASS S&P 500 CORE FUNDS SHARES INDEX(1) INDEX(1) ------------- -------- ---------- 3/31/2006 10000 10000 10000 04/06 10040 10134 10104 05/06 9740 9843 9798 06/06 9840 9856 9806 07/06 9710 9917 9772 08/06 9940 10152 10015 09/06 10251 10414 10226 10/06 10711 10753 10567 11/06 10921 10957 10774 12/06 10881 11111 10883 01/07 11233 11279 11059 02/07 10932 11059 10868 03/07 11133 11182 10977 04/07 11495 11677 11434 05/07 11997 12084 11824 06/07 11706 11884 11681 07/07 11425 11516 11352 08/07 11525 11688 11482 09/07 11967 12125 11897 10/07 12568 12318 12154 11/07 12237 11802 11671 12/07 12426 11721 11604 01/08 11068 11018 10925 02/08 10850 10660 10642 03/08 10757 10614 10503 04/08 11233 11131 11020 05/08 11493 11275 11220 06/08 10788 10325 10351 07/08 10653 10239 10204 08/08 10601 10387 10335 09/08 9140 9462 9381 10/08 7430 7873 7791 11/08 6756 7308 7175 12/08 6979 7385 7302 01/09 6540 6763 6736 02/09 6017 6046 6084 03/09 6592 6574 6599 04/09 7219 7203 7270 05/09 7480 7605 7702 06/09 7532 7621 7693 07/09 8096 8196 8283 08/09 8313 8492 8571 (1) Lipper Inc. Past performance cannot guarantee shown in the chart and table(s) does not is that of the Fund's Class A, B, C and R comparable future results. reflect deduction of taxes a shareholder shares. The performance of the Fund's would pay on Fund distributions or sale of other share classes will differ primarily The data shown in the chart above Fund shares. Performance of the indexes due to different sales charge structures includes reinvested distributions and Fund does not reflect the effects of taxes. and class expenses, and may be greater expenses including management fees. Index than or less than the performance of the results include reinvested dividends. The performance data shown in the chart Fund's Institutional Class shares shown in Performance of an index of funds reflects above is that of the Fund's institutional the chart above. fund expenses and management fees; share class. The performance data shown in performance of a market index does not. the chart in the annual report Performance - --------------------------------------------------------------------------------------- THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FOR INSTITUTIONAL INVESTOR USE ONLY -- NOT FOR USE WITH THE PUBLIC THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED, SHOWN TO THE PUBLIC [INVESCO AIM LOGO] OR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. - service mark - invescoaim.com SCOR-INS-1 Invesco Aim Distributors, Inc.
CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
- ----------------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2,4) (08/31/09) PERIOD(2,5) RATIO(3) - ----------------------------------------------------------------------------------------------------------- Institutional $1,000.00 $1,371.30 $2.87 $1,022.79 $2.45 0.48% - -----------------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009 through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. (3) Effective July 1, 2009, the fund's advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit Total Annual Fund Operating Expenses of the Institutional Class shares to 0.75% of average daily net assets. The annualized expense ratio restated as if this agreement had been in effect throughout the entire most recent fiscal half year is 0.75% for the Institutional Class shares. (4) The actual expenses paid restated if the changes discussed above had been in effect throughout the entire most recent fiscal half year is $4.48 for the Institutional Class shares. (5) The hypothetical expenses paid restated as if the changes discussed above in footnote 3 had been in effect throughout the entire most recent fiscal half year is $3.82 for the Institutional Class shares. AIM STRUCTURED CORE FUND - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS The Board of Trustees (the Board) of AIM strategies and limitations of these funds. the year as part of their ongoing Counselor Series Trust is required under oversight of the Fund, and did not the Investment Company Act of 1940 to In addition to their meetings identify any particular factor that was approve annually the renewal of the AIM throughout the year, the Sub-Committees controlling. Each Trustee may have Structured Core Fund (the Fund) investment meet at designated contract renewal evaluated the information provided advisory agreement with Invesco Aim meetings each year to conduct an in-depth differently from another Trustee and Advisors, Inc. (Invesco Aim) and the review of the performance, fees, expenses, attributed different weight to the various Master Intergroup Sub-Advisory Contract and other matters related to their factors. The Trustees recognized that the for Mutual Funds (the sub-advisory assigned funds. During the contract advisory arrangements and resulting contracts) with Invesco Asset Management renewal process, the Trustees receive advisory fees for the Fund and the other Deutschland GmbH, Invesco Asset Management comparative performance and fee data AIM Funds are the result of years of Limited, Invesco Asset Management (Japan) regarding the AIM Funds prepared by an review and negotiation between the Limited, Invesco Australia Limited, independent company, Lipper, Inc. Trustees and Invesco Aim, that the Invesco Global Asset Management (N.A.), (Lipper), under the direction and Trustees may focus to a greater extent on Inc., Invesco Hong Kong Limited, Invesco supervision of the Senior Officer who also certain aspects of these arrangements in Institutional (N.A.), Inc., Invesco Senior prepares a separate analysis of this some years than in others, and that the Secured Management, Inc. and Invesco information for the Trustees. Each Trustees' deliberations and conclusions in Trimark Ltd. (collectively, the Affiliated Sub-Committee then makes recommendations a particular year may be based in part on Sub-Advisers). During contract renewal to the Investments Committee regarding the their deliberations and conclusions meetings held on June 16-17, 2009, the fees and expenses of their assigned funds. regarding these same arrangements Board as a whole, and the disinterested or The Investments Committee considers each throughout the year and in prior years. "independent" Trustees voting separately, Sub-Committee's recommendations and makes approved the continuance of the Fund's its own recommendations regarding the fees The discussion below serves as a investment advisory agreement and the and expenses of the AIM Funds to the full summary of the Senior Officer's sub-advisory contracts for another year, Board. The Investments Committee also independent written evaluation with effective July 1, 2009. In doing so, the considers each Sub-Committee's respect to the Fund's investment advisory Board determined that the Fund's recommendations in making its annual agreement as well as a discussion of the investment advisory agreement and the recommendation to the Board whether to material factors and related conclusions sub-advisory contracts are in the best approve the continuance of each AIM Fund's that formed the basis for the Board's interests of the Fund and its shareholders investment advisory agreement and approval of the Fund's investment advisory and that the compensation to Invesco Aim sub-advisory contracts for another year. agreement and sub-advisory contracts. and the Affiliated Sub-Advisers under the Unless otherwise stated, information set Fund's investment advisory agreement and The independent Trustees met separately forth below is as of June 17, 2009, and sub-advisory contracts is fair and during their evaluation of the Fund's does not reflect any changes that may have reasonable. investment advisory agreement and occurred since that date, including but sub-advisory contracts with independent not limited to changes to the Fund's THE BOARD'S FUND EVALUATION PROCESS legal counsel. The independent Trustees performance, advisory fees, expense were also assisted in their annual limitations and/ or fee waivers. The Board's Investments Committee has evaluation of the Fund's investment established three Sub-Committees that are advisory agreement by the Senior Officer. FACTORS AND CONCLUSIONS AND SUMMARY OF responsible for overseeing the management One responsibility of the Senior Officer INDEPENDENT WRITTEN FEE EVALUATION of a number of the series portfolios of is to manage the process by which the AIM the AIM Funds. This Sub-Committee Funds' proposed management fees are A. Nature, Extent and Quality of structure permits the Trustees to focus on negotiated during the annual contract Services Provided by Invesco Aim the performance of the AIM Funds that have renewal process to ensure that they are been assigned to them. The Sub-Committees negotiated in a manner that is at arms' The Board reviewed the advisory services meet throughout the year to review the length and reasonable. Accordingly, the provided to the Fund by Invesco Aim under performance of their assigned funds, and Senior Officer must either supervise a the Fund's investment advisory agreement, the Sub-Committees review monthly and competitive bidding process or prepare an the performance of Invesco Aim in quarterly comparative performance independent written evaluation. The Senior providing these services, and the information and periodic asset flow data Officer recommended that an independent credentials and experience of the officers for their assigned funds. These materials written evaluation be provided and, at the and employees of Invesco Aim who provide are prepared under the direction and direction of the Board, prepared an these services. The Board's review of the supervision of the independent Senior independent written evaluation. qualifications of Invesco Aim to provide Officer, an officer of the AIM Funds who these services included the Board's reports directly to the independent During the annual contract renewal consideration of Invesco Aim's portfolio Trustees. Over the course of each year, process, the Board considered the factors and product review process, various back the Sub-Committees meet with portfolio discussed below in evaluating the fairness office support functions provided by managers for their assigned funds and and reasonableness of the Fund's Invesco Aim and its affiliates, and other members of management and review investment advisory agreement and Invesco Aim's equity and fixed income with these individuals the performance, sub-advisory contracts. The Board trading operations. The Board concluded investment objective(s), policies, considered all of the information provided that the nature, extent and quality of the to them, including information provided at advisory services provided to the Fund by their meetings throughout Invesco Aim are appropriate and that Invesco Aim 25 AIM STRUCTURED CORE FUND continued
currently is providing satisfactory ers by permitting Invesco Aim to utilize group that was publicly available as of advisory services in accordance with the the additional resources and talent of the the end of the past calendar year. The terms of the Fund's investment advisory Affiliated Sub-Advisers in managing the Board noted that some comparative data was agreement. In addition, based on their Fund. at least one year old and that other data ongoing meetings throughout the year with did not reflect the market downturn that the Fund's portfolio manager or managers, C. Fund Performance occurred in the fourth quarter of 2008. the Board concluded that these individuals are competent and able to continue to The Board considered Fund performance as a The Board compared the Fund's carry out their responsibilities under the relevant factor in considering whether to sub-advisory fee rate to the effective fee Fund's investment advisory agreement. approve the investment advisory agreement rates (the advisory fee after any advisory as well as the sub-advisory contracts for fee waivers and before any expense In determining whether to continue the the Fund, as Invesco Institutional limitations/waivers) of numerous Fund's investment advisory agreement, the currently manages assets of the Fund. separately managed accounts/wrap accounts Board considered the prior relationship advised or sub-advised by Invesco between Invesco Aim and the Fund, as well The Board noted that the Fund recently Institutional. The Board noted that the as the Board's knowledge of Invesco Aim's began operations and that only two Fund's sub-advisory fee rate was generally operations, and concluded that it is calendar years of comparative performance at or below the rates for the separately beneficial to maintain the current data was available. The Board compared the managed accounts/ wrap accounts advised or relationship, in part, because of such Fund's performance during the one and two sub-advised by Invesco Institutional. The knowledge. The Board also considered the year periods to the performance of all Board considered that management of the steps that Invesco Aim and its affiliates funds in the Lipper performance universe separately managed accounts/wrap accounts continue to take to improve the quality that are not managed by Invesco Aim or an by Invesco Institutional involves and efficiency of the services they Affiliated Sub-Adviser and against the different levels of services and different provide to the AIM Funds in the areas of Lipper Large Cap Core Funds Index. The operational and regulatory requirements investment performance, product line Board noted that the Fund's performance than Invesco Aim's and Invesco diversification, distribution, fund was in the third quintile of its Institutional's management of the Fund. operations, shareholder services and performance universe for the one and two The Board concluded that these differences compliance. The Board concluded that the year periods (the first quintile being the are appropriately reflected in the fee quality and efficiency of the services best performing funds and the fifth structure for the Fund. Invesco Aim and its affiliates provide to quintile being the worst performing the AIM Funds in each of these areas funds). The Board noted that the Fund's The Board noted that Invesco Aim support the Board's approval of the performance was above the performance of contractually agreed to continue to waive continuance of the Fund's investment the Index for the one year period and fees and/or limit expenses of the Fund advisory agreement. below the performance of the Index for the through at least June 30, 2010 in an two year period. Although the independent amount necessary to limit total annual B. Nature, Extent and Quality of written evaluation of the Fund's Senior operating expenses to a specified Services Provided by Affiliated Officer only considered Fund performance percentage of average daily net assets for Sub-Advisers through the most recent calendar year, the each class of the Fund. The Board noted Board also reviewed more recent Fund that the specified percentage before the The Board reviewed the services performance and this review did not change waiver becomes effective has been provided by the Affiliated Sub-Advisers their conclusions. The Board noted that, increased effective July 1, 2009, and that under the sub-advisory contracts and the in response to the Board's focus on fund the waiver will have a smaller impact on credentials and experience of the officers performance, Invesco Aim has taken a expenses during the coming year. The Board and employees of the Affiliated number of actions intended to improve the also noted that Invesco Aim has agreed to Sub-Advisers who provide these services. investment process for the funds. reduce the per account transfer agent fee The Board concluded that the nature, for all the retail funds, including the extent and quality of the services D. Advisory and Sub-Advisory Fees and Fund, effective July 1, 2009. provided by the Affiliated Sub-Advisers Fee Waivers are appropriate. The Board noted that the The Board also considered the services Affiliated Sub-Advisers, which have The Board compared the Fund's contractual provided by the Affiliated Sub-Advisers offices and personnel that are advisory fee rate to the contractual pursuant to the sub-advisory contracts and geographically dispersed in financial advisory fee rates of funds in the Fund's the services provided by Invesco Aim centers around the world, can provide Lipper expense group that are not managed pursuant to the Fund's advisory agreement, research and other information and make by Invesco Aim or an Affiliated as well as the allocation of fees between recommendations on the markets and Sub-Adviser, at a common asset level. The Invesco Aim and the Affiliated economies of various countries and Board noted that the Fund's contractual Sub-Advisers pursuant to the sub-advisory securities of companies located in such advisory fee rate was below the median contracts. The Board noted that the countries or on various types of contractual advisory fee rate of funds in sub-advisory fees have no direct effect on investments and investment techniques. The its expense group. The Board also reviewed the Fund or its shareholders, as they are Board noted that investment decisions for the methodology used by Lipper in paid by Invesco Aim to the Affiliated the Fund are made by Invesco Institutional determining contractual fee rates, which Sub-Advisers, and that Invesco Aim and the (N.A.), Inc. (Invesco Institutional). The includes using audited financial data from Affiliated Sub-Advisers are affiliates. Board concluded that the sub-advisory the most recent annual report of each fund contracts benefit the Fund and its in the expense After taking account of the Fund's sharehold- contractual advisory fee rate, the 26 AIM STRUCTURED CORE FUND continued
contractual sub-advisory fee rate, the Invesco Aim has the financial resources market funds attributable to such comparative advisory fee information necessary to fulfill these obligations. investments, although Invesco Aim has discussed above, expense limitations and The Board also considered whether each contractually agreed to waive through at other relevant factors, the Board Affiliated Sub-Adviser is financially least June 30, 2010, the advisory fees concluded that the Fund's advisory and sound and has the resources necessary to payable by the Fund in an amount equal to sub-advisory fees are fair and reasonable. perform its obligations under the 100% of the net advisory fee Invesco Aim sub-advisory contracts, and concluded that receives from the affiliated money market E. Economies of Scale and Breakpoints each Affiliated Sub-Adviser has the funds with respect to the Fund's financial resources necessary to fulfill investment in the affiliated money market The Board considered the extent to which these obligations. funds of uninvested cash, but not cash there are economies of scale in the collateral. The Board concluded that the provision of advisory services to the G. Collateral Benefits to Invesco Aim Fund's investment of uninvested cash and Fund. The Board also considered whether and its Affiliates cash collateral from any securities the Fund benefits from such economies of lending arrangements in the affiliated scale through contractual breakpoints in The Board considered various other money market funds is in the best the Fund's advisory fee schedule. The benefits received by Invesco Aim and its interests of the Fund and its Board noted that the Fund's contractual affiliates resulting from Invesco Aim's shareholders. advisory fee schedule includes seven relationship with the Fund, including the breakpoints, but that due to the Fund's fees received by Invesco Aim and its asset level at the end of the past affiliates for their provision of calendar year, the Fund has yet to benefit administrative, transfer agency and from the breakpoints. The Board also noted distribution services to the Fund. The that the Fund shares directly in economies Board considered the performance of of scale through lower fees charged by Invesco Aim and its affiliates in third party service providers based on the providing these services and the combined size of all of the AIM Funds and organizational structure employed by affiliates. Invesco Aim and its affiliates to provide these services. The Board also considered F. Profitability and Financial that these services are provided to the Resources Fund pursuant to written contracts that are reviewed and approved on an annual The Board reviewed information from basis by the Board. The Board concluded Invesco Aim concerning the costs of the that Invesco Aim and its affiliates are advisory and other services that Invesco providing these services in a satisfactory Aim and its affiliates provide to the Fund manner and in accordance with the terms of and the profitability of Invesco Aim and their contracts, and are qualified to its affiliates in providing these continue to provide these services to the services. The Board also reviewed Fund. information concerning the financial condition of Invesco Aim and its The Board considered the benefits affiliates. The Board reviewed with realized by Invesco Aim and the Affiliated Invesco Aim the methodology used to Sub-Advisers as a result of portfolio prepare the profitability information. The brokerage transactions executed through Board considered the overall profitability "soft dollar" arrangements. The Board of Invesco Ltd., the ultimate parent of noted that soft dollar arrangements shift Invesco Aim and the Affiliated the payment obligation for research and Sub-Advisers, and of Invesco Aim, as well execution services from Invesco Aim and as the profitability of Invesco Aim in the Affiliated Sub-Advisers to the funds connection with managing the Fund. The and therefore may reduce Invesco Aim's and Board noted that Invesco Aim continues to the Affiliated Sub-Advisers' expenses. The operate at a net profit, although the Board concluded that Invesco Aim's and the reduction of assets under management as a Affiliated Sub-Advisers' soft dollar result of market movements and the arrangements are appropriate. The Board increase in voluntary fee waivers for also concluded that, based on their review affiliated money market funds have reduced and representations made by the Chief the profitability of Invesco Aim and its Compliance Officer of Invesco Aim, these affiliates. The Board concluded that the arrangements are consistent with Fund's fees are fair and reasonable, and regulatory requirements. that the level of profits realized by Invesco Aim and its affiliates from The Board considered the fact that the providing services to the Fund is not Fund's uninvested cash and cash collateral excessive in light of the nature, quality from any securities lending arrangements and extent of the services provided. The may be invested in money market funds Board considered whether Invesco Aim is advised by Invesco Aim pursuant to financially sound and has the resources procedures approved by the Board. The necessary to perform its obligations under Board noted that Invesco Aim will receive the Fund's investment advisory agreement, advisory fees from these affiliated money and concluded that 27 AIM STRUCTURED CORE FUND
TAX INFORMATION Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors. The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement. The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended August 31, 2009:
FEDERAL AND STATE INCOME TAX ---------------------------- Long-Term Capital Gain Dividends $20,130,471 Qualified Dividend Income* 100.00% Corporate Dividends Received Deduction* 100.00% U.S. Treasury Obligations* 0.11%
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year. 28 AIM STRUCTURED CORE FUND Trustees and Officers The address of each trustee and officer of AIM Counselor Series Trust (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------------ Martin L. Flanagan(1) -- 1960 2007 Executive Director, Chief Executive Officer and President, None Trustee Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Chairman, Invesco Aim Advisors, Inc. (registered investment advisor); Trustee, The AIM Family of Funds(R); Vice Chairman, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd. and Chairman, Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and Principal Executive Officer President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company) and Invesco Aim Capital Management, Inc. (registered investment advisor); Director and President, INVESCO Funds Group, Inc. (registered investment advisor and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltee (registered investment advisor and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: President, Invesco Trimark Dealer Inc.; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Director and President, Invesco Trimark Ltd./Invesco Trimark Ltee; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited (insurance Trustee and Chair consulting company) company); Captaris, Inc. (unified messaging provider); and Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Bob R. Baker -- 1936 1983 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Bayley -- 1939 2003 Retired None Trustee Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Board of Governors, Trustee firm) Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association - ------------------------------------------------------------------------------------------------------------------------------------ Albert R. Dowden -- 1941 2003 Director of a number of public and private business Board of Nature's Trustee corporations, including the Boss Group Ltd. (private Sunshine Products, Inc. investment and management); Continental Energy Services, LLC (oil and gas pipeline service); Reich & Tang Funds (registered investment company), and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, CompuDyne Corporation (provider of product and services to the public security market); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Senior Vice President, AB Volvo; Director of various public and private corporations - ------------------------------------------------------------------------------------------------------------------------------------ Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff Trustee (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) - ------------------------------------------------------------------------------------------------------------------------------------ Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich & Tang Trustee Funds (16 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ Prema Mathai-Davis -- 1950 2003 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Larry Soll -- 1942 1997 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Raymond Stickel, Jr. -- 1944 2005 Retired None Trustee Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Flanagan is considered an interested person of the Trust because he is an officer of the advisor to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the advisor to the Trust. (2) Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. T-1 Trustees and Officers - (continued)
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family N/A Senior Vice President and of Funds(R) Formerly: Director of Compliance and Assistant Senior Officer General Counsel, ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General Counsel and Director of Compliance, ALPS Mutual Funds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General N/A Senior Vice President, Chief Counsel, Invesco Aim Management Group, Inc., Invesco Aim Legal Officer and Secretary Advisors, Inc. and Invesco Aim Capital Management, Inc.; Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); and Manager, Invesco PowerShares Capital Management LLC Formerly: Director, Vice President and Secretary, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company); Vice President and Secretary, PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator); General Counsel and Secretary, Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company) - ------------------------------------------------------------------------------------------------------------------------------------ Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice N/A Vice President President, The AIM Family of Funds(R) Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R); Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company - ------------------------------------------------------------------------------------------------------------------------------------ Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, N/A Vice President Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., .Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; and Vice President, The AIM Family of Funds(R) Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Sheri Morris -- 1964 2003 Vice President, Treasurer and Principal Financial Officer, N/A Vice President, Treasurer and The AIM Family of Funds(R); and Vice President, Invesco Aim Principal Financial Officer Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management Inc. Formerly: Assistant Vice President and Assistant Treasurer, The AIM Family of Funds(R) and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash N/A Vice President Management Group; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only) Formerly: President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer and Managing Director, Invesco Aim Capital Management, Inc.; and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only) - ------------------------------------------------------------------------------------------------------------------------------------ Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim N/A Anti-Money Laundering Advisors, Inc., Invesco Aim Capital Management, Inc., Compliance Officer Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., Invesco Aim Private Asset Management, Inc. and The AIM Family of Funds(R) Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company; and Manager of the Fraud Prevention Department, Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; N/A Chief Compliance Officer Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, The AIM Family of Funds(R), Invesco Global Asset Management (N.A.), Inc. (registered investment advisor), Invesco Institutional (N.A.), Inc., (registered investment advisor), INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment advisor) and Invesco Senior Secured Management, Inc. (registered investment advisor); and Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company; and Global Head of Product Development, AIG-Global Investment Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------
The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund's prospectus for information on the Fund's sub-advisors. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street Houston, TX 77046-1173 Suite 100 Suite 100 Suite 2900 Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678 COUNSEL TO THE FUND Stradley Ronon Stevens & COUNSEL TO THE TRANSFER AGENT CUSTODIAN Young, LLP INDEPENDENT TRUSTEES Invesco Aim Investment Services, Inc. State Street Bank and Trust 2600 One Commerce Square Kramer, Levin, Naftalis & Frankel LLP P.O. Box 4739 Company Philadelphia, PA 19103 1177 Avenue of the Americas Houston, TX 77210-4739 225 Franklin New York, NY 10036-2714 Boston, MA 02110-2801
T-2 (GRAPHIC) - ------------------------------------------------------------------------------------------------------------------------------------ GO PAPERLESS WITH EDELIVERY Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all about eeees: - - ENVIRONMENTALLY FRIENDLY. Go green by reducing the number - EFFICIENT. Stop waiting for regular mail. Your documents of trees used to produce paper. will be sent via email as soon as they're available. - - ECONOMICAL. Help reduce your fund's printing and delivery - EASY. Download, save and print files using your home expenses and put more capital back in your fund's returns. computer with a few clicks of your mouse. This service is provided by Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Aim Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within thirty days after receiving your request. - ------------------------------------------------------------------------------------------------------------------------------------ FUND HOLDINGS AND PROXY VOTING INFORMATION The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-09913 and 333-36074. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov. If used after January 20, 2010, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for the most recent quarter-end. Invesco Aim - service mark - is a service mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for the products and services represented by Invesco Aim; they each provide investment advisory services to individual and institutional clients and do not sell securities. Please refer to each fund's prospectus for information on the fund's subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the retail mutual funds, exchange-traded funds and institutional money market funds and the subdistributor for the STIC Global Funds represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd. It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco [INVESCO AIM LOGO] Global Asset Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the -- SERVICE MARK -- consolidated adviser firm will be renamed Invesco Advisers, Inc. Additional information will be posted at invescoaim.com on or about the end of the fourth quarter of 2009. invescoaim.com SCOR-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] ANNUAL REPORT TO SHAREHOLDERS AUGUST 31, 2009 - service mark - AIM STRUCTURED GROWTH FUND [GRAPHIC] 2 Letters to Shareholders 4 Performance Summary 4 Management Discussion 6 Long-Term Fund Performance 8 Supplemental Information 9 Schedule of Investments 11 Financial Statements 14 Notes to Financial Statements 21 Financial Highlights 22 Auditor's Report 23 Fund Expenses 24 Approval of Investment Advisory and Sub-Advisory Agreements 27 Tax Information T-1 Trustees and Officers
Dear Shareholders: While the year covered by this report was difficult -- for long-time investors and veteran [TAYLOR investment professionals alike -- economic conditions and market trends appeared much more PHOTO] favorable at the close of the fiscal year than at its start. The 12 months ended August 31, 2009, included a sharp market sell-off that occurred in the second half of 2008. That downturn affected virtually all sectors, markets and investors. The decline had a number of causes, the most immediate being unprecedented turmoil in credit markets. Economic uncertainty prompted banks to hoard cash and reduce lending, and caused Philip Taylor investors to shun short-term corporate debt. As a result, businesses found it difficult to fund their day-to-day operations, and the U.S. economy -- as well as economies around the globe -- virtually froze briefly. INCREASED COMMUNICATION These developments prompted a greater-than-usual number of shareholders to contact me. Some of you took the time to write a letter while others of you emailed me at phil@invescoaim.com. Many of you sought explanations for the decline in the value of your accounts, while others asked more general questions about when the economy might improve. Your questions, comments and suggestions gave me better insight into what was on your minds, and I was pleased that so many of you took the time to share your thoughts with me. As a result, Invesco Aim's investment professionals and I have increased our efforts to stay in touch with and share our views with you. We increased the number of "Investment Perspectives" articles on our website, invescoaim.com. Through these articles, we've tried to provide timely market commentary, general investor education information and sector updates. I hope you'll take a moment to read them and let me know if you find them useful. To access your Fund's latest quarterly commentary, click on "Products and Performance" at the top of our website; next, select "Mutual Funds"; and then click on "Quarterly Commentary." I also hope you've stayed in touch with your financial advisor. An experienced financial advisor who is familiar with your individual investment goals, time horizon and risk tolerance can be a source of comfort and information during uncertain times. He or she can monitor your investments to ensure they're on track and can prevent you from making impulsive short-term decisions that may have adverse long-term consequences. REASONS FOR OPTIMISM The economy and equity markets reacted to a barrage of negative news during the year. Consumer spending -- which accounts for more than two-thirds(1) of the U.S. economy -- was sluggish as unemployment rose; more workers worried about their job security; home and portfolio values declined; and credit became more difficult to obtain. In his semiannual monetary policy report to Congress in late July, U.S. Federal Reserve Board Chairman Ben Bernanke summarized the stresses and strains the U.S. and global economies suffered in late 2008 and early 2009. Importantly, he suggested that the aggressive, coordinated actions taken by governments and central banks around the world finally may be yielding results. He testified that: o The pace of overall economic decline appears to have slowed significantly. o Credit availability, for consumers and businesses, has improved noticeably. o Investors' extreme risk aversion has eased somewhat. o The decline in housing activity appears to have moderated. While these and other trends offer encouragement, uncertainties remain. Chairman Bernanke testified that he anticipates a gradual recovery in 2010 with some acceleration in economic growth in 2011, together with subdued inflation over the next two years. His considered judgment appears to be shared by investors who have begun to return, cautiously, to the equities market, causing major U.S. stock-market indexes to bounce off their March lows. A SINGLE FOCUS I believe Invesco Aim is uniquely positioned to serve our clients. Our parent company, Invesco Ltd., is one of the largest(2) and most diversified global asset managers. It provides clients with diversified investment strategies and a range of investment products managed by distinct management teams around the world. We believe we can serve you best by focusing on one thing and doing it well: managing your money. Our investment professionals have managed clients' money in up markets and down markets. All of us here recognize that market conditions change often; what will not change is our commitment to putting our clients first, helping you achieve your financial goals and providing excellent customer service. If you have questions about this report or your account, please contact one of our client services representatives at 800 959 4246. If you have comments for me, I encourage you to email me at phil@invescoaim.com. Thank you for investing with us. All of us at Invesco Aim look forward to serving you. Sincerely, /s/ PHILIP TAYLOR Philip Taylor Senior Managing Director, Invesco Ltd. CEO, Invesco Aim (1) Reuters; (2) Pensions & Investments 2 AIM STRUCTURED GROWTH FUND
Dear Fellow Shareholders: Although the economy and financial markets have shown some signs of hope, investors remain [CROCKETT rightfully cautious. Staying with an appropriately diversified investment program focused on PHOTO] your individual long-term goals can be a wise course in such uncertain times. We believe the route to financial success is more like a marathon than a sprint. Please be assured that your Board continues to oversee the AIM Funds with a strong sense of responsibility for your money and your trust. As always, we seek to manage costs and enhance Bruce Crockett performance in ways that put your interests first. We are near the end of a busy 2009 proxy season, during which Invesco Aim Advisors, Inc.'s proxy committee votes on your behalf on issues put to a shareholder vote by the companies whose stock the Funds hold. This year, after careful case-by-case analysis by committee members and portfolio managers, the proxy committee voted with corporate management less often than in previous years, focusing on the issues of board independence, Say-On-Pay initiatives, and stock option re-pricing in light of the market's decline. The committee remained committed to supporting non-binding Say-on-Pay proposals and abstaining from voting on social issues. At its June meeting, your Board reviewed and renewed the investment advisory contracts between the AIM Funds and Invesco Aim Advisors, Inc. You can find the results of this rigorous annual process at invescoaim.com. Go to "Products & Performance" and click on "Investment Advisory Agreement Renewals." The website also contains news and market information, investment education and planning information and current reports and prospectuses for all the AIM Funds and I highly recommend it to you. You are always welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving you in the coming months. Sincerely, /s/ BRUCE L. CROCKETT Bruce L. Crockett Independent Chair AIM Funds Board of Trustees 3 AIM STRUCTURED GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------------------ MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE - --------------------------------------------------------------------------------------- PERFORMANCE SUMMARY volatility remain within the Fund strategy's guidelines. We continually For the fiscal year ended August 31, 2009, AIM Structured Growth Fund underperformed monitor the portfolio and the overall its style-specific benchmark, the Russell 1000 Growth Index.(triangle) These results investment process is repeated on a were largely due to stock selection in the materials and industrials sectors which monthly basis to determine which companies hindered performance. should be bought for, or eliminated from, the portfolio. Your Fund's long-term performance appears later in this report. ------------------------------------------ - --------------------------------------------------------------------------------------- MARKET CONDITIONS AND YOUR FUND FUND VS. INDEXES The fiscal year ended August 31, 2009, Total returns, 8/31/08 to 8/31/09, at net asset value (NAV). Performance shown does not included the worst U.S. economic downturn include applicable contingent deferred sales charges (CDSC) or front-end sales charges, since the Great Depression.(1) An which would have reduced performance. overheated housing market was the primary cause of the recession. When home prices Class A Shares -21.72% fell, financial instruments linked to that Class B Shares -22.19 market declined in value, causing Class C Shares -22.29 significant pressures in other areas of Class R Shares -21.88 the economy. Beginning in the first Class Y Shares* -21.55 quarter of 2008, gross domestic product S&P 500 Index(triangle) (Broad Market Index) -18.25 (the total output of goods and services in Russell 1000 Growth Index(triangle) (Style-Specific Index) -16.76 the U.S. economy) contracted in five out Lipper Large-Cap Core Funds Index(triangle) (Peer Group Index) -18.11 of six subsequent quarters.(1) Unemployment, which stood at 4.9% in (triangle)Lipper Inc. January 2008, nearly doubled to 9.7% in August 2009, as economic distress * Share class incepted during the fiscal year. See page 7 for a detailed explanation reverberated throughout the economy.(2) of Fund performance. - ------------------------------------------ With this backdrop of dire economic HOW WE INVEST stocks also may be considered. Each stock news, the large cap equity market -- as in the universe is evaluated on four measured by the S&P 500 Index -- We manage your Fund to provide exposure to factors: company earnings momentum, price experienced two extremes over the last large cap core equity stocks. The trend, management action and relative year, creating a "tale of two markets." portfolio strives to outperform the S&P valuation. The scores from these four From August 31, 2008, to the market's 500 Index while minimizing the amount of factors are combined to arrive at an bottom on March 9, 2009, the S&P 500 Index additional risk relative to the benchmark. overall alpha score (excess return fell 46.4%.(3) From March 9 through August The Fund can be used as a long-term forecast) for each stock. Each alpha score 31, 2009, however, the S&P 500 Index allocation to large cap stocks that is relative to the other securities within rebounded sharply, gaining 52.6%.(3) complements other style-specific the same industry. Stocks also are strategies within a diversified asset evaluated on a multitude of other factors Until the market low, market allocation strategy. to develop a stock-specific risk forecast participants largely shunned investment and transaction cost forecast. risk. Company fundamentals were subject to Our investment process integrates the intense scrutiny; perceived instability in following key steps: We then incorporate the alpha forecast, a company caused its stock price to risk forecast and transaction cost decline. Leverage was shunned; cash and o Universe development forecast using an optimizer (a software income were embraced. After March, tool) to build a portfolio that we believe however, investors gradually became risk o Stock rankings is an optimal balance of the stocks' consumers again and market leadership potential return and risk. This portfolio changed abruptly. o Risk assessment is constructed according to certain constraints to increase the probability o Portfolio construction that the Fund's relative performance and o Trading While the companies included in the Russell 1000 Growth Index are used as a general guide for developing the Fund's investable universe, non-benchmark - ------------------------------------------ ------------------------------------------ ------------------------------------------ PORTFOLIO COMPOSITION TOP FIVE INDUSTRIES* TOP 10 EQUITY HOLDINGS* By sector Information Technology 31.1% Computer Hardware 13.8% 1. Apple Inc. 6.4% Health Care 22.7 Pharmaceuticals 11.8 2. International Business Consumer Discretionary 21.4 Apparel Retail 7.8 Machines Corp. 5.6 Industrials 7.7 Biotechnology 7.0 3. Wal-Mart Stores, Inc. 4.8 Consumer Staples 5.7 Systems Software 6.6 4. Exxon Mobil Corp. 4.2 Energy 4.7 ----------------------------------------- 5. Microsoft Corp. 4.1 Utilities 2.1 Total Net Assets $86.5 million 6. Amgen Inc. 3.9 Telecommunication Services 1.4 Total Number of Holdings* 68 7. Gap, Inc. (The) 3.3 Financials 1.1 8. United Technologies Corp. 3.2 Materials 0.5 9. Texas Instruments Inc. 3.2 U.S. Treasury Bills, Money Market 10. eBay Inc. 3.1 Funds Plus Other Assets Less Liabilities 1.6 The Fund's holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security. * Excluding money market fund holdings. 4 AIM STRUCTURED CORE FUND
As large cap stocks began to recover, severe correction and detracted from Fund JEREMY LEFKOWITZ they were led by low-quality stocks, many performance. AK Steel was consequently of which were the hardest-hit during the sold during the fiscal year. A similar Portfolio manager, is lead manager of AIM collapse. Our review of data for the March pattern emerged for another materials Structured Growth Fund. He began his through August 2009 time period showed stock, fertilizer company CF INDUSTRIES. investment career in 1968 and has been that stocks that outperformed their This stock was also sold during the fiscal associated with Invesco Institutional industry peers tended to be smaller, year. and/or its affiliates since 1982. Mr. lower-priced and more illiquid. Lefkowitz earned a B.S. in industrial Perversely, stocks that outperformed their On the positive side, our stock engineering and an M.B.A. in finance from industry peers also tended to exhibit selection helped Fund performance in the Columbia University. fundamental weakness. For example, financials sector, which was at the heart companies that outperformed tended to be of the recession story. An overweight DANIEL KOSTYK those that were expected to lose money position in insurance company AFLAC over the coming fiscal year, had negative provided a boost to the portfolio. Chartered Financial Analyst, portfolio cash flow coming into this period, had manager, is manager of AIM Structured their earnings forecasts slashed by 50% or In terms of risk management, we seek to Growth Fund. He has been associated with more by analysts, were highly levered, and minimize any style biases in the Invesco Institutional and/or its saw their stock prices decline portfolio. Active managers typically add affiliates since 1995. Mr. Kostyk earned a dramatically over the prior six months. value in one of or a combination of four B.S. in mechanical engineering from These are not the type of stocks we seek areas: beta bias (relative volatility), Northwestern University in Chicago and an to include in your Fund, because our style bias, sector/industry over/under M.B.A. in finance from the University of research found that such stocks tend to weight and stock selection. We attempt to Chicago. lead to long-term investing failure. add value through our stock selection decisions. Consequently, our risk ANTHONY MUNCHAK Regarding the results of AIM Structured management process seeks to neutralize the Growth Fund, it is important to understand Fund's exposure relative to the benchmark Chartered Financial Analyst, portfolio our investment process to better evaluate with regard to beta, style and manager, is manager of AIM Structured the drivers of our relative performance sector/industry exposures. Growth Fund. He has been associated with versus the Fund's style-specific Invesco Institutional and/or its benchmark. We generally evaluate We thank you for your continued affiliates since 2000. Mr. Munchak earned performance based on the impact of our investment in AIM Structured Growth Fund. a B.S. and an M.S. from Boston College. He stock selection and risk management also earned an M.B.A. from Bentley processes. (1) Bureau of Economic Analysis College. Our stock selection model, based on the (2) Bureau of Labor Statistics GLEN MURPHY four factors (company earnings momentum, price trend, management action and (3) Lipper Inc. Chartered Financial Analyst, portfolio relative value) that make up our alpha manager, is manager of AIM Structured (excess return) forecast for stocks in our The views and opinions expressed in Growth Fund. He has been associated with investment universe, was a detractor from management's discussion of Fund Invesco Institutional and/or its Fund performance. In selecting holdings performance are those of Invesco Aim affiliates since 1995. Mr. Murphy earned a for the Fund, we also take into account Advisors, Inc. These views and opinions B.B.A. from the University of our risk and transaction cost forecasts. are subject to change at any time based on Massachusetts and an M.S. in finance from We use our optimization software to assist factors such as market and economic Boston College. in making investment decisions, based on conditions. These views and opinions may risk and transaction cost forecasts as not be relied upon as investment advice or FRANCIS ORLANDO well as our alpha forecast. Consequently, recommendations, or as an offer for a while our stock selection model may particular security. The information is Chartered Financial Analyst, portfolio identify a stock with an attractive alpha not a complete analysis of every aspect of manager, is manager of AIM Structured forecast, the optimizer may indicate that any market, country, industry, security or Growth Fund. He has been associated with its transaction costs are too high and/or the Fund. Statements of fact are from Invesco Institutional and/or its its risk level is unacceptable. Placing sources considered reliable, but Invesco affiliates since 1987. Mr. Orlando earned more of an emphasis on transaction costs Aim Advisors, Inc. makes no representation a B.B.A. from Merrimack College and an and potential risk in making stock or warranty as to their completeness or M.B.A. from Boston College. selections can benefit or detract from accuracy. Although historical performance Fund performance. For the fiscal year, it is no guarantee of future results, these Assisted by the Global Quantitative detracted from our results. insights may help you understand our Equity Research Team investment management philosophy. Our stock selection within the portfolio hindered Fund performance during See important Fund and index disclosures this fiscal year -- particularly within later in this report. the industrials and materials sectors. After enjoying a very strong run in 2007 and the first half of 2008, steel maker and materials company AK STEEL suffered a 5 AIM STRUCTURED GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------------------ YOUR FUND'S LONG-TERM PERFORMANCE RESULTS OF A $10,000 INVESTMENT - OLDEST SHARE CLASSES WITH SALES CHARGES SINCE INCEPTION Fund and index data from 3/31/06 [PERFORMANCE GRAPH] AIM AIM AIM AIM LIPPER STRUCTURED STRUCTURED STRUCTURED STRUCTURED LARGE-CAP GROWTH FUND- GROWTH FUND- GROWTH FUND- GROWTH FUND- RUSSELL 1000 GROWTH CLASS A CLASS B CLASS C CLASS R GROWTH S&P 500 FUNDS SHARES SHARES SHARES SHARES INDEX(1) INDEX(1) INDEX(1) ------------ ------------ ------------ ------------ ------------ -------- --------- 3/31/2006 9450 10000 10000 10000 10000 10000 10000 04/06 9488 10030 10030 10030 9986 10134 9984 05/06 9204 9720 9720 9730 9648 9843 9519 06/06 9299 9820 9820 9830 9610 9856 9487 07/06 9167 9680 9680 9691 9427 9917 9244 08/06 9384 9899 9899 9920 9721 10152 9458 09/06 9668 10190 10190 10220 9988 10414 9662 10/06 10103 10649 10649 10680 10339 10753 9953 11/06 10301 10849 10849 10880 10544 10957 10180 12/06 10262 10800 10800 10843 10580 11111 10234 01/07 10594 11141 11141 11183 10852 11279 10498 02/07 10300 10830 10830 10882 10648 11059 10261 03/07 10490 11020 11020 11073 10706 11182 10339 04/07 10822 11361 11361 11423 11210 11677 10758 05/07 11295 11852 11852 11923 11613 12084 11123 06/07 11021 11561 11552 11633 11440 11884 11018 07/07 10755 11271 11271 11353 11262 11516 10878 08/07 10850 11361 11361 11453 11442 11688 11057 09/07 11267 11792 11792 11883 11921 12125 11732 10/07 11826 12372 12372 12474 12327 12318 12256 11/07 11513 12032 12032 12133 11873 11802 11756 12/07 11692 12214 12214 12325 11830 11721 11767 01/08 10413 10865 10865 10967 10907 11018 10760 02/08 10198 10639 10639 10751 10691 10660 10536 03/08 10110 10547 10547 10658 10626 10614 10446 04/08 10559 10999 10999 11121 11184 11131 11090 05/08 10794 11236 11236 11368 11593 11275 11392 06/08 10140 10546 10546 10669 10758 10325 10554 07/08 10003 10401 10401 10535 10554 10239 10346 08/08 9954 10340 10340 10473 10668 10387 10374 09/08 8578 8910 8910 9033 9432 9462 9044 10/08 6968 7233 7233 7336 7772 7873 7464 11/08 6344 6585 6585 6667 7154 7308 6716 12/08 6548 6791 6791 6883 7283 7385 6896 01/09 6126 6348 6348 6450 6932 6763 6540 02/09 5646 5844 5844 5925 6411 6046 6113 03/09 6185 6400 6400 6502 6983 6574 6638 04/09 6773 7007 6997 7110 7653 7203 7342 05/09 7008 7244 7243 7367 8033 7605 7744 06/09 7058 7296 7295 7419 8122 7621 7747 07/09 7587 7830 7830 7965 8699 8196 8330 08/09 7795 7812 8036 8183 8880 8492 8495 (1) Lipper Inc. Past performance cannot guarantee shareholder had liquidated his entire fund expenses and management fees; comparable future results. investment in the Fund at the close of the performance of a market index does not. reporting period and paid the applicable Performance shown in the chart and The data shown in the chart include contingent deferred sales charges. Index table(s) does not reflect deduction of reinvested distributions, applicable sales results include reinvested dividends, but taxes a shareholder would pay on Fund charges and Fund expenses including they do not reflect sales charges. distributions or sale of Fund shares. management fees. Results for Class B Performance of the peer group reflects shares are calculated as if a hypothetical 6 AIM STRUCTURED GROWTH FUND
- ------------------------------------------ ------------------------------------------ AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS SHARES DO NOT HAVE A FRONT-END SALES CHARGE; RETURNS SHOWN ARE AT NET ASSET As of 8/31/09, including maximum As of 6/30/09, the most recent calendar VALUE AND DO NOT REFLECT A 0.75% CDSC THAT applicable sales charges quarter-end, including maximum applicable MAY BE IMPOSED ON A TOTAL REDEMPTION OF sales charges RETIREMENT PLAN ASSETS WITHIN THE FIRST CLASS A SHARES YEAR. CLASS Y SHARES DO NOT HAVE A CLASS A SHARES FRONT-END SALES CHARGE OR A CDSC; Inception (3/31/06) -7.03% Inception (3/31/06) -10.16% THEREFORE, PERFORMANCE IS AT NET ASSET 1 Year -26.00 1 Year -34.20 VALUE. CLASS B SHARES CLASS B SHARES Inception (3/31/06) -6.97% Inception (3/31/06) -10.07% THE PERFORMANCE OF THE FUND'S SHARE 1 Year -26.08 1 Year -34.29 CLASSES WILL DIFFER PRIMARILY DUE TO CLASS C SHARES CLASS C SHARES DIFFERENT SALES CHARGE STRUCTURES AND Inception (3/31/06) -6.19% Inception (3/31/06) -9.25% CLASS EXPENSES. 1 Year -23.07 1 Year -31.52 CLASS R SHARES CLASS R SHARES HAD THE ADVISOR NOT WAIVED FEES AND/OR Inception (3/31/06) -5.70% Inception (3/31/06) -8.77% REIMBURSED EXPENSES, PERFORMANCE WOULD 1 Year -21.88 1 Year -30.46 HAVE BEEN LOWER. CLASS Y SHARES CLASS Y SHARES Inception -5.42% Inception -8.57% (1) Total annual operating expenses less 1 Year -21.55 1 Year -30.34 any contractual fee waivers and/or expense reimbursements by the advisor CLASS Y SHARES' INCEPTION DATE IS OCTOBER THE NET ANNUAL FUND OPERATING EXPENSE in effect through at least June 30, 3, 2008; RETURNS SINCE THAT DATE ARE RATIO SET FORTH IN THE MOST RECENT FUND 2010. See current prospectus for more ACTUAL RETURNS. ALL OTHER RETURNS ARE PROSPECTUS AS OF THE DATE OF THIS REPORT information. BLENDED RETURNS OF ACTUAL CLASS Y SHARE FOR CLASS A, CLASS B, CLASS C, CLASS R AND PERFORMANCE AND RESTATED CLASS A SHARE CLASS Y SHARES WAS 1.00%, 1.75%, 1.75%, PERFORMANCE (FOR PERIODS PRIOR TO THE 1.25%, AND 0.75%, RESPECTIVELY.(1) THE INCEPTION DATE OF CLASS Y SHARES) AT NET TOTAL ANNUAL FUND OPERATING EXPENSE RATIO ASSET VALUE. THE RESTATED CLASS A SHARE SET FORTH IN THE MOST RECENT FUND PERFORMANCE REFLECTS THE RULE 12B-1 FEES PROSPECTUS AS OF THE DATE OF THIS REPORT APPLICABLE TO CLASS A SHARES AS WELL AS FOR CLASS A, CLASS B, CLASS C, CLASS R AND ANY FEE WAIVERS OR EXPENSE REIMBURSEMENTS CLASS Y SHARES WAS 1.18%, 1.93%, 1.93% RECEIVED BY CLASS A SHARES. CLASS A 1.43% AND 0.93%, RESPECTIVELY. THE EXPENSE SHARES' INCEPTION DATE IS MARCH 31, 2006. RATIOS PRESENTED ABOVE MAY VARY FROM THE EXPENSE RATIOS PRESENTED IN OTHER SECTIONS THE PERFORMANCE DATA QUOTED REPRESENT OF THIS REPORT THAT ARE BASED ON EXPENSES PAST PERFORMANCE AND CANNOT GUARANTEE INCURRED DURING THE PERIOD COVERED BY THIS COMPARABLE FUTURE RESULTS; CURRENT REPORT. PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE VISIT INVESCOAIM.COM FOR THE MOST RECENT CLASS A SHARE PERFORMANCE REFLECTS THE MONTH-END PERFORMANCE. PERFORMANCE FIGURES MAXIMUM 5.50% SALES CHARGE, AND CLASS B REFLECT REINVESTED DISTRIBUTIONS, CHANGES AND CLASS C SHARE PERFORMANCE REFLECTS THE IN NET ASSET VALUE AND THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES MAXIMUM SALES CHARGE UNLESS OTHERWISE CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE STATED. INVESTMENT RETURN AND PRINCIPAL CDSC ON CLASS B SHARES DECLINES FROM 5% VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE BEGINNING AT THE TIME OF PURCHASE TO 0% AT A GAIN OR LOSS WHEN YOU SELL SHARES. THE BEGINNING OF THE SEVENTH YEAR. THE CDSC ON CLASS C SHARES IS 1% FOR THE FIRST YEAR AFTER PURCHASE. CLASS R 7 AIM STRUCTURED GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------------------ AIM STRUCTURED GROWTH FUND'S INVESTMENT OBJECTIVE IS LONG-TERM GROWTH OF CAPITAL. o Unless otherwise stated, information presented in this report is as of August 31, 2009, and is based on total net assets o Unless otherwise noted, all data provided by Invesco Aim. - ------------------------------------------ ABOUT SHARE CLASSES fund does trade in this way, it may o The LIPPER LARGE-CAP GROWTH FUNDS INDEX incur increased costs, which can lower is an equally weighted representation o Effective September 30, 2003, for the actual return of the fund. Active of the largest funds in the Lipper qualified plans only, those previously trading may also increase short term Large-Cap Growth Funds category. These established are eligible to purchase gains and losses, which may affect funds typically have an above average Class B shares of any AIM fund. Please taxes that must be paid. price-to-earnings ratio, price-to-book see the prospectus for more ratio, and three-year sales-per-share information. o The Fund invests in "growth" stocks, growth value, compared to the S&P 500 which may be more volatile than other Index. o Class R shares are available only to investment styles because growth stocks certain retirement plans. Please see are more sensitive to investor o The Fund is not managed to track the the prospectus for more information. perceptions of an issuing company's performance of any particular index, growth potential. including the indexes defined here, and o Class Y shares are available to only consequently, the performance of the certain investors. Please see the o Interest rate risk refers to the risk Fund may deviate significantly from the prospectus for more information. that bond prices generally fall as performance of the indexes. interest rates rise and vice versa. - ------------------------------------------ o A direct investment cannot be made in PRINCIPAL RISKS OF INVESTING IN THE FUND o Leveraging entails risks such as an index. Unless otherwise indicated, magnifying changes in the value of the index results include reinvested o Credit risk is the risk of loss on an portfolio's securities. dividends, and they do not reflect investment due to the deterioration of sales charges. Performance of an index an issuer's financial health. Such a o Since a large percentage of the Fund's of funds reflects fund expenses; deterioration of financial health may assets may be invested in securities of performance of a market index does not. result in a reduction of the credit a limited number of companies, each rating of the issuer's securities and investment has a greater effect on the OTHER INFORMATION may lead to the issuer's inability to Fund's overall performance, and any honor its contractual obligations, change in the value of those securities o The Chartered Financial Analysts (R) including making timely payment of could significantly affect the value of (CFA(R)) designation is globally interest and principal. your investment in the Fund. recognized and attests to a charterholder's success in a rigorous o The Fund may use enhanced investment o There is no guarantee that the and comprehensive study program in the techniques such as derivatives. The investment techniques and risk analysis field of investment management and principal risk of derivatives is that used by the Fund's portfolio managers research analysis. the fluctuations in their values may will produce the desired results. not correlate perfectly with the o The returns shown in management's overall securities markets. Derivatives o The prices of securities held by the discussion of Fund performance are are subject to counterparty risk -- the Fund may decline in response to market based on net asset values calculated risk that the other party will not risks. for shareholder transactions. Generally complete the transaction with the Fund. accepted accounting principles require ------------------------------------------ adjustments to be made to the net o Prices of equity securities change in ABOUT INDEXES USED IN THIS REPORT assets of the Fund at period end for response to many factors, including the financial reporting purposes, and as historical and prospective earnings of o The S&P 500(R) INDEX is a market such, the net asset values for the issuer, the value of its assets, capitalization-weighted index covering shareholder transactions and the general economic conditions, interest all major areas of the U.S. economy. It returns based on those net asset values rates, investor perceptions and market is not the 500 largest companies but may differ from the net asset values liquidity. rather the most widely held 500 and returns reported in the Financial companies chosen with respect to market Highlights. o Foreign securities have additional size, liquidity and their industry. risks, including exchange rate changes, o Industry classifications used in this political and economic upheaval, o The RUSSELL 1000(R) GROWTH INDEX report are generally according to the relative lack of information, measures the performance of those Global Industry Classification relatively low market liquidity, and Russell 1000 companies with higher Standard, which was developed by and is the potential lack of strict financial price-to-book ratios and higher the exclusive property and a service and accounting controls and standards. forecasted growth values. The Russell mark of MSCI Inc. and Standard & 1000 Growth Index is a Poor's. o The Fund may engage in active and trademark/service mark of the Frank frequent trading of portfolio Russell Company. Russell(R) is a securities to achieve its investment trademark of the Frank Russell Company. objective. If a ------------------------------------------ FUND NASDAQ SYMBOLS Class A Shares AASGX Class B Shares BASGX THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, Class C Shares CASGX WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. Class R Shares RASGX INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class Y Shares AASYX - --------------------------------------------------------------------------------------- NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE 8 AIM STRUCTURED GROWTH FUND
SCHEDULE OF INVESTMENTS(a) August 31, 2009
SHARES VALUE - ----------------------------------------------------------------------------- COMMON STOCKS & OTHER EQUITY INTERESTS-98.43% AEROSPACE & DEFENSE-3.21% United Technologies Corp. 46,800 $ 2,778,048 ============================================================================= AGRICULTURAL PRODUCTS-0.64% Archer-Daniels-Midland Co. 19,100 550,653 ============================================================================= AIR FREIGHT & LOGISTICS-0.70% United Parcel Service, Inc.-Class B 11,400 609,444 ============================================================================= APPAREL RETAIL-7.84% Aeropostale, Inc.(b) 61,400 2,403,810 - ----------------------------------------------------------------------------- Chico's FAS, Inc.(b) 7,200 91,656 - ----------------------------------------------------------------------------- Foot Locker, Inc. 98,700 1,052,142 - ----------------------------------------------------------------------------- Gap, Inc. (The) 144,200 2,833,530 - ----------------------------------------------------------------------------- Ross Stores, Inc. 8,600 401,104 ============================================================================= 6,782,242 ============================================================================= AUTOMOTIVE RETAIL-1.14% AutoNation, Inc.(b) 52,100 988,858 ============================================================================= BIOTECHNOLOGY-6.96% Amgen Inc.(b) 55,900 3,339,466 - ----------------------------------------------------------------------------- Biogen Idec Inc.(b) 46,300 2,324,723 - ----------------------------------------------------------------------------- Facet Biotech Corp.(b) 20,900 209,836 - ----------------------------------------------------------------------------- PDL BioPharma Inc. 15,900 143,895 ============================================================================= 6,017,920 ============================================================================= COMMUNICATIONS EQUIPMENT-0.77% 3Com Corp.(b) 119,900 521,565 - ----------------------------------------------------------------------------- F5 Networks, Inc.(b) 4,100 141,409 ============================================================================= 662,974 ============================================================================= COMPUTER & ELECTRONICS RETAIL-1.68% RadioShack Corp. 71,100 1,075,743 - ----------------------------------------------------------------------------- Rent-A-Center, Inc.(b) 19,000 374,870 ============================================================================= 1,450,613 ============================================================================= COMPUTER HARDWARE-13.80% Apple Inc.(b) 32,750 5,508,878 - ----------------------------------------------------------------------------- Hewlett-Packard Co. 34,800 1,562,172 - ----------------------------------------------------------------------------- International Business Machines Corp. 41,200 4,863,660 ============================================================================= 11,934,710 ============================================================================= COMPUTER STORAGE & PERIPHERALS-2.58% EMC Corp.(b) 76,700 1,219,530 - ----------------------------------------------------------------------------- Western Digital Corp.(b) 29,600 1,014,688 ============================================================================= 2,234,218 ============================================================================= SHARES DATA PROCESSING & OUTSOURCED SERVICES-0.27% Broadridge Financial Solutions Inc. 11,200 233,184 ============================================================================= DEPARTMENT STORES-0.20% Sears Holdings Corp.(b) 2,700 171,315 ============================================================================= EDUCATION SERVICES-5.15% Apollo Group, Inc.-Class A(b) 36,400 2,359,448 - ----------------------------------------------------------------------------- Career Education Corp.(b) 18,000 427,500 - ----------------------------------------------------------------------------- ITT Educational Services, Inc.(b) 15,900 1,669,341 ============================================================================= 4,456,289 ============================================================================= GENERAL MERCHANDISE STORES-0.56% Family Dollar Stores, Inc. 15,900 481,452 ============================================================================= HEALTH CARE EQUIPMENT-0.32% Boston Scientific Corp.(b) 23,200 272,600 ============================================================================= HEALTH CARE SERVICES-0.65% Omnicare, Inc. 24,700 565,383 ============================================================================= HOME IMPROVEMENT RETAIL-2.71% Home Depot, Inc. (The) 86,000 2,346,940 ============================================================================= HOMEBUILDING-1.98% D.R. Horton, Inc. 74,700 1,001,727 - ----------------------------------------------------------------------------- KB Home 14,200 258,582 - ----------------------------------------------------------------------------- Ryland Group, Inc. (The) 19,900 456,108 ============================================================================= 1,716,417 ============================================================================= HYPERMARKETS & SUPER CENTERS-4.79% Wal-Mart Stores, Inc. 81,400 4,140,818 ============================================================================= INDEPENDENT POWER PRODUCERS & ENERGY TRADERS-2.06% Mirant Corp.(b) 105,500 1,777,675 ============================================================================= INDUSTRIAL CONGLOMERATES-3.49% 3M Co. 26,300 1,896,230 - ----------------------------------------------------------------------------- General Electric Co. 80,700 1,121,730 ============================================================================= 3,017,960 ============================================================================= INDUSTRIAL MACHINERY-0.31% John Bean Technologies Corp. 16,000 267,040 ============================================================================= INTEGRATED OIL & GAS-4.74% Chevron Corp. 900 62,946 - ----------------------------------------------------------------------------- Exxon Mobil Corp. 52,400 3,623,460 - ----------------------------------------------------------------------------- Occidental Petroleum Corp. 5,600 409,360 ============================================================================= 4,095,766 =============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 9 AIM STRUCTURED GROWTH FUND
SHARES VALUE - ----------------------------------------------------------------------------- INTEGRATED TELECOMMUNICATION SERVICES-0.84% AT&T Inc. 21,100 $ 549,655 - ----------------------------------------------------------------------------- Qwest Communications International Inc. 49,200 176,628 ============================================================================= 726,283 ============================================================================= INTERNET SOFTWARE & SERVICES-3.35% eBay Inc.(b) 121,700 2,694,438 - ----------------------------------------------------------------------------- ValueClick, Inc.(b) 19,400 198,850 ============================================================================= 2,893,288 ============================================================================= INVESTMENT BANKING & BROKERAGE-0.50% Goldman Sachs Group, Inc. (The) 2,600 430,196 ============================================================================= LIFE & HEALTH INSURANCE-0.54% Aflac, Inc. 11,500 467,130 ============================================================================= MANAGED HEALTH CARE-2.97% UnitedHealth Group Inc. 91,800 2,570,400 ============================================================================= PAPER PACKAGING-0.52% Temple-Inland Inc. 26,700 451,497 ============================================================================= PHARMACEUTICALS-11.82% Bristol-Myers Squibb Co. 33,600 743,568 - ----------------------------------------------------------------------------- Eli Lilly and Co. 62,100 2,077,866 - ----------------------------------------------------------------------------- Forest Laboratories, Inc.(b) 49,500 1,448,865 - ----------------------------------------------------------------------------- Johnson & Johnson 43,800 2,647,272 - ----------------------------------------------------------------------------- Merck & Co., Inc. 6,400 207,552 - ----------------------------------------------------------------------------- Schering-Plough Corp. 23,100 650,958 - ----------------------------------------------------------------------------- Sepracor Inc.(b) 65,300 1,185,195 - ----------------------------------------------------------------------------- Valeant Pharmaceuticals International(b) 39,400 1,020,066 - ----------------------------------------------------------------------------- Wyeth 5,000 239,250 ============================================================================= 10,220,592 ============================================================================= RESTAURANTS-0.10% Brinker International, Inc. 6,000 87,360 ============================================================================= SEMICONDUCTORS-3.69% Marvell Technology Group Ltd.(b) 29,800 454,450 - ----------------------------------------------------------------------------- Texas Instruments Inc. 111,200 2,734,408 ============================================================================= 3,188,858 ============================================================================= SOFT DRINKS-0.29% Dr. Pepper Snapple Group, Inc.(b) 9,600 253,824 ============================================================================= SPECIALTY STORES-0.06% Barnes & Noble, Inc. 2,300 47,587 ============================================================================= SYSTEMS SOFTWARE-6.62% Microsoft Corp. 145,200 3,579,180 - ----------------------------------------------------------------------------- Symantec Corp.(b) 142,200 2,150,064 ============================================================================= 5,729,244 ============================================================================= WIRELESS TELECOMMUNICATION SERVICES-0.58% Sprint Nextel Corp.(b) 136,500 499,590 ============================================================================= Total Common Stocks & Other Equity Interests (Cost $79,934,057) 85,118,368 ============================================================================= PRINCIPAL AMOUNT U.S. TREASURY BILLS-0.36% 0.18%, 09/17/09 (Cost $309,975)(c)(d) $310,000 309,975 ============================================================================= SHARES MONEY MARKET FUNDS-1.29% Liquid Assets Portfolio-Institutional Class(e) 558,340 558,340 - ----------------------------------------------------------------------------- Premier Portfolio-Institutional Class(e) 558,340 558,340 ============================================================================= Total Money Market Funds (Cost $1,116,680) 1,116,680 ============================================================================= TOTAL INVESTMENTS-100.08% (Cost $81,360,712) 86,545,023 ============================================================================= OTHER ASSETS LESS LIABILITIES-(0.08)% (65,011) ============================================================================= NET ASSETS-100.00% $86,480,012 _____________________________________________________________________________ =============================================================================
Notes to Schedule of Investments: (a) Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor's. (b) Non-income producing security. (c) Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. (d) All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1J and Note 4. (e) The money market fund and the Fund are affiliated by having the same investment advisor. See accompanying Notes to Financial Statements which are an integral part of the financial statements. 10 AIM STRUCTURED GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES August 31, 2009 ASSETS: Investments, at value (Cost $80,244,032) $ 85,428,343 - -------------------------------------------------------------------------------- Investments in affiliated money market funds, at value and cost 1,116,680 ================================================================================ Total investments, at value (Cost $81,360,712) 86,545,023 ================================================================================ Receivables for: Fund shares sold 18,567 - -------------------------------------------------------------------------------- Dividends 191,629 - -------------------------------------------------------------------------------- Investment for trustee deferred compensation and retirement plans 4,989 - -------------------------------------------------------------------------------- Other assets 21,795 ================================================================================ Total assets 86,782,003 ________________________________________________________________________________ ================================================================================ LIABILITIES: Payables for: Fund shares reacquired 228,073 - -------------------------------------------------------------------------------- Variation margin 9,812 - -------------------------------------------------------------------------------- Accrued fees to affiliates 1,120 - -------------------------------------------------------------------------------- Accrued other operating expenses 52,151 - -------------------------------------------------------------------------------- Trustee deferred compensation and retirement plans 10,835 ================================================================================ Total liabilities 301,991 ================================================================================ Net assets applicable to shares outstanding $ 86,480,012 ________________________________________________________________________________ ================================================================================ NET ASSETS CONSIST OF: Shares of beneficial interest $131,946,130 - -------------------------------------------------------------------------------- Undistributed net investment income 1,244,630 - -------------------------------------------------------------------------------- Undistributed net realized gain (loss) (51,976,316) - -------------------------------------------------------------------------------- Unrealized appreciation 5,265,568 ================================================================================ $ 86,480,012 ________________________________________________________________________________ ================================================================================ NET ASSETS: Class A $ 2,491,367 ________________________________________________________________________________ ================================================================================ Class B $ 298,406 ________________________________________________________________________________ ================================================================================ Class C $ 974,258 ________________________________________________________________________________ ================================================================================ Class R $ 30,408 ________________________________________________________________________________ ================================================================================ Class Y $ 73,069 ________________________________________________________________________________ ================================================================================ Institutional Class $ 82,612,504 ________________________________________________________________________________ ================================================================================ SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 313,263 ________________________________________________________________________________ ================================================================================ Class B 38,183 ________________________________________________________________________________ ================================================================================ Class C 124,710 ________________________________________________________________________________ ================================================================================ Class R 3,829 ________________________________________________________________________________ ================================================================================ Class Y 9,184 ________________________________________________________________________________ ================================================================================ Institutional Class 10,370,881 ________________________________________________________________________________ ================================================================================ Class A: Net asset value per share $ 7.95 - -------------------------------------------------------------------------------- Maximum offering price per share (Net asset value of $7.95 divided by 94.50%) $ 8.41 ________________________________________________________________________________ ================================================================================ Class B: Net asset value and offering price per share $ 7.82 ________________________________________________________________________________ ================================================================================ Class C: Net asset value and offering price per share $ 7.81 ________________________________________________________________________________ ================================================================================ Class R: Net asset value and offering price per share $ 7.94 ________________________________________________________________________________ ================================================================================ Class Y: Net asset value and offering price per share $ 7.96 ________________________________________________________________________________ ================================================================================ Institutional Class: Net asset value and offering price per share $ 7.97 ________________________________________________________________________________ ================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 11 AIM STRUCTURED GROWTH FUND STATEMENT OF OPERATIONS For the year ended August 31, 2009 INVESTMENT INCOME: Dividends $ 1,998,223 - ------------------------------------------------------------------------------------------------ Dividends from affiliated money market funds (includes securities lending income of $126,358) 140,341 - ------------------------------------------------------------------------------------------------ Interest 900 ================================================================================================ Total investment income 2,139,464 ================================================================================================ EXPENSES: Advisory fees 583,728 - ------------------------------------------------------------------------------------------------ Administrative services fees 50,000 - ------------------------------------------------------------------------------------------------ Custodian fees 12,365 - ------------------------------------------------------------------------------------------------ Distribution fees: Class A 6,359 - ------------------------------------------------------------------------------------------------ Class B 2,870 - ------------------------------------------------------------------------------------------------ Class C 10,517 - ------------------------------------------------------------------------------------------------ Class R 120 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- A, B, C, R and Y 15,589 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- Institutional 4,713 - ------------------------------------------------------------------------------------------------ Trustees' and officers' fees and benefits 21,387 - ------------------------------------------------------------------------------------------------ Registration and filing fees 70,058 - ------------------------------------------------------------------------------------------------ Professional services fees 55,308 - ------------------------------------------------------------------------------------------------ Other 37,963 ================================================================================================ Total expenses 870,977 ================================================================================================ Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (123,262) ================================================================================================ Net expenses 747,715 ================================================================================================ Net investment income 1,391,749 ================================================================================================ REALIZED AND UNREALIZED GAIN (LOSS) FROM: Net realized gain (loss) from: Investment securities (47,326,857) - ------------------------------------------------------------------------------------------------ Futures contracts 979,576 ================================================================================================ (46,347,281) ================================================================================================ Change in net unrealized appreciation of: Investment securities 4,809,487 - ------------------------------------------------------------------------------------------------ Futures contracts 80,405 ================================================================================================ 4,889,892 ================================================================================================ Net realized and unrealized gain (loss) (41,457,389) ================================================================================================ Net increase (decrease) in net assets resulting from operations $(40,065,640) ________________________________________________________________________________________________ ================================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 12 AIM STRUCTURED GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS For the years ended August 31, 2009 and 2008
2009 2008 - -------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 1,391,749 $ 1,100,353 - -------------------------------------------------------------------------------------------------------- Net realized gain (loss) (46,347,281) (5,565,465) - -------------------------------------------------------------------------------------------------------- Change in net unrealized appreciation (depreciation) 4,889,892 (10,577,763) ======================================================================================================== Net increase (decrease) in net assets resulting from operations (40,065,640) (15,042,875) ======================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A (9,644) (16,383) - -------------------------------------------------------------------------------------------------------- Class R (34) -- - -------------------------------------------------------------------------------------------------------- Class Y (853) -- - -------------------------------------------------------------------------------------------------------- Institutional Class (741,359) (840,921) ======================================================================================================== Total distributions from net investment income (751,890) (857,304) ======================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS: Class A -- (206,607) - -------------------------------------------------------------------------------------------------------- Class B -- (19,986) - -------------------------------------------------------------------------------------------------------- Class C -- (68,888) - -------------------------------------------------------------------------------------------------------- Class R -- (386) - -------------------------------------------------------------------------------------------------------- Institutional Class -- (4,857,348) ======================================================================================================== Total distributions from net realized gains -- (5,153,215) ======================================================================================================== SHARE TRANSACTIONS-NET: Class A (1,212,517) (1,833,555) - -------------------------------------------------------------------------------------------------------- Class B (60,118) 79,346 - -------------------------------------------------------------------------------------------------------- Class C (437,430) 136,158 - -------------------------------------------------------------------------------------------------------- Class R 10,011 15,882 - -------------------------------------------------------------------------------------------------------- Class Y 104,995 -- - -------------------------------------------------------------------------------------------------------- Institutional Class (37,102,160) 15,306,943 ======================================================================================================== Net increase (decrease) in net assets resulting from share transactions (38,697,219) 13,704,774 ======================================================================================================== Net increase (decrease) in net assets (79,514,749) (7,348,620) ======================================================================================================== NET ASSETS: Beginning of year 165,994,761 173,343,381 ======================================================================================================== End of year (includes undistributed net investment income of $1,244,630 and $604,771, respectively) $ 86,480,012 $165,994,761 ________________________________________________________________________________________________________ ========================================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 13 AIM STRUCTURED GROWTH FUND NOTES TO FINANCIAL STATEMENTS August 31, 2009 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Structured Growth Fund (the "Fund") is a series portfolio of AIM Counselor Series Trust (the "Trust"). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of seven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The Fund's investment objective is long-term growth of capital. The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Institutional Class. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waiver shares may be subject to contingent deferred sales charges ("CDSC"). Class B shares and Class C shares are sold with a CDSC. Class R, Class Y and Institutional Class shares are sold at net asset value. Under certain circumstances, Class R shares are subject to a CDSC. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase. 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 or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes 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 specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans. Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security's fair value. Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer's assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. 14 AIM STRUCTURED GROWTH FUND 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 periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held. Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund's net asset value and, accordingly, they reduce the Fund's total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the advisor. The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class. C. COUNTRY DETERMINATION -- For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment advisor may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer's securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. D. DISTRIBUTIONS -- Distributions from income and net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund's taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period. F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to the Institutional Class are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period end date and before the date the financial statements are released to print, which is generally 45 days from the period end date. H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund's servicing agreements, that contain a variety of indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. I. SECURITIES LENDING -- The Fund may lend portfolio securities having a market value up to one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. 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, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. 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. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. J. FUTURES CONTRACTS -- The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or 15 AIM STRUCTURED GROWTH FUND delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange- traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, 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. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. K. COLLATERAL -- To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund's practice to replace such collateral no later than the next business day. NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with Invesco Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Advisor based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE - ------------------------------------------------------------------- First $250 million 0.60% - ------------------------------------------------------------------- Next $250 million 0.575% - ------------------------------------------------------------------- Next $500 million 0.55% - ------------------------------------------------------------------- Next $1.5 billion 0.525% - ------------------------------------------------------------------- Next $2.5 billion 0.50% - ------------------------------------------------------------------- Next $2.5 billion 0.475% - ------------------------------------------------------------------- Next $2.5 billion 0.45% - ------------------------------------------------------------------- Over $10 billion 0.425% ___________________________________________________________________ ===================================================================
Under the terms of a master sub-advisory agreement approved by shareholders of the Fund between the Advisor and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-Advisor(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Advisor(s). The Advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y and Institutional Class shares to 1.00%, 1.75%, 1.75%, 1.25%, 0.75% and 0.75% of average daily net assets, respectively, through at least June 30, 2010. In determining the Advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary or non-routine items; (v) expenses related to a merger or reorganization, as approved by the Fund's Board of Trustees; and (vi) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, in addition to the expense reimbursement arrangement with Invesco Ltd. ("Invesco") described more fully below, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. These credits are used to pay certain expenses incurred by the Fund. Further, the Advisor has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Advisor receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds. For the year ended August 31, 2009, the Advisor waived advisory fees $102,019 and reimbursed class level expenses of $9,805, $1,106, $4,055, $93, $347 and $4,713 of Class A, Class B, Class C, Class R, Class Y and Institutional Class shares, respectively. At the request of the Trustees of the Trust, Invesco agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended August 31, 2009, Invesco did not reimburse any expenses. The Trust has entered into a master administrative services agreement with Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain administrative costs incurred in providing accounting services to the Fund. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees. The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. IAIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking 16 AIM STRUCTURED GROWTH FUND services. All fees payable by IAIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust's Board of Trustees. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees. The Trust has entered into master distribution agreements with Invesco Aim Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class B, Class C, Class R, Class Y and Institutional Class 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, Class B, Class C and Class R shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI compensation at the annual rate of 0.25% of the Fund's average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority ("FINRA") impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. For the year ended August 31, 2009, expenses incurred under the Plans are shown in the Statement of Operations as distribution fees. Front-end sales commissions and CDSC (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the year ended August 31, 2009, IADI advised the Fund that IADI retained $1,171 in front-end sales commissions from the sale of Class A shares and $0, $268, $187 and $0 from Class A, Class B, Class C and Class R shares, respectively, for CDSC imposed on redemptions by shareholders. Certain officers and Trustees of the Trust are officers and directors of Invesco Aim, IAIS and/or IADI. NOTE 3--ADDITIONAL VALUATION INFORMATION Generally Accepted Accounting Principles (GAAP) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level: Level 1 -- Prices are determined using quoted prices in an active market for identical assets. Level 2 -- Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. Level 3 -- Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. The following is a summary of the tiered valuation input levels, as of the end of the reporting period, August 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL - ------------------------------------------------------------------------------------------------------------------------ Equity Securities $86,235,048 $ -- $ -- $86,235,048 - ------------------------------------------------------------------------------------------------------------------------ U.S. Treasury Securities -- 309,975 -- 309,975 ======================================================================================================================== $86,545,023 ======================================================================================================================== Other Investments* 81,257 -- -- 81,257 ======================================================================================================================== Total Investments $86,316,305 $309,975 $-- $86,626,280 ________________________________________________________________________________________________________________________ ========================================================================================================================
* Other Investments includes futures contracts, which are included at unrealized appreciation. NOTE 4--DERIVATIVE INVESTMENTS Effective March 1, 2009, the Fund has adopted the provisions of FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities. The standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position and financial performance. The adoption of this provision has no impact on the results of operations reported in the financial statements. VALUE OF DERIVATIVE INSTRUMENTS AT PERIOD-END The Table below summarizes the value of the Fund's derivative instruments, detailed by primary risk exposure, held as of August 31, 2009:
VALUE ----------------------- RISK EXPOSURE/ DERIVATIVE TYPE ASSETS LIABILITIES - ----------------------------------------------------------------------------------------------------- Market risk Futures contracts(a) $81,257 $ -- _____________________________________________________________________________________________________ =====================================================================================================
(a) Includes cumulative appreciation of futures contracts. Only current day's variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. 17 AIM STRUCTURED GROWTH FUND EFFECT OF DERIVATIVE INSTRUMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2009 The table below summarizes the gains on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
LOCATION OF GAIN ON STATEMENT OF OPERATIONS ----------------------- FUTURES* - ---------------------------------------------------------------------------------------------------- Realized Gain Market risk $1,197,469 ==================================================================================================== Change in Unrealized Appreciation Market risk 258,431 ==================================================================================================== Total $1,455,900 ____________________________________________________________________________________________________ ====================================================================================================
* The average value outstanding of futures during the period was $5,182,330.
OPEN FUTURES CONTRACTS - ------------------------------------------------------------------------------------------------------------------------ NUMBER OF MONTH/ UNREALIZED CONTRACT CONTRACTS COMMITMENT VALUE APPRECIATION - ------------------------------------------------------------------------------------------------------------------------ Chicago Mercantile Exchange E-mini S&P 500 Index 24 September-09/Long $1,223,640 $81,257 ________________________________________________________________________________________________________________________ ========================================================================================================================
NOTE 5--EXPENSE OFFSET ARRANGEMENT(S) The expense offset arrangements are comprised of (i) transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions and (ii) custodian credits which result from periodic overnight cash balances at the custodian. For the year ended August 31, 2009, the Fund received credits from these arrangements, which resulted in the reduction of the Fund's total expenses of $1,124. NOTE 6--TRUSTEES' AND OFFICERS' FEES AND BENEFITS "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officers' Fees and Benefits" also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund. During the year ended August 31, 2009, the Fund paid legal fees of $3,417 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. NOTE 7--CASH BALANCES The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco Aim, not to exceed the contractually agreed upon rate. 18 AIM STRUCTURED GROWTH FUND NOTE 8--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED AUGUST 31, 2009 AND 2008:
2009 2008 - ----------------------------------------------------------------------------------------------------- Ordinary income $751,890 $5,736,595 - ----------------------------------------------------------------------------------------------------- Long-term capital gain -- 273,924 ===================================================================================================== Total distributions $751,890 $6,010,519 _____________________________________________________________________________________________________ =====================================================================================================
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
2009 - ------------------------------------------------------------------------------------------------ Undistributed ordinary income $ 1,256,291 - ------------------------------------------------------------------------------------------------ Net unrealized appreciation -- investments 3,517,083 - ------------------------------------------------------------------------------------------------ Temporary book/tax differences (11,661) - ------------------------------------------------------------------------------------------------ Post-October deferrals (30,689,668) - ------------------------------------------------------------------------------------------------ Capital loss carryforward (19,538,163) - ------------------------------------------------------------------------------------------------ Shares of beneficial interest 131,946,130 ================================================================================================ Total net assets $ 86,480,012 ________________________________________________________________________________________________ ================================================================================================
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's net unrealized appreciation difference is attributable primarily to wash sales. The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits. Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. The Fund has a capital loss carryforward as of August 31, 2009 which expires as follows:
CAPITAL EXPIRATION LOSS CARRYFORWARD* - ------------------------------------------------------------------------------------------------- August 31, 2016 $ 665,716 - ------------------------------------------------------------------------------------------------- August 31, 2017 18,872,447 ================================================================================================= Total capital loss carryforward $19,538,163 _________________________________________________________________________________________________ =================================================================================================
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. NOTE 9--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended August 31, 2009 was $99,716,996 and $136,377,134, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ----------------------------------------------------------------------------------------------- Aggregate unrealized appreciation of investment securities $10,277,214 - ----------------------------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (6,760,131) =============================================================================================== Net unrealized appreciation of investment securities $ 3,517,083 _______________________________________________________________________________________________ =============================================================================================== Cost of investments for tax purposes is $83,027,940.
19 AIM STRUCTURED GROWTH FUND NOTE 10--SHARE INFORMATION
SUMMARY OF SHARE ACTIVITY - ----------------------------------------------------------------------------------------------------------------------- YEAR ENDED AUGUST 31, --------------------------------------------------------- 2009(a) 2008 --------------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------------- Sold: Class A 169,910 $ 1,152,699 126,221 $ 1,439,845 - ----------------------------------------------------------------------------------------------------------------------- Class B 18,151 124,957 37,404 424,646 - ----------------------------------------------------------------------------------------------------------------------- Class C 8,285 61,492 64,135 718,782 - ----------------------------------------------------------------------------------------------------------------------- Class R 1,235 9,977 1,458 15,648 - ----------------------------------------------------------------------------------------------------------------------- Class Y(b) 42,748 327,844 -- -- - ----------------------------------------------------------------------------------------------------------------------- Institutional Class 751,214 5,229,110 1,601,599 18,008,711 ======================================================================================================================= Issued as reinvestment of dividends: Class A 1,449 9,419 18,312 218,096 - ----------------------------------------------------------------------------------------------------------------------- Class B -- -- 1,576 18,615 - ----------------------------------------------------------------------------------------------------------------------- Class C -- -- 5,708 67,407 - ----------------------------------------------------------------------------------------------------------------------- Class R 5 34 32 386 - ----------------------------------------------------------------------------------------------------------------------- Class Y 131 853 -- -- - ----------------------------------------------------------------------------------------------------------------------- Institutional Class 114,055 741,359 477,642 5,698,269 ======================================================================================================================= Automatic conversion of Class B shares to Class A shares: Class A 9,173 58,967 7,720 81,915 - ----------------------------------------------------------------------------------------------------------------------- Class B (9,301) (58,967) (7,802) (81,915) ======================================================================================================================= Reacquired: Class A(b) (347,229) (2,433,602) (325,612) (3,573,411) - ----------------------------------------------------------------------------------------------------------------------- Class B (16,909) (126,108) (26,522) (282,000) - ----------------------------------------------------------------------------------------------------------------------- Class C (73,737) (498,922) (61,575) (650,031) - ----------------------------------------------------------------------------------------------------------------------- Class R -- -- (14) (152) - ----------------------------------------------------------------------------------------------------------------------- Class Y (33,695) (223,702) -- -- - ----------------------------------------------------------------------------------------------------------------------- Institutional Class (6,011,495) (43,072,629) (784,168) (8,400,037) ======================================================================================================================= Net increase (decrease) in share activity (5,376,010) $(38,697,219) 1,136,114 $13,704,774 _______________________________________________________________________________________________________________________ =======================================================================================================================
(a) 86% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are mutual funds that are advised by Invesco Aim. (b) Effective upon the commencement date of Class Y shares, October 3, 2008, the following shares were converted from Class A into Class Y shares of the Fund:
CLASS SHARES AMOUNT -------------------------------------------------------------------------------------------------- Class Y 23,646 $ 190,353 -------------------------------------------------------------------------------------------------- Class A (23,646) (190,353) __________________________________________________________________________________________________ ==================================================================================================
20 AIM STRUCTURED GROWTH FUND NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
NET GAINS NET ASSET NET (LOSSES) ON DIVIDENDS DISTRIBUTIONS VALUE, INVESTMENT SECURITIES (BOTH TOTAL FROM FROM NET FROM NET BEGINNING INCOME REALIZED AND INVESTMENT INVESTMENT REALIZED TOTAL OF PERIOD (LOSS)(a) UNREALIZED) OPERATIONS INCOME GAINS DISTRIBUTIONS - ------------------------------------------------------------------------------------------------------------------------ CLASS A Year ended 08/31/09 $10.20 $ 0.09 $(2.31) $(2.22) $(0.03) $ -- $(0.03) Year ended 08/31/08 11.45 0.04 (0.93) (0.89) (0.03) (0.33) (0.36) Year ended 08/31/07 9.93 0.02 1.53 1.55 (0.02) (0.01) (0.03) Year ended 08/31/06(e) 10.00 0.11 (0.18) (0.07) -- -- -- - ------------------------------------------------------------------------------------------------------------------------ CLASS B Year ended 08/31/09 10.05 0.03 (2.26) (2.23) -- -- -- Year ended 08/31/08 11.35 (0.04) (0.93) (0.97) -- (0.33) (0.33) Year ended 08/31/07 9.90 (0.07) 1.53 1.46 -- (0.01) (0.01) Year ended 08/31/06(e) 10.00 0.08 (0.18) (0.10) -- -- -- - ------------------------------------------------------------------------------------------------------------------------ CLASS C Year ended 08/31/09 10.05 0.03 (2.27) (2.24) -- -- -- Year ended 08/31/08 11.35 (0.04) (0.93) (0.97) -- (0.33) (0.33) Year ended 08/31/07 9.90 (0.07) 1.53 1.46 -- (0.01) (0.01) Year ended 08/31/06(e) 10.00 0.08 (0.18) (0.10) -- -- -- - ------------------------------------------------------------------------------------------------------------------------ CLASS R Year ended 08/31/09 10.18 0.07 (2.30) (2.23) (0.01) -- (0.01) Year ended 08/31/08 11.44 0.01 (0.94) (0.93) -- (0.33) (0.33) Year ended 08/31/07 9.92 (0.01) 1.54 1.53 (0.00) (0.01) (0.01) Year ended 08/31/06(e) 10.00 0.10 (0.18) (0.08) -- -- -- - ------------------------------------------------------------------------------------------------------------------------ CLASS Y Year ended 08/31/09(e) 8.05 0.08 (0.14) (0.06) (0.03) -- (0.03) - ------------------------------------------------------------------------------------------------------------------------ INSTITUTIONAL CLASS Year ended 08/31/09 10.23 0.10 (2.31) (2.21) (0.05) -- (0.05) Year ended 08/31/08 11.48 0.07 (0.93) (0.86) (0.06) (0.33) (0.39) Year ended 08/31/07 9.94 0.05 1.53 1.58 (0.03) (0.01) (0.04) Year ended 08/31/06(e) 10.00 0.12 (0.18) (0.06) -- -- -- ________________________________________________________________________________________________________________________ ======================================================================================================================== RATIO OF RATIO OF EXPENSES EXPENSES TO AVERAGE TO AVERAGE NET NET ASSETS ASSETS WITHOUT RATIO OF NET NET ASSET NET ASSETS, WITH FEE WAIVERS FEE WAIVERS INVESTMENT INCOME VALUE, END TOTAL END OF PERIOD AND/OR EXPENSES AND/OR EXPENSES (LOSS) TO AVERAGE PORTFOLIO OF PERIOD RETURN(b) (000S OMITTED) ABSORBED ABSORBED NET ASSETS TURNOVER(C) - ----------------------------------------------------------------------------------------------------------------------------------- CLASS A Year ended 08/31/09 $ 7.95 (21.72)% $ 2,491 1.01%(d) 1.50%(d) 1.20%(d) 102% Year ended 08/31/08 10.20 (8.25) 4,894 1.00 1.18 0.37 119 Year ended 08/31/07 11.45 15.63 7,481 1.01 1.29 0.17 91 Year ended 08/31/06(e) 9.93 (0.70) 862 1.03(f) 5.52(f) 2.57(f) 7 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS B Year ended 08/31/09 7.82 (22.19) 298 1.76(d) 2.25(d) 0.45(d) 102 Year ended 08/31/08 10.05 (8.98) 465 1.75 1.93 (0.38) 119 Year ended 08/31/07 11.35 14.76 472 1.76 2.04 (0.58) 91 Year ended 08/31/06(e) 9.90 (1.00) 662 1.78(f) 6.27(f) 1.82(f) 7 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS C Year ended 08/31/09 7.81 (22.29) 974 1.76(d) 2.25(d) 0.45(d) 102 Year ended 08/31/08 10.05 (8.98) 1,911 1.75 1.93 (0.38) 119 Year ended 08/31/07 11.35 14.76 2,065 1.76 2.04 (0.58) 91 Year ended 08/31/06(e) 9.90 (1.00) 599 1.78(f) 6.27(f) 1.82(f) 7 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS R Year ended 08/31/09 7.94 (21.88) 30 1.26(d) 1.75(d) 0.95(d) 102 Year ended 08/31/08 10.18 (8.55) 26 1.25 1.43 0.12 119 Year ended 08/31/07 11.44 15.46 13 1.26 1.54 (0.08) 91 Year ended 08/31/06(e) 9.92 (0.80) 595 1.28(f) 5.77(f) 2.32(f) 7 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS Y Year ended 08/31/09(e) 7.96 (0.60) 73 0.75(d)(f) 1.29(d)(f) 1.46(d)(f) 102 - ----------------------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL CLASS Year ended 08/31/09 7.97 (21.45) 82,613 0.75(d) 0.86(d) 1.46(d) 102 Year ended 08/31/08 10.23 (7.99) 158,699 0.73 0.73 0.64 119 Year ended 08/31/07 11.48 15.93 163,313 0.75 0.89 0.43 91 Year ended 08/31/06(e) 9.94 (0.60) 86,898 0.77(f) 5.20(f) 2.83(f) 7 ___________________________________________________________________________________________________________________________________ ===================================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. (c) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. (d) Ratios are based on average daily net assets (000's omitted) of $2,543, $287, $1,052, $24, $91 and $93,299 for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares, respectively. (e) Commencement date of March 31, 2006 for Class A, Class B, Class C, Class R and Institutional Class shares and October 3, 2008 for Class Y shares. (f) Annualized. 21 AIM STRUCTURED GROWTH FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees of AIM Counselor Series Trust and Shareholders of AIM Structured Growth 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 AIM Structured Growth Fund (one of the funds constituting AIM Counselor Series Trust, hereafter referred to as the "Fund") at August 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PRICEWATERHOUSECOOPERS LLP October 16, 2009 Houston, Texas 22 AIM STRUCTURED GROWTH FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(2) RATIO - --------------------------------------------------------------------------------------------------- A $1,000.00 $1,380.20 $ 6.00 $1,020.16 $5.09 1.00% - --------------------------------------------------------------------------------------------------- B 1,000.00 1,376.80 10.48 1,016.38 8.89 1.75 - --------------------------------------------------------------------------------------------------- C 1,000.00 1,375.00 10.48 1,016.38 8.89 1.75 - --------------------------------------------------------------------------------------------------- R 1,000.00 1,380.90 7.50 1,018.90 6.36 1.25 - --------------------------------------------------------------------------------------------------- Y 1,000.00 1,384.30 4.51 1,021.42 3.82 0.75 - ---------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009 through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. 23 AIM STRUCTURED GROWTH FUND Supplement to Annual Report dated 8/31/09 AIM STRUCTURED GROWTH FUND INSTITUTIONAL CLASS SHARES ------------------------------------------ Please note that past performance is AVERAGE ANNUAL TOTAL RETURNS not indicative of future results. More The following information has been For periods ended 8/31/09 recent returns may be more or less than prepared to provide Institutional Class those shown. All returns assume shareholders with a performance overview Inception (3/31/06) -5.21% reinvestment of distributions at NAV. specific to their holdings. Institutional ------------------------------------------ Investment return and principal value will Class shares are offered exclusively to 1 Year -21.45 fluctuate so your shares, when redeemed, institutional investors, including defined ------------------------------------------ may be worth more or less than their contribution plans that meet certain original cost. See full report for criteria. ------------------------------------------ information on comparative benchmarks. AVERAGE ANNUAL TOTAL RETURNS Please consult your Fund prospectus for For periods ended 6/30/09, the most more information. For the most current recent calendar quarter-end month-end performance, please call Inception (3/31/06) -8.35% 800 451 4246 or visit invescoaim.com. ------------------------------------------ 1 Year -30.17 ------------------------------------------ Institutional Class shares have no sales charge; therefore, performance is at net asset value (NAV). Performance of Institutional Class shares will differ from performance of other share classes primarily due to differing sales charges and class expenses. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 0.73%. The expense ratios presented above may vary from the expense ratios presented in other sections of the actual report that are based on expenses incurred during the period covered by the report. - ------------------------------------------ NASDAQ SYMBOL IASGX Over for information on your Fund's expenses. - --------------------------------------------------------------------------------------- THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FOR INSTITUTIONAL INVESTOR USE ONLY -- NOT FOR USE WITH THE PUBLIC THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED, SHOWN TO THE PUBLIC [INVESCO AIM LOGO] OR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. - service mark - invescoaim.com SGRO-INS-1 Invesco Aim Distributors, Inc.
Supplement to Annual Report dated 8/31/09 AIM STRUCTURED GROWTH FUND RESULTS OF A $10,000 INVESTMENT - INSTITUTIONAL CLASS SHARES SINCE INCEPTION Fund and index data from 3/31/06 [PERFORMANCE CHART] AIM STRUCTURED GROWTH LIPPER FUND- RUSSELL 1000 LARGE-CAP INSTITUTIONAL GROWTH S&P 500 GROWTH CLASS SHARES INDEX(1) INDEX(1) FUNDS INDEX(1) ------------- ------------ -------- -------------- 3/31/2006 10000 10000 10000 10000 04/06 10040 9986 10134 9984 05/06 9740 9648 9843 9519 06/06 9840 9610 9856 9487 07/06 9710 9427 9917 9244 08/06 9940 9721 10152 9458 09/06 10251 9988 10414 9662 10/06 10711 10339 10753 9953 11/06 10921 10544 10957 10180 12/06 10881 10580 11111 10234 01/07 11233 10852 11279 10498 02/07 10932 10648 11059 10261 03/07 11133 10706 11182 10339 04/07 11495 11210 11677 10758 05/07 11997 11613 12084 11123 06/07 11706 11440 11884 11018 07/07 11425 11262 11516 10878 08/07 11525 11442 11688 11057 09/07 11967 11921 12125 11732 10/07 12568 12327 12318 12256 11/07 12237 11873 11802 11756 12/07 12426 11830 11721 11767 01/08 11068 10907 11018 10760 02/08 10850 10691 10660 10536 03/08 10757 10626 10614 10446 04/08 11233 11184 11131 11090 05/08 11493 11593 11275 11392 06/08 10788 10758 10325 10554 07/08 10653 10554 10239 10346 08/08 10601 10668 10387 10374 09/08 9140 9432 9462 9044 10/08 7430 7772 7873 7464 11/08 6756 7154 7308 6716 12/08 6979 7283 7385 6896 01/09 6540 6932 6763 6540 02/09 6017 6411 6046 6113 03/09 6592 6983 6574 6638 04/09 7219 7653 7203 7342 05/09 7480 8033 7605 7744 06/09 7532 8122 7621 7747 07/09 8096 8699 8196 8330 08/09 8328 8880 8492 8495 (1) Lipper Inc. Past performance cannot guarantee shown in the chart and table(s) does not is that of the Fund's Class A, B, C and R comparable future results. reflect deduction of taxes a shareholder shares. The performance of the Fund's would pay on Fund distributions or sale of other share classes will differ primarily The data shown in the chart above Fund shares. Performance of the indexes due to different sales charge structures includes reinvested distributions and Fund does not reflect the effects of taxes. and class expenses, and may be greater expenses including management fees. Index than or less than the performance of the results include reinvested dividends. The performance data shown in the chart Fund's Institutional Class shares shown in Performance of an index of funds reflects above is that of the Fund's institutional the chart above. fund expenses and management fees; share class. The performance data shown in performance of a market index does not. the chart in the annual report Performance - --------------------------------------------------------------------------------------- THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FOR INSTITUTIONAL INVESTOR USE ONLY -- NOT FOR USE WITH THE PUBLIC THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED, SHOWN TO THE PUBLIC [INVESCO AIM LOGO] OR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. - service mark - invescoaim.com SGRO-INS-1 Invesco Aim Distributors, Inc.
CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009 through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
- ----------------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(2) RATIO - ----------------------------------------------------------------------------------------------------------- Institutional $1,000.00 $1,383.70 $4.51 $1,021.42 $3.82 0.75% - -----------------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009 through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. AIM STRUCTURED GROWTH FUND - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS The Board of Trustees (the Board) of AIM strategies and limitations of these funds. the year as part of their ongoing Counselor Series Trust is required under oversight of the Fund, and did not the Investment Company Act of 1940 to In addition to their meetings identify any particular factor that was approve annually the renewal of the AIM throughout the year, the Sub-Committees controlling. Each Trustee may have Structured Growth Fund (the Fund) meet at designated contract renewal evaluated the information provided investment advisory agreement with Invesco meetings each year to conduct an in-depth differently from another Trustee and Aim Advisors, Inc. (Invesco Aim) and the review of the performance, fees, expenses, attributed different weight to the various Master Intergroup Sub-Advisory Contract and other matters related to their factors. The Trustees recognized that the for Mutual Funds (the sub-advisory assigned funds. During the contract advisory arrangements and resulting contracts) with Invesco Asset Management renewal process, the Trustees receive advisory fees for the Fund and the other Deutschland GmbH, Invesco Asset Management comparative performance and fee data AIM Funds are the result of years of Limited, Invesco Asset Management (Japan) regarding the AIM Funds prepared by an review and negotiation between the Limited, Invesco Australia Limited, independent company, Lipper, Inc. Trustees and Invesco Aim, that the Invesco Global Asset Management (N.A.), (Lipper), under the direction and Trustees may focus to a greater extent on Inc., Invesco Hong Kong Limited, Invesco supervision of the Senior Officer who also certain aspects of these arrangements in Institutional (N.A.), Inc., Invesco Senior prepares a separate analysis of this some years than in others, and that the Secured Management, Inc. and Invesco information for the Trustees. Each Trustees' deliberations and conclusions in Trimark Ltd. (collectively, the Affiliated Sub-Committee then makes recommendations a particular year may be based in part on Sub-Advisers). During contract renewal to the Investments Committee regarding the their deliberations and conclusions meetings held on June 16-17, 2009, the fees and expenses of their assigned funds. regarding these same arrangements Board as a whole, and the disinterested or The Investments Committee considers each throughout the year and in prior years. "independent" Trustees voting separately, Sub-Committee's recommendations and makes approved the continuance of the Fund's its own recommendations regarding the fees The discussion below serves as a investment advisory agreement and the and expenses of the AIM Funds to the full summary of the Senior Officer's sub-advisory contracts for another year, Board. The Investments Committee also independent written evaluation with effective July 1, 2009. In doing so, the considers each Sub-Committee's respect to the Fund's investment advisory Board determined that the Fund's recommendations in making its annual agreement as well as a discussion of the investment advisory agreement and the recommendation to the Board whether to material factors and related conclusions sub-advisory contracts are in the best approve the continuance of each AIM Fund's that formed the basis for the Board's interests of the Fund and its shareholders investment advisory agreement and approval of the Fund's investment advisory and that the compensation to Invesco Aim sub-advisory contracts for another year. agreement and sub-advisory contracts. and the Affiliated Sub-Advisers under the Unless otherwise stated, information set Fund's investment advisory agreement and The independent Trustees met separately forth below is as of June 17, 2009, and sub-advisory contracts is fair and during their evaluation of the Fund's does not reflect any changes that may have reasonable. investment advisory agreement and occurred since that date, including but sub-advisory contracts with independent not limited to changes to the Fund's THE BOARD'S FUND EVALUATION PROCESS legal counsel. The independent Trustees performance, advisory fees, expense were also assisted in their annual limitations and/ or fee waivers. The Board's Investments Committee has evaluation of the Fund's investment established three Sub-Committees that are advisory agreement by the Senior Officer. FACTORS AND CONCLUSIONS AND SUMMARY OF responsible for overseeing the management One responsibility of the Senior Officer INDEPENDENT WRITTEN FEE EVALUATION of a number of the series portfolios of is to manage the process by which the AIM the AIM Funds. This Sub-Committee Funds' proposed management fees are A. Nature, Extent and Quality of structure permits the Trustees to focus on negotiated during the annual contract Services Provided by Invesco Aim the performance of the AIM Funds that have renewal process to ensure that they are been assigned to them. The Sub-Committees negotiated in a manner that is at arms' The Board reviewed the advisory services meet throughout the year to review the length and reasonable. Accordingly, the provided to the Fund by Invesco Aim under performance of their assigned funds, and Senior Officer must either supervise a the Fund's investment advisory agreement, the Sub-Committees review monthly and competitive bidding process or prepare an the performance of Invesco Aim in quarterly comparative performance independent written evaluation. The Senior providing these services, and the information and periodic asset flow data Officer recommended that an independent credentials and experience of the officers for their assigned funds. These materials written evaluation be provided and, at the and employees of Invesco Aim who are prepared under the direction and direction of the Board, prepared an provide these services. The Board's review supervision of the independent Senior independent written evaluation. of the qualifications of Invesco Aim to Officer, an officer of the AIM Funds who provide these services included the reports directly to the independent During the annual contract renewal Board's consideration of Invesco Aim's Trustees. Over the course of each year, process, the Board considered the factors portfolio and product review process, the Sub-Committees meet with portfolio discussed below in evaluating the fairness various back office support functions managers for their assigned funds and and reasonableness of the Fund's provided by Invesco Aim and its other members of management and review investment advisory agreement and affiliates, and Invesco Aim's equity and with these individuals the performance, sub-advisory contracts. The Board fixed income trading operations. The Board investment objective(s), policies, considered all of the information provided concluded that the nature, extent and to them, including information provided at quality of the advisory services provided their meetings throughout to the Fund by Invesco Aim are appropriate and that Invesco Aim 24 AIM STRUCTURED GROWTH FUND continued
currently is providing satisfactory ers by permitting Invesco Aim to utilize noted that some comparative data was at advisory services in accordance with the the additional resources and talent of the least one year old and that other data did terms of the Fund's investment advisory Affiliated Sub-Advisers in managing the not reflect the market downturn that agreement. In addition, based on their Fund. occurred in the fourth quarter of 2008. ongoing meetings throughout the year with the Fund's portfolio manager or managers, C. Fund Performance The Board compared the Fund's the Board concluded that these individuals sub-advisory fee rate to the effective fee are competent and able to continue to The Board considered Fund performance as a rates (the advisory fee after any advisory carry out their responsibilities under the relevant factor in considering whether to fee waivers and before any expense Fund's investment advisory agreement. approve the investment advisory agreement limitations/waivers) of two separately as well as the sub-advisory contracts for managed accounts/wrap accounts advised by In determining whether to continue the the Fund, as Invesco Institutional Invesco Institutional. The Board noted Fund's investment advisory agreement, the currently manages assets of the Fund. that the Fund's sub-advisory fee rate was Board considered the prior relationship below the rates for the separately managed between Invesco Aim and the Fund, as well The Board noted that the Fund recently accounts/wrap accounts advised by Invesco as the Board's knowledge of Invesco Aim's began operations and that only two Institutional. The Board considered that operations, and concluded that it is calendar years of comparative performance management of the separately managed beneficial to maintain the current data was available. The Board compared the accounts/wrap accounts by Invesco relationship, in part, because of such Fund's performance during the one and two Institutional involves different levels of knowledge. The Board also considered the year periods to the performance of funds services and different operational and steps that Invesco Aim and its affiliates in the Lipper performance universe that regulatory requirements than Invesco Aim's continue to take to improve the quality are not managed by Invesco Aim or an and Invesco Institutional's management of and efficiency of the services they Affiliated Sub-Adviser and against the the Fund. The Board concluded that these provide to the AIM Funds in the areas of Lipper Multi-Cap Growth Funds Index. The differences are appropriately reflected in investment performance, product line Board noted that the Fund's performance the fee structure for the Fund. diversification, distribution, fund was in the fourth quintile of its operations, shareholder services and performance universe for the one and two The Board noted that Invesco Aim has compliance. The Board concluded that the year periods (the first quintile being the contractually agreed to waive fees and/ or quality and efficiency of the services best performing funds and the fifth limit expenses of the Fund through at Invesco Aim and its affiliates provide to quintile being the worst performing least June 30, 2010 in an amount necessary the AIM Funds in each of these areas funds). The Board noted that the Fund's to limit total annual operating expenses support the Board's approval of the performance was below the performance of to a specified percentage of average daily continuance of the Fund's investment the Index for the one and two year net assets for each class of the Fund. The advisory agreement. periods. Although the independent written Board considered the effect this expense evaluation of the Fund's Senior Officer limitation would have on the Fund's B. Nature, Extent and Quality of only considered Fund performance through estimated total expenses. The Board also Services Provided by Affiliated the most recent calendar year, the Board noted that Invesco Aim has agreed to Sub-Advisers also reviewed more recent Fund performance reduce the per account transfer agent fee and this review did not change their for all the retail funds, including the The Board reviewed the services provided conclusions. The Board noted that, in Fund, effective July 1, 2009. by the Affiliated Sub-Advisers under the response to the Board's focus on fund sub-advisory contracts and the credentials performance, Invesco Aim has taken a The Board also considered the services and experience of the officers and number of actions intended to improve the provided by the Affiliated Sub-Advisers employees of the Affiliated Sub-Advisers investment process for the funds. pursuant to the sub-advisory contracts who provide these services. The Board and the services provided by Invesco Aim concluded that the nature, extent and D. Advisory and Sub-Advisory Fees and pursuant to the Fund's advisory agreement, quality of the services provided by the Fee Waivers as well as the allocation of fees between Affiliated Sub-Advisers are appropriate. Invesco Aim and the Affiliated The Board noted that the Affiliated The Board compared the Fund's contractual Sub-Advisers pursuant to the sub-advisory Sub-Advisers, which have offices and advisory fee rate to the contractual contracts. The Board noted that the personnel that are geographically advisory fee rates of funds in the Fund's sub-advisory fees have no direct effect on dispersed in financial centers around the Lipper expense group that are not managed the Fund or its shareholders, as they are world, can provide research and other by Invesco Aim or an Affiliated paid by Invesco Aim to the Affiliated information and make recommendations on Sub-Adviser, at a common asset level. The Sub-Advisers, and that Invesco Aim and the the markets and economies of various Board noted that the Fund's contractual Affiliated Sub-Advisers are affiliates. countries and securities of companies advisory fee rate was below the median located in such countries or on various contractual advisory fee rate of funds in After taking account of the Fund's types of investments and investment its expense group. The Board also reviewed contractual advisory fee rate, the techniques. The Board noted that the methodology used by Lipper in contractual sub-advisory fee rate, the investment decisions for the Fund are made determining contractual fee rates, which comparative advisory fee information by Invesco Institutional (N.A.), Inc. includes using audited financial data from discussed above, the expense limitations (Invesco Institutional). The Board the most recent annual report of each fund and other relevant factors, the Board concluded that the sub-advisory contracts in the expense group that was publicly concluded that the Fund's advisory and benefit the Fund and its sharehold- available as of the end of the past sub-advisory fees are fair and reasonable. calendar year. The Board 25 AIM STRUCTURED GROWTH FUND continued
E. Economies of Scale and Breakpoints Affiliated Sub-Adviser is financially least June 30, 2010, the advisory fees sound and has the resources necessary to payable by the Fund in an amount equal to The Board considered the extent to which perform its obligations under the 100% of the net advisory fees Invesco Aim there are economies of scale in the sub-advisory contracts, and concluded that receives from the affiliated money market provision of advisory services to the each Affiliated Sub-Adviser has the funds with respect to the Fund's Fund. The Board also considered whether financial resources necessary to fulfill investment in the affiliated money market the Fund benefits from such economies of these obligations. funds of uninvested cash, but not cash scale through contractual breakpoints in collateral. The Board concluded that the the Fund's advisory fee schedule. The G. Collateral Benefits to Invesco Aim Fund's investment of uninvested cash and Board noted that the Fund's contractual and its Affiliates cash collateral from any securities advisory fee schedule includes seven lending arrangements in the affiliated breakpoints, but that due to the Fund's The Board considered various other money market funds is in the best asset level at the end of the past benefits received by Invesco Aim and its interests of the Fund and its calendar year, the Fund has yet to benefit affiliates resulting from Invesco Aim's shareholders. from the breakpoints. Based on this relationship with the Fund, including the information, the Board concluded that the fees received by Invesco Aim and its Fund's advisory fees would reflect affiliates for their provision of economies of scale at higher asset levels. administrative, transfer agency and The Board also noted that the Fund shares distribution services to the Fund. The directly in economies of scale through Board considered the performance of lower fees charged by third party service Invesco Aim and its affiliates in providers based on the combined size of providing these services and the all of the AIM Funds and affiliates. organizational structure employed by Invesco Aim and its affiliates to provide F. Profitability and Financial these services. The Board also considered Resources that these services are provided to the Fund pursuant to written contracts that The Board reviewed information from are reviewed and approved on an annual Invesco Aim concerning the costs of the basis by the Board. The Board concluded advisory and other services that Invesco that Invesco Aim and its affiliates are Aim and its affiliates provide to the Fund providing these services in a satisfactory and the profitability of Invesco Aim and manner and in accordance with the terms of its affiliates in providing these their contracts, and are qualified to services. The Board also reviewed continue to provide these services to the information concerning the financial Fund. condition of Invesco Aim and its affiliates. The Board reviewed with The Board considered the benefits Invesco Aim the methodology used to realized by Invesco Aim and the Affiliated prepare the profitability information. The Sub-Advisers as a result of portfolio Board considered the overall profitability brokerage transactions executed through of Invesco Ltd., the ultimate parent of "soft dollar" arrangements. The Board Invesco Aim and the Affiliated noted that soft dollar arrangements shift Sub-Advisers, and of Invesco Aim, as well the payment obligation for research and as the profitability of Invesco Aim in execution services from Invesco Aim and connection with managing the Fund. The the Affiliated Sub-Advisers to the funds Board noted that Invesco Aim continues to and therefore may reduce Invesco Aim's and operate at a net profit, although the the Affiliated Sub-Advisers' expenses. The reduction of assets under management as a Board concluded that Invesco Aim's and the result of market movements and the Affiliated Sub-Advisers' soft dollar increase in voluntary fee waivers for arrangements are appropriate. The Board affiliated money market funds have reduced also concluded that, based on their review the profitability of Invesco Aim and its and representations made by the Chief affili-ates. The Board concluded that the Compliance Officer of Invesco Aim, these Fund's fees are fair and reasonable, and arrangements are consistent with that the level of profits realized by regulatory requirements. Invesco Aim and its affiliates from providing services to the Fund is not The Board considered the fact that the excessive in light of the nature, quality Fund's uninvested cash and cash collateral and extent of the services provided. The from any securities lending arrangements Board considered whether Invesco Aim is may be invested in money market funds financially sound and has the resources advised by Invesco Aim pursuant to necessary to perform its obligations under procedures approved by the Board. The the Fund's investment advisory agreement, Board noted that Invesco Aim will receive and concluded that Invesco Aim has the advisory fees from these affiliated money financial resources necessary to fulfill market funds attributable to such these obligations. The Board also investments, although Invesco Aim has considered whether each contractually agreed to waive through at 26 AIM STRUCTURED GROWTH FUND
TAX INFORMATION Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors. The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement. The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended August 31, 2009:
FEDERAL AND STATE INCOME TAX ---------------------------- Qualified Dividend Income* 100% Corporate Dividends Received Deduction* 100% U.S. Treasury Obligations* 0.04%
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year. 27 AIM STRUCTURED GROWTH FUND TRUSTEES AND OFFICERS The address of each trustee and officer of AIM Counselor Series Trust (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------------ Martin L. Flanagan(1) -- 1960 2007 Executive Director, Chief Executive Officer and President, None Trustee Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Chairman, Invesco Aim Advisors, Inc. (registered investment advisor); Trustee, The AIM Family of Funds(R); Vice Chairman, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd. and Chairman, Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and Principal Executive Officer President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company) and Invesco Aim Capital Management, Inc. (registered investment advisor); Director and President, INVESCO Funds Group, Inc. (registered investment advisor and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltee (registered investment advisor and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: President, Invesco Trimark Dealer Inc.; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Director and President, Invesco Trimark Ltd./Invesco Trimark Ltee; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited (insurance Trustee and Chair consulting company) company); Captaris, Inc. (unified messaging provider); and Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Bob R. Baker -- 1936 1983 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Bayley -- 1939 2003 Retired None Trustee Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Board of Governors, Trustee firm) Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association - ------------------------------------------------------------------------------------------------------------------------------------ Albert R. Dowden -- 1941 2003 Director of a number of public and private business Board of Nature's Trustee corporations, including the Boss Group Ltd. (private Sunshine Products, Inc. investment and management); Continental Energy Services, LLC (oil and gas pipeline service); Reich & Tang Funds (registered investment company), and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, CompuDyne Corporation (provider of product and services to the public security market); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Senior Vice President, AB Volvo; Director of various public and private corporations - ------------------------------------------------------------------------------------------------------------------------------------ Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff Trustee (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) - ------------------------------------------------------------------------------------------------------------------------------------ Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich & Tang Trustee Funds (16 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ Prema Mathai-Davis -- 1950 2003 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Larry Soll -- 1942 1997 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Raymond Stickel, Jr. -- 1944 2005 Retired None Trustee Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Flanagan is considered an interested person of the Trust because he is an officer of the advisor to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the advisor to the Trust. (2) Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. T-1 Trustees and Officers - (continued)
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ Other Officers - ------------------------------------------------------------------------------------------------------------------------------------ Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family N/A Senior Vice President and of Funds(R) Formerly: Director of Compliance and Assistant Senior Officer General Counsel, ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General Counsel and Director of Compliance, ALPS Mutual Funds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General N/A Senior Vice President, Chief Counsel, Invesco Aim Management Group, Inc., Invesco Aim Legal Officer and Secretary Advisors, Inc. and Invesco Aim Capital Management, Inc.; Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); and Manager, Invesco PowerShares Capital Management LLC Formerly: Director, Vice President and Secretary, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company); Vice President and Secretary, PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator); General Counsel and Secretary, Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company) - ------------------------------------------------------------------------------------------------------------------------------------ Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice N/A Vice President President, The AIM Family of Funds(R) Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R); Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company - ------------------------------------------------------------------------------------------------------------------------------------ Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, N/A Vice President Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., .Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; and Vice President, The AIM Family of Funds(R) Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Sheri Morris -- 1964 2003 Vice President, Treasurer and Principal Financial Officer, N/A Vice President, Treasurer and The AIM Family of Funds(R); and Vice President, Invesco Aim Principal Financial Officer Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management Inc. Formerly: Assistant Vice President and Assistant Treasurer, The AIM Family of Funds(R) and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash N/A Vice President Management Group; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only) Formerly: President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer and Managing Director, Invesco Aim Capital Management, Inc.; and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only) - ------------------------------------------------------------------------------------------------------------------------------------ Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim N/A Anti-Money Laundering Advisors, Inc., Invesco Aim Capital Management, Inc., Compliance Officer Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., Invesco Aim Private Asset Management, Inc. and The AIM Family of Funds(R) Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company; and Manager of the Fraud Prevention Department, Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; N/A Chief Compliance Officer Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, The AIM Family of Funds(R), Invesco Global Asset Management (N.A.), Inc. (registered investment advisor), Invesco Institutional (N.A.), Inc., (registered investment advisor), INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment advisor) and Invesco Senior Secured Management, Inc. (registered investment advisor); and Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company; and Global Head of Product Development, AIG-Global Investment Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------
The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund's prospectus for information on the Fund's sub-advisors. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street Houston, TX 77046-1173 Suite 100 Suite 100 Suite 2900 Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678 COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN Stradley Ronon Stevens & INDEPENDENT TRUSTEES Invesco Aim Investment Services, Inc. State Street Bank and Trust Young, LLP Kramer, Levin, Naftalis & Frankel LLP P.O. Box 4739 Company 2600 One Commerce Square 1177 Avenue of the Americas Houston, TX 77210-4739 225 Franklin Philadelphia, PA 19103 New York, NY 10036-2714 Boston, MA 02110-2801
T-2 [GRAPHIC] - ------------------------------------------------------------------------------------------------------------------------------------ GO PAPERLESS WITH EDELIVERY Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all about eeees: - - ENVIRONMENTALLY FRIENDLY. Go green by reducing the - EFFICIENT. Stop waiting for regular mail. Your documents number of trees used to produce paper. will be sent via email as soon as they're available. - - ECONOMICAL. Help reduce your fund's printing and - EASY. Download, save and print files using your home delivery expenses and put more capital back in your computer with a few clicks of your mouse. fund's returns. This service is provided by Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Aim Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within thirty days after receiving your request. - ------------------------------------------------------------------------------------------------------------------------------------ FUND HOLDINGS AND PROXY VOTING INFORMATION The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-09913 and 333-36074. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov. If used after January 20, 2010, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for the most recent quarter-end. Invesco Aim - service mark - is a service mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for the products and services represented by Invesco Aim; they each provide investment advisory services to individual and institutional clients and do not sell securities. Please refer to each fund's prospectus for information on the fund's subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the retail mutual funds, exchange-traded funds and institutional money market funds and the subdistributor for the STIC Global Funds represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd. It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco Global Asset [INVESCO AIM LOGO] Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the consolidated adviser - SERVICE MARK - firm will be renamed Invesco Advisers, Inc. Additional information will be posted at invescoaim.com on or about the end of the fourth quarter of 2009. invescoaim.com SGRO-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] ANNUAL REPORT TO SHAREHOLDERS AUGUST 31, 2009 - SERVICE MARK - AIM STRUCTURED VALUE FUND (GRAPHIC) 2 Letters to Shareholders 4 Performance Summary 4 Management Discussion 6 Long-Term Fund Performance 8 Supplemental Information 9 Schedule of Investments 12 Financial Statements 14 Notes to Financial Statements 22 Financial Highlights 23 Auditor's Report 24 Fund Expenses 25 Approval of Investment Advisory and Sub-Advisory Agreements 28 Tax Information T-1 Trustees and Officers
Dear Shareholders: While the year covered by this report was difficult -- for long-time investors and veteran investment professionals alike -- economic conditions and market trends appeared much more [TAYLOR favorable at the close of the fiscal year than at its start. PHOTO] The 12 months ended August 31, 2009, included a sharp market sell-off that occurred in the second half of 2008. That downturn affected virtually all sectors, markets and investors. The decline had a number of causes, the most immediate being unprecedented turmoil in credit markets. Economic uncertainty prompted banks to hoard cash and reduce lending, and caused Philip Taylor investors to shun short-term corporate debt. As a result, businesses found it difficult to fund their day-to-day operations, and the U.S. economy -- as well as economies around the globe -- virtually froze briefly. INCREASED COMMUNICATION These developments prompted a greater-than-usual number of shareholders to contact me. Some of you took the time to write a letter while others of you emailed me at phil@invescoaim.com. Many of you sought explanations for the decline in the value of your accounts, while others asked more general questions about when the economy might improve. Your questions, comments and suggestions gave me better insight into what was on your minds, and I was pleased that so many of you took the time to share your thoughts with me. As a result, Invesco Aim's investment professionals and I have increased our efforts to stay in touch with and share our views with you. We increased the number of "Investment Perspectives" articles on our website, invescoaim.com. Through these articles, we've tried to provide timely market commentary, general investor education information and sector updates. I hope you'll take a moment to read them and let me know if you find them useful. To access your Fund's latest quarterly commentary, click on "Products and Performance" at the top of our website; next, select "Mutual Funds"; and then click on "Quarterly Commentary." I also hope you've stayed in touch with your financial advisor. An experienced financial advisor who is familiar with your individual investment goals, time horizon and risk tolerance can be a source of comfort and information during uncertain times. He or she can monitor your investments to ensure they're on track and can prevent you from making impulsive short-term decisions that may have adverse long-term consequences. REASONS FOR OPTIMISM The economy and equity markets reacted to a barrage of negative news during the year. Consumer spending -- which accounts for more than two-thirds(1) of the U.S. economy -- was sluggish as unemployment rose; more workers worried about their job security; home and portfolio values declined; and credit became more difficult to obtain. In his semiannual monetary policy report to Congress in late July, U.S. Federal Reserve Board Chairman Ben Bernanke summarized the stresses and strains the U.S. and global economies suffered in late 2008 and early 2009. Importantly, he suggested that the aggressive, coordinated actions taken by governments and central banks around the world finally may be yielding results. He testified that: o The pace of overall economic decline appears to have slowed significantly. o Credit availability, for consumers and businesses, has improved noticeably. o Investors' extreme risk aversion has eased somewhat. o The decline in housing activity appears to have moderated. While these and other trends offer encouragement, uncertainties remain. Chairman Bernanke testified that he anticipates a gradual recovery in 2010 with some acceleration in economic growth in 2011, together with subdued inflation over the next two years. His considered judgment appears to be shared by investors who have begun to return, cautiously, to the equities market, causing major U.S. stock-market indexes to bounce off their March lows. A SINGLE FOCUS I believe Invesco Aim is uniquely positioned to serve our clients. Our parent company, Invesco Ltd., is one of the largest(2) and most diversified global asset managers. It provides clients with diversify ed investment strategies and a range of investment products managed by distinct management teams around the world. We believe we can serve you best by focusing on one thing and doing it well: managing your money. Our investment professionals have managed clients' money in up markets and down markets. All of us here recognize that market conditions change often; what will not change is our commitment to putting our clients first, helping you achieve your financial goals and providing excellent customer service. If you have questions about this report or your account, please contact one of our client services representatives at 800 959 4246. If you have comments for me, I encourage you to email me at phil@invescoaim.com. Thank you for investing with us. All of us at Invesco Aim look forward to serving you. Sincerely, /s/ Philip Taylor Philip Taylor Senior Managing Director, Invesco Ltd. CEO, Invesco Aim (1) Reuters; (2) Pensions & Investments 2 AIM STRUCTURED VALUE FUND
Dear Fellow Shareholders: Although the economy and financial markets have shown some signs of hope, investors remain rightfully cautious. Staying with an appropriately diversified investment program focused on your individual long-term goals can be a wise course in such uncertain times. We believe the [CROCKETT route to financial success is more like a marathon than a sprint. PHOTO] Please be assured that your Board continues to oversee the AIM Funds with a strong sense of responsibility for your money and your trust. As always, we seek to manage costs and enhance performance in ways that put your interests first. Bruce Crockett We are near the end of a busy 2009 proxy season, during which Invesco Aim Advisors, Inc.'s proxy committee votes on your behalf on issues put to a shareholder vote by the companies whose stock the Funds hold. This year, after careful case-by-case analysis by committee members and portfolio managers, the proxy committee voted with corporate management less often than in previous years, focusing on the issues of board independence, Say-On-Pay initiatives, and stock option re-pricing in light of the market's decline. The committee remained committed to supporting non-binding Say-on-Pay proposals and abstaining from voting on social issues. At its June meeting, your Board reviewed and renewed the investment advisory contracts between the AIM Funds and Invesco Aim Advisors, Inc. You can find the results of this rigorous annual process at invescoaim.com. Go to "Products & Performance" and click on "Investment Advisory Agreement Renewals." The website also contains news and market information, investment education and planning information and current reports and prospectuses for all the AIM Funds and I highly recommend it to you. You are always welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving you in the coming months. Sincerely, /s/ Bruce L. Crockett Bruce L. Crockett Independent Chair AIM Funds Board of Trustees 3 AIM STRUCTURED VALUE FUND
- --------------------------------------------------------------------------------------- MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE determine which companies should be bought or sold within the portfolio. - --------------------------------------------------------------------------------------- PERFORMANCE SUMMARY ------------------------------------------ MARKET CONDITIONS AND YOUR FUND For the fiscal year ended August 31, 2009, AIM Structured Value Fund, at net asset value, held up better than its style-specific benchmark, the Russell 1000 Value Index. The fiscal year ended August 31, 2009, These results were largely due to strong stock selection within the financials sector included the worst U.S. economic downturn - -- an area highly affected by the ongoing economic recession. since the Great Depression.(1) An overheated housing market was the primary Your Fund's long-term performance appears later in this report. the recession. When home prices fell, cause of financial instruments linked to - --------------------------------------------------------------------------------------- that market declined in value, causing FUND VS. INDEXES significant pressures in other areas of the economy. Beginning in the first Total returns, 8/31/08 to 8/31/09, at net asset value (NAV). Performance shown does not quarter of 2008, gross domestic product include applicable contingent deferred sales charges (CDSC) or front-end sales charges, (the total output of goods and services in which would have reduced performance. the U.S. economy) contracted in five out of six subsequent quarters.(1) Class A Shares -15.95% Unemployment, which stood at 4.9% in Class B Shares -16.60 January 2008, nearly doubled to 9.7% in Class C Shares -16.51 August 2009, as economic distress Class R Shares -16.01 reverberated throughout the economy.(2) Class Y Shares* -15.79 S&P 500 Index(triangle) (Broad Market Index) -18.25 With this backdrop of dire economic Russell 1000 Value Index(triangle) (Style-Specific Index) -20.27 news, the large cap equity market -- as Lipper Large-Cap Value Funds Indexo (Peer Group Index) -16.78 measured by the S&P 500 Index -- experienced two extremes over the last (triangle) Lipper Inc. year, creating a "tale of two markets". From August 31, 2008 through the market's * Share class incepted during the fiscal year. See page 7 for a detailed explanation bottom on March 9, 2009, the S&P 500 Index of Fund performance. fell 46.4%.3 From March 9th through August 31, 2009, however, the S&P 500 Index - ------------------------------------------ rebounded sharply, gaining 52.6%.(3) HOW WE INVEST factors: company earnings momentum, price trend, management action and relative Until the market low, market We manage your Fund to provide exposure to valuation. The scores from these four participants largely shunned investment large cap value equity stocks. The factors are combined to arrive at an risk. Company fundamentals were subject to portfolio strives to outperform the overall alpha score (excess return intense scrutiny; where perceived Russell 1000 Value Index while minimizing forecast) for each stock. Each alpha score instability in a company caused its the amount of additional risk relative to is relative to the other securities within security price to decline. Leverage was the benchmark. The Fund can be used as a the same industry. Stocks also are shunned; cash and income were embraced. long-term allocation to large cap stocks evaluated on a multitude of other factors After March, however, investors gradually that complements other style-specific to develop a stock-specific risk forecast became risk consumers again and market strategies within a diversified asset and transaction cost forecast. leadership changed abruptly. allocation strategy. We then incorporate the alpha forecast, As large cap stocks began to recover, Our investment process integrates the risk forecast and transaction cost they were led by low-quality stocks, many following key steps: forecast using an optimizer (a software of which were the hardest-hit during the tool) to build a portfolio that we believe collapse. Our review of data for the March o Universe development is an optimal balance of the stocks' through August 2009 time period potential return and risk. This portfolio o Stock rankings is constructed according to certain constraints to increase the probability o Risk assessment that the Fund's relative performance and volatility remain within the Fund o Portfolio construction strategy's guidelines. We continually monitor the portfolio and the overall o Trading investment process is repeated on a monthly basis to While the companies included within the Russell 1000 Value Index are used as a general guide for developing the Fund's investable universe, non-benchmark stocks also may be considered. Each stock in the universe is evaluated on four - ------------------------------------------ ------------------------------------------ ------------------------------------------ PORTFOLIO COMPOSITION TOP FIVE INDUSTRIES* TOP 10 EQUITY HOLDINGS* By sector 1. Integrated Oil & Gas 16.2% 1. Exxon Mobil Corp. 6.7% 2. Property & Casualty Insurance 9.2 2. General Electric Co. 4.8 Financials 23.3% 3. Integrated Telecommunication 3. AT&T Inc. 4.6 Energy 17.3 Services 7.6 4. Chevron Corp. 4.2 Consumer Discretionary 15.7 4. Pharmaceuticals 6.4 5. Verizon Communications Inc. 2.8 Health Care 12.4 5. Industrial Conglomerates 4.9 6. ConocoPhillips 2.7 Telecommunication Services 9.1 7. Occidental Petroleum Corp. 2.6 Industrials 7.4 ------------------------------------------ 8. Travelers Cos., Inc. (The) 2.5 Information Technology 5.4 Total Net Assets $74.2 million 9. Goldman Sachs Group, Inc. (The) 2.5 Materials 3.0 Total Number of Holdings* 111 10. Pfizer Inc. 2.2 Consumer Staples 2.8 Utilities 2.3 The Fund's holdings are subject to change, and there is no assurance that the Fund will U.S. Treasury Bills, Money Market continue to hold any particular security. Funds Plus Other Assets Less Liabilities 1.3 * Excluding money market fund holdings. 4 AIM STRUCTURED VALUE FUND
showed that those stocks that outperformed rebound in early March, the materials JEREMY LEFKOWITZ their industry peers tended to be smaller, sector outperformed the benchmark. lower-priced, and more illiquid. Portfolio manager, is lead manager of AIM Perversely, stocks that outperformed their In relative terms of risk management, we Structured Value Fund. He began his industry peers also tended to exhibit seek to minimize any style biases in the investment career in 1968 and has been fundamental weakness. For example, portfolio. Active managers typically add associated with Invesco Institutional companies that outperformed tended to be value in one of or a combination of four and/or its affiliates since 1982. Mr. those that were expected to lose money areas: beta bias (relative volatility), Lefkowitz earned a B.S. in industrial over the coming fiscal year, had negative style bias, sector/industry over/under engineering and an M.B.A. in finance from cash flow coming into this period, had weight and stock selection. We attempt to Columbia University. their earnings forecasts slashed by 50% or add value through our stock selection more by analysts, were highly levered, and decisions. Consequently, our risk DANIEL KOSTYK saw their prices decline dramatically over management process seeks to neutralize the the prior six months. These are not Fund's exposure relative to the benchmark Chartered Financial Analyst, portfolio characteristics of stocks that we seek to with regard to beta, style and manager, is manager of AIM Structured include in your Fund, because our research sector/industry exposures. Value Fund. He has been associated with found that such stocks tend to lead to We thank you for your continued Invesco Institutional and/or its long-term investing failure. investment in AIM Structured Value Fund. affiliates since 1995. Mr. Kostyk earned a B.S. in mechanical engineering from Regarding the results of AIM Structured (1) Bureau of Economic Analysis Northwestern University in Chicago and an Value Fund, it is important to understand M.B.A. in finance from the University of our investment process to better evaluate (2) Bureau of Labor Statistics Chicago. the drivers of our relative performance versus the style-specific benchmark. We (3) Lipper Inc. ANTHONY MUNCHAK generally evaluate performance based on the impact of our stock selection and risk The views and opinions expressed in Chartered Financial Analyst, portfolio management processes. management's discussion of Fund manager, is manager of AIM Structured performance are those of Invesco Aim Value Fund. He has been associated with Our stock selection model, based on the Advisors, Inc. These views and opinions Invesco Institutional and/or its four factors (company earnings momentum, are subject to change at any time based on affiliates since 2000. Mr. Munchak earned price trend, management action and factors such as market and economic a B.S. and an M.S. from Boston College. He relative value) that make up our alpha conditions. These views and opinions may also earned an M.B.A. from Bentley (excess return) forecast for stocks in our not be relied upon as investment advice or College. investment universe, was a detractor from recommendations, or as an offer for a Fund performance. In selecting holdings particular security. The information is GLEN MURPHY for the Fund, we also take into account not a complete analysis of every aspect of our risk and transaction cost forecasts. any market, country, industry, security or Chartered Financial Analyst, portfolio We use our optimization software to assist the Fund. Statements of fact are from manager, is manager of AIM Structured in making investment decisions, based on sources considered reliable, but Invesco Value Fund. He has been associated with risk and transaction cost forecasts as Aim Advisors, Inc. makes no representation Invesco Institutional and/or its well as our alpha forecast. Consequently, or warranty as to their completeness or affiliates since 1995. Mr. Murphy earned a while our stock selection model may accuracy. Although historical performance B.B.A. from the University of identify a stock with an attractive alpha is no guarantee of future results, these Massachusetts and an M.S. in finance from forecast, the optimizer may indicate that insights may help you understand our Boston College. its transaction costs are too high and/or investment management philosophy. its risk level is unacceptable. Placing FRANCIS ORLANDO more of an emphasis on transaction costs See important Fund and index disclosures and potential risk in making stock later in this report. Chartered Financial Analyst, portfolio selections can benefit or detract from manager, is manager of AIM Structured Fund performance. For the fiscal year, it Value Fund. He has been associated with contributed to our results. Invesco Institutional and/or its affiliates since 1987. Mr. Orlando earned Our stock selection within the a B.B.A. from Merrimack College and an portfolio was strong for the fiscal year, M.B.A. from Boston College. particularly in the financials sector. A timely overweight in insurance company XL Assisted by the Global Quantitative Equity CAPITAL LIMITED was one of the biggest Research Team contributors to Fund performance. Stock selection and an overweight position in the consumer discretionary sector benefited Fund performance. Conversely, stock selection and an underweight position in the materials sector detracted from Fund performance. As the market began to 5 AIM STRUCTURED VALUE FUND
YOUR FUND'S LONG-TERM PERFORMANCE RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASSES WITH SALES CHARGES SINCE INCEPTION Fund and index data from 3/31/06
(PERFORMANCE GRAPH)
AIM AIM AIM AIM LIPPER FUND DATA FROM STRUCTURED STRUCTURED STRUCTURED STRUCTURED LARGE- 03/31/06, VALUE VALUE VALUE VALUE CAP INDEX DATA FUND- FUND- FUND- FUND- RUSSELL S&P VALUE FROM CLASS A CLASS B CLASS C CLASS R 1000 VALUE 500 FUNDS 03/31/06 SHARES SHARES SHARES SHARES INDEX(1) INDEX(1) INDEX(1) - -------------- ---------- ---------- ---------- ---------- ---------- -------- -------- 3/31/2006 9450 10000 10000 10000 10000 10000 10000 04/06 9639 10190 10190 10200 10254 10134 10249 05/06 9318 9850 9850 9860 9995 9843 9998 06/06 9441 9970 9970 9981 10059 9856 10005 07/06 9724 10260 10260 10281 10304 9917 10158 08/06 9866 10399 10399 10421 10476 10152 10346 09/06 10027 10569 10569 10601 10685 10414 10586 10/06 10377 10929 10929 10971 11035 10753 10902 11/06 10614 11180 11180 11221 11286 10957 11090 12/06 10748 11307 11307 11347 11540 11111 11329 01/07 11015 11588 11577 11628 11687 11279 11475 02/07 10740 11287 11287 11338 11505 11059 11270 03/07 10987 11538 11537 11598 11683 11182 11414 04/07 11385 11949 11948 12010 12115 11677 11903 05/07 11746 12319 12318 12392 12552 12084 12341 06/07 11338 11889 11879 11961 12258 11884 12153 07/07 10711 11219 11218 11298 11692 11516 11665 08/07 10834 11349 11338 11429 11823 11688 11803 09/07 11204 11729 11718 11811 12229 12125 12177 10/07 11338 11859 11848 11952 12230 12318 12273 11/07 10691 11169 11157 11258 11632 11802 11745 12/07 10667 11143 11132 11243 11520 11721 11608 01/08 10139 10581 10570 10675 11058 11018 11020 02/08 9825 10254 10243 10355 10595 10660 10649 03/08 9699 10110 10110 10211 10515 10614 10501 04/08 10149 10580 10570 10685 11028 11131 11021 05/08 10178 10600 10590 10706 11010 11275 11114 06/08 9326 9711 9700 9809 9957 10325 10143 07/08 9267 9639 9629 9747 9921 10239 10005 08/08 9346 9710 9700 9819 10089 10387 10119 09/08 8749 9087 9076 9190 9348 9462 9267 10/08 7311 7584 7584 7683 7730 7873 7713 11/08 6920 7185 7175 7271 7175 7308 7151 12/08 7133 7401 7402 7498 7275 7385 7313 01/09 6220 6445 6456 6538 6438 6763 6663 02/09 5588 5790 5790 5874 5578 6046 5941 03/09 6120 6331 6331 6433 6055 6574 6454 04/09 6753 6986 6976 7086 6704 7203 7061 05/09 7013 7246 7246 7371 7119 7605 7523 06/09 6933 7153 7152 7276 7066 7621 7508 07/09 7525 7766 7755 7888 7645 8196 8083 08/09 7856 7865 8099 8244 8044 8492 8422 (1) Lipper Inc. Past performance cannot guarantee investment in the Fund at the close of the Performance shown in the chart and comparable future results. reporting period and paid the applicable table(s) does not reflect deduction of contingent deferred sales charges. Index taxes a shareholder would pay on Fund The data shown in the chart include results include reinvested dividends, but distributions or sale of Fund shares. reinvested distributions, applicable sales they do not reflect sales charges. charges and Fund expenses including Performance of the peer group reflects management fees. Results for Class B fund expenses and management fees; shares are calculated as if a hypothetical performance of a market index does not. shareholder had liquidated his entire 6 AIM STRUCTURED VALUE FUND
- ------------------------------------------ ------------------------------------------ AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS SHARES DO NOT HAVE A FRONT-END SALES CHARGE; RETURNS SHOWN ARE AT NET ASSET As of 8/31/09, including maximum applicable As of 6/30/09, the most recent calendar VALUE AND DO NOT REFLECT A 0.75% CDSC THAT sales charges quarter-end, including maximum applicable MAY BE IMPOSED ON A TOTAL REDEMPTION OF sales charges RETIREMENT PLAN ASSETS WITHIN THE FIRST CLASS A SHARES YEAR. CLASS Y SHARES DO NOT HAVE A Inception (3/31/06) -6.82% CLASS A SHARES FRONT-END SALES CHARGE OR A CDSC; 1 Year -20.61 Inception (3/31/06) -10.66% THEREFORE, PERFORMANCE IS AT NET ASSET 1 Year -29.73 VALUE. CLASS B SHARES Inception (3/31/06) -6.78% CLASS B SHARES THE PERFORMANCE OF THE FUND'S SHARE 1 Year -20.70 Inception (3/31/06) -10.61% CLASSES WILL DIFFER PRIMARILY DUE TO 1 Year -29.96 DIFFERENT SALES CHARGE STRUCTURES AND CLASS C SHARES CLASS EXPENSES. Inception (3/31/06) -5.98% CLASS C SHARES 1 Year -17.33 Inception (3/31/06) -9.80% HAD THE ADVISOR NOT WAIVED FEES AND/OR 1 Year -26.99 REIMBURSED EXPENSES, PERFORMANCE WOULD CLASS R SHARES HAVE BEEN LOWER. Inception (3/31/06) -5.49% CLASS R SHARES 1 Year -16.01 Inception (3/31/06) -9.33% (1) Total annual operating expenses less 1 Year -25.82 any contractual fee waivers and/or CLASS Y SHARES expense reimbursements by the advisor Inception -5.21% CLASS Y SHARES in effect through at least June 30, 1 Year -15.79 Inception -9.08% 2010. See current prospectus for more 1 Year -25.62 information. CLASS Y SHARES' INCEPTION DATE IS OCTOBER THE NET ANNUAL FUND OPERATING EXPENSE 3, 2008; RETURNS SINCE THAT DATE ARE RATIO SET FORTH IN THE MOST RECENT FUND ACTUAL RETURNS. ALL OTHER RETURNS ARE PROSPECTUS AS OF THE DATE OF THIS REPORT BLENDED RETURNS OF ACTUAL CLASS Y SHARE FOR CLASS A, CLASS B, CLASS C, CLASS R AND PERFORMANCE AND RESTATED CLASS A SHARE CLASS Y SHARES WAS 1.01%, 1.76%, 1.76%, PERFORMANCE (FOR PERIODS PRIOR TO THE 1.26%, AND 0.76%, RESPECTIVELY.(1) THE TOTAL INCEPTION DATE OF CLASS Y SHARES) AT NET ANNUAL FUND OPERATING EXPENSE RATIO SET ASSET VALUE. THE RESTATED CLASS A SHARE FORTH IN THE MOST RECENT FUND PROSPECTUS PERFORMANCE REFLECTS THE RULE 12B-1 FEES AS OF THE DATE OF THIS REPORT FOR CLASS A, APPLICABLE TO CLASS A SHARES AS WELL AS CLASS B, CLASS C, CLASS R AND CLASS Y ANY FEE WAIVERS OR EXPENSE REIMBURSEMENTS SHARES WAS 1.42%, 2.17%, 2.17%, 1.67% AND RECEIVED BY CLASS A SHARES. CLASS A 1.17% RESPECTIVELY. THE EXPENSE RATIOS SHARES' INCEPTION DATE IS MARCH 31, 2006. PRESENTED ABOVE MAY VARY FROM THE EXPENSE RATIOS PRESENTED IN OTHER SECTIONS OF THIS THE PERFORMANCE DATA QUOTED REPRESENT REPORT THAT ARE BASED ON EXPENSES INCURRED PAST PERFORMANCE AND CANNOT GUARANTEE DURING THE PERIOD COVERED BY THIS REPORT. COMPARABLE FUTURE RESULTS; CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE CLASS A SHARE PERFORMANCE REFLECTS THE VISIT INVESCOAIM.COM FOR THE MOST RECENT MAXIMUM 5.50% SALES CHARGE, AND CLASS B MONTH-END PERFORMANCE. PERFORMANCE FIGURES AND CLASS C SHARE PERFORMANCE REFLECTS THE REFLECT REINVESTED DISTRIBUTIONS, CHANGES APPLICABLE CONTINGENT DEFERRED SALES IN NET ASSET VALUE AND THE EFFECT OF THE CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE MAXIMUM SALES CHARGE UNLESS OTHERWISE CDSC ON CLASS B SHARES DECLINES FROM 5% STATED. INVESTMENT RETURN AND PRINCIPAL BEGINNING AT THE TIME OF PURCHASE TO 0% AT VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE THE BEGINNING OF THE SEVENTH YEAR. THE A GAIN OR LOSS WHEN YOU SELL SHARES. CDSC ON CLASS C SHARES IS 1% FOR THE FIRST YEAR AFTER PURCHASE. CLASS R 7 AIM STRUCTURED VALUE FUND
- ------------------------------------------------------------------------------------------------------------------------------------ AIM STRUCTURED VALUE FUND'S INVESTMENT OBJECTIVE IS LONG-TERM GROWTH OF CAPITAL. o Unless otherwise stated, information presented in this report is as of August 31, 2009, and is based on total net assets. o Unless otherwise noted, all data provided by Invesco Aim. ABOUT SHARE CLASSES o Effective September 30, 2003, for investment has a greater effect on Large-Cap Value Funds category. These qualified plans only, those previously the Fund's overall performance, and funds typically have a below- established are eligible to purchase any change in the value of those average price-to-earnings ratio, Class B shares of any AIM fund. Please securities could significantly affect price-to-book ratio, and three-year see the prospectus for more the value of your investment in the sales-per-share growth value, information. Fund. compared to the S&P 500 Index. o Class R shares are available only to o Credit risk is the risk of loss on an o The Fund is not managed to track the certain retirement plans. Please see investment due to the deterioration of performance of any particular index, the prospectus for more information. an issuer's financial health. Such a including the indexes defined here, and deterioration of financial health may consequently, the performance of the o Class Y shares are available to only result in a reduction of the credit Fund may deviate significantly from the certain investors. Please see the rating of the issuer's securities and performance of the indexes. prospectus for more information. may lead to the issuer's inability to honor its contractual obligations, o A direct investment cannot be made in PRINCIPAL RISKS OF INVESTING including making timely payment of an index. Unless otherwise indicated, IN THE FUND interest and principal. index results include reinvested dividends, and they do not reflect o There is no guarantee that the sales charges. Performance of an index o The Fund may use enhanced investment investment techniques and risk analysis of funds reflects fund expenses; techniques such as derivatives. The used by the Fund's portfolio managers performance of a market index does not. principal risk of derivatives is that will produce the desired results. the fluctuations in their values may ------------------------------------------ not correlate perfectly with the o The prices of securities held by the OTHER INFORMATION overall securities markets. Derivatives Fund may decline in response to market are subject to counterparty risk -- the risks. o The Chartered Financial Analysts(R) risk that the other party will not (CFA(R)) designation is globally complete the transaction with the Fund. o The Fund invests in "value" stocks, recognized and attests to a which can continue to be inexpensive charterholder's success in a rigorous o Prices of equity securities change in for long periods of time and may never and comprehensive study program in the response to many factors, including the realize their full value. field of investment management and historical and prospective earnings of research analysis. the issuer, the value of its assets, ------------------------------------------ general economic conditions, interest ABOUT INDEXES USED IN THIS REPORT o The returns shown in management's rates, investor perceptions and market discussion of Fund performance are liquidity. o The S&P 500(R) INDEX is a market based on net asset values calculated capitalization-weighted index covering for shareholder transactions. Generally o Foreign securities have additional all major areas of the U.S. economy. It accepted accounting principles require risks, including exchange rate changes, is not the 500 largest companies, but adjustments to be made to the net political and economic upheaval, rather the most widely held 500 assets of the Fund at period end for relative lack of information, companies chosen with respect to market financial reporting purposes, and as relatively low market liquidity, and size, liquidity and their industry. such, the net asset values for the potential lack of strict financial shareholder transactions and the and accounting controls and standards. o The RUSSELL 1000(R) VALUE INDEX returns based on those net asset values measures the performance of those may differ from the net asset values o Interest rate risk refers to the risk Russell 1000 companies with lower and returns reported in the Financial that bond prices generally fall as price-to-book ratios and lower Highlights. interest rates rise and vice versa. forecasted growth values. The Russell 1000 Value Index is a trademark/ o Industry classifications used in this o Leveraging entails risks such as service mark of the Frank Russell report are generally according to the magnifying changes in the value of the Company. Russell(R) is a trademark of Global Industry Classification portfolio's securities. the Frank Russell Company. Standard, which was developed by and is the exclusive property and a service o Since a large percentage of the Fund's o The LIPPER LARGE-CAP VALUE FUNDS INDEX mark of MSCI Inc. and Standard & assets may be invested in securities of is an equally weighted representation Poor's. a limited number of companies, each of the largest funds in the Lipper ------------------------------------------ THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. Class A Shares ASAVX INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class B Shares ASBVX Class C Shares SBCVX - --------------------------------------------------------------------------------------- Class R Shares ASRVX NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE Class Y Shares ASAYX 8 AIM STRUCTURED VALUE FUND
SCHEDULE OF INVESTMENTS(a) August 31, 2009
SHARES VALUE - ----------------------------------------------------------------------------- COMMON STOCKS & OTHER EQUITY INTERESTS-98.67% AEROSPACE & DEFENSE-1.46% United Technologies Corp. 18,200 $ 1,080,352 ============================================================================= AGRICULTURAL PRODUCTS-0.79% Archer-Daniels-Midland Co. 20,300 585,249 ============================================================================= APPAREL RETAIL-2.68% Foot Locker, Inc. 90,800 967,928 - ----------------------------------------------------------------------------- Gap, Inc. (The) 52,000 1,021,800 ============================================================================= 1,989,728 ============================================================================= APPAREL, ACCESSORIES & LUXURY GOODS-1.03% Jones Apparel Group, Inc. 49,000 763,910 ============================================================================= APPLICATION SOFTWARE-0.11% TIBCO Software Inc.(b) 9,200 81,604 ============================================================================= ASSET MANAGEMENT & CUSTODY BANKS-0.71% Bank of New York Mellon Corp. 17,800 527,058 ============================================================================= AUTOMOBILE MANUFACTURERS-0.17% Ford Motor Co.(b) 16,200 123,120 ============================================================================= AUTOMOTIVE RETAIL-0.13% AutoNation, Inc.(b) 5,100 96,798 ============================================================================= BIOTECHNOLOGY-2.49% Amgen Inc.(b) 22,200 1,326,228 - ----------------------------------------------------------------------------- Biogen Idec Inc.(b) 5,700 286,197 - ----------------------------------------------------------------------------- Facet Biotech Corp.(b) 11,000 110,440 - ----------------------------------------------------------------------------- PDL BioPharma Inc. 14,300 129,415 ============================================================================= 1,852,280 ============================================================================= BROADCASTING-0.42% CBS Corp.-Class B 12,200 126,270 - ----------------------------------------------------------------------------- CTC Media, Inc.(b) 13,900 184,870 ============================================================================= 311,140 ============================================================================= CABLE & SATELLITE-0.04% DISH Network Corp.-Class A(b) 2,000 32,620 ============================================================================= COAL & CONSUMABLE FUELS-0.05% Peabody Energy Corp. 1,100 35,948 ============================================================================= COMMERCIAL PRINTING-0.23% Deluxe Corp. 10,200 170,442 ============================================================================= COMMUNICATIONS EQUIPMENT-0.61% 3Com Corp.(b) 81,000 352,350 - ----------------------------------------------------------------------------- Harris Stratex Networks, Inc.-Class A(b) 16,300 98,778 ============================================================================= 451,128 ============================================================================= COMPUTER & ELECTRONICS RETAIL-2.29% RadioShack Corp. 90,500 1,369,265 - ----------------------------------------------------------------------------- Rent-A-Center, Inc.(b) 16,600 327,518 ============================================================================= 1,696,783 ============================================================================= COMPUTER HARDWARE-0.38% International Business Machines Corp. 2,400 283,320 ============================================================================= COMPUTER STORAGE & PERIPHERALS-2.21% EMC Corp.(b) 19,900 316,410 - ----------------------------------------------------------------------------- QLogic Corp.(b) 32,500 513,825 - ----------------------------------------------------------------------------- Western Digital Corp.(b) 23,600 809,008 ============================================================================= 1,639,243 ============================================================================= CONSTRUCTION & ENGINEERING-0.15% Dycom Industries, Inc.(b) 10,000 112,200 ============================================================================= CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS-0.69% Navistar International Corp.(b) 6,400 276,736 - ----------------------------------------------------------------------------- Oshkosh Corp. 7,100 238,560 ============================================================================= 515,296 ============================================================================= CONSUMER FINANCE-1.51% American Express Co. 33,200 1,122,824 ============================================================================= DEPARTMENT STORES-0.93% Sears Holdings Corp.(b) 10,900 691,605 ============================================================================= DIVERSIFIED BANKS-0.67% Wells Fargo & Co. 18,200 500,864 ============================================================================= DIVERSIFIED CHEMICALS-0.52% Ashland Inc. 10,600 388,808 ============================================================================= DIVERSIFIED METALS & MINING-0.83% Freeport-McMoRan Copper & Gold Inc. 5,700 358,986 - ----------------------------------------------------------------------------- Southern Copper Corp. (Peru) 9,200 259,992 ============================================================================= 618,978 ============================================================================= EDUCATION SERVICES-0.82% Apollo Group, Inc.-Class A(b) 7,800 505,596 - ----------------------------------------------------------------------------- Career Education Corp.(b) 4,300 102,125 ============================================================================= 607,721 ============================================================================= ELECTRIC UTILITIES-0.64% Exelon Corp. 9,500 475,190 ============================================================================= GENERAL MERCHANDISE STORES-0.24% Family Dollar Stores, Inc. 5,900 178,652 =============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 9 AIM STRUCTURED VALUE FUND
SHARES VALUE - ----------------------------------------------------------------------------- HEALTH CARE EQUIPMENT-0.71% Boston Scientific Corp.(b) 40,900 $ 480,575 - ----------------------------------------------------------------------------- Kinetic Concepts, Inc.(b) 1,400 44,730 ============================================================================= 525,305 ============================================================================= HEALTH CARE FACILITIES-0.05% Healthsouth Corp.(b) 2,500 39,025 ============================================================================= HEALTH CARE SERVICES-0.36% Omnicare, Inc. 11,600 265,524 ============================================================================= HOME IMPROVEMENT RETAIL-1.08% Home Depot, Inc. (The) 29,300 799,597 ============================================================================= HOMEBUILDING-3.75% D.R. Horton, Inc. 112,100 1,503,261 - ----------------------------------------------------------------------------- KB Home 28,600 520,806 - ----------------------------------------------------------------------------- M.D.C. Holdings, Inc. 4,900 183,554 - ----------------------------------------------------------------------------- NVR, Inc.(b) 360 243,090 - ----------------------------------------------------------------------------- Ryland Group, Inc. (The) 14,600 334,632 ============================================================================= 2,785,343 ============================================================================= HOUSEHOLD PRODUCTS-1.68% Procter & Gamble Co. (The) 23,000 1,244,530 ============================================================================= INDEPENDENT POWER PRODUCERS & ENERGY TRADERS-1.66% Mirant Corp.(b) 73,300 1,235,105 ============================================================================= INDUSTRIAL CONGLOMERATES-4.92% 3M Co. 1,000 72,100 - ----------------------------------------------------------------------------- General Electric Co. 257,400 3,577,860 ============================================================================= 3,649,960 ============================================================================= INTEGRATED OIL & GAS-16.24% Chevron Corp. 44,500 3,112,330 - ----------------------------------------------------------------------------- ConocoPhillips 44,700 2,012,841 - ----------------------------------------------------------------------------- Exxon Mobil Corp. 71,900 4,971,885 - ----------------------------------------------------------------------------- Murphy Oil Corp. 600 34,200 - ----------------------------------------------------------------------------- Occidental Petroleum Corp. 26,300 1,922,530 ============================================================================= 12,053,786 ============================================================================= INTEGRATED TELECOMMUNICATION SERVICES-7.60% AT&T Inc. 132,100 3,441,205 - ----------------------------------------------------------------------------- Qwest Communications International Inc. 42,100 151,139 - ----------------------------------------------------------------------------- Verizon Communications Inc. 66,100 2,051,744 ============================================================================= 5,644,088 ============================================================================= INTERNET SOFTWARE & SERVICES-0.27% eBay Inc.(b) 9,000 199,260 ============================================================================= INVESTMENT BANKING & BROKERAGE-2.45% Goldman Sachs Group, Inc. (The) 11,000 1,820,060 ============================================================================= IT CONSULTING & OTHER SERVICES-0.13% Acxiom Corp.(b) 10,600 96,672 ============================================================================= LIFE & HEALTH INSURANCE-2.87% Aflac, Inc. 21,600 877,392 - ----------------------------------------------------------------------------- Prudential Financial, Inc. 15,200 768,816 - ----------------------------------------------------------------------------- Unum Group 21,400 482,142 ============================================================================= 2,128,350 ============================================================================= MANAGED HEALTH CARE-2.30% UnitedHealth Group Inc. 57,300 1,604,400 - ----------------------------------------------------------------------------- WellPoint Inc.(b) 2,000 105,700 ============================================================================= 1,710,100 ============================================================================= MOVIES & ENTERTAINMENT-0.19% Time Warner Inc. 5,000 139,550 ============================================================================= MULTI-LINE INSURANCE-0.17% Loews Corp. 3,700 126,355 ============================================================================= OIL & GAS EQUIPMENT & SERVICES-0.07% Oil States International, Inc.(b) 1,800 53,046 ============================================================================= OIL & GAS EXPLORATION & PRODUCTION-0.70% Apache Corp. 6,100 518,195 ============================================================================= OIL & GAS REFINING & MARKETING-0.20% Tesoro Corp. 10,500 147,840 ============================================================================= OTHER DIVERSIFIED FINANCIAL SERVICES-3.61% Bank of America Corp. 56,700 997,353 - ----------------------------------------------------------------------------- Citigroup Inc. 96,100 480,500 - ----------------------------------------------------------------------------- JPMorgan Chase & Co. 27,700 1,203,842 ============================================================================= 2,681,695 ============================================================================= PAPER PACKAGING-0.63% Temple-Inland Inc. 27,500 465,025 ============================================================================= PAPER PRODUCTS-0.41% International Paper Co. 13,300 305,235 ============================================================================= PHARMACEUTICALS-6.44% Eli Lilly and Co. 10,900 364,714 - ----------------------------------------------------------------------------- Forest Laboratories, Inc.(b) 12,900 377,583 - ----------------------------------------------------------------------------- King Pharmaceuticals, Inc.(b) 12,800 132,864 - ----------------------------------------------------------------------------- Merck & Co., Inc. 25,000 810,750 - ----------------------------------------------------------------------------- Pfizer Inc. 97,900 1,634,930 - ----------------------------------------------------------------------------- Schering-Plough Corp. 3,700 104,266 - ----------------------------------------------------------------------------- Sepracor Inc.(b) 15,700 284,955 - ----------------------------------------------------------------------------- Valeant Pharmaceuticals International(b) 13,600 352,104 - ----------------------------------------------------------------------------- Wyeth 15,000 717,750 ============================================================================= 4,779,916 =============================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 10 AIM STRUCTURED VALUE FUND
SHARES VALUE - ----------------------------------------------------------------------------- PROPERTY & CASUALTY INSURANCE-9.17% Allstate Corp. (The) 33,700 $ 990,443 - ----------------------------------------------------------------------------- Axis Capital Holdings Ltd. 6,000 182,880 - ----------------------------------------------------------------------------- Chubb Corp. (The) 30,900 1,526,151 - ----------------------------------------------------------------------------- Progressive Corp. (The)(b) 42,500 702,100 - ----------------------------------------------------------------------------- Travelers Cos., Inc. (The) 37,300 1,880,666 - ----------------------------------------------------------------------------- XL Capital Ltd.-Class A 87,800 1,523,330 ============================================================================= 6,805,570 ============================================================================= PUBLISHING-1.87% Gannett Co., Inc. 124,700 1,077,408 - ----------------------------------------------------------------------------- McGraw-Hill Cos., Inc. (The) 9,300 312,573 ============================================================================= 1,389,981 ============================================================================= REINSURANCE-0.66% Arch Capital Group Ltd. (Bermuda)(b) 1,900 123,443 - ----------------------------------------------------------------------------- PartnerRe Ltd. (Bermuda) 500 36,955 - ----------------------------------------------------------------------------- RenaissanceRe Holdings Ltd. 6,100 332,145 ============================================================================= 492,543 ============================================================================= RESTAURANTS-0.04% Brinker International, Inc. 2,000 29,120 ============================================================================= SEMICONDUCTORS-0.54% RF Micro Devices, Inc.(b) 25,500 119,850 - ----------------------------------------------------------------------------- Texas Instruments Inc. 11,400 280,326 ============================================================================= 400,176 ============================================================================= SOFT DRINKS-0.36% Dr. Pepper Snapple Group, Inc.(b) 10,200 269,688 ============================================================================= SPECIALIZED REIT'S-1.51% Public Storage 15,900 1,121,745 ============================================================================= SPECIALTY STORES-0.05% Barnes & Noble, Inc. 1,900 39,311 ============================================================================= STEEL-0.56% Reliance Steel & Aluminum Co. 3,600 132,984 - ----------------------------------------------------------------------------- Schnitzer Steel Industries, Inc.-Class A 3,800 205,238 - ----------------------------------------------------------------------------- Worthington Industries, Inc. 5,900 77,703 ============================================================================= 415,925 ============================================================================= SYSTEMS SOFTWARE-1.11% Symantec Corp.(b) 54,300 821,016 ============================================================================= WIRELESS TELECOMMUNICATION SERVICES-1.51% Sprint Nextel Corp.(b) 306,800 1,122,888 ============================================================================= Total Common Stocks & Other Equity Interests (Cost $72,287,806) 73,254,386 ============================================================================= PRINCIPAL AMOUNT U.S. TREASURY BILLS-0.35% 0.18%, 09/17/09 (Cost $259,979)(c)(d) $260,000 259,979 ============================================================================= SHARES MONEY MARKET FUNDS-0.82% Liquid Assets Portfolio-Institutional Class(e) 305,343 305,343 - ----------------------------------------------------------------------------- Premier Portfolio-Institutional Class(e) 305,343 305,343 ============================================================================= Total Money Market Funds (Cost $610,686) 610,686 ============================================================================= TOTAL INVESTMENTS-99.84% (Cost $73,158,471) 74,125,051 ============================================================================= OTHER ASSETS LESS LIABILITIES-0.16% 121,703 ============================================================================= NET ASSETS-100.00% $74,246,754 _____________________________________________________________________________ =============================================================================
Investment Abbreviations: REIT - Real Estate Investment Trust
Notes to Schedule of Investments: (a) Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor's. (b) Non-income producing security. (c) Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. (d) All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1J and Note 4. (e) The money market fund and the Fund are affiliated by having the same investment advisor. See accompanying Notes to Financial Statements which are an integral part of the financial statements. 11 AIM STRUCTURED VALUE FUND STATEMENT OF ASSETS AND LIABILITIES August 31, 2009 ASSETS: Investments, at value (Cost $72,547,785) $ 73,514,365 - -------------------------------------------------------------------------------- Investments in affiliated money market funds, at value and cost 610,686 ================================================================================ Total investments, at value (Cost $73,158,471) 74,125,051 ================================================================================ Receivables for: Fund shares sold 17,347 - -------------------------------------------------------------------------------- Dividends 163,190 - -------------------------------------------------------------------------------- Fund expenses absorbed 5,209 - -------------------------------------------------------------------------------- Investment for trustee deferred compensation and retirement plans 4,912 - -------------------------------------------------------------------------------- Other assets 21,701 ================================================================================ Total assets 74,337,410 ________________________________________________________________________________ ================================================================================ LIABILITIES: Payables for: Fund shares reacquired 23,425 - -------------------------------------------------------------------------------- Variation margin 5,962 - -------------------------------------------------------------------------------- Accrued fees to affiliates 2,754 - -------------------------------------------------------------------------------- Accrued other operating expenses 48,776 - -------------------------------------------------------------------------------- Trustee deferred compensation and retirement plans 9,739 ================================================================================ Total liabilities 90,656 ================================================================================ Net assets applicable to shares outstanding $ 74,246,754 ________________________________________________________________________________ ================================================================================ NET ASSETS CONSIST OF: Shares of beneficial interest $121,593,427 - -------------------------------------------------------------------------------- Undistributed net investment income 1,443,118 - -------------------------------------------------------------------------------- Undistributed net realized gain (loss) (49,828,601) - -------------------------------------------------------------------------------- Unrealized appreciation 1,038,810 ================================================================================ $ 74,246,754 ________________________________________________________________________________ ================================================================================ NET ASSETS: Class A $ 1,664,941 ________________________________________________________________________________ ================================================================================ Class B $ 415,156 ________________________________________________________________________________ ================================================================================ Class C $ 258,048 ________________________________________________________________________________ ================================================================================ Class R $ 34,985 ________________________________________________________________________________ ================================================================================ Class Y $ 103,636 ________________________________________________________________________________ ================================================================================ Institutional Class $ 71,769,988 ________________________________________________________________________________ ================================================================================ SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 212,635 ________________________________________________________________________________ ================================================================================ Class B 53,270 ________________________________________________________________________________ ================================================================================ Class C 33,131 ________________________________________________________________________________ ================================================================================ Class R 4,476 ________________________________________________________________________________ ================================================================================ Class Y 13,214 ________________________________________________________________________________ ================================================================================ Institutional Class 9,148,449 ________________________________________________________________________________ ================================================================================ Class A: Net asset value per share $ 7.83 - -------------------------------------------------------------------------------- Maximum offering price per share (Net asset value of $7.83 divided by 94.50%) $ 8.29 ________________________________________________________________________________ ================================================================================ Class B: Net asset value and offering price per share $ 7.79 ________________________________________________________________________________ ================================================================================ Class C: Net asset value and offering price per share $ 7.79 ________________________________________________________________________________ ================================================================================ Class R: Net asset value and offering price per share $ 7.82 ________________________________________________________________________________ ================================================================================ Class Y: Net asset value and offering price per share $ 7.84 ________________________________________________________________________________ ================================================================================ Institutional Class: Net asset value and offering price per share $ 7.85 ________________________________________________________________________________ ================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 12 AIM STRUCTURED VALUE FUND STATEMENT OF OPERATIONS For the year ended August 31, 2009 INVESTMENT INCOME: Dividends (net of foreign withholding taxes of $38) $ 2,518,908 - ------------------------------------------------------------------------------------------------ Dividends from affiliated money market funds (includes securities lending income of $69,271) 84,017 - ------------------------------------------------------------------------------------------------ Interest 747 ================================================================================================ Total investment income 2,603,672 ================================================================================================ EXPENSES: Advisory fees 526,826 - ------------------------------------------------------------------------------------------------ Administrative services fees 50,000 - ------------------------------------------------------------------------------------------------ Custodian fees 14,531 - ------------------------------------------------------------------------------------------------ Distribution fees: Class A 5,466 - ------------------------------------------------------------------------------------------------ Class B 5,713 - ------------------------------------------------------------------------------------------------ Class C 2,002 - ------------------------------------------------------------------------------------------------ Class R 128 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- A, B, C, R and Y 15,742 - ------------------------------------------------------------------------------------------------ Transfer agent fees -- Institutional 5,647 - ------------------------------------------------------------------------------------------------ Trustees' and officers' fees and benefits 21,034 - ------------------------------------------------------------------------------------------------ Registration and filing fees 69,474 - ------------------------------------------------------------------------------------------------ Professional services fees 45,967 - ------------------------------------------------------------------------------------------------ Other 28,045 ================================================================================================ Total expenses 790,575 ================================================================================================ Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (120,416) ================================================================================================ Net expenses 670,159 ================================================================================================ Net investment income 1,933,513 ================================================================================================ REALIZED AND UNREALIZED GAIN (LOSS) FROM: Net realized gain (loss) from: Investment securities (34,858,791) - ------------------------------------------------------------------------------------------------ Futures contracts 591,102 ================================================================================================ (34,267,689) ================================================================================================ Change in net unrealized appreciation of: Investment securities 6,075,430 - ------------------------------------------------------------------------------------------------ Futures contracts 66,650 ================================================================================================ 6,142,080 ================================================================================================ Net realized and unrealized gain (loss) (28,125,609) ================================================================================================ Net increase (decrease) in net assets resulting from operations $(26,192,096) ________________________________________________________________________________________________ ================================================================================================
See accompanying Notes to Financial Statements which are an integral part of the financial statements. 13 AIM STRUCTURED VALUE FUND STATEMENT OF CHANGES IN NET ASSETS For the years ended August 31, 2009 and 2008
2009 2008 - -------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 1,933,513 $ 2,526,972 - -------------------------------------------------------------------------------------------------------- Net realized gain (loss) (34,267,689) (15,544,729) - -------------------------------------------------------------------------------------------------------- Change in net unrealized appreciation (depreciation) 6,142,080 (7,998,414) ======================================================================================================== Net increase (decrease) in net assets resulting from operations (26,192,096) (21,016,171) ======================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A (70,369) (18,421) - -------------------------------------------------------------------------------------------------------- Class B (13,013) (1,111) - -------------------------------------------------------------------------------------------------------- Class C (3,568) (332) - -------------------------------------------------------------------------------------------------------- Class R (418) (78) - -------------------------------------------------------------------------------------------------------- Class Y (5,073) -- - -------------------------------------------------------------------------------------------------------- Institutional Class (2,408,982) (1,688,483) ======================================================================================================== Total distributions from net investment income (2,501,423) (1,708,425) ======================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS: Class A -- (36,401) - -------------------------------------------------------------------------------------------------------- Class B -- (12,339) - -------------------------------------------------------------------------------------------------------- Class C -- (3,686) - -------------------------------------------------------------------------------------------------------- Class R -- (211) - -------------------------------------------------------------------------------------------------------- Institutional Class -- (2,625,170) ======================================================================================================== Total distributions from net realized gains -- (2,677,807) ======================================================================================================== SHARE TRANSACTIONS-NET: Class A (1,417,556) 2,560,980 - -------------------------------------------------------------------------------------------------------- Class B (361,809) 460,895 - -------------------------------------------------------------------------------------------------------- Class C 67,296 119,138 - -------------------------------------------------------------------------------------------------------- Class R 23,234 10,135 - -------------------------------------------------------------------------------------------------------- Class Y 117,368 -- - -------------------------------------------------------------------------------------------------------- Institutional Class (35,132,527) 24,069,585 ======================================================================================================== Net increase (decrease) in net assets resulting from share transactions (36,703,994) 27,220,733 ======================================================================================================== Net increase (decrease) in net assets (65,397,513) 1,818,330 ======================================================================================================== NET ASSETS: Beginning of year 139,644,267 137,825,937 ======================================================================================================== End of year (includes undistributed net investment income of $1,443,118 and $2,011,028, respectively) $ 74,246,754 $139,644,267 ________________________________________________________________________________________________________ ========================================================================================================
NOTES TO FINANCIAL STATEMENTS August 31, 2009 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Structured Value Fund (the "Fund") is a series portfolio of AIM Counselor Series Trust (the "Trust"). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of seven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The Fund's investment objective is long-term growth of capital. 14 AIM STRUCTURED VALUE FUND The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Institutional Class. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waiver shares may be subject to contingent deferred sales charges ("CDSC"). Class B shares and Class C shares are sold with a CDSC. Class R, Class Y and Institutional Class shares are sold at net asset value. Under certain circumstances, Class R shares are subject to a CDSC. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase. 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 or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes 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 specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans. Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security's fair value. Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer's assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. 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 periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held. Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund's net asset value and, accordingly, they reduce the Fund's total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the advisor. 15 AIM STRUCTURED VALUE FUND The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class. C. COUNTRY DETERMINATION -- For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment advisor may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer's securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. D. DISTRIBUTIONS -- Distributions from income and net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund's taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period. F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to the Institutional Class are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period end date and before the date the financial statements are released to print, which is generally 45 days from the period end date. H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund's servicing agreements, that contain a variety of indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. I. SECURITIES LENDING -- The Fund may lend portfolio securities having a market value up to one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. 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, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. 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. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. J. FUTURES CONTRACTS -- The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, 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. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. 16 AIM STRUCTURED VALUE FUND K. COLLATERAL -- To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund's practice to replace such collateral no later than the next business day. NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with Invesco Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Advisor based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE - ------------------------------------------------------------------- First $250 million 0.60% - ------------------------------------------------------------------- Next $250 million 0.575% - ------------------------------------------------------------------- Next $500 million 0.55% - ------------------------------------------------------------------- Next $1.5 billion 0.525% - ------------------------------------------------------------------- Next $2.5 billion 0.50% - ------------------------------------------------------------------- Next $2.5 billion 0.475% - ------------------------------------------------------------------- Next $2.5 billion 0.45% - ------------------------------------------------------------------- Over $10 billion 0.425% ___________________________________________________________________ ===================================================================
Under the terms of a master sub-advisory agreement approved by shareholders of the Fund between the Advisor and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-Advisor(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Advisor(s). The Advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y and Institutional Class shares to 1.00%, 1.75%, 1.75%, 1.25%, 0.75% and 0.75% of average daily net assets, respectively, through at least June 30, 2010. In determining the Advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items or non-routine items; (v) expenses related to a merger or reorganization, as approved by the Fund's Board of Trustees; and (vi) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, in addition to the expense reimbursement arrangement with Invesco Ltd. ("Invesco") described more fully below, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. In addition, the Fund may also benefit from a one time credit to be used to offset custodian expenses. These credits are used to pay certain expenses incurred by the Fund. Further, the Advisor has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Advisor receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds. For the year ended August 31, 2009, the Advisor waived advisory fees $99,027 and reimbursed class level expenses of $10,643, $2,781, $974, $125, $1,020 and $5,647 of Class A, Class B, Class C, Class R, Class Y and Institutional Class shares, respectively. At the request of the Trustees of the Trust, Invesco agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. These expenses along with the related expense reimbursement are included in the Statement of Operations. For the year ended August 31, 2009, Invesco did not reimburse any expenses. The Trust has entered into a master administrative services agreement with Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain administrative costs incurred in providing accounting services to the Fund. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees. The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. IAIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IAIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust's Board of Trustees. For the year ended August 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees. The Trust has entered into master distribution agreements with Invesco Aim Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class B, Class C, Class R, Class Y and Institutional Class 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, Class B, Class C and Class R shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI compensation at the annual rate of 0.25% of the Fund's average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority ("FINRA") impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. For the year ended August 31, 2009, expenses incurred under the Plans are shown in the Statement of Operations as distribution fees. 17 AIM STRUCTURED VALUE FUND Front-end sales commissions and CDSC (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the year ended August 31, 2009, IADI advised the Fund that IADI retained $1,748 in front-end sales commissions from the sale of Class A shares and $0, $1,125, $79 and $0 from Class A, Class B, Class C and Class R shares, respectively, for CDSC imposed on redemptions by shareholders. Certain officers and Trustees of the Trust are officers and directors of Invesco Aim, IAIS and/or IADI. NOTE 3--ADDITIONAL VALUATION INFORMATION Generally Accepted Accounting Principles (GAAP) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level: Level 1 -- Prices are determined using quoted prices in an active market for identical assets. Level 2 -- Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. Level 3 -- Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. The following is a summary of the tiered valuation input levels, as of the end of the reporting period, August 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL - ------------------------------------------------------------------------------------------------------------------------ Equity Securities $73,865,072 $ -- $ -- $73,865,072 - ------------------------------------------------------------------------------------------------------------------------ U.S. Treasury Securities -- 259,979 -- 259,979 ======================================================================================================================== $74,125,051 ======================================================================================================================== Other Investments* 72,230 -- -- 72,230 ======================================================================================================================== Total Investments $73,937,302 $259,979 $-- $74,197,281 ________________________________________________________________________________________________________________________ ========================================================================================================================
* Other Investments includes futures, which are included at unrealized appreciation. NOTE 4--DERIVATIVE INVESTMENTS Effective March 1, 2009, the Fund has adopted the provisions of FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities. The standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position and financial performance. The adoption of this provision has no impact on the results of operations reported in the financial statements. VALUE OF DERIVATIVE INSTRUMENTS AT PERIOD-END The Table below summarizes the value of the Fund's derivative instruments, detailed by primary risk exposure, held as of August 31, 2009:
VALUE ----------------------- RISK EXPOSURE/ DERIVATIVE TYPE ASSETS LIABILITIES - ----------------------------------------------------------------------------------------------------- Market risk Futures contracts(a) $72,230 $ -- _____________________________________________________________________________________________________ =====================================================================================================
(a) Includes cumulative appreciation of futures contracts. Only current day's variation margin receivable (payable) is reported within the Statement of Assets & Liabilities. 18 AIM STRUCTURED VALUE FUND EFFECT OF DERIVATIVE INSTRUMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2009 The table below summarizes the gains on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:
LOCATION OF GAIN ON STATEMENT OF OPERATIONS ----------------------- FUTURES* - ---------------------------------------------------------------------------------------------------- Realized Gain Market risk $1,201,640 ==================================================================================================== Change in Unrealized Appreciation Market risk 203,798 ==================================================================================================== Total $1,405,438 ____________________________________________________________________________________________________ ====================================================================================================
* The average value of outstanding futures during the period was $5,140,703.
OPEN FUTURES CONTRACTS - ---------------------------------------------------------------------------------------------------------------------- NUMBER OF MONTH/ UNREALIZED CONTRACT CONTRACTS COMMITMENT VALUE APPRECIATION - ---------------------------------------------------------------------------------------------------------------------- Chicago Mercantile Exchange E-mini S&P 500 Index 14 September-09/Long $713,790 $72,230 ______________________________________________________________________________________________________________________ ======================================================================================================================
NOTE 5--EXPENSE OFFSET ARRANGEMENT(S) The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the year ended August 31, 2009, the Fund received credits from this arrangement, which resulted in the reduction of the Fund's total expenses of $199. NOTE 6--TRUSTEES' AND OFFICERS' FEES AND BENEFITS "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officers' Fees and Benefits" also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. "Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund. During the year ended August 31, 2009, the Fund paid legal fees of $3,383 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. NOTE 7--CASH BALANCES The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco Aim, not to exceed the contractually agreed upon rate. 19 AIM STRUCTURED VALUE FUND NOTE 8--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED AUGUST 31, 2009 AND 2008:
2009 2008 - ------------------------------------------------------------------------------------------------------- Ordinary income $2,501,423 $4,036,815 - ------------------------------------------------------------------------------------------------------- Long-term capital gain -- 349,417 ======================================================================================================= Total distributions $2,501,423 $4,386,232 _______________________________________________________________________________________________________ =======================================================================================================
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
2009 - ------------------------------------------------------------------------------------------------ Undistributed ordinary income $ 1,453,672 - ------------------------------------------------------------------------------------------------ Net unrealized appreciation (depreciation) -- investments (630,032) - ------------------------------------------------------------------------------------------------ Temporary book/tax differences (10,554) - ------------------------------------------------------------------------------------------------ Post-October deferrals (26,843,150) - ------------------------------------------------------------------------------------------------ Capital loss carryforward (21,316,609) - ------------------------------------------------------------------------------------------------ Shares of beneficial interest 121,593,427 ================================================================================================ Total net assets $ 74,246,754 ________________________________________________________________________________________________ ================================================================================================
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's net unrealized appreciation (depreciation) difference is attributable primarily to wash sales. The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits. Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. The Fund has a capital loss carryforward as of August 31, 2009 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* - ----------------------------------------------------------------------------------------------- August 31, 2016 $ 430,774 - ----------------------------------------------------------------------------------------------- August 31, 2017 20,885,835 =============================================================================================== Total capital loss carryforward $21,316,609 _______________________________________________________________________________________________ ===============================================================================================
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. NOTE 9--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended August 31, 2009 was $68,725,351 and $104,721,333, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ------------------------------------------------------------------------------------------------ Aggregate unrealized appreciation of investment securities $ 6,427,773 - ------------------------------------------------------------------------------------------------ Aggregate unrealized (depreciation) of investment securities (7,057,805) ================================================================================================ Net unrealized appreciation (depreciation) of investment securities $ (630,032) ________________________________________________________________________________________________ ================================================================================================ Cost of investments for tax purposes is $74,755,083.
20 AIM STRUCTURED VALUE FUND NOTE 10--SHARE INFORMATION
SUMMARY OF SHARE ACTIVITY - ----------------------------------------------------------------------------------------------------------------------- YEAR ENDED AUGUST 31, --------------------------------------------------------- 2009(a) 2008 --------------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------------- Sold: Class A 130,514 $ 879,263 324,245 $ 3,314,989 - ----------------------------------------------------------------------------------------------------------------------- Class B 36,712 245,248 79,256 803,847 - ----------------------------------------------------------------------------------------------------------------------- Class C 23,865 173,244 22,824 233,105 - ----------------------------------------------------------------------------------------------------------------------- Class R 5,096 41,323 954 9,846 - ----------------------------------------------------------------------------------------------------------------------- Class Y(b) 28,662 239,041 -- -- - ----------------------------------------------------------------------------------------------------------------------- Institutional Class 686,674 4,780,084 2,458,953 25,971,597 ======================================================================================================================= Issued as reinvestment of dividends: Class A 10,273 70,309 4,851 52,634 - ----------------------------------------------------------------------------------------------------------------------- Class B 1,816 12,474 1,222 13,256 - ----------------------------------------------------------------------------------------------------------------------- Class C 509 3,504 345 3,735 - ----------------------------------------------------------------------------------------------------------------------- Class R 61 418 26 289 - ----------------------------------------------------------------------------------------------------------------------- Class Y 739 5,073 -- -- - ----------------------------------------------------------------------------------------------------------------------- Institutional Class 351,163 2,408,982 397,571 4,313,653 ======================================================================================================================= Automatic conversion of Class B shares to Class A shares: Class A 13,879 95,812 10,189 99,570 - ----------------------------------------------------------------------------------------------------------------------- Class B (13,941) (95,812) (10,221) (99,570) ======================================================================================================================= Reacquired: Class A(b) (370,317) (2,462,940) (87,363) (906,213) - ----------------------------------------------------------------------------------------------------------------------- Class B (79,923) (523,719) (24,920) (256,638) - ----------------------------------------------------------------------------------------------------------------------- Class C (16,009) (109,452) (12,182) (117,702) - ----------------------------------------------------------------------------------------------------------------------- Class R (2,546) (18,507) -- -- - ----------------------------------------------------------------------------------------------------------------------- Class Y (16,187) (126,746) -- -- - ----------------------------------------------------------------------------------------------------------------------- Institutional Class (5,929,928) (42,321,593) (623,869) (6,215,665) ======================================================================================================================= Net increase (decrease) in share activity (5,138,888) $(36,703,994) 2,541,881 $27,220,733 _______________________________________________________________________________________________________________________ =======================================================================================================================
(a) 91% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco Aim. (b) Effective upon the commencement date of Class Y shares, October 3, 2008, the following shares were converted from Class A into Class Y shares of the Fund:
CLASS SHARES AMOUNT -------------------------------------------------------------------------------------------------- Class Y 27,463 $ 229,041 -------------------------------------------------------------------------------------------------- Class A (27,463) (229,041) __________________________________________________________________________________________________ ==================================================================================================
21 AIM STRUCTURED VALUE FUND NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
NET GAINS NET ASSET (LOSSES) ON DIVIDENDS DISTRIBUTIONS VALUE, NET SECURITIES (BOTH TOTAL FROM FROM NET FROM NET BEGINNING INVESTMENT REALIZED AND INVESTMENT INVESTMENT REALIZED TOTAL OF PERIOD INCOME(a) UNREALIZED) OPERATIONS INCOME GAINS DISTRIBUTIONS - ------------------------------------------------------------------------------------------------------------------------ CLASS A Year ended 08/31/09 $ 9.54 $0.14 $(1.68) $(1.54) $(0.17) $ -- $(0.17) Year ended 08/31/08 11.40 0.16 (1.70) (1.54) (0.11) (0.21) (0.32) Year ended 08/31/07 10.44 0.14 0.89 1.03 (0.06) (0.01) (0.07) Year ended 08/31/06(e) 10.00 0.20 0.24 0.44 -- -- -- - ------------------------------------------------------------------------------------------------------------------------ CLASS B Year ended 08/31/09 9.50 0.09 (1.68) (1.59) (0.12) -- (0.12) Year ended 08/31/08 11.35 0.08 (1.70) (1.62) (0.02) (0.21) (0.23) Year ended 08/31/07 10.40 0.05 0.91 0.96 -- (0.01) (0.01) Year ended 08/31/06(e) 10.00 0.16 0.24 0.40 -- -- -- - ------------------------------------------------------------------------------------------------------------------------ CLASS C Year ended 08/31/09 9.49 0.08 (1.66) (1.58) (0.12) -- (0.12) Year ended 08/31/08 11.33 0.08 (1.69) (1.61) (0.02) (0.21) (0.23) Year ended 08/31/07 10.40 0.05 0.89 0.94 -- (0.01) (0.01) Year ended 08/31/06(e) 10.00 0.16 0.24 0.40 -- -- -- - ------------------------------------------------------------------------------------------------------------------------ CLASS R Year ended 08/31/09 9.52 0.12 (1.67) (1.55) (0.15) -- (0.15) Year ended 08/31/08 11.38 0.13 (1.70) (1.57) (0.08) (0.21) (0.29) Year ended 08/31/07 10.42 0.11 0.90 1.01 (0.04) (0.01) (0.05) Year ended 08/31/06(e) 10.00 0.18 0.24 0.42 -- -- -- - ------------------------------------------------------------------------------------------------------------------------ CLASS Y Year ended 08/31/09(e) 8.34 0.14 (0.46) (0.32) (0.18) -- (0.18) - ------------------------------------------------------------------------------------------------------------------------ INSTITUTIONAL CLASS Year ended 08/31/09 9.56 0.15 (1.67) (1.52) (0.19) -- (0.19) Year ended 08/31/08 11.43 0.19 (1.71) (1.52) (0.14) (0.21) (0.35) Year ended 08/31/07 10.45 0.17 0.89 1.06 (0.07) (0.01) (0.08) Year ended 08/31/06(e) 10.00 0.21 0.24 0.45 -- -- -- ________________________________________________________________________________________________________________________ ======================================================================================================================== RATIO OF RATIO OF EXPENSES EXPENSES TO AVERAGE TO AVERAGE NET RATIO OF NET NET ASSETS ASSETS WITHOUT INVESTMENT NET ASSET NET ASSETS, WITH FEE WAIVERS FEE WAIVERS INCOME VALUE, END TOTAL END OF PERIOD AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO OF PERIOD RETURN(b) (000S OMITTED) ABSORBED ABSORBED NET ASSETS TURNOVER(c) - ------------------------------------------------------------------------------------------------------------------------------ CLASS A Year ended 08/31/09 $ 7.83 (15.87)% $ 1,665 1.01%(d) 1.61%(d) 1.96%(d) 78% Year ended 08/31/08 9.54 (13.83) 4,088 1.01 1.42 1.57 88 Year ended 08/31/07 11.40 9.80 2,011 1.01 1.36 1.17 62 Year ended 08/31/06(e) 10.44 4.40 856 1.03(f) 5.80(f) 4.59(f) 5 - ------------------------------------------------------------------------------------------------------------------------------ CLASS B Year ended 08/31/09 7.79 (16.60) 415 1.76(d) 2.36(d) 1.21(d) 78 Year ended 08/31/08 9.50 (14.50) 1,031 1.76 2.17 0.82 88 Year ended 08/31/07 11.35 9.20 718 1.76 2.11 0.42 62 Year ended 08/31/06(e) 10.40 4.00 790 1.78(f) 6.55(f) 3.84(f) 5 - ------------------------------------------------------------------------------------------------------------------------------ CLASS C Year ended 08/31/09 7.79 (16.51) 258 1.76(d) 2.36(d) 1.21(d) 78 Year ended 08/31/08 9.49 (14.43) 235 1.76 2.17 0.82 88 Year ended 08/31/07 11.33 9.01 156 1.76 2.11 0.42 62 Year ended 08/31/06(e) 10.40 4.00 632 1.78(f) 6.55(f) 3.84(f) 5 - ------------------------------------------------------------------------------------------------------------------------------ CLASS R Year ended 08/31/09 7.82 (16.01) 35 1.26(d) 1.86(d) 1.71(d) 78 Year ended 08/31/08 9.52 (14.08) 18 1.26 1.67 1.32 88 Year ended 08/31/07 11.38 9.65 10 1.26 1.61 0.92 62 Year ended 08/31/06(e) 10.42 4.20 625 1.28(f) 6.05(f) 4.34(f) 5 - ------------------------------------------------------------------------------------------------------------------------------ CLASS Y Year ended 08/31/09(e) 7.84 (3.57) 104 0.76(d)(f) 1.45(d)(f) 2.21(d)(f) 78 - ------------------------------------------------------------------------------------------------------------------------------ INSTITUTIONAL CLASS Year ended 08/31/09 7.85 (15.59) 71,770 0.75(d) 0.87(d) 2.22(d) 78 Year ended 08/31/08 9.56 (13.64) 134,272 0.75 0.78 1.83 88 Year ended 08/31/07 11.43 10.13 134,931 0.75 0.94 1.43 62 Year ended 08/31/06(e) 10.45 4.50 73,488 0.77(f) 5.50(f) 4.85(f) 5 ______________________________________________________________________________________________________________________________ ==============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. (c) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. (d) Ratios are based on average daily net assets (000's omitted) of $2,187, $571, $200, $26, $196 and $84,644 for Class A, Class B, Class C, Class R, Class Y and Institutional Class shares, respectively. (e) Commencement date of March 31, 2006 for Class A, Class B, Class C, Class R and Institutional Class shares and October 3, 2008 for Class Y shares. (f) Annualized. 22 AIM STRUCTURED VALUE FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees of AIM Counselor Series Trust and Shareholders of AIM Structured Value 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 AIM Structured Value Fund (one of the funds constituting AIM Counselor Series Trust, hereafter referred to as the "Fund") at August 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PRICEWATERHOUSECOOPERS LLP October 16, 2009 Houston, Texas 23 AIM STRUCTURED VALUE FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009, through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(2) RATIO - --------------------------------------------------------------------------------------------------- A $1,000.00 $1,405.70 $ 6.12 $1,020.11 $5.14 1.01% - --------------------------------------------------------------------------------------------------- B 1,000.00 1,398.60 10.64 1,016.33 8.94 1.76 - --------------------------------------------------------------------------------------------------- C 1,000.00 1,398.60 10.64 1,016.33 8.94 1.76 - --------------------------------------------------------------------------------------------------- R 1,000.00 1,403.90 7.63 1,018.85 6.41 1.26 - --------------------------------------------------------------------------------------------------- Y 1,000.00 1,405.00 4.61 1,021.37 3.87 0.76 - ---------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009, through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. 24 AIM STRUCTURED VALUE FUND Supplement to Annual Report dated 8/31/09 AIM STRUCTURED VALUE FUND INSTITUTIONAL CLASS SHARES ------------------------------------------ Please note that past performance is AVERAGE ANNUAL TOTAL RETURNS not indicative of future results. More The following information has been For periods ended 8/31/09 recent returns may be more or less than prepared to provide Institutional Class those shown. All returns assume shareholders with a performance overview Inception (3/31/06) -5.01% reinvestment of distributions at NAV. specific to their holdings. Institutional ------------------------------------------ Investment return and principal value will Class shares are offered exclusively to 1 Year -15.59 fluctuate so your shares, when redeemed, institutional investors, including defined ------------------------------------------ may be worth more or less than their contribution plans that meet certain original cost. See full report for criteria. ------------------------------------------ information on comparative benchmarks. AVERAGE ANNUAL TOTAL RETURNS Please consult your Fund prospectus for For periods ended 6/30/09, the most recent more information. For the most current calendar quarter-end month-end performance, please call 800 451 4246 or visit invescoaim.com. Inception (3/31/06) -8.87% ------------------------------------------ (1) Total annual operating expenses less 1 Year -25.52 any contractual fee waivers and/or ------------------------------------------ expense reimbursements by the advisor in effect through at least June 30, Institutional Class shares have no sales 2010. See current prospectus for more charge; therefore, performance is at net information. asset value (NAV). Performance of Institutional Class shares will differ from performance of other share classes primarily due to differing sales charges and class expenses. The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 0.75%.(1) The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this supplement for Institutional Class shares was 0.78%. The expense ratios presented above may vary from the expense ratios presented in other sections of the actual report that are based on expenses incurred during the period covered by the report. - ------------------------------------------ NASDAQ SYMBOL ASIVX Over for information on your Fund's expenses. - --------------------------------------------------------------------------------------- THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FOR INSTITUTIONAL INVESTOR USE ONLY -- NOT FOR USE WITH THE PUBLIC THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED, SHOWN TO THE PUBLIC [INVESCO AIM LOGO] OR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. - service mark - invescoaim.com SVAL-INS-1 Invesco Aim Distributors, Inc.
Supplement to Annual Report dated 8/31/09 AIM STRUCTURED VALUE FUND RESULTS OF A $10,000 INVESTMENT - INSTITUTIONAL CLASS SHARES SINCE INCEPTION Fund and Index data from 3/31/06 (PERFORMANCE CHART)
AIM STRUCTURED LIPPER VALUE FUND- RUSSELL 1000 LARGE-CAP INSTITUTIONAL VALUE S&P 500 VALUE FUNDS CLASS SHARES INDEX(1) INDEX(1) INDEX(1) ------------- ------------ -------- ----------- 3/31/2006 10000 10000 10000 10000 04/06 10200 10254 10134 10249 05/06 9860 9995 9843 9998 06/06 10000 10059 9856 10005 07/06 10300 10304 9917 10158 08/06 10451 10476 10152 10346 09/06 10631 10685 10414 10586 10/06 11000 11035 10753 10902 11/06 11260 11286 10957 11090 12/06 11397 11540 11111 11329 01/07 11679 11687 11279 11475 02/07 11397 11505 11059 11270 03/07 11660 11683 11182 11414 04/07 12072 12115 11677 11903 05/07 12465 12552 12084 12341 06/07 12032 12258 11884 12153 07/07 11368 11692 11516 11665 08/07 11509 11823 11688 11803 09/07 11891 12229 12125 12177 10/07 12042 12230 12318 12273 11/07 11357 11632 11802 11745 12/07 11341 11520 11721 11608 01/08 10769 11058 11018 11020 02/08 10447 10595 10660 10649 03/08 10313 10515 10614 10501 04/08 10791 11028 11131 11021 05/08 10822 11010 11275 11114 06/08 9929 9957 10325 10143 07/08 9866 9921 10239 10005 08/08 9939 10089 10387 10119 09/08 9315 9348 9462 9267 10/08 7786 7730 7873 7713 11/08 7370 7175 7308 7151 12/08 7597 7275 7385 7313 01/09 6636 6438 6763 6663 02/09 5963 5578 6046 5941 03/09 6529 6055 6574 6454 04/09 7202 6704 7203 7061 05/09 7480 7119 7605 7523 06/09 7395 7066 7621 7508 07/09 8026 7645 8196 8083 08/09 8388 8044 8492 8422
Past performance cannot guarantee shown in the chart and table(s) does not is that of the Fund's Class A, B, C and R comparable future results. reflect deduction of taxes a shareholder shares. The performance of the Fund's would pay on Fund distributions or sale of other share classes will differ primarily The data shown in the chart above Fund shares. Performance of the indexes due to different sales charge structures includes reinvested distributions and Fund does not reflect the effects of taxes. and class expenses, and may be greater expenses including management fees. Index than or less than the performance of the results include reinvested dividends. The performance data shown in the chart Fund's Institutional Class shares shown in Performance of an index of funds reflects above is that of the Fund's institutional the chart above. fund expenses and management fees; share class. The performance data shown in performance of a market index does not. the chart in the annual report Performance THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FOR INSTITUTIONAL INVESTOR USE ONLY -- NOT FOR USE WITH THE PUBLIC THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED, SHOWN TO THE PUBLIC [INVESCO AIM LOGO] OR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. - service mark - invescoaim.com SVAL-INS-1 Invesco Aim Distributors, Inc.
CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period March 1, 2009, through August 31, 2009. ACTUAL EXPENSES The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
- ----------------------------------------------------------------------------------------------------------- HYPOTHETICAL (5% ANNUAL RETURN BEFORE ACTUAL EXPENSES) ------------------------------------------------------ BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE CLASS (03/01/09) (08/31/09)(1) PERIOD(2) (08/31/09) PERIOD(2) RATIO - ----------------------------------------------------------------------------------------------------------- Institutional $1,000.00 $1,406.80 $4.55 $1,021.42 $3.82 0.75% - -----------------------------------------------------------------------------------------------------------
(1) The actual ending account value is based on the actual total return of the Fund for the period March 1, 2009, through August 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund's expense ratio and a hypothetical annual return of 5% before expenses. (2) Expenses are equal to the Fund's annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. AIM STRUCTURED VALUE FUND - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS The Board of Trustees (the Board) of AIM strategies and limitations of these funds. the year as part of their ongoing Counselor Series Trust is required under oversight of the Fund, and did not the Investment Company Act of 1940 to In addition to their meetings identify any particular factor that was approve annually the renewal of the AIM throughout the year, the Sub-Committees controlling. Each Trustee may have Structured Value Fund (the Fund) meet at designated contract renewal evaluated the information provided investment advisory agreement with Invesco meetings each year to conduct an in-depth differently from another Trustee and Aim Advisors, Inc. (Invesco Aim) and the review of the performance, fees, expenses, attributed different weight to the various Master Intergroup Sub-Advisory Contract and other matters related to their factors. The Trustees recognized that the for Mutual Funds (the sub-advisory assigned funds. During the contract advisory arrangements and resulting contracts) with Invesco Asset Management renewal process, the Trustees receive advisory fees for the Fund and the other Deutschland GmbH, Invesco Asset Management comparative performance and fee data AIM Funds are the result of years of Limited, Invesco Asset Management (Japan) regarding the AIM Funds prepared by an review and negotiation between the Limited, Invesco Australia Limited, independent company, Lipper, Inc. Trustees and Invesco Aim, that the Invesco Global Asset Management (N.A.), (Lipper), under the direction and Trustees may focus to a greater extent on Inc., Invesco Hong Kong Limited, Invesco supervision of the Senior Officer who also certain aspects of these arrangements in Institutional (N.A.), Inc., Invesco Senior prepares a separate analysis of this some years than in others, and that the Secured Management, Inc. and Invesco information for the Trustees. Each Trustees' deliberations and conclusions in Trimark Ltd. (collectively, the Affiliated Sub-Committee then makes recommendations a particular year may be based in part on Sub-Advisers). During contract renewal to the Investments Committee regarding the their deliberations and conclusions meetings held on June 16-17, 2009, the fees and expenses of their assigned funds. regarding these same arrangements Board as a whole, and the disinterested or The Investments Committee considers each throughout the year and in prior years. "independent" Trustees voting separately, Sub-Committee's recommendations and makes approved the continuance of the Fund's its own recommendations regarding the fees The discussion below serves as a investment advisory agreement and the and expenses of the AIM Funds to the full summary of the Senior Officer's sub-advisory contracts for another year, Board. The Investments Committee also independent written evaluation with effective July 1, 2009. In doing so, the considers each Sub-Committee's respect to the Fund's investment advisory Board determined that the Fund's recommendations in making its annual agreement as well as a discussion of the investment advisory agreement and the recommendation to the Board whether to material factors and related conclusions sub-advisory contracts are in the best approve the continuance of each AIM Fund's that formed the basis for the Board's interests of the Fund and its shareholders investment advisory agreement and approval of the Fund's investment advisory and that the compensation to Invesco Aim sub-advisory contracts for another year. agreement and sub-advisory contracts. and the Affiliated Sub-Advisers under the Unless otherwise stated, information set Fund's investment advisory agreement and The independent Trustees met separately forth below is as of June 17, 2009, and sub-advisory contracts is fair and during their evaluation of the Fund's does not reflect any changes that may have reasonable. investment advisory agreement and occurred since that date, including but sub-advisory contracts with independent not limited to changes to the Fund's THE BOARD'S FUND EVALUATION PROCESS legal counsel. The independent Trustees performance, advisory fees, expense were also assisted in their annual limitations and/or fee waivers. The Board's Investments Committee has evaluation of the Fund's investment established three Sub-Committees that are advisory agreement by the Senior Officer. FACTORS AND CONCLUSIONS AND SUMMARY OF responsible for overseeing the management One responsibility of the Senior Officer INDEPENDENT WRITTEN FEE EVALUATION of a number of the series portfolios of is to manage the process by which the AIM the AIM Funds. This Sub-Committee Funds' proposed management fees are A. Nature, Extent and Quality of structure permits the Trustees to focus on negotiated during the annual contract Services Provided by Invesco Aim the performance of the AIM Funds that have renewal process to ensure that they are been assigned to them. The Sub-Committees negotiated in a manner that is at arms' The Board reviewed the advisory services meet throughout the year to review the length and reasonable. Accordingly, the provided to the Fund by Invesco Aim under performance of their assigned funds, and Senior Officer must either supervise a the Fund's investment advisory agreement, the Sub-Committees review monthly and competitive bidding process or prepare an the performance of Invesco Aim in quarterly comparative performance independent written evaluation. The Senior providing these services, and the information and periodic asset flow data Officer recommended that an independent credentials and experience of the officers for their assigned funds. These materials written evaluation be provided and, at the and employees of Invesco Aim who provide are prepared under the direction and direction of the Board, prepared an these services. The Board's review of the supervision of the independent Senior independent written evaluation. qualifications of Invesco Aim to provide Officer, an officer of the AIM Funds who these services included the Board's reports directly to the independent During the annual contract renewal consideration of Invesco Aim's portfolio Trustees. Over the course of each year, process, the Board considered the factors and product review process, various back the Sub-Committees meet with portfolio discussed below in evaluating the fairness office support functions provided by managers for their assigned funds and and reasonableness of the Fund's Invesco Aim and its affiliates, and other members of management and review investment advisory agreement and Invesco Aim's equity and fixed income with these individuals the performance, sub-advisory contracts. The Board trading operations. The Board concluded investment objective(s), policies, considered all of the information provided that the nature, extent and quality of the to them, including information provided at advisory services provided to the Fund by their meetings throughout Invesco Aim are appropriate and that Invesco Aim 25 AIM STRUCTURED VALUE FUND continued
currently is providing satisfactory ers by permitting Invesco Aim to utilize end of the past calendar year. The Board advisory services in accordance with the the additional resources and talent of the noted that some comparative data was at terms of the Fund's investment advisory Affiliated Sub-Advisers in managing the least one year old and that other data did agreement. In addition, based on their Fund. not reflect the market downturn that ongoing meetings throughout the year with occurred in the fourth quarter of 2008. the Fund's portfolio manager or managers, C. Fund Performance The Board noted that neither Invesco Aim the Board concluded that these individuals nor its affiliates serve as an adviser to are competent and able to continue to The Board considered Fund performance as a other domestic mutual funds or other carry out their responsibilities under the relevant factor in considering whether to domestic clients with investment Fund's investment advisory agreement. approve the investment advisory agreement strategies comparable to those of the as well as the sub-advisory contracts for Fund. In determining whether to continue the the Fund, as Invesco Institutional Fund's investment advisory agreement, the currently manages assets of the Fund. The Board noted that Invesco Aim has Board considered the prior relationship contractually agreed to waive fees and/or between Invesco Aim and the Fund, as well The Board noted that the Fund recently limit expenses of the Fund through at as the Board's knowledge of Invesco Aim's began operations and that only two least June 30, 2010 in an amount necessary operations, and concluded that it is calendar years of comparative performance to limit total annual operating expenses beneficial to maintain the current data was available. The Board compared the to a specified percentage of average daily relationship, in part, because of such Fund's performance during the one and two net assets for each class of the Fund. The knowledge. The Board also considered the year periods to the performance of funds Board considered the effect this expense steps that Invesco Aim and its affiliates in the Lipper performance universe that limitation would have on the Fund's continue to take to improve the quality are not managed by Invesco Aim or an estimated total expenses. The Board also and efficiency of the services they Affiliated Sub-Adviser and against the noted that Invesco Aim has agreed to provide to the AIM Funds in the areas of Lipper Large Cap Value Funds Index. The reduce the per account transfer agent fee investment performance, product line Board noted that the Fund's performance for all the retail funds, including the diversification, distribution, fund was in the first quintile of its Fund, effective July 1, 2009. operations, shareholder services and performance universe for the one year compliance. The Board concluded that the period and in the second quintile for the The Board also considered the services quality and efficiency of the services two year period (the first quintile being provided by the Affiliated Sub-Advisers Invesco Aim and its affiliates provide to the best performing funds and the fifth pursuant to the sub-advisory contracts and the AIM Funds in each of these areas quintile being the worst performing the services provided by Invesco Aim support the Board's approval of the funds). The Board noted that the Fund's pursuant to the Fund's advisory agreement, continuance of the Fund's investment performance was above the performance of as well as the allocation of fees between advisory agreement. the Index for the one and two year Invesco Aim and the Affiliated periods. Although the independent written Sub-Advisers pursuant to the sub-advisory B. Nature, Extent and Quality of evaluation of the Fund's Senior Officer contracts. The Board noted that the Services Provided by Affiliated only considered Fund performance through sub-advisory fees have no direct effect on Sub-Advisers the most recent calendar year, the Board the Fund or its shareholders, as they are also reviewed more recent Fund performance paid by Invesco Aim to the Affiliated The Board reviewed the services provided and this review did not change their Sub-Advisers, and that Invesco Aim and the by the Affiliated Sub-Advisers under the conclusions. The Board noted that, in Affiliated Sub-Advisers are affiliates. sub-advisory contracts and the credentials response to the Board's focus on fund and experience of the officers and performance, Invesco Aim has taken a After taking account of the Fund's employees of the Affiliated Sub-Advisers number of actions intended to improve the contractual advisory fee rate, the who provide these services. The Board investment process for the funds. contractual sub-advisory fee rate, the concluded that the nature, extent and comparative advisory fee information quality of the services provided by the D. Advisory and Sub-Advisory Fees and discussed above, the expense limitations Affiliated Sub-Advisers are appropriate. Fee Waivers and other relevant factors, the Board The Board noted that the Affiliated concluded that the Fund's advisory and Sub-Advisers, which have offices and The Board compared the Fund's contractual sub-advisory fees are fair and reasonable. personnel that are geographically advisory fee rate to the contractual dispersed in financial centers around the advisory fee rates of funds in the Fund's E. Economies of Scale and Breakpoints world, can provide research and other Lipper expense group that are not managed information and make recommendations on by Invesco Aim or an Affiliated The Board considered the extent to which the markets and economies of various Sub-Adviser, at a common asset level. The there are economies of scale in the countries and securities of companies Board noted that the Fund's contractual provision of advisory services to the located in such countries or on various advisory fee rate was below the median Fund. The Board also considered whether types of investments and investment contractual advisory fee rate of funds in the Fund benefits from such economies of techniques. The Board noted that its expense group. The Board also reviewed scale through contractual breakpoints in investment decisions for the Fund are made the methodology used by Lipper in the Fund's advisory fee schedule. The by Invesco Institutional (N.A.), Inc. determining contractual fee rates, which Board noted that the Fund's contractual (Invesco Institutional). The Board includes using audited financial data from advisory fee schedule includes seven concluded that the sub-advisory contracts the most recent annual report of each fund breakpoints but that, due to the Fund's benefit the Fund and its sharehold- in the expense group that was publicly asset level at the end of the past available as of the calendar year, the Fund has yet to benefit from the breakpoints. Based on this information, the Board concluded that the Fund's advisory fees would reflect economies of 26 AIM STRUCTURED VALUE FUND continued
scale at higher asset levels. The Board services to the Fund. The Board considered also noted that the Fund shares directly the performance of Invesco Aim and its in economies of scale through lower fees affiliates in providing these services and charged by third party service providers the organizational structure employed by based on the combined size of all of the Investor Aim and its affiliates to provide AIM Funds and affiliates. these services. The Board also considered that these services are provided to the F. Profitability and Financial Fund pursuant to written contracts that Resources are reviewed and approved on an annual basis by the Board. The Board concluded The Board reviewed information from that Investor Aim and its affiliates are Invesco Aim concerning the costs of the providing these services in a satisfactory advisory and other services that Invesco manner and in accordance with the terms of Aim and its affiliates provide to the Fund their contracts, and are qualified to and the profitability of Invesco Aim and continue to provide these services to the its affiliates in providing these Fund. services. The Board also reviewed information concerning the financial The Board considered the benefits condition of Invesco Aim and its realized by Investor Aim and the affiliates. The Board reviewed with Affiliated Sub-Advisers as a result of Invesco Aim the methodology used to portfolio brokerage transactions executed prepare the profitability information. The through "soft dollar" arrangements. The Board considered the overall profitability Board noted that soft dollar arrangements of Invesco Ltd., the ultimate parent of shift the payment obligation for research Invesco Aim and the Affiliated and execution services from Invesco Aim Sub-Advisers, and of Invesco Aim, as well and the Affiliated Sub-Advisers to the as the profitability of Invesco Aim in funds and therefore may reduce Invesco connection with managing the Fund. The Aim's and the Affiliated Sub-Advisers' Board noted that Investor Aim continues to expenses. The Board concluded that operate at a net profit, although the Invesco Aim's and the Affiliated reduction of assets under management as a Sub-Advisers' soft dollar arrangements are result of market movements and the appropriate. The Board also concluded increase in voluntary fee waivers for that, based on their review and affiliated money market funds have reduced representations made by the Chief the profitability of Investor Aim and its Compliance Officer of Invesco Aim, these affiliates. The Board concluded that the arrangements are consistent with Fund's fees are fair and reasonable, and regulatory requirements. that the level of profits realized by Investor Aim and its affiliates from The Board considered the fact that the providing services to the Fund is not Fund's uninvested cash and cash collateral excessive in light of the nature, quality from any securities lending arrangements and extent of the services provided. The may be invested in money market funds Board considered whether Invesco Aim is advised by Invesco Aim pursuant to financially sound and has the resources procedures approved by the Board. The necessary to perform its obligations under Board noted that Invesco Aim will receive the Fund's investment advisory agreement, advisory fees from these affiliated money and concluded that Invesco Aim has the market funds attributable to such financial resources necessary to fulfill investments, although Invesco Aim has these obligations. The Board also contractually agreed to waive through at considered whether each Affiliated least June 30, 2010, the advisory fees Sub-Adviser is financially sound and has payable by the Fund in an amount equal to the resources necessary to perform its 100% of the net advisory fees Invesco Aim obligations under the sub-advisory receives from the affiliated money market contracts, and concluded that each funds with respect to the Fund's Affiliated Sub-Adviser has the financial investment in the affiliated money market resources necessary to fulfill these funds of uninvested cash, but not cash obligations. collateral. The Board concluded that the Fund's investment of uninvested cash and G. Collateral Benefits to Invesco Aim cash collateral from any securities and its Affiliates lending arrangements in the affiliated money market funds is in the best The Board considered various other interests of the Fund and its benefits received by Invesco Aim and its shareholders. affiliates resulting from Invesco Aim's relationship with the Fund, including the fees received by Invesco Aim and its affiliates for their provision of administrative, transfer agency and distribution 27 AIM STRUCTURED VALUE FUND
TAX INFORMATION Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors. The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement. The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended August 31, 2009:
FEDERAL AND STATE INCOME TAX ---------------------------- Qualified Dividend Income* 100% Corporate Dividends Received Deduction* 100% U.S. Treasury Obligations* 0.02%
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year. 28 AIM STRUCTURED VALUE FUND TRUSTEES AND OFFICERS The address of each trustee and officer of AIM Counselor Series Trust (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------------ Martin L. Flanagan(1) -- 1960 2007 Executive Director, Chief Executive Officer and President, None Trustee Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Chairman, Invesco Aim Advisors, Inc. (registered investment advisor); Trustee, The AIM Family of Funds(R); Vice Chairman, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd. and Chairman, Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and Principal Executive Officer President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company) and Invesco Aim Capital Management, Inc. (registered investment advisor); Director and President, INVESCO Funds Group, Inc. (registered investment advisor and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltee (registered investment advisor and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: President, Invesco Trimark Dealer Inc.; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Director and President, Invesco Trimark Ltd./Invesco Trimark Ltee; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds (R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited (insurance Trustee and Chair consulting company) company); Captaris, Inc. (unified messaging provider); and Investment Company Institute - ------------------------------------------------------------------------------------------------------------------------------------ Bob R. Baker -- 1936 1983 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Bayley -- 1939 2003 Retired None Trustee Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Board of Governors, Trustee firm) Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association - ------------------------------------------------------------------------------------------------------------------------------------ Albert R. Dowden -- 1941 2003 Director of a number of public and private business Board of Nature's Trustee corporations, including the Boss Group Ltd. (private Sunshine Products, Inc. investment and management); Continental Energy Services, LLC (oil and gas pipeline service); Reich & Tang Funds (registered investment company), and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, CompuDyne Corporation (provider of product and services to the public security market); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Senior Vice President, AB Volvo; Director of various public and private corporations - ------------------------------------------------------------------------------------------------------------------------------------ Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff Trustee (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) - ------------------------------------------------------------------------------------------------------------------------------------ Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich & Tang Trustee Funds (16 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ Prema Mathai-Davis -- 1950 2003 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Larry Soll -- 1942 1997 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Raymond Stickel, Jr. -- 1944 2005 Retired None Trustee Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) - ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Flanagan is considered an interested person of the Trust because he is an officer of the advisor to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the advisor to the Trust. (2) Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. T-1 TRUSTEES AND OFFICERS - (CONTINUED)
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family N/A Senior Vice President and of Funds(R) Formerly: Director of Compliance and Assistant Senior Officer General Counsel, ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General Counsel and Director of Compliance, ALPS Mutual Funds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General N/A Senior Vice President, Chief Counsel, Invesco Aim Management Group, Inc., Invesco Aim Legal Officer and Secretary Advisors, Inc. and Invesco Aim Capital Management, Inc.; Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); and Manager, Invesco PowerShares Capital Management LLC Formerly: Director, Vice President and Secretary, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company); Vice President and Secretary, PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator); General Counsel and Secretary, Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company) - ------------------------------------------------------------------------------------------------------------------------------------ Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice N/A Vice President President, The AIM Family of Funds(R) Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R); Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company - ------------------------------------------------------------------------------------------------------------------------------------ Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, N/A Vice President Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., .Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; and Vice President, The AIM Family of Funds(R) Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds(R); Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Sheri Morris -- 1964 2003 Vice President, Treasurer and Principal Financial Officer, N/A Vice President, Treasurer and The AIM Family of Funds(R); and Vice President, Invesco Aim Principal Financial Officer Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management Inc. Formerly: Assistant Vice President and Assistant Treasurer, The AIM Family of Funds(R) and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash N/A Vice President Management Group; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; Vice President, Invesco Institutional (N.A.), Inc. (registered investment advisor); and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds(R) (other than AIM Treasurer's Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds(R) (AIM Treasurer's Series Trust and Short-Term Investments Trust only) Formerly: President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer and Managing Director, Invesco Aim Capital Management, Inc.; and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds(R) (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only) - ------------------------------------------------------------------------------------------------------------------------------------ Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim N/A Anti-Money Laundering Advisors, Inc., Invesco Aim Capital Management, Inc., Compliance Officer Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., Invesco Aim Private Asset Management, Inc. and The AIM Family of Funds(R) Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company; and Manager of the Fraud Prevention Department, Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; N/A Chief Compliance Officer Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, The AIM Family of Funds(R), Invesco Global Asset Management (N.A.), Inc. (registered investment advisor), Invesco Institutional (N.A.), Inc., (registered investment advisor), INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment advisor) and Invesco Senior Secured Management, Inc. (registered investment advisor); and Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company; and Global Head of Product Development, AIG-Global Investment Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund's prospectus for information on the Fund's sub-advisors. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street Houston, TX 77046-1173 Suite 100 Suite 100 Suite 2900 Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678 COUNSEL TO THE FUND Stradley Ronon Stevens & COUNSEL TO THE TRANSFER AGENT CUSTODIAN Young, LLP INDEPENDENT TRUSTEES Invesco Aim Investment Services, Inc. State Street Bank and Trust 2600 One Commerce Square Kramer, Levin, Naftalis & Frankel LLP P.O. Box 4739 Company Philadelphia, PA 19103 1177 Avenue of the Americas Houston, TX 77210-4739 225 Franklin New York, NY 10036-2714 Boston, MA 02110-2801
T-2 (GRAPHIC) - ------------------------------------------------------------------------------------------------------------------------------------ GO PAPERLESS WITH EDELIVERY Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all about eeees: - - ENVIRONMENTALLY FRIENDLY. Go green by reducing the number - EFFICIENT. Stop waiting for regular mail. Your documents of trees used to produce paper. will be sent via email as soon as they're available. - - ECONOMICAL. Help reduce your fund's printing and delivery - EASY. Download, save and print files using your home expenses and put more capital back in your fund's computer with a few clicks of your mouse. returns. This service is provided by Invesco Aim Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Aim Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within thirty days after receiving your request. - ------------------------------------------------------------------------------------------------------------------------------------ FUND HOLDINGS AND PROXY VOTING INFORMATION The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-09913 and 333-36074. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov. If used after January 20, 2010, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for the most recent quarter-end. Invesco Aim - SERVICE MARK - is a service mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for the products and services represented by Invesco Aim; they each provide investment advisory services to individual and institutional clients and do not sell securities. Please refer to each fund's prospectus for information on the fund's subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the retail mutual funds, exchange-traded funds and institutional money market funds and the subdistributor for the STIC Global Funds represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd. It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco Global Asset [INVESCO AIM LOGO] Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the consolidated adviser - SERVICE MARK - firm will be renamed Invesco Advisers, Inc. Additional information will be posted at invescoaim.com on or about the end of the fourth quarter of 2009. invescoaim.com SVAL-AR-1 Invesco Aim Distributors, Inc.
ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the Registrant had adopted a code of ethics (the "Code") that applies to the Registrant's principal executive officer ("PEO") and principal financial officer ("PFO"). There were no amendments to the Code during the period covered by the report. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code to the PEO or PFO during the period covered by this report. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Trustees has determined that the Registrant has at least one audit committee financial expert serving on its Audit Committee. The Audit Committee financial expert is Raymond Stickel, Jr. Mr. Stickel is "independent" within the meaning of that term as used in Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. FEES BILLED BY PWC RELATED TO THE REGISTRANT PWC billed the Registrant aggregate fees for services rendered to the Registrant for the last two fiscal years as follows:
Percentage of Fees Percentage of Fees Billed Applicable to Billed Applicable to Non-Audit Services Non-Audit Services Provided for fiscal Fees Billed for Provided for fiscal Fees Billed for year end 2008 Services Rendered to year end 2009 Services Rendered to Pursuant to Waiver of the Registrant for Pursuant to Waiver of the Registrant for Pre-Approval fiscal year end 2009 Pre-Approval Requirement(1) fiscal year end 2008 Requirement(1) -------------------- --------------------------- -------------------- --------------------- Audit Fees $296,296 N/A $259,468 N/A Audit-Related Fees (2) $ 6,000 0% $ 0 0% Tax Fees(3) $ 59,206 0% $ 64,876 0% All Other Fees $ 0 0% $ 0 0% -------- -------- Total Fees $361,502 0% $324,344 0%
PWC billed the Registrant aggregate non-audit fees of $65,206 for the fiscal year ended 2009, and $64,876 for the fiscal year ended 2008, for non-audit services rendered to the Registrant. - ---------- (1) With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant to PWC during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrant's Audit Committee and approved by the Registrant's Audit Committee prior to the completion of the audit. (2) Audit-Related Fees for the fiscal year ended August 31, 2009 includes fees billed for completing agreed-upon procedures related to fund mergers. (3) Tax fees for the fiscal year end August 31, 2009 includes fees billed for reviewing tax returns and consultation services. Tax fees for the fiscal year end August 31, 2008 includes fees billed for reviewing tax returns and consultation services. FEES BILLED BY PWC RELATED TO INVESCO AIM AND INVESCO AIM AFFILIATES PWC billed Invesco Aim Advisors, Inc. ("Invesco Aim"), the Registrant's adviser, and any entity controlling, controlled by or under common control with Invesco Aim that provides ongoing services to the Registrant ("Invesco Aim Affiliates") aggregate fees for pre-approved non-audit services rendered to Invesco Aim and Invesco Aim Affiliates for the last two fiscal years as follows:
Fees Billed for Non- Fees Billed for Non- Audit Services Audit Services Rendered to Invesco Percentage of Fees Rendered to Invesco Percentage of Fees Aim and Invesco Aim Billed Applicable to Aim and Invesco Aim Billed Applicable to Affiliates for fiscal Non-Audit Services Affiliates for fiscal Non-Audit Services year end 2009 That Provided for fiscal year year end 2008 That Provided for fiscal year Were Required end 2009 Pursuant to Were Required end 2008 Pursuant to to be Pre-Approved Waiver of Pre- to be Pre-Approved Waiver of Pre- by the Registrant's Approval by the Registrant's Approval Audit Committee Requirement(1) Audit Committee Requirement(1) --------------------- ------------------------ --------------------- ------------------------ Audit-Related Fees $0 0% $0 0% Tax Fees $0 0% $0 0% All Other Fees $0 0% $0 0% --- --- Total Fees(2) $0 0% $0 0%
- ---------- (1) With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant, Invesco Aim and Invesco Aim Affiliates to PWC during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrant's Audit Committee and approved by the Registrant's Audit Committee prior to the completion of the audit. (2) Including the fees for services not required to be pre-approved by the registrant's audit committee, PWC billed Invesco Aim and Invesco Aim Affiliates aggregate non-audit fees of $0 for the fiscal year ended 2009, and $0 for the fiscal year ended 2008, for non-audit services rendered to Invesco Aim and Invesco Aim Affiliates. The Audit Committee also has considered whether the provision of non-audit services that were rendered to Invesco Aim and Invesco Aim Affiliates that were not required to be pre-approved pursuant to SEC regulations, if any, is compatible with maintaining PWC's independence. To the extent that such services were provided, the Audit Committee determined that the provision of such services is compatible with PWC maintaining independence with respect to the Registrant. PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES POLICIES AND PROCEDURES As adopted by the Audit Committees of the AIM Funds (the "Funds") Last Amended September 18, 2006 STATEMENT OF PRINCIPLES Under the Sarbanes-Oxley Act of 2002 and rules adopted by the Securities and Exchange Commission ("SEC") ("Rules"), the Audit Committees of the Funds' (the "Audit Committee") Board of Trustees (the "Board") are responsible for the appointment, compensation and oversight of the work of independent accountants (an "Auditor"). As part of this responsibility and to assure that the Auditor's independence is not impaired, the Audit Committees pre-approve the audit and non-audit services provided to the Funds by each Auditor, as well as all non-audit services provided by the Auditor to the Funds' investment adviser and to affiliates of the adviser that provide ongoing services to the Funds ("Service Affiliates") if the services directly impact the Funds' operations or financial reporting. The SEC Rules also specify the types of services that an Auditor may not provide to its audit client. The following policies and procedures comply with the requirements for pre-approval and provide a mechanism by which management of the Funds may request and secure pre-approval of audit and non-audit services in an orderly manner with minimal disruption to normal business operations. Proposed services either may be pre-approved without consideration of specific case-by-case services by the Audit Committees ("general pre-approval") or require the specific pre-approval of the Audit Committees ("specific pre-approval"). As set forth in these policies and procedures, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committees. Additionally, any fees exceeding 110% of estimated pre-approved fee levels provided at the time the service was pre-approved will also require specific approval by the Audit Committees before payment is made. The Audit Committees will also consider the impact of additional fees on the Auditor's independence when determining whether to approve any additional fees for previously pre-approved services. The Audit Committees will annually review and generally pre-approve the services that may be provided by each Auditor without obtaining specific pre-approval from the Audit Committee. The term of any general pre-approval runs from the date of such pre-approval through September 30th of the following year, unless the Audit Committees consider a different period and state otherwise. The Audit Committees will add to or subtract from the list of general pre-approved services from time to time, based on subsequent determinations. The purpose of these policies and procedures is to set forth the guidelines to assist the Audit Committees in fulfilling their responsibilities. DELEGATION The Audit Committees may from time to time delegate pre-approval authority to one or more of its members who are Independent Trustees. All decisions to pre-approve a service by a delegated member shall be reported to the Audit Committee at its next quarterly meeting. AUDIT SERVICES The annual audit services engagement terms will be subject to specific pre-approval of the Audit Committees. Audit services include the annual financial statement audit and other procedures such as tax provision work that is required to be performed by the independent auditor to be able to form an opinion on the Funds' financial statements. The Audit Committee will obtain, review and consider sufficient information concerning the proposed Auditor to make a reasonable evaluation of the Auditor's qualifications and independence. In addition to the annual Audit services engagement, the Audit Committees may grant either general or specific pre-approval of other audit services, which are those services that only the independent auditor reasonably can provide. Other Audit services may include services such as issuing consents for the inclusion of audited financial statements with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings. NON-AUDIT SERVICES The Audit Committees may provide either general or specific pre-approval of any non-audit services to the Funds and its Service Affiliates if the Audit Committees believe that the provision of the service will not impair the independence of the Auditor, is consistent with the SEC's Rules on auditor independence, and otherwise conforms to the Audit Committee's general principles and policies as set forth herein. AUDIT-RELATED SERVICES "Audit-related services" are assurance and related services that are reasonably related to the performance of the audit or review of the Fund's financial statements or that are traditionally performed by the independent auditor. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters not classified as "Audit services"; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; and agreed-upon procedures related to mergers, compliance with ratings agency requirements and interfund lending activities. TAX SERVICES "Tax services" include, but are not limited to, the review and signing of the Funds' federal tax returns, the review of required distributions by the Funds and consultations regarding tax matters such as the tax treatment of new investments or the impact of new regulations. The Audit Committee will scrutinize carefully the retention of the Auditor in connection with a transaction initially recommended by the Auditor, the major business purpose of which may be tax avoidance or the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee will consult with the Funds' Treasurer (or his or her designee) and may consult with outside counsel or advisors as necessary to ensure the consistency of Tax services rendered by the Auditor with the foregoing policy. No Auditor shall represent any Fund or any Service Affiliate before a tax court, district court or federal court of claims. Under rules adopted by the Public Company Accounting Oversight Board and approved by the SEC, in connection with seeking Audit Committee pre-approval of permissible Tax services, the Auditor shall: 1. Describe in writing to the Audit Committees, which writing may be in the form of the proposed engagement letter: a. The scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the Fund, relating to the service; and b. Any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the Auditor and any person (other than the Fund) with respect to the promoting, marketing, or recommending of a transaction covered by the service; 2. Discuss with the Audit Committees the potential effects of the services on the independence of the Auditor; and 3. Document the substance of its discussion with the Audit Committees. ALL OTHER AUDITOR SERVICES The Audit Committees may pre-approve non-audit services classified as "All other services" that are not categorically prohibited by the SEC, as listed in Exhibit 1 to this policy. PRE-APPROVAL FEE LEVELS OR ESTABLISHED AMOUNTS Pre-approval of estimated fees or established amounts for services to be provided by the Auditor under general or specific pre-approval policies will be set periodically by the Audit Committees. Any proposed fees exceeding 110% of the maximum estimated pre-approved fees or established amounts for pre-approved audit and non-audit services will be reported to the Audit Committees at the quarterly Audit Committees meeting and will require specific approval by the Audit Committees before payment is made. The Audit Committee will always factor in the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services and in determining whether to approve any additional fees exceeding 110% of the maximum pre-approved fees or established amounts for previously pre-approved services. PROCEDURES On an annual basis, A I M Advisors, Inc. ("AIM") will submit to the Audit Committees for general pre-approval, a list of non-audit services that the Funds or Service Affiliates of the Funds may request from the Auditor. The list will describe the non-audit services in reasonable detail and will include an estimated range of fees and such other information as the Audit Committee may request. Each request for services to be provided by the Auditor under the general pre-approval of the Audit Committees will be submitted to the Funds' Treasurer (or his or her designee) and must include a detailed description of the services to be rendered. The Treasurer or his or her designee will ensure that such services are included within the list of services that have received the general pre-approval of the Audit Committees. The Audit Committees will be informed at the next quarterly scheduled Audit Committees meeting of any such services for which the Auditor rendered an invoice and whether such services and fees had been pre-approved and if so, by what means. Each request to provide services that require specific approval by the Audit Committees shall be submitted to the Audit Committees jointly by the Fund's Treasurer or his or her designee and the Auditor, and must include a joint statement that, in their view, such request is consistent with the policies and procedures and the SEC Rules. Each request to provide tax services under either the general or specific pre-approval of the Audit Committees will describe in writing: (i) the scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the audit client, relating to the service; and (ii) any compensation arrangement or other agreement between the Auditor and any person (other than the audit client) with respect to the promoting, marketing, or recommending of a transaction covered by the service. The Auditor will discuss with the Audit Committees the potential effects of the services on the Auditor's independence and will document the substance of the discussion. Non-audit services pursuant to the de minimis exception provided by the SEC Rules will be promptly brought to the attention of the Audit Committees for approval, including documentation that each of the conditions for this exception, as set forth in the SEC Rules, has been satisfied. On at least an annual basis, the Auditor will prepare a summary of all the services provided to any entity in the investment company complex as defined in section 2-01(f)(14) of Regulation S-X in sufficient detail as to the nature of the engagement and the fees associated with those services. The Audit Committees have designated the Funds' Treasurer to monitor the performance of all services provided by the Auditor and to ensure such services are in compliance with these policies and procedures. The Funds' Treasurer will report to the Audit Committee on a periodic basis as to the results of such monitoring. Both the Funds' Treasurer and management of AIM will immediately report to the chairman of the Audit Committee any breach of these policies and procedures that comes to the attention of the Funds' Treasurer or senior management of AIM. EXHIBIT 1 TO PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES POLICIES AND PROCEDURES CONDITIONALLY PROHIBITED NON-AUDIT SERVICES (NOT PROHIBITED IF THE FUND CAN REASONABLY CONCLUDE THAT THE RESULTS OF THE SERVICE WOULD NOT BE SUBJECT TO AUDIT PROCEDURES IN CONNECTION WITH THE AUDIT OF THE FUND'S FINANCIAL STATEMENTS) - Bookkeeping or other services related to the accounting records or financial statements of the audit client - Financial information systems design and implementation - Appraisal or valuation services, fairness opinions, or contribution-in-kind reports - Actuarial services - Internal audit outsourcing services CATEGORICALLY PROHIBITED NON-AUDIT SERVICES - Management functions - Human resources - Broker-dealer, investment adviser, or investment banking services - Legal services - Expert services unrelated to the audit - Any service or product provided for a contingent fee or a commission - Services related to marketing, planning, or opining in favor of the tax treatment of confidential transactions or aggressive tax position transactions, a significant purpose of which is tax avoidance - Tax services for persons in financial reporting oversight roles at the Fund - Any other service that the Public Company Oversight Board determines by regulation is impermissible. PwC advised the Funds' Audit Committee that PwC had identified following matter for consideration under the SEC's auditor independence rules. PwC became aware that certain aspects of investment advisory services provided by a PwC network member Firm's Wealth Advisory Practice to its clients (generally high net worth individuals not associated with Invesco) were inconsistent with the SEC's auditor independence requirements of the SEC. The technical violations occurred as a result of professionals of the Wealth Advisory Practice making a single recommendation of an audit client's product to its clients rather than also identifying one or more suitable alternatives for the Wealth Advisory Practice's client to consider. The Wealth Advisory Practice also received commissions from the fund manager. With respect to Invesco and its affiliates, there were 33 cases of single product recommendation and 20 cases of commissions received totaling approximately (pound)7,000. These violations occurred over a two year period and ended in November 2007. It should be noted that at no time did The Wealth Advisory Practice recommend products on behalf Invesco and its affiliates. Additionally, members of the audit engagement team were not aware of these violations or services; the advice provided was based on an understanding of the investment objectives of the clients of the Wealth Advisory Practice and not to promote the Company and its affiliates, and the volume and nature of the violations were insignificant. Although PwC received commissions, PwC derived no economic benefit from the commission as any commissions received were deducted from the time based fees charged to the investor client and created no incentive for PwC to recommend the investment. PwC advised the Audit Committee that it believes its independence had not been adversely affected as it related to the audits of the Funds by this matter. In reaching this conclusion, PwC noted that during the time of its audits, the engagement team was not aware of the services provided and noted the insignificance of the services provided. Based on the foregoing, PwC did not believe this matter affected PwC's ability to act objectively and impartially and to issue a report on financial statements as the Funds' independent auditor, and, believes that a reasonable investor with knowledge of all the facts would agree with this conclusion. Based upon PwC's review, discussion and representations above, the audit committee, in its business judgment, concurred with PwC's conclusions in relation to its independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Investments in securities of unaffiliated issuers is included as part of the reports to stockholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None ITEM 11. CONTROLS AND PROCEDURES. (a) As of September 21, 2009, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the effectiveness of the Registrant's disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act"), as amended. Based on that evaluation, the Registrant's officers, including the PEO and PFO, concluded that, as of September 21, 2009, the Registrant's disclosure controls and procedures were reasonably designed to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure. (b) There have been no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 12. EXHIBITS. 12(a) (1) Code of Ethics. 12(a) (2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. 12(a) (3) Not applicable. 12(b) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Registrant: AIM Counselor Series Trust By: /s/ Philip A. Taylor --------------------------------- Philip A. Taylor Principal Executive Officer Date: November 6, 2009 Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By: /s/ Philip A. Taylor --------------------------------- Philip A. Taylor Principal Executive Officer Date: November 6, 2009 By: /s/ Sheri Morris --------------------------------- Sheri Morris Principal Financial Officer Date: November 6, 2009 EXHIBIT INDEX 12(a)(1) Code of Ethics. 12(a)(2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. 12(a)(3) Not applicable. 12(b) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. EX-99.CODE ETH 2 h68105exv99wcodeeth.txt EX-99.CODE ETH EXHIBIT - CODE OF ETHICS DISCLOSURE CONTROLS PROCEDURE THE AIM FAMILY OF FUNDS CODE OF ETHICS FOR SENIOR OFFICERS I. INTRODUCTION The Boards of Directors/Trustees ("Board") of The AIM Family of Funds (the "Companies") have adopted this code of ethics (this "Code") applicable to their Principal Executive Officer and Principal Financial and Accounting Officer (the "Covered Officers") to promote: - honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; - full, fair, accurate, timely and understandable disclosure in documents filed with the Securities and Exchange Commission ("SEC") and in other public communications; - compliance with applicable governmental laws, rules and regulations; - the prompt internal reporting to an appropriate person or persons identified in the Code of violations of the Code; and - accountability for adherence to the Code. II. COVERED OFFICERS SHOULD ACT HONESTLY AND CANDIDLY Each Covered Officer named in Exhibit A to this Code owes a duty to the Companies to act with integrity. Integrity requires, among other things, being honest and candid. Deceit and subordination of principle are inconsistent with integrity. Each Covered Officer must: - act with integrity, including being honest and candid while still maintaining the confidentiality of information where required by law or the Companies' policies; - observe both the form and spirit of laws and governmental rules and regulations, accounting standards and policies of the Companies; - adhere to a high standard of business ethics; and - place the interests of the Companies before the Covered Officer's own personal interests. Business practices Covered Officers should be guided by and adhere to these fiduciary standards. III. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF INTEREST GUIDING PRINCIPLES. A "conflict of interest" occurs when an individual's private interest interferes with the interests of the Companies. A conflict of interest can arise when a Covered Officer takes actions or has interests that may make it difficult to perform his or her work for the Companies objectively and effectively. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his or her position in any of the Companies. In addition, investment companies should be sensitive to situations that create apparent, but not actual, conflicts of interest. Service to the Companies should never be subordinated to personal gain and advantage. Certain conflicts of interest covered by this Code arise out of the relationships between Covered Officers and the Companies that already are subject to conflict of interest provisions in the Investment Company Act of 1940, as amended and the Investment Advisers Act of 1940, as amended. For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Companies because of their status as "affiliated persons" of the Companies. Therefore, as to the existing statutory and regulatory prohibitions on individual behavior, they will be deemed to be incorporated in this Code and therefore any material violation will also be deemed a violation of this Code. Covered Officers must in all cases comply with applicable statutes and regulations. As to conflicts arising from, or as a result of the contractual relationship between, the Companies and the investment adviser of which the Covered Officers are also officers or employees, it is recognized by the Board that, subject to the adviser's fiduciary duties to the Companies, the Covered Officers will in the normal course of their duties (whether formally for the Companies or for the adviser, or for both) be involved in establishing policies and implementing decisions which will have different effects on the adviser and the Companies. The Board recognizes that the participation of the Covered Officers in such activities is inherent in the contractual relationship between the Companies and the adviser and is consistent with the expectation of the Board of the performance by the Covered Officers of their duties as officers of the Companies. In addition, it is recognized by the Board that the Covered Officers may also be officers or employees of other investment companies advised by the same adviser and the codes which apply to senior officers of those investment companies will apply to the Covered Officers acting in those distinct capacities. Each Covered Officer must: - avoid conflicts of interest wherever possible; - handle any actual or apparent conflict of interest ethically; - not use his or her personal influence or personal relationships to influence investment decisions or financial reporting by an investment company whereby the Covered Officer would benefit personally to the detriment of any of the Companies; - not cause an investment company to take action, or fail to take action, for the personal benefit of the Covered Officer rather than the benefit of such company; - not use knowledge of portfolio transactions made or contemplated for an investment company to profit or cause others to profit, by the market effect of such transactions; and - as described in more detail below, discuss any material transaction or relationship that could reasonably be expected to give rise to a conflict of interest with the Chief Legal Officer of the AIM Funds (the "Chief Legal Officer"). Some conflict of interest situations that should always be discussed with the Chief Legal Officer, if material, include the following: - any outside business activity that detracts from an individual's ability to devote appropriate time and attention to his or her responsibilities with the Companies; - being in the position of supervising, reviewing or having any influence on the job evaluation, pay or benefit of any immediate family member; - any direct ownership interest in, or any consulting or employment relationship with, any of the Companies' service providers, other than its investment adviser, distributor or other AMVESCAP affiliated entities and other than a de minimis ownership interest (for purposes of this section of the Code an ownership interest of 1% or less shall constitute a de minimis ownership interest, and an ownership interest of more than 1% creates a rebuttable presumption that there may be a material conflict of interest); and - a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Companies for effecting portfolio transactions or for selling or redeeming shares, other than an interest arising from the Covered Officer's employment with Invesco Aim, its subsidiaries, its parent organizations and any affiliates or subsidiaries thereof, such as compensation or equity ownership, and other than an interest arising from a de minimis ownership interest in a company with which the Companies execute portfolios transactions or a company that receives commissions or other fees related to its sales and redemptions of shares of the Companies (for purposes of this section of the Code an ownership interest of 1% or less shall constitute a de minimis ownership interest, and an ownership interest of more than 1% creates a rebuttable presumption that there may be a material conflict of interest). IV. DISCLOSURE Each Covered Officer is required to be familiar, and comply, with the Companies' disclosure controls and procedures so that the Companies' subject reports and documents filed with the SEC comply in all material respects with the applicable federal securities laws and SEC rules. In addition, each Covered Officer having direct or supervisory authority regarding these SEC filings or the Companies' other public communications should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Companies and take other appropriate steps regarding these disclosures with the goal of making full, fair, accurate, timely and understandable disclosure. Each Covered Officer must: - familiarize himself/herself with the disclosure requirements applicable to the Companies as well as the business and financial operations of the Companies; and - not knowingly misrepresent, or cause others to misrepresent, facts about the Companies to others, whether within or outside the Companies, including representations to the Companies' internal auditors, independent Directors/Trustees, independent auditors, and to governmental regulators and self-regulatory organizations. V. COMPLIANCE It is the Companies' policy to comply in all material respects with all applicable governmental laws, rules and regulations. It is the personal responsibility of each Covered Officer to adhere to the standards and restrictions imposed by those laws, rules and regulations, including those relating to affiliated transactions, accounting and auditing matters. VI. REPORTING AND ACCOUNTABILITY Each Covered Officer must: - upon receipt of the Code, sign and submit to the Chief Compliance Officer of the Companies an acknowledgement stating that he or she has received, read, and understands the Code. - annually thereafter submit a form to the Chief Compliance Officer of the Companies confirming that he or she has received, read and understands the Code and has complied with the requirements of the Code. - not retaliate against any employee or other Covered Officer for reports of potential violations that are made in good faith. - notify the Chief Legal Officer promptly if he becomes aware of any existing or potential violation of this Code. Failure to do so is itself a violation of this Code. Except as described otherwise below, the Chief Legal Officer is responsible for applying this Code to specific situations in which questions are presented to him or her and has the authority to interpret this Code in any particular situation. The Chief Legal Officer shall take all action he or she considers appropriate to investigate any actual or potential violations reported to him or her. The Chief Legal Officer is authorized to consult, as appropriate, with the Chairman of the Audit Committees of the Board, counsel to the Companies and counsel to the independent Directors/Trustees, and is encouraged to do so. The Chief Legal Officer is responsible for granting waivers and determining sanctions, as appropriate. In addition, approvals, interpretations, or waivers sought by the Covered Officers may also be considered by the Chairman of the AIM Funds Audit Committees. The Companies will follow these procedures in investigating and enforcing this Code, and in reporting on the Code: - the Chief Legal Officer will take all appropriate action to investigate any violations reported to him or her; - violations and potential violations will be reported to the Chairman of the Audit Committees of the Board after such investigation; - if the Chairman of the Audit Committees determines that a violation has occurred, he or she will inform the Board, which will take all appropriate disciplinary or preventive action; - appropriate disciplinary or preventive action may include a letter of censure, suspension, dismissal or, in the event of criminal or other serious violations of law, notification to the SEC or other appropriate law enforcement authorities; - the Chief Legal Officer will be responsible for granting waivers, as appropriate; and - any changes to or waivers of this Code will, to the extent required, be disclosed on Form N-CSR as provided by SEC rules. VII. OTHER POLICIES AND PROCEDURES The Companies' and the Advisers' and Principal Underwriters' codes of ethics under Rule 17j-1 under the Investment Company Act and the Advisers' more detailed policies and procedures set forth in its Compliance and Supervisory Procedures Manual are separate requirements applying to Covered Officers and others, and are not part of this Code. VIII. AMENDMENTS This Code may not be amended except in written form, which is specifically approved by a majority vote of the Companies' Board, including a majority of independent Directors/Trustees. IX. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code shall be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the members of the Companies' Board, counsel to the Companies, and counsel to the independent Directors/Trustees. EXHIBIT A Persons Covered by this Code of Ethics: Philip A. Taylor Sheri Morris Karen Dunn Kelley THE AIM FAMILY OF FUNDS CODE OF ETHICS--ACKNOWLEDGEMENT I hereby acknowledge that I am a Principal Officer of the Companies and I am aware of and subject to the Companies' Code of Ethics for Principal Officers. Accordingly, I have read and understood the requirements of the Code of Ethics and I am committed to fully comply with the Code of Ethics. I recognize my obligation to promote: 1. Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; 2. Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Companies file with, or submit to, the Commission and in other public communications made by the Companies; and 3. Compliance with applicable governmental laws, rules, and regulations. - ------------------------------------- ---------------------------------------- Date Name: Title: EX-99.CERT 3 h68105exv99wcert.txt EX-99.CERT I, Philip A. Taylor, Principal Executive Officer, certify that: 1. I have reviewed this report on Form N-CSR of AIM Counselor Series Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3 (d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidating subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filling date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 6, 2009 /s/ Philip A. Taylor ---------------------------------------- Philip A. Taylor, Principal Executive Officer I, Sheri Morris, Principal Financial Officer, certify that: 1. I have reviewed this report on Form N-CSR of AIM Counselor Series Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3 (d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidating subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filling date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 6, 2009 /s/ Sheri Morris ---------------------------------------- Sheri Morris, Principal Financial Officer EX-99.906CERT 4 h68105exv99w906cert.txt EX-99.906CERT CERTIFICATION OF SHAREHOLDER REPORT In connection with the Certified Shareholder Report of AIM Counselor Series Trust (the "Company") on Form N-CSR for the period ended August 31, 2009, as filed with the Securities and Exchange Commission (the "Report"), I, Philip A. Taylor, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 6, 2009 /s/ Philip A. Taylor ---------------------------------------- Philip A. Taylor, Principal Executive Officer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. CERTIFICATION OF SHAREHOLDER REPORT In connection with the Certified Shareholder Report of AIM Counselor Series Trust (the "Company") on Form N-CSR for the period ended August 31, 2009, as filed with the Securities and Exchange Commission (the "Report"), I, Sheri Morris, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 6, 2009 /s/ Sheri Morris ---------------------------------------- Sheri Morris, Principal Financial Officer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----