N-30D 1 n-30d.txt AIFI- AIM EUROPEAN DEVELOPMENT FUND - SEMIANNUAL 1 SEMIANNUAL REPORT / APRIL 30 2000 AIM EUROPEAN DEVELOPMENT FUND [COVER IMAGE] [AIM LOGO APPEARS HERE] --Registered Trademark-- 2 [COVER IMAGE] ------------------------------------- HOMMAGE A BLERIOT, NO. 2, FRAGMENT BY ROBERT DELAUNAY LOUIS BLERIOT, A FRENCH ENGINEER AND INVENTOR, WAS THE FIRST PERSON TO FLY ACROSS THE ENGLISH CHANNEL FROM FRANCE, TRANS- PORTED BY A 28-HORSEPOWER MONOPLANE OF HIS OWN DESIGN. NEARLY 100 YEARS LATER, THE SAME SPIRIT OF ENTREPRENEURSHIP AND COURAGE THAT LAUNCHED BLERIOT'S FLIGHT HAS SENT EUROPE'S MARKETS SOARING. ------------------------------------- AIM European Development Fund is for shareholders who seek long-term growth of capital. The fund invests in a diversified portfolio of equity securities of companies located in Europe with strong earnings momentum. ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT: o AIM European Development Fund's performance figures are historical, and they reflect the reinvestment of distributions and changes in net asset value. o When sales charges are included in performance figures, Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. The performance of the fund's Class B and Class C shares will differ from that of its Class A shares due to different sales- charge structure and class expenses. o International investing presents certain risks not associated with investing solely in the United States. These include risks relating to fluctuations in the value of the U.S. dollar relative to the values of other currencies, the custodial arrangements made for the fund's foreign holdings, differences in accounting, political risks and the lesser degree of public information required to be provided by non-U.S. companies. o Investing in single-sector or single-region mutual funds may involve greater risk and potential reward than investing in a more diversified fund. o The fund's investment return and principal value will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT: o The unmanaged Lipper European Fund Index represents an average of the performance of the 30 largest European-region mutual funds tracked by Lipper, Inc., an independent mutual fund performance monitor. o The unmanaged MSCI Europe Index is a group of European securities tracked by Morgan Stanley Capital International. o An investment cannot be made in an index. Unless other wise indicated, index results include reinvested dividends, and they do not include sales charges. AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF YOUR MONEY. This report may be distributed only to current shareholders or to persons who have received a current prospectus of the fund. AVERAGE ANNUAL TOTAL RETURNS As of 4/30/00, including sales charges ================================================================================ CLASS A SHARES Inception (11/03/97) 42.50% 1 year 72.83%* *82.87%, excluding sales charges CLASS B SHARES Inception (11/03/97) 44.00% 1 year 76.40%* * 81.40%, excluding CDSC CLASS C SHARES Inception (11/03/97) 44.74% 1 year 80.55%* *81.55%, excluding CDSC The fund's average annual total returns as of the close of the reporting period are shown in the table above. In addition, industry regulations require us to provide average annual total returns as of 3/31/00, the most recent calendar quarter-end, which were: Class A shares, one year, 94.32%; inception (11/03/97), 50.79%. Class B shares, one year, 98.94%; inception (11/03/97), 52.55%. Class C shares, one year, 102.87%; inception (11/03/97), 53.26%. ================================================================================ Past performance does not guarantee comparable future results. MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE SHOWN. AIM EUROPEAN DEVELOPMENT FUND 3 SEMIANNUAL REPORT / CHAIRMAN'S LETTER Dear Fellow Shareholder: When we started AIM in 1976, we had only a table, two [PHOTO OF chairs and a telephone. At the time, Bob Graham, Gary Crum Charles T. and I had the idea of creating a mutual fund company that Bauer, put people first. Our slogan, "people are the product," Chairman of means that people--our employees and our investors-- are the Board of our company. THE FUND Almost a quarter-century later, we've grown to more than APPEARS HERE] seven million investors, $176 billion in assets under management and 53 retail funds. Over that time, the industry [Photo of Robert as a whole has grown from $51 billion in assets to more than H. Graham $7 trillion today. I never dreamed we would see such Appears Here] phenomenal growth. You are the main reason for our success, and I want you to know how much I appreciate your loyalty and trust over the past 24 years. Usually in this letter I review market activity during the period covered by the report. This time, I'd just like to say thank you. I am retiring as chairman of the AIM Funds effective September 30, and as chairman of AIM effective December 31, 2000. Bob Graham, whose picture appears under mine, will succeed me as AIM's chairman and chairman of the AIM Funds. Gary Crum will remain president of A I M Capital Management, Inc., leading our investment division. I am enormously proud to leave AIM in such capable hands. I'm also very proud of our team of employees, now more than 2,300 strong. Because of their collective commitment to excellence and ethical business practices, AIM has earned the trust of investors and financial advisors alike. And every employee, from portfolio managers to client services representatives, is dedicated to serving our shareholders. Rest assured that nothing at AIM will change because of my retirement. You can still depend on this company to manage your money responsibly and provide you with top-notch service. As chairman of AIM and chairman of the AIM Funds, Bob is committed to preserving the things that have made AIM great in the past and positioning it to succeed in the future. And Gary is dedicated to maintaining the quality and long-term performance you've come to expect from AIM. In the pages that follow, the managers of your fund comment on recent market activity, how they have managed your fund over the past six months and their outlook for the coming months. We trust you will find their comments helpful. If you have any questions or comments, please contact us through our Web site, www.aimfunds.com, or call our Client Services department at 800-959-4246 during normal business hours. Information about your account is available at our Web site and on our automated AIM Investor Line, 800-246-5463. Thank you again for the support and trust you've shown us. I feel privileged to have helped you with your financial goals, and I wish you success in all your endeavors. Sincerely, /s/ CHARLES T. BAUER Charles T. Bauer Chairman, A I M Advisors, Inc. AIM EUROPEAN DEVELOPMENT FUND 4 SEMIANNUAL REPORT / MANAGERS' OVERVIEW EUROPEAN HIGH-TECH STOCKS SKYROCKET, MARKET VOLATILITY INCREASES EUROPEAN EQUITY MARKETS RALLIED, THEN SOLD OFF LATE IN THE REPORTING PERIOD. HOW DID AIM EUROPEAN DEVELOPMENT FUND PERFORM? Despite market volatility, the fund continued to post strong returns. For the six-month reporting period ended April 30, 2000, the fund returned 55.36% for Class A shares, 54.75% for Class B shares and 54.78% for Class C shares based on net asset value (without a sales charge). The fund significantly outperformed its peer group -- the Lipper European Fund Index -- which returned 25.87% over the same period. Total net assets more than doubled during the reporting period, rising from $178.1 million on October 31, 1999, to $485.1 million on April 30, 2000. DESCRIBE THE EUROPEAN MARKET ENVIRONMENT DURING THE REPORTING PERIOD. Technology, media and telecommunications stocks, commonly referred to as TMTs, catapulted European equity markets to new highs through the first 41/2 months of the reporting period. Early first-quarter returns were particularly strong for small-capitalization tech stocks. The TMT rally ended in late March, however, as heavy profit-taking plunged European equity markets into one of their most volatile day-to-day periods ever. Fortunately, sentiment began to improve late in April as some TMT companies released news of stronger-than-expected earnings. Swedish telephone equipment maker LM Ericsson, for instance, reported large first-quarter pretax profits and high sales expectations for the rest of the year. Finland's mobile-phone giant, Nokia, also performed well. Ironically, until the 1980s, Nokia engaged in industries like rubber manufacturing before finding its niche in the mobile-telephone industry. Nokia is now the world's largest maker of mobile phones and provider of mobile and wired networks. Both Ericsson and Nokia are top fund holdings. If growth-oriented, TMT stocks were in favor for most of the period; cyclical industries, consumer staples (foods, pharmaceuticals, etc.) and basic-materials sectors were not. The fund's heavy concentration in technology, media and telecommunication stocks and its diversification across all capitalization levels greatly enhanced fund returns. WHAT SHAPED MARKET CONDITIONS OVER THE REPORTING PERIOD? Europe's economic backdrop looked stronger than it has in years. Overall, unemployment in Europe has declined and inflation has been kept in check. Also, the introduction of a single currency, the euro (see sidebar), has helped accelerate economic growth. Last October, for instance, in its semiannual World Economic Outlook, the International Monetary Fund (the IMF) forecast 2.8% growth for Euroland for 2000. In its latest outlook, the IMF predicts Euroland's 2000 growth rate to be 3.2%. Recent tax reform is also changing the face of Europe. In Germany, there is a proposal to eliminate the capital-gains tax on corporate asset sales, currently 50%. This kind of reform will undoubtedly foster even greater cross-country mergers and acquisitions. MERGER-AND-ACQUISITION ACTIVITY APPEARS TO BE A DOMINANT TREND. HOW HAS THIS AFFECTED THE FUND? Merger mania has hit Europe. Once the domain of the United States, the dollar volume of European deals quintupled from $200 billion annually in the early 1990s to almost $1 trillion in 1999. Conditions in Europe have been ripe for takeovers as robust stock prices and low inflation have made it difficult for companies to boost profits by raising prices. In many high-tech industries, it is simpler to acquire a capability or a technology than to actually build it. One of the largest cross-country acquisitions was Vodafone AirTouch's hostile takeover of Germany's Mannesmann. This acquisition makes Britain's Vodafone the largest com- FUND PERFORMANCE Six-month returns as of 4/30/00, excluding sales charges AIM EUROPEAN DEVELOPMENT FUND VS. BENCHMARK INDEXES ================================================================================ FUND CLASS A SHARES 55.36% FUND CLASS B SHARES 54.75% FUND CLASS C SHARES 54.78% LIPPER EUROPEAN FUND INDEX 25.87% MSCI EUROPE INDEX 8.31% ================================================================================ PORTFOLIO COMPOSITION As of 4/30/00, based on total net assets GEOGRAPHIC ALLOCATIONS [PIE CHART]
EURO NON EURO ---- -------- GERMANY 13.67% UNITED KINGDOM 17.90% FRANCE 16.65% SWITZERLAND 12.89% FINLAND 6.16% SWEDEN 7.71% NETHERLANDS 4.29% UNITED STATES 2.29% SPAIN 2.15% DENMARK 1.95% ITALY 1.54% NORWAY 1.10% IRELAND 0.98% OTHER NON-EURO 9.82% PORTUGAL 0.90%
See important fund and index disclosures inside front cover. AIM EUROPEAN DEVELOPMENT FUND 2 5 SEMIANNUAL REPORT / MANAGERS' OVERVIEW pany in Europe. It is also the world's largest wireless service, with more than 40 million subscribers in 25 countries. What makes the Vodafone/Mannesmann merger so compelling is that this means Europe is becoming more open to cross-border consolidation. Vodafone is one of the fund's top holdings. COULD YOU DISCUSS SOME OF YOUR HOLDINGS? We continue to favor the TMT sector. For instance, Paris-based Societe Television Francaise 1, commonly called TF1, is a fund holding. One of France's leading television-production companies, TF1 produces programming for both television and the Internet. We also see strong earnings momentum in several German companies. German electronics giant Siemens is streamlining its operations in a major restructuring effort. Siemens is also due to combine its computer operations with those of Japan's Fujitsu and its nuclear power business with that of France's Framatome. WHAT IS YOUR OUTLOOK FOR EUROPEAN MARKETS? Recent market volatility aside, the outlook for Europe remains bright. Enthusiasm for technology should remain strong, as Europe's Internet usage growth rate is now higher than that in the United States. And despite the uneasiness some investors feel toward the euro, government policies are changing. This is evidenced by the socialist coalition in Germany proposing the elimination of capital-gains taxes on corporate assets and other countries considering tax-rate cuts. And in the new single-currency marketplace, European companies realize that they must have critical mass to compete. Mergers and acquisitions are still in an early stage in Europe; therefore, consolidation will likely continue. HOW LOW WILL THE EURO GO? Introduced in January 1999, the euro (the single currency for 11 European countries) initially strengthened, but has been in a downward spiral for much of its young life. This year it fell below parity (level with the dollar) and continued to set all-time lows in March and April; it even broke the U.S.$0.90 level at the beginning of May. Many investors thought that the ailing currency would surely find support at parity or that European Central Bank (ECB) rate hikes would prop it up. A strong U.S. economy has helped weaken the euro, and perhaps the young and relatively inexperienced ECB does not yet command the respect of a Greenspan Fed. The ECB has had the ominous task of applying a single interest rate and a single growth policy for 11 countries--the largest of which, Germany, has slow growth and the smaller of which, Ireland and Spain, have very high growth. The euro's weakness, however, has helped boost earnings for Euroland companies that export to the United States or that deal in dollar-denominated goods. For instance, three Euroland tire makers (German's Continental, France's Michelin and Italy's Pirelli) all reap the benefits of a weak euro when they export their tires to the United States.
============================================================================================================================== TOP 10 HOLDINGS TOP 10 INDUSTRIES ------------------------------------------------------------------------------------------------------------------------------ 1. Nokia Oyj (Finland) 2.95% 1. Computers (Software & Services) 11.35% 2. Telefonaktiebolaget LM Ericsson A.B.-Class B (Sweden) 2.08 2. Communications Equipment 9.19 3. Tecan A.G. (Switzerland) 1.65 3. Broadcasting (Television, Radio & Cable) 6.45 4. Koninklijke (Royal) Philips Electronics N.V. (Netherlands) 1.65 4. Telephone 5.99 5. Straumann A.G. (Switzerland) 1.58 5. Electronics (Semiconductors) 5.72 6. ADVA A.G. Optical Networking (Germany) 1.57 6. Electronics (Component Distributors) 5.14 7. Siemens A.G. (Germany) 1.50 7. Services (Commercial & Consumer) 4.79 8. Havas Advertising S.A. (France) 1.50 8. Telecommunications (Cellular/Wireless) 4.38 9. Biacore International A.B. (Sweden) 1.48 9. Insurance (Multi-Line) 2.52 10. Vodafone AirTouch PLC (United Kingdom) 1.40 10. Machinery (Diversified) 2.39 The fund's portfolio is subject to change, and there is no assurance that the fund will continue to hold any particular security. ==============================================================================================================================
See important fund and index disclosures inside front cover. AIM EUROPEAN DEVELOPMENT FUND 3 6 SCHEDULE OF INVESTMENTS April 30, 2000 (Unaudited)
MARKET SHARES VALUE FOREIGN STOCKS & OTHER EQUITY INTERESTS-90.18% DENMARK-1.95% Navision Software A/S (Computers-Software & Services)(a) 42,300 $ 3,096,255 -------------------------------------------------------------- Vestas Wind Systems A/S (Manufacturing-Specialized) 19,090 6,381,188 -------------------------------------------------------------- 9,477,443 -------------------------------------------------------------- FINLAND-6.16% Comptel Oyj (Computers-Software & Services) 232,250 5,252,944 -------------------------------------------------------------- Elcoteq Network-Class A (Manufacturing- Specialized) 71,000 2,267,313 -------------------------------------------------------------- Nokia Oyj (Communications Equipment) 249,520 14,324,539 -------------------------------------------------------------- Perlos Oyj (Electronics-Semiconductors) 167,700 6,217,368 -------------------------------------------------------------- Sonera Oyj (Telecommunications-Cellular/ Wireless) 33,250 1,830,176 -------------------------------------------------------------- 29,892,340 -------------------------------------------------------------- FRANCE-16.65% ALTEN (Computers-Software & Services)(a) 11,112 1,546,784 -------------------------------------------------------------- Altran Technologies S.A. (Services-Commercial & Consumer) 21,900 4,479,055 -------------------------------------------------------------- Avenir Telecom (Telecommunications-Cellular/ Wireless)(a) 19,500 4,944,445 -------------------------------------------------------------- AXA (Insurance-Multi-Line) 39,650 5,883,599 -------------------------------------------------------------- Banque Nationale de Paris (Banks-Major Regional) 64,100 5,184,486 -------------------------------------------------------------- Galeries Lafayette (Retail-Department Stores) 29,300 4,987,551 -------------------------------------------------------------- GFI Informatique (Computers-Software & Services) 12,600 1,845,620 -------------------------------------------------------------- Havas Advertising S.A. (Services-Advertising/ Marketing) 14,600 7,292,411 -------------------------------------------------------------- M6 Metropole Television (Broadcasting-Television, Radio & Cable) 9,400 5,383,560 -------------------------------------------------------------- NRJ S.A. (Broadcasting-Television, Radio & Cable) 9,800 6,348,220 -------------------------------------------------------------- Pinault-Printemps-Redoute S.A. (Retail-General Merchandise) 16,900 3,411,850 -------------------------------------------------------------- Royal Canin S.A. (Foods) 27,200 2,551,370 -------------------------------------------------------------- Societe Television Francaise 1 (Broadcasting-Television, Radio & Cable) 7,600 5,206,603 -------------------------------------------------------------- SOITEC (Electronics-Component Distributors)(a) 23,900 5,873,114 -------------------------------------------------------------- STMicroelectronics N.V. (Electronics-Semiconductors) 34,000 6,492,879 --------------------------------------------------------------
MARKET SHARES VALUE FRANCE-(CONTINUED) Total Fina Elf (Oil & Gas-Refining & Marketing) 40,137 $ 6,094,628 -------------------------------------------------------------- Transiciel S.A. (Computers-Software & Services) 24,100 3,218,763 -------------------------------------------------------------- 80,744,938 -------------------------------------------------------------- GERMANY-13.67% ADVA A.G. Optical Networking (Communications Equipment)(a) 13,900 7,638,317 -------------------------------------------------------------- Brokat Infosystems A.G. (Computers-Software & Services)(a) 26,800 3,267,274 -------------------------------------------------------------- ce Consumer Electronic A.G. (Electronics-Component Distributors) 22,100 3,719,717 -------------------------------------------------------------- Epcos A.G. (Electronics-Component Distributors)(a) 46,300 6,550,242 -------------------------------------------------------------- Gfk A.G. (Services-Commercial & Consumer)(a) 65,719 2,630,810 -------------------------------------------------------------- Heyde A.G. (Computers-Software & Services)(a) 24,200 3,742,917 -------------------------------------------------------------- Infineon Technologies A.G. (Electronics- Semiconductors)(a) 66,750 4,600,233 -------------------------------------------------------------- Intershop Communications A.G. (Computers- Software & Services)(a) 12,650 5,622,132 -------------------------------------------------------------- Kamps A.G. (Retail-Food Chains) 92,000 3,009,073 -------------------------------------------------------------- Marschollek, Lautenschlaeger und Partner A.G. (Services-Commercial & Consumer) 8,000 4,236,029 -------------------------------------------------------------- Medion A.G. (Electronics-Component Distributors) 42,500 3,731,317 -------------------------------------------------------------- Siemens A.G. (Manufacturing-Diversified) 49,400 7,294,431 -------------------------------------------------------------- Singulus Technologies A.G. (Machinery-Diversified)(a) 28,600 3,249,933 -------------------------------------------------------------- Software A.G. (Computers-Software & Services)(a) 18,000 2,079,803 -------------------------------------------------------------- Telegate A.G. (Telephone)(a) 39,000 4,932,026 -------------------------------------------------------------- 66,304,254 -------------------------------------------------------------- IRELAND-0.98% Ryanair Holdings PLC-ADR (Airlines)(a) 116,200 4,735,150 -------------------------------------------------------------- ITALY-1.54% Gruppo Editoriale L'Espresso (Publishing) 248,816 3,508,778 -------------------------------------------------------------- Telecom Italia Mobile S.p.A. (Telecommunications- Cellular/Wireless) 415,000 3,964,453 -------------------------------------------------------------- 7,473,231 -------------------------------------------------------------- NETHERLANDS-4.29% CMG PLC (Computers-Software & Services) 68,100 4,367,995 -------------------------------------------------------------- Exact Holding N.V. (Computers-Software & Services)(a) 30,000 1,692,228 --------------------------------------------------------------
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MARKET SHARES VALUE NETHERLANDS-(CONTINUED) Koninklijke (Royal) Philips Electronics N.V. (Electrical Equipment) 179,680 $ 8,021,613 -------------------------------------------------------------- KPNQwest N.V. (Telecommunications-Long Distance)(a) 100,500 4,178,575 -------------------------------------------------------------- United Pan-Europe Communications N.V. (Broadcasting-Television, Radio & Cable)(a) 70,400 2,563,918 -------------------------------------------------------------- 20,824,329 -------------------------------------------------------------- NORWAY-1.10% TGS Nopec Geophysical Co. ASA (Oil & Gas-Exploration & Production)(a) 484,000 5,355,239 -------------------------------------------------------------- PORTUGAL-0.90% PT MULTIMEDIA-Servicos de Telecomunicacoes e Multimedia SGPS S.A. (Broadcasting- Television, Radio & Cable)(a) 62,400 4,357,214 -------------------------------------------------------------- SPAIN-2.15% NH Hoteles, S.A. (Investment Management)(a) 561,600 6,310,154 -------------------------------------------------------------- Telefonica S.A. (Telephone)(a) 183,900 4,095,803 -------------------------------------------------------------- 10,405,957 -------------------------------------------------------------- SWEDEN-7.71% Biacore International A.B. (Electronics-Instrumentation)(a) 197,400 7,160,955 -------------------------------------------------------------- Enea Data A.B. (Computers-Software & Services) 16,600 2,925,706 -------------------------------------------------------------- Europolitan Holdings A.B. (Telecommunications- Cellular/Wireless) 289,800 4,431,588 -------------------------------------------------------------- NetCom A.B.-Class B (Telecommunications- Cellular/Wireless)(a) 85,500 6,079,194 -------------------------------------------------------------- OM Grupppen A.B. (Investment Banking/ Brokerage) 162,000 6,726,644 -------------------------------------------------------------- Telefonaktiebolaget LM Ericsson A.B.-Class B (Communications Equipment) 113,500 10,097,053 -------------------------------------------------------------- 37,421,140 -------------------------------------------------------------- SWITZERLAND-12.89% ABB Ltd. (Engineering & Construction) 41,100 4,617,039 -------------------------------------------------------------- Adecco S.A. (Services-Commercial & Consumer) 7,200 5,914,659 -------------------------------------------------------------- Ares-Serono Group-Class B (Health Care- Drugs-Generic & Other)(a) 1,520 4,672,511 -------------------------------------------------------------- Charles Voegele Holding A.G. (Retail-Department Stores)(a) 16,150 3,140,929 -------------------------------------------------------------- Compagnie Financiere Richemont A.G. (Tobacco) 2,575 6,263,716 -------------------------------------------------------------- Kudelski S.A. (Electronics-Component Distributors)(a) 490 5,046,502 -------------------------------------------------------------- Micronas Semiconductor Holding A.G. (Electronics-Semiconductors)(a) 4,700 2,496,662 --------------------------------------------------------------
MARKET SHARES VALUE SWITZERLAND-(CONTINUED) Mikron Holding A.G. (Machinery-Diversified) 8,200 $ 5,926,851 -------------------------------------------------------------- Schindler Holding A.G. (Machinery- Diversified)(a) 1,700 2,426,880 -------------------------------------------------------------- Straumann A.G. (Health Care-Specialized Services)(a) 7,110 7,661,051 -------------------------------------------------------------- Tecan A.G. (Health Care-Medical Products & Supplies) 9,300 8,023,106 -------------------------------------------------------------- Zurich Allied A.G. (Insurance-Multi-Line) 14,900 6,340,610 -------------------------------------------------------------- 62,530,516 -------------------------------------------------------------- UNITED KINGDOM-17.90% ARM Holdings PLC (Electronics- Semiconductors)(a) 454,250 4,634,534 -------------------------------------------------------------- Autonomy Corp. PLC (Computers-Software & Services)(a) 20,000 2,660,000 -------------------------------------------------------------- Bookham Technology PLC (Communications Equipment)(a) 77,600 3,535,554 -------------------------------------------------------------- Capita Group PLC (Services-Commercial & Consumer) 232,850 5,973,649 -------------------------------------------------------------- COLT Telecom Group PLC (Telephone)(a) 81,000 3,443,170 -------------------------------------------------------------- Dialog Semiconductor PLC (Electronics-Semiconductors)(a) 30,000 3,302,574 -------------------------------------------------------------- J.D. Wetherspoon PLC (Leisure Time-Products) 728,000 4,722,982 -------------------------------------------------------------- Jazztel PLC-ADR (Telephone)(a) 77,700 4,040,400 -------------------------------------------------------------- JJB Sports PLC (Retail-General Merchandise) 345,000 3,131,413 -------------------------------------------------------------- Kewill Systems PLC (Computers-Software & Services)(a) 239,200 5,041,141 -------------------------------------------------------------- Kingston Communication (Hull) PLC (Telecommunications-Long Distance)(a) 306,300 3,831,179 -------------------------------------------------------------- Logica PLC (Computers-Software & Services) 129,400 3,900,184 -------------------------------------------------------------- Marconi PLC (Communications Equipment) 231,100 2,885,183 -------------------------------------------------------------- Matalan PLC (Retail-Discounters) 785,000 5,563,536 -------------------------------------------------------------- NDS Group PLC-ADR (Broadcasting-Television, Radio & Cable)(a) 44,000 2,486,000 -------------------------------------------------------------- Pace Micro Technology PLC (Communications Equipment) 524,000 6,121,565 -------------------------------------------------------------- Redstone Telecom PLC (Telephone)(a) 416,000 2,818,723 -------------------------------------------------------------- Sage Group PLC (The) (Computers-Software & Services) 330,500 3,660,252 -------------------------------------------------------------- Shell Transport & Trading Co. (Oil- International Integrated) 718,700 5,849,299 -------------------------------------------------------------- Shire Pharmaceuticals Group PLC (Health Care-Drugs-Generic & Other)(a) 88,420 1,254,697 -------------------------------------------------------------- Trintech Group PLC-ADR (Computers-Software & Services)(a) 43,000 1,161,000 -------------------------------------------------------------- Vodafone AirTouch PLC (Telephone) 1,483,186 6,803,788 -------------------------------------------------------------- 86,820,823 --------------------------------------------------------------
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MARKET SHARES VALUE UNITED STATES-2.29% NTL Inc. (Telephone)(a) 38,250 $ 2,926,125 -------------------------------------------------------------- UnitedGlobalCom Inc.-Class A (Broadcasting-Television, Radio & Cable)(a) 92,700 4,924,688 -------------------------------------------------------------- Viatel, Inc. (Telecommunications-Long Distance)(a) 84,700 3,239,775 -------------------------------------------------------------- 11,090,588 -------------------------------------------------------------- Total Foreign Stocks & Other Equity Interests (Cost $355,695,175) 437,433,162 --------------------------------------------------------------
MARKET SHARES VALUE MONEY MARKET FUNDS-6.03% STIC Liquid Assets Portfolio(b) 14,627,566 $ 14,627,566 -------------------------------------------------------------- STIC Prime Portfolio(b) 14,627,566 14,627,566 -------------------------------------------------------------- Total Money Market Funds (Cost $29,255,132) 29,255,132 -------------------------------------------------------------- TOTAL INVESTMENTS-96.21% (Cost $384,950,307) 466,688,294 -------------------------------------------------------------- OTHER ASSETS LESS LIABILITIES-3.79% 18,398,784 -------------------------------------------------------------- NET ASSETS-100.00% $485,087,078 ==============================================================
Investment Abbreviations: ADR - American Depositary Receipt Notes to Schedule of Investments: (a) Non-income producing security. (b) The money market fund has the same investment advisor as the Fund. See Notes to Financial Statements. 6 9 STATEMENT OF ASSETS AND LIABILITIES April 30, 2000 (Unaudited) ASSETS: Investments, at market value (cost $384,950,307) $466,688,294 ------------------------------------------------------------ Foreign currencies, at value (cost $23,421,451) 23,021,607 ------------------------------------------------------------ Receivables for: Investments sold 6,078,174 ------------------------------------------------------------ Capital stock sold 4,394,230 ------------------------------------------------------------ Dividends and interest 564,188 ------------------------------------------------------------ Investment for deferred compensation plan 11,557 ------------------------------------------------------------ Other assets 56,870 ------------------------------------------------------------ Total assets 500,814,920 ------------------------------------------------------------ LIABILITIES: Payables for: Investments purchased 13,106,672 ------------------------------------------------------------ Capital stock reacquired 1,612,076 ------------------------------------------------------------ Deferred compensation plan 11,557 ------------------------------------------------------------ Accrued advisory fees 376,639 ------------------------------------------------------------ Accrued administrative services fees 11,317 ------------------------------------------------------------ Accrued distribution fees 324,898 ------------------------------------------------------------ Accrued transfer agent fees 102,312 ------------------------------------------------------------ Accrued directors' fees 1,505 ------------------------------------------------------------ Accrued operating expenses 180,866 ------------------------------------------------------------ Total liabilities 15,727,842 ------------------------------------------------------------ Net assets applicable to shares outstanding $485,087,078 ============================================================ NET ASSETS: Class A $268,004,842 ============================================================ Class B $171,021,414 ============================================================ Class C $ 46,060,822 ============================================================ CAPITAL STOCK, $0.001 PAR VALUE PER SHARE: Class A: Authorized 200,000,000 ------------------------------------------------------------ Outstanding 10,507,613 ============================================================ Class B: Authorized 200,000,000 ------------------------------------------------------------ Outstanding 6,822,055 ============================================================ Class C: Authorized 200,000,000 ------------------------------------------------------------ Outstanding 1,836,071 ============================================================ Class A: Net asset value and redemption price per share $ 25.51 ------------------------------------------------------------ Offering price per share: (Net asset value of $25.51 divided by 94.50%) $ 26.99 ============================================================ Class B: Net asset value and offering price per share $ 25.07 ============================================================ Class C: Net asset value and offering price per share $ 25.09 ============================================================
STATEMENT OF OPERATIONS For the six months ended April 30, 2000 (Unaudited) INVESTMENT INCOME: Dividends (net of foreign withholding tax $92,371) $ 1,304,718 ------------------------------------------------------------ Interest 14,853 ------------------------------------------------------------ Total investment income 1,319,571 ------------------------------------------------------------ EXPENSES: Advisory fees 1,771,395 ------------------------------------------------------------ Administrative services fees 54,194 ------------------------------------------------------------ Custodian fees 184,749 ------------------------------------------------------------ Distribution fees -- Class A 370,491 ------------------------------------------------------------ Distribution fees -- Class B 662,790 ------------------------------------------------------------ Distribution fees -- Class C 155,931 ------------------------------------------------------------ Transfer agent fees -- Class A 212,220 ------------------------------------------------------------ Transfer agent fees -- Class B 191,304 ------------------------------------------------------------ Transfer agent fees -- Class C 45,007 ------------------------------------------------------------ Directors' fees 2,655 ------------------------------------------------------------ Other 196,222 ------------------------------------------------------------ Total expenses 3,846,958 ------------------------------------------------------------ Less expenses paid indirectly (3,599) ------------------------------------------------------------ Net expenses 3,843,359 ------------------------------------------------------------ Net investment income (loss) (2,523,788) ------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES AND FOREIGN CURRENCIES Net realized gain (loss) from: Investment securities 39,656,172 ------------------------------------------------------------ Foreign currencies (821,867) ------------------------------------------------------------ 38,834,305 ------------------------------------------------------------ Change in net unrealized appreciation (depreciation) of: Investment securities 43,680,963 ------------------------------------------------------------ Foreign currencies (71,234) ------------------------------------------------------------ 43,609,729 ------------------------------------------------------------ Net gain on investment securities and foreign currencies 82,444,034 ------------------------------------------------------------ Net increase in net assets resulting from operations $79,920,246 ============================================================
See Notes to Financial Statements. 7 10 STATEMENT OF CHANGES IN NET ASSETS For the six months ended April 30, 2000 and the year ended October 31, 1999 (Unaudited)
APRIL 30, OCTOBER 31, 2000 1999 ------------ ------------ OPERATIONS: Net investment income (loss) $ (2,523,788) $ (1,719,011) ------------------------------------------------------------------------------------------ Net realized gain (loss) from investment securities and foreign currencies 38,834,305 (5,794,428) ------------------------------------------------------------------------------------------ Change in net unrealized appreciation of investment securities and foreign currencies 43,609,729 43,126,751 ------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations 79,920,246 35,613,312 ------------------------------------------------------------------------------------------ Distributions to shareholders from net investment income: Class A -- (80,229) ------------------------------------------------------------------------------------------ Share transactions-net: Class A 122,036,127 2,449,615 ------------------------------------------------------------------------------------------ Class B 75,355,389 3,977,973 ------------------------------------------------------------------------------------------ Class C 29,614,749 (246,455) ------------------------------------------------------------------------------------------ Net increase in net assets 306,926,511 41,714,216 ------------------------------------------------------------------------------------------ NET ASSETS: Beginning of period 178,160,567 136,446,351 ------------------------------------------------------------------------------------------ End of period $485,087,078 $178,160,567 ========================================================================================== NET ASSETS CONSIST OF: Capital (par value and additional paid-in) $379,760,080 $152,753,815 ------------------------------------------------------------------------------------------ Undistributed net investment income (loss) (2,533,777) (9,989) ------------------------------------------------------------------------------------------ Undistributed net realized gain (loss) from investment securities and foreign currencies 26,204,512 (12,629,793) ------------------------------------------------------------------------------------------ Unrealized appreciation of investment securities and foreign currencies 81,656,263 38,046,534 ------------------------------------------------------------------------------------------ $485,087,078 $178,160,567 ==========================================================================================
See Notes to Financial Statements. 8 11 NOTES TO FINANCIAL STATEMENTS April 30, 2000 (Unaudited) NOTE 1-SIGNIFICANT ACCOUNTING POLICIES AIM European Development Fund (the "Fund") is a series portfolio of AIM International Funds, Inc. (the "Company"). The Company is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of six separate portfolios. The Fund currently offers three different classes of shares: Class A shares, Class B shares and Class C shares. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with a contingent deferred sales charge. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. The Fund's investment objective is long-term growth of capital. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. A. Security Valuations -- A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security reported on the NASDAQ National Market System is valued at the last sales price on the valuation date or absent a last sales price, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as yield, type of issue, coupon rate and maturity date. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Company's officers in a manner specifically authorized by the Board of Directors of the Company. Short-term obligations having 60 days or less to maturity are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE which would not be reflected in the computation of the Fund's net asset value. If events materially affecting the value of such securities occur during such period, then these securities will be valued at their fair value as determined in good faith by or under the supervision of the Board of Directors. 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 as earned from settlement date and is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. C. Distributions -- Distributions from income and net realized capital gains, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes. D. Federal Income Taxes -- The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. The Fund has a capital loss carryforward of $12,347,305 which may be carried forward to offset future taxable gains, if any, which expires, if not previously utilized, in the year 2007. E. Foreign Currency Translations -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for that portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. 9 12 F. Foreign Currency Contracts -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. G. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes. NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Company has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.95% of the first $500 million of the Fund's average daily net assets, plus 0.90% of the Fund's average daily net assets in excess of $500 million. Under the terms of a sub-advisory agreement between AIM and INVESCO Global Asset Management Limited ("IGAM"), AIM pays IGAM a fee at an annual rate of 0.20% of the first $500 million of the Fund's average daily net assets, plus 0.175% of the Fund's average daily net assets in excess of $500 million. The Fund, pursuant to a master administrative services agreement with AIM, has agreed to pay AIM for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended April 30, 2000, AIM was paid $54,194 for such services. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and shareholder services to the Fund. For the six months ended April 30, 2000, AFS was paid $244,477 for such services. The Company has entered into master distribution agreements with A I M Distributors, Inc. ("AIM Distributors") to serve as the distributor for the Class A, Class B and Class C shares of the Fund. The Company has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A shares, Class B shares and Class C shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays AIM Distributors compensation at the annual rate of 0.35% of the Fund's average daily net assets of Class A shares and 1.00% of the average daily net assets of Class B and C shares. Of these amounts, the Fund may pay a service fee of 0.25% of the average daily net assets of the Class A, Class B or Class C shares to selected dealers and financial institutions who furnish continuing personal shareholder services to their customers who purchase and own the appropriate class of shares of the Fund. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. The Plans also impose a cap on the total sales charges, including asset-based sales charges that may be paid by the respective classes. During the six months ended April 30, 2000, the Class A, Class B and Class C shares paid AIM Distributors $370,491, $662,790 and $155,931, respectively, as compensation under the Plans. AIM Distributors received commissions of $285,769 from sales of the Class A shares of the Fund during the six months ended April 30, 2000. Such commissions are not an expense of the Fund. They are deducted from, and are not included in, the proceeds from sales of Class A shares. During the six months ended April 30, 2000, AIM Distributors received $6,523 in contingent deferred sales charges imposed on redemptions of Fund shares. Certain officers and directors of the Company are officers and directors of AIM, AFS and AIM Distributors. During the six months ended April 30, 2000, the Fund paid legal fees of $1,651 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Company's directors. A member of that firm is a director of the Company. NOTE 3-INDIRECT EXPENSES During the six months ended April 30, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of $2,220 and $1,379, respectively, under expense offset arrangements. The effect of the above arrangements resulted in a reduction of the Fund's total expenses of $3,599 during the six months ended April 30, 2000. NOTE 4-DIRECTORS' FEES Directors' fees represent remuneration paid to directors who are not an "interested person" of AIM. The Company invests directors' fees, if so elected by a director, in mutual fund shares in accordance with a deferred compensation plan. NOTE 5-BANK BORROWINGS The Fund is a participant in a committed line of credit facility with a syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit may borrow on a first come, first served basis. During the six months ended April 30, 2000, the Fund did not borrow under the line of credit agreement. The funds which are party to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee is allocated among the funds based on their respective average net assets for the period. 10 13 NOTE 6-INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities) purchased and sold by the Fund during the six months ended April 30, 2000 was $412,019,362 and $224,063,747, respectively. The amount of unrealized appreciation (depreciation) of investment securities, for tax purposes, as of April 30, 2000 is as follows: Aggregate unrealized appreciation of investment securities $101,238,009 --------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (19,733,841) --------------------------------------------------------------------------- Net unrealized appreciation of investment securities $ 81,504,168 ===========================================================================
Cost of investments for tax purposes is $385,184,126. NOTE 7-CAPITAL STOCK Changes in capital stock outstanding during the six months ended April 30, 2000 and the year ended October 31, 1999 were as follows:
APRIL 30, 2000 OCTOBER 31, 1999 --------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------- ---------- ------------- Sold: Class A 8,182,114 $ 226,706,844 7,243,646 $ 103,416,688 ------------------------------------------------------------------------------------------------------------------------ Class B 3,571,988 98,378,969 3,045,028 43,081,822 ------------------------------------------------------------------------------------------------------------------------ Class C 1,566,080 42,307,253 2,148,542 29,835,245 ------------------------------------------------------------------------------------------------------------------------ Issued as reinvestment of dividends: Class A -- -- 5,672 76,739 ------------------------------------------------------------------------------------------------------------------------ Reacquired: Class A (3,714,461) (104,670,717) (7,125,444) (101,043,812) ------------------------------------------------------------------------------------------------------------------------ Class B (890,787) (23,023,580) (2,797,703) (39,103,849) ------------------------------------------------------------------------------------------------------------------------ Class C (466,711) (12,692,504) (2,160,106) (30,081,700) ------------------------------------------------------------------------------------------------------------------------ 8,248,223 $ 227,006,265 359,635 $ 6,181,133 ========================================================================================================================
NOTE 8-FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a Share outstanding throughout each period, total investment return, ratios and supplemental data. This information has been derived from information provided in the financial statements.
CLASS A --------------------------------------------------- NOVEMBER 3, 1997 (DATE OPERATIONS COMMENCED) SIX MONTHS ENDED YEAR ENDED TO APRIL 30, OCTOBER 31, OCTOBER 31, 2000 1999 1998(a) ---------------- ----------- ---------------- Net asset value, beginning of period $ 16.42 $ 12.96 $ 10.00 ----------------------------------------------------------- -------- ------- ------- Income from investment operations: Net investment income (loss) (0.10) (0.11) (0.08) ----------------------------------------------------------- -------- ------- ------- Net gains on securities (both realized and unrealized) 9.19 3.58 3.04 ----------------------------------------------------------- -------- ------- ------- Total from investment operations 9.09 3.47 2.96 ----------------------------------------------------------- -------- ------- ------- Less distributions from net investment income -- (0.01) -- ----------------------------------------------------------- -------- ------- ------- Net asset value, end of period $ 25.51 $ 16.42 $ 12.96 =========================================================== ======== ======= ======= Total return(b) 55.36% 26.81% 29.60% =========================================================== ======== ======= ======= Ratios/supplemental data: Net assets, end of period (000s omitted) $268,005 $99,148 $76,686 =========================================================== ======== ======= ======= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.73%(c) 1.88% 1.98%(d) ----------------------------------------------------------- -------- ------- ------- Without fee waivers and/or expense reimbursements 1.73%(c) 1.88% 2.15%(d) =========================================================== ======== ======= ======= Ratio of net investment income (loss) to average net assets (1.03)%(c) (0.69)% (0.58)%(d) =========================================================== ======== ======= ======= Portfolio turnover rate 67% 122% 93% =========================================================== ======== ======= =======
(a) Calculated using average shares outstanding. (b) Does not deduct sales charges and is not annualized for periods less than one year. (c) Ratios are annualized and based on average net assets of $212,872,400. (d) Annualized. 11 14 NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B ------------------------------------------------------ NOVEMBER 3, 1997 (DATE OPERATIONS SIX MONTHS ENDED YEAR ENDED COMMENCED) APRIL 30, OCTOBER 31, TO 2000 1999 OCTOBER 31, 1998(a) ---------------- ----------- ------------------- Net asset value, beginning of period $ 16.20 $ 12.87 $ 10.00 ----------------------------------------------------------- -------- ------- ------- Income from investment operations: Net investment income (loss) (0.17) (0.22) (0.18)(a) ----------------------------------------------------------- -------- ------- ------- Net gains on securities (both realized and unrealized) 9.04 3.55 3.05 ----------------------------------------------------------- -------- ------- ------- Total from investment operations 8.87 3.33 2.87 ----------------------------------------------------------- -------- ------- ------- Net asset value, end of period $ 25.07 $ 16.20 $ 12.87 =========================================================== ======== ======= ======= Total return(b) 54.75% 25.87% 28.70% =========================================================== ======== ======= ======= Ratios/supplemental data: Net assets, end of period (000s omitted) $171,021 $67,074 $50,121 =========================================================== ======== ======= ======= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.46%(c) 2.63% 2.72%(d) ----------------------------------------------------------- -------- ------- ------- Without fee waivers and/or expense reimbursements 2.46%(c) 2.63% 2.89%(d) =========================================================== ======== ======= ======= Ratio of net investment income (loss) to average net assets (1.76)%(c) (1.44)% (1.32)%(d) =========================================================== ======== ======= ======= Portfolio turnover rate 67% 122% 93% =========================================================== ======== ======= =======
(a) Calculated using average shares outstanding. (b) Does not deduct contingent deferred sales charges and is not annualized for periods less than one year. (c) Ratios are annualized and based on average net assets of $133,286,248. (d) Annualized.
CLASS C ------------------------------------------------------ NOVEMBER 3, 1997 (DATE OPERATIONS SIX MONTHS ENDED YEAR ENDED COMMENCED) APRIL 30, OCTOBER 31, TO 2000 1999 OCTOBER 31, 1998(a) ---------------- ----------- ------------------- Net asset value, beginning of period $ 16.21 $ 12.88 $10.00 ----------------------------------------------------------- ------- ------- ------ Income from investment operations: Net investment income (loss) (0.15) (0.23) (0.18) ----------------------------------------------------------- ------- ------- ------ Net gains on securities (both realized and unrealized) 9.03 3.56 3.06 ----------------------------------------------------------- ------- ------- ------ Total from investment operations 8.88 3.33 2.88 ----------------------------------------------------------- ------- ------- ------ Net asset value, end of period $ 25.09 $ 16.21 $12.88 =========================================================== ======= ======= ====== Total return(b) 54.78% 25.85% 28.80% =========================================================== ======= ======= ====== Ratios/supplemental data: Net assets, end of period (000s omitted) $46,061 $11,938 $9,639 =========================================================== ======= ======= ====== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.46%(c) 2.63% 2.72%(d) ----------------------------------------------------------- ------- ------- ------ Without fee waivers and/or expense reimbursements 2.46%(c) 2.63% 2.89%(d) =========================================================== ======= ======= ====== Ratio of net investment income (loss) to average net assets (1.76)%(c) (1.44)% (1.32)%(d) =========================================================== ======= ======= ====== Portfolio turnover rate 67% 122% 93% =========================================================== ======= ======= ======
(a) Calculated using average shares outstanding. (b) Does not deduct contingent deferred sales charges and is not annualized for periods less than one year. (c) Ratios are annualized and based on average net assets of $31,357,491. (d) Annualized. 12 15
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND Charles T. Bauer Charles T. Bauer 11 Greenway Plaza Chairman Chairman Suite 100 A I M Management Group Inc. Houston, TX 77046 Robert H. Graham Bruce L. Crockett President INVESTMENT ADVISOR Director ACE Limited; Carol F. Relihan A I M Advisors, Inc. Formerly Director, President, and Senior Vice President and Secretary 11 Greenway Plaza Chief Executive Officer Suite 100 COMSAT Corporation Gary T. Crum Houston, TX 77046 Senior Vice President Owen Daly II SUB-ADVISOR Director Edgar M. Larsen Cortland Trust Inc. Senior Vice President INVESCO Global Asset Management Limited Edward K. Dunn Jr. Dana R. Sutton Cedar House Chairman, Mercantile Mortgage Corp.; Vice President and Treasurer 41 Cedar Avenue Formerly Vice Chairman and President, Hamilton, HM12 Bermuda Mercantile-Safe Deposit & Trust Co.; and Robert G. Alley President, Mercantile Bankshares Vice President TRANSFER AGENT Jack Fields Melville B. Cox A I M Fund Services, Inc. Chief Executive Officer Vice President P.O. Box 4739 Texana Global, Inc.; Houston, TX 77210-4739 Formerly Member Mary J. Benson of the U.S. House of Representatives Assistant Vice President and CUSTODIAN Assistant Treasurer Carl Frischling State Street Bank and Trust Company Partner Sheri Morris 225 Franklin Street Kramer, Levin, Naftalis & Frankel LLP Assistant Vice President and Boston, MA 02110 Assistant Treasurer Robert H. Graham COUNSEL TO THE FUND President and Chief Executive Officer Renee A. Friedli A I M Management Group Inc. Assistant Secretary Ballard Spahr Andrews & Ingersoll, LLP Prema Mathai-Davis P. Michelle Grace 1735 Market Street Chief Executive Officer, YWCA of the U.S.A. Assistant Secretary Philadelphia, PA 19103 Lewis F. Pennock Nancy L. Martin COUNSEL TO THE DIRECTORS Attorney Assistant Secretary Kramer, Levin, Naftalis & Frankel LLP Louis S. Sklar Ofelia M. Mayo 919 Third Avenue Executive Vice President Assistant Secretary New York, NY 10022 Hines Interests Limited Partnership Lisa A. Moss DISTRIBUTOR Assistant Secretary A I M Distributors, Inc. Kathleen J. Pflueger 11 Greenway Plaza Assistant Secretary Suite 100 Houston, TX 77046 Samuel D. Sirko Assistant Secretary
16 THE AIM FAMILY OF FUNDS-Registered Trademark-- GROWTH FUNDS INTERNATIONAL GROWTH FUNDS A I M Management Group Inc. has AIM Aggressive Growth Fund AIM Advisor International Value Fund provided leadership in the AIM Blue Chip Fund AIM Asian Growth Fund mutual fund industry since 1976 AIM Capital Development Fund AIM Developing Markets Fund and managed approximately $176 AIM Constellation Fund(1) AIM Euroland Growth Fund(5) billion in assets for more than AIM Dent Demographic Trends Fund AIM European Development Fund 7.4 million shareholders, AIM Emerging Growth Fund AIM International Equity Fund including individual investors, AIM Large Cap Growth Fund AIM Japan Growth Fund corporate clients and financial AIM Large Cap Opportunities Fund AIM Latin American Growth Fund institutions, as of March 31, AIM Mid Cap Equity Fund 2000. AIM Mid Cap Growth Fund GLOBAL GROWTH FUNDS The AIM Family of AIM Mid Cap Opportunities Fund(2) AIM Global Aggressive Growth Fund Funds--Registered Trademark-- is AIM Select Growth Fund AIM Global Growth Fund distributed nationwide, and AIM AIM Small Cap Growth Fund(3) AIM Global Trends Fund(6) today is the eighth-largest AIM Small Cap Opportunities Fund(4) mutual fund complex in the AIM Value Fund GLOBAL GROWTH & INCOME FUNDS United States in assets under AIM Weingarten Fund AIM Global Utilities Fund management, according to Strategic Insight, an GROWTH & INCOME FUNDS GLOBAL INCOME FUNDS independent mutual fund monitor. AIM Advisor Flex Fund AIM Global Income Fund AIM Advisor Real Estate Fund AIM Strategic Income Fund AIM Balanced Fund AIM Basic Value Fund THEME FUNDS AIM Charter Fund AIM Global Consumer Products and Services Fund AIM Global Financial Services Fund INCOME FUNDS AIM Global Health Care Fund AIM Floating Rate Fund AIM Global Infrastructure Fund AIM High Yield Fund AIM Global Resources Fund AIM High Yield Fund II AIM Global Telecommunications and Technology Fund AIM Income Fund AIM Intermediate Government Fund AIM Limited Maturity Treasury Fund TAX-FREE INCOME FUNDS AIM High Income Municipal Fund AIM Municipal Bond Fund AIM Tax-Exempt Bond Fund of Connecticut AIM Tax-Free Intermediate Fund MONEY MARKET FUNDS AIM Money Market Fund AIM Tax-Exempt Cash Fund
(1) Effective December 1, 1999, AIM Constellation Fund's investment strategy broadened to allow investments across all market capitalizations. (2) AIM Mid Cap Opportunities Fund closed to new investors on March 21, 2000. (3) AIM Small Cap Growth Fund closed to new investors on November 8, 1999. (4) AIM Small Cap Opportunities Fund closed to new investors on November 4, 1999. (5) On September 1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund. Previously the fund invested in all size companies in most areas of Europe. The fund now seeks to invest at least 65% of its assets in large-cap companies within countries using the euro as their currency (EMU-member countries). (6) Effective August 27, 1999, AIM Global Trends Fund was restructured to operate as a traditional mutual fund. Before that date, the fund operated as a fund of funds. For more complete information about any AIM fund(s), including sales charges and expenses, ask your financial advisor or securities dealer for a free prospectus(es). Please read the prospectus(es) carefully before you invest or send money. If used as sales material after July 20, 2000, this report must be accompanied by a current Quarterly Review of Performance for AIM Funds. [AIM LOGO APPEARS HERE] [DALBAR LOGO APPEARS HERE] --Registered Trademark-- INVEST WITH DISCIPLINE --Registered Trademark-- AIM Distributors, Inc. EDF-SAR-1