497 1 h20411fe497.txt AIM INTERNATIONAL MUTUAL FUNDS - 497(E) AIM EQUITY FUNDS AIM Aggressive Growth Fund - Institutional Class AIM Blue Chip Fund - Institutional Class AIM Capital Development Fund - Institutional Class AIM Charter Fund - Institutional Class AIM Constellation Fund - Institutional Class AIM Large Cap Basic Value Fund - Institutional Class AIM Large Cap Growth Fund - Institutional Class AIM Mid Cap Growth Fund - Institutional Class AIM Weingarten Fund - Institutional Class Supplement dated November 23, 2004 to the Prospectus dated April 30, 2004, as supplemented April 30, 2004, May 14, 2004, May 18, 2004, July 16, 2004, September 8, 2004 and October 12, 2004 AIM FUNDS GROUP AIM Balanced Fund - Institutional Class AIM Basic Balanced Fund - Institutional Class AIM Mid Cap Basic Value Fund - Institutional Class AIM Premier Equity Fund - Institutional Class Supplement dated November 23, 2004 to the Prospectus dated April 30, 2004, as supplemented April 30, 2004, May 3, 2004, May 14, 2004, May 18, 2004, July 16, 2004, September 8, 2004 and October 12, 2004 AIM GROWTH SERIES AIM Aggressive Allocation Fund - Institutional Class AIM Basic Value Fund - Institutional Class AIM Conservative Allocation Fund - Institutional Class AIM Global Equity Fund - Institutional Class AIM Mid Cap Core Equity Fund - Institutional Class AIM Moderate Allocation Fund - Institutional Class AIM Small Cap Growth Fund - Institutional Class Supplement dated November 23, 2004 to the Prospectus dated April 30, 2004, as revised September 17, 2004, as supplemented September 17, 2004, September 23, 2004 (A), September 23, 2004 (B) and October 12, 2004 AIM INTERNATIONAL MUTUAL FUNDS AIM International Growth Fund - Institutional Class Supplement dated November 23, 2004 to the Prospectus dated February 27, 2004, as supplemented February 27, 2004, May 18, 2004, July 16, 2004, September 8, 2004 and October 12, 2004 AIM INVESTMENT FUNDS AIM Trimark Endeavor Fund - Institutional Class AIM Trimark Fund - Institutional Class AIM Trimark Small Companies Fund - Institutional Class Supplement dated November 23, 2004 to the Prospectus dated March 1, 2004, as revised April 30, 2004, as supplemented April 30, 2004, May 3, 2004, May 18, 2004, July 16, 2004, September 8, 2004 and October 12, 2004 AIM INVESTMENT SECURITIES FUNDS AIM High Yield Fund - Institutional Class AIM Limited Maturity Treasury Fund - Institutional Class AIM Money Market Fund - Institutional Class AIM Real Estate Fund - Institutional Class AIM Short Term Bond Fund - Institutional Class AIM Total Return Bond Fund - Institutional Class Supplement B dated November 23, 2004 to the Prospectus dated April 30, 2004, as supplemented April 30, 2004, May 18, 2004, July 15, 2004, July 16, 2004, September 8, 2004 and October 12, 2004 AIM TAX-EXEMPT FUNDS AIM Tax-Free Intermediate Fund - Institutional Class Supplement dated November 23, 2004 to the Prospectus dated July 30, 2004, as supplemented July 30, 2004, September 8, 2004 and October 12, 2004 TOOLS USED TO COMBAT EXCESSIVE SHORT-TERM TRADING ACTIVITY While the funds provide their shareholders with daily liquidity, their investment programs are designed to serve long-term investors. Excessive short-term trading activity in the funds' shares (i.e., a purchase of fund shares followed shortly thereafter by a redemption of such shares, or vice versa) may hurt the long-term performance of certain funds by requiring them to maintain an excessive amount of cash or to liquidate portfolio holdings at a disadvantageous time. A I M Advisors, Inc. and its affiliates (collectively, the "AIM Affiliates") currently use the following tools designed to discourage excessive short-term trading in the retail AIM funds (the "funds") 1) trade activity monitoring; 2) trading guidelines; 3) redemption fee on trades in certain funds; and 4) selective use of fair value pricing. Each of these tools is described in more detail below. Although these tools are designed to discourage excessive short-term trading, you should understand that none of these tools alone nor all of them taken together eliminate the possibility that excessive short-term trading activity in the funds will occur. Moreover, each of these tools involves judgments that are inherently subjective. The AIM Affiliates seek to make these judgments to the best of their abilities in a manner that they believe is consistent with shareholder interests. TRADE ACTIVITY MONITORING The AIM Affiliates monitor selected trades on a daily basis in an effort to detect excessive short-term trading activities. If, as a result of this monitoring, AIM Affiliates believe that a shareholder has engaged in excessive short-term trading, they may, in their discretion, ask the shareholder to stop such activities or refuse to process purchases or exchanges in the shareholder's accounts other than exchanges into a money market fund. In making such judgments, the AIM Affiliates seek to act in a manner that they believe is consistent with the best interests of shareholders. The ability of the AIM Affiliates to monitor trades that are placed by the underlying shareholders of omnibus accounts maintained by brokers, retirement plan accounts and approved fee-based program accounts is severely limited in those instances in which the broker, retirement plan administrator or fee-based program sponsor maintains the underlying shareholder accounts. This is one reason why this tool cannot eliminate the possibility of excessive short-term trading. TRADING GUIDELINES If you exceed four exchanges out of a fund (other than AIM Money Market Fund, AIM Tax-Exempt Cash Fund, AIM Limited Maturity Treasury Fund and Premier U.S. Government Money Portfolio) per calendar year, or a fund or the distributor determines, in its sole discretion, that your short-term trading activity is excessive (regardless of whether or not you exceed such guidelines), it may, in its discretion, reject any additional purchase and exchange orders. Each fund and the distributor reserves the discretion to accept exchanges in excess of these guidelines on a case-by-case basis if it believes that granting such exceptions would be consistent with the best interests of shareholders. An exchange is the movement out of (redemption) one fund and into (purchase) another fund. The ability of the AIM Affiliates to monitor exchanges made by the underlying shareholders of omnibus accounts maintained by brokers, retirement plan accounts and approved fee-based program accounts is severely limited in those instances in which the broker, retirement plan administrator or fee-based program sponsor maintains the underlying shareholder accounts. This is one reason why this tool cannot eliminate the possibility of excessive short-term trading. REDEMPTION FEE You may be charged a 2% redemption fee if you redeem, including redeeming by exchange, Class A, Investor Class or Institutional Class (applicable only to AIM S&P 500 Index Fund) shares of certain funds within 30 days of purchase. The AIM Affiliates expect to charge the redemption fee on other classes of shares when the funds' transfer agent system has the capability of processing the fee across these other classes. See "Redeeming Shares Redemption Fee" for more information. The ability of a fund to assess a redemption fee on the underlying shareholders of omnibus accounts maintained by brokers, retirement plan accounts and approved fee-based program accounts is severely limited in those instances in which the broker, retirement plan administrator or fee-based program sponsor maintains the underlying shareholder account and may be further limited by systems limitations applicable to these types of accounts. Additionally, the AIM Affiliates maintain certain retirement plan accounts on a record keeping system that is currently incapable of processing the redemption fee. The provider of this system is working to enhance the system to facilitate the processing of this fee. These are two reasons why this tool cannot eliminate the possibility of excessive short-term trading activity. FAIR VALUE PRICING The trading hours for most foreign securities end prior to the close of the New York Stock Exchange, the time the fund's net asset value is calculated. The occurrence of certain events after the close of foreign markets, but prior to the close of the U.S. market (such as a significant change in the U.S. market) often will result in an adjustment to the trading prices of foreign securities when foreign markets open on the following business day. If such events occur, the fund may value foreign securities at fair value, taking into account such events, when it calculates its net asset value. Fair value determinations are made in good faith in accordance with procedures adopted by the Board of Trustees of the fund. The overall pricing methodology and pricing services can change from time to time as approved by the Board of Trustees. See "Pricing of Shares - Determination of Net Asset Value" for more information. Fair value pricing results in an estimated price and may reduce the possibility that short-term traders could take advantage of potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of excessive short-term trading. REDEEMING SHARES REDEMPTION FEE You may be charged a 2% redemption fee (on total redemption proceeds) if you redeem, including redeeming by exchange, Class A, Investor Class or Institutional Class (applicable only to AIM S&P 500 Index Fund) shares of the following funds (either by selling or exchanging to another AIM Fund) within 30 days of their purchase: AIM Asia Pacific Growth Fund AIM Global Value Fund AIM Developing Markets Fund AIM High Yield Fund AIM European Growth Fund AIM International Core Equity Fund AIM European Small Company Fund AIM International Emerging Growth Fund AIM Global Aggressive Growth Fund AIM International Growth Fund AIM Global Equity Fund AIM S&P 500 Index Fund AIM Global Growth Fund AIM Trimark Fund
The redemption fee will be retained by to the fund from which you are redeeming shares (including redemptions by exchange), and is intended to offset the trading costs, market impact and other costs associated with short-term money movements in and out of the fund. The redemption fee is imposed to the extent that the number of fund shares you redeem exceeds the number of fund shares that you have held for more than 30 days. In determining whether the minimum 30 days holding period has been met, only the period during which you have held shares of the fund from which you are redeeming is counted. For this purpose, shares held longest will be treated as being redeemed first and shares held shortest as being redeemed last. The 2% redemption fee will not be charged on transactions involving the following: 1) total or partial redemptions of shares by omnibus accounts maintained by brokers that do not have the systematic capability to process the redemption fee; 2) total or partial redemptions of shares by approved fee-based programs that do not have the systematic capability to process the redemption fee; 3) total or partial redemptions of shares held through retirement plans maintained pursuant to Sections 401, 403, 408, 408A and 457 of the Internal Revenue Code (the "Code") where the systematic capability to process the redemption fee does not exist; 4) total or partial redemptions effectuated pursuant to an automatic non-discretionary rebalancing program or a systematic withdrawal plan set up in the funds; 5) total or partial redemptions requested within 30 days following the death or post-purchase disability of (i) any registered shareholder on an account or (ii) the settlor of a living trust which is the registered shareholder of an account, of shares held in the account at the time of death or initial determination of post-purchase disability; 6) total or partial redemption of shares acquired through investment of dividends and other distributions; or 7) redemptions initiated by a fund. The AIM Affiliates' goals are to apply the redemption fee on all classes of shares regardless of the type of account in which such shares are held. This goal is not immediately achievable because of systems limitations and marketplace resistance. Currently, the redemption fee may be applied on Class A and Investor Class shares (and Institutional Class Shares for AIM S&P Index Fund). AIM expects to charge the redemption fee on all other classes of shares when the funds' transfer agent system has the capability of processing the fee across these other classes. In addition, AIM intends to develop a plan to encourage brokers that maintain omnibus accounts, sponsors of fee-based program accounts and retirement plan administrators for accounts that are exempt from the redemption fee pursuant to the terms above to modify computer programs to impose the redemption fee or to develop alternate processes to monitor and restrict short-term trading activity in the funds. Lastly, the provider of AIM's retirement plan record keeping system is working to enhance the system to facilitate the processing of the redemption fee. Until such computer programs are modified or alternate processes are developed, the fund's ability to assess a redemption fee on these types of share classes and accounts is severely limited. These are reasons why the redemption fees cannot eliminate the possibility of excessive short-term trading activity. The funds have the discretion to waive the 2% redemption fee if a fund is in jeopardy of failing the 90% income test or losing its RIC qualification for tax purposes.