N-CSRS 1 h25519nvcsrs.txt AIM INTERNATIONAL MUTUAL FUNDS ------------------------- OMB APPROVAL ------------------------- OMB Number: 3235-0570 Expires: Sept. 30, 2007 Estimated average burden hours per response: 19.4 ------------------------- 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 811-6463 --------------------------------------------------------- AIM International Mutual Funds -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 11 Greenway Plaza, Suite 100 Houston, Texas 77046 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Robert H. Graham 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: 10/31 ------------- Date of reporting period: 04/30/05 ------------- Item 1. Reports to Stockholders. AIM ASIA PACIFIC GROWTH FUND Semiannual Report to Shareholders o April 30, 2005 [COVER IMAGE] [YOUR GOALS. OUR SOLUTIONS.] [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- --Registered Trademark-- AIM ASIA PACIFIC GROWTH FUND SEEKS TO PROVIDE LONG-TERM GROWTH OF CAPITAL. o Unless otherwise stated, information presented in this report is as of April 30, 2005, and is based on total net assets. ABOUT SHARE CLASSES Fund's performance, please see the financial reporting purposes, and as Fund's prospectus. such, the net asset values for o Effective September 30, 2003, Class B shareholder transactions and the returns shares are not available as an ABOUT INDEXES USED IN THIS REPORT based on those net asset values may investment for retirement plans differ from the net asset values and maintained pursuant to Section 401 of o The unmanaged MSCI Europe, Australasia returns reported in the Financial the Internal Revenue Code, including and the Far East Index (the MSCI EAFE Highlights. 401(k) plans, money purchase pension --Registered Trademark-- INDEX) is a plans and profit sharing plans. Plans group of foreign securities tracked by o Industry classifications used in this that have existing accounts invested in Morgan Stanley Capital International. report are generally according to the Class B shares will continue to be Global Industry Classification Standard, allowed to make additional purchases. o THE MSCI ALL COUNTRY (AC) ASIA PACIFIC which was developed by and is the FREE EX-JAPAN INDEX is a group of exclusive property and a service mark of PRINCIPLE RISKS OF INVESTING IN A FUND developed and emerging Asian and Morgan Stanley Capital International Asia-Pacific markets (except Japan) Inc. and Standard & Poor's. o International investing presents covered by Morgan Stanley Capital certain risks not associated with International. A "free" index represents The Fund provides a complete list of its investing solely in the United States. investable opportunities for global holdings four times in each fiscal year, These include risks relating to investors, taking into account the local at the quarter-ends. For the second and fluctuations in the value of the U.S. market restrictions on share ownership fourth quarters, the lists appear in the dollar relative to the values of other by foreign investors. Fund's semiannual and annual reports to currencies, the custody arrangements shareholders. For the first and third made for the Fund's foreign holdings, o The unmanaged LIPPER PACIFIC EX-JAPAN quarters, the Fund files the lists with differences in accounting, political FUND INDEX represents an average of the the Securities and Exchange Commission risks and the lesser degree of public largest Pacific ex-Japan funds tracked (SEC) on Form N-Q. Shareholders can look information required to be provided by by Lipper, Inc., an independent mutual up the Fund's Forms N-Q on the SEC's Web non-U.S. companies. fund performance monitor, and is site at sec.gov. Copies of the Fund's considered representative of Pacific Forms N-Q may be reviewed and copied at o Investing in emerging markets involves ex-Japan stocks. the SEC's Public Reference Room at 450 greater risk and potential reward than Fifth Street, N.W., Washington, D.C. investing in more established markets. o The Fund is not managed to track the 20549-0102. You can obtain information performance of any particular index, on the operation of the Public Reference o Investing in a single-sector or including the indexes defined here, and Room, including information about single-region mutual fund involves consequently, the performance of the duplicating fee charges, by calling greater risk and potential reward than Fund may deviate significantly from the 1-202-942-8090 or 1-800-732-0330, or by investing in a more diversified fund. performance of the indexes. electronic request at the following e-mail address: publicinfo@sec.gov. The o Investing in small and mid-size o A direct investment cannot be made in SEC file numbers for the Fund are companies involves risks not associated an index. Unless otherwise indicated, 811-6463 and 33-44611. The Fund's most with investing in more established index results include reinvested recent portfolio holdings, as filed on companies, including business risk, dividends, and they do not reflect sales Form N-Q, are also available at significant stock price fluctuations and charges. Performance of an index of AIMinvestments.com. illiquidity. funds reflects fund expenses; performance of a market index does not. A description of the policies and o Although investments in initial public procedures that the Fund uses to offerings (IPOs) have had a positive OTHER INFORMATION determine how to vote proxies relating impact on the Fund's performance in the to portfolio securities is available past, there can be no assurance that the o The returns shown in management's without charge, upon request, from our Fund will have favorable IPO investment discussion of Fund performance are based Client Services department at opportunities in the future. Attractive on net asset values calculated for 800-959-4246 or on the AIM Web site, IPOs are often oversubscribed and may shareholder transactions. Generally AIMinvestments.com. On the home page, not be available to the Fund, or may be accepted accounting principles require scroll down and click on AIM Funds Proxy available in only very limited adjustments to be made to the net assets Policy. The information is also quantities. For additional information of the Fund at period end for available on the SEC Web site, sec.gov. regarding the Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2004, is available at our Web site. Go to AIMinvestments.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 Web site, sec.gov. ===================================================================================== THIS REPORT 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. ===================================================================================== NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE AIMINVESTMENTS.COM
AIM ASIA PACIFIC GROWTH FUND DEAR FELLOW SHAREHOLDERS: Most equity market and fund indexes, domestic and international, produced positive total returns for the six [GRAHAM months ended April 30, 2005, but for the most part, those PHOTO] positive numbers reflected gains made during the latter months of 2004. Year-to-date as of April 30, 2005, the returns were far less attractive. ROBERT H. GRAHAM High oil prices remained a source of unease; crude oil remained near or above $50 per barrel throughout the reporting period. The Producer Price Index was up fairly sharply in April, largely due to energy costs. And central [WILLIAMSON bank policy continued to focus on containing short-term PHOTO] inflation via increases in the overnight federal funds interest rate, the rate the Federal Reserve (the Fed) most directly controls. Shortly after the reporting period closed, the Fed raised that rate to 3%; it was the eighth increase MARK H. WILLIAMSON since mid-2004. Should the Fed continue to raise rates, this could eventually dampen economic performance, which in fact has been quite good. Gross domestic product grew 4.4% for all of 2004 and the preliminary estimate of annualized growth for the first quarter of 2005 was 3.5%. o Though the growth rate of the manufacturing sector slowed in April and again in May, manufacturing continued to grow, according to the Institute for Supply Management (ISM), whose purchasing manager surveys cover more than 80% of the U.S. economy. In May, manufacturing grew for the 24th consecutive month while the overall economy grew for the 43rd consecutive month, ISM reported. o Though job growth during May was much slower than during April, the unemployment rate remained unchanged at 5.1% as May 2005 ended. o For the first quarter of 2005, earnings for companies included in the Standard & Poor's Composite Index of 500 Stocks, an index of the broad U.S. stock market, were up more than 10%, on average, over a year earlier. o Bond yields have not risen as much as might be expected given eight increases in short-term interest rates in less than a year. This may indicate that the bond market is not anticipating a long-term inflationary pattern. After the slow start in 2005, domestic and many international markets began to rally after the close of the reporting period, demonstrating once again how changeable markets are in the short term. Given the elusiveness of accurate short-term market forecasts, as always, we urge our shareholders to: o keep a long-term investment perspective, o make sure their portfolio of investments is suitably diversified, and o contact their financial advisors when they have questions about their investments or the markets. YOUR FUND In the following pages you will find a discussion of your Fund's investment philosophy, an explanation of its performance for the reporting period, and a summary of its portfolio as of April 30. Further information about your Fund, The AIM Family of Funds--Registered Trademark--, and investing in general is always available on our widely praised Web site, AIMinvestments.com. Please visit frequently. We at AIM remain committed to building solutions to help you meet your investment goals. We thank you for your continued participation in AIM Investments--Registered Trademark--. If you have any questions, please contact our award-winning Client Service representatives at 800-959-4246. We are happy to be of help. Sincerely, /S/ ROBERT H. GRAHAM /S/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson President & Vice Chair, Chairman & President, AIM Funds A I M Advisors, Inc. June 17, 2005 AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M Capital Management, Inc. are the investment advisors and A I M Distributors, Inc. is the distributor for the retail funds represented by AIM Investments. AIM ASIA PACIFIC GROWTH FUND We select investments on a stock-by-stock basis. This means we MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE ======================================== follow a bottom-up investment approach, focusing on individual stocks, not PERFORMANCE SUMMARY FUND VS. INDEXES sector or country trends. Another important component of our investment Despite a sharp sell-off in March and TOTAL RETURNS, 10/31/04-4/30/05, strategy is that we do not hedge April, Asia/Pacific Rim market EXCLUDING APPLICABLE SALES CHARGES. IF currencies. We believe foreign currency performance remained positive for the SALES CHARGES WERE INCLUDED, RETURNS exposure increases the diversification reporting period. Buoyed by strong WOULD BE LOWER. benefit of international investing. performance in the fourth quarter of 2004 and early months of 2005, Pacific Class A Shares 12.24% MARKET CONDITIONS AND YOUR FUND Rim markets posted double-digit gains for the six months ended April 30, 2005. Class B Shares 11.87 Asia/Pacific Rim markets staged impressive rallies late in 2004 to open As indicated in the table to the Class C Shares 11.92 the reporting period with double-digit right, the Fund easily outpaced its performance. The early months of 2005 broad market index on the strength of MSCI EAFE Index also produced gains as rising commodity Asian returns. The MSCI EAFE Index is (Broad Market Index) 8.71 prices benefited commodity-producing composed of stocks from many economies such as Australia. In March regions--some of which did not perform MSCI AC Asia Pacific Free and April, however, a moderation in as well as Asian markets during the ex-Japan global expansion, continued high oil reporting period. (Style-specific Index) 12.60 prices and investor flight from riskier assets took a toll on emerging Asian The Fund tracked its style-specific Lipper Pacific ex-Japan markets. index, while slightly underperforming Fund Index its Lipper peer group. We attribute the (Peer Group Index) 13.10 Despite the late period sell-off, we Fund's lower return to more limited continued to find many investment exposure to better performing industries SOURCE: LIPPER,INC. opportunities that fit our investment in China and also to the poor criteria throughout the reporting performance of select Chinese holdings. ======================================== period. In South Korea, Hyundai Department Store proved a top HOW WE INVEST contributor. After a period of weak earnings, the company underwent Our investment strategy is based on the cost-cutting measures. These reforms principle that strong have been rewarded by the market. We earnings--sustainable, repeatable, continue to find the company attractive above-average growth--can drive stock given its strong earnings growth and prices. Therefore, when selecting stocks return on equity. for the Fund we look for companies with the following attributes: Despite the Fund's strong country return in South Korea, we underperformed o accelerating earnings and revenues our o strong cash flow generation (dividends, share buybacks) o high return on invested capital o reasonable valuations ======================================== ======================================== ======================================== TOP 5 COUNTRIES* PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* By sector 1. South Korea 15.6% 1. Esprit Holdings Ltd. (Bermuda) 3.2% [PIE CHART] 2. Australia 14.1 Industrials 10.9% 2. Philippine Long Distance Telecommunication Services 5.2% Telephone Co. (Philippines) 2.3 3. India 8.9 Consumer Staples 9.1% Health Care 4.6% 3. BHP Billiton Ltd. (Australia) 2.2 4. Bermuda 8.9 Materials 3.7% Energy 2.0% 4. Hana Bank (South Korea) 2.2 5. Taiwan 8.7 Money Market Funds Plus Other Assets Less Liabilities 6.6% 5. CJ Corp. (South Korea) 2.0 TOTAL NET ASSETS $182.1 MILLION Financials 24.3% Consumer Discretionary 19.4% 6. Samsung Electronics Co., Ltd. TOTAL NUMBER OF HOLDINGS* 102 Information Technology 14.2% (South Korea) 1.9 The Fund's holdings are subject to 7. Infosys Technologies Ltd. change, and there is no assurance that (India) 1.9 the Fund will continue to hold any particular security. 8. CSL Ltd. (Australia) 1.9 *Excluding money market fund holdings. 9. Cheung Kong (Holdings) Ltd. (Hong Kong) 1.8 10. Keppel Corp. Ltd. (Singapore) 1.8 ======================================== ======================================== ========================================
2 benchmark here due to losses sustained performed well during the reporting SHUXIN CAO, by Gravity Co., a Korean online gaming period. [CAO Chartered Financial company. We continue to believe in the PHOTO] Analyst, portfolio company, however, given its attractive Despite good performance for Indian manager is valuation to its sector average and holdings as a whole, TATA CONSULTANCY co-manager of AIM strong growth prospects with new games SERVICES, an Indian outsourcing company, Asia Pacific Growth Fund. He joined AIM in the pipeline. proved a drag on performance when it in 1997. Mr. Cao graduated from Tianjin reported disappointing results. The Foreign Language Institute with a B.A. Australian markets reached new highs company reported that its income fell in English. He also received an M.B.A. in mid-March. In April, however, the 34% for its fiscal fourth quarter ended from Texas A&M University and is a market tumbled amid corporate profit March 31, 2005. Tata stated that a Certified Public Accountant. warnings and economic concerns over a weaker U.S. dollar hurt growth as most possibly slowing U.S. economy. Despite a of the company's earnings are in sizeable drop in share price in April, dollars. (A weaker dollar means the BARRETT K. SIDES, BHP BILLITON, the world leader in company's profits are smaller when [SIDES senior portfolio material mining, was one of the Fund's exchanged for rupees.) Given the stock's PHOTO] manager, is top contributors during the reporting disappointing earnings, we exited the co-manager of AIM period. We continue to own the stock due position during the reporting period. Asia Pacific Growth to the consistency with which it Fund. He joined AIM in 1990. Mr. Sides delivers earnings. Many Asian/Pacific Rim currencies graduated with a B.S. in economics from appreciated strongly against the U.S. Bucknell University. He also received a BUOYED BY STRONG dollar during the reporting period, master's in international business from PERFORMANCE IN THE which benefitted Fund performance. A key the University of St. Thomas. FOURTH QUARTER OF 2004 aspect of our investment strategy is AND EARLY MONTHS OF that we do not hedge currencies. We Assisted by Asia/Latin America Team 2005, PACIFIC RIM purchase stocks in their local currency MARKETS POSTED and then translate that value back into DOUBLE-DIGIT GAINS FOR the Fund in U.S. dollars. During the THE SIX MONTHS ENDED reporting period, the Australian dollar, APRIL 30, 2005. Indian rupee, Korean won and Taiwan new dollar gained ground on the U.S. dollar. Our Chinese exposure proved the largest detractor to Fund performance IN CLOSING during the reporting period. Many of our Chinese consumer staples holdings Despite volatile market conditions in sustained losses over rising raw the later stages of the reporting material costs. However, we continue to period, we are pleased to once again believe that the consumer staples stocks provide shareholders with positive Fund we own have strong brand names and a returns. We continue to believe that sustainable long-term outlook. For Asian stocks offer investors an instance, CHINA MENGNIU--a Chinese milk attractive alternative to U.S. stocks. producer--reported strong 2004 results Asian companies generally offer lower and net profits up 94%. The company valuations and higher dividend yields continues to gain market share due to than their U.S. counterparts. We its strong brand name. appreciate your continued participation in AIM Asia Pacific Growth Fund. What we did not own in China also proved a factor in our underperformance THE VIEWS AND OPINIONS EXPRESSED IN on a relative performance basis. Our MANAGEMENT'S DISCUSSION OF FUND lack of exposure to Chinese PERFORMANCE ARE THOSE OF A I M ADVISORS, conglomerates, telecommunications INC. THESE VIEWS AND OPINIONS ARE companies and commodity producers proved SUBJECT TO CHANGE AT ANY TIME BASED ON disadvantageous as these types of FACTORS SUCH AS MARKET AND ECONOMIC Chinese companies CONDITIONS. THESE VIEWS AND OPINIONS MAY NOT BE RELIED UPON AS INVESTMENT ADVICE OR RECOMMENDATIONS, OR AS AN OFFER FOR A PARTICULAR SECURITY. THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET, COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES CONSIDERED RELIABLE, BUT A I M 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 [RIGHT ARROW GRAPHIC] MANAGEMENT PHILOSOPHY. FOR A PRESENTATION OF YOUR FUND'S See important fund and index LONG-TERM PERFORMANCE RECORD, PLEASE disclosures inside 3 front cover. TURN TO PAGE 5.
3 AIM ASIA PACIFIC GROWTH FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE with the amount you invested, to values and expenses may not be used to estimate the expenses that you paid over estimate the actual ending account As a shareholder of the Fund, you incur the period. Simply divide your account balance or expenses you paid for the two types of costs: (1) transaction value by $1,000 (for example, an $8,600 period. You may use this information to costs, which may include sales charges account value divided by $1,000 = 8.6), compare the ongoing costs of investing (loads) on purchase payments; contingent then multiply the result by the number in the Fund and other funds. To do so, deferred sales charges on redemptions; in the table under the heading entitled compare this 5% hypothetical example and redemption fees, if any; and (2) "Actual Expenses Paid During Period" to with the 5% hypothetical examples that ongoing costs, including management estimate the expenses you paid on your appear in the shareholder reports of the fees; distribution and/or service fees account during this period. other funds. (12b-1); and other Fund expenses. This example is intended to help you HYPOTHETICAL EXAMPLE FOR COMPARISON Please note that the expenses shown understand your ongoing costs (in PURPOSES in the table are meant to highlight your dollars) of investing in the Fund and to ongoing costs only and do not reflect compare these costs with ongoing costs The table below also provides any transactional costs, such as sales of investing in other mutual funds. The information about hypothetical account charges (loads) on purchase payments, example is based on an investment of values and hypothetical expenses based contingent deferred sales charges on $1,000 invested at the beginning of the on the Fund's actual expense ratio and redemptions, and redemption fees, if period and held for the entire period an assumed rate of return of 5% per year any. Therefore, the hypothetical November 1, 2004, through April 30, before expenses, which is not the Fund's information is useful in comparing 2005. actual return. The Fund's actual ongoing costs only, and will not help cumulative total returns at net asset you determine the relative total costs ACTUAL EXPENSES value after expenses for the six months of owning different funds. In addition, ended April 30, 2005, appear in the if these transactional costs were The table below provides information table "Fund vs. Indexes" on page 2. The included, your costs would have been about actual account values and actual hypothetical account higher. expenses. You may use the information in this table, together ================================================================================================================================== ACTUAL HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES) BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES ENDING ACCOUNT EXPENSES SHARE VALUE VALUE PAID DURING VALUE PAID DURING CLASS (11/01/04) (4/30/05)(1) PERIOD(2) (4/30/05) PERIOD(2) A $1,000.00 $1,122.40 $10.89 $1,014.53 $10.34 B 1,000.00 1,118.70 14.29 1,011.31 13.56 C 1,000.00 1,119.20 14.29 1,011.31 13.56 (1) The actual ending account value is based on the actual total return of the Fund for the period November 1, 2004, to April 30, 2005, 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. The Fund's actual cumulative total returns at net asset value after expenses for the six months ended April 30, 2005, appear in the table "Fund vs. Indexes" on page 2. (2) Expenses are equal to the Fund's annualized expense ratio (2.07%, 2.72% and 2.72% for Class A, B, and C shares, respectively) multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). ================================================================================================================================== [ARROW BUTTON For More Information Visit IMAGE] AIMINVESTMENTS.COM
4 AIM ASIA PACIFIC GROWTH FUND YOUR FUND'S LONG-TERM PERFORMANCE Below you will find a presentation of your Fund's performance record for periods ended April 30, 2005, the close of the six-month period covered by this report. Please read the important disclosure accompanying these tables, which explains how Fund performance is calculated and the sales charges, if any, that apply to the share class in which you are invested. In addition to returns as of the close of the reporting period, industry regulations require us to provide average annual total returns as of March 31, 2005, the most recent calendar quarter-end. ======================================== ======================================== AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS As of 4/30/05, including applicable As of 3/31/05, including applicable sales charges sales charges CLASS A SHARES CLASS A SHARES Inception (11/3/97) 5.26% Inception (11/3/97) 5.39% 5 Years 0.54 5 Years -1.62 1 Year 13.32 1 Year 7.95 CLASS B SHARES CLASS B SHARES Inception (11/3/97) 5.34% Inception (11/3/97) 5.48% 5 Years 0.66 5 Years -1.52 1 Year 14.12 1 Year 8.52 CLASS C SHARES CLASS C SHARES Inception (11/3/97) 5.30% Inception (11/3/97) 5.43% 5 Years 0.99 5 Years -1.16 1 Year 18.11 1 Year 12.48 ======================================== ======================================== THE PERFORMANCE DATA QUOTED REPRESENT INVESTMENT RETURN AND PRINCIPAL VALUE THE PERFORMANCE OF THE FUND'S SHARE PAST PERFORMANCE AND CANNOT GUARANTEE WILL FLUCTUATE SO THAT YOU MAY HAVE A CLASSES WILL DIFFER DUE TO DIFFERENT COMPARABLE FUTURE RESULTS; CURRENT GAIN OR LOSS WHEN YOU SELL SHARES. SALES CHARGE STRUCTURES AND CLASS PERFORMANCE MAY BE LOWER OR HIGHER. EXPENSES. PLEASE VISIT AIMINVESTMENTS.COM FOR THE CLASS A SHARE PERFORMANCE REFLECTS MOST RECENT MONTH-END PERFORMANCE. THE MAXIMUM 5.50% SALES CHARGE, AND HAD THE ADVISOR NOT WAIVED FEES CLASS B AND CLASS C SHARE PERFORMANCE AND/OR REIMBURSED EXPENSES IN THE PAST, PERFORMANCE FIGURES REFLECT REFLECTS THE APPLICABLE CONTINGENT PERFORMANCE WOULD HAVE BEEN LOWER. REINVESTED DISTRIBUTIONS, CHANGES IN NET DEFERRED SALES CHARGE (CDSC) FOR THE ASSET VALUE AND THE EFFECT OF THE PERIOD INVOLVED. THE CDSC ON CLASS B A REDEMPTION FEE OF 2% WILL BE MAXIMUM SALES CHARGE UNLESS OTHERWISE SHARES DECLINES FROM 5% BEGINNING AT THE IMPOSED ON CERTAIN REDEMPTIONS OR STATED. PERFORMANCE FIGURES DO NOT TIME OF PURCHASE TO 0% AT THE BEGINNING EXCHANGES OUT OF THE FUND WITHIN 30 DAYS REFLECT DEDUCTION OF TAXES A SHAREHOLDER OF THE SEVENTH YEAR. THE CDSC ON CLASS C OF PURCHASE. EXCEPTIONS TO THE WOULD PAY ON FUND DISTRIBUTIONS OR SALE SHARES IS 1% FOR THE FIRST YEAR AFTER REDEMPTION FEE ARE LISTED IN THE FUND'S OF FUND SHARES. PURCHASE. PROSPECTUS.
5 FINANCIALS SCHEDULE OF INVESTMENTS April 30, 2005 (Unaudited)
MARKET SHARES VALUE ------------------------------------------------------------------------ FOREIGN STOCKS & OTHER EQUITY INTERESTS-93.37% AUSTRALIA-14.14% BHP Billiton Ltd. (Diversified Metals & Mining)(a) 315,700 $ 3,994,534 ------------------------------------------------------------------------ Brambles Industries Ltd. (Diversified Commercial Services)(a)(b) 317,000 1,947,779 ------------------------------------------------------------------------ Coca-Cola Amatil Ltd. (Soft Drinks)(a) 463,000 3,000,671 ------------------------------------------------------------------------ Computershare Ltd. (Data Processing & Outsourced Services)(a)(b) 532,600 2,111,849 ------------------------------------------------------------------------ CSL Ltd. (Biotechnology)(a) 137,900 3,415,650 ------------------------------------------------------------------------ Promina Group Ltd. (Property & Casualty Insurance)(a) 362,300 1,453,707 ------------------------------------------------------------------------ QBE Insurance Group Ltd. (Property & Casualty Insurance)(a)(b) 142,000 1,661,010 ------------------------------------------------------------------------ Ramsay Health Care Ltd. (Health Care Facilities)(a) 338,700 2,100,415 ------------------------------------------------------------------------ Ramsay Health Care Ltd.-Rts., expiring 05/11/05 (Health Care Facilities)(c)(d)(e) 37,633 23,513 ------------------------------------------------------------------------ St. George Bank Ltd. (Diversified Banks)(a)(b) 72,100 1,395,971 ------------------------------------------------------------------------ Toll Holdings Ltd. (Trucking)(a) 302,300 3,005,007 ------------------------------------------------------------------------ Woolworths Ltd. (Food Retail)(a) 136,000 1,630,622 ======================================================================== 25,740,728 ======================================================================== BERMUDA-8.89% COFCO International Ltd. (Packaged Foods & Meats)(a) 2,241,000 949,994 ------------------------------------------------------------------------ Esprit Holdings Ltd. (Apparel Retail)(a) 782,000 5,825,713 ------------------------------------------------------------------------ Giordano International Ltd. (Apparel Retail)(a) 2,508,000 1,742,769 ------------------------------------------------------------------------ Joyce Boutique Holdings Ltd. (Apparel Retail)(a)(f) 10,754,000 826,805 ------------------------------------------------------------------------ Li & Fung Ltd. (Distributors)(a) 986,000 1,891,285 ------------------------------------------------------------------------ Midland Realty (Holdings) Ltd. (Real Estate Management & Development)(a) 2,076,000 1,309,825 ------------------------------------------------------------------------ Regal Hotels International Holdings Ltd. (Hotels, Resorts & Cruise Lines)(a)(f) 18,198,000 1,695,263 ------------------------------------------------------------------------ Texwinca Holdings Ltd. (Textiles)(a) 716,000 597,576 ------------------------------------------------------------------------ Top Form International Ltd. (Apparel, Accessories & Luxury Goods)(a) 4,640,000 1,353,505 ======================================================================== 16,192,735 ======================================================================== CAYMAN ISLANDS-6.03% ASM Pacific Technology Ltd. (Semiconductor Equipment)(a) 207,000 842,740 ------------------------------------------------------------------------ China Mengniu Dairy Co. Ltd. (Packaged Foods & Meats)(a)(f) 1,504,000 1,001,126 ------------------------------------------------------------------------ Chitaly Holdings Ltd. (Home Furnishings)(a) 1,220,000 1,116,457 ------------------------------------------------------------------------ Global Bio-chem Technology Group Co. Ltd. (Agricultural Products)(a) 1,974,000 1,293,028 ------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ CAYMAN ISLANDS-(CONTINUED) Global Bio-chem Technology Group Co. Ltd.-Wts., expiring 05/31/07 (Agricultural Products)(e) 131,250 $ 5,809 ------------------------------------------------------------------------ Hengan International Group Co. Ltd. (Personal Products)(a) 2,000,000 1,243,065 ------------------------------------------------------------------------ Luen Thai Holdings Ltd. (Distributors) (Acquired 07/09/04-10/06/04; Cost $848,739)(a)(f)(g) 1,974,000 742,692 ------------------------------------------------------------------------ Norstar Founders Group Ltd. (Auto Parts & Equipment)(a) 3,836,000 890,201 ------------------------------------------------------------------------ Sa Sa International Holdings Ltd. (Specialty Stores)(a) 634,000 290,705 ------------------------------------------------------------------------ Shanda Interactive Entertainment Ltd.-ADR (Home Entertainment Software)(b)(f) 59,300 1,907,681 ------------------------------------------------------------------------ Solomon Systech International Ltd. (Semiconductors)(a) 5,012,000 1,642,159 ======================================================================== 10,975,663 ======================================================================== CHINA-5.14% China Petroleum and Chemical Corp. (Sinopec)- Class H (Integrated Oil & Gas)(a) 3,566,000 1,402,657 ------------------------------------------------------------------------ China Shipping Development Co. Ltd.-Class H (Marine)(a) 1,158,000 1,018,820 ------------------------------------------------------------------------ Ping An Insurance (Group) Co. of China, Ltd.- Class H (Life & Health Insurance)(a)(f) 1,257,000 1,924,264 ------------------------------------------------------------------------ Shanghai Electric Group Co. Ltd.-Class H (Industrial Machinery)(f) 7,514,000 1,619,397 ------------------------------------------------------------------------ Shanghai Forte Land Co. Ltd.-Class H (Real Estate Management & Development)(a) 2,910,000 766,461 ------------------------------------------------------------------------ Tong Ren Tang Technologies Co. Ltd.-Class H (Pharmaceuticals) 300,000 581,127 ------------------------------------------------------------------------ Weiqiao Textile Co. Ltd.-Class H (Textiles)(a) 796,000 1,050,145 ------------------------------------------------------------------------ Wumart Stores, Inc.-Class H (Hypermarkets & Super Centers)(a) 330,000 537,983 ------------------------------------------------------------------------ Yantai North Andre Juice Co. Ltd.-Class H (Packaged Foods & Meats)(a) 4,695,000 452,819 ======================================================================== 9,353,673 ======================================================================== HONG KONG-8.36% Cheung Kong (Holdings) Ltd. (Real Estate Management & Development)(a) 355,000 3,355,833 ------------------------------------------------------------------------ CNOOC Ltd. (Oil & Gas Exploration & Production)(a) 860,000 462,679 ------------------------------------------------------------------------ CNOOC Ltd.-ADR (Oil & Gas Exploration & Production) 16,100 866,502 ------------------------------------------------------------------------ Dah Sing Financial Group (Diversified Banks)(a) 115,600 745,616 ------------------------------------------------------------------------ Hutchison Whampoa Ltd. (Industrial Conglomerates)(a) 252,000 2,250,491 ------------------------------------------------------------------------
F-1
MARKET SHARES VALUE ------------------------------------------------------------------------ HONG KONG-(CONTINUED) Sun Hung Kai Properties Ltd. (Real Estate Management & Development)(a) 300,000 $ 2,873,013 ------------------------------------------------------------------------ Techtronic Industries Co. Ltd. (Household Appliances)(a) 1,069,500 2,378,542 ------------------------------------------------------------------------ Wing Hang Bank Ltd. (Diversified Banks)(a) 361,000 2,281,191 ======================================================================== 15,213,867 ======================================================================== INDIA-8.90% Bharat Forge Ltd. (Auto Parts & Equipment) 74,025 2,212,313 ------------------------------------------------------------------------ Bharat Forge Ltd.-Wts., expiring 09/30/06 (Auto Parts & Equipment)(e) 1,763 10,766 ------------------------------------------------------------------------ HDFC Bank Ltd. (Diversified Banks)(a) 196,400 2,429,209 ------------------------------------------------------------------------ HDFC Bank Ltd.-ADR (Diversified Banks) 17,500 759,675 ------------------------------------------------------------------------ Hotel Leelaventure Ltd. (Hotels, Resorts & Cruise Lines) 246,100 987,403 ------------------------------------------------------------------------ Housing Development Finance Corp. Ltd. (Thrifts & Mortgage Finance)(a) 140,300 2,366,572 ------------------------------------------------------------------------ Infosys Technologies Ltd. (IT Consulting & Other Services)(a) 79,528 3,455,013 ------------------------------------------------------------------------ LIC Housing Finance Ltd. (Consumer Finance) 180,000 1,035,736 ------------------------------------------------------------------------ Ranbaxy Laboratories Ltd. (Pharmaceuticals)(a) 44,560 933,971 ------------------------------------------------------------------------ Tata Motors Ltd. (Construction, Farm Machinery & Heavy Trucks)(a) 76,000 718,748 ------------------------------------------------------------------------ Wockhardt Ltd. (Pharmaceuticals)(a) 161,700 1,297,198 ======================================================================== 16,206,604 ======================================================================== INDONESIA-0.99% PT Telekomunikasi Indonesia-Series B (Integrated Telecommunication Services)(a) 4,016,000 1,803,859 ======================================================================== MALAYSIA-3.42% IOI Corp. Berhad (Agricultural Products)(a) 622,000 1,500,011 ------------------------------------------------------------------------ Maxis Communications Berhad (Wireless Telecommunication Services)(a) 955,000 2,425,854 ------------------------------------------------------------------------ Public Bank Berhad (Diversified Banks)(a) 598,000 1,087,813 ------------------------------------------------------------------------ SP Setia Berhad (Real Estate Management & Development)(a) 1,156,000 1,221,222 ======================================================================== 6,234,900 ======================================================================== PHILIPPINES-2.74% Philippine Long Distance Telephone Co. (Integrated Telecommunication Services)(a) 161,000 4,153,040 ------------------------------------------------------------------------ SM Prime Holdings (Real Estate Management & Development)(a) 6,078,900 837,276 ======================================================================== 4,990,316 ======================================================================== SINGAPORE-6.03% Citiraya Industries Ltd. (Environmental Services)(c)(d) 2,178,000 225,897 ------------------------------------------------------------------------ DBS Group Holdings Ltd. (Diversified Banks)(a) 177,000 1,545,966 ------------------------------------------------------------------------ Keppel Corp. Ltd. (Industrial Conglomerates)(a) 510,000 3,341,657 ------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ SINGAPORE-(CONTINUED) Keppel Land Ltd. (Real Estate Management & Development)(a) 884,000 $ 1,358,453 ------------------------------------------------------------------------ SembCorp Logistics Ltd. (Air Freight & Logistics) 690,662 691,463 ------------------------------------------------------------------------ Singapore Airlines Ltd. (Airlines)(a) 317,000 2,170,784 ------------------------------------------------------------------------ Sunningdale Precision Industries Ltd. (Industrial Machinery)(a) 1,800,000 746,940 ------------------------------------------------------------------------ United Overseas Bank Ltd. (Diversified Banks)(a) 103,000 899,362 ======================================================================== 10,980,522 ======================================================================== SOUTH KOREA-15.64% Cheil Communications Inc. (Advertising)(a) 8,170 1,342,145 ------------------------------------------------------------------------ CJ Corp. (Packaged Foods & Meats)(a) 50,330 3,611,720 ------------------------------------------------------------------------ Core Logic Inc. (Semiconductors)(a) 34,190 1,221,480 ------------------------------------------------------------------------ Daekyo Co., Ltd. (Publishing)(a) 11,800 681,532 ------------------------------------------------------------------------ Gravity Co. Ltd.-ADR (Casinos & Gaming)(f) 133,500 1,193,490 ------------------------------------------------------------------------ Hana Bank (Diversified Banks)(a) 155,600 3,927,521 ------------------------------------------------------------------------ Hankook Tire Co. Ltd. (Tires & Rubber)(a) 118,700 1,212,717 ------------------------------------------------------------------------ Hyundai Department Store Co., Ltd. (Department Stores)(a) 74,400 3,277,745 ------------------------------------------------------------------------ Hyundai Mipo Dockyard Co., Ltd. (Construction, Farm Machinery & Heavy Trucks)(a) 32,720 2,115,034 ------------------------------------------------------------------------ Kiryung Electronics Co., Ltd. (Communications Equipment)(a) 223,000 1,519,461 ------------------------------------------------------------------------ KT Freetel Co., Ltd. (Wireless Telecommunication Services)(a) 46,500 1,072,780 ------------------------------------------------------------------------ POSCO-ADR (Steel) 28,100 1,279,393 ------------------------------------------------------------------------ Samsung Electronics Co., Ltd. (Electronic Equipment Manufacturers)(a) 7,720 3,530,814 ------------------------------------------------------------------------ Shinhan Financial Group Co., Ltd. (Diversified Banks)(a) 45,100 1,177,027 ------------------------------------------------------------------------ Shinsegae Co., Ltd. (Hypermarkets & Super Centers)(a) 4,100 1,315,724 ======================================================================== 28,478,583 ======================================================================== TAIWAN-8.68% Asia Optical Co., Inc. (Photographic Products)(a) 273,631 1,691,286 ------------------------------------------------------------------------ Catcher Technology Co., Ltd. (Computer Storage & Peripherals)(a) 578,600 3,078,025 ------------------------------------------------------------------------ Chinatrust Financial Holding Co. Ltd. (Diversified Banks)(a) 1,961,667 2,252,736 ------------------------------------------------------------------------ Hon Hai Precision Industry Co., Ltd. (Electronic Manufacturing Services)(a) 577,625 2,743,093 ------------------------------------------------------------------------ Hotai Motor Co. Ltd. (Automobile Manufacturers)(a) 619,000 1,383,990 ------------------------------------------------------------------------ Merry Electronics Co., Ltd. (Consumer Electronics)(a) 420,810 957,787 ------------------------------------------------------------------------ Novatek Microelectronics Corp., Ltd. (Semiconductors)(a) 173,410 773,549 ------------------------------------------------------------------------ Taiwan Semiconductor Manufacturing Co. Ltd. (Semiconductors)(a) 1,752,613 2,914,480 ======================================================================== 15,794,946 ========================================================================
F-2
MARKET SHARES VALUE ------------------------------------------------------------------------ THAILAND-4.41% Kasikornbank PCL (Diversified Banks)(a) 1,940,000 $ 2,733,104 ------------------------------------------------------------------------ Siam Cement PCL (The) (Construction Materials)(a) 236,000 1,422,318 ------------------------------------------------------------------------ Siam Commercial Bank PCL (Diversified Banks)(a) 2,425,000 2,901,920 ------------------------------------------------------------------------ Thai Oil PCL (Oil & Gas Refining & Marketing)(a) 592,000 970,189 ======================================================================== 8,027,531 ======================================================================== Total Foreign Stocks & Other Equity Interests (Cost $116,221,200) 169,993,927 ========================================================================
MARKET SHARES VALUE ------------------------------------------------------------------------ MONEY MARKET FUNDS-5.89% Liquid Assets Portfolio-Institutional Class(h) 5,358,786 $ 5,358,786 ------------------------------------------------------------------------ STIC Prime Portfolio-Institutional Class(h) 5,358,786 5,358,786 ======================================================================== Total Money Market Funds (Cost $10,717,572) 10,717,572 ======================================================================== TOTAL INVESTMENTS-99.26% (excluding investments purchased with cash collateral from securities loaned) (Cost $126,938,772) 180,711,499 ======================================================================== INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-2.89% Liquid Assets Portfolio-Institutional Class(h)(i) 2,627,781 2,627,781 ------------------------------------------------------------------------ STIC Prime Portfolio-Institutional Class(h)(i) 2,627,780 2,627,780 ======================================================================== Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $5,255,561) 5,255,561 ======================================================================== TOTAL INVESTMENTS-102.15% (Cost $132,194,333) 185,967,060 ======================================================================== OTHER ASSETS LESS LIABILITIES-(2.15%) (3,914,521) ======================================================================== NET ASSETS-100.00% $182,052,539 ________________________________________________________________________ ========================================================================
Investment Abbreviations: ADR - American Depositary Receipt Rts. - Rights Wts. - Warrants
Notes to Schedule of Investments: (a) In accordance with the procedures established by the Board of Trustees, the foreign security is fair valued using adjusted closing market prices. The aggregate market value of these securities at April 30, 2005 was $156,593,762, which represented 84.21% of the Fund's Total Investments. See Note 1A. (b) All or a portion of this security has been pledged as collateral for securities lending transactions at April 30, 2005. (c) Security considered to be illiquid; the portfolio is limited to investing 15% of net assets in illiquid securities. The aggregate market value of these securities considered illiquid at April 30, 2005 was $249,410, which represented 0.14% of the Fund's Net Assets. (d) Security fair valued in good faith in accordance with the procedures established by the Board of Trustees. The aggregate market value of these securities at April 30, 2005 was $249,410, which represented 0.13% of the Fund's Total Investments. See Note 1A. (e) Non-income producing security acquired through a corporate action. (f) Non-income producing security. (g) Security not registered under the Securities Act of 1933, as amended (e.g., the security was purchased in a Rule 144A transaction or a Regulation D transaction). The security may be resold only pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The Fund has no rights to demand registration of this security. The market value of this security at April 30, 2005 represented 0.41% of the Fund's Net Assets. Unless Otherwise indicated, this security is not considered to be illiquid. (h) The money market fund and the Fund are affiliated by having the same investment advisor. See Note 3. (i) The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 7. See accompanying notes which are an integral part of the financial statements. F-3 STATEMENT OF ASSETS AND LIABILITIES April 30, 2005 (Unaudited) ASSETS: Investments, at market value (cost $116,221,200)* $169,993,927 ----------------------------------------------------------- Investments in affiliated money market funds (cost $15,973,133) 15,973,133 =========================================================== Total investments (cost $132,194,333) 185,967,060 =========================================================== Foreign currencies, at market value (cost $1,800,091) 1,824,953 ----------------------------------------------------------- Receivables for: Investments sold 110,161 ----------------------------------------------------------- Fund shares sold 385,592 ----------------------------------------------------------- Dividends 641,785 ----------------------------------------------------------- Investment for trustee deferred compensation and retirement plans 29,803 ----------------------------------------------------------- Other assets 15,467 =========================================================== Total assets 188,974,821 ___________________________________________________________ =========================================================== LIABILITIES: Payables for: Investments purchased 815,316 ----------------------------------------------------------- Fund shares reacquired 403,559 ----------------------------------------------------------- Trustee deferred compensation and retirement plans 34,605 ----------------------------------------------------------- Collateral upon return of securities loaned 5,255,561 ----------------------------------------------------------- Accrued distribution fees 77,888 ----------------------------------------------------------- Accrued trustees' and officer's fees and benefits 1,432 ----------------------------------------------------------- Accrued transfer agent fees 109,645 ----------------------------------------------------------- Accrued operating expenses 224,276 =========================================================== Total liabilities 6,922,282 =========================================================== Net assets applicable to shares outstanding $182,052,539 ___________________________________________________________ =========================================================== NET ASSETS CONSIST OF: Shares of beneficial interest $182,703,356 ----------------------------------------------------------- Undistributed net investment income 993,138 ----------------------------------------------------------- Undistributed net realized gain (loss) from investment securities and foreign currencies (55,442,175) ----------------------------------------------------------- Unrealized appreciation of investment securities and foreign currencies 53,798,220 =========================================================== $182,052,539 ___________________________________________________________ =========================================================== NET ASSETS: Class A $131,663,665 ___________________________________________________________ =========================================================== Class B $ 32,566,478 ___________________________________________________________ =========================================================== Class C $ 17,822,396 ___________________________________________________________ =========================================================== SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 8,552,093 ___________________________________________________________ =========================================================== Class B 2,215,785 ___________________________________________________________ =========================================================== Class C 1,217,037 ___________________________________________________________ =========================================================== Class A: Net asset value per share $ 15.40 ----------------------------------------------------------- Offering price per share: (Net asset value of $15.40 divided by 94.50%) $ 16.30 ___________________________________________________________ =========================================================== Class B: Net asset value and offering price per share $ 14.70 ___________________________________________________________ =========================================================== Class C: Net asset value and offering price per share $ 14.64 ___________________________________________________________ ===========================================================
* At April 30, 2005, securities with an aggregate market value of $5,100,810 were on loan to brokers. See accompanying notes which are an integral part of the financial statements. F-4 STATEMENT OF OPERATIONS For the six months ended April 30, 2005 (Unaudited) INVESTMENT INCOME: Dividends (net of foreign withholding tax of $231,754) $ 2,840,075 ------------------------------------------------------------------------- Dividends from affiliated money market funds (includes securities lending income of $16,530 after rebates of $48,477) 86,860 ------------------------------------------------------------------------- Interest 4,411 ========================================================================= Total investment income 2,931,346 ========================================================================= EXPENSES: Advisory fees 802,216 ------------------------------------------------------------------------- Administrative services fees 24,795 ------------------------------------------------------------------------- Custodian fees 201,881 ------------------------------------------------------------------------- Distribution fees: Class A 211,947 ------------------------------------------------------------------------- Class B 158,877 ------------------------------------------------------------------------- Class C 79,998 ------------------------------------------------------------------------- Transfer agent fees 317,769 ------------------------------------------------------------------------- Trustees' and officer's fees and benefits 9,923 ------------------------------------------------------------------------- Other 108,643 ========================================================================= Total expenses 1,916,049 ========================================================================= Less: Fees waived, expenses reimbursed and expense offset arrangement (13,098) ========================================================================= Net expenses 1,902,951 ========================================================================= Net investment income 1,028,395 ========================================================================= REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES AND FOREIGN CURRENCIES: Net realized gain from: Investment securities (net of tax on the sale of foreign investments of $169-Note 1G) 5,293,999 ------------------------------------------------------------------------- Foreign currencies 236,795 ========================================================================= 5,530,794 ========================================================================= Change in net unrealized appreciation (depreciation) of: Investment securities (net of change in estimated tax on foreign investments held of $(52,221)-Note 1G) 11,146,136 ------------------------------------------------------------------------- Foreign currencies (35,937) ========================================================================= 11,110,199 ========================================================================= Net gain from investment securities and foreign currencies 16,640,993 ========================================================================= Net increase in net assets resulting from operations $17,669,388 _________________________________________________________________________ =========================================================================
See accompanying notes which are an integral part of the financial statements. F-5 STATEMENT OF CHANGES IN NET ASSETS For the six months ended April 30, 2005 and the year ended October 31, 2004 (Unaudited)
APRIL 30, OCTOBER 31, 2005 2004 ========================================================================================== OPERATIONS: Net investment income (loss) $ 1,028,395 $ (389,741) ------------------------------------------------------------------------------------------ Net realized gain from investment securities and foreign currencies 5,530,794 11,337,475 ------------------------------------------------------------------------------------------ Change in net unrealized appreciation of investment securities and foreign currencies 11,110,199 5,453,611 ========================================================================================== Net increase in net assets resulting from operations 17,669,388 16,401,345 ========================================================================================== Share transactions-net: Class A 12,731,707 (3,558,053) ------------------------------------------------------------------------------------------ Class B (23,977) 1,546,688 ------------------------------------------------------------------------------------------ Class C 5,152,276 1,579,175 ========================================================================================== Net increase (decrease) in net assets resulting from share transactions 17,860,006 (432,190) ========================================================================================== Net increase in net assets 35,529,394 15,969,155 ========================================================================================== NET ASSETS: Beginning of period 146,523,145 130,553,990 ========================================================================================== End of period (including undistributed net investment income (loss) of $993,138 and $(35,257), respectively) $182,052,539 $146,523,145 __________________________________________________________________________________________ ==========================================================================================
See accompanying notes which are an integral part of the financial statements. F-6 NOTES TO FINANCIAL STATEMENTS April 30, 2005 (Unaudited) NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Asia Pacific Growth Fund (the "Fund") is a series portfolio of AIM International Mutual Funds (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 six separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The Fund currently offers multiple classes of shares. 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. Companies are listed in the Schedule of Investments based on the country in which they are organized. Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust (including the Trust's investment manager) 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 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. However, the Fund has not had prior claims or losses pursuant to these contracts. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. A. SECURITY VALUATIONS -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued on the basis of prices furnished by independent pricing services, which may be considered fair valued, or market makers. Each security reported on the NASDAQ National Market System 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 will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end registered investment companies 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 closed-end registered investment companies that trade on an exchange are valued at the last sales price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) 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 having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. 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. 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. 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 the close of the respective markets. Events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. 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 market value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current market 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, ADRs and domestic and foreign index futures. F-7 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. 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. 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. 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 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 Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. F. REDEMPTION FEES -- The Fund has instituted a 2% redemption fee on certain share classes 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, including exchanges of shares held less than 30 days. The redemption fee is accounted for as an addition to shares of beneficial interest by the Fund and is allocated among the share classes based on the relative net assets of each class. G. 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. H. 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. NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE --------------------------------------------------------------------- First $500 million 0.95% --------------------------------------------------------------------- Over $500 million 0.90% _____________________________________________________________________ =====================================================================
F-8 Effective January 1, 2005 through June 30, 2006, AIM has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund based on the Fund's average daily net assets do not exceed the annual rate of:
AVERAGE NET ASSETS RATE --------------------------------------------------------------------- First $250 million 0.935% --------------------------------------------------------------------- Next $250 million 0.91% --------------------------------------------------------------------- Next $500 million 0.885% --------------------------------------------------------------------- Next $1.5 billion 0.86% --------------------------------------------------------------------- Next $2.5 billion 0.835% --------------------------------------------------------------------- Next $2.5 billion 0.81% --------------------------------------------------------------------- Next $2.5 billion 0.785% --------------------------------------------------------------------- Over $10 billion 0.76% _____________________________________________________________________ =====================================================================
AIM has voluntarily 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 and Class C shares to 2.25%, 2.90% and 2.90% 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 total annual fund operating expenses to exceed the limits stated above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items (these are expenses that are not anticipated to arise from the Fund's day-to-day operations), or items designated as such by the Fund's Board of Trustees; (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 AMVESCAP PLC ("AMVESCAP") described more fully below, the only 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. To the extent that the annualized expense ratio does not exceed the expense limitation, AIM will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year. AIM did not waive fees and/or reimburse expenses during the period under this expense limitation. Further, AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds on investments by the Fund in such affiliated money market funds (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the fund). AIM is also voluntarily waiving a portion of the advisory fee payable by the Fund equal to the difference between the income earned from investing in the affiliated money market fund and the hypothetical income earned from investing in an appropriate comparative benchmark. Voluntary fee waivers or reimbursements may be modified or discontinued at any time upon consultation with the Board of Trustees without further notice to investors. For the six months ended April 30, 2005, AIM waived fees of $9,136. For the six months ended April 30, 2005, at the request of the Trustees of the Trust, AMVESCAP agreed to reimburse $2,030 of 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. 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. Pursuant to such agreement, for the six months ended April 30, 2005, AIM was paid $24,795. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer agency and shareholder services to the Fund and reimburse AISI for certain expenses incurred by AISI in the course of providing such services. AISI may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. For the six months ended April 30, 2005, the Fund paid AISI $317,769. The Trust has entered into master distribution agreements with A I M Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B and Class C shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A, Class B and Class C shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays ADI 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 Class C shares. Of these amounts, up to 0.25% of the average daily net assets of the Class A, Class B or Class C 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. NASD Rules 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. Pursuant to the Plans, for the six months ended April 30, 2005, the Class A, Class B and Class C shares paid $211,947, $158,877 and $79,998, respectively. Front-end sales commissions and contingent deferred sales charges ("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 six months ended April 30, 2005, ADI advised the Fund that it retained $42,065 in front-end sales commissions from the sale of Class A shares and $3, $8,041 and $1,208 from Class A, Class B shares and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders. Certain officers and trustees of the Trust are officers and directors of AIM, AISI and/or ADI. F-9 NOTE 3--INVESTMENTS IN AFFILIATES The Fund is permitted, pursuant to an exemptive order from the Securities and Exchange Commission ("SEC"), to invest daily available cash balances and cash collateral from securities lending transactions in affiliated money market funds. The Fund and the money market funds below have the same investment advisor and therefore, are considered to be affiliated. The tables below show the transactions in and earnings from investments in affiliated money market funds for the six months ended April 30, 2005. INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
UNREALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME ---------------------------------------------------------------------------------------------------------------------- Liquid Assets Portfolio- Institutional Class $1,749,008 $19,723,350 $(16,113,572) $ -- $ 5,358,786 $34,898 ---------------------------------------------------------------------------------------------------------------------- STIC Prime Portfolio- Institutional Class 1,749,008 19,723,350 (16,113,572) -- 5,358,786 35,432 ====================================================================================================================== Subtotal $3,498,016 $39,446,700 $(32,227,144) $ -- $10,717,572 $70,330 ====================================================================================================================== REALIZED FUND GAIN (LOSS) --------------------------- Liquid Assets Portfolio- Institutional Class $ -- --------------------------- STIC Prime Portfolio- Institutional Class -- =========================== Subtotal $ -- ===========================
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
UNREALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME* ---------------------------------------------------------------------------------------------------------------------- Liquid Assets Portfolio- Institutional Class $2,664,115 $19,771,186 $(19,807,520) $ -- $ 2,627,781 $ 8,196 ---------------------------------------------------------------------------------------------------------------------- STIC Prime Portfolio- Institutional Class 2,664,115 19,771,185 (19,807,520) -- 2,627,780 8,334 ====================================================================================================================== Subtotal $5,328,230 $39,542,371 $(39,615,040) $ -- $ 5,255,561 $16,530 ====================================================================================================================== Total $8,826,246 $78,989,071 $(71,842,184) $ -- $15,973,133 $86,860 ______________________________________________________________________________________________________________________ ====================================================================================================================== REALIZED FUND GAIN (LOSS) --------------------------- Liquid Assets Portfolio- Institutional Class $ -- --------------------------- STIC Prime Portfolio- Institutional Class -- =========================== Subtotal $ -- =========================== Total $ -- ___________________________ ===========================
* Net of rebates. NOTE 4--EXPENSE OFFSET ARRANGEMENT 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 six months ended April 30, 2005, the Fund received credits from this arrangement which resulted in the reduction of the Fund's total expenses of $1,932. F-10 NOTE 5--TRUSTEES' AND OFFICER'S FEES AND BENEFITS "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to each Trustee of the Fund who is not an "interested person" of the AIM Funds. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officer's 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, 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 Officer's 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. In addition to the above, "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to the Senior Officer of the AIM Funds. During the six months ended April 30, 2005, the Fund paid legal fees of $2,119 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 Pursuant to an exemptive order from the SEC, the Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. A loan will be secured by collateral if the Fund's aggregate borrowings from all sources exceeds 10% of the Fund's total assets. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. The Fund is a participant in an uncommitted unsecured revolving credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000, or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the credit facility can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the six months ended April 30, 2005, the Fund did not borrow or lend under the interfund lending facility or borrow under the uncommitted unsecured revolving credit facility. Additionally, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated at an amount equal to the Federal Funds rate plus 100 basis points. NOTE 7--PORTFOLIO SECURITIES LOANED 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. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds. 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. The Fund could also 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 a loss on the collateral invested. At April 30, 2005, securities with an aggregate value of $5,100,810 were on loan to brokers. The loans were secured by cash collateral of $5,255,561 received by the Fund and subsequently invested in affiliated money market funds. For the six months ended April 30, 2005, the Fund received dividends on cash collateral of $16,530 for securities lending transactions, which are net of rebates. F-11 NOTE 8--TAX INFORMATION The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund's fiscal year-end. 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 had a capital loss carryforward as of October 31, 2004 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* ----------------------------------------------------------------------------- October 31, 2005 $31,339,013 ----------------------------------------------------------------------------- October 31, 2009 27,317,937 ----------------------------------------------------------------------------- October 31, 2010 1,617,552 ============================================================================= Total capital loss carryforward $60,274,502 _____________________________________________________________________________ =============================================================================
* 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 and money market funds) purchased and sold by the Fund during the six months ended April 30, 2005 was $42,848,231 and $28,492,421, respectively. For interim reporting periods, the cost of investments for tax purposes includes reversals of certain tax items, such as, wash sales that have occurred since the prior fiscal year-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS ------------------------------------------------------------------------------- Aggregate unrealized appreciation of investment securities $56,508,038 ------------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (3,375,244) =============================================================================== Net unrealized appreciation of investment securities $53,132,794 _______________________________________________________________________________ =============================================================================== Cost of investments for tax purposes is $132,834,266.
F-12 NOTE 10--SHARE INFORMATION 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 CDSC. Under certain circumstances, Class A shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN SHARES OUTSTANDING(a) ---------------------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED APRIL 30, 2005 OCTOBER 31, 2004 -------------------------- -------------------------- SHARES AMOUNT SHARES AMOUNT ---------------------------------------------------------------------------------------------------------------------- Sold: Class A 2,109,009 $ 32,342,599 3,833,128 $ 49,414,797 ---------------------------------------------------------------------------------------------------------------------- Class B 367,723 5,369,591 980,158 12,296,597 ---------------------------------------------------------------------------------------------------------------------- Class C 900,058 12,962,071 1,722,011 21,531,254 ====================================================================================================================== Automatic conversion of Class B shares to Class A shares: Class A 88,529 1,359,014 184,570 2,390,898 ---------------------------------------------------------------------------------------------------------------------- Class B (92,600) (1,359,014) (192,392) (2,390,898) ====================================================================================================================== Reacquired:(b) Class A (1,382,909) (20,969,906) (4,329,566) (55,363,748) ---------------------------------------------------------------------------------------------------------------------- Class B (280,218) (4,034,554) (680,316) (8,359,011) ---------------------------------------------------------------------------------------------------------------------- Class C (540,177) (7,809,795) (1,620,319) (19,952,079) ====================================================================================================================== 1,169,415 $ 17,860,006 (102,726) $ (432,190) ______________________________________________________________________________________________________________________ ======================================================================================================================
(a) There is one entity that is a record owner of more than 5% of the outstanding shares of the Fund and it owns 8% of the outstanding shares of the Fund. AIM Distributors has an agreement with this entity to sell Fund shares. The Fund, AIM and/or AIM affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, AIM and/or 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 is also owned beneficially. (b) Amount is net of redemption fees of $17,682, $4,529 and $2,505 for Class A, Class B and Class C shares, respectively, for the six months ended April 30, 2005 and $7,403, $2,065 and $805 for Class A, Class B and Class C shares, respectively, for the year ended October 31, 2004. F-13 NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A -------------------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, SIX MONTHS ENDED ------------------------------------------------------------------------ APRIL 30, 2005 2004 2003 2002 2001 2000 ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 13.72 $ 12.07 $ 8.53 $ 8.59 $ 10.70 $ 10.76 ------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.10 (0.01)(a) (0.01)(a) (0.04)(a) (0.01)(a) (0.07)(a) ------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 1.58 1.66 3.55 (0.02) (2.06) 0.01 =============================================================================================================================== Total from investment operations 1.68 1.65 3.54 (0.06) (2.07) (0.06) =============================================================================================================================== Less distributions from net realized gains -- -- -- -- (0.04) -- =============================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 -- -- -- -- =============================================================================================================================== Net asset value, end of period $ 15.40 $ 13.72 $ 12.07 $ 8.53 $ 8.59 $ 10.70 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Total return(b) 12.24% 13.67% 41.50% (0.70)% (19.46)% (0.56)% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $131,664 $106,129 $97,192 $62,806 $61,729 $93,755 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.07%(c) 2.23% 2.26% 2.25% 2.02% 1.92% ------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.08%(c) 2.25% 2.41% 2.49% 2.37% 2.06% =============================================================================================================================== Ratio of net investment income (loss) to average net assets 1.40%(c) (0.09)% (0.11)% (0.41)% (0.06)% (0.57)% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Portfolio turnover rate(d) 18% 68% 100% 114% 73% 64% _______________________________________________________________________________________________________________________________ ===============================================================================================================================
(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 the returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year. (c) Ratio are annualized and based on average daily net assets of $122,116,113. (d) Not annualized for periods less than one year.
CLASS B ------------------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, SIX MONTHS ENDED ----------------------------------------------------------------------- APRIL 30, 2005 2004 2003 2002 2001 2000 ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 13.14 $ 11.64 $ 8.27 $ 8.38 $ 10.50 $ 10.65 ------------------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income (loss) 0.05 (0.09)(a) (0.07)(a) (0.10)(a) (0.07)(a) (0.17)(a) ------------------------------------------------------------------------------------------------------------------------------ Net gains (losses) on securities (both realized and unrealized) 1.51 1.59 3.44 (0.01) (2.01) 0.02 ============================================================================================================================== Total from investment operations 1.56 1.50 3.37 (0.11) (2.08) (0.15) ============================================================================================================================== Less distributions from net realized gains -- -- -- -- (0.04) -- ============================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 -- -- -- -- ============================================================================================================================== Net asset value, end of period $ 14.70 $ 13.14 $ 11.64 $ 8.27 $ 8.38 $ 10.50 ______________________________________________________________________________________________________________________________ ============================================================================================================================== Total return(b) 11.87% 12.89% 40.75% (1.31)% (19.92)% (1.41)% ______________________________________________________________________________________________________________________________ ============================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $32,566 $29,174 $24,599 $19,916 $25,479 $39,852 ______________________________________________________________________________________________________________________________ ============================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.72%(c) 2.88% 2.91% 2.90% 2.67% 2.67% ------------------------------------------------------------------------------------------------------------------------------ Without fee waivers and/or expense reimbursements 2.73%(c) 2.90% 3.06% 3.14% 3.02% 2.76% ______________________________________________________________________________________________________________________________ ============================================================================================================================== Ratio of net investment income (loss) to average net assets 0.75%(c) (0.74)% (0.76)% (1.06)% (0.72)% (1.32)% ______________________________________________________________________________________________________________________________ ============================================================================================================================== Portfolio turnover rate(d) 18% 68% 100% 114% 73% 64% ______________________________________________________________________________________________________________________________ ==============================================================================================================================
(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 the returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year. (c) Ratio are annualized and based on average daily net assets of $32,038,757. (d) Not annualized for periods less than one year. F-14 NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
CLASS C ---------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, -------------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 --------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 13.09 $ 11.60 $ 8.25 $ 8.37 $ 10.49 $10.63 --------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.05 (0.09)(a) (0.07)(a) (0.10)(a) (0.07)(a) (0.17)(a) --------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 1.50 1.58 3.42 (0.02) (2.01) 0.03 ===================================================================================================================== Total from investment operations 1.55 1.49 3.35 (0.12) (2.08) (0.14) ===================================================================================================================== Less distributions from net realized gains -- -- -- -- (0.04) -- ===================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 -- -- -- -- ===================================================================================================================== Net asset value, end of period $ 14.64 $ 13.09 $11.60 $ 8.25 $ 8.37 $10.49 _____________________________________________________________________________________________________________________ ===================================================================================================================== Total return(b) 11.84% 12.84% 40.61% (1.43)% (19.94)% (1.32)% _____________________________________________________________________________________________________________________ ===================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $17,822 $11,220 $8,763 $6,019 $ 4,692 $6,797 _____________________________________________________________________________________________________________________ ===================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.72%(c) 2.88% 2.91% 2.90% 2.67% 2.67% --------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.73%(c) 2.90% 3.06% 3.14% 3.02% 2.76% _____________________________________________________________________________________________________________________ ===================================================================================================================== Ratio of net investment income (loss) to average net assets 0.75%(c) (0.74)% (0.76)% (1.06)% (0.72)% (1.32)% _____________________________________________________________________________________________________________________ ===================================================================================================================== Portfolio turnover rate(d) 18% 68% 100% 114% 73% 64% _____________________________________________________________________________________________________________________ =====================================================================================================================
(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 the returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year. (c) Ratio are annualized and based on average daily net assets of $16,132,245. (d) Not annualized for periods less than one year. NOTE 12--LEGAL PROCEEDINGS Terms used in the Legal Proceedings Note are defined terms solely for the purpose of this note. SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment advisor to certain AIM Funds), A I M Advisors, Inc. ("AIM") (the Fund's investment advisor) and A I M Distributors, Inc. ("ADI") (the distributor of the retail AIM Funds) reached final settlements with certain regulators, including, among others, the Securities and Exchange Commission ("SEC"), the New York Attorney General ("NYAG") and the Colorado Attorney General ("COAG"), to resolve civil enforcement actions and/or investigations related to market timing activity and related issues in the AIM Funds, including those formerly advised by IFG. As part of the settlements, IFG agreed to pay a total of $325 million (including $110 million in civil penalties). Additionally, AIM and ADI agreed to pay a total of $50 million (including $30 million in civil penalties). These settlement funds will be made available for distribution to the shareholders of the applicable AIM Funds that were harmed by market timing activity, and may (or may not) increase as a result of contributions from third parties who reach final settlements with the SEC or other regulators to resolve allegations of market timing and/or late trading. The settlement funds will be distributed in accordance with a methodology to be determined by AIM's independent distribution consultant, in consultation with AIM and the independent trustees of the AIM Funds and acceptable to the staff of the SEC. As the methodology is unknown at the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the distribution of these settlement funds may have on the Fund or whether such distribution will have an impact on the Fund's financial statements in the future. At the request of the trustees of the AIM Funds, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and AIM, has agreed to reimburse expenses incurred by the AIM Funds related to market timing matters. REGULATORY INQUIRIES AND PENDING LITIGATION IFG, AIM, ADI and/or related entities and individuals have received inquiries from numerous regulators in the form of subpoenas or other oral or written requests for information and/or documents related to one or more of the following issues, some of which concern one or more AIM Funds: market timing activity, late trading, fair value pricing, excessive or improper advisory and/or distribution fees, mutual fund sales practices, including revenue sharing and directed-brokerage arrangements, investments in securities of other registered investment companies, contractual plans, issues related to F-15 NOTE 12--LEGAL PROCEEDINGS--(CONTINUED) Section 529 college savings plans and procedures for locating lost securityholders. IFG, AIM and ADI are providing full cooperation with respect to these inquiries. As described more fully below, the AIM Funds, IFG, AIM, ADI and/or related entities and individuals are defendants in numerous civil lawsuits related to one or more of these issues. Regulatory actions and/or additional civil lawsuits related to these or other issues may be filed against the AIM Funds, IFG, AIM and/or related entities and individuals in the future. On April 12, 2005, the Attorney General of the State of West Virginia ("WVAG") filed civil proceedings against AIM, IFG and ADI, as well as numerous unrelated mutual fund complexes and financial institutions. None of the AIM Funds has been named as a defendant in these proceedings. The WVAG complaint, filed in the Circuit Court of Marshall County, West Virginia [Civil Action No. 05-C-81], alleges, in substance, that AIM, IFG and ADI engaged in unfair competition and/or unfair or deceptive trade practices by failing to disclose in the prospectuses for the AIM Funds, including those formerly advised by IFG, that they had entered into certain arrangements permitting market timing of such Funds. As a result of the foregoing, the WVAG alleges violations of W. Va. Code sec. 46A-1-101, et seq. (the West Virginia Consumer Credit and Protection Act). The WVAG complaint is seeking, among other things, injunctive relief, civil monetary penalties and a writ of quo warranto against the defendants. If AIM is unsuccessful in its defense of the WVAG proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could affect the ability of AIM or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any registered investment company, including the Fund. The Fund has been informed by AIM that, if these results occur, AIM will seek exemptive relief from the SEC to permit it to continue to serve as the Fund's investment advisor. There is no assurance that such exemptive relief will be granted. Civil lawsuits, including purported class action and shareholder derivative suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or related entities and individuals, depending on the lawsuit, alleging: - that the defendants permitted improper market timing and related issues in the AIM Funds; - that certain AIM Funds inadequately employed fair value pricing; - that the defendants charged excessive advisory and/or distribution fees and failed to pass on to shareholders the perceived savings generated by economies of scale and that the defendants adopted unlawful distribution plans; - that the defendants breached their fiduciary duties by charging distribution fees while funds and/or specific share classes were closed generally to new investors and/or while other share classes of the same fund were not charged the same distribution fees; - that the defendants improperly used the assets of the AIM Funds to pay brokers to aggressively promote the sale of the AIM Funds over other mutual funds and that the defendants concealed such payments from investors by disguising them as brokerage commissions; and - that the defendants breached their fiduciary duties by failing to ensure that the AIM Funds participated in class action settlements in which the AIM Funds were eligible to participate. These lawsuits allege as theories of recovery, depending on the lawsuit, violations of various provisions of the Federal and state securities laws and ERISA, negligence, breach of fiduciary duty and/or breach of contract. These lawsuits seek remedies that include, depending on the lawsuit, damages, restitution, injunctive relief, imposition of a constructive trust, removal of certain directors and/or employees, various corrective measures under ERISA, rescission of certain AIM Funds' advisory agreements and/or distribution plans and recovery of all fees paid, an accounting of all fund-related fees, commissions and soft dollar payments, restitution of all commissions and fees paid, and prospective relief in the form of reduced fees. At the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the outcome of the Regulatory Inquiries and Pending Litigation described above may have on AIM, ADI or the Fund. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * As a result of the matters discussed above, investors in the AIM Funds might react by redeeming their investments. This might require the AIM Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AIM Funds. F-16 OTHER INFORMATION TRUSTEES AND OFFICERS BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND Bob R. Baker Robert H. Graham 11 Greenway Plaza Frank S. Bayley President Suite 100 James T. Bunch Houston, TX 77046-1173 Bruce L. Crockett Mark H. Williamson Chair Executive Vice President INVESTMENT ADVISOR Albert R. Dowden A I M Advisors, Inc. Edward K. Dunn Jr. Lisa O. Brinkley 11 Greenway Plaza Jack M. Fields Senior Vice President and Chief Compliance Suite 100 Carl Frischling Officer Houston, TX 77046-1173 Robert H. Graham Gerald J. Lewis Russell C. Burk TRANSFER AGENT Prema Mathai-Davis Senior Vice President (Senior Officer) AIM Investment Services, Inc. Lewis F. Pennock P.O. Box 4739 Ruth H. Quigley Kevin M. Carome Houston, TX 77210-4739 Larry Soll Senior Vice President, Secretary and Chief Mark H. Williamson Legal Officer CUSTODIAN State Street Bank and Trust Company Sidney M. Dilgren 225 Franklin Street Vice President and Treasurer Boston, MA 02110-2801 Robert G. Alley COUNSEL TO THE FUND Vice President Ballard Spahr Andrews & Ingersoll, LLP J. Philip Ferguson 1735 Market Street, 51st Floor Vice President Philadelphia, PA 19103-7599 Karen Dunn Kelley COUNSEL TO THE INDEPENDENT TRUSTEES Vice President Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714 DISTRIBUTOR A I M Distributors, Inc. 11 Greenway Plaza Suite 100 Houston, TX 77046-1173
DOMESTIC EQUITY SECTOR EQUITY AIM Aggressive Growth Fund AIM Advantage Health Sciences Fund(1) AIM Basic Balanced Fund* AIM Energy Fund(1) AIM Basic Value Fund AIM Financial Services Fund(1) AIM Blue Chip Fund AIM Global Health Care Fund AIM Capital Development Fund AIM Global Real Estate Fund AIM Charter Fund AIM Gold & Precious Metals Fund(1) AIM Constellation Fund AIM Leisure Fund(1) AIM Diversified Dividend Fund AIM Multi-Sector Fund(1) AIM Dynamics Fund(1) AIM Real Estate Fund(7) AIM Large Cap Basic Value Fund AIM Technology Fund(1) AIM Large Cap Growth Fund AIM Utilities Fund(1) AIM Mid Cap Basic Value Fund AIM Mid Cap Core Equity Fund(2) AIM Mid Cap Growth Fund FIXED INCOME AIM Opportunities I Fund AIM Opportunities II Fund TAXABLE AIM Opportunities III Fund AIM Premier Equity Fund AIM Floating Rate Fund AIM S&P 500 Index Fund(1) AIM High Yield Fund AIM Select Equity Fund AIM Income Fund AIM Small Cap Equity Fund(3) AIM Intermediate Government Fund AIM Small Cap Growth Fund(4) AIM Limited Maturity Treasury Fund AIM Small Company Growth Fund(1) AIM Money Market Fund AIM Trimark Endeavor Fund AIM Short Term Bond Fund AIM Trimark Small Companies Fund AIM Total Return Bond Fund AIM Weingarten Fund Premier Portfolio Premier U.S. Government Money Portfolio(1) *Domestic equity and income fund TAX-FREE INTERNATIONAL/GLOBAL EQUITY AIM High Income Municipal Fund AIM Asia Pacific Growth Fund AIM Municipal Bond Fund AIM Developing Markets Fund AIM Tax-Exempt Cash Fund AIM European Growth Fund AIM Tax-Free Intermediate Fund AIM European Small Company Fund(5) Premier Tax-Exempt Portfolio AIM Global Aggressive Growth Fund AIM Global Equity Fund AIM Global Growth Fund AIM ALLOCATION SOLUTIONS AIM Global Value Fund AIM International Core Equity Fund(1) AIM Conservative Allocation Fund AIM International Growth Fund AIM Growth Allocation Fund(8) AIM International Small Company Fund(6) AIM Moderate Allocation Fund AIM Trimark Fund AIM Moderate Growth Allocation Fund AIM Moderately Conservative Allocation Fund
(1) The following name changes became effective October 15, 2004: INVESCO Advantage Health Sciences Fund to AIM Advantage Health Sciences Fund, INVESCO Dynamics Fund to AIM Dynamics Fund, INVESCO Energy Fund to AIM Energy Fund, INVESCO Financial Services Fund to AIM Financial Services Fund, INVESCO Gold & Precious Metals Fund to AIM Gold & Precious Metals Fund, INVESCO International Core Equity Fund to AIM International Core Equity Fund, INVESCO Leisure Fund to AIM Leisure Fund, INVESCO Mid-Cap Growth Fund to AIM Mid Cap Stock Fund, INVESCO Multi-Sector Fund to AIM Multi-Sector Fund, INVESCO S&P 500 Index Fund to AIM S&P 500 Index Fund, INVESCO Small Company Growth Fund to AIM Small Company Growth Fund, INVESCO Technology Fund to AIM Technology Fund, INVESCO U.S. Government Money Fund to Premier U.S. Government Money Portfolio, INVESCO Utilities Fund to AIM Utilities Fund. (2) As of end of business on February 27, 2004, AIM Mid Cap Core Equity Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (3) Effective December 13, 2004, AIM Small Cap Equity Fund is open to all investors. (4) As of end of business on March 18, 2002, AIM Small Cap Growth Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (5) As of end of business on March 28, 2005, AIM European Small Company Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (6) Effective December 30, 2004, AIM International Emerging Growth Fund was renamed AIM International Small Company Fund. As of end of business on March 14, 2005, the Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (7) As of end of business on April 29, 2005, AIM Real Estate Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (8) Effective April 29, 2005, AIM Aggressive Allocation Fund was renamed AIM Growth Allocation Fund. If used after July 20, 2005, this report must be accompanied by a Fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $131 billion in assets. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $375 billion in assets under management. Data as of March 31, 2005. ================================================================================ CONSIDER THE INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY. FOR THIS AND OTHER INFORMATION ABOUT AIM FUNDS, OBTAIN A PROSPECTUS FROM YOUR FINANCIAL ADVISOR AND READ IT CAREFULLY BEFORE INVESTING. ================================================================================ AIMinvestments.com APG-SAR-1 A I M Distributors, Inc. Mutual Retirement Annuities College Separately Offshore Cash Funds Products Savings Managed Products Management Plans Accounts [YOUR GOALS. OUR SOLUTIONS.] [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- --Registered Trademark-- AIM EUROPEAN GROWTH FUND Semiannual Report to Shareholders o April 30, 2005 [COVER IMAGE] [YOUR GOALS. OUR SOLUTIONS.] [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- --Registered Trademark-- AIM EUROPEAN GROWTH FUND SEEKS TO PROVIDE LONG-TERM GROWTH OF CAPITAL. o Unless otherwise stated, information presented in this report is as of April 30, 2005, and is based on total net assets. ABOUT SHARE CLASSES For additional information regarding the OTHER INFORMATION Fund's performance, please see the o Effective September 30, 2003, Class B Fund's prospectus. o The returns shown in management's shares are not available as an discussion of Fund performance are based investment for retirement plans ABOUT INDEXES USED IN THIS REPORT on net asset values calculated for maintained pursuant to Section 401 of shareholder transactions. Generally the Internal Revenue Code, including o The unmanaged MSCI Europe, Australasia accepted accounting principles require 401(k) plans, money purchase pension and the Far East Index (the MSCI adjustments to be made to the net assets plans and profit sharing plans. Plans EAFE--Registered Trademark-- INDEX) is a of the Fund at period end for financial that have existing accounts invested in group of foreign securities tracked by reporting purposes, and as such, the net Class B shares will continue to be Morgan Stanley Capital International. asset values for shareholder allowed to make additional purchases. transactions and the returns based on o The unmanaged MSCI EUROPE INDEX is a those net asset values may differ from o Class R shares are available only to group of European securities tracked by the net asset values and returns certain retirement plans. Please see the Morgan Stanley Capital International. reported in the Financial Highlights. prospectus for more information. The Growth portion measures performance of companies with higher price/earnings o Industry classifications used in this o Investor Class shares are closed to ratios and higher forecasted growth report are generally according to the most investors. For more information on values. Global Industry Classification Standard, who may continue to invest in the which was developed by and is the Investor Class shares, please see the o The unmanaged MSCI EUROPE GROWTH INDEX exclusive property and a service mark of prospectus. is a subset of the unmanaged MSCI Europe Morgan Stanley Capital International Index, which represents the performance Inc. and Standard & Poor's. PRINCIPAL RISKS OF INVESTING IN THE FUND of European stocks tracked by Morgan Stanley Capital International. The The Fund provides a complete list of its o International investing presents Growth portion measures performance of holdings four times in each fiscal year, certain risks not associated with companies with higher price/earnings at the quarter-ends. For the second and investing solely in the United States. ratios and higher forecasted growth fourth quarters, the lists appear in the These include risks relating to values. Fund's semiannual and annual reports to fluctuations in the value of the U.S. shareholders. For the first and third dollar relative to the values of other o The unmanaged LIPPER EUROPEAN FUND quarters, the Fund files the lists with currencies, the custody arrangements INDEX represents an average of the 30 the Securities and Exchange Commission made for the Fund's foreign holdings, largest European funds tracked by (SEC) on Form N-Q. Shareholders can look differences in accounting, political Lipper, Inc., an independent mutual fund up the Fund's Forms N-Q on the SEC's Web risks and the lesser degree of public performance monitor. site at sec.gov. Copies of the Fund's information required to be provided by Forms N-Q may be reviewed and copied at non-U.S. companies. o The Fund is not managed to track the the SEC's Public Reference Room at 450 performance of any particular index, Fifth Street, N.W., Washington, D.C. o Investing in a single-sector or including the indexes defined here, and 20549-0102. You can obtain information single-region mutual fund involves consequently, the performance of the on the operation of the Public Reference greater risk and potential reward than Fund may deviate significantly from the Room, including information about investing in a more diversified fund. performance of the indexes. duplicating fee charges, by calling 1-202-942-8090 or 1-800-732-0330, or by o Although investments in initial public o A direct investment cannot be made in electronic request at the following offerings (IPOs) have had a positive an index. Unless otherwise indicated, e-mail address: publicinfo@sec.gov. The impact on the Fund's performance in the index results include reinvested SEC file numbers for the Fund are past, there can be no assurance that the dividends, and they do not reflect sales 811-6463 and 33-44611. The Fund's most Fund will have favorable IPO investment charges. Performance of an index of recent portfolio holdings, as filed on opportunities in the future. Attractive funds reflects fund expenses; Form N-Q, are also available at IPOs are often oversubscribed and may performance of a market index does not. AIMinvestments.com. not be available to the Fund, or may be available in only very limited A description of the policies and quantities. 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 AIM Web site, AIMinvestments.com. On the home page, scroll down and click on AIM Funds Proxy Policy. The information is also available on the SEC Web site, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2004, is available at our Web site. Go to AIMinvestments.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 Web site, sec.gov.
================================================================================ THIS REPORT 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. ================================================================================ NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE AIMINVESTMENTS.COM AIM EUROPEAN GROWTH FUND DEAR FELLOW SHAREHOLDERS: Most equity market and fund indexes, domestic and international, produced positive total returns for the six months ended April 30, 2005, but for the most part, those positive numbers reflected gains made during the latter months of 2004. Year-to-date as of April 30, 2005, the [GRAHAM returns were far less attractive. PHOTO] High oil prices remained a source of unease; crude oil remained near or above $50 per barrel throughout the reporting period. The Producer Price Index was up fairly ROBERT H. GRAHAM sharply in April, largely due to energy costs. And central bank policy continued to focus on containing short-term inflation via increases in the overnight federal funds interest rate, the rate the Federal Reserve (the Fed) most directly controls. Shortly after the reporting period closed, the Fed raised that rate to 3%; it was the eighth increase since mid-2004. Should the Fed continue to raise [WILLIAMSON rates, this could eventually dampen economic performance, PHOTO] which in fact has been quite good. Gross domestic product grew 4.4% for all of 2004 and the preliminary estimate of annualized growth for the first quarter of 2005 was 3.5%. o Though the growth rate of the manufacturing sector MARK H. WILLIAMSON slowed in April and again in May, manufacturing continued to grow, according to the Institute for Supply Management (ISM), whose purchasing manager surveys cover more than 80% of the U.S. economy. In May, manufacturing grew for the 24th consecutive month while the overall economy grew for the 43rd consecutive month, ISM reported. o Though job growth during May was much slower than during April, the unemployment rate remained unchanged at 5.1% as May 2005 ended. o For the first quarter of 2005, earnings for companies included in the Standard & Poor's Composite Index of 500 Stocks, an index of the broad U.S. stock market, were up more than 10%, on average, over a year earlier. o Bond yields have not risen as much as might be expected given eight increases in short-term interest rates in less than a year. This may indicate that the bond market is not anticipating a long-term inflationary pattern. After the slow start in 2005, domestic and many international markets began to rally after the close of the reporting period, demonstrating once again how changeable markets are in the short term. Given the elusiveness of accurate short-term market forecasts, as always, we urge our shareholders to: o keep a long-term investment perspective, o make sure their portfolio of investments is suitably diversified, and o contact their financial advisors when they have questions about their investments or the markets. YOUR FUND In the following pages you will find a discussion of your Fund's investment philosophy, an explanation of its performance for the reporting period, and a summary of its portfolio as of April 30. Further information about your Fund, The AIM Family of Funds--Registered Trademark--, and investing in general is always available on our widely praised Web site, AIMinvestments.com. Please visit frequently. We at AIM remain committed to building solutions to help you meet your investment goals. We thank you for your continued participation in AIM Investments--Registered Trademark--. If you have any questions, please contact our award-winning Client Service representatives at 800-959-4246. We are happy to be of help. Sincerely, /s/ ROBERT H. GRAHAM /s/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson President & Vice Chair, Chairman & President, AIM Funds A I M Advisors, Inc. June 17, 2005 AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M Capital Management, Inc. are the investment advisors and A I M Distributors, Inc. is the distributor for the retail funds represented by AIM Investments. AIM EUROPEAN GROWTH FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE ========================================== of positive returns for the MSCI Europe PERFORMANCE SUMMARY Index. Sentiment began to change in FUND VS. INDEXES mid-March, however, amid the possibility During the reporting period, European of further oil price hikes and signs of markets turned in mixed Total returns, 10/31/04-4/30/05, sluggish corporate growth. Given this results--rallying strongly at the close excluding applicable sales charges. If environment, most world markets, of 2004 and then selling off in sales charges were included, returns including those in Europe, posted mid-March as high oil prices, rising would be lower. negative returns for both March and global interest rates and risk aversion April. dampened investor enthusiasm. As Class A Shares 11.64% indicated in the table to the right, we Company earnings reports, however, are pleased to report that the Fund Class B Shares 11.30 received mixed review by the market and rewarded shareholders with higher investors. Many European companies, returns than all of its benchmark Class C Shares 11.30 including several of the Fund's top indexes during the reporting period. holdings, exceeded analysts' estimates. Class R Shares 11.59 For instance, first quarter revenues for We attribute the Fund's comparative Fund holding Vinci, a French success to strong stock selection, our Investor Class Shares 11.71 construction company, came in slightly exposure to outperforming small/mid-cap ahead of analysts' expectations. The stocks and the performance of many of MSCI EAFE Index (Broad Market company's first-quarter 2005 revenues our consumer discretionary and financial Index) 8.71 were up 8.9% year-over-year due to an holdings. increase in demand for French MSCI Europe Growth Index construction. Vinci proved a significant HOW WE INVEST (Style-specific Index) 9.14 contributor to Fund performance during the reporting period. Our investment strategy is based on the Lipper European Fund Index principle that strong (Peer Group Index) 10.85 Although positive earnings reports earnings--sustainable, repeatable, continued to outnumber disappointments, above-average growth--can drive stock SOURCE: LIPPER,INC. investors often analyzed "outlook" prices. Therefore, when selecting stocks comments even if reported results met or for the Fund we look for companies with ========================================== exceeded guidance. Puma, a German the following attributes: sportswear company and long-time Fund We select investments on a holding, declined after it reiterated o accelerating earnings and revenues stock-by-stock basis. This means we its outlook for sales growth in the follow a bottom-up investment approach, mid-to-high single digits. After several o strong cash flow generation (dividends, focusing on individual stocks, not years where Puma's profits have doubled share buybacks) sector or country trends. Another each year, the stock was penalized for important component of our investment decelerating growth and concern over o high return on invested capital strategy is that we do not hedge falling European orders. We continue to currencies. We believe foreign currency favor the company, however, due to its o reasonable valuations exposure increases the diversification large market share opportunity in the benefit of international investing. U.S., growth avenues in Asia and compelling valuation. MARKET CONDITIONS AND YOUR FUND European markets trended upward for most of the reporting period with the first quarter of 2005 marking the eighth consecutive quarter ========================================== ========================================== ========================================= TOP 5 COUNTRIES* PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* By sector 1. United Kingdom 23.1% 1. Puma A.G. Rudolf Dassler Sport [PIE CHART] (Germany) 2.4% 2. France 13.2 Energy 7.6% Consumer Staples 8.4% 2. Anglo Irish Bank Corp. PLC 3. Germany 7.1 Health Care 6.4% (Ireland) 2.4 Materials 4.2% 4. Italy 6.3 Telecommunication Services 3.9% 3. OTP Bank Rt. (Hungary) 2.2 Utilities 2.0% 5. Switzerland 5.8 Information Technology 1.0% 4. Eni S.p.A. (Italy) 2.0 Money Market Funds Plus TOTAL NET ASSETS $896 MILLION Other Assets Less Liabilities 7.2% 5. Enterprise Inns PLC Consumer Discretionary 24.5% (United Kingdom) 2.0 TOTAL NUMBER OF HOLDINGS* 97 Financials 18.6% Industrials 16.2% 6. Imperial Tobacco Group PLC The Fund's holdings are subject to (United Kingdom) 1.8 change, and there is no assurance that the Fund will continue to hold any 7. Vinci S.A. (France) 1.7 particular security. 8. Mobistar S.A. (Belgium) 1.6 *Excluding money market fund holdings. 9. Syngenta A.G. (Switzerland) 1.6 10. TOTAL S.A. (France) 1.6 ========================================== ========================================== =========================================
2 A common theme among many European period. Puma, mentioned earlier, JASON T. HOLZER, earnings reports continues to be strong declined on falling European orders. [HOLZER Chartered Financial company cash flow leading to increased VIMPELCOM, a Russian wireless operator, PHOTO] Analyst, senior dividends and share buybacks. OPAP, a also proved a detractor. Given its portfolio manager, is Greek gaming company, for example, pays emerging market locale, the stock was lead manager of AIM out the majority of its earnings in sold indiscriminately by increasingly European Growth Fund with respect to the dividends to shareholders. The company, risk averse investors. We continue to Fund's small and mid-cap investments. which reported first quarter earnings at own the stock, however, as we have faith Mr. Holzer joined AIM in 1996. He the top end of market expectations, was in the company's business models and received a B.A. in quantitative a significant contributor to Fund believe current valuations are very economics and an M.S. in performance. compelling. engineering-economic systems from Stanford University. Despite the sluggish growth Foreign exchange can play a role in associated with some of Europe's largest Fund performance as we do not hedge CLAS G. OLSSON, senior economies, more peripheral European currencies. Despite a stronger U.S. [OLSSON portfolio manager and nations such as Greece, Ireland and many dollar in 2005, for the reporting period PHOTO] head of AIM's eastern European countries continue to as a whole, foreign currency International sustain strong economic growth. Given appreciation by the euro and pound added Investment Management our bottom-up stock selection process, slightly to fund returns. Unit, is lead manager of AIM European we select stocks based on company Growth Fund with respect to the Fund's fundamentals, not locale. Therefore, we IN CLOSING large cap investments. Mr. Olsson joined maintain a well-diversified portfolio of AIM in 1994. Mr. Olsson became a stocks from Europe's core economies--the Once again, we are pleased to provide commissioned naval officer at the Royal United Kingdom, Germany, France and shareholders with positive Fund returns Swedish Naval Academy in 1988. He also Italy--as well as many other smaller for the reporting period. We continue to received a B.B.A. from The University of European economies. believe that European equities offer Texas at Austin. attractive diversification opportunities ...WE ARE PLEASED TO given their lower valuations and higher MATTHEW W. DENNIS, REPORT THAT THE FUND dividend yields compared with many U.S. [DENNIS Chartered Financial REWARDED SHAREHOLDERS stocks. In our opinion, low interest PHOTO] Analyst, portfolio WITH HIGHER RETURNS THAN rates in the euro zone, structural manager, is manager of ALL OF ITS BENCHMARK reforms throughout Europe and increased AIM European Growth INDEXES DURING THE labor flexibility in Germany and France Fund. He has been in the investment REPORTING PERIOD. continue to make Europe a compelling business since 1994. Mr. Dennis received investment arena. We thank you for your a B.A. in economics from The University On a sector basis, financial stocks continued support in AIM European Growth of Texas at Austin. He also earned an contributed significantly to performance Fund. M.S. in finance from Texas A&M with strong performances from Fund University. holdings ANGLO IRISH BANK and The views and opinions expressed in Hungarian-based OTP BANK. Limited management's discussion of Fund BORGE ENDRESEN, exposure to the information technology performance are those of A I M Advisors, [ENDRESEN Chartered Financial sector--the worst performing sector in Inc. These views and opinions are PHOTO] Analyst, portfolio the MSCI Europe Index--also proved subject to change at any time based on manager, is manager of favorable. factors such as market and economic AIM European Growth conditions. These views and opinions may Fund. He joined AIM in 1999 and Despite strong Fund returns, there not be relied upon as investment advice graduated summa cum laude from the were a few holdings that dragged on or recommendations, or as an offer for a University of Oregon with a B.S. in performance over the particular security. The information is finance. He also earned an M.B.A. from not a complete analysis of every aspect The University of Texas at Austin. of any market, country, industry, security or the Fund. Statements of fact RICHARD NIELD, are from sources considered reliable, [NIELD Chartered Financial but A I M Advisors, Inc. makes no PHOTO] Analyst, portfolio representation or warranty as to their manager, is manager of completeness or accuracy. Although AIM European Growth historical performance is no guarantee Fund. Mr. Nield joined AIM in 2000. He of future results, these insights may earned a bachelor of commerce degree in help you understand our investment finance and international business from management philosophy. McGill University in Montreal, Canada. See important Fund and index Assisted by Europe/Canada Team disclosures inside front cover. [RIGHT ARROW GRAPHIC] FOR A PRESENTATION OF YOUR FUND'S LONG-TERM PERFORMANCE RECORD, PLEASE TURN TO PAGE 5.
3 AIM EUROPEAN GROWTH FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE expenses that you paid over the period. estimate the actual ending account Simply divide your account value by balance or expenses you paid for the As a shareholder of the Fund, you incur $1,000 (for example, an $8,600 account period. You may use this information to two types of costs: (1) transaction value divided by $1,000 = 8.6), then compare the ongoing costs of investing costs, which may include sales charges multiply the result by the number in the in the Fund and other funds. To do so, (loads) on purchase payments; contingent table under the heading entitled "Actual compare this 5% hypothetical example deferred sales charges on redemptions; Expenses Paid During Period" to estimate with the 5% hypothetical examples that and redemption fees, if any; and (2) the expenses you paid on your account appear in the shareholder reports of the ongoing costs, including management during this period. other funds. fees; distribution and/or service fees (12b-1); and other Fund expenses. This HYPOTHETICAL EXAMPLE FOR COMPARISON Please note that the expenses shown example is intended to help you PURPOSES in the table are meant to highlight your understand your ongoing costs (in ongoing costs only and do not reflect dollars) of investing in the Fund and to The table below also provides any transactional costs, such as sales compare these costs with ongoing costs information about hypothetical account charges (loads) on purchase payments, of investing in other mutual funds. The values and hypothetical expenses based contingent deferred sales charges on example is based on an investment of on the Fund's actual expense ratio and redemptions, and redemption fees, if $1,000 invested at the beginning of the an assumed rate of return of 5% per year any. Therefore, the hypothetical period and held for the entire period before expenses, which is not the Fund's information is useful in comparing November 1, 2004, through April 30, actual return. The Fund's actual ongoing costs only, and will not help 2005. cumulative total returns at net asset you determine the relative total costs value after expenses for the six months of owning different funds. In addition, ACTUAL EXPENSES ended April 30, 2005, appear in the if these transactional costs were table "Fund vs. Indexes" on page 2. The included, your costs would have been The table below provides information hypothetical account values and expenses higher. about actual account values and actual may not be used to expenses. You may use the information in this table, together with the amount you invested, to estimate the ==================================================================================================================================== ACTUAL HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES) BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES ENDING ACCOUNT EXPENSES SHARE VALUE VALUE PAID DURING VALUE PAID DURING CLASS (11/1/04) (4/30/05)(1) PERIOD(2) (4/30/05) PERIOD(2) A $1,000.00 $1,116.40 $ 9.03 $1,016.27 $ 8.60 B 1,000.00 1,113.00 12.42 1,013.04 11.83 C 1,000.00 1,113.00 12.42 1,013.04 11.83 R 1,000.00 1,115.90 9.81 1,015.52 9.35 Investor 1,000.00 1,117.10 8.45 1,016.81 8.05 (1) The actual ending account value is based on the actual total return of the Fund for the period November 1, 2004, to April 30, 2005, 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. The Fund's actual cumulative total returns at net asset value after expenses for the six months ended April 30, 2005, appear in the table "Fund vs. Indexes" on page 2. (2) Expenses are equal to the Fund's annualized expense ratio (1.72%, 2.37%, 2.37%, 1.87% and 1.61% for Class A, B, C, R and Investor Class shares, respectively) multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). ====================================================================================================================================
[ARROW For More Information Visit BUTTON AIMINVESTMENTS.COM IMAGE] 4 AIM EUROPEAN GROWTH FUND YOUR FUND'S LONG-TERM PERFORMANCE Below you will find a presentation of your Fund's performance record for periods ended April 30, 2005, the close of the six-month period covered by this report. Please read the important disclosure accompanying these tables, which explains how Fund performance is calculated and the sales charges, if any, that apply to the share class in which you are invested. In addition to returns as of the close of the reporting period, industry regulations require us to provide average annual total returns as of March 31, 2005, the most recent calendar quarter-end. ========================================== ========================================== IN NET ASSET VALUE AND THE EFFECT OF THE MAXIMUM SALES CHARGE UNLESS OTHERWISE AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS STATED. PERFORMANCE FIGURES DO NOT REFLECT DEDUCTION OF TAXES A SHAREHOLDER As of 4/30/05, including applicable sales As of 3/31/05, including applicable sales WOULD PAY ON FUND DISTRIBUTIONS OR SALE charges charges OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT CLASS A SHARES CLASS A SHARES YOU MAY HAVE A GAIN OR LOSS WHEN YOU Inception (11/3/97) 14.58% Inception (11/3/97) 15.25% SELL SHARES. 5 Years 1.65 5 Years 0.14 1 Year 16.48 1 Year 18.43 CLASS A SHARE PERFORMANCE REFLECTS THE MAXIMUM 5.50% SALES CHARGE, AND CLASS B SHARES CLASS B SHARES CLASS B AND CLASS C SHARE PERFORMANCE Inception (11/3/97) 14.67% Inception (11/3/97) 15.34% REFLECTS THE APPLICABLE CONTINGENT 5 Years 1.77 5 Years 0.22 DEFERRED SALES CHARGE (CDSC) FOR THE 1 Year 17.51 1 Year 19.48 PERIOD INVOLVED. THE CDSC ON CLASS B SHARES DECLINES FROM 5% BEGINNING AT THE CLASS C SHARES CLASS C SHARES TIME OF PURCHASE TO 0% AT THE BEGINNING Inception (11/3/97) 14.68% Inception (11/3/97) 15.35% OF THE SEVENTH YEAR. THE CDSC ON CLASS C 5 Years 2.13 5 Years 0.62 SHARES IS 1% FOR THE FIRST YEAR AFTER 1 Year 21.50 1 Year 23.51 PURCHASE. CLASS R SHARES DO NOT HAVE A FRONT-END SALES CHARGE; RETURNS SHOWN CLASS R SHARES CLASS R SHARES ARE AT NET ASSET VALUE AND DO NOT Inception 15.27% Inception 15.95% REFLECT A 0.75% CDSC THAT MAY BE IMPOSED 5 Years 2.64 5 Years 1.11 ON A TOTAL REDEMPTION OF RETIREMENT PLAN 1 Year 23.08 1 Year 25.10 ASSETS WITHIN THE FIRST YEAR. INVESTOR CLASS SHARES DO NOT HAVE A FRONT-END INVESTOR CLASS SHARES INVESTOR CLASS SHARES SALES CHARGE OR A CDSC; THEREFORE, Inception 15.47% Inception 16.15% PERFORMANCE IS AT NET ASSET VALUE. 5 Years 2.83 5 Years 1.29 1 Year 23.43 1 Year 25.50 THE PERFORMANCE OF THE FUND'S SHARE CLASSES WILL DIFFER DUE TO DIFFERENT ========================================== ========================================== SALES CHARGE STRUCTURES AND CLASS EXPENSES. CLASS R SHARES' INCEPTION DATE IS JUNE OF HISTORICAL INVESTOR CLASS SHARE 3, 2002. RETURNS SINCE THAT DATE ARE PERFORMANCE AND RESTATED CLASS A SHARE A REDEMPTION FEE OF 2% WILL BE HISTORICAL RETURNS. ALL OTHER RETURNS PERFORMANCE (FOR PERIODS PRIOR TO THE IMPOSED ON CERTAIN REDEMPTIONS OR ARE BLENDED RETURNS OF HISTORICAL CLASS INCEPTION DATE OF INVESTOR CLASS SHARES) EXCHANGES OUT OF THE FUND WITHIN 30 DAYS R SHARE PERFORMANCE AND RESTATED CLASS A AT NET ASSET VALUE AND REFLECT THE OF PURCHASE. EXCEPTIONS TO THE SHARE PERFORMANCE (FOR PERIODS PRIOR TO HIGHER RULE 12b-1 FEES APPLICABLE TO REDEMPTION FEE ARE LISTED IN THE FUND'S THE INCEPTION DATE OF CLASS R SHARES) AT CLASS A SHARES. CLASS A SHARES' PROSPECTUS. NET ASSET VALUE, ADJUSTED TO REFLECT THE INCEPTION DATE IS NOVEMBER 3, 1997. HIGHER RULE 12b-1 FEES APPLICABLE TO CLASS R SHARES. CLASS A SHARES' THE PERFORMANCE DATA QUOTED REPRESENT INCEPTION DATE IS NOVEMBER 3, 1997. PAST PERFORMANCE AND CANNOT GUARANTEE COMPARABLE FUTURE RESULTS; CURRENT INVESTOR CLASS SHARES' INCEPTION DATE PERFORMANCE MAY BE LOWER OR HIGHER. IS SEPTEMBER 30, 2003. RETURNS SINCE PLEASE VISIT AIMINVESTMENTS.COM FOR THE THAT DATE ARE HISTORICAL RETURNS. ALL MOST RECENT MONTH-END PERFORMANCE. OTHER RETURNS ARE BLENDED RETURNS PERFORMANCE FIGURES REFLECT REINVESTED DISTRIBUTIONS, CHANGES
5 FINANCIALS SCHEDULE OF INVESTMENTS April 30, 2005 (Unaudited)
MARKET SHARES VALUE ------------------------------------------------------------------------- FOREIGN STOCKS-92.81% AUSTRIA-1.28% Bank Austria Creditanstalt (Diversified Banks)(a) 54,600 $ 5,041,407 ------------------------------------------------------------------------- Erste Bank der oesterreichischen Sparkassen A.G. (Diversified Banks)(a) 132,960 6,450,545 ========================================================================= 11,491,952 ========================================================================= BELGIUM-4.05% Colruyt N.V. (Food Retail)(a) 68,300 10,313,953 ------------------------------------------------------------------------- KBC Groupe S.A. (Diversified Banks)(a)(b) 146,855 11,618,797 ------------------------------------------------------------------------- Mobistar S.A. (Wireless Telecommunication Services)(a)(c) 167,834 14,300,000 ========================================================================= 36,232,750 ========================================================================= FRANCE-13.21% BNP Paribas S.A. (Diversified Banks)(a) 158,247 10,442,617 ------------------------------------------------------------------------- Eiffage S.A. (Construction & Engineering) (Acquired 03/03/04-11/02/04; Cost $7,597,104)(a)(d) 104,500 12,249,529 ------------------------------------------------------------------------- Elior (Restaurants)(a)(b) 609,300 7,626,683 ------------------------------------------------------------------------- Euler Hermes S.A. (Property & Casualty Insurance)(a) 63,700 5,073,585 ------------------------------------------------------------------------- Imerys S.A. (Construction Materials)(a)(b) 96,176 6,870,901 ------------------------------------------------------------------------- JC Decaux S.A. (Advertising)(a)(c) 190,200 5,027,201 ------------------------------------------------------------------------- Neopost S.A. (Office Electronics)(a) 104,800 8,783,770 ------------------------------------------------------------------------- Pernod Ricard (Distillers & Vintners)(a) 45,978 6,968,404 ------------------------------------------------------------------------- Renault S.A. (Automobile Manufacturers)(a) 53,290 4,466,500 ------------------------------------------------------------------------- Sanofi-Aventis (Pharmaceuticals)(a) 96,700 8,563,057 ------------------------------------------------------------------------- Societe Generale (Diversified Banks)(a) 67,790 6,758,065 ------------------------------------------------------------------------- Technip (Oil & Gas Equipment & Services)(a)(b) 38,450 6,530,268 ------------------------------------------------------------------------- TOTAL S.A. (Integrated Oil & Gas)(a) 63,473 14,114,468 ------------------------------------------------------------------------- Vinci S.A. (Construction & Engineering)(a)(b) 98,850 14,856,178 ========================================================================= 118,331,226 ========================================================================= GERMANY-7.12% Adidas-Salomon A.G. (Apparel, Accessories & Luxury Goods)(a)(b) 32,400 5,033,056 ------------------------------------------------------------------------- Celesio A.G. (Health Care Distributors)(a)(b)(c) 89,200 7,075,391 ------------------------------------------------------------------------- Continental A.G. (Tires & Rubber)(a)(b) 157,625 11,618,987 ------------------------------------------------------------------------- Deutsche Boerse A.G. (Specialized Finance)(a) 92,500 6,990,319 ------------------------------------------------------------------------- MAN A.G. (Industrial Machinery)(a) 105,100 4,423,603 ------------------------------------------------------------------------- Merck KGaA (Pharmaceuticals)(a)(b) 94,700 7,234,456 ------------------------------------------------------------------------- Puma A.G. Rudolf Dassler Sport (Footwear) (Acquired 01/30/02-10/03/02; Cost $3,468,340)(a)(b)(d) 92,939 21,419,365 ========================================================================= 63,795,177 =========================================================================
MARKET SHARES VALUE ------------------------------------------------------------------------- GREECE-5.72% EFG Eurobank Ergasias (Diversified Banks)(a) 298,400 $ 9,031,562 ------------------------------------------------------------------------- Germanos S.A. (Computer & Electronics Retail)(a) 289,900 9,131,197 ------------------------------------------------------------------------- OPAP S.A. (Casinos & Gaming) (Acquired 07/14/03-11/03/04; Cost $6,491,747)(a)(d) 476,600 12,492,392 ------------------------------------------------------------------------- Piraeus Bank S.A. (Diversified Banks)(a) 378,700 6,421,880 ------------------------------------------------------------------------- Public Power Corp. (Electric Utilities)(a)(c) 151,980 4,062,497 ------------------------------------------------------------------------- Titan Cement Co. S.A. (Construction Materials)(a) 317,300 10,072,769 ========================================================================= 51,212,297 ========================================================================= HUNGARY-3.07% MOL Magyar Olaj-es Gazipari Rt. (Integrated Oil & Gas)(a) 90,500 7,437,380 ------------------------------------------------------------------------- OTP Bank Rt. (Diversified Banks)(a)(c) 654,600 20,099,836 ========================================================================= 27,537,216 ========================================================================= IRELAND-5.62% Anglo Irish Bank Corp. PLC (Diversified Banks)(a) 1,828,944 21,164,647 ------------------------------------------------------------------------- CRH PLC (Construction Materials)(a) 263,350 6,559,240 ------------------------------------------------------------------------- DCC PLC (Industrial Conglomerates) 448,600 9,986,572 ------------------------------------------------------------------------- IAWS Group PLC (Packaged Foods & Meats)(a) 373,500 5,367,730 ------------------------------------------------------------------------- Independent News & Media PLC (Publishing)(a) 2,289,800 7,251,214 ========================================================================= 50,329,403 ========================================================================= ITALY-6.31% Banca Intesa S.p.A. (Diversified Banks)(a)(b) 1,315,100 6,279,698 ------------------------------------------------------------------------- Banco Popolare di Verona e Novara Scrl (Diversified Banks)(a) 254,700 4,690,142 ------------------------------------------------------------------------- Davide Campari-Milano S.p.A. (Distillers & Vintners)(a) 126,400 8,965,353 ------------------------------------------------------------------------- Eni S.p.A. (Integrated Oil & Gas)(a) 725,414 18,240,869 ------------------------------------------------------------------------- Lottomatica S.p.A. (Casinos & Gaming)(a)(b) 258,000 8,782,454 ------------------------------------------------------------------------- Mediaset S.p.A. (Broadcasting & Cable TV)(a) 732,200 9,508,321 ========================================================================= 56,466,837 ========================================================================= LUXEMBOURG-1.06% SBS Broadcasting S.A. (Broadcasting & Cable TV)(c) 206,300 9,510,430 ========================================================================= NETHERLANDS-3.99% Aalberts Industries N.V. (Industrial Conglomerates)(a) 252,436 11,999,672 ------------------------------------------------------------------------- Koninklijke BAM Groep N.V. (Construction & Engineering)(a) 81,000 4,479,230 ------------------------------------------------------------------------- Randstad Holding N.V. (Employment Services)(a)(c) 115,325 4,683,385 -------------------------------------------------------------------------
F-1
MARKET SHARES VALUE ------------------------------------------------------------------------- NETHERLANDS-(CONTINUED) Royal Numico N.V. (Packaged Foods & Meats)(a)(b)(c) 120,627 $ 4,990,551 ------------------------------------------------------------------------- TNT N.V. (Air Freight & Logistics)(a) 354,460 9,622,932 ========================================================================= 35,775,770 ========================================================================= NORWAY-3.09% Aktiv Kapital A.S.A. (Specialized Finance)(a)(b) 357,300 5,328,300 ------------------------------------------------------------------------- Schibsted A.S.A. (Publishing)(a) 296,200 7,053,038 ------------------------------------------------------------------------- Smedvig A.S.A.-Class A (Oil & Gas Drilling)(a)(c) 428,178 7,491,375 ------------------------------------------------------------------------- Telenor A.S.A. (Integrated Telecommunication Services)(a)(c) 228,028 1,902,746 ------------------------------------------------------------------------- TGS Nopec Geophysical Co. A.S.A. (Oil & Gas Equipment & Services)(a)(c) 219,700 5,936,908 ========================================================================= 27,712,367 ========================================================================= RUSSIA-0.77% AO VimpelCom-ADR (Wireless Telecommunication Services)(c) 210,400 6,884,288 ========================================================================= SPAIN-5.16% Corporacion Mapfre S.A. (Multi-Line Insurance)(a) 721,763 10,733,047 ------------------------------------------------------------------------- Enagas (Gas Utilities) (Acquired 06/25/02-11/19/04; Cost $5,303,178)(a)(d) 587,760 9,278,709 ------------------------------------------------------------------------- Gestevision Telecinco S.A. (Broadcasting & Cable TV) (Acquired 06/23/04; Cost $3,074,314)(a)(b)(c)(d) 250,300 5,728,218 ------------------------------------------------------------------------- Grupo Ferrovial, S.A. (Construction & Engineering)(a) 213,748 12,171,160 ------------------------------------------------------------------------- Industria de Diseno Textil, S.A. (Apparel Retail)(a) 280,650 8,328,138 ========================================================================= 46,239,272 ========================================================================= SWEDEN-2.51% Assa Abloy A.B.-Class B (Building Products)(a)(b) 192,300 2,488,932 ------------------------------------------------------------------------- Gambro A.B.-Class A (Health Care Services)(a)(b) 628,800 8,495,920 ------------------------------------------------------------------------- Volvo A.B.-Class B (Construction & Farm Machinery & Heavy Trucks)(a) 283,040 11,459,599 ========================================================================= 22,444,451 ========================================================================= SWITZERLAND-5.81% Compagnie Financiere Richemont A.G.-Class A (Apparel, Accessories & Luxury Goods)(a)(e) 210,000 6,272,774 ------------------------------------------------------------------------- Rieter Holding A.G. (Auto Parts & Equipment)(a)(b) 15,700 4,406,993 ------------------------------------------------------------------------- Roche Holding A.G. (Pharmaceuticals)(a) 108,450 13,121,550 ------------------------------------------------------------------------- Swatch Group A.G. (The)-Class B (Apparel, Accessories & Luxury Goods)(a) 33,620 4,320,054 ------------------------------------------------------------------------- Syngenta A.G. (Fertilizers & Agricultural Chemicals)(a) 136,930 14,186,609 ------------------------------------------------------------------------- UBS A.G. (Diversified Capital Markets)(a)(b) 121,140 9,687,096 ========================================================================= 51,995,076 =========================================================================
MARKET SHARES VALUE ------------------------------------------------------------------------- TURKEY-0.92% Tupras-Turkiye Petrol Rafinerileri A.S. (Oil & Gas Refining, Marketing & Transportation)(a)(c) 656,918 $ 8,269,423 ========================================================================= UNITED KINGDOM-23.12% Aviva PLC (Multi-line Insurance)(a) 574,000 6,484,248 ------------------------------------------------------------------------- Balfour Beatty PLC (Construction & Engineering)(a) 1,766,700 10,311,539 ------------------------------------------------------------------------- Bunzl PLC (Trading Companies & Distributors)(a) 1,141,700 11,112,830 ------------------------------------------------------------------------- Capita Group PLC (Employment Services)(a) 629,100 4,537,417 ------------------------------------------------------------------------- Daily Mail and General Trust-Class A (Publishing)(a) 309,800 3,954,349 ------------------------------------------------------------------------- Enterprise Inns PLC (Restaurants)(a) 1,258,580 17,550,205 ------------------------------------------------------------------------- Imperial Tobacco Group PLC (Tobacco)(a) 571,580 16,375,169 ------------------------------------------------------------------------- Inchcape PLC (Distributors)(a) 188,530 6,391,738 ------------------------------------------------------------------------- International Power PLC (Multi-Utilities & Unregulated Power)(a)(c) 1,310,000 4,567,823 ------------------------------------------------------------------------- Intertek Group PLC (Diversified Commercial Services)(a) 548,000 7,955,504 ------------------------------------------------------------------------- Johnston Press PLC (Publishing)(a) 644,190 6,100,776 ------------------------------------------------------------------------- NETeller PLC (Specialized Finance)(a)(c) 485,300 4,576,673 ------------------------------------------------------------------------- Next PLC (Department Stores)(a) 241,120 6,827,217 ------------------------------------------------------------------------- Provident Financial PLC (Consumer Finance)(a) 356,500 4,548,932 ------------------------------------------------------------------------- Punch Taverns PLC (Restaurants)(a) 678,000 8,230,009 ------------------------------------------------------------------------- Reckitt Benckiser PLC (Household Products)(a) 343,045 11,140,624 ------------------------------------------------------------------------- Royal Bank of Scotland Group PLC (Diversified Banks)(a) 169,543 5,117,994 ------------------------------------------------------------------------- Shire Pharmaceuticals Group PLC (Pharmaceuticals)(a) 1,190,694 12,460,660 ------------------------------------------------------------------------- Sportingbet PLC (Casinos & Gaming)(a)(c) 1,698,100 9,304,764 ------------------------------------------------------------------------- T&F Informa PLC (Publishing)(a) 1,224,190 9,002,015 ------------------------------------------------------------------------- Tesco PLC (Food Retail)(a) 1,910,235 11,277,725 ------------------------------------------------------------------------- Ultra Electronics Holdings PLC (Aerospace & Defense)(a) 547,110 7,815,565 ------------------------------------------------------------------------- Vodafone Group PLC (Wireless Telecommunication Services)(a) 4,719,746 12,335,567 ------------------------------------------------------------------------- William Hill PLC (Casinos & Gaming)(a) 433,530 4,480,034 ------------------------------------------------------------------------- WS Atkins PLC (Diversified Commercial Services)(a) 396,200 4,584,023 ========================================================================= 207,043,400 ========================================================================= Total Foreign Stocks (Cost $562,794,079) 831,271,335 ========================================================================= MONEY MARKET FUNDS-5.69% Liquid Assets Portfolio-Institutional Class(f) 25,477,464 25,477,464 ------------------------------------------------------------------------- STIC Prime Portfolio-Institutional Class(f) 25,477,464 25,477,464 ========================================================================= Total Money Market Funds (Cost $50,954,928) 50,954,928 ========================================================================= TOTAL INVESTMENTS-98.50% (excluding investments purchased with cash collateral from securities loaned) (Cost $613,749,007) 882,226,263 =========================================================================
F-2
MARKET SHARES VALUE ------------------------------------------------------------------------- INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-12.54% STIC Prime Portfolio-Institutional Class(f)(g) 112,289,366 $112,289,366 ========================================================================= Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $112,289,366) 112,289,366 ========================================================================= TOTAL INVESTMENTS-111.04% (Cost $726,038,373) 994,515,629 ========================================================================= OTHER ASSETS LESS LIABILITIES-(11.04%) (98,911,541) ========================================================================= NET ASSETS-100.00% $895,604,088 _________________________________________________________________________ =========================================================================
Investment Abbreviations: ADR - American Depositary Receipt
Notes to Schedule of Investments: (a) In accordance with the procedures established by the Board of Trustees, the foreign security is fair valued using adjusted closing market prices. The aggregate market value of these securities at April 30, 2005 was $804,890,045, which represented 80.93% of the Fund's Total Investments. See Note 1A. (b) All or a portion of this security has been pledged as collateral for securities lending transactions at April 30, 2005. (c) Non-income producing security. (d) Security not registered under the Securities Act of 1933, as amended (e.g., the security was purchased in a Rule 144A transaction or a Regulation D transaction). The security may be resold only pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The Fund has no rights to demand registration of these securities. The aggregate market value of these securities at April 30, 2005 was $61,168,213, which represented 6.83% of the Fund's Net Assets. Unless otherwise indicated, these securities are not considered to be illiquid. (e) Consists of more than one class of securities traded together as a unit. In addition to the security listed, each unit includes warrants to purchase common or preferred shares of the issuer. (f) The money market fund and the Fund are affiliated by having the same investment advisor. See Note 3. (g) The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 7. See accompanying notes which are an integral part of the financial statements. F-3 STATEMENT OF ASSETS AND LIABILITIES April 30, 2005 (Unaudited) ASSETS: Investments, at market value (cost $562,794,079)* $ 831,271,335 ------------------------------------------------------------ Investments in affiliated money market funds (cost $163,244,294) 163,244,294 ============================================================ Total investments (cost $726,038,373) 994,515,629 ============================================================ Foreign currencies, at market value (cost $9,310,840) 9,237,090 ------------------------------------------------------------ Receivables for: Investments sold 6,326,175 ------------------------------------------------------------ Fund shares sold 1,444,669 ------------------------------------------------------------ Dividends and interest 2,683,527 ------------------------------------------------------------ Investment for trustee deferred compensation and retirement plans 93,272 ------------------------------------------------------------ Other assets 42,339 ============================================================ Total assets 1,014,342,701 ____________________________________________________________ ============================================================ LIABILITIES: Payables for: Investments purchased 3,572,743 ------------------------------------------------------------ Fund shares reacquired 1,856,053 ------------------------------------------------------------ Trustee deferred compensation and retirement plans 129,482 ------------------------------------------------------------ Collateral upon return of securities loaned 112,289,366 ------------------------------------------------------------ Accrued distribution fees 358,030 ------------------------------------------------------------ Accrued trustees' and officer's fees and benefits 1,845 ------------------------------------------------------------ Accrued transfer agent fees 370,477 ------------------------------------------------------------ Accrued operating expenses 160,617 ============================================================ Total liabilities 118,738,613 ============================================================ Net assets applicable to shares outstanding $ 895,604,088 ____________________________________________________________ ============================================================ NET ASSETS CONSIST OF: Shares of beneficial interest $ 695,449,702 ------------------------------------------------------------ Undistributed net investment income 134,889 ------------------------------------------------------------ Undistributed net realized gain (loss) from investment securities and foreign currencies (68,346,174) ------------------------------------------------------------ Unrealized appreciation of investment securities and foreign currencies 268,365,671 ============================================================ $ 895,604,088 ____________________________________________________________ ============================================================ NET ASSETS: Class A $ 479,280,741 ____________________________________________________________ ============================================================ Class B $ 145,969,957 ____________________________________________________________ ============================================================ Class C $ 60,824,177 ____________________________________________________________ ============================================================ Class R $ 3,754,658 ____________________________________________________________ ============================================================ Investor Class $ 205,774,555 ____________________________________________________________ ============================================================ SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 16,385,563 ____________________________________________________________ ============================================================ Class B 5,238,742 ____________________________________________________________ ============================================================ Class C 2,181,777 ____________________________________________________________ ============================================================ Class R 128,824 ____________________________________________________________ ============================================================ Investor Class 7,042,614 ____________________________________________________________ ============================================================ Class A: Net asset value per share $ 29.25 ------------------------------------------------------------ Offering price per share: (Net asset value of $29.25 divided by 94.50%) $ 30.95 ____________________________________________________________ ============================================================ Class B: Net asset value and offering price per share $ 27.86 ____________________________________________________________ ============================================================ Class C: Net asset value and offering price per share $ 27.88 ____________________________________________________________ ============================================================ Class R: Net asset value and offering price per share $ 29.15 ____________________________________________________________ ============================================================ Investor Class: Net asset value and offering price per share $ 29.22 ____________________________________________________________ ============================================================
* At April 30, 2005, securities with an aggregate market value of $107,567,417 were on loan to brokers. See accompanying notes which are an integral part of the financial statements. F-4 STATEMENT OF OPERATIONS For the six months ended April 30, 2005 (Unaudited) INVESTMENT INCOME: Dividends (net of foreign withholding tax of $627,688) $ 7,700,419 ------------------------------------------------------------------------- Dividends from affiliated money market funds (including securities lending income of $84,719 after rebates of $212,371) 718,559 ------------------------------------------------------------------------- Interest 8,025 ========================================================================= Total investment income 8,427,003 ========================================================================= EXPENSES: Advisory fees 4,116,244 ------------------------------------------------------------------------- Administrative services fees 121,860 ------------------------------------------------------------------------- Custodian fees 496,203 ------------------------------------------------------------------------- Distribution fees: Class A 829,331 ------------------------------------------------------------------------- Class B 733,454 ------------------------------------------------------------------------- Class C 283,487 ------------------------------------------------------------------------- Class R 7,531 ------------------------------------------------------------------------- Investor Class 242,665 ------------------------------------------------------------------------- Transfer agent fees 1,200,885 ------------------------------------------------------------------------- Trustees' and officer's fees and benefits 20,731 ------------------------------------------------------------------------- Other 233,066 ========================================================================= Total expenses 8,285,457 ========================================================================= Less: Fees waived, expenses reimbursed and expense offset arrangement (97,947) ========================================================================= Net expenses 8,187,510 ========================================================================= Net investment income 239,493 ========================================================================= REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES, AND FOREIGN CURRENCIES: Net realized gain (loss) from: Investment securities 84,255,541 ------------------------------------------------------------------------- Foreign currencies (155,103) ========================================================================= 84,100,438 ========================================================================= Change in net unrealized appreciation (depreciation) of: Investment securities 5,961,974 ------------------------------------------------------------------------- Foreign currencies (243,169) ========================================================================= 5,718,805 ========================================================================= Net gain from investment securities and foreign currencies 89,819,243 ========================================================================= Net increase in net assets resulting from operations $90,058,736 _________________________________________________________________________ =========================================================================
See accompanying notes which are an integral part of the financial statements. F-5 STATEMENT OF CHANGES IN NET ASSETS For the six months ended April 30, 2005 and the year ended October 31, 2004 (Unaudited)
APRIL 30, OCTOBER 31, 2005 2004 ------------------------------------------------------------------------------------------ OPERATIONS: Net investment income $ 239,493 $ 593,975 ------------------------------------------------------------------------------------------ Net realized gain from investment securities and foreign currencies 84,100,438 67,086,371 ------------------------------------------------------------------------------------------ Change in net unrealized appreciation of investment securities and foreign currencies 5,718,805 113,461,421 ========================================================================================== Net increase in net assets resulting from operations 90,058,736 181,141,767 ========================================================================================== Distributions to shareholders from net investment income: Class A (528,385) (106,111) ------------------------------------------------------------------------------------------ Class R (715) -- ------------------------------------------------------------------------------------------ Investor Class (486,653) (212,530) ========================================================================================== Decrease in net assets resulting from distributions (1,015,753) (318,641) ========================================================================================== Share transactions-net: Class A 24,153,995 12,387,787 ------------------------------------------------------------------------------------------ Class B 235,363 (8,714,512) ------------------------------------------------------------------------------------------ Class C 10,422,248 4,006,947 ------------------------------------------------------------------------------------------ Class R 1,401,334 1,093,306 ------------------------------------------------------------------------------------------ Investor Class (265,688) 139,066,257 ========================================================================================== Net increase in net assets resulting from share transactions 35,947,252 147,839,785 ========================================================================================== Net increase in net assets 124,990,235 328,662,911 ========================================================================================== NET ASSETS: Beginning of period 770,613,853 441,950,942 ========================================================================================== End of period (including undistributed net investment income of $134,889 and $911,149, respectively). $895,604,088 $770,613,853 __________________________________________________________________________________________ ==========================================================================================
NOTES TO FINANCIAL STATEMENTS April 30, 2005 (Unaudited) NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM European Growth Fund (the "Fund") is a series portfolio of AIM International Mutual Funds (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 six separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The Fund currently offers multiple classes of shares. 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. Companies are listed in the Schedule of Investments based on the country in which they are organized. Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust (including the Trust's investment manager) 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 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. However, the Fund has not had prior claims or losses pursuant to these contracts. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. F-6 A. SECURITY VALUATIONS -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued on the basis of prices furnished by independent pricing services, which may be considered fair valued, or market makers. Each security reported on the NASDAQ National Market System 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 will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end registered investment companies 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 closed-end registered investment companies that trade on an exchange are valued at the last sales price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) 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 having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. 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. 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. 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 the close of the respective markets. Events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. 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 market value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current market 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, ADRs and domestic and foreign index futures. 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. 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. 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. 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 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 Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. F-7 E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. F. REDEMPTION FEES -- The Fund has instituted a 2% redemption fee on certain share classes 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, including exchanges of shares held less than 30 days. The redemption fee is accounted for as an addition to shares of beneficial interest by the Fund and is allocated among the share classes based on the relative net assets of each class. G. 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. H. 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. NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement, the Fund paid an advisory fee based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE --------------------------------------------------------------------- First $500 million 0.95% --------------------------------------------------------------------- Over $500 million 0.90% _____________________________________________________________________ =====================================================================
Effective January 1, 2005 through December 31, 2009, AIM has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual rate of:
AVERAGE NET ASSETS RATE ---------------------------------------------------------------------- First $250 million 0.935% ---------------------------------------------------------------------- Next $250 million 0.91% ---------------------------------------------------------------------- Next $500 million 0.885% ---------------------------------------------------------------------- Next $1.5 billion 0.86% ---------------------------------------------------------------------- Next $2.5 billion 0.835% ---------------------------------------------------------------------- Next $2.5 billion 0.81% ---------------------------------------------------------------------- Next $2.5 billion 0.785% ---------------------------------------------------------------------- Over $10 billion 0.76% ______________________________________________________________________ ======================================================================
AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds on investments by the Fund in such affiliated money market funds (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the fund). AIM is also voluntarily waiving a portion of the advisory fee payable by the Fund equal to the difference between the income earned from investing in the affiliated money market fund and the hypothetical income earned from investing in an appropriate comparative benchmark. Voluntary fee waivers or reimbursements may be modified or discontinued at any time upon consultation with the Board of Trustees without further notice to investors. For the six months ended April 30, 2005, AIM waived fees of $73,483. For the six months ended April 30, 2005, at the request of the Trustees of the Trust, AMVESCAP PLC ("AMVESCAP") agreed to reimburse $19,898 of 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. F-8 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. Pursuant to such agreement, for the six months ended April 30, 2005, AIM was paid $121,860. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer agency and shareholder services to the Fund and reimburse AISI for certain expenses incurred by AISI in the course of providing such services. AISI may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. For the six months ended April 30, 2005, the Fund paid AISI $1,200,885. The Trust has entered into master distribution agreements with A I M Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B, Class C, Class R and Investor 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 Class A, Class B, Class C and Class R Plans, pays ADI compensation at the annual rate of 0.35% 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. The Fund, pursuant to the Investor Class Plan, pays ADI for its allocated share of expenses incurred pursuant to the Investor Class Plan for the period, up to a maximum annual rate of 0.25% of the average daily net assets of the Investor Class shares. Of these amounts, up to 0.25% of the average daily net assets of the Class A, Class B, Class C, Class R or Investor Class 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. NASD Rules 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. Pursuant to the Plans, for the six months ended April 30, 2005, the Class A, Class B, Class C, Class R and Investor Class shares paid $829,331, $733,454, $283,487, $7,531 and $242,665, respectively. Front-end sales commissions and contingent deferred sales charges ("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 six months ended April 30, 2005, ADI advised the Fund it retained $89,721 in front-end sales commissions from the sale of Class A shares and $770, $10,038, $3,077 and $0 from Class A, Class B, 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 AIM, AISI and/or ADI. NOTE 3--INVESTMENTS IN AFFILIATES The Fund is permitted, pursuant to an exemptive order from the Securities and Exchange Commission ("SEC"), to invest daily available cash balances and cash collateral from securities lending transactions in affiliated money market funds. The Fund and the money market funds below have the same investment advisor and therefore, are considered to be affiliated. The tables below show the transactions in and earnings from investments in affiliated money market funds for the six months ended April 30, 2005. INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
UNREALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND REALIZED FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME GAIN (LOSS) ------------------------------------------------------------------------------------------------------------------------------------ Liquid Assets Portfolio- Institutional Class $26,427,712 $ 54,460,569 $ (55,410,817) $ -- $ 25,477,464 $313,571 $ -- ------------------------------------------------------------------------------------------------------------------------------------ STIC Prime Portfolio- Institutional Class 26,427,712 54,460,569 (55,410,817) -- 25,477,464 320,269 -- ==================================================================================================================================== Subtotal $52,855,424 $108,921,138 $(110,821,634) $ -- $ 50,954,928 $633,840 $ -- ====================================================================================================================================
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
UNREALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND REALIZED FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME* GAIN (LOSS) ------------------------------------------------------------------------------------------------------------------------------------ STIC Prime Portfolio- Institutional Class $11,605,133 $230,846,844 $(130,162,611) $ -- $112,289,366 $ 84,719 $ -- ==================================================================================================================================== Total $64,460,557 $339,767,982 $(240,984,245) $ -- $163,244,294 $718,559 $ -- ____________________________________________________________________________________________________________________________________ ====================================================================================================================================
* Net of rebates. NOTE 4--EXPENSE OFFSET ARRANGEMENT 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 six months ended April 30, 2005, the Fund received credits from this arrangement which resulted in the reduction of the Fund's total expenses of $4,566. F-9 NOTE 5--TRUSTEES' AND OFFICER'S FEES AND BENEFITS "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to each Trustee of the Fund who is not an "interested person" of the AIM Funds. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officer's 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, 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 Officer's 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. In addition to the above, "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to the Senior Officer of the AIM Funds. During the six months ended April 30, 2005, the Fund paid legal fees of $3,280 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 Pursuant to an exemptive order from the SEC, the Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. A loan will be secured by collateral if the Fund's aggregate borrowings from all sources exceeds 10% of the Fund's total assets. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. The Fund is a participant in an uncommitted unsecured revolving credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000, or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the credit facility can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the six months ended April 30, 2005, the Fund did not borrow or lend under the interfund lending facility or borrow under the uncommitted unsecured revolving credit facility. Additionally, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated at an amount equal to the Federal Funds rate plus 100 basis points. NOTE 7--PORTFOLIO SECURITIES LOANED 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. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds. 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. The Fund could also 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 a loss on the collateral invested. At April 30, 2005, securities with an aggregate value of $107,567,417 were on loan to brokers. The loans were secured by cash collateral of $112,289,366 received by the Fund and subsequently invested in an affiliated money market fund. For the six months ended April 30, 2005, the Fund received dividends on cash collateral of $84,719 for securities lending transactions, which are net of rebates. F-10 NOTE 8--TAX INFORMATION The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund's fiscal year-end. 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. Under these limitation rules, the Fund is limited as of October 31, 2004 to utilizing $67,322,664 of capital loss carryforward in the fiscal year ended October 31, 2005. The Fund had a capital loss carryforward as of October 31, 2004 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* ----------------------------------------------------------------------------- October 31, 2008 $ 54,381,587 ----------------------------------------------------------------------------- October 31, 2009 97,117,124 ============================================================================= Total capital loss carryforward $151,498,711 _____________________________________________________________________________ =============================================================================
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. To the extent that unrealized gain as of November 24, 2003 the date of the reorganization of INVESCO European Fund into the Fund are realized on securities held at such date, the capital loss carryforward may be further limited for up to five years from the date of the reorganization. NOTE 9--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities and money market funds) purchased and sold by the Fund during the six months ended April 30, 2005 was $239,544,844 and $201,026,427, respectively. For interim reporting periods, the cost of investments for tax purposes includes reversals of certain tax items, such as, wash sales that have occurred since the prior fiscal year-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS ------------------------------------------------------------------------------ Aggregate unrealized appreciation of investment securities $274,614,943 ------------------------------------------------------------------------------ Aggregate unrealized (depreciation) of investment securities (6,326,538) ============================================================================== Net unrealized appreciation of investment securities $268,288,405 ______________________________________________________________________________ ============================================================================== Cost of investments for tax purposes is $726,227,224.
F-11 NOTE 10--SHARE INFORMATION The Fund currently offers five different classes of shares: Class A shares, Class B shares, Class C shares Class R shares and Investor Class shares. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with CDSC. Class R shares and Investor Class shares are sold at net asset value. Under certain circumstances, Class A shares and Class R shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN SHARES OUTSTANDING(a) ---------------------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED 2005 OCTOBER 31, 2004 -------------------------- -------------------------- SHARES AMOUNT SHARES AMOUNT ---------------------------------------------------------------------------------------------------------------------- Sold: Class A 2,698,719 $ 78,860,899 4,125,663 $ 97,941,773 ---------------------------------------------------------------------------------------------------------------------- Class B 628,165 17,591,153 860,401 19,605,645 ---------------------------------------------------------------------------------------------------------------------- Class C 615,133 17,173,897 748,539 17,048,651 ---------------------------------------------------------------------------------------------------------------------- Class R 60,099 1,775,677 74,842 1,721,074 ---------------------------------------------------------------------------------------------------------------------- Investor Class 617,226 18,092,785 780,496 18,487,554 ====================================================================================================================== Issued as reinvestment of dividends: Class A 15,790 454,285 4,447 91,218 ---------------------------------------------------------------------------------------------------------------------- Class R 24 704 -- -- ---------------------------------------------------------------------------------------------------------------------- Investor Class 16,214 465,660 9,940 203,374 ====================================================================================================================== Issued in connection with acquisitions:(b) Class A -- -- 22,379 452,046 ---------------------------------------------------------------------------------------------------------------------- Class B -- -- 5,121 99,255 ---------------------------------------------------------------------------------------------------------------------- Class C -- -- 53,300 1,033,743 ---------------------------------------------------------------------------------------------------------------------- Investor Class -- -- 7,999,868 161,401,679 ====================================================================================================================== Automatic conversion of Class B shares to Class A shares: Class A 157,336 4,665,008 283,516 6,765,403 ---------------------------------------------------------------------------------------------------------------------- Class B (164,958) (4,665,008) (296,150) (6,765,403) ====================================================================================================================== Reacquired:(c) Class A (2,026,519) (59,826,197) (3,960,360) (92,862,653) ---------------------------------------------------------------------------------------------------------------------- Class B (451,695) (12,690,782) (955,724) (21,654,009) ---------------------------------------------------------------------------------------------------------------------- Class C (238,709) (6,751,649) (633,985) (14,075,447) ---------------------------------------------------------------------------------------------------------------------- Class R (12,849) (375,047) (26,338) (627,768) ---------------------------------------------------------------------------------------------------------------------- Investor Class (641,291) (18,824,133) (1,747,995) (41,026,350) ====================================================================================================================== 1,272,685 $ 35,947,252 7,347,960 $147,839,785 ______________________________________________________________________________________________________________________ ======================================================================================================================
(a) There are three entities that are each record owners of more than 5% of the outstanding shares of the Fund and in the aggregate they own 23% of the outstanding shares of the Fund. AIM Distributors has an agreement with these entities to sell Fund shares. The Fund, AIM, and/or AIM affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, AIM and/or AIM affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these shareholders are also owned beneficially. (b) As of the opening of business on November 24, 2003, the Fund acquired all of the net assets of INVESCO European Fund pursuant to a plan of reorganization approved by the Trustees of the Fund on June 11, 2003 and INVESCO European Fund shareholders on October 28, 2003. The acquisition was accomplished by a tax-free exchange of 8,080,668 shares of the Fund for 18,162,024 shares of INVESCO European Fund outstanding as of the close of business on November 21, 2003. INVESCO European Fund's net assets at that date of $162,986,723, including $27,261,043 of unrealized appreciation, were combined with those of the Fund. The aggregate net assets of the Fund immediately before the acquisition were $448,879,513. (c) Amount is net of redemption fees of $6,295, $1,952, $756, $41 and $2,752 for Class A, Class B, Class C, Class R and Investor Class shares, respectively, for the six months ended April 30, 2005 and $4,825, $1,632, $518, $20 and $2,335 for Class A, Class B, Class C, Class R and Investor Class shares, respectively, for the year ended October 31, 2004. F-12 NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A --------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, -------------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 26.23 $ 20.02 $ 15.60 $ 16.52 $ 23.59 $ 16.42 --------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.03(a) 0.05(a) (0.01)(a) (0.07)(a) (0.06)(a) (0.21)(a) --------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 3.02 6.17 4.43 (0.85) (7.01) 7.38 =========================================================================================================================== Total from investment operations 3.05 6.22 4.42 (0.92) (7.07) 7.17 =========================================================================================================================== Less dividends from net investment income (0.03) (0.01) -- -- -- -- =========================================================================================================================== Redemption fees added to beneficial interest 0.00 0.00 -- -- -- -- =========================================================================================================================== Net asset value, end of period $ 29.25 $ 26.23 $ 20.02 $ 15.60 $ 16.52 $ 23.59 ___________________________________________________________________________________________________________________________ =========================================================================================================================== Total return(b) 11.64% 31.06% 28.33% (5.57)% (29.97)% 43.67% ___________________________________________________________________________________________________________________________ =========================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $479,281 $407,566 $301,659 $283,812 $157,651 $273,605 ___________________________________________________________________________________________________________________________ =========================================================================================================================== Ratio of expenses to average net assets 1.72%(c)(d) 1.87% 2.01%(d) 1.93% 1.83% 1.69% =========================================================================================================================== Ratio of net investment income (loss) to average net assets 0.18%(c) 0.19% (0.04)% (0.42)% (0.32)% (0.82)% ___________________________________________________________________________________________________________________________ =========================================================================================================================== Portfolio turnover rate(e) 24% 60% 81% 94% 99% 112% ___________________________________________________________________________________________________________________________ ===========================================================================================================================
(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. (c) Ratios are annualized and based on average daily net assets of $477,830,899. (d) After fee waivers and/or expense reimbursements. Ratio of expense to average net asset prior to fee waivers and/or expense reimbursements were 1.74% (annualized) and 2.02% for the six months ended April 30, 2005 and year ended October 31, 2003, respectively. (e) Not annualized for periods less than one year. F-13 NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
CLASS B -------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 -------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 25.03 $ 19.23 $ 15.08 $ 16.07 $ 23.11 $ 16.20 -------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.07)(a) (0.10)(a) (0.11)(a) (0.18)(a) (0.19)(a) (0.38)(a) -------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 2.90 5.90 4.26 (0.81) (6.85) 7.29 ========================================================================================================================== Total from investment operations 2.83 5.80 4.15 (0.99) (7.04) 6.91 ========================================================================================================================== Redemption fees added to beneficial interest 0.00 0.00 -- -- -- -- ========================================================================================================================== Net asset value, end of period $ 27.86 $ 25.03 $ 19.23 $ 15.08 $ 16.07 $ 23.11 __________________________________________________________________________________________________________________________ ========================================================================================================================== Total return(b) 11.31% 30.16% 27.52% (6.16)% (30.46)% 42.65% __________________________________________________________________________________________________________________________ ========================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $145,970 $130,863 $107,959 $97,436 $105,324 $169,614 __________________________________________________________________________________________________________________________ ========================================================================================================================== Ratio of expenses to average net assets 2.37%(c)(d) 2.52% 2.66%(d) 2.58% 2.50% 2.39% ========================================================================================================================== Ratio of net investment income (loss) to average net assets (0.47)%(c) (0.46)% (0.69)% (1.07)% (0.98)% (1.52)% __________________________________________________________________________________________________________________________ ========================================================================================================================== Portfolio turnover rate(e) 24% 60% 81% 94% 99% 112% __________________________________________________________________________________________________________________________ ==========================================================================================================================
(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. (c) Ratios are annualized and based on average daily net assets of $147,906,425. (d) After fee waivers and/or expense reimbursements. Ratio of expense to average net asset prior to fee waivers and/or expense reimbursements were 2.39% (annualized) and 2.67% for the six months ended April 30, 2005 and year ended October 31, 2003, respectively. (e) Not annualized for periods less than one year.
CLASS C ---------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, --------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 ---------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 25.05 $ 19.24 $ 15.09 $ 16.09 $ 23.13 $ 16.21 ---------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.07)(a) (0.10)(a) (0.11)(a) (0.18)(a) (0.19)(a) (0.38)(a) ---------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 2.90 5.91 4.26 (0.82) (6.85) 7.30 ====================================================================================================================== Total from investment operations 2.83 5.81 4.15 (1.00) (7.04) 6.92 ====================================================================================================================== Redemption fees added to beneficial interest 0.00 0.00 -- -- -- -- ====================================================================================================================== Net asset value, end of period $ 27.88 $ 25.05 $ 19.24 $ 15.09 $ 16.09 $ 23.13 ______________________________________________________________________________________________________________________ ====================================================================================================================== Total return(b) 11.30% 30.20% 27.50% (6.22)% (30.44)% 42.69% ______________________________________________________________________________________________________________________ ====================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $60,824 $45,222 $31,509 $27,323 $32,604 $54,164 ______________________________________________________________________________________________________________________ ====================================================================================================================== Ratio of expenses to average net assets 2.37%(c)(d) 2.52% 2.66%(d) 2.58% 2.50% 2.39% ====================================================================================================================== Ratio of net investment income (loss) to average net assets (0.47)%(c) (0.46)% (0.69)% (1.07)% (0.98)% (1.52)% ______________________________________________________________________________________________________________________ ====================================================================================================================== Portfolio turnover rate(e) 24% 60% 81% 94% 99% 112% ______________________________________________________________________________________________________________________ ======================================================================================================================
(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. (c) Ratios are annualized and based on average daily net assets of $57,167,230. (d) After fee waivers and/or expense reimbursements. Ratio of expense to average net asset prior to fee waivers and/or expense reimbursements were 2.39% (annualized) and 2.67% for the six months ended April 30, 2005 and year ended October 31, 2003, respectively. (e) Not annualized for periods less than one year. F-14 NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
CLASS R ---------------------------------------------------------- JUNE 3, 2002 SIX MONTHS YEAR ENDED (DATE SALES ENDED OCTOBER 31, COMMENCED) TO APRIL 30, ------------------- OCTOBER 31, 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $26.13 $19.98 $15.59 $ 18.35 ------------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income (loss) 0.00(a) 0.01(a) (0.03)(a) (0.04)(a) ------------------------------------------------------------------------------------------------------------------------ Net gains (losses) on securities (both realized and unrealized) 3.03 6.14 4.42 (2.72) ======================================================================================================================== Total from investment operations 3.03 6.15 4.39 (2.76) ======================================================================================================================== Less dividends from net investment income (0.01) -- -- -- ======================================================================================================================== Redemption fees added to beneficial interest 0.00 0.00 -- -- ======================================================================================================================== Net asset value, end of period $29.15 $26.13 $19.98 $ 15.59 ________________________________________________________________________________________________________________________ ======================================================================================================================== Total return(b) 11.59% 30.78% 28.16% (15.04)% ________________________________________________________________________________________________________________________ ======================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $3,755 $2,131 $ 660 $ 15 ________________________________________________________________________________________________________________________ ======================================================================================================================== Ratio of expenses to average net assets 1.87%(c)(d) 2.02% 2.16%(d) 2.08%(e) ======================================================================================================================== Ratio of net investment income (loss) to average net assets 0.03%(c) 0.04% (0.19)% (0.57)%(e) ________________________________________________________________________________________________________________________ ======================================================================================================================== Portfolio turnover rate(f) 24% 60% 81% 94% ________________________________________________________________________________________________________________________ ========================================================================================================================
(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. Not annualized for periods less than one year. (c) Ratios are annualized and based on average daily net assets of $3,037,634. (d) After fee waivers and/or expense reimbursements. Ratio of expense to average net asset prior to fee waivers and/or expense reimbursements were 1.89% (annualized) and 2.17% for the six months ended April 30, 2005 and year ended October 31, 2003, respectively. (e) Annualized. (f) Not annualized for periods less than one year. F-15 NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
INVESTOR CLASS -------------------------------------------------- SEPTEMBER 30, 2003 SIX MONTHS (DATE SALES ENDED YEAR ENDED COMMENCED) TO APRIL 30, OCTOBER 31, OCTOBER 31, 2005 2004 2003 ---------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 26.22 $ 20.01 $18.84 ---------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.04(a) 0.09(a) 0.00(a) ---------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 3.03 6.15 1.17 ================================================================================================================ Total from investment operations 3.07 6.24 1.17 ================================================================================================================ Less dividends from net investment income (0.07) (0.03) -- ================================================================================================================ Redemption fees added to beneficial interest 0.00 0.00 -- ================================================================================================================ Net asset value, end of period $ 29.22 $ 26.22 $20.01 ________________________________________________________________________________________________________________ ================================================================================================================ Total return(b) 11.71% 31.20% 6.21% ________________________________________________________________________________________________________________ ================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $205,775 $184,832 $ 163 ________________________________________________________________________________________________________________ ================================================================================================================ Ratio of expenses to average net assets With fee waivers and/or expense reimbursements 1.61%(c) 1.71% 1.79%(d) ---------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.63%(c) 1.74% 1.79%(d) ================================================================================================================ Ratio of net investment income to average net assets 0.29%(c) 0.35% 0.18%(d) ________________________________________________________________________________________________________________ ================================================================================================================ Portfolio turnover rate(e) 24% 60% 81% ________________________________________________________________________________________________________________ ================================================================================================================
(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. Not annualized for periods less than one year. (c) Ratios are annualized and based on average daily net assets of $208,581,483. (d) Annualized. (e) Not annualized for periods less than one year. NOTE 12--LEGAL PROCEEDINGS Terms used in the Legal Proceedings Note are defined terms solely for the purpose of this note. SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment advisor to certain AIM Funds), A I M Advisors, Inc. ("AIM") (the Fund's investment advisor) and A I M Distributors, Inc. ("ADI") (the distributor of the retail AIM Funds) reached final settlements with certain regulators, including, among others, the Securities and Exchange Commission ("SEC"), the New York Attorney General ("NYAG") and the Colorado Attorney General ("COAG"), to resolve civil enforcement actions and/or investigations related to market timing activity and related issues in the AIM Funds, including those formerly advised by IFG. As part of the settlements, IFG agreed to pay a total of $325 million (including $110 million in civil penalties). Additionally, AIM and ADI agreed to pay a total of $50 million (including $30 million in civil penalties). These settlement funds will be made available for distribution to the shareholders of the applicable AIM Funds that were harmed by market timing activity, and may (or may not) increase as a result of contributions from third parties who reach final settlements with the SEC or other regulators to resolve allegations of market timing and/or late trading. The settlement funds will be distributed in accordance with a methodology to be determined by AIM's independent distribution consultant, in consultation with AIM and the independent trustees of the AIM Funds and acceptable to the staff of the SEC. As the methodology is unknown at the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the distribution of these settlement funds may have on the Fund or whether such distribution will have an impact on the Fund's financial statements in the future. At the request of the trustees of the AIM Funds, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and AIM, has agreed to reimburse expenses incurred by the AIM Funds related to market timing matters. REGULATORY INQUIRIES AND PENDING LITIGATION IFG, AIM, ADI and/or related entities and individuals have received inquiries from numerous regulators in the form of subpoenas or other oral or written requests for information and/or documents related to one or more of the following issues, some of which concern one or more AIM Funds: market timing activity, late trading, fair value pricing, excessive or improper advisory and/or distribution fees, mutual fund sales practices, including revenue F-16 NOTE 12--LEGAL PROCEEDINGS--(CONTINUED) sharing and directed-brokerage arrangements, investments in securities of other registered investment companies, contractual plans, issues related to Section 529 college savings plans and procedures for locating lost securityholders. IFG, AIM and ADI are providing full cooperation with respect to these inquiries. As described more fully below, the AIM Funds, IFG, AIM, ADI and/or related entities and individuals are defendants in numerous civil lawsuits related to one or more of these issues. Regulatory actions and/or additional civil lawsuits related to these or other issues may be filed against the AIM Funds, IFG, AIM and/or related entities and individuals in the future. On April 12, 2005, the Attorney General of the State of West Virginia ("WVAG") filed civil proceedings against AIM, IFG and ADI, as well as numerous unrelated mutual fund complexes and financial institutions. None of the AIM Funds has been named as a defendant in these proceedings. The WVAG complaint, filed in the Circuit Court of Marshall County, West Virginia [Civil Action No. 05-C-81], alleges, in substance, that AIM, IFG and ADI engaged in unfair competition and/or unfair or deceptive trade practices by failing to disclose in the prospectuses for the AIM Funds, including those formerly advised by IFG, that they had entered into certain arrangements permitting market timing of such Funds. As a result of the foregoing, the WVAG alleges violations of W. Va. Code sec. 46A-1-101, et seq. (the West Virginia Consumer Credit and Protection Act). The WVAG complaint is seeking, among other things, injunctive relief, civil monetary penalties and a writ of quo warranto against the defendants. If AIM is unsuccessful in its defense of the WVAG proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could affect the ability of AIM or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any registered investment company, including the Fund. The Fund has been informed by AIM that, if these results occur, AIM will seek exemptive relief from the SEC to permit it to continue to serve as the Fund's investment advisor. There is no assurance that such exemptive relief will be granted. Civil lawsuits, including purported class action and shareholder derivative suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or related entities and individuals, depending on the lawsuit, alleging: - that the defendants permitted improper market timing and related issues in the AIM Funds; - that certain AIM Funds inadequately employed fair value pricing; - that the defendants charged excessive advisory and/or distribution fees and failed to pass on to shareholders the perceived savings generated by economies of scale and that the defendants adopted unlawful distribution plans; - that the defendants breached their fiduciary duties by charging distribution fees while funds and/or specific share classes were closed generally to new investors and/or while other share classes of the same fund were not charged the same distribution fees; - that the defendants improperly used the assets of the AIM Funds to pay brokers to aggressively promote the sale of the AIM Funds over other mutual funds and that the defendants concealed such payments from investors by disguising them as brokerage commissions; and - that the defendants breached their fiduciary duties by failing to ensure that the AIM Funds participated in class action settlements in which the AIM Funds were eligible to participate. These lawsuits allege as theories of recovery, depending on the lawsuit, violations of various provisions of the Federal and state securities laws and ERISA, negligence, breach of fiduciary duty and/or breach of contract. These lawsuits seek remedies that include, depending on the lawsuit, damages, restitution, injunctive relief, imposition of a constructive trust, removal of certain directors and/or employees, various corrective measures under ERISA, rescission of certain AIM Funds' advisory agreements and/or distribution plans and recovery of all fees paid, an accounting of all fund-related fees, commissions and soft dollar payments, restitution of all commissions and fees paid, and prospective relief in the form of reduced fees. At the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the outcome of the Regulatory Inquiries and Pending Litigation described above may have on AIM, ADI or the Fund. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * As a result of the matters discussed above, investors in the AIM Funds might react by redeeming their investments. This might require the AIM Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AIM Funds. F-17 OTHER INFORMATION BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND Bob R. Baker Robert H. Graham 11 Greenway Plaza Frank S. Bayley President Suite 100 James T. Bunch Houston, TX 77046-1173 Bruce L. Crockett Mark H. Williamson Chair Executive Vice President INVESTMENT ADVISOR Albert R. Dowden A I M Advisors, Inc. Edward K. Dunn Jr. Lisa O. Brinkley 11 Greenway Plaza Jack M. Fields Senior Vice President and Suite 100 Carl Frischling Chief Compliance Officer Houston, TX 77046-1173 Robert H. Graham Gerald J. Lewis Russell C. Burk TRANSFER AGENT Prema Mathai-Davis Senior Vice President AIM Investment Services, Inc. Lewis F. Pennock P.O. Box 4739 Ruth H. Quigley Kevin M. Carome Houston, TX 77210-4739 Larry Soll Senior Vice President, Secretary and Mark H. Williamson Chief Legal Officer CUSTODIAN State Street Bank and Trust Company Sidney M. Dilgren 225 Franklin Street Vice President and Treasurer Boston, MA 02110-2801 Robert G. Alley Vice President COUNSEL TO THE FUND Ballard Spahr J. Philip Ferguson Andrews & Ingersoll, LLP Vice President 1735 Market Street, 51st Floor Philadelphia, PA 19103-7599 Karen Dunn Kelley Vice President COUNSEL TO THE INDEPENDENT TRUSTEES Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714 DISTRIBUTOR A I M Distributors, Inc. 11 Greenway Plaza Suite 100 Houston, TX 77046-1173
DOMESTIC EQUITY SECTOR EQUITY AIM Advantage Health Sciences Fund(1) AIM Aggressive Growth Fund AIM Energy Fund(1) AIM Basic Balanced Fund* AIM Financial Services Fund(1) AIM Basic Value Fund AIM Global Health Care Fund AIM Blue Chip Fund AIM Global Real Estate Fund AIM Capital Development Fund AIM Gold & Precious Metals Fund(1) AIM Charter Fund AIM Leisure Fund(1) AIM Constellation Fund AIM Multi-Sector Fund(1) AIM Diversified Dividend Fund AIM Real Estate Fund(7) AIM Dynamics Fund(1) AIM Technology Fund(1) AIM Large Cap Basic Value Fund AIM Utilities Fund(1) AIM Large Cap Growth Fund AIM Mid Cap Basic Value Fund AIM Mid Cap Core Equity Fund(2) FIXED INCOME AIM Mid Cap Growth Fund AIM Opportunities I Fund TAXABLE AIM Opportunities II Fund AIM Opportunities III Fund AIM Floating Rate Fund AIM Premier Equity Fund AIM High Yield Fund AIM S&P 500 Index Fund(1) AIM Income Fund AIM Select Equity Fund AIM Intermediate Government Fund AIM Small Cap Equity Fund(3) AIM Limited Maturity Treasury Fund AIM Small Cap Growth Fund(4) AIM Money Market Fund AIM Small Company Growth Fund(1) AIM Short Term Bond Fund AIM Trimark Endeavor Fund AIM Total Return Bond Fund AIM Trimark Small Companies Fund Premier Portfolio AIM Weingarten Fund Premier U.S. Government Money Portfolio(1) *Domestic equity and income fund TAX-FREE AIM High Income Municipal Fund INTERNATIONAL/GLOBAL EQUITY AIM Municipal Bond Fund AIM Tax-Exempt Cash Fund AIM Asia Pacific Growth Fund AIM Tax-Free Intermediate Fund AIM Developing Markets Fund Premier Tax-Exempt Portfolio AIM European Growth Fund AIM European Small Company Fund(5) AIM Global Aggressive Growth Fund AIM ALLOCATION SOLUTIONS AIM Global Equity Fund AIM Global Growth Fund AIM Conservative Allocation Fund AIM Global Value Fund AIM Growth Allocation Fund(8) AIM International Core Equity Fund(1) AIM Moderate Allocation Fund AIM International Growth Fund AIM Moderate Growth Allocation Fund AIM International Small Company Fund(6) AIM Moderately Conservative Allocation Fund AIM Trimark Fund
(1) The following name changes became effective October 15, 2004: INVESCO Advantage Health Sciences Fund to AIM Advantage Health Sciences Fund, INVESCO Dynamics Fund to AIM Dynamics Fund, INVESCO Energy Fund to AIM Energy Fund, INVESCO Financial Services Fund to AIM Financial Services Fund, INVESCO Gold & Precious Metals Fund to AIM Gold & Precious Metals Fund, INVESCO International Core Equity Fund to AIM International Core Equity Fund, INVESCO Leisure Fund to AIM Leisure Fund, INVESCO Mid-Cap Growth Fund to AIM Mid Cap Stock Fund, INVESCO Multi-Sector Fund to AIM Multi-Sector Fund, INVESCO S&P 500 Index Fund to AIM S&P 500 Index Fund, INVESCO Small Company Growth Fund to AIM Small Company Growth Fund, INVESCO Technology Fund to AIM Technology Fund, INVESCO U.S. Government Money Fund to Premier U.S. Government Money Portfolio, INVESCO Utilities Fund to AIM Utilities Fund. (2) As of end of business on February 27, 2004, AIM Mid Cap Core Equity Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (3) Effective December 13, 2004, AIM Small Cap Equity Fund is open to all investors. (4) As of end of business on March 18, 2002, AIM Small Cap Growth Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (5) As of end of business on March 28, 2005, AIM European Small Company Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (6) Effective December 30, 2004, AIM International Emerging Growth Fund was renamed AIM International Small Company Fund. As of end of business on March 14, 2005, the Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (7) As of end of business on April 29, 2005, AIM Real Estate Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (8) Effective April 29, 2005, AIM Aggressive Allocation Fund was renamed AIM Growth Allocation Fund. If used after July 20, 2005, this report must be accompanied by a Fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $131 billion in assets. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $375 billion in assets under management. Data as of March 31, 2005. ================================================================================ CONSIDER THE INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY. FOR THIS AND OTHER INFORMATION ABOUT AIM FUNDS, OBTAIN A PROSPECTUS FROM YOUR FINANCIAL ADVISOR AND READ IT CAREFULLY BEFORE INVESTING. ================================================================================ AIMinvestments.com EGR-SAR-1 A I M Distributors, Inc. [YOUR GOALS. OUR SOLUTIONS.] --Registered Trademark-- Mutual Retirement Annuities College Separately Offshore Cash Funds Products Savings Managed Products Management Plans Accounts [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- AIM GLOBAL AGGRESSIVE GROWTH FUND Semiannual Report to Shareholders o April 30, 2005 [COVER IMAGE] [YOUR GOALS. OUR SOLUTIONS.] [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- --Registered Trademark-- AIM GLOBAL AGGRESSIVE GROWTH FUND SEEKS TO PROVIDE ABOVE-AVERAGE LONG-TERM GROWTH OF CAPITAL. o Unless otherwise stated, information presented in this report is as of April 30, 2005, and is based on total net assets. ABOUT SHARE CLASSES o The unmanaged Lipper Global The Fund provides a complete list of its Small/Mid-Cap Growth Category Average holdings four times in each fiscal year, o Effective September 30, 2003, Class B represents the average performance of at the quarter-ends. For the second and shares are not available as an funds in the Lipper Global Small/Mid Cap fourth quarters, the lists appear in the investment for retirement plans Category, tracked by Lipper, Inc., an Fund's semiannual and annual reports to maintained pursuant to Section 401 of independent mutual fund performance shareholders. For the first and third the Internal Revenue Code, including monitor. quarters, the Fund files the lists with 401(k) plans, money purchase pension the Securities and Exchange Commission plans and profit sharing plans. Plans o The Fund is not managed to track the (SEC) on Form N-Q. Shareholders can look that have existing accounts invested in performance of any particular index, up the Fund's Forms N-Q on the SEC's Web Class B shares will continue to be including the indexes defined here, and site at sec.gov. Copies of the Fund's allowed to make additional purchases. consequently, the performance of the Forms N-Q may be reviewed and copied at Fund may deviate significantly from the the SEC's Public Reference Room at 450 PRINCIPAL RISKS OF INVESTING IN THE FUND performance of the indexes. Fifth Street, N.W., Washington, D.C. 20549-0102. You can obtain information o International investing presents o A direct investment cannot be made in on the operation of the Public Reference certain risks not associated with an index. Unless otherwise indicated, Room, including information about investing solely in the United States. index results include reinvested duplicating fee charges, by calling These include risks relating to dividends, and they do not reflect sales 1-202-942-8090 or 1-800-732-0330, or by fluctuations in the value of the U.S. charges. Performance of an index of electronic request at the following dollar relative to the values of other funds reflects fund expenses; e-mail address: publicinfo@sec.gov. The currencies, the custody arrangements performance of a market index does not. SEC file numbers for the Fund are made for the Fund's foreign holdings, 811-6463 and 33-44611. The Fund's most differences in accounting, political OTHER INFORMATION recent portfolio holdings, as filed on risks and the lesser degree of public Form N-Q, are also available at information required to be provided by o The returns shown in management's AIMinvestments.com. non-U.S. companies. discussion of Fund performance are based on net asset values calculated for A description of the policies and o Investing in emerging markets involves shareholder transactions. Generally procedures that the Fund uses to greater risk and potential reward than accepted accounting principles require determine how to vote proxies relating investing in more established markets. adjustments to be made to the net assets to portfolio securities is available of the Fund at period end for financial without charge, upon request, from our o Investing in small and mid-size reporting purposes, and as such, the net Client Services department at companies involves risks not associated asset values for shareholder 800-959-4246 or on the AIM Web site, with investing in more established transactions and the returns based on AIMinvestments.com. On the home page, companies, including business risk, those net asset values may differ from scroll down and click on AIM Funds Proxy significant stock price fluctuations and the net asset values and returns Policy. The information is also illiquidity. reported in the Financial Highlights. available on the SEC Web site, sec.gov. ABOUT INDEXES USED IN THIS REPORT o Industry classifications used in this Information regarding how the Fund voted report are generally according to the proxies related to its portfolio o The unmanaged MSCI World Index is a Global Industry Classification Standard, securities during the 12 months ended group of global securities tracked by which was developed by and is the June 30, 2004, is available at our Web Morgan Stanley Capital International. exclusive property and a service mark of site. Go to AIMinvestments.com, access Morgan Stanley Capital International the About Us tab, click on Required o The unmanaged MSCI World Growth Index Inc. and Standard & Poor's. Notices and then click on Proxy Voting is a subset of the MSCI World Index, a Activity. Next, select the Fund from the group of global securities tracked by drop-down menu. The information is also Morgan Stanley Capital International; available on the SEC Web site, sec.gov. the Growth subset measures performance of companies with higher price/earnings ratios and higher forecasted growth values.
=========================================================================== THIS REPORT 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. =========================================================================== NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE AIMINVESTMENTS.COM AIM GLOBAL AGGRESSIVE GROWTH FUND DEAR FELLOW SHAREHOLDERS: Most equity market and fund indexes, domestic and international, produced positive total returns for the six months ended April 30, 2005, but for the most part, those positive numbers reflected gains made during the latter months of 2004. Year-to-date as of April 30, 2005, the [GRAHAM PHOTO] returns were far less attractive. High oil prices remained a source of unease; crude oil remained near or above $50 per barrel throughout the reporting period. The Producer Price Index was up fairly ROBERT H. GRAHAM sharply in April, largely due to energy costs. And central bank policy continued to focus on containing short-term inflation via increases in the overnight federal funds interest rate, the rate the Federal Reserve (the Fed) most directly controls. Shortly after the reporting period closed, the Fed raised that rate to 3%; it was the eighth increase since mid-2004. Should the Fed continue to raise [WILLIAMSON PHOTO] rates, this could eventually dampen economic performance, which in fact has been quite good. Gross domestic product grew 4.4% for all of 2004 and the preliminary estimate of annualized growth for the first quarter of 2005 was 3.5%. MARK H. WILLIAMSON o Though the growth rate of the manufacturing sector slowed in April and again in May, manufacturing continued to grow, according to the Institute for Supply Management (ISM), whose purchasing manager surveys cover more than 80% of the U.S. economy. In May, manufacturing grew for the 24th consecutive month while the overall economy grew for the 43rd consecutive month, ISM reported. o Though job growth during May was much slower than during April, the unemployment rate remained unchanged at 5.1% as May 2005 ended. o For the first quarter of 2005, earnings for companies included in the Standard & Poor's Composite Index of 500 Stocks, an index of the broad U.S. stock market, were up more than 10%, on average, over a year earlier. o Bond yields have not risen as much as might be expected given eight increases in short-term interest rates in less than a year. This may indicate that the bond market is not anticipating a long-term inflationary pattern. After the slow start in 2005, domestic and many international markets began to rally after the close of the reporting period, demonstrating once again how changeable markets are in the short term. Given the elusiveness of accurate short-term market forecasts, as always, we urge our shareholders to: o keep a long-term investment perspective, o make sure their portfolio of investments is suitably diversified, and o contact their financial advisors when they have questions about their investments or the markets. YOUR FUND In the following pages you will find a discussion of your Fund's investment philosophy, an explanation of its performance for the reporting period, and a summary of its portfolio as of April 30. Further information about your Fund, The AIM Family of Funds--Registered Trademark--, and investing in general is always available on our widely praised Web site, AIMinvestments.com. Please visit frequently. We at AIM remain committed to building solutions to help you meet your investment goals. We thank you for your continued participation in AIM Investments--Registered Trademark--. If you have any questions, please contact our award-winning Client Service representatives at 800-959-4246. We are happy to be of help. Sincerely, /s/ ROBERT H. GRAHAM /s/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson President & Vice Chair, Chairman & President, AIM Funds A I M Advisors, Inc. June 17, 2005 AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M Capital Management, Inc. are the investment advisors and A I M Distributors, Inc. is the distributor for the retail funds represented by AIM Investments. AIM GLOBAL AGGRESSIVE GROWTH FUND MANAGEMENT'S DISCUSSION OF FUND MARKET CONDITIONS AND YOUR FUND PERFORMANCE ======================================= For much of the reporting period, global PERFORMANCE SUMMARY markets rallied on the strength of FUND VS. INDEXES rising confidence in world growth During the reporting period, global prospects. Sentiment changed in markets rallied strongly at the close of TOTAL RETURNS, 10/31/04-4/30/05, mid-March, however, amid the possibility 2004 but then sold off in mid-March as EXCLUDING APPLICABLE SALES CHARGES. IF of further oil price hikes and signs of high oil prices, rising global interest SALES CHARGES WERE INCLUDED, RETURNS sluggish corporate growth. Given this rates and risk aversion dampened WOULD BE LOWER. environment, world equity markets investor enthusiasm. Given this largely posted negative returns for both uncertain environment, we are pleased to Class A Shares 8.30% March and April. report positive Fund returns for our shareholders during the reporting Class B Shares 7.91 Despite the late period sell-off, period. global equity markets generally posted Class C Shares 7.90 gains for the reporting period. We attribute the Fund's comparative International markets continued to success to our focus on mid-cap stocks, MSCI World Index dominate results, outperforming domestic our large weighting to outperforming (Broad Market Index) 5.70 markets by more than a two-to-one margin European markets and our more limited in both local currency and U.S. terms. exposure to U.S. securities. MSCI World Growth Index Given this trend, our large weighting in (Style-specific Index) 4.35 European securities and more limited HOW WE INVEST exposure to U.S. stocks (compared to our Lipper Global Small/Mid-Cap style-specific benchmark) proved Our investment strategy is based on the Growth Category Average (Peer favorable. principle that strong Group Index) 8.11 earnings--sustainable, repeatable, We continue to find attractive above-average growth--can drive stock SOURCE: LIPPER,INC. opportunities in Europe which offer key prices. Therefore, when selecting stocks attributes we seek in companies for the for the fund we look for companies with ======================================= portfolio--strong earnings growth, cash the following attributes: generation and low valuations. One of the best market coverage, we use a our top European contributors was VINCI, o accelerating earnings and revenues multi-national team approach and divide a French construction company. Given an responsibility for the Fund by increase in demand for French o strong cash flow generation geographic regions. Each team member is construction projects, first quarter therefore a regional specialist, while revenues for Vinci rose 8.9% o high return on invested capital also a sector generalist. year-over-year--coming in slightly ahead of analysts' expectations. The company o reasonable valuations Although team members specialize in also continues to raise its dividend specific regions, we select investments payout. We took profits and sold this As a global growth fund, we invest in on a stock-by-stock basis. This means we position during the reporting period. both domestic and international stocks. follow a bottom-up investment approach, To ensure selecting the most attractive stocks, not countries or sectors. Another important component of our investment strategy is that we do not hedge currencies. We believe foreign currency exposure increases the diversification benefit of international investing. ======================================= ======================================= ======================================= TOP 5 COUNTRIES* PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* By sector 1. OTP Bank Rt. (Hungary) 2.8% 1. United States 28.8% [PIE CHART] 2. Enterprise Inns PLC 2. United Kingdom 10.1 Consumer Discretionary 26.1% (United Kingdom) 2.5 Financials 18.9% 3. Japan 8.8 Industrials 11.2% 3. Anglo Irish Bank Corp. PLC Information Technology 10.3% (Ireland) 2.2 4. Canada 6.3 Health Care 7.3% Consumer Staples 6.3% 4. Syngenta A.G. (Switzerland) 1.8 5. Germany 5.2 Energy 5.2% Money Market Funds Plus 5. Standard Bank Group Ltd. TOTAL NET ASSETS $834.4 MILLION Other Assets Less Liabilities 5.1% (South Africa) 1.6 Materials 4.9% TOTAL NUMBER OF HOLDINGS* 131 Telecommunication Services 3.5% 6. Espirit Holdings Ltd. Utilities 1.2% (Bermuda) 1.5 The Fund's holdings are subject to change, and there is no assurance that 7. OPAP S.A. (Greece) 1.4 the Fund will continue to hold any particular security. 8. Puma A.G. Rudolf Dassler Sport (Germany) 1.3 *Excluding money market fund holdings. 9. Continental A.G. (Germany) 1.3 10. Amdocs Ltd. (United Kingdom) 1.3 ======================================= ======================================= =======================================
2 In the United States, the Fund a bug in its update for Virus Buster JAMES G. BIRDSALL, benefited from strong stock performance software caused malfunctions in the [BIRDSALL portfolio manager, is from UNITED DEFENSE INDUSTRIES, a networks of a number of Japanese PHOTO] lead manager of AIM manufacturer of combat vehicles and government offices and businesses. Global Aggressive Growth artillery saws. During the first quarter During the reporting period, we trimmed Fund with respect to the of 2005, the company underwent a cash our position in this security. Fund's domestic portion takeout by a British defense contractor of the Fund's portfolio. He joined AIM that develops, delivers and supports VimpelCom, a Russian wireless in 1995. Mr. Birdsall received his defense and aerospace systems. This operator, also proved a detractor. Given B.B.A. with a concentration in finance generated a double-digit takeover its emerging market locale, the stock from Stephen F. Austin State University. premium for the stock. We decided to was sold indiscriminately by He also earned an M.B.A. with a take profits and sold the stock before increasingly risk averse investors. We concentration in finance and the close of the reporting period. continued to own the stock, however, as international business at the University we have faith in the company's business of St. Thomas. models and believe current valuations WE CONTINUE TO FIND are very compelling. JASON T. HOLZER, ATTRACTIVE OPPORTUNITIES [HOLZER Chartered Financial IN EUROPE WHICH OFFER Given the Fund's large weighting in PHOTO] Analyst, senior KEY ATTRIBUTES WE SEEK international securities, foreign portfolio manager, is IN COMPANIES FOR THE exchange can play a role in Fund lead manager of AIM PORTFOLIO--STRONG performance as we do not hedge Global Aggressive Growth EARNINGS GROWTH, CASH currencies. Despite a stronger U.S. Fund with respect to the Fund's GENERATION AND LOW dollar in 2005, for the reporting period investments in Europe and Canada. Mr. VALUATIONS. as a whole, foreign currency Holzer joined AIM in 1996. He received a appreciation added slightly to fund B.A. in quantitative economics and an returns. M.S. in engineering-economic systems On a sector basis, financial stocks from Stanford University. were the largest contributor to fund IN CLOSING performance. Long-time fund holding BARRETT K. SIDES, senior ANGLO IRISH BANK continues to be one of Despite sometimes volatile market [SIDES portfolio manager, is the Fund's most consistent performers. conditions, we are pleased to once again PHOTO] lead manager of AIM Amid record loan growth, robust asset provide shareholders with positive Fund Global Aggressive Growth quality and stable lending margins, the returns for the reporting period. We Fund with respect to the company's pretax profit for the believe our bottom-up investment process Fund's investments in six-month period ended March 31, 2005, allows us to build a solid portfolio Asia Pacific and Latin America. He rose 35%, year-over-year. based on quality companies from around joined AIM in 1990. Mr. Sides graduated the world. Given our global reach, we with a B.S. in economics from Bucknell While most sectors added positively believe the Fund can provide investors University. He also received a master's to Fund returns, information technology diversification opportunities beyond in international business from the and telecommunication services--two of U.S. stocks including lower valuations University of St. Thomas. the worst performing sectors in the MSCI and higher dividend yields often World Index--did not. Fortunately, we associated with international companies. SHUXIN CAO, Chartered had less exposure to these poor Thank you for your continued [CAO Financial Analyst, performing areas than our benchmark. participation in AIM Global Aggressive PHOTO] portfolio manager, is Growth Fund. manager of AIM Global Despite strong returns during the Aggressive Growth Fund. reporting period, a few Fund holdings The views and opinions expressed in He joined AIM in 1997. detracted from performance including management's discussion of Fund Mr. Cao graduated from Tianjin Foreign TREND MICRO and VIMPELCOM. Trend Micro, performance are those of A I M Advisors, Language Institute with a B.A. in a Tokyo-based provider of antivirus and Inc. These views and opinions are English. He also received an M.B.A. from security software, witnessed a decline subject to change at any time based on Texas A&M University and is a Certified in its share price after factors such as market and economic Public Accountant. conditions. These views and opinions may not be relied upon as investment advice BORGE ENDRESEN, or recommendations, or as an offer for a [ENDRESEN Chartered Financial particular security. The information is PHOTO] Analyst, portfolio not a complete analysis of every aspect manager, is manager of of any market, country, industry, AIM Global Aggressive security or the Fund. Statements of fact Growth Fund. He joined are from sources considered reliable, AIM in 1999 and graduated summa cum but A I M Advisors, Inc. makes no laude from the University of Oregon with representation or warranty as to their a B.S. in finance. He also earned an completeness or accuracy. Although M.B.A. from The University of Texas at historical performance is no guarantee Austin. of future results, these insights may help you understand our Assisted by Asia/Latin America Team, investment management Europe/Canada Team and Large Cap Growth philosophy. Team See important Fund and index [RIGHT ARROW GRAPHIC] disclosures inside front cover. FOR A PRESENTATION OF YOUR FUND'S LONG-TERM PERFORMANCE RECORD, PLEASE TURN TO PAGE 5.
3 AIM GLOBAL AGGRESSIVE GROWTH FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE You may use the information in this April 30, 2005, appear in the table table, together with the amount you "Fund vs. Indexes" on page 2. The As a shareholder of the Fund, you incur invested, to estimate the expenses that hypothetical account values and expenses two types of costs: (1) transaction you paid over the period. Simply divide may not be used to estimate the actual costs, which may include sales charges your account value by $1,000 (for ending account balance or expenses you (loads) on purchase payments; contingent example, an $8,600 account value divided paid for the period. You may use this deferred sales charges on redemptions; by $1,000 = 8.6), then multiply the information to compare the ongoing costs and redemption fees, if any; and (2) result by the number in the table under of investing in the Fund and other ongoing costs, including management the heading entitled "Actual Expenses funds. To do so, compare this 5% fees; distribution and/or service fees Paid During Period" to estimate the hypothetical example with the 5% (12b-1); and other Fund expenses. This expenses you paid on your account during hypothetical examples that appear in the example is intended to help you this period. shareholder reports of the other funds. understand your ongoing costs (in dollars) of investing in the Fund and to HYPOTHETICAL EXAMPLE FOR COMPARISON Please note that the expenses shown compare these costs with ongoing costs PURPOSES in the table are meant to highlight your of investing in other mutual funds. The ongoing costs only and do not reflect example is based on an investment of The table below also provides any transactional costs, such as sales $1,000 invested at the beginning of the information about hypothetical account charges (loads) on purchase payments, period and held for the entire period values and hypothetical expenses based contingent deferred sales charges on November 1, 2004, through April 30, on the Fund's actual expense ratio and redemptions, and redemption fees, if 2005. an assumed rate of return of 5% per year any. Therefore, the hypothetical before expenses, which is not the Fund's information is useful in comparing ACTUAL EXPENSES actual return. The Fund's actual ongoing costs only, and will not help cumulative total returns at net asset you determine the relative total costs The table below provides information value after expenses for the six months of owning different funds. about actual account values and actual ended expenses. ==================================================================================================================================== ACTUAL HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES) BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES ENDING ACCOUNT EXPENSES SHARE VALUE VALUE PAID DURING VALUE PAID DURING CLASS (11/1/04) (4/30/05)(1) PERIOD(2,3) (4/30/05) PERIOD(2,4) A $1,000.00 $1,083.00 $ 8.93 $1,016.22 $ 8.65 B 1,000.00 1,079.10 12.01 1,013.24 11.63 C 1,000.00 1,079.00 12.01 1,013.24 11.63 (1) The actual ending account value is based on the actual total return of the Fund for the period November 1, 2004, to April 30, 2005, 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. The Fund's actual cumulative total returns at net asset value after expenses for the six months ended April 30, 2005, appear in the table "Fund vs. Indexes" on page 2. (2) Expenses are equal to the Fund's annualized expense ratio, 1.73%, 2.33%, and 2.33% for Class A, B and C shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Effective on January 1, 2005, the advisor contractually agreed to waive a portion of its advisory fees and reduce the Class A 12b-1 fees from 0.50% to 0.35%.The annualized expense ratios restated as if this agreement had been in effect throughout the entire most recent fiscal half year are 1.64%, 2.29% and 2.29% for Class A, B and C shares, respectively. (3) The actual expenses paid restated as if the changes discussed above had been in effect throughout the most recent fiscal half year are $8.47, $11.81 and $11.80 for Class A, B and C shares, respectively. (4) The hypothetical expenses paid restated as if the changes discussed above had been in effect throughout the most recent fiscal half year are $8.20, $11.43 and $11.43 for Class A, B and C shares, respectively. ====================================================================================================================================
[ARROW BUTTON For More Information Visit IMAGE] AIMINVESTMENTS.COM 4 AIM GLOBAL AGGRESSIVE GROWTH FUND YOUR FUND'S LONG-TERM PERFORMANCE Below you will find a presentation of your Fund's performance record for periods ended April 30, 2005, the close of the six-month period covered by this report. Please read the important disclosure accompanying these tables, which explains how Fund performance is calculated and the sales charges, if any, that apply to the share class in which you are invested. In addition to returns as of the close of the reporting period, industry regulations require us to provide average annual total returns as of March 31, 2005, the most recent calendar quarter-end. ======================================= ======================================= AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS As of 4/30/05, including applicable As of 3/31/05, including applicable sales charges sales charges CLASS A SHARES CLASS A SHARES 10 Years 7.98% 10 Years 8.76% 5 Years -5.74 5 Years -7.43 1 Year 9.46 1 Year 10.17 CLASS B SHARES CLASS B SHARES 10 Years 8.04% 10 Years 8.80% 5 Years -5.61 5 Years -7.29 1 Year 9.22 1 Year 10.02 CLASS C SHARES CLASS C SHARES Inception (8/4/97) 2.96% Inception (8/4/97) 3.49% 5 Years -5.31 5 Years -7.00 1 Year 13.29 1 Year 14.02 ======================================= ======================================= THE PERFORMANCE DATA QUOTED REPRESENT INVESTMENT RETURN AND PRINCIPAL VALUE THE PERFORMANCE OF THE FUND'S SHARE PAST PERFORMANCE AND CANNOT GUARANTEE WILL FLUCTUATE SO THAT YOU MAY HAVE A CLASSES WILL DIFFER DUE TO DIFFERENT COMPARABLE FUTURE RESULTS; CURRENT GAIN OR LOSS WHEN YOU SELL SHARES. SALES CHARGE STRUCTURES AND CLASS PERFORMANCE MAY BE LOWER OR HIGHER. EXPENSES. PLEASE VISIT AIMINVESTMENTS.COM FOR THE CLASS A SHARE PERFORMANCE REFLECTS MOST RECENT MONTH-END PERFORMANCE. THE MAXIMUM 4.75% SALES CHARGE, AND A REDEMPTION FEE OF 2% WILL BE CLASS B AND CLASS C SHARE PERFORMANCE IMPOSED ON CERTAIN REDEMPTIONS OR PERFORMANCE FIGURES REFLECT REFLECTS THE APPLICABLE CONTINGENT EXCHANGES OUT OF THE FUND WITHIN 30 DAYS REINVESTED DISTRIBUTIONS, CHANGES IN NET DEFERRED SALES CHARGE (CDSC) FOR THE OF PURCHASE. EXCEPTIONS TO THE ASSET VALUE AND THE EFFECT OF THE PERIOD INVOLVED. THE CDSC ON CLASS B REDEMPTION FEE ARE LISTED IN THE FUND'S MAXIMUM SALES CHARGE UNLESS OTHERWISE SHARES DECLINES FROM 5% BEGINNING AT THE PROSPECTUS. STATED. PERFORMANCE FIGURES DO NOT TIME OF PURCHASE TO 0% AT THE BEGINNING REFLECT DEDUCTION OF TAXES A SHAREHOLDER OF THE SEVENTH YEAR. THE CDSC ON CLASS C WOULD PAY ON FUND DISTRIBUTIONS OR SALE SHARES IS 1% FOR THE FIRST YEAR AFTER OF FUND SHARES. PURCHASE.
5 FINANCIALS SCHEDULE OF INVESTMENTS April 30, 2005 (Unaudited)
MARKET SHARES VALUE ------------------------------------------------------------------------- FOREIGN STOCKS & OTHER EQUITY INTERESTS-66.15% AUSTRALIA-0.77% Brambles Industries Ltd. (Diversified Commercial Services)(a)(b) 598,000 $ 3,674,360 ------------------------------------------------------------------------- Computershare Ltd. (Data Processing & Outsourced Services)(a)(b) 700,000 2,775,618 ========================================================================= 6,449,978 ========================================================================= AUSTRIA-1.17% Erste Bank der oesterreichischen Sparkassen A.G. (Diversified Banks)(a) 201,700 9,785,462 ========================================================================= BERMUDA-2.73% Cooper Industries, Ltd.-Class A (Electrical Components & Equipment) 95,000 6,047,700 ------------------------------------------------------------------------- Esprit Holdings Ltd. (Apparel Retail)(a) 1,692,500 12,608,721 ------------------------------------------------------------------------- Giordano International Ltd. (Apparel Retail)(a) 5,900,000 4,099,817 ========================================================================= 22,756,238 ========================================================================= BRAZIL-0.95% Natura Cosmeticos S.A. (Personal Products) (Acquired 02/25/05-03/07/05; Cost $2,851,258)(c) 95,900 2,882,120 ------------------------------------------------------------------------- Perdigao S.A.-Pfd. (Packaged Foods & Meats) 136,100 2,567,518 ------------------------------------------------------------------------- Sadia S.A.-Pfd. (Packaged Foods & Meats) 1,554,300 2,483,438 ========================================================================= 7,933,076 ========================================================================= CANADA-6.31% Astral Media Inc. (Broadcasting & Cable TV) 173,900 4,422,299 ------------------------------------------------------------------------- Brascan Corp.-Class A (Other Diversified Financial Services) 169,700 6,133,394 ------------------------------------------------------------------------- Canadian Oil Sands Trust (Oil & Gas Exploration & Production) 70,000 4,469,742 ------------------------------------------------------------------------- PetroKazakhstan Inc.-Class A (Integrated Oil & Gas) 228,400 6,614,134 ------------------------------------------------------------------------- Power Financial Corp. (Other Diversified Financial Services) 263,200 6,912,830 ------------------------------------------------------------------------- Precision Drilling Corp. (Oil & Gas Drilling)(d) 64,900 4,683,053 ------------------------------------------------------------------------- Sherritt International Corp. (Diversified Metals & Mining)(d) 1,282,300 9,548,338 ------------------------------------------------------------------------- Shoppers Drug Mart Corp. (Drug Retail) (Acquired 05/16/03-11/18/03; Cost $5,546,847)(c)(e) 316,500 9,872,154 ========================================================================= 52,655,944 ========================================================================= FRANCE-2.71% Eiffage S.A. (Construction & Engineering) (Acquired 03/16/05-03/18/05; Cost $4,692,420)(a)(b)(c) 38,000 4,454,374 -------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------
FRANCE-(CONTINUED) Imerys S.A. (Construction Materials)(a)(b) 76,500 $ 5,465,229 ------------------------------------------------------------------------- Pernod Ricard (Distillers & Vintners)(a) 49,000 7,426,416 ------------------------------------------------------------------------- Technip (Oil & Gas Equipment & Services) (Acquired 08/03/04-11/09/04; Cost $4,530,854)(a)(b)(c) 31,000 5,264,976 ========================================================================= 22,610,995 ========================================================================= GERMANY-5.24% Adidas-Salomon A.G. (Apparel, Accessories & Luxury Goods)(a)(b)(d) 62,000 9,631,157 ------------------------------------------------------------------------- Celesio A.G. (Health Care Distributors)(a)(b)(d) 85,300 6,766,040 ------------------------------------------------------------------------- Continental A.G. (Tires & Rubber)(a)(b) 145,140 10,698,682 ------------------------------------------------------------------------- Deutsche Boerse A.G. (Specialized Finance)(a) 75,200 5,682,940 ------------------------------------------------------------------------- Puma A.G. Rudolf Dassler Sport (Footwear) (Acquired 10/29/02-06/02/03; Cost $3,419,627)(a)(b)(c) 47,435 10,932,198 ========================================================================= 43,711,017 ========================================================================= GREECE-2.04% EFG Eurobank Ergasias (Diversified Banks)(a) 190,000 5,750,659 ------------------------------------------------------------------------- OPAP S.A. (Casinos & Gaming) (Acquired 07/14/03-01/30/04; Cost $5,368,735)(a)(c) 430,000 11,270,937 ========================================================================= 17,021,596 ========================================================================= HUNGARY-2.81% OTP Bank Rt. (Diversified Banks)(a) 763,500 23,443,668 ========================================================================= IRELAND-3.18% Anglo Irish Bank Corp. PLC (Diversified Banks)(a) 1,554,172 17,984,969 ------------------------------------------------------------------------- Independent News & Media PLC (Publishing)(a) 2,690,400 8,519,813 ========================================================================= 26,504,782 ========================================================================= ITALY-1.18% Banco Popolare di Verona e Novara Scrl (Diversified Banks)(a) 325,800 5,999,405 ------------------------------------------------------------------------- Lottomatica S.p.A. (Casinos & Gaming)(a) 112,600 3,832,963 ========================================================================= 9,832,368 ========================================================================= JAPAN-8.79% Daiwa House Industry Co., Ltd. (Homebuilding)(a) 335,000 3,756,715 ------------------------------------------------------------------------- EXEDY Corp. (Auto Parts & Equipment)(a)(b) 235,100 3,935,378 ------------------------------------------------------------------------- Fanuc Ltd. (Industrial Machinery)(a) 136,700 8,044,926 ------------------------------------------------------------------------- JSR Corp. (Specialty Chemicals)(a)(b) 243,000 4,909,783 ------------------------------------------------------------------------- Keiyo Bank, Ltd. (The) (Regional Banks)(a) 869,000 4,383,317 ------------------------------------------------------------------------- Mars Engineering Corp. (Leisure Products)(a) 97,400 3,146,759 -------------------------------------------------------------------------
F-1
MARKET SHARES VALUE ------------------------------------------------------------------------- JAPAN-(CONTINUED) NEOMAX Co., Ltd. (Electrical Components & Equipment)(a)(b) 231,000 $ 5,506,995 ------------------------------------------------------------------------- NHK Spring Co., Ltd. (Auto Parts & Equipment)(a)(b) 759,000 5,768,760 ------------------------------------------------------------------------- Nidec Corp. (Electronic Equipment Manufacturers)(a)(b) 44,600 5,235,970 ------------------------------------------------------------------------- Nippon Electric Gas Co., Ltd. (Electronic Equipment Manufacturers)(a) 316,000 5,022,128 ------------------------------------------------------------------------- OMRON Corp. (Electronic Equipment Manufacturers)(a) 189,000 4,129,719 ------------------------------------------------------------------------- Sekisui Chemical Co., Ltd. (Homebuilding)(a) 711,000 5,137,601 ------------------------------------------------------------------------- Suzuki Motor Corp. (Automobile Manufacturers)(a) 318,000 5,416,105 ------------------------------------------------------------------------- Trend Micro Inc. (Application Software)(a) 111,600 4,032,706 ------------------------------------------------------------------------- Yamaha Motor Co., Ltd. (Motorcycle Manufacturers)(a)(b) 278,600 4,865,816 ========================================================================= 73,292,678 ========================================================================= MEXICO-2.77% Alfa, S.A.-Class A (Industrial Conglomerates) 1,459,200 7,390,760 ------------------------------------------------------------------------- America Movil S.A. de C.V.-Series L-ADR (Wireless Telecommunication Services)(b) 150,800 7,487,220 ------------------------------------------------------------------------- Wal-Mart de Mexico S.A. de C.V.-Series V (Hypermarkets & Super Centers) 2,216,200 8,218,245 ========================================================================= 23,096,225 ========================================================================= NETHERLANDS-0.61% Royal Numico N.V. (Packaged Foods & Meats)(a)(b)(d) 122,500 5,068,041 ========================================================================= NORWAY-0.21% Telenor A.S.A. (Integrated Telecommunication Services)(a)(b) 213,300 1,779,850 ========================================================================= RUSSIA-1.14% AO VimpelCom-ADR (Wireless Telecommunication Services)(d) 291,670 9,543,442 ========================================================================= SINGAPORE-0.07% Citiraya Industries Ltd. (Environmental Services)(e)(f) 5,946,000 616,706 ========================================================================= SOUTH AFRICA-2.88% Standard Bank Group Ltd. (Diversified Banks)(a) 1,338,442 13,412,548 ------------------------------------------------------------------------- Telkom South Africa Ltd. (Integrated Telecommunication Services) (Acquired 11/25/03-03/10/05; Cost $7,045,548)(a)(c) 607,400 10,596,890 ========================================================================= 24,009,438 ========================================================================= SOUTH KOREA-1.46% Hana Bank (Diversified Banks)(a) 171,100 4,318,759 ------------------------------------------------------------------------- Kiryung Electronics Co., Ltd. (Communications Equipment)(a) 479,000 3,263,776 -------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------
SOUTH KOREA-(CONTINUED) Shinsegae Co., Ltd. (Hypermarkets & Super Centers)(a) 14,200 $ 4,556,897 ========================================================================= 12,139,432 ========================================================================= SPAIN-4.21% Cintra Concesiones de Infraestructuras de Transporte S.A. (Highways & Railtracks) (Acquired 10/26/04-12/17/04; Cost $6,936,449)(a)(c) 665,400 7,146,277 ------------------------------------------------------------------------- Corporacion Mapfre S.A. (Multi-Line Insurance)(a)(b) 456,572 6,789,498 ------------------------------------------------------------------------- Enagas (Gas Utilities) (Acquired 07/29/04- 08/02/04; Cost $4,083,275)(a)(c) 373,000 5,888,387 ------------------------------------------------------------------------- Gestevision Telecinco S.A. (Broadcasting & Cable TV) (Acquired 07/28/04-08/12/04; Cost $3,954,534)(a)(c)(d) 253,100 5,792,297 ------------------------------------------------------------------------- Grupo Ferrovial, S.A. (Construction & Engineering)(a) 167,600 9,543,417 ========================================================================= 35,159,876 ========================================================================= SWEDEN-0.87% Gambro A.B.-Class A (Health Care Services)(a) 536,300 7,246,123 ========================================================================= SWITZERLAND-2.26% Baloise Holding A.G.-Class R (Multi-Line Insurance)(a) 70,300 3,600,015 ------------------------------------------------------------------------- Syngenta A.G. (Fertilizers & Agricultural Chemicals)(a) 147,600 15,292,072 ========================================================================= 18,892,087 ========================================================================= THAILAND-0.46% Siam Commercial Bank PCL (Diversified Banks)(a) 3,213,000 3,844,895 ========================================================================= TURKEY-1.21% Koc Holding A.S. (Industrial Conglomerates)(a) 939,000 3,515,068 ------------------------------------------------------------------------- Koc Holding A.S. (Industrial Conglomerates)(g) 189,284 682,864 ------------------------------------------------------------------------- Tupras-Turkiye Petrol Rafinerileri A.S. (Oil & Gas Refining, Marketing & Transportation)(a)(d) 469,743 5,913,225 ========================================================================= 10,111,157 ========================================================================= UNITED KINGDOM-10.12% Amdocs Ltd. (Application Software)(d) 400,000 10,684,000 ------------------------------------------------------------------------- Bunzl PLC (Trading Companies & Distributors)(a) 890,400 8,666,781 ------------------------------------------------------------------------- Capita Group PLC (Employment Services)(a) 581,000 4,190,493 ------------------------------------------------------------------------- Daily Mail & General Trust-Class A (Publishing)(a) 252,700 3,225,513 ------------------------------------------------------------------------- Enterprise Inns PLC (Restaurants)(a) 1,488,600 20,757,708 ------------------------------------------------------------------------- Inchcape PLC (Distributors)(a) 180,100 6,105,935 ------------------------------------------------------------------------- International Power PLC (Multi-Utilities & Unregulated Power)(a)(d) 1,210,000 4,219,135 ------------------------------------------------------------------------- Provident Financial PLC (Consumer Finance)(a) 329,300 4,201,861 -------------------------------------------------------------------------
F-2
MARKET SHARES VALUE ------------------------------------------------------------------------- UNITED KINGDOM-(CONTINUED) Shire Pharmaceuticals Group PLC (Pharmaceuticals)(a) 868,790 $ 9,091,922 ------------------------------------------------------------------------- T&F Informa PLC (Publishing)(a) 772,680 5,681,861 ------------------------------------------------------------------------- William Hill PLC (Casinos & Gaming)(a) 393,360 4,064,923 ------------------------------------------------------------------------- WS Atkins PLC (Diversified Commercial Services)(a) 304,000 3,517,271 ========================================================================= 84,407,403 ========================================================================= Total Foreign Stocks & Other Equity Interests (Cost $370,881,021) 551,912,477 ========================================================================= DOMESTIC COMMON STOCKS-28.77% ADVERTISING-0.26% Harte-Hanks, Inc. 77,500 2,208,750 ========================================================================= AEROSPACE & DEFENSE-1.32% Precision Castparts Corp. 65,000 4,787,900 ------------------------------------------------------------------------- Rockwell Collins, Inc.(b) 135,000 6,193,800 ========================================================================= 10,981,700 ========================================================================= APPAREL RETAIL-0.61% Pacific Sunwear of California, Inc.(b)(d) 225,000 5,087,250 ========================================================================= APPAREL, ACCESSORIES & LUXURY GOODS-0.64% V. F. Corp. 95,000 5,376,050 ========================================================================= APPLICATION SOFTWARE-0.71% Citrix Systems, Inc.(d) 175,000 3,937,500 ------------------------------------------------------------------------- NAVTEQ Corp.(d) 55,000 2,003,100 ========================================================================= 5,940,600 ========================================================================= ASSET MANAGEMENT & CUSTODY BANKS-0.55% Legg Mason, Inc.(b) 65,000 4,605,900 ========================================================================= CASINOS & GAMING-0.53% GTECH Holdings Corp. 180,000 4,404,600 ========================================================================= COMMUNICATIONS EQUIPMENT-0.79% Comverse Technology, Inc.(d) 290,000 6,609,100 ========================================================================= CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS-0.37% Oshkosh Truck Corp. 41,000 3,081,150 ========================================================================= CONSUMER FINANCE-0.45% Providian Financial Corp.(b)(d) 225,000 3,750,750 ========================================================================= DATA PROCESSING & OUTSOURCED SERVICES-0.92% Alliance Data Systems Corp.(b)(d) 190,000 7,676,000 ========================================================================= DEPARTMENT STORES-1.04% Nordstrom, Inc. 170,000 8,641,100 =========================================================================
MARKET SHARES VALUE -------------------------------------------------------------------------
DISTILLERS & VINTNERS-0.73% Constellation Brands, Inc.-Class A(d) 115,000 $ 6,061,650 ========================================================================= ELECTRONIC EQUIPMENT MANUFACTURERS-0.57% Amphenol Corp.-Class A 120,000 4,732,800 ========================================================================= HEALTH CARE EQUIPMENT-2.07% Bard (C.R.), Inc. 95,000 6,761,150 ------------------------------------------------------------------------- Fisher Scientific International Inc.(d) 85,000 5,047,300 ------------------------------------------------------------------------- Varian Medical Systems, Inc.(b)(d) 163,000 5,499,620 ========================================================================= 17,308,070 ========================================================================= HEALTH CARE SERVICES-0.68% Laboratory Corp. of America Holdings(d) 115,000 5,692,500 ========================================================================= HOTELS, RESORTS & CRUISE LINES-0.68% Hilton Hotels Corp. 260,000 5,675,800 ========================================================================= HOUSEHOLD PRODUCTS-0.36% Energizer Holdings, Inc.(d) 52,500 2,990,925 ========================================================================= INDUSTRIAL CONGLOMERATES-0.81% Textron Inc. 90,000 6,781,500 ========================================================================= INTERNET SOFTWARE & SERVICES-0.63% VeriSign, Inc.(b)(d) 200,000 5,292,000 ========================================================================= LEISURE PRODUCTS-0.48% Polaris Industries Inc. 70,000 4,029,200 ========================================================================= MANAGED HEALTH CARE-1.48% Humana Inc.(b)(d) 210,000 7,276,500 ------------------------------------------------------------------------- WellChoice Inc.(d) 90,000 5,058,000 ========================================================================= 12,334,500 ========================================================================= MULTI-LINE INSURANCE-0.64% HCC Insurance Holdings, Inc. 150,000 5,335,500 ========================================================================= OIL & GAS EQUIPMENT & SERVICES-1.67% BJ Services Co.(b) 175,000 8,531,250 ------------------------------------------------------------------------- National-Oilwell Varco Inc.(d) 137,000 5,444,380 ========================================================================= 13,975,630 ========================================================================= OIL & GAS EXPLORATION & PRODUCTION-0.26% Newfield Exploration Co.(d) 31,000 2,201,930 ========================================================================= OTHER DIVERSIFIED FINANCIAL SERVICES-0.54% Alliance Capital Management Holding L.P. 100,000 4,494,000 ========================================================================= PHARMACEUTICALS-0.29% Sepracor Inc.(d) 40,000 2,396,800 =========================================================================
F-3
MARKET SHARES VALUE ------------------------------------------------------------------------- PUBLISHING-0.56% Getty Images, Inc.(b)(d) 65,000 $ 4,650,750 ========================================================================= REGIONAL BANKS-0.77% Bank of Hawaii Corp. 135,000 6,392,250 ========================================================================= RESTAURANTS-1.38% Darden Restaurants, Inc. 180,000 5,400,000 ------------------------------------------------------------------------- Yum! Brands, Inc. 130,000 6,104,800 ========================================================================= 11,504,800 ========================================================================= SEMICONDUCTORS-1.59% Microchip Technology Inc. 263,370 7,500,778 ------------------------------------------------------------------------- National Semiconductor Corp.(b) 300,000 5,724,000 ========================================================================= 13,224,778 ========================================================================= SPECIALIZED FINANCE-0.70% Chicago Mercantile Exchange Holdings Inc.(b) 30,000 5,865,600 ========================================================================= SPECIALTY CHEMICALS-0.69% Ecolab Inc. 175,000 5,724,250 ========================================================================= SPECIALTY STORES-1.53% Advance Auto Parts, Inc.(d) 80,000 4,268,000 ------------------------------------------------------------------------- PETCO Animal Supplies, Inc.(d) 150,000 4,695,000 ------------------------------------------------------------------------- Tiffany & Co.(b) 125,000 3,768,750 ========================================================================= 12,731,750 ========================================================================= SYSTEMS SOFTWARE-0.56% McAfee Inc.(d) 225,000 4,704,750 =========================================================================
MARKET SHARES VALUE -------------------------------------------------------------------------
TECHNOLOGY DISTRIBUTORS-0.27% Ingram Micro Inc.-Class A(d) 135,000 $ 2,249,100 ========================================================================= THRIFTS & MORTGAGE FINANCE-0.64% Radian Group Inc. 120,000 5,331,600 ========================================================================= Total Domestic Common Stocks (Cost $218,148,035) 240,045,383 ========================================================================= MONEY MARKET FUNDS-3.19% Liquid Assets Portfolio-Institutional Class(h) 13,308,844 13,308,844 ------------------------------------------------------------------------- STIC Prime Portfolio-Institutional Class(h) 13,308,844 13,308,844 ========================================================================= Total Money Market Funds (Cost $26,617,688) 26,617,688 ========================================================================= TOTAL INVESTMENTS-98.11% (excluding investments purchased with cash collateral from securities loaned) (Cost $615,646,744) 818,575,548 ========================================================================= INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-14.04% Liquid Assets Portfolio-Institutional Class(h)(i) 58,562,612 58,562,612 ------------------------------------------------------------------------- STIC Prime Portfolio-Institutional Class(h)(i) 58,562,612 58,562,612 ========================================================================= Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $117,125,224) 117,125,224 ========================================================================= TOTAL INVESTMENTS-112.15% (Cost $732,771,968) 935,700,772 ========================================================================= OTHER ASSETS LESS LIABILITIES-(12.15%) (101,340,029) ========================================================================= NET ASSETS-100.00% $ 834,360,743 _________________________________________________________________________ =========================================================================
Investment Abbreviations: ADR - American Depositary Receipt Pfd. - Preferred
Notes to Schedule of Investments: (a) In accordance with the procedures established by the Board of Trustees, the foreign security is fair valued using adjusted closing market prices. The aggregate market value of these securities at April 30, 2005 was $440,652,520, which represented 47.09% of the Fund's Total Investments. See Note 1A. (b) All or a portion of this security has been pledged as collateral for securities lending transactions at April 30, 2005. (c) Security not registered under the Securities Act of 1933, as amended (e.g., the security was purchased in a Rule 144A transaction or a Regulation D transaction). The security may be resold only pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The Fund has no rights to demand registration of these securities. The aggregate market value of these securities at April 30, 2005 was $74,100,610, which represented 8.88% of the Fund's Net Assets. Unless otherwise indicated, these securities are not considered to be illiquid. (d) Non-income producing security. (e) Security fair valued in good faith in accordance with the procedures established by the Board of Trustees. The aggregate market value of these securities at April 30, 2005 was $10,488,860, which represented 1.12% of the Fund's Total Investments. See Note 1A. (f) Security considered to be illiquid; the portfolio is limited to investing 15% of Net Assets in illiquid securities. The market value of this security considered illiquid at April 30, 2005 represented 0.07% of the Fund's Net Assets. (g) Non-income producing security acquired through a corporate action. (h) The money market fund and the Fund are affiliated by having the same investment advisor. See Note 3. (i) The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 8. See accompanying notes which are an integral part of the financial statements. F-4 STATEMENT OF ASSETS AND LIABILITIES April 30, 2005 (Unaudited) ASSETS: Investments, at market value (cost $589,029,056)* $791,957,860 ----------------------------------------------------------- Investments in affiliated money market funds (cost $143,742,912) 143,742,912 =========================================================== Total investments (cost $732,771,968) 935,700,772 =========================================================== Foreign currencies, at market value (cost $15,453,149) 15,854,867 =========================================================== Receivables for: Investments sold 10,395,153 ----------------------------------------------------------- Fund shares sold 945,911 ----------------------------------------------------------- Dividends 1,429,382 ----------------------------------------------------------- Investment for trustee deferred compensation and retirement plans 74,240 ----------------------------------------------------------- Other assets 35,180 =========================================================== Total assets 964,435,505 ___________________________________________________________ =========================================================== LIABILITIES: Payables for: Investments purchased 10,007,511 ----------------------------------------------------------- Fund shares reacquired 1,558,346 ----------------------------------------------------------- Trustee deferred compensation and retirement plans 153,728 ----------------------------------------------------------- Collateral upon return of securities loaned 117,125,224 ----------------------------------------------------------- Accrued distribution fees 335,731 ----------------------------------------------------------- Accrued trustees' and officer's fees and benefits 2,042 ----------------------------------------------------------- Accrued transfer agent fees 570,920 ----------------------------------------------------------- Accrued operating expenses 321,260 =========================================================== Total liabilities 130,074,762 =========================================================== Net assets applicable to shares outstanding $834,360,743 ___________________________________________________________ =========================================================== NET ASSETS CONSIST OF: Shares of beneficial interest $653,528,797 ----------------------------------------------------------- Undistributed net investment income (loss) (2,051,900) ----------------------------------------------------------- Undistributed net realized gain (loss) from investment securities and foreign currencies (20,219,034) ----------------------------------------------------------- Unrealized appreciation of investment securities and foreign currencies 203,102,880 ___________________________________________________________ =========================================================== $834,360,743 ___________________________________________________________ =========================================================== NET ASSETS: Class A $626,509,424 ___________________________________________________________ =========================================================== Class B $185,943,301 ___________________________________________________________ =========================================================== Class C $ 21,908,018 ___________________________________________________________ =========================================================== SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 34,058,017 ___________________________________________________________ =========================================================== Class B 10,815,387 ___________________________________________________________ =========================================================== Class C 1,273,851 ___________________________________________________________ =========================================================== Class A: Net asset value per share $ 18.40 ----------------------------------------------------------- Offering price per share: (Net asset value of $18.40 divided by 95.25%) $ 19.32 ___________________________________________________________ =========================================================== Class B: Net asset value and offering price per share $ 17.19 ___________________________________________________________ =========================================================== Class C: Net asset value and offering price per share $ 17.20 ___________________________________________________________ ===========================================================
* At April 30, 2005, securities with an aggregate market value of $113,189,004 were on loan to brokers. See accompanying notes which are an integral part of the financial statements. F-5 STATEMENT OF OPERATIONS For the six months ended April 30, 2005 (Unaudited) INVESTMENT INCOME: Dividends (net of foreign withholding tax of $328,756) $ 6,140,086 -------------------------------------------------------------------------- Dividends from affiliated money market funds (including securities lending income of $173,106 after rebates of $1,116,936) 350,378 -------------------------------------------------------------------------- Interest 22,057 ========================================================================== Total investment income 6,512,521 ========================================================================== EXPENSES: Advisory fees 3,978,628 -------------------------------------------------------------------------- Administrative services fees 111,594 -------------------------------------------------------------------------- Custodian fees 397,131 -------------------------------------------------------------------------- Distribution fees: Class A 1,241,586 -------------------------------------------------------------------------- Class B 1,192,845 -------------------------------------------------------------------------- Class C 113,333 -------------------------------------------------------------------------- Transfer agent fees 1,519,596 -------------------------------------------------------------------------- Trustees' and officer's fees and benefits 22,254 -------------------------------------------------------------------------- Other 241,309 ========================================================================== Total expenses 8,818,276 ========================================================================== Less: Fees waived, expenses reimbursed and expense offset arrangements (403,280) ========================================================================== Net expenses 8,414,996 ========================================================================== Net investment income (loss) (1,902,475) ========================================================================== REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES AND FOREIGN CURRENCIES: Net realized gain from: Investment securities (net of tax on the sale of foreign investments of $575-Note 1G; includes gains from securities sold to affiliates of $79,064) 129,445,246 -------------------------------------------------------------------------- Foreign currencies 1,248,600 ========================================================================== 130,693,846 ========================================================================== Change in net unrealized appreciation (depreciation) of: Investment securities (net of change in estimated tax on foreign investments held of $52,582-Note 1G) (58,087,090) -------------------------------------------------------------------------- Foreign currencies (85,955) ========================================================================== (58,173,045) ========================================================================== Net gain from investment securities and foreign currencies 72,520,801 ========================================================================== Net increase in net assets resulting from operations $ 70,618,326 __________________________________________________________________________ ==========================================================================
See accompanying notes which are an integral part of the financial statements. F-6 STATEMENT OF CHANGES IN NET ASSETS For the six months ended April 30, 2005 and the year ended October 31, 2004 (Unaudited)
APRIL 30, OCTOBER 31, 2005 2004 ------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $ (1,902,475) $ (8,818,644) ------------------------------------------------------------------------------------------- Net realized gain from investment securities and foreign currencies 130,693,846 119,729,166 ------------------------------------------------------------------------------------------- Change in net unrealized appreciation (depreciation) of investment securities and foreign currencies (58,173,045) 38,340,359 =========================================================================================== Net increase in net assets resulting from operations 70,618,326 149,250,881 =========================================================================================== Share transactions-net: Class A 13,661,138 13,287,763 ------------------------------------------------------------------------------------------- Class B (93,941,674) (175,103,307) ------------------------------------------------------------------------------------------- Class C (839,554) (2,607,686) =========================================================================================== Net increase (decrease) in net assets resulting from share transactions (81,120,090) (164,423,230) =========================================================================================== Net increase (decrease) in net assets (10,501,764) (15,172,349) =========================================================================================== NET ASSETS: Beginning of period 844,862,507 860,034,856 =========================================================================================== End of period (including undistributed net investment income (loss) of $(2,051,900) and $(149,425), respectively) $834,360,743 $ 844,862,507 ___________________________________________________________________________________________ ===========================================================================================
See accompanying notes which are an integral part of the financial statements. F-7 NOTES TO FINANCIAL STATEMENTS April 30, 2005 (Unaudited) NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Global Aggressive Growth Fund (the "Fund") is a series portfolio of AIM International Mutual Funds (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 six separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The Fund currently offers multiple classes of shares. 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 above-average long-term growth of capital. Companies are listed in the Schedule of Investments based on the country in which they are organized. Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust (including the Trust's investment manager) 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 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. However, the Fund has not had prior claims or losses pursuant to these contracts. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. A. SECURITY VALUATIONS -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued on the basis of prices furnished by independent pricing services, which may be considered fair valued, or market makers. Each security reported on the NASDAQ National Market System 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 will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end registered investment companies 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 closed-end registered investment companies that trade on an exchange are valued at the last sales price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) 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 having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. 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. 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. 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 the close of the respective markets. Events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. 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 market value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current market 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, ADRs and domestic and foreign index futures. F-8 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. 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. 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. 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 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 Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. F. REDEMPTION FEES -- The Fund has instituted a 2% redemption fee on certain share classes 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, including exchanges of shares held less than 30 days. The redemption fee is accounted for as an addition to shares of beneficial interest by the Fund and is allocated among the share classes based on the relative net assets of each class. G. 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. H. 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. F-9 NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE --------------------------------------------------------------------- First $1 billion 0.90% --------------------------------------------------------------------- Over $1 billion 0.85% _____________________________________________________________________ =====================================================================
Effective January 1, 2005 through December 31, 2009, AIM has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund based on the Fund's average daily net assets do not exceed the annual rate of:
AVERAGE NET ASSETS RATE --------------------------------------------------------------------- First $250 million 0.80% --------------------------------------------------------------------- Next $250 million 0.78% --------------------------------------------------------------------- Next $500 million 0.76% --------------------------------------------------------------------- Next $1.5 billion 0.74% --------------------------------------------------------------------- Next $2.5 billion 0.72% --------------------------------------------------------------------- Next $2.5 billion 0.70% --------------------------------------------------------------------- Next $2.5 billion 0.68% --------------------------------------------------------------------- Over $10 billion 0.66% _____________________________________________________________________ =====================================================================
AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds on investments by the Fund in such affiliated money market funds (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the fund). AIM is also voluntarily waiving a portion of the advisory fee payable by the Fund equal to the difference between the income earned from investing in the affiliated money market fund and the hypothetical income earned from investing in an appropriate comparative benchmark. Voluntary fee waivers or reimbursements may be modified or discontinued at any time upon consultation with the Board of Trustees without further notice to investors. For the six months ended April 30, 2005, AIM waived fees of $363,130. For the six months ended April 30, 2005, at the request of the Trustees of the Trust, AMVESCAP PLC ("AMVESCAP") agreed to reimburse $29,465 of 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. 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. Pursuant to such agreement, for the six months ended April 30, 2005, AIM was paid $111,594. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer agency and shareholder services to the Fund and reimburse AISI for certain expenses incurred by AISI in the course of providing such services. AISI may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. For the six months ended April 30, 2005, the Fund paid AISI $1,519,596. The Trust has entered into master distribution agreements with A I M Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B and Class C shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A, Class B and Class C shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays ADI 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 Class C shares. Prior to January 1, 2005, the Fund paid ADI 0.50% of the average daily net assets of Class A shares. Of these amounts, up to 0.25% of the average daily net assets of the Class A, Class B or Class C 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. NASD Rules 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. Pursuant to the Plans, for the six months ended April 30, 2005, the Class A, Class B and Class C shares paid $1,241,586, $1,192,845 and $113,333, respectively. Front-end sales commissions and contingent deferred sales charges ("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 six months ended April 30, 2005, ADI advised the Fund that it retained $38,290 in front-end sales commissions for the sale of Class A shares and $224, $27,600 and $604 from Class A, Class B and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders. Certain officers and trustees of the Trust are officers and directors of AIM, AISI and/or ADI. F-10 NOTE 3--INVESTMENTS IN AFFILIATES The Fund is permitted, pursuant to an exemptive order from the Securities and Exchange Commission ("SEC"), to invest daily available cash balances and cash collateral from securities lending transactions in affiliated money market funds. The Fund and the money market funds below have the same investment advisor and therefore, are considered to be affiliated. The tables below show the transactions in and earnings from investments in affiliated money market funds for the six months ended April 30, 2005. INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
UNREALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND REALIZED FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME GAIN (LOSS) ---------------------------------------------------------------------------------------------------------------------------------- Liquid Assets Portfolio- Institutional Class $1,521,179 $ 87,710,078 $ (75,922,413) $ -- $13,308,844 $ 87,818 $ -- ---------------------------------------------------------------------------------------------------------------------------------- STIC Prime Portfolio- Institutional Class 1,521,179 87,710,078 (75,922,413) -- 13,308,844 89,454 -- ================================================================================================================================== Subtotal $3,042,358 $175,420,156 $(151,844,826) $ -- $26,617,688 $177,272 $ -- ==================================================================================================================================
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
UNREALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND REALIZED FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME* GAIN (LOSS) ---------------------------------------------------------------------------------------------------------------------------------- Liquid Assets Portfolio- Institutional Class $ 76,343,445 $148,586,725 $(166,367,558) $ -- $ 58,562,612 $ 85,764 $ -- ---------------------------------------------------------------------------------------------------------------------------------- STIC Prime Portfolio- Institutional Class 76,343,445 147,652,645 (165,433,478) -- 58,562,612 87,342 -- ================================================================================================================================== Subtotal $152,686,890 $296,239,370 $(331,801,036) $ -- $117,125,224 $173,106 $ -- ================================================================================================================================== Total $155,729,248 $471,659,526 $(483,645,862) $ -- $143,742,912 $350,378 $ -- __________________________________________________________________________________________________________________________________ ==================================================================================================================================
* Net of rebates. 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, during the six months ended April 30, 2005, the Fund engaged in securities purchases of $5,002,309 and sales of $1,930,292, which resulted in net realized gain of $79,064. NOTE 5--EXPENSE OFFSET ARRANGEMENTS 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 six months ended April 30, 2005, the Fund received credits from these arrangements which resulted in the reduction of the Fund's total expenses of $10,685. NOTE 6-- TRUSTEES' AND OFFICER'S FEES AND BENEFITS "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to each Trustee of the Fund who is not an "interested person" of the AIM Funds. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officer's 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, 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 Officer's 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. In addition to the above, "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to the Senior Officer of the AIM Funds. F-11 During the six months ended April 30, 2005, the Fund paid legal fees of $3,364 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--BORROWINGS Pursuant to an exemptive order from the SEC, the Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. A loan will be secured by collateral if the Fund's aggregate borrowings from all sources exceeds 10% of the Fund's total assets. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. The Fund is a participant in an uncommitted unsecured revolving credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000, or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the credit facility can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the six months ended April 30, 2005, the Fund did not borrow or lend under the interfund lending facility or borrow under the uncommitted unsecured revolving credit facility. Additionally, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated at an amount equal to the Federal Funds rate plus 100 basis points. NOTE 8--PORTFOLIO SECURITIES LOANED 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. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds. 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. The Fund could also 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 a loss on the collateral invested. At April 30, 2005, securities with an aggregate value of $113,189,004 were on loan to brokers. The loans were secured by cash collateral of $117,125,224 received by the Fund and subsequently invested in affiliated money market funds. For the six months ended April 30, 2005, the Fund received dividends on cash collateral of $173,106 for securities lending transactions, which are net of rebates. NOTE 9--TAX INFORMATION The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund's fiscal year-end. 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. F-12 The Fund had a capital loss carryforward as of October 31, 2004 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* --------------------------------------------------------------------------- October 31, 2010 $148,732,311 ___________________________________________________________________________ ===========================================================================
* 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 10--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities and money market funds) purchased and sold by the Fund during the six months ended April 30, 2005 was $316,316,752 and $400,317,716, respectively. For interim reporting periods, the cost of investments for tax purposes includes reversals of certain tax items, such as, wash sales that have occurred since the prior fiscal year-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS ------------------------------------------------------------------------------ Aggregate unrealized appreciation of investment securities $218,194,296 ------------------------------------------------------------------------------ Aggregate unrealized (depreciation) of investment securities (15,821,158) ============================================================================== Net unrealized appreciation of investment securities $202,373,138 ______________________________________________________________________________ ============================================================================== Cost of investments for tax purposes is $733,327,634.
NOTE 11--SHARE INFORMATION 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 CDSC. Under certain circumstances, Class A shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN SHARES OUTSTANDING(a) ------------------------------------------------------------------------------------------------------------------------ SIX MONTHS ENDED YEAR ENDED APRIL 30, 2005 OCTOBER 31, 2004 -------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------------------------------------------------------------ Sold: Class A 1,189,534 $ 22,230,372 4,622,748 $ 71,616,617 ------------------------------------------------------------------------------------------------------------------------ Class B 443,822 7,799,961 775,098 11,562,193 ------------------------------------------------------------------------------------------------------------------------ Class C 145,316 2,543,343 212,782 3,180,392 ======================================================================================================================== Automatic conversion of Class B shares to Class A shares: Class A 3,868,710 72,975,710 6,909,424 111,234,847 ------------------------------------------------------------------------------------------------------------------------ Class B (4,134,133) (72,975,710) (7,355,880) (111,234,847) ======================================================================================================================== Reacquired:(b) Class A (4,344,163) (81,544,944) (10,817,220) (169,563,701) ------------------------------------------------------------------------------------------------------------------------ Class B (1,644,097) (28,765,925) (5,078,337) (75,430,653) ------------------------------------------------------------------------------------------------------------------------ Class C (193,129) (3,382,897) (388,928) (5,788,078) ======================================================================================================================== (4,668,140) $(81,120,090) (11,120,313) $(164,423,230) ________________________________________________________________________________________________________________________ ========================================================================================================================
(a) There are two entities that are each record owners of more than 5% of the outstanding shares of the Fund and in aggregate they own 17% of the outstanding shares of the Fund. ADI has an agreement with these entities to sell Fund shares. The Fund, AIM and/or AIM affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, AIM and/or 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 are also owned beneficially. (b) Amount is net of redemption fees of $884, $82 and $0 for Class A, Class B and Class C shares, respectively, for the six months ended April 30, 2005 and $6,487, $3,766 and $255 for Class A, Class B and Class C shares, respectively, for the year ended October 31, 2004. F-13 NOTE 12--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A --------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ---------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 --------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 16.99 $ 14.28 $ 11.00 $ 12.58 $ 25.87 $ 21.95 --------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.02)(a) (0.13)(a) (0.13) (0.15)(a) (0.13) (0.28)(a) --------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 1.43 2.84 3.41 (1.43) (8.42) 5.56 =============================================================================================================== Total from investment operations 1.41 2.71 3.28 (1.58) (8.55) 5.28 =============================================================================================================== Less distributions from net realized gains -- -- -- -- (4.74) (1.36) =============================================================================================================== Redemptions fees added to shares of beneficial interest 0.00 0.00 -- -- -- -- =============================================================================================================== Net asset value, end of period $ 18.40 $ 16.99 $ 14.28 $ 11.00 $ 12.58 $ 25.87 _______________________________________________________________________________________________________________ =============================================================================================================== Total return(b) 8.30% 18.98% 29.82% (12.56)% (38.87)% 24.27% _______________________________________________________________________________________________________________ =============================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $626,509 $566,573 $465,855 $405,360 $563,828 $1,103,740 _______________________________________________________________________________________________________________ =============================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.73%(c) 2.02% 2.10% 2.00% 1.87% 1.65% --------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.82%(c) 2.03% 2.11% 2.00% 1.87% 1.65% =============================================================================================================== Ratio of net investment income (loss) to average net assets (0.26)%(c) (0.81)% (0.97)% (1.19)% (0.75)% (0.96)% _______________________________________________________________________________________________________________ =============================================================================================================== Portfolio turnover rate(d) 37% 68% 64% 73% 87% 62% _______________________________________________________________________________________________________________ ===============================================================================================================
(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. (c) Ratios are annualized and based on average daily net assets of $628,066,161. (d) Not annualized for periods less than one year. F-14 NOTE 12--FINANCIAL HIGHLIGHTS--(CONTINUED)
CLASS B --------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ---------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 --------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 15.93 $ 13.45 $ 10.42 $ 11.97 $ 24.98 $ 21.35 --------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.07)(a) (0.19)(a) (0.19) (0.20)(a) (0.21) (0.42)(a) --------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 1.33 2.67 3.22 (1.35) (8.06) 5.41 =============================================================================================================== Total from investment operations 1.26 2.48 3.03 (1.55) (8.27) 4.99 =============================================================================================================== Less distributions from net realized gains -- -- -- -- (4.74) (1.36) =============================================================================================================== Redemptions fees added to shares of beneficial interest 0.00 0.00 -- -- -- -- =============================================================================================================== Net asset value, end of period $ 17.19 $ 15.93 $ 13.45 $ 10.42 $ 11.97 $ 24.98 _______________________________________________________________________________________________________________ =============================================================================================================== Total return(b) 7.91% 18.44% 29.08% (12.95)% (39.19)% 23.56% _______________________________________________________________________________________________________________ =============================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $185,943 $257,230 $374,027 $388,101 $583,933 $1,158,979 _______________________________________________________________________________________________________________ =============================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.33%(c) 2.52% 2.60% 2.51% 2.39% 2.19% --------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.42%(c) 2.53% 2.61% 2.51% 2.39% 2.19% =============================================================================================================== Ratio of net investment income (loss) to average net assets (0.86)%(c) (1.31)% (1.47)% (1.70)% (1.27)% (1.50)% _______________________________________________________________________________________________________________ =============================================================================================================== Portfolio turnover rate(d) 37% 68% 64% 73% 87% 62% _______________________________________________________________________________________________________________ ===============================================================================================================
(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. (c) Ratios are annualized and based on average daily net assets of $240,546,066. (d) Not annualized for periods less than one year. F-15 NOTE 12--FINANCIAL HIGHLIGHTS--(CONTINUED)
CLASS C ------------------------------------------------------------------------------------ SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 15.93 $ 13.46 $ 10.42 $ 11.98 $ 24.99 $ 21.35 -------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.07)(a) (0.19)(a) (0.19) (0.20)(a) (0.21) (0.42)(a) -------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 1.34 2.66 3.23 (1.36) (8.06) 5.42 ==================================================================================================================== Total from investment operations 1.27 2.47 3.04 (1.56) (8.27) 5.00 ==================================================================================================================== Less distributions from net realized gains -- -- -- -- (4.74) (1.36) ==================================================================================================================== Redemptions fees added to shares of beneficial interest 0.00 0.00 -- -- -- -- ==================================================================================================================== Net asset value, end of period $ 17.20 $ 15.93 $ 13.46 $ 10.42 $ 11.98 $ 24.99 ____________________________________________________________________________________________________________________ ==================================================================================================================== Total return(b) 7.97% 18.35% 29.17% (13.02)% (39.17)% 23.61% ____________________________________________________________________________________________________________________ ==================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $21,908 $21,059 $20,153 $19,099 $28,260 $50,908 ____________________________________________________________________________________________________________________ ==================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.33%(c) 2.52% 2.60% 2.51% 2.39% 2.19% -------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.42%(c) 2.53% 2.61% 2.51% 2.39% 2.19% ==================================================================================================================== Ratio of net investment income (loss) to average net assets (0.86)%(c) (1.31)% (1.47)% (1.70)% (1.28)% (1.50)% ____________________________________________________________________________________________________________________ ==================================================================================================================== Portfolio turnover rate(d) 37% 68% 64% 73% 87% 62% ____________________________________________________________________________________________________________________ ====================================================================================================================
(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. (c) Ratios are annualized and based on average daily net assets of $22,854,374. (d) Not annualized for periods less than one year. NOTE 13--LEGAL PROCEEDINGS Terms used in the Legal Proceedings Note are defined terms solely for the purpose of this note. SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment advisor to certain AIM Funds), A I M Advisors, Inc. ("AIM") (the Fund's investment advisor) and A I M Distributors, Inc. ("ADI") (the distributor of the retail AIM Funds) reached final settlements with certain regulators, including, among others, the Securities and Exchange Commission ("SEC"), the New York Attorney General ("NYAG") and the Colorado Attorney General ("COAG"), to resolve civil enforcement actions and/or investigations related to market timing activity and related issues in the AIM Funds, including those formerly advised by IFG. As part of the settlements, IFG agreed to pay a total of $325 million (including $110 million in civil penalties). Additionally, AIM and ADI agreed to pay a total of $50 million (including $30 million in civil penalties). These settlement funds will be made available for distribution to the shareholders of the applicable AIM Funds that were harmed by market timing activity, and may (or may not) increase as a result of contributions from third parties who reach final settlements with the SEC or other regulators to resolve allegations of market timing and/or late trading. The settlement funds will be distributed in accordance with a methodology to be determined by AIM's independent distribution consultant, in consultation with AIM and the independent trustees of the AIM Funds and acceptable to the staff of the SEC. As the methodology is unknown at the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the distribution of these settlement funds may have on the Fund or whether such distribution will have an impact on the Fund's financial statements in the future. At the request of the trustees of the AIM Funds, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and AIM, has agreed to reimburse expenses incurred by the AIM Funds related to market timing matters. REGULATORY INQUIRIES AND PENDING LITIGATION IFG, AIM, ADI and/or related entities and individuals have received inquiries from numerous regulators in the form of subpoenas or other oral or written requests for information and/or documents related to one or more of the following issues, some of which concern one or more AIM Funds: market timing activity, late trading, fair value pricing, excessive or improper advisory and/or distribution fees, mutual fund sales practices, including revenue sharing and directed-brokerage arrangements, investments in securities of other registered investment companies, contractual plans, issues related to F-16 NOTE 13--LEGAL PROCEEDINGS--(CONTINUED) Section 529 college savings plans and procedures for locating lost securityholders. IFG, AIM and ADI are providing full cooperation with respect to these inquiries. As described more fully below, the AIM Funds, IFG, AIM, ADI and/or related entities and individuals are defendants in numerous civil lawsuits related to one or more of these issues. Regulatory actions and/or additional civil lawsuits related to these or other issues may be filed against the AIM Funds, IFG, AIM and/or related entities and individuals in the future. On April 12, 2005, the Attorney General of the State of West Virginia ("WVAG") filed civil proceedings against AIM, IFG and ADI, as well as numerous unrelated mutual fund complexes and financial institutions. None of the AIM Funds has been named as a defendant in these proceedings. The WVAG complaint, filed in the Circuit Court of Marshall County, West Virginia [Civil Action No. 05-C-81], alleges, in substance, that AIM, IFG and ADI engaged in unfair competition and/or unfair or deceptive trade practices by failing to disclose in the prospectuses for the AIM Funds, including those formerly advised by IFG, that they had entered into certain arrangements permitting market timing of such Funds. As a result of the foregoing, the WVAG alleges violations of W. Va. Code sec. 46A-1-101, et seq. (the West Virginia Consumer Credit and Protection Act). The WVAG complaint is seeking, among other things, injunctive relief, civil monetary penalties and a writ of quo warranto against the defendants. If AIM is unsuccessful in its defense of the WVAG proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could affect the ability of AIM or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any registered investment company, including the Fund. The Fund has been informed by AIM that, if these results occur, AIM will seek exemptive relief from the SEC to permit it to continue to serve as the Fund's investment advisor. There is no assurance that such exemptive relief will be granted. Civil lawsuits, including purported class action and shareholder derivative suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or related entities and individuals, depending on the lawsuit, alleging: - that the defendants permitted improper market timing and related issues in the AIM Funds; - that certain AIM Funds inadequately employed fair value pricing; - that the defendants charged excessive advisory and/or distribution fees and failed to pass on to shareholders the perceived savings generated by economies of scale and that the defendants adopted unlawful distribution plans; - that the defendants breached their fiduciary duties by charging distribution fees while funds and/or specific share classes were closed generally to new investors and/or while other share classes of the same fund were not charged the same distribution fees; - that the defendants improperly used the assets of the AIM Funds to pay brokers to aggressively promote the sale of the AIM Funds over other mutual funds and that the defendants concealed such payments from investors by disguising them as brokerage commissions; and - that the defendants breached their fiduciary duties by failing to ensure that the AIM Funds participated in class action settlements in which the AIM Funds were eligible to participate. These lawsuits allege as theories of recovery, depending on the lawsuit, violations of various provisions of the Federal and state securities laws and ERISA, negligence, breach of fiduciary duty and/or breach of contract. These lawsuits seek remedies that include, depending on the lawsuit, damages, restitution, injunctive relief, imposition of a constructive trust, removal of certain directors and/or employees, various corrective measures under ERISA, rescission of certain AIM Funds' advisory agreements and/or distribution plans and recovery of all fees paid, an accounting of all fund-related fees, commissions and soft dollar payments, restitution of all commissions and fees paid, and prospective relief in the form of reduced fees. At the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the outcome of the Regulatory Inquiries and Pending Litigation described above may have on AIM, ADI or the Fund. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * As a result of the matters discussed above, investors in the AIM Funds might react by redeeming their investments. This might require the AIM Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AIM Funds. F-17 OTHER INFORMATION BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND Bob R. Baker Robert H. Graham 11 Greenway Plaza Frank S. Bayley President Suite 100 James T. Bunch Houston, TX 77046-1173 Bruce L. Crockett Mark H. Williamson Chair Executive Vice President INVESTMENT ADVISOR Albert R. Dowden A I M Advisors, Inc. Edward K. Dunn Jr. Lisa O. Brinkley 11 Greenway Plaza Jack M. Fields Senior Vice President and Suite 100 Carl Frischling Chief Compliance Officer Houston, TX 77046-1173 Robert H. Graham Gerald J. Lewis Russell C. Burk TRANSFER AGENT Prema Mathai-Davis Senior Vice President AIM Investment Services, Inc. Lewis F. Pennock (Senior Officer) P.O. Box 4739 Ruth H. Quigley Houston, TX 77210-4739 Larry Soll Kevin M. Carome Mark H. Williamson Senior Vice President, Secretary and CUSTODIAN Chief Legal Officer State Street Bank and Trust Company 225 Franklin Street Sidney M. Dilgren Boston, MA 02110-2801 Vice President and Treasurer COUNSEL TO THE FUND Robert G. Alley Ballard Spahr Vice President Andrews & Ingersoll, LLP 1735 Market Street, 51st Floor J. Philip Ferguson Philadelphia, PA 19103-7599 Vice President COUNSEL TO THE INDEPENDENT TRUSTEES Karen Dunn Kelley Kramer, Levin, Naftalis & Frankel LLP Vice President 1177 Avenue of the Americas New York, NY 10036-2714 DISTRIBUTOR A I M Distributors, Inc. 11 Greenway Plaza Suite 100 Houston, TX 77046-1173
DOMESTIC EQUITY SECTOR EQUITY AIM Aggressive Growth Fund AIM Advantage Health Sciences Fund(1) AIM Basic Balanced Fund* AIM Energy Fund(1) AIM Basic Value Fund AIM Financial Services Fund(1) AIM Blue Chip Fund AIM Global Health Care Fund AIM Capital Development Fund AIM Global Real Estate Fund AIM Charter Fund AIM Gold & Precious Metals Fund(1) AIM Constellation Fund AIM Leisure Fund(1) AIM Diversified Dividend Fund AIM Multi-Sector Fund(1) AIM Dynamics Fund(1) AIM Real Estate Fund(7) AIM Large Cap Basic Value Fund AIM Technology Fund(1) AIM Large Cap Growth Fund AIM Utilities Fund(1) AIM Mid Cap Basic Value Fund AIM Mid Cap Core Equity Fund(2) AIM Mid Cap Growth Fund FIXED INCOME AIM Opportunities I Fund AIM Opportunities II Fund TAXABLE AIM Opportunities III Fund AIM Premier Equity Fund AIM Floating Rate Fund AIM S&P 500 Index Fund(1) AIM High Yield Fund AIM Select Equity Fund AIM Income Fund AIM Small Cap Equity Fund(3) AIM Intermediate Government Fund AIM Small Cap Growth Fund(4) AIM Limited Maturity Treasury Fund AIM Small Company Growth Fund(1) AIM Money Market Fund AIM Trimark Endeavor Fund AIM Short Term Bond Fund AIM Trimark Small Companies Fund AIM Total Return Bond Fund AIM Weingarten Fund Premier Portfolio Premier U.S. Government Money Portfolio(1) *Domestic equity and income fund TAX-FREE INTERNATIONAL/GLOBAL EQUITY AIM High Income Municipal Fund AIM Municipal Bond Fund AIM Asia Pacific Growth Fund AIM Tax-Exempt Cash Fund AIM Developing Markets Fund AIM Tax-Free Intermediate Fund AIM European Growth Fund Premier Tax-Exempt Portfolio AIM European Small Company Fund(5) AIM Global Aggressive Growth Fund AIM Global Equity Fund AIM ALLOCATION SOLUTIONS AIM Global Growth Fund AIM Global Value Fund AIM Conservative Allocation Fund AIM International Core Equity Fund(1) AIM Growth Allocation Fund(8) AIM International Growth Fund AIM Moderate Allocation Fund AIM International Small Company Fund(6) AIM Moderate Growth Allocation Fund AIM Trimark Fund AIM Moderately Conservative Allocation Fund
(1) The following name changes became effective October 15, 2004: INVESCO Advantage Health Sciences Fund to AIM Advantage Health Sciences Fund, INVESCO Dynamics Fund to AIM Dynamics Fund, INVESCO Energy Fund to AIM Energy Fund, INVESCO Financial Services Fund to AIM Financial Services Fund, INVESCO Gold & Precious Metals Fund to AIM Gold & Precious Metals Fund, INVESCO International Core Equity Fund to AIM International Core Equity Fund, INVESCO Leisure Fund to AIM Leisure Fund, INVESCO Mid-Cap Growth Fund to AIM Mid Cap Stock Fund, INVESCO Multi-Sector Fund to AIM Multi-Sector Fund, INVESCO S&P 500 Index Fund to AIM S&P 500 Index Fund, INVESCO Small Company Growth Fund to AIM Small Company Growth Fund, INVESCO Technology Fund to AIM Technology Fund, INVESCO U.S. Government Money Fund to Premier U.S. Government Money Portfolio, INVESCO Utilities Fund to AIM Utilities Fund. (2) As of end of business on February 27, 2004, AIM Mid Cap Core Equity Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (3) Effective December 13, 2004, AIM Small Cap Equity Fund is open to all investors. (4) As of end of business on March 18, 2002, AIM Small Cap Growth Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (5) As of end of business on March 28, 2005, AIM European Small Company Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (6) Effective December 30, 2004, AIM International Emerging Growth Fund was renamed AIM International Small Company Fund. As of end of business on March 14, 2005, the Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (7) As of end of business on April 29, 2005, AIM Real Estate Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (8) Effective April 29, 2005, AIM Aggressive Allocation Fund was renamed AIM Growth Allocation Fund. If used after July 20, 2005, this report must be accompanied by a Fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $131 billion in assets. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $375 billion in assets under management. Data as of March 31, 2005. ================================================================================ CONSIDER THE INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY. FOR THIS AND OTHER INFORMATION ABOUT AIM FUNDS, OBTAIN A PROSPECTUS FROM YOUR FINANCIAL ADVISOR AND READ IT CAREFULLY BEFORE INVESTING. ================================================================================ AIMinvestments.com GLA-SAR-1 A I M Distributors, Inc. [YOUR GOALS. OUR SOLUTIONS.] --Registered Trademark-- Mutual Retirement Annuities College Separately Offshore Cash Funds Products Savings Managed Products Management Plans Accounts [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- AIM GLOBAL GROWTH FUND Semiannual Report to Shareholders o April 30, 2005 [COVER IMAGE] [YOUR GOALS. OUR SOLUTIONS.] [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- --Registered Trademark-- AIM GLOBAL GROWTH FUND SEEKS TO PROVIDE LONG-TERM GROWTH OF CAPITAL. o Unless otherwise stated, information presented in this report is as of April 30, 2005, and is based on total net assets. ABOUT SHARE CLASSES o The unmanaged LIPPER GLOBAL LARGE-CAP The Fund provides a complete list of its GROWTH FUND INDEX represents an average holdings four times in each fiscal year, o Effective September 30, 2003, Class B of the performance of large-cap global at the quarter-ends. For the second and shares are not available as an growth funds tracked by Lipper, Inc., an fourth quarters, the lists appear in the investment for retirement plans independent mutual fund performance Fund's semiannual and annual reports to maintained pursuant to Section 401 of monitor. shareholders. For the first and third the Internal Revenue Code, including quarters, the Fund files the lists with 401(k) plans, money purchase pension o The Fund is not managed to track the the Securities and Exchange Commission plans and profit sharing plans. Plans performance of any particular index, (SEC) on Form N-Q. Shareholders can look that have existing accounts invested in including the indexes defined here, and up the Fund's Forms N-Q on the SEC's Web Class B shares will continue to be consequently, the performance of the site at sec.gov. Copies of the Fund's allowed to make additional purchases. Fund may deviate significantly from the Forms N-Q may be reviewed and copied at performance of the indexes. the SEC's Public Reference Room at 450 PRINCIPAL RISKS OF INVESTING IN THE FUND Fifth Street, N.W., Washington, D.C. o A direct investment cannot be made in 20549-0102. You can obtain information o International investing presents an index. Unless otherwise indicated, on the operation of the Public Reference certain risks not associated with index results include reinvested Room, including information about investing solely in the United States. dividends, and they do not reflect sales duplicating fee charges, by calling These include risks relating to charges. Performance of an index of 1-202-942-8090 or 1-800-732-0330, or by fluctuations in the value of the U.S. funds reflects fund expenses; electronic request at the following dollar relative to the values of other performance of a market index does not. e-mail address: publicinfo@sec.gov. The currencies, the custody arrangements SEC file numbers for the Fund are made for the Fund's foreign holdings, OTHER INFORMATION 811-6463 and 33-44611. The Fund's most differences in accounting, political recent portfolio holdings, as filed on risks and the lesser degree of public o The returns shown in management's Form N-Q, are also available at information required to be provided by discussion of Fund performance are based AIMinvestments.com. non-U.S. companies. on net asset values calculated for shareholder transactions. Generally A description of the policies and ABOUT INDEXES USED IN THIS REPORT accepted accounting principles require procedures that the Fund uses to adjustments to be made to the net assets determine how to vote proxies relating o The unmanaged MSCI WORLD INDEX is a of the Fund at period end for financial to portfolio securities is available group of global securities tracked by reporting purposes, and as such, the net without charge, upon request, from our Morgan Stanley Capital International. asset values for shareholder Client Services department at transactions and the returns based on 800-959-4246 or on the AIM Web site, o The unmanaged MSCI WORLD GROWTH INDEX those net asset values may differ from AIMinvestments.com. On the home page, is a subset of the MSCI World Index, a the net asset values and returns scroll down and click on AIM Funds Proxy group of global securities tracked by reported in the Financial Highlights. Policy. The information is also Morgan Stanley Capital International; available on the SEC Web site, sec.gov. the Growth subset measures performance o Industry classifications used in this of companies with higher price/earnings report are generally according to the Information regarding how the Fund voted ratios and higher forecasted growth Global Industry Classification Standard, proxies related to its portfolio values. which was developed by and is the securities during the 12 months ended exclusive property and a service mark of June 30, 2004, is available at our Web Morgan Stanley Capital International site. Go to AIMinvestments.com, access Inc. and Standard & Poor's. 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 Web site, sec.gov.
================================================================================ THIS REPORT 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. ================================================================================ ===================================================== NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE ===================================================== AIMInvestments.com AIM GLOBAL GROWTH FUND DEAR FELLOW SHAREHOLDERS: [PHOTO OF Most equity market and fund indexes, domestic and ROBERT H. international, produced positive total returns for the six GRAHAM] months ended April 30, 2005, but for the most part, those positive numbers reflected gains made during the latter ROBERT H. GRAHAM months of 2004. Year-to-date as of April 30, 2005, the returns were far less attractive. High oil prices remained a source of unease; crude oil [PHOTO OF remained near or above $50 per barrel throughout the MARK H. reporting period. The Producer Price Index was up fairly WILLIAMSON] sharply in April, largely due to energy costs. And central bank policy continued to focus on containing short-term MARK H. WILLIAMSON inflation via increases in the overnight federal funds interest rate, the rate the Federal Reserve (the Fed) most directly controls. Shortly after the reporting period closed, the Fed raised that rate to 3%; it was the eighth increase since mid-2004. Should the Fed continue to raise rates, this could eventually dampen economic performance, which in fact has been quite good. Gross domestic product grew 4.4% for all of 2004 and the preliminary estimate of annualized growth for the first quarter of 2005 was 3.5%. o Though the growth rate of the manufacturing sector slowed in April and again in May, manufacturing continued to grow, according to the Institute for Supply Management (ISM), whose purchasing manager surveys cover more than 80% of the U.S. economy. In May, manufacturing grew for the 24th consecutive month while the overall economy grew for the 43rd consecutive month, ISM reported. o Though job growth during May was much slower than during April, the unemployment rate remained unchanged at 5.1% as May 2005 ended. o For the first quarter of 2005, earnings for companies included in the Standard & Poor's Composite Index of 500 Stocks, an index of the broad U.S. stock market, were up more than 10%, on average, over a year earlier. o Bond yields have not risen as much as might be expected given eight increases in short-term interest rates in less than a year. This may indicate that the bond market is not anticipating a long-term inflationary pattern. After the slow start in 2005, domestic and many international markets began to rally after the close of the reporting period, demonstrating once again how changeable markets are in the short term. Given the elusiveness of accurate short-term market forecasts, as always, we urge our shareholders to: o keep a long-term investment perspective, o make sure their portfolio of investments is suitably diversified, and o contact their financial advisors when they have questions about their investments or the markets. YOUR FUND In the following pages you will find a discussion of your Fund's investment philosophy, an explanation of its performance for the reporting period, and a summary of its portfolio as of April 30. Further information about your Fund, The AIM Family of Funds--Registered Trademark--, and investing in general is always available on our widely praised Web site, AIMinvestments.com. Please visit frequently. We at AIM remain committed to building solutions to help you meet your investment goals. We thank you for your continued participation in AIM Investments--Registered Trademark--. If you have any questions, please contact our award-winning Client Service representatives at 800-959-4246. We are happy to be of help. Sincerely, /s/ ROBERT H. GRAHAM /s/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson President & Vice Chair, Chairman & President, AIM Funds A I M Advisors, Inc. June 17, 2005 AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M Capital Management, Inc. are the investment advisors and A I M Distributors, Inc. is the distributor for the retail funds represented by AIM Investments. AIM GLOBAL GROWTH FUND MANAGEMENT'S DISCUSSION responsibility for the Fund by OF FUND PERFORMANCE geographic regions. Each team member is therefore a regional specialist, while PERFORMANCE SUMMARY ========================================== also a sector generalist. During the reporting period, global FUND VS. INDEXES Although team members specialize in markets turned in mixed specific regions, we select investments results--rallying strongly at the close TOTAL RETURNS, 10/31/04-4/30/05, EXCLUDING on a stock-by-stock basis. This means we of 2004 and then selling off in APPLICABLE SALES CHARGES. IF SALES CHARGES follow a bottom-up investment approach, mid-March as high oil prices, rising WERE INCLUDED, RETURNS WOULD BE LOWER. selecting the most attractive stocks, global interest rates and risk aversion not countries or sectors. Another dampened investor enthusiasm. Given this Class A Shares 5.22% important component of our investment uncertain environment, we are pleased to strategy is that we do not hedge report positive Fund returns for our Class B Shares 4.89 currencies. We believe foreign currency shareholders during the reporting exposure increases the diversification period. Class C Shares 4.88 benefit of international investing. As illustrated in the table to the MSCI World Index MARKET CONDITIONS AND YOUR FUND right, the Fund outperformed both its (Broad Market Index) 5.70 style-specific and peer group indexes. For much of the reporting period, global We attribute this comparative success to MSCI World Growth Index markets rallied on the strength of strong stock selection, our large (Style-specific Index) 4.35 rising confidence in world growth weighting to outperforming European prospects. Sentiment changed in markets and our more limited exposure to Lipper Global Large-Cap Growth mid-March, however, amid the possibility U.S. securities. Fund Index (Peer Group Index) 3.99 of further oil price hikes and signs of sluggish corporate growth. World equity The Fund's return was slightly lower Source: Lipper, Inc. markets--as represented by the MSCI than that of the MSCI World Index due to ========================================== World Index--posted negative returns for the nature of the index. Although the both March and April. Fund is comprised of growth stocks, the HOW WE INVEST index has both growth and value stocks Despite the late period sell-off, among its constituents. As global Our investment strategy is based on the global equity markets generally posted markets became more defensive during the principle that strong gains for the reporting period. reporting period, value stocks earnings--sustainable, repeatable, International markets continued to outperformed growth stocks, providing above-average growth--can drive stock dominate results, outperforming domestic higher returns for the MSCI World Index. prices. Therefore, when selecting stocks markets by more than a two-to-one margin for the Fund we look for companies with in both local currency and U.S. dollar the following attributes: terms. Given this environment, our continued focus on European securities o accelerating earnings and revenues, and more limited exposure to U.S. stocks once again proved favorable for Fund o strong cash flow generation performance. (dividends, share buybacks) o high return on invested capital o reasonable valuations As a global growth fund, we invest in both domestic and international stocks. To ensure the best market coverage, we use a multi-national team approach and divide
======================================= ========================================= ======================================== TOP 5 COUNTRIES* PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* 1. United States 25.8% By sector 1. Eni S.p.A. (Italy) 2.2% 2. United Kingdom 12.4 [PIE CHART] 2. Vinci S.A. (France) 2.1 3. France 10.3 Financials 20.6% 3. Imperial Tobacco Group PLC (United Kingdom) 2.1 4. Japan 7.8 Consumer Discretionary 13.6% 4. Total S.A. (France) 1.9 5. Switzerland 7.4 Information Technology 13.6% 5. Syngenta A.G. (Switzerland) 1.8 TOTAL NET ASSETS $423.2 MILLION Health Care 11.1% 6. Tesco PLC (United Kingdom) 1.7 TOTAL NUMBER OF HOLDINGS* 121 Consumer Staples 10.3% 7. UBS A.G. (Switzerland) 1.6 Industrials 10.1% The Fund's holdings are subject to 8. Mediaset S.p.A. (Italy) 1.6 change, and there is no assurance that Energy 8.0% the Fund will continue to hold any 9. Alcon, Inc. (Switzerland) 1.6 particular security. Materials 6.3% 10. Volvo A.B.-Class B (Sweden) 1.5 *Excluding money market fund holdings. Telecommunication Services 3.8% Money Market Funds and Other Assets Less Liabilities 2.6% ======================================= ========================================= ========================================
2 Our largest regional allocation was SYMANTEC, a U.S.-based global leader in KIRK L. ANDERSON, in European stocks--which often pay information security, declined as portfolio manager, higher dividends and offer more investors became uneasy when the company [ANDERSON is lead manager of attractive valuations than their U.S. announced plans to acquire VERITAS PHOTO] AIM Global Growth peers. OPAP, a Greek gaming company, for software--fearing the merger might Fund with respect to example, pays out the majority of its distract management. We had the domestic portion earnings in dividends to shareholders. merger-related concerns as well and we of the Fund's portfolio. He joined AIM The company, which reported first eliminated the stock from the Fund in 1994. Mr. Anderson earned a B.A. in quarter earnings at the top end of before the close of the reporting political science from Texas A&M market expectations, continues to period. University. He also received an M.S. in dominate its market and was a finance from the University of Houston. significant contributor to Fund Although Fund returns were positive performance. across all regions, Japanese and Indian MATTHEW W. DENNIS, stocks as a group detracted from Fund Chartered Financial OUR LARGEST REGIONAL performance. In Japan, a deceleration of [DENNIS Analyst, portfolio ALLOCATION WAS IN exports and renewed deflationary issues PHOTO] manager, is lead EUROPEAN STOCKS--WHICH pressured stocks, while Indian shares manager of AIM OFTEN PAY HIGHER fell amid cautious earnings guidance Global Growth Fund DIVIDENDS AND OFFER from top outsourcing firms. with respect to the Fund's investments MORE ATTRACTIVE in Europe and Canada. He has been in the VALUATIONS THAN THEIR Despite a stronger U.S. dollar in investment business since 1994. Mr. U.S. PEERS. 2005, foreign currency exchange proved Dennis received a B.A. in economics from POSITIVE for the Fund as many major The University of Texas at Austin. He Strong stock selection in the currencies--including the euro, pound also earned an M.S. in finance from construction and financial services and yen--appreciated slightly against Texas A&M University. industries helped the Fund achieve the dollar for the reporting period as a higher returns than its style-specific whole. BARRETT K. SIDES, index. senior portfolio IN CLOSING [SIDES manager, is lead o Vinci, a French construction company, PHOTO] manager of AIM benefited from a strong increase in Despite sometimes volatile market Global Growth Fund French construction, reporting an conditions, we are pleased to once again with respect to the increase in revenues of 8.9% in the provide shareholders with positive Fund Fund's investments in Asia Pacific and first quarter of 2005, as well as an returns for the reporting period. We Latin America. He joined AIM in 1990. increased dividend. believe our bottom-up investment process Mr. Sides graduated with a B.S. in allows us to build a solid portfolio economics from Bucknell University. He o One of our most significant and based on quality companies from around also received a master's in consistent contributors continues to be the world. Given our global reach, we international business from the ANGLO IRISH BANK. Amid record loan believe the Fund can provide investors University of St. Thomas. growth, robust asset quality and stable diversification opportunities beyond lending margins the company's pretax U.S. stocks including lower valuations SHUXIN CAO, profit for the six-month period ended and higher dividend yields often Chartered Financial March 31, 2005 rose 35% year-over-year. associated with international companies. [CAO Analyst, portfolio Thank you for your continued PHOTO] manager, is manager High energy prices--oil reached more participation in AIM Global Growth Fund. of AIM Global Growth than $55 a barrel during the reporting Fund. He joined AIM period--benefited our primary oil The views and opinions expressed in in 1997. Mr. Cao graduated from Tianjin company holdings, ENI (Italy), TOTAL management's discussion of Fund Foreign Language Institute with a B.A. (France), and EXXON MOBIL (U.S.) pushing performance are those of A I M Advisors, in English. He also received an M.B.A. company cash flow and earnings estimates Inc. These views and opinions are from Texas A&M University and is a higher. Conversely, higher oil prices subject to change at any time based on Certified Public Accountant. put a damper on consumer discretionary factors such as market and economic spending, which had a negative impact on conditions. These views and opinions may CLAS G. OLSSON, some of our retail holdings, including not be relied upon as investment advice senior portfolio U.K. based Next and GUS. or recommendations, or as an offer for a [OLSSON manager and head of particular security. The information is PHOTO] AIM's International During the reporting period, not a complete analysis of every aspect Investment information technology proved the worst of any market, country, industry, Management Unit, is performing sector for both the Fund and security or the Fund. Statements of fact manager of AIM Global Growth Fund. Mr. its benchmark. are from sources considered reliable, Olsson joined AIM in 1994. Mr. Olsson but A I M Advisors, Inc. makes no became a commissioned naval officer at representation or warranty as to their the Royal Swedish Naval Academy in 1988. completeness or accuracy. Although He also received a B.B.A. from The historical performance is no guarantee University of Texas at Austin. of future results, these insights may help you understand our investment Assisted by Asia/Latin America Team, management philosophy. Europe/Canada Team and Large Cap Growth Team See important Fund and index disclosures inside front cover. [RIGHT ARROW GRAPHIC] FOR A PRESENTATION OF YOUR FUND'S LONG-TERM PERFORMANCE RECORD, PLEASE TURN TO PAGE 5.
3 AIM GLOBAL GROWTH FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE with the amount you invested, to values and expenses may not be used to estimate the expenses that you paid over estimate the actual ending account As a shareholder of the Fund, you incur the period. Simply divide your account balance or expenses you paid for the two types of costs: (1) transaction value by $1,000 (for example, an $8,600 period. You may use this information to costs, which may include sales charges account value divided by $1,000 = 8.6), compare the ongoing costs of investing (loads) on purchase payments; contingent then multiply the result by the number in the Fund and other funds. To do so, deferred sales charges on redemptions; in the table under the heading entitled compare this 5% hypothetical example and redemption fees, if any; and (2) "Actual Expenses Paid During Period" to with the 5% hypothetical examples that ongoing costs, including management estimate the expenses you paid on your appear in the shareholder reports of the fees; distribution and/or service fees account during this period. other funds. (12b-1); and other Fund expenses. This example is intended to help you HYPOTHETICAL EXAMPLE FOR Please note that the expenses shown understand your ongoing costs (in COMPARISON PURPOSES in the table are meant to highlight your dollars) of investing in the Fund and to ongoing costs only and do not reflect compare these costs with ongoing costs The table below also provides any transactional costs, such as sales of investing in other mutual funds. The information about hypothetical account charges (loads) on purchase payments, example is based on an investment of values and hypothetical expenses based contingent deferred sales charges on $1,000 invested at the beginning of the on the Fund's actual expense ratio and redemptions, and redemption fees, if period and held for the entire period an assumed rate of return of 5% per year any. Therefore, the hypothetical November 1, 2004, through April 30, before expenses, which is not the Fund's information is useful in comparing 2005. actual return. The Fund's actual ongoing costs only, and will not help cumulative total returns at net asset you determine the relative total costs ACTUAL EXPENSES value after expenses for the six months of owning different funds. In addition, ended April 30, 2005, appear in the if these transactional costs were The table below provides information table "Fund vs. Indexes" on page 2. The included, your costs would have been about actual account values and actual hypothetical account higher. expenses. You may use the information in this table, together
=================================================================================================================================== ACTUAL HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES) BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES ENDING ACCOUNT EXPENSES SHARE VALUE VALUE PAID DURING VALUE PAID DURING CLASS (11/1/04) (4/30/05)(1) PERIOD(2),(3) (4/30/05) PERIOD(2),(4) A $1,000.00 $1,052.20 $ 9.30 $1,015.73 $ 9.13 B 1,000.00 1,048.90 12.32 1,012.77 12.10 C 1,000.00 1,048.80 12.32 1,012.77 12.10 (1) The actual ending account value is based on the actual total return of the Fund for the period November 1, 2004, to April 30, 2005, 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. The Fund's actual cumulative total returns at net asset value after expenses for the six months ended April 30, 2005, appear in the table "Fund vs. Indexes" on page 2. (2) Expenses are equal to the Fund's annualized expense ratio (1.83%, 2.43% and 2.43% for Class A, B and C shares, respectively) multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Effective on January 1, 2005, the advisor contractually agreed to waive a portion of its advisory fees. In addition, the Board of Trustees has approved a permanent reduction of the 12B-1 plan fees applicable to Class A shares to 0.35%. The annualized expense ratio restated as if these agreements had been in effect throughout the entire most recent fiscal half year are 1.76%, 2.41% and 2.41% for Class A, B and C shares, respectively. (3) The actual expenses paid restated as if the changes discussed above had been in effect throughout the most recent fiscal half year are $8.93, $12.22 and $12.22 for Class A, B and C shares, respectively. (4) The hypothetical expenses paid restated as if the changes discussed above had been in effect throughout the most recent fiscal half year are $8.77, $12.00 and $12.00 for Class A, B and C shares, respectively. =================================================================================================================================== [ARROW BUTTON For More Information Visit IMAGE] AIMinvestments.com
4 AIM GLOBAL GROWTH FUND YOUR FUND'S LONG-TERM PERFORMANCE Below you will find a presentation of your Fund's performance record for periods ended April 30, 2005, the close of the six-month period covered by this report. Please read the important disclosure accompanying these tables, which explains how Fund performance is calculated and the sales charges, if any, that apply to the share class in which you are invested. In addition to returns as of the close of the reporting period, industry regulations require us to provide average annual total returns as of March 31, 2005, the most recent calendar quarter-end. =================================================================================================================================== AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS As of 4/30/05, including applicable sales As of 3/31/05, including applicable sales charges charges CLASS A SHARES CLASS A SHARES 10 Years 5.95% 10 Years 6.61% 5 Years -9.32 5 Years -10.25 1 Year 4.28 1 Year 5.98 CLASS B SHARES CLASS B SHARES 10 Years 6.03% 10 Years 6.68% 5 Years -9.28 5 Years -10.19 1 Year 3.89 1 Year 5.70 CLASS C SHARES CLASS C SHARES Inception (8/4/97) 0.76% Inception (8/4/97) 1.19% 5 Years -8.90 5 Years -9.82 1 Year 7.89 1 Year 9.77 =================================================================================================================================== THE PERFORMANCE DATA QUOTED REPRESENT INVESTMENT RETURN AND PRINCIPAL VALUE THE PERFORMANCE OF THE FUND'S SHARE PAST PERFORMANCE AND CANNOT GUARANTEE WILL FLUCTUATE SO THAT YOU MAY HAVE A CLASSES WILL DIFFER DUE TO DIFFERENT COMPARABLE FUTURE RESULTS; CURRENT GAIN OR LOSS WHEN YOU SELL SHARES. SALES CHARGE STRUCTURES AND CLASS PERFORMANCE MAY BE LOWER OR HIGHER. EXPENSES. PLEASE VISIT AIMINVESTMENTS.COM FOR THE CLASS A SHARE PERFORMANCE REFLECTS MOST RECENT MONTH-END PERFORMANCE. THE MAXIMUM 4.75% SALES CHARGE, AND CLASS A REDEMPTION FEE OF 2% WILL BE PERFORMANCE FIGURES REFLECT REINVESTED B AND CLASS C SHARE PERFORMANCE REFLECTS IMPOSED ON CERTAIN REDEMPTIONS OR DISTRIBUTIONS, CHANGES IN NET ASSET THE APPLICABLE CONTINGENT DEFERRED SALES EXCHANGES OUT OF THE FUND WITHIN 30 DAYS VALUE AND THE EFFECT OF THE MAXIMUM CHARGE (CDSC) FOR THE PERIOD INVOLVED. OF PURCHASE. EXCEPTIONS TO THE SALES CHARGE UNLESS OTHERWISE STATED. THE CDSC ON CLASS B SHARES DECLINES FROM REDEMPTION FEE ARE LISTED IN THE FUND'S PERFORMANCE FIGURES DO NOT REFLECT 5% BEGINNING AT THE TIME OF PURCHASE TO PROSPECTUS. DEDUCTION OF TAXES A SHAREHOLDER WOULD 0% AT THE BEGINNING OF THE SEVENTH YEAR. PAY ON FUND DISTRIBUTIONS OR SALE OF THE CDSC ON CLASS C SHARES IS 1% FOR THE FUND SHARES. FIRST YEAR AFTER PURCHASE.
5 FINANCIALS SCHEDULE OF INVESTMENTS April 30, 2005 (Unaudited)
MARKET SHARES VALUE ------------------------------------------------------------------------ FOREIGN STOCKS & OTHER EQUITY INTERESTS-71.62% AUSTRALIA-2.20% BHP Billiton Ltd. (Diversified Metals & Mining)(a) 359,600 $ 4,549,998 ------------------------------------------------------------------------ Promina Group Ltd. (Property & Casualty Insurance)(a) 532,000 2,134,618 ------------------------------------------------------------------------ QBE Insurance Group Ltd. (Property & Casualty Insurance)(a)(b) 224,300 2,623,694 ======================================================================== 9,308,310 ======================================================================== AUSTRIA-0.58% Bank Austria Creditanstalt (Diversified Banks)(a) 26,700 2,465,303 ======================================================================== BELGIUM-0.98% KBC Groupe S.A. (Diversified Banks)(a)(b) 52,650 4,165,535 ======================================================================== BERMUDA-1.02% Nabors Industries, Ltd. (Oil & Gas Drilling)(c) 34,000 1,831,580 ------------------------------------------------------------------------ Tyco International Ltd. (Industrial Conglomerates) 80,000 2,504,800 ======================================================================== 4,336,380 ======================================================================== BRAZIL-0.77% Companhia de Bebidas das Americas-Pfd. ADR (Brewers)(b) 120,500 3,265,550 ======================================================================== CANADA-2.69% Manulife Financial Corp. (Life & Health Insurance)(b) 110,200 5,050,450 ------------------------------------------------------------------------ Power Corp. of Canada (Other Diversified Financial Services)(b) 120,100 3,046,523 ------------------------------------------------------------------------ Suncor Energy, Inc. (Integrated Oil & Gas)(b) 89,200 3,293,386 ======================================================================== 11,390,359 ======================================================================== FRANCE-10.29% BNP Paribas S.A. (Diversified Banks)(a)(b) 84,930 5,604,475 ------------------------------------------------------------------------ Bouygues S.A. (Wireless Telecommunication Services)(a)(b) 77,600 3,092,313 ------------------------------------------------------------------------ Lafarge S.A. (Construction Materials)(a)(b) 28,632 2,605,490 ------------------------------------------------------------------------ Pernod Ricard (Distillers & Vintners)(a)(b) 22,670 3,435,854 ------------------------------------------------------------------------ Renault S.A. (Automobile Manufacturers)(a)(b) 34,760 2,913,408 ------------------------------------------------------------------------ Sanofi-Aventis (Pharmaceuticals)(a)(b) 46,400 4,108,850 ------------------------------------------------------------------------ Societe Generale (Diversified Banks)(a)(b) 51,570 5,141,074 ------------------------------------------------------------------------ Total S.A. (Integrated Oil & Gas)(a)(b) 35,559 7,907,242 ------------------------------------------------------------------------ Vinci S.A. (Construction & Engineering)(a)(b) 58,080 8,728,850 ======================================================================== 43,537,556 ========================================================================
MARKET SHARES VALUE ------------------------------------------------------------------------
GERMANY-2.37% Adidas-Salomon A.G. (Apparel, Accessories & Luxury Goods)(a)(b) 34,150 $ 5,304,904 ------------------------------------------------------------------------ MAN A.G. (Industrial Machinery)(a) 50,800 2,138,145 ------------------------------------------------------------------------ Merck KGaA (Pharmaceuticals)(a) 33,700 2,574,458 ======================================================================== 10,017,507 ======================================================================== GREECE-2.55% Alpha Bank A.E. (Diversified Banks)(a) 65,000 2,095,548 ------------------------------------------------------------------------ EFG Eurobank Ergasias (Diversified Banks)(a) 107,400 3,250,636 ------------------------------------------------------------------------ OPAP S.A. (Casinos & Gaming)(a) 207,700 5,444,125 ======================================================================== 10,790,309 ======================================================================== HONG KONG-1.25% Cheung Kong (Holdings) Ltd. (Real Estate Management & Development)(a) 352,000 3,327,474 ------------------------------------------------------------------------ Sun Hung Kai Properties Ltd. (Real Estate Management & Development)(a)(b) 203,000 1,944,072 ======================================================================== 5,271,546 ======================================================================== HUNGARY-0.45% OTP Bank Rt. (Diversified Banks)(a) 62,000 1,903,742 ======================================================================== INDIA-1.21% Infosys Technologies Ltd.-ADR (IT Consulting & Other Services)(b) 86,300 5,108,960 ======================================================================== IRELAND-2.30% Anglo Irish Bank Corp. PLC (Diversified Banks)(a) 518,760 6,003,121 ------------------------------------------------------------------------ CRH PLC (Construction Materials)(a) 149,490 3,723,337 ======================================================================== 9,726,458 ======================================================================== ISRAEL-0.96% Teva Pharmaceutical Industries Ltd.-ADR (Pharmaceuticals) 130,060 4,063,074 ======================================================================== ITALY-4.32% Banca Intesa S.p.A. (Diversified Banks)(a)(b) 489,300 2,336,443 ------------------------------------------------------------------------ Eni S.p.A. (Integrated Oil & Gas)(a)(b) 369,600 9,293,762 ------------------------------------------------------------------------ Mediaset S.p.A. (Broadcasting & Cable TV)(a)(b) 511,500 6,642,320 ======================================================================== 18,272,525 ======================================================================== JAPAN-7.78% Canon Inc. (Office Electronics)(a) 85,800 4,462,752 ------------------------------------------------------------------------ Hoya Corp. (Electronic Equipment Manufacturers)(a)(b) 52,000 5,429,201 ------------------------------------------------------------------------ Keyence Corp. (Electronic Equipment Manufacturers)(a) 25,100 5,537,655 ------------------------------------------------------------------------ Nitto Denko Corp. (Specialty Chemicals)(a) 63,000 3,435,611 ------------------------------------------------------------------------
F-1
MARKET SHARES VALUE ------------------------------------------------------------------------ JAPAN-(CONTINUED) Orix Corp. (Consumer Finance)(a) 12,300 $ 1,669,783 ------------------------------------------------------------------------ SMC Corp. (Industrial Machinery)(a) 22,100 2,321,514 ------------------------------------------------------------------------ Takeda Pharmaceutical Co. Ltd. (Pharmaceuticals)(a) 63,300 3,080,492 ------------------------------------------------------------------------ Toyota Motor Corp. (Automobile Manufacturers)(a) 108,200 3,926,091 ------------------------------------------------------------------------ Trend Micro Inc. (Application Software)(a)(b) 84,100 3,038,984 ======================================================================== 32,902,083 ======================================================================== MEXICO-1.37% Grupo Televisa S.A.-ADR (Broadcasting & Cable TV) 32,900 1,848,322 ------------------------------------------------------------------------ Wal-Mart de Mexico S.A. de C.V.-Series V (Hypermarkets & Super Centers) 1,066,000 3,953,005 ======================================================================== 5,801,327 ======================================================================== NETHERLANDS-2.32% DSM N.V. (Specialty Chemicals)(a) 45,700 3,061,152 ------------------------------------------------------------------------ Royal Numico N.V. (Packaged Foods & Meats)(a)(c) 69,900 2,891,886 ------------------------------------------------------------------------ TNT N.V. (Air Freight & Logistics)(a) 142,400 3,865,896 ======================================================================== 9,818,934 ======================================================================== NORWAY-0.26% Telenor A.S.A. (Integrated Telecommunication Services)(a)(b) 133,100 1,110,633 ======================================================================== SINGAPORE-1.02% DBS Group Holdings Ltd. (Diversified Banks)(a) 238,000 2,078,756 ------------------------------------------------------------------------ Singapore Airlines Ltd. (Airlines)(a) 324,000 2,218,720 ======================================================================== 4,297,476 ======================================================================== SOUTH KOREA-1.40% Samsung Electronics Co., Ltd. (Electronic Equipment Manufacturers)(a) 7,000 3,201,515 ------------------------------------------------------------------------ Shinhan Financial Group Co., Ltd. (Diversified Banks)(a) 104,000 2,714,208 ======================================================================== 5,915,723 ======================================================================== SPAIN-1.58% Industria de Diseno Textil, S.A. (Apparel Retail)(a)(b) 138,800 4,118,815 ------------------------------------------------------------------------ Telefonica, S.A. (Integrated Telecommunication Services)(a)(b) 152,200 2,587,159 ======================================================================== 6,705,974 ======================================================================== SWEDEN-1.87% Assa Abloy A.B.-Class B (Building Products)(a)(b) 111,700 1,445,729 ------------------------------------------------------------------------ Volvo A.B.-Class B (Construction & Farm Machinery & Heavy Trucks)(a)(b) 159,700 6,465,863 ======================================================================== 7,911,592 ======================================================================== SWITZERLAND-7.41% Alcon, Inc. (Health Care Supplies)(c) 68,000 6,596,000 ------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------
SWITZERLAND-(CONTINUED) Compagnie Financiere Richemont A.G.-Class A (Apparel, Accessories & Luxury Goods)(a) 134,800 $ 4,026,524 ------------------------------------------------------------------------ Roche Holding A.G. (Pharmaceuticals)(a)(b) 52,550 6,358,114 ------------------------------------------------------------------------ Syngenta A.G. (Fertilizers & Agricultural Chemicals)(a)(c) 73,110 7,574,549 ------------------------------------------------------------------------ UBS A.G. (Diversified Capital Markets)(a) 85,230 6,815,512 ======================================================================== 31,370,699 ======================================================================== TAIWAN-0.32% Taiwan Semiconductor Manufacturing Co. Ltd. (Semiconductors)(a) 815,000 1,355,291 ======================================================================== UNITED KINGDOM-12.35% Amdocs Ltd. (Application Software)(c) 103,000 2,751,130 ------------------------------------------------------------------------ Aviva PLC (Multi-line Insurance)(a) 382,584 4,321,898 ------------------------------------------------------------------------ BP PLC (Integrated Oil & Gas)(a) 208,000 2,119,655 ------------------------------------------------------------------------ GUS PLC (Catalog Retail)(a) 224,700 3,594,501 ------------------------------------------------------------------------ Imperial Tobacco Group PLC (Tobacco)(a) 303,970 8,708,422 ------------------------------------------------------------------------ Next PLC (Department Stores)(a) 170,800 4,836,134 ------------------------------------------------------------------------ O2 PLC (Wireless Telecommunication Services)(c) 1,660,000 3,712,079 ------------------------------------------------------------------------ Reckitt Benckiser PLC (Household Products)(a) 198,980 6,462,014 ------------------------------------------------------------------------ Royal Bank of Scotland Group PLC (Diversified Banks)(a) 91,003 2,747,107 ------------------------------------------------------------------------ Tesco PLC (Food Retail)(a) 1,249,169 7,374,896 ------------------------------------------------------------------------ Vodafone Group PLC (Wireless Telecommunication Services)(a) 2,162,130 5,650,961 ======================================================================== 52,278,797 ======================================================================== Total Foreign Stocks & Other Equity Interests (Cost $214,192,295) 303,091,643 ======================================================================== DOMESTIC COMMON STOCKS-25.80% AEROSPACE & DEFENSE-0.42% Lockheed Martin Corp. 29,000 1,767,550 ======================================================================== AIR FREIGHT & LOGISTICS-0.50% FedEx Corp. 25,000 2,123,750 ======================================================================== ASSET MANAGEMENT & CUSTODY BANKS-0.34% Legg Mason, Inc. 20,500 1,452,630 ======================================================================== BIOTECHNOLOGY-0.51% Gilead Sciences, Inc.(c) 58,000 2,151,800 ======================================================================== COMMUNICATIONS EQUIPMENT-1.29% Cisco Systems, Inc.(c) 150,000 2,592,000 ------------------------------------------------------------------------ Motorola, Inc. 96,000 1,472,640 ------------------------------------------------------------------------ QUALCOMM Inc. 40,000 1,395,600 ======================================================================== 5,460,240 ======================================================================== COMPUTER HARDWARE-1.33% Dell Inc.(c) 162,000 5,642,460 ========================================================================
F-2
MARKET SHARES VALUE ------------------------------------------------------------------------ COMPUTER STORAGE & PERIPHERALS-1.08% EMC Corp.(c) 180,000 $ 2,361,600 ------------------------------------------------------------------------ Lexmark International, Inc.-Class A(c) 32,000 2,222,400 ======================================================================== 4,584,000 ======================================================================== CONSUMER FINANCE-0.79% Capital One Financial Corp. 20,000 1,417,800 ------------------------------------------------------------------------ SLM Corp. 40,000 1,905,600 ======================================================================== 3,323,400 ======================================================================== DEPARTMENT STORES-0.24% Nordstrom, Inc. 20,000 1,016,600 ======================================================================== DIVERSIFIED BANKS-0.50% U.S. Bancorp 76,000 2,120,400 ======================================================================== DIVERSIFIED COMMERCIAL SERVICES-0.65% Cendant Corp. 139,000 2,767,490 ======================================================================== ELECTRICAL COMPONENTS & EQUIPMENT-0.44% Rockwell Automation, Inc. 40,000 1,849,200 ======================================================================== FOOTWEAR-0.56% NIKE, Inc.-Class B 31,000 2,381,110 ======================================================================== HEALTH CARE EQUIPMENT-0.41% Waters Corp.(c) 44,000 1,743,720 ======================================================================== HEALTH CARE FACILITIES-0.28% HCA Inc. 21,000 1,172,640 ======================================================================== HEALTH CARE SERVICES-0.27% Quest Diagnostics Inc. 11,000 1,163,800 ======================================================================== HOME IMPROVEMENT RETAIL-0.64% Home Depot, Inc. (The) 77,000 2,723,490 ======================================================================== HOMEBUILDING-0.34% NVR, Inc.(c) 2,000 1,436,700 ======================================================================== HOTELS, RESORTS & CRUISE LINES-0.57% Hilton Hotels Corp. 110,000 2,401,300 ======================================================================== HOUSEHOLD PRODUCTS-1.22% Clorox Co. (The) 25,000 1,582,500 ------------------------------------------------------------------------ Procter & Gamble Co. (The) 66,000 3,573,900 ======================================================================== 5,156,400 ======================================================================== HOUSEWARES & SPECIALTIES-0.70% Fortune Brands, Inc. 35,000 2,960,300 ======================================================================== HYPERMARKETS & SUPER CENTERS-0.51% Wal-Mart Stores, Inc. 46,000 2,168,440 ========================================================================
MARKET SHARES VALUE ------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES-0.56% General Electric Co. 65,000 $ 2,353,000 ======================================================================== INTEGRATED OIL & GAS-0.98% Exxon Mobil Corp. 73,000 4,163,190 ======================================================================== INTERNET SOFTWARE & SERVICES-1.00% VeriSign, Inc.(c) 95,000 2,513,700 ------------------------------------------------------------------------ Yahoo! Inc.(c) 50,000 1,725,500 ======================================================================== 4,239,200 ======================================================================== INVESTMENT BANKING & BROKERAGE-1.19% Goldman Sachs Group, Inc. (The) 47,000 5,019,130 ======================================================================== MANAGED HEALTH CARE-1.89% Aetna Inc. 25,000 1,834,250 ------------------------------------------------------------------------ Humana Inc.(c) 50,000 1,732,500 ------------------------------------------------------------------------ UnitedHealth Group Inc. 47,000 4,441,970 ======================================================================== 8,008,720 ======================================================================== MOVIES & ENTERTAINMENT-0.44% Walt Disney Co. (The) 70,000 1,848,000 ======================================================================== OIL & GAS EQUIPMENT & SERVICES-0.52% BJ Services Co. 45,000 2,193,750 ======================================================================== OIL & GAS REFINING, MARKETING & TRANSPORTATION-0.73% Valero Energy Corp. 45,000 3,083,850 ======================================================================== PHARMACEUTICALS-1.44% Johnson & Johnson 89,000 6,108,070 ======================================================================== PROPERTY & CASUALTY INSURANCE-0.96% Allstate Corp. (The) 72,000 4,043,520 ======================================================================== RAILROADS-0.47% Burlington Northern Santa Fe Corp. 41,000 1,978,250 ======================================================================== SEMICONDUCTORS-0.40% Microchip Technology Inc. 59,000 1,680,320 ======================================================================== STEEL-0.42% Nucor Corp. 35,000 1,788,500 ======================================================================== SYSTEMS SOFTWARE-1.21% Microsoft Corp. 90,000 2,277,000 ------------------------------------------------------------------------ Oracle Corp.(c) 245,000 2,832,200 ======================================================================== 5,109,200 ======================================================================== Total Domestic Common Stocks (Cost $96,867,829) 109,184,120 ========================================================================
F-3
MARKET SHARES VALUE ------------------------------------------------------------------------ MONEY MARKET FUNDS-1.81% Liquid Assets Portfolio-Institutional Class(d) 3,824,006 $ 3,824,006 ------------------------------------------------------------------------ STIC Prime Portfolio-Institutional Class(d) 3,824,006 3,824,006 ======================================================================== Total Money Market Funds (Cost $7,648,012) 7,648,012 ======================================================================== TOTAL INVESTMENTS-99.23% (excluding investments purchased with cash collateral from securities loaned) (Cost $318,708,136) 419,923,775 ========================================================================
MARKET SHARES VALUE ------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-18.46% STIC Prime Portfolio-Institutional Class(d)(e) 78,123,534 $ 78,123,534 ======================================================================== Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $78,123,534) 78,123,534 ======================================================================== TOTAL INVESTMENTS-117.69% (Cost $396,831,670) 498,047,309 ======================================================================== OTHER ASSETS LESS LIABILITIES-(17.69%) (74,858,302) ======================================================================== NET ASSETS-100.00% $423,189,007 ________________________________________________________________________ ========================================================================
Investment Abbreviations: ADR - American Depositary Receipt Pfd. - Preferred
Notes to Schedule of Investments: (a) In accordance with the procedures established by the Board of Trustees, the foreign security is fair valued using adjusted closing market prices. The aggregate market value of these securities at April 30, 2005 was $256,066,784, which represented 51.41% of the Fund's Total Investments. See Note 1A. (b) All or a portion of this security has been pledged as collateral for securities lending transactions at April 30, 2005. (c) Non-income producing security. (d) The money market fund and the Fund are affiliated by having the same investment advisor. See Note 3. (e) The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 7. See accompanying notes which are an integral part of the financial statements. F-4 STATEMENT OF ASSETS AND LIABILITIES April 30, 2005 (Unaudited) ASSETS: Investments, at market value (cost $311,060,124)* $ 412,275,763 ------------------------------------------------------------ Investments in affiliated money market funds (cost $85,771,546) 85,771,546 ============================================================ Total investments (cost $396,831,670) 498,047,309 ============================================================ Foreign currencies, at market value (cost $1,328,969) 1,323,388 ------------------------------------------------------------ Receivables for: Investments sold 5,547,152 ------------------------------------------------------------ Fund shares sold 205,821 ------------------------------------------------------------ Dividends and interest 874,442 ------------------------------------------------------------ Investment for trustee deferred compensation and retirement plans 53,254 ------------------------------------------------------------ Other assets 20,998 ============================================================ Total assets 506,072,364 ____________________________________________________________ ============================================================ LIABILITIES: Payables for: Investments purchased 3,002,405 ------------------------------------------------------------ Fund shares reacquired 1,080,010 ------------------------------------------------------------ Trustee deferred compensation and retirement plans 86,820 ------------------------------------------------------------ Collateral upon return of securities loaned 78,123,534 ------------------------------------------------------------ Accrued distribution fees 188,481 ------------------------------------------------------------ Accrued trustees' and officer's fees and benefits 1,743 ------------------------------------------------------------ Accrued transfer agent fees 295,267 ------------------------------------------------------------ Accrued operating expenses 105,097 ============================================================ Total liabilities 82,883,357 ============================================================ Net assets applicable to shares outstanding $ 423,189,007 ____________________________________________________________ ============================================================ NET ASSETS CONSIST OF: Shares of beneficial interest $ 680,056,451 ------------------------------------------------------------ Undistributed net investment income 15,274 ------------------------------------------------------------ Undistributed net realized gain (loss) from investment securities and foreign currencies (358,076,708) ------------------------------------------------------------ Unrealized appreciation of investment securities and foreign currencies 101,193,990 ============================================================ $ 423,189,007 ____________________________________________________________ ============================================================ NET ASSETS: Class A $ 280,441,810 ____________________________________________________________ ============================================================ Class B $ 118,186,022 ____________________________________________________________ ============================================================ Class C $ 24,561,175 ____________________________________________________________ ============================================================ SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 16,002,485 ____________________________________________________________ ============================================================ Class B 7,149,057 ____________________________________________________________ ============================================================ Class C 1,484,959 ____________________________________________________________ ============================================================ Class A: Net asset value per share $ 17.52 ------------------------------------------------------------ Offering price per share: (Net asset value of $17.52 divided by 95.25%) $ 18.39 ____________________________________________________________ ============================================================ Class B: Net asset value and offering price per share $ 16.53 ____________________________________________________________ ============================================================ Class C: Net asset value and offering price per share $ 16.54 ____________________________________________________________ ============================================================
* At April 30, 2005, securities with an aggregate market value of $74,652,924 were on loan to brokers. See accompanying notes which are an integral part of the financial statements. F-5 STATEMENT OF OPERATIONS For the six months ended April 30, 2005 (Unaudited) INVESTMENT INCOME: Dividends (net of foreign withholding tax of $231,724) $ 4,544,329 ------------------------------------------------------------------------- Dividends from affiliated money market funds (includes securities lending income of $111,158 after rebates of $715,912) 198,927 ------------------------------------------------------------------------- Interest 4,198 ========================================================================= Total investment income 4,747,454 ========================================================================= EXPENSES: Advisory fees 1,932,709 ------------------------------------------------------------------------- Administrative services fees 62,215 ------------------------------------------------------------------------- Custodian fees 145,635 ------------------------------------------------------------------------- Distribution fees: Class A 587,237 ------------------------------------------------------------------------- Class B 674,490 ------------------------------------------------------------------------- Class C 134,747 ------------------------------------------------------------------------- Transfer agent fees 1,010,353 ------------------------------------------------------------------------- Trustees' and officer's fees and benefits 15,380 ------------------------------------------------------------------------- Other 180,912 ========================================================================= Total expenses 4,743,678 ========================================================================= Less: Fees waived, expenses reimbursed and expense offset arrangement (111,501) ========================================================================= Net expenses 4,632,177 ========================================================================= Net investment income 115,277 ========================================================================= REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES AND FOREIGN CURRENCIES: Net realized gain from: Investment securities 29,100,074 ------------------------------------------------------------------------- Foreign currencies 165,663 ========================================================================= 29,265,737 ========================================================================= Change in net unrealized appreciation (depreciation) of: Investment securities (5,091,817) ------------------------------------------------------------------------- Foreign currencies (38,389) ========================================================================= (5,130,206) ========================================================================= Net gain from investment securities and foreign currencies 24,135,531 ========================================================================= Net increase in net assets resulting from operations $24,250,808 _________________________________________________________________________ =========================================================================
See accompanying notes which are an integral part of the financial statements. F-6 STATEMENT OF CHANGES IN NET ASSETS For the six months ended April 30, 2005 and the year ended October 31, 2004 (Unaudited)
APRIL 30, OCTOBER 31, 2005 2004 ------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $ 115,277 $ (2,212,745) ------------------------------------------------------------------------------------------- Net realized gain from investment securities, foreign currencies, and futures contracts 29,265,737 65,312,164 ------------------------------------------------------------------------------------------- Change in net unrealized appreciation (depreciation) of investment securities, foreign currencies, and futures contracts (5,130,206) (7,636,388) =========================================================================================== Net increase in net assets resulting from operations 24,250,808 55,463,031 =========================================================================================== Share transactions-net: Class A (20,938,754) (77,829,276) ------------------------------------------------------------------------------------------- Class B (28,362,631) (60,815,446) ------------------------------------------------------------------------------------------- Class C (4,538,107) (8,514,512) =========================================================================================== Net increase (decrease) in net assets resulting from share transactions (53,839,492) (147,159,234) =========================================================================================== Net increase (decrease) in net assets (29,588,684) (91,696,203) =========================================================================================== NET ASSETS: Beginning of period 452,777,691 544,473,894 =========================================================================================== End of period (including undistributed net investment income (loss) of $15,274 and $(100,003), respectively) $423,189,007 $ 452,777,691 ___________________________________________________________________________________________ ===========================================================================================
See accompanying notes which are an integral part of the financial statements. F-7 NOTES TO FINANCIAL STATEMENTS April 30, 2005 (Unaudited) NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Global Growth Fund (the "Fund") is a series portfolio of AIM International Mutual Funds (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 six separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The Fund currently offers multiple classes of shares. 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. Companies are listed in the Schedule of Investments based on the country in which they are organized. Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust (including the Trust's investment manager) 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 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. However, the Fund has not had prior claims or losses pursuant to these contracts. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. A. SECURITY VALUATIONS -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued on the basis of prices furnished by independent pricing services, which may be considered fair valued, or market makers. Each security reported on the NASDAQ National Market System 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 will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end registered investment companies 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 closed-end registered investment companies that trade on an exchange are valued at the last sales price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) 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 having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. 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. 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. 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 the close of the respective markets. Events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. 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 market value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current market 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, ADRs and domestic and foreign index futures. F-8 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. 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. 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. 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 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 Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. F. REDEMPTION FEES -- The Fund has instituted a 2% redemption fee on certain share classes 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, including exchanges of shares held less than 30 days. The redemption fee is accounted for as an addition to shares of beneficial interest by the Fund and is allocated among the share classes based on the relative net assets of each class. G. 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. H. 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. I. FUTURES CONTRACTS -- The Fund may purchase or sell futures contracts as a hedge against changes in market conditions. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities as collateral for the account of the broker (the Fund's agent in acquiring the futures position). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by "marking to market" on a daily basis to reflect the market value of the contracts at the end of each day's trading. Variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. When the contracts are closed, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund's basis in the contract. 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. F-9 NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE -------------------------------------------------------------------- First $1 billion 0.85% -------------------------------------------------------------------- Over $1 billion 0.80% ____________________________________________________________________ ====================================================================
Effective January 1, 2005 through December 31, 2009, AIM has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund based on the Fund's average daily net assets do not exceed the annual rate of:
AVERAGE NET ASSETS RATE ------------------------------------------------------------------- First $250 million 0.80% ------------------------------------------------------------------- Next $250 million 0.78% ------------------------------------------------------------------- Next $500 million 0.76% ------------------------------------------------------------------- Next $1.5 billion 0.74% ------------------------------------------------------------------- Next $2.5 billion 0.72% ------------------------------------------------------------------- Next $2.5 billion 0.70% ------------------------------------------------------------------- Next $2.5 billion 0.68% ------------------------------------------------------------------- Over $10 billion 0.66% ___________________________________________________________________ ===================================================================
AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds on investments by the Fund in such affiliated money market funds (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the fund). AIM is also voluntarily waiving a portion of the advisory fee payable by the Fund equal to the difference between the income earned from investing in the affiliated money market fund and the hypothetical income earned from investing in an appropriate comparative benchmark. Voluntary fee waivers or reimbursements may be modified or discontinued at any time upon consultation with the Board of Trustees without further notice to investors. For the six months ended April 30, 2005, AIM waived fees of $88,872. For the six months ended April 30, 2005, at the request of the Trustees of the Trust, AMVESCAP PLC ("AMVESCAP") agreed to reimburse $17,182 of 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. 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. Pursuant to such agreement, for the six months ended April 30, 2005, AIM was paid $62,215. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer agency and shareholder services to the Fund and reimburse AISI for certain expenses incurred by AISI in the course of providing such services. AISI may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. For the six months ended April 30, 2005, the Fund paid AISI $1,010,353. The Trust has entered into master distribution agreements with A I M Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B and Class C shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A, Class B and Class C shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays ADI 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 Class C shares. Prior to January 1, 2005, the Fund paid ADI 0.50% of the average daily net assets of Class A shares. Of these amounts, up to 0.25% of the average daily net assets of the Class A, Class B or Class C 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. NASD Rules 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. Pursuant to the Plans, for the six months ended April 30, 2005, the Class A, Class B and Class C shares paid $587,237, $674,490 and $134,747, respectively. Front-end sales commissions and contingent deferred sales charges ("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 six months ended April 30, 2005, ADI advised the Fund that it retained $22,056 in front-end sales commissions from the sale of Class A shares and $623, $11,435 and $1,072 from Class A, Class B and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders. Certain officers and trustees of the Trust are officers and directors of AIM, AISI and/or ADI. F-10 NOTE 3--INVESTMENTS IN AFFILIATES The Fund is permitted, pursuant to an exemptive order from the Securities and Exchange Commission ("SEC"), to invest daily available cash balances and cash collateral from securities lending transactions in affiliated money market funds. The Fund and the money market funds below have the same investment advisor and therefore, are considered to be affiliated. The tables below show the transactions in and earnings from investments in affiliated money market funds for the six months ended April 30, 2005. INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
UNREALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND REALIZED FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME GAIN (LOSS) ---------------------------------------------------------------------------------------------------------------------------------- Liquid Assets Portfolio- Institutional Class $ 5,732,411 $33,278,504 $(35,186,909) $ -- $3,824,006 $43,504 $ -- ---------------------------------------------------------------------------------------------------------------------------------- STIC Prime Portfolio- Institutional Class 5,732,411 33,278,504 (35,186,909) -- 3,824,006 44,265 -- ================================================================================================================================== Subtotal $11,464,822 $66,557,008 $(70,373,818) $ -- $7,648,012 $87,769 $ -- ==================================================================================================================================
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
UNREALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND REALIZED FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME* GAIN (LOSS) ---------------------------------------------------------------------------------------------------------------------------------- Liquid Assets Portfolio- Institutional Class $76,311,756 $ 19,447,605 $ (95,759,361) $ -- $ -- $ 48,097 $ -- ---------------------------------------------------------------------------------------------------------------------------------- STIC Prime Portfolio- Institutional Class -- 146,099,821 (67,976,287) -- 78,123,534 63,061 -- ================================================================================================================================== Subtotal $76,311,756 $165,547,426 $(163,735,648) $ -- $78,123,534 $111,158 $ -- ================================================================================================================================== Total $87,776,578 $232,104,434 $(234,109,466) $ -- $85,771,546 $198,927 $ -- __________________________________________________________________________________________________________________________________ ==================================================================================================================================
* Net of rebates. NOTE 4--EXPENSE OFFSET ARRANGEMENT 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 six months ended April 30, 2005, the Fund received credits from this arrangement which resulted in the reduction of the Fund's total expenses of $5,447. NOTE 5--TRUSTEES' AND OFFICER'S FEES AND BENEFITS "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to each Trustee of the Fund who is not an "interested person" of the AIM Funds. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officer's 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, 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 Officer's 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. In addition to the above, "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to the Senior Officer of the AIM Funds. During the six months ended April 30, 2005, the Fund paid legal fees of $2,648 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 Pursuant to an exemptive order from the SEC, the Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. A loan will be secured by collateral if the Fund's aggregate borrowings from all sources exceeds 10% of the Fund's total assets. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. F-11 The Fund is a participant in an uncommitted unsecured revolving credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000, or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the credit facility can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the six months ended April 30, 2005, the Fund did not borrow or lend under the interfund lending facility or borrow under the uncommitted unsecured revolving credit facility. Additionally, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated at an amount equal to the Federal Funds rate plus 100 basis points. NOTE 7--PORTFOLIO SECURITIES LOANED 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. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds. 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. The Fund could also 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 a loss on the collateral invested. At April 30, 2005, securities with an aggregate value of $74,652,924 were on loan to brokers. The loans were secured by cash collateral of $78,123,534 received by the Fund and subsequently invested in an affiliated money market fund. For the six months ended April 30, 2005, the Fund received dividends on cash collateral of $111,158 for securities lending transactions, which are net of rebates. NOTE 8--TAX INFORMATION The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund's fiscal year-end. 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 had a capital loss carryforward as of October 31, 2004 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* ----------------------------------------------------------------------------- October 31, 2009 $274,382,571 ----------------------------------------------------------------------------- October 31, 2010 101,042,257 ----------------------------------------------------------------------------- October 31, 2011 11,321,620 ============================================================================= Total capital loss carryforward $386,746,448 _____________________________________________________________________________ =============================================================================
* 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 and money market funds) purchased and sold by the Fund during the six months ended April 30, 2005 was $107,846,312 and $155,347,133, respectively. For interim reporting periods, the cost of investments for tax purposes includes reversals of certain tax items, such as, wash sales that have occurred since the prior fiscal year-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS ------------------------------------------------------------------------------ Aggregate unrealized appreciation of investment securities $106,336,460 ------------------------------------------------------------------------------ Aggregate unrealized (depreciation) of investment securities (5,489,212) ============================================================================== Net unrealized appreciation of investment securities $100,847,248 ______________________________________________________________________________ ============================================================================== Cost of investments for tax purposes is $397,200,061.
F-12 NOTE 10--SHARE INFORMATION 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 CDSC. Under certain circumstances, Class A shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN SHARES OUTSTANDING(a) ----------------------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED APRIL 30, 2005 OCTOBER 31, 2004 -------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------------------------------------------------------------------- Sold: Class A 489,439 $ 8,765,240 1,232,139 $ 19,652,547 ----------------------------------------------------------------------------------------------------------------------- Class B 292,111 4,946,314 565,634 8,560,279 ----------------------------------------------------------------------------------------------------------------------- Class C 104,073 1,761,593 221,675 3,352,828 ======================================================================================================================= Automatic conversion of Class B shares to Class A shares: Class A 859,380 15,429,511 1,762,944 28,418,398 ----------------------------------------------------------------------------------------------------------------------- Class B (910,196) (15,429,511) (1,859,129) (28,418,398) ======================================================================================================================= Reacquired:(b) Class A (2,523,353) (45,133,505) (7,934,725) (125,900,221) ----------------------------------------------------------------------------------------------------------------------- Class B (1,058,194) (17,879,434) (2,711,929) (40,957,327) ----------------------------------------------------------------------------------------------------------------------- Class C (372,905) (6,299,700) (783,613) (11,867,340) ======================================================================================================================= (3,119,645) $(53,839,492) (9,507,004) $(147,159,234) _______________________________________________________________________________________________________________________ =======================================================================================================================
(a) There are two entities that are each record owners of more than 5% of the outstanding shares of the Fund and in the aggregate they own 13% of the outstanding shares of the Fund. AIM Distributors has an agreement with these entities to sell Fund shares. The Fund, AIM and/or AIM affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, AIM and/or 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 shareholders are also owned beneficially. (b) Amount is net of redemption fees of $483, $219 and $44 for Class A, Class B and Class C shares, respectively, for the six months ended April 30, 2005 and $1,549, $802 and $149 for Class A, Class B and Class C shares, respectively, for the year ended October 31, 2004. F-13 NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A ------------------------------------------------------------------------------ SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 16.65 $ 14.91 $ 12.66 $ 14.58 $ 24.83 $ 23.43 -------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.02(a) (0.04)(b) (0.08) (0.11)(b) (0.13) (0.03)(b) -------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 0.85 1.78 2.33 (1.81) (10.08) 2.77 ================================================================================================================================ Total from investment operations 0.87 1.74 2.25 (1.92) (10.21) 2.74 ================================================================================================================================ Less distributions from net realized gains -- -- -- -- (0.04) (1.34) ================================================================================================================================ Redemption fees added to shares of beneficial interest 0.00 0.00 -- -- -- -- ================================================================================================================================ Net asset value, end of period $ 17.52 $ 16.65 $ 14.91 $ 12.66 $ 14.58 $ 24.83 ________________________________________________________________________________________________________________________________ ================================================================================================================================ Total return(c) 5.23% 11.67% 17.77% (13.17)% (41.17)% 11.52% ________________________________________________________________________________________________________________________________ ================================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $280,442 $286,068 $329,739 $335,954 $439,612 $796,992 ________________________________________________________________________________________________________________________________ ================================================================================================================================ Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.83%(d) 1.96% 2.04% 1.95% 1.68% 1.62% -------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.87%(d) 1.97% 2.04% 1.95% 1.79% 1.63% ================================================================================================================================ Ratio of net investment income (loss) to average net assets 0.26%(a)(d) (0.24)% (0.58)% (0.75)% (0.66)% (0.10)% ________________________________________________________________________________________________________________________________ ================================================================================================================================ Portfolio turnover rate(e) 24% 56% 75% 98% 134% 110% ________________________________________________________________________________________________________________________________ ================================================================================================================================
(a) Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include a special cash dividend 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 $(0.01) and (0.06)%, respectively. (b) Calculated using average shares outstanding. (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) Ratios are annualized and based on average daily net assets of $295,335,080. (e) Not annualized for periods less than one year. F-14 NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
CLASS B -------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 15.76 $ 14.18 $ 12.09 $ 14.00 $ 23.98 $ 22.78 -------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.03)(a) (0.11)(b) (0.15) (0.17)(b) (0.24) (0.17)(b) -------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 0.80 1.69 2.24 (1.74) (9.70) 2.71 ================================================================================================================================ Total from investment operations 0.77 1.58 2.09 (1.91) (9.94) 2.54 ================================================================================================================================ Less distributions from net realized gains -- -- -- -- (0.04) (1.34) ================================================================================================================================ Redemption fees added to shares of beneficial interest 0.00 0.00 -- -- -- -- ================================================================================================================================ Net asset value, end of period $ 16.53 $ 15.76 $ 14.18 $ 12.09 $ 14.00 $ 23.98 ________________________________________________________________________________________________________________________________ ================================================================================================================================ Total return(c) 4.89% 11.14% 17.29% (13.64)% (41.50)% 10.95% ________________________________________________________________________________________________________________________________ ================================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $118,186 $139,061 $181,891 $206,189 $369,171 $806,409 ________________________________________________________________________________________________________________________________ ================================================================================================================================ Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.43%(d) 2.46% 2.54% 2.45% 2.19% 2.16% -------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.47%(d) 2.47% 2.54% 2.45% 2.30% 2.17% ================================================================================================================================ Ratio of net investment income (loss) to average net assets (0.34)%(a)(d) (0.74)% (1.08)% (1.25)% (1.16)% (0.64)% ________________________________________________________________________________________________________________________________ ================================================================================================================================ Portfolio turnover rate(e) 24% 56% 75% 98% 134% 110% ________________________________________________________________________________________________________________________________ ================================================================================================================================
(a) Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include a special cash dividend 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 (0.66)%, respectively. (b) Calculated using average shares outstanding. (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) Ratios are annualized and based on average daily net assets of $136,015,891. (e) Not annualized for periods less than one year. F-15 NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
CLASS C ------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, -------------------------------------------------------- 2005 2004 2003 2002 2001 2000 -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 15.77 $ 14.18 $ 12.10 $ 14.01 $ 23.98 $ 22.79 -------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.03)(a) (0.11)(b) (0.15) (0.17)(b) (0.22) (0.17)(b) -------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 0.80 1.70 2.23 (1.74) (9.71) 2.70 ================================================================================================================================ Total from investment operations 0.77 1.59 2.08 (1.91) (9.93) 2.53 ================================================================================================================================ Less distributions from net realized gains -- -- -- -- (0.04) (1.34) ================================================================================================================================ Redemption fees added to shares of beneficial interest 0.00 0.00 -- -- -- -- ================================================================================================================================ Net asset value, end of period $ 16.54 $ 15.77 $ 14.18 $ 12.10 $ 14.01 $ 23.98 ________________________________________________________________________________________________________________________________ ================================================================================================================================ Total return(c) 4.88% 11.21% 17.19% (13.63)% (41.46)% 10.90% ________________________________________________________________________________________________________________________________ ================================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $24,561 $27,649 $32,844 $34,778 $51,624 $88,810 ________________________________________________________________________________________________________________________________ ================================================================================================================================ Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.43%(d) 2.46% 2.54% 2.45% 2.19% 2.16% -------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.47%(d) 2.47% 2.54% 2.45% 2.30% 2.17% ================================================================================================================================ Ratio of net investment income (loss) to average net assets (0.34)%(a)(d) (0.74)% (1.08)% (1.25)% (1.16)% (0.64)% ________________________________________________________________________________________________________________________________ ================================================================================================================================ Portfolio turnover rate(e) 24% 56% 75% 98% 134% 110% ________________________________________________________________________________________________________________________________ ================================================================================================================================
(a) Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include a special cash dividend 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 (0.66)%, respectively. (b) Calculated using average shares outstanding. (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) Ratios are annualized and based on average daily net assets of $27,172,795. (e) Not annualized for periods less than one year. NOTE 12--LEGAL PROCEEDINGS Terms used in the Legal Proceedings Note are defined terms solely for the purpose of this note. SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment advisor to certain AIM Funds), A I M Advisors, Inc. ("AIM") (the Fund's investment advisor) and A I M Distributors, Inc. ("ADI") (the distributor of the retail AIM Funds) reached final settlements with certain regulators, including, among others, the Securities and Exchange Commission ("SEC"), the New York Attorney General ("NYAG") and the Colorado Attorney General ("COAG"), to resolve civil enforcement actions and/or investigations related to market timing activity and related issues in the AIM Funds, including those formerly advised by IFG. As part of the settlements, IFG agreed to pay a total of $325 million (including $110 million in civil penalties). Additionally, AIM and ADI agreed to pay a total of $50 million (including $30 million in civil penalties). These settlement funds will be made available for distribution to the shareholders of the applicable AIM Funds that were harmed by market timing activity, and may (or may not) increase as a result of contributions from third parties who reach final settlements with the SEC or other regulators to resolve allegations of market timing and/or late trading. The settlement funds will be distributed in accordance with a methodology to be determined by AIM's independent distribution consultant, in consultation with AIM and the independent trustees of the AIM Funds and acceptable to the staff of the SEC. As the methodology is unknown at the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the distribution of these settlement funds may have on the Fund or whether such distribution will have an impact on the Fund's financial statements in the future. At the request of the trustees of the AIM Funds, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and AIM, has agreed to reimburse expenses incurred by the AIM Funds related to market timing matters. F-16 NOTE 12--LEGAL PROCEEDINGS--(CONTINUED) REGULATORY INQUIRIES AND PENDING LITIGATION IFG, AIM, ADI and/or related entities and individuals have received inquiries from numerous regulators in the form of subpoenas or other oral or written requests for information and/or documents related to one or more of the following issues, some of which concern one or more AIM Funds: market timing activity, late trading, fair value pricing, excessive or improper advisory and/or distribution fees, mutual fund sales practices, including revenue sharing and directed-brokerage arrangements, investments in securities of other registered investment companies, contractual plans, issues related to Section 529 college savings plans and procedures for locating lost securityholders. IFG, AIM and ADI are providing full cooperation with respect to these inquiries. As described more fully below, the AIM Funds, IFG, AIM, ADI and/or related entities and individuals are defendants in numerous civil lawsuits related to one or more of these issues. Regulatory actions and/or additional civil lawsuits related to these or other issues may be filed against the AIM Funds, IFG, AIM and/or related entities and individuals in the future. On April 12, 2005, the Attorney General of the State of West Virginia ("WVAG") filed civil proceedings against AIM, IFG and ADI, as well as numerous unrelated mutual fund complexes and financial institutions. None of the AIM Funds has been named as a defendant in these proceedings. The WVAG complaint, filed in the Circuit Court of Marshall County, West Virginia [Civil Action No. 05-C-81], alleges, in substance, that AIM, IFG and ADI engaged in unfair competition and/or unfair or deceptive trade practices by failing to disclose in the prospectuses for the AIM Funds, including those formerly advised by IFG, that they had entered into certain arrangements permitting market timing of such Funds. As a result of the foregoing, the WVAG alleges violations of W. Va. Code sec. 46A-1-101, et seq. (the West Virginia Consumer Credit and Protection Act). The WVAG complaint is seeking, among other things, injunctive relief, civil monetary penalties and a writ of quo warranto against the defendants. If AIM is unsuccessful in its defense of the WVAG proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could affect the ability of AIM or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any registered investment company, including the Fund. The Fund has been informed by AIM that, if these results occur, AIM will seek exemptive relief from the SEC to permit it to continue to serve as the Fund's investment advisor. There is no assurance that such exemptive relief will be granted. Civil lawsuits, including purported class action and shareholder derivative suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or related entities and individuals, depending on the lawsuit, alleging: - that the defendants permitted improper market timing and related issues in the AIM Funds; - that certain AIM Funds inadequately employed fair value pricing; - that the defendants charged excessive advisory and/or distribution fees and failed to pass on to shareholders the perceived savings generated by economies of scale and that the defendants adopted unlawful distribution plans; - that the defendants breached their fiduciary duties by charging distribution fees while funds and/or specific share classes were closed generally to new investors and/or while other share classes of the same fund were not charged the same distribution fees; - that the defendants improperly used the assets of the AIM Funds to pay brokers to aggressively promote the sale of the AIM Funds over other mutual funds and that the defendants concealed such payments from investors by disguising them as brokerage commissions; and - that the defendants breached their fiduciary duties by failing to ensure that the AIM Funds participated in class action settlements in which the AIM Funds were eligible to participate. These lawsuits allege as theories of recovery, depending on the lawsuit, violations of various provisions of the Federal and state securities laws and ERISA, negligence, breach of fiduciary duty and/or breach of contract. These lawsuits seek remedies that include, depending on the lawsuit, damages, restitution, injunctive relief, imposition of a constructive trust, removal of certain directors and/or employees, various corrective measures under ERISA, rescission of certain AIM Funds' advisory agreements and/or distribution plans and recovery of all fees paid, an accounting of all fund-related fees, commissions and soft dollar payments, restitution of all commissions and fees paid, and prospective relief in the form of reduced fees. At the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the outcome of the Regulatory Inquiries and Pending Litigation described above may have on AIM, ADI or the Fund. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * As a result of the matters discussed above, investors in the AIM Funds might react by redeeming their investments. This might require the AIM Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AIM Funds. F-17 OTHER INFORMATION BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND Bob R. Baker Robert H. Graham 11 Greenway Plaza Frank S. Bayley President Suite 100 James T. Bunch Houston, TX 77046-1173 Bruce L. Crockett Mark H. Williamson Chair Executive Vice President INVESTMENT ADVISOR Albert R. Dowden A I M Advisors, Inc. Edward K. Dunn Jr. Lisa O. Brinkley 11 Greenway Plaza Jack M. Fields Senior Vice President and Suite 100 Carl Frischling Chief Compliance Officer Houston, TX 77046-1173 Robert H. Graham Gerald J. Lewis Russell C. Burk TRANSFER AGENT Prema Mathai-Davis Senior Vice President AIM Investment Services, Inc. Lewis F. Pennock P.O. Box 4739 Ruth H. Quigley Kevin M. Carome Houston, TX 77210-4739 Larry Soll Senior Vice President, Secretary and Mark H. Williamson Chief Legal Officer CUSTODIAN State Street Bank and Trust Company Sidney M. Dilgren 225 Franklin Street Vice President and Treasurer Boston, MA 02110-2801 Robert G. Alley COUNSEL TO THE FUND Vice President Ballard Spahr Andrews & Ingersoll, LLP J. Philip Ferguson 1735 Market Street, 51st Floor Vice President Philadelphia, PA 19103-7599 Karen Dunn Kelley COUNSEL TO THE INDEPENDENT TRUSTEES Vice President Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714 DISTRIBUTOR A I M Distributors, Inc. 11 Greenway Plaza Suite 100 Houston, TX 77046-1173
DOMESTIC EQUITY INTERNATIONAL/GLOBAL EQUITY FIXED INCOME AIM Aggressive Growth Fund AIM Asia Pacific Growth Fund TAXABLE AIM Basic Balanced Fund* AIM Developing Markets Fund AIM Basic Value Fund AIM European Growth Fund AIM Floating Rate Fund AIM Blue Chip Fund AIM European Small Company Fund(5) AIM High Yield Fund AIM Capital Development Fund AIM Global Aggressive Growth Fund AIM Income Fund AIM Charter Fund AIM Global Equity Fund AIM Intermediate Government Fund AIM Constellation Fund AIM Global Growth Fund AIM Limited Maturity Treasury Fund AIM Diversified Dividend Fund AIM Global Value Fund AIM Money Market Fund AIM Dynamics Fund(1) AIM International Core Equity Fund(1) AIM Short Term Bond Fund AIM Large Cap Basic Value Fund AIM International Growth Fund AIM Total Return Bond Fund AIM Large Cap Growth Fund AIM International Small Company Fund(6) Premier Portfolio AIM Mid Cap Basic Value Fund AIM Trimark Fund Premier U.S. Government Money AIM Mid Cap Core Equity Fund(2) Portfolio(1) AIM Mid Cap Growth Fund SECTOR EQUITY AIM Opportunities I Fund TAX-FREE AIM Opportunities II Fund AIM Advantage Health Sciences Fund(1) AIM Opportunities III Fund AIM Energy Fund(1) AIM High Income Municipal Fund AIM Premier Equity Fund AIM Financial Services Fund(1) AIM Municipal Bond Fund AIM S&P 500 Index Fund(1) AIM Global Health Care Fund AIM Tax-Exempt Cash Fund AIM Select Equity Fund AIM Global Real Estate Fund AIM Tax-Free Intermediate Fund AIM Small Cap Equity Fund(3) AIM Gold & Precious Metals Fund(1) Premier Tax-Exempt Portfolio AIM Small Cap Growth Fund(4) AIM Leisure Fund(1) AIM Small Company Growth Fund(1) AIM Multi-Sector Fund(1) AIM ALLOCATION SOLUTIONS AIM Trimark Endeavor Fund AIM Real Estate Fund(7) AIM Trimark Small Companies Fund AIM Technology Fund(1) AIM Conservative Allocation Fund AIM Weingarten Fund AIM Utilities Fund(1) AIM Growth Allocation Fund(8) AIM Moderate Allocation Fund AIM Moderate Growth Allocation Fund AIM Moderately Conservative Allocation Fund ==================================================================================== CONSIDER THE INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY. FOR THIS AND OTHER INFORMATION ABOUT AIM FUNDS, OBTAIN A PROSPECTUS FROM YOUR FINANCIAL ADVISOR AND READ IT CAREFULLY BEFORE INVESTING. ====================================================================================
* Domestic equity and income fund (1) The following name changes became effective October 15, 2004: INVESCO Advantage Health Sciences Fund to AIM Advantage Health Sciences Fund, INVESCO Dynamics Fund to AIM Dynamics Fund, INVESCO Energy Fund to AIM Energy Fund, INVESCO Financial Services Fund to AIM Financial Services Fund, INVESCO Gold & Precious Metals Fund to AIM Gold & Precious Metals Fund, INVESCO International Core Equity Fund to AIM International Core Equity Fund, INVESCO Leisure Fund to AIM Leisure Fund, INVESCO Mid-Cap Growth Fund to AIM Mid Cap Stock Fund, INVESCO Multi-Sector Fund to AIM Multi-Sector Fund, INVESCO S&P 500 Index Fund to AIM S&P 500 Index Fund, INVESCO Small Company Growth Fund to AIM Small Company Growth Fund, INVESCO Technology Fund to AIM Technology Fund, INVESCO U.S. Government Money Fund to Premier U.S. Government Money Portfolio, INVESCO Utilities Fund to AIM Utilities Fund. (2) As of end of business on February 27, 2004, AIM Mid Cap Core Equity Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (3) Effective December 13, 2004, AIM Small Cap Equity Fund is open to all investors. (4) As of end of business on March 18, 2002, AIM Small Cap Growth Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (5) As of end of business on March 28, 2005, AIM European Small Company Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (6) Effective December 30, 2004, AIM International Emerging Growth Fund was renamed AIM International Small Company Fund. As of end of business on March 14, 2005, the Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (7) As of end of business on April 29, 2005, AIM Real Estate Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (8) Effective April 29, 2005, AIM Aggressive Allocation Fund was renamed AIM Growth Allocation Fund. If used after July 20, 2005, this report must be accompanied by a Fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $131 billion in assets. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $375 billion in assets under management. Data as of March 31, 2005. AIMinvestments.com GLG-SAR-1 A I M Distributors, Inc. [YOUR GOALS. OUR SOLUTIONS.] --Registered Trademark-- ------------------------------------------------------------------------------- Mutual Retirement Annuities College Separately Offshore Cash [AIM INVESTMENTS LOGO APPEARS HERE] Funds Products Savings Managed Products Management --Registered Trademark-- Plans Accounts -------------------------------------------------------------------------------
AIM INTERNATIONAL GROWTH FUND Semiannual Report to Shareholders o April 30, 2005 [COVER IMAGE] [YOUR GOALS. OUR SOLUTIONS.] [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- --Registered Trademark-- AIM INTERNATIONAL GROWTH FUND SEEKS TO PROVIDE LONG-TERM GROWTH OF CAPITAL. o Unless otherwise stated, information presented in this report is as of April 30, 2005, and is based on total net assets. ABOUT SHARE CLASSES Index, which represents the performance o Industry classifications used in this of foreign stocks tracked by Morgan report are generally according to the o Effective September 30, 2003, Class B Stanley Capital International. The Global Industry Classification Standard, shares are not available as an Growth portion measures performance of which was developed by and is the investment for retirement plans companies with higher price/earnings exclusive property and a service mark of maintained pursuant to Section 401 of ratios and higher forecasted growth Morgan Stanley Capital International the Internal Revenue Code, including values. Inc. and Standard & Poor's. 401(k) plans, money purchase pension plans and profit sharing plans. Plans o The unmanaged Lipper International The Fund provides a complete list of its that have existing accounts invested in Multi-Cap Growth Fund Index represents holdings four times in each fiscal year, Class B shares will continue to be an average of multi-cap international at the quarter-ends. For the second and allowed to make additional purchases. growth funds tracked by Lipper, Inc., an fourth quarters, the lists appear in the independent mutual fund performance Fund's semiannual and annual reports to o Class R shares are available only to monitor, and is considered shareholders. For the first and third certain retirement plans. Please see the representative of international stocks. quarters, the Fund files the lists with prospectus for more information. the Securities and Exchange Commission o The Fund is not managed to track the (SEC) on Form N-Q. Shareholders can look PRINCIPAL RISKS OF INVESTING IN THE FUND performance of any particular index, up the Fund's Forms N-Q on the SEC's Web including the indexes defined here, and site at sec.gov. Copies of the Fund's o International investing presents consequently, the performance of the Forms N-Q may be reviewed and copied at certain risks not associated with Fund may deviate significantly from the the SEC's Public Reference Room at 450 investing solely in the United States. performance of the indexes. Fifth Street, N.W., Washington, D.C. These include risks relating to 20549-0102. You can obtain information fluctuations in the value of the U.S. o A direct investment cannot be made in on the operation of the Public Reference dollar relative to the values of other an index. Unless otherwise indicated, Room, including information about currencies, the custody arrangements index results include reinvested duplicating fee charges, by calling made for the Fund's foreign holdings, dividends, and they do not reflect sales 1-202-942-8090 or 1-800-732-0330, or by differences in accounting, political charges. Performance of an index of electronic request at the following risks and the lesser degree of public funds reflects fund expenses; e-mail address: publicinfo@sec.gov. The information required to be provided by performance of a market index does not. SEC file numbers for the Fund are non-U.S. companies. 811-6463 and 33-44611. The Fund's most OTHER INFORMATION recent portfolio holdings, as filed on o Investing in emerging markets involves Form N-Q, are also available at greater risk and potential reward than o The returns shown in management's AIMinvestments.com. investing in more established markets. discussion of Fund performance are based on net asset values calculated for A description of the policies and ABOUT INDEXES USED IN THIS REPORT shareholder transactions. Generally procedures that the Fund uses to accepted accounting principles require determine how to vote proxies relating o The unmanaged MSCI Europe, Australasia adjustments to be made to the net assets to portfolio securities is available and the Far East Index (the MSCI EAFE of the Fund at period end for financial without charge, upon request, from our --Registered Trademark--) is a group of reporting purposes, and as such, the net Client Services department at foreign securities tracked by Morgan asset values for shareholder 800-959-4246 or on the AIM Web site, Stanley Capital International. transactions and the returns based on AIMinvestments.com. On the home page, those net asset values may differ from scroll down and click on AIM Funds Proxy o The unmanaged MSCI Europe, Australasia the net asset values and returns Policy. The information is also and the Far East (the MSCI EAFE reported in the Financial Highlights. available on the SEC Web site, sec.gov. --Registered Trademark--) Growth Index is a subset of the unmanaged MSCI Information regarding how the Fund voted EAFE--Registered Trademark-- proxies related to its portfolio securities during the 12 months ended June 30, 2004, is available at our Web site. Go to AIMinvestments.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 Web site, sec.gov.
================================================================================ THIS REPORT 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. ================================================================================ NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE AIMINVESTMENTS.COM AIM INTERNATIONAL GROWTH FUND DEAR FELLOW SHAREHOLDERS: Most equity market and fund indexes, domestic and international, produced positive total returns for the six months ended April 30, 2005, but for the most part, those [GRAHAM positive numbers reflected gains made during the latter PHOTO] months of 2004. Year-to-date as of April 30, 2005, the returns were far less attractive. High oil prices remained a source of unease; crude oil ROBERT H. GRAHAM remained near or above $50 per barrel throughout the reporting period. The Producer Price Index was up fairly sharply in April, largely due to energy costs. And central bank policy continued to focus on containing short-term [WILLIAMSON inflation via increases in the overnight federal funds PHOTO] interest rate, the rate the Federal Reserve (the Fed) most directly controls. Shortly after the reporting period closed, the Fed raised that rate to 3%; it was the eighth increase since mid-2004. Should the Fed continue to raise MARK H. WILLIAMSON rates, this could eventually dampen economic performance, which in fact has been quite good. Gross domestic product grew 4.4% for all of 2004 and the preliminary estimate of annualized growth for the first quarter of 2005 was 3.5%. o Though the growth rate of the manufacturing sector slowed in April and again in May, manufacturing continued to grow, according to the Institute for Supply Management (ISM), whose purchasing manager surveys cover more than 80% of the U.S. economy. In May, manufacturing grew for the 24th consecutive month while the overall economy grew for the 43rd consecutive month, ISM reported. o Though job growth during May was much slower than during April, the unemployment rate remained unchanged at 5.1% as May 2005 ended. o For the first quarter of 2005, earnings for companies included in the Standard & Poor's Composite Index of 500 Stocks, an index of the broad U.S. stock market, were up more than 10%, on average, over a year earlier. o Bond yields have not risen as much as might be expected given eight increases in short-term interest rates in less than a year. This may indicate that the bond market is not anticipating a long-term inflationary pattern. After the slow start in 2005, domestic and many international markets began to rally after the close of the reporting period, demonstrating once again how changeable markets are in the short term. Given the elusiveness of accurate short-term market forecasts, as always, we urge our shareholders to: o keep a long-term investment perspective, o make sure their portfolio of investments is suitably diversified, and o contact their financial advisors when they have questions about their investments or the markets. YOUR FUND In the following pages you will find a discussion of your Fund's investment philosophy, an explanation of its performance for the reporting period, and a summary of its portfolio as of April 30. Further information about your Fund, The AIM Family of Funds --Registered Trademark--, and investing in general is always available on our widely praised Web site, AIMinvestments.com. Please visit frequently. We at AIM remain committed to building solutions to help you meet your investment goals. We thank you for your continued participation in AIM Investments --Registered Trademark--. If you have any questions, please contact our award-winning Client Service representatives at 800-959-4246. We are happy to be of help. Sincerely, /S/ ROBERT H. GRAHAM /S/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson President & Vice Chair, Chairman & President, AIM Funds A I M Advisors, Inc. June 17, 2005 AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M Capital Management, Inc. are the investment advisors and A I M Distributors, Inc. is the distributor for the retail funds represented by AIM Investments. AIM INTERNATIONAL GROWTH FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE MARKET CONDITIONS AND YOUR FUND ======================================== For much of the reporting period, PERFORMANCE SUMMARY FUND VS. INDEXES international stocks trended upward with some foreign markets posting multi-year During the reporting period, foreign TOTAL RETURNS, 10/31/04-4/30/05, highs in early March. Sentiment changed markets once again outperformed U.S. EXCLUDING APPLICABLE SALES CHARGES. IF in mid-March, however, amid the markets--often by a two-to-one margin. SALES CHARGES WERE INCLUDED, RETURNS possibility of further oil price hikes WOULD BE LOWER. and signs of sluggish corporate growth. Although the Fund posted higher Given this environment, most world returns than its benchmark indexes for Class A Shares 7.93% markets posted negative returns for both the majority of the reporting period, a March and April. sharp sell-off in select holdings in Class B Shares 7.53 April impacted Fund performance. Poor Company earnings reports, however, performance from select Japanese and Class C Shares 7.53 received mixed review by the market and Indian holdings contributed to the investors. Many international companies, Fund's lower comparative return for the Class R Shares 7.82 including several of the Fund's top reporting period as a whole. holdings, exceeded analysts' estimates. MSCI EAFE Index While positive earnings reports Our focus remains, however, on (Broad Market Index) 8.71 continued to outnumber disappointments, long-term performance. For the period, investors often overlooked these ended April 30, 2005, the Fund's Class A MSCI EAFE Growth Index positive results and, instead, analyzed shares at NAV outperformed the MSCI EAFE (Style-specific Index) 8.30 "outlook" comments. Growth Index on a one-year, five-year and ten-year basis. Lipper International Multi-Cap Next PLC--one of our best investments Growth Fund Index over the last few years--declined due to HOW WE INVEST (Peer Group Index) 8.99 slower retail growth in the U.K. as consumers responded to a number of rate Our investment strategy is based on the SOURCE: LIPPER, INC. hikes by the Bank of England. Next is principle that strong ======================================== one of the leading retailers in Europe earnings--sustainable, repeatable, with a return on invested capital of above-average growth--can drive stock As an international growth fund, we more than 20% in 2004. The company's prices. Therefore, when selecting stocks invest in stocks from around the world. historic 5-year growth rate of 25% for the Fund we look for companies with To ensure the best market coverage, we slowed to high single digits this year. the following attributes: use a multi-national team approach and Although analyst consensus earnings divide responsibility for the Fund by estimates have not changed and o accelerating earnings and revenues geographic regions. Each team member is valuations remain attractive, we have therefore a regional specialist, while trimmed our exposure due to subdued o strong cash flow generation also a sector generalist. growth prospects. We continue to (dividends, share buybacks) believe, however, that Next is one of Although team members specialize in the highest quality companies in Europe o high return on invested capital specific regions, we select investments and therefore continue to own it. on a stock-by-stock basis. This means we o reasonable valuations follow a bottom-up investment approach, selecting the most attractive stocks, not countries or sectors. Another important component of our investment strategy is that we do not hedge currencies. We believe foreign currency exposure increases diversification benefits. ======================================== ======================================== ======================================== TOP 5 COUNTRIES* PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* By sector 1. United Kingdom 14.9% 1. TOTAL S.A. (France) 2.1% [PIE CHART] 2. Japan 14.2 2. Eni S.p.A. (Italy) 2.0 Financials 21.9% 3. France 11.1 Consumer Discretionary 17.6% 3. Imperial Tobacco Group PLC Industrials 10.2% (United Kingdom) 2.0 4. Canada 6.3 Consumer Staples 10.2% Information Technology 8.4% 4. Tesco PLC (United Kingdom) 1.8 5. Switzerland 6.3 Energy 7.7% Health Care 7.2% 5. Vinci S.A. (France) 1.8 TOTAL NET ASSETS $1.8 BILLION Materials 6.6% Money Market Funds Plus 6. Syngenta A.G. (Switzerland) 1.8 TOTAL NUMBER OF HOLDINGS* 110 Other Assets Less Liabilities 4.9% Telecommunication Services 4.8% 7. Anglo Irish Bank Corp. PLC The Fund's holdings are subject to Utilities 0.5% (Ireland) 1.7 change, and there is no assurance that the Fund will continue to hold any 8. Reckitt Benckiser PLC particular security. (United Kingdom) 1.6 *Excluding money market fund holdings. 9. UBS A.G. (Switzerland) 1.6 10. Mediaset S.p.A. (Italy) 1.6 ======================================== ======================================== ========================================
2 A common feature among many European, Select Indian holdings also proved a CLAS G. OLSSON, Canadian and Asian earnings reports was drag on Fund performance. TATA strong company cash flow leading to CONSULTANCY SERVICES, an Indian senior portfolio increased dividends and share buybacks. outsourcing company, reported [OLSSON manager and head of OPAP, a Greek gaming company, for disappointing results as its income fell PHOTO] AIM's International example, pays out the majority of its 34% for its fiscal fourth quarter ended Investment earnings in dividends to shareholders. March 31, 2005. Tata stated that a Management Unit, is The company, which reported first weaker U.S. dollar hurt growth as most lead manager of AIM International Growth quarter earnings at the top end of of the company's earnings are in Fund with respect to the Fund's market expectations, was a significant dollars. (A weaker dollar means the investments in Europe and Canada. Mr. contributor to Fund performance. company's profits are smaller when Olsson joined AIM in 1994. Mr. Olsson exchanged for rupees.) Given the stock's became a commissioned naval officer at disappointing earnings, we exited the the Royal Swedish Naval Academy in 1988. Foreign equities position during the reporting period. He also received a B.B.A. from The continued to offer University of Texas at Austin. investors an attractive Foreign exchange added slightly to alternative to U.S. Fund returns. Although the U.S. dollar stocks... strengthened in 2005, many foreign BARRETT K. SIDES, currencies still appreciated against the Collectively, our largest regional U.S. currency for the reporting period senior portfolio allocation is in European stocks. Strong as a whole, including the yen, euro and [SIDES manager, is lead performance by some of our consumer pound. Foreign exchange proved somewhat PHOTO] manager of AIM staples companies added to our negative for Canadian holdings, however, International Growth performance. RECKITT BENCKISER--one of as the Canadian dollar depreciated Fund with respect to the world's leading household goods against the dollar over the reporting the Fund's investments in Asia Pacific companies--reported strong earnings period. and Latin America. He joined AIM in numbers in a difficult environment. The 1990. Mr. Sides graduated with a B.S. in company continued to outperform its IN CLOSING economics from Bucknell University. He global peers driven by strong topline also received a master's in growth and the success of recent product As has been the trend for several years, international business from the launches such as Finish 4-in-1, Airwick international markets continued to University of St. Thomas. Mobil'Air, and Freshmatic. The company's outperform their domestic peers during gross and operating margins also the reporting period. Foreign equities improved--despite increased raw material continued to offer investors an SHUXIN CAO, costs. attractive alternative to U.S. stocks: lower valuations, higher dividend yields Chartered Financial The Fund's exposure to a faltering and currency diversification. Despite a [CAO] Analyst, portfolio Japanese market--approximately half of difficult environment for the Fund in PHOTO] manager, is manager the Fund's Asian assets as of April 30, April, we are pleased to provide of AIM International 2005--proved a drag on performance. shareholders with positive Fund returns Growth Fund. He Despite near zero interest rates, for the reporting period. We thank you joined AIM in 1997. Mr. Cao graduated Japanese consumers remain reluctant to for your continued investment in AIM from Tianjin Foreign Language Institute spend. Deflationary pressures have also International Growth Fund. with a B.A. in English. He also received increased due to softer global demand an M.B.A. from Texas A&M University and for Japanese exports, particularly high The views and opinions expressed in is a Certified Public Accountant. tech products. management's discussion of Fund performance are those of A I M Advisors, Toyota lost momentum earlier this Inc. These views and opinions are MATTHEW W. DENNIS, year as GM announced poor first quarter subject to change at any time based on earnings due to a weak U.S. market. This factors such as market and economic Chartered Financial raised questions about Toyota's conditions. These views and opinions may [DENNIS Analyst, portfolio performance in key North American not be relied upon as investment advice PHOTO] manager, is manager markets. We continue to own the stock, or recommendations, or as an offer for a of AIM International however, based on strong company particular security. The information is Growth Fund. He has fundamentals and attractive valuations. not a complete analysis of every aspect been in the investment business since of any market, country, industry, 1994. Mr. Dennis received a B.A. in security or the Fund. Statements of fact economics from The University of Texas are from sources considered reliable, at Austin. He also earned an M.S. in but A I M Advisors, Inc. makes no finance from Texas A&M University. representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee JASON T. HOLZER, of future results, these insights may help you understand our investment Chartered Financial management philosophy. [HOLZER Analyst, senior PHOTO] portfolio manager, See important Fund and index is manager of AIM disclosures inside front cover. International Growth Fund. Mr. Holzer joined AIM in 1996. He received a B.A. in quantitative economics and an M.S. in engineering-economic systems from Stanford University. Assisted by Asia/Latin America Team and Europe/Canada Team [RIGHT ARROW GRAPHIC] FOR A PRESENTATION OF YOUR FUND'S LONG-TERM PERFORMANCE RECORD, PLEASE TURN TO PAGE 5.
3 AIM INTERNATIONAL GROWTH FUND CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE to estimate the expenses that you paid or expenses you paid for the period. You over the period. Simply divide your may use this information to compare the As a shareholder of the Fund, you incur account value by $1,000 (for example, an ongoing costs of investing in the Fund two types of costs: (1) transaction $8,600 account value divided by $1,000 = and other funds. To do so, compare this costs, which may include sales charges 8.6), then multiply the result by the 5% hypothetical example with the 5% (loads) on purchase payments; contingent number in the table under the heading hypothetical examples that appear in the deferred sales charges on redemptions; entitled "Actual Expenses Paid During shareholder reports of the other funds. and redemption fees, if any; and (2) Period" to estimate the expenses you ongoing costs, including management paid on your account during this period. Please note that the expenses shown fees; distribution and/or service fees in the table are meant to highlight your (12b-1); and other Fund expenses. This HYPOTHETICAL EXAMPLE FOR COMPARISON ongoing costs only and do not reflect example is intended to help you PURPOSES any transactional costs, such as sales understand your ongoing costs (in charges (loads) on purchase payments, dollars) of investing in the Fund and to The table below also provides contingent deferred sales charges on compare these costs with ongoing costs information about hypothetical account redemptions, and redemption fees, if of investing in other mutual funds. The values and hypothetical expenses based any. Therefore, the hypothetical example is based on an investment of on the Fund's actual expense ratio and information is useful in comparing $1,000 invested at the beginning of the an assumed rate of return of 5% per year ongoing costs only, and will not help period and held for the entire period before expenses, which is not the Fund's you determine the relative total costs November 1, 2004, through April 30, actual return. The Fund's actual of owning different funds. In addition, 2005. cumulative total returns at net asset if these transactional costs were value after expenses for the six months included, your costs would have been ACTUAL EXPENSES ended April 30, 2005, appear in the higher. table "Fund vs. Indexes" on page 2. The The table below provides information hypothetical account values and expenses about actual account values and actual may not be used to estimate the actual expenses. You may use the information in ending account balance this table, together with the amount you invested, =================================================================================================================================== ACTUAL HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES) BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES ENDING ACCOUNT EXPENSES SHARE VALUE VALUE PAID DURING VALUE PAID DURING CLASS (11/1/04) (4/30/05)(1) PERIOD(2) (4/30/05) PERIOD(2) ----- ----------------- -------------- ----------- -------------- ----------- A $1,000.00 $1,079.30 $ 8.97 $1,016.17 $ 8.70 B 1,000.00 1,075.30 12.56 1,012.69 12.18 C 1,000.00 1,075.30 12.56 1,012.69 12.18 R 1,000.00 1,078.20 10.00 1,015.17 9.69 (1) The actual ending account value is based on the actual total return of the Fund for the period November 1, 2004, to April 30, 2005, 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. The Fund's actual cumulative total returns at net asset value after expenses for the six months ended April 30, 2005, appear in the table "Fund vs. Indexes" on page 2. (2) Expenses are equal to the Fund's annualized expense ratio (1.74%, 2.44%, 2.44% and 1.94% for Class A, B, C, and R shares, respectively) multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). ===================================================================================================================================
[ARROW For More Information Visit BUTTON AIMINVESTMENTS.COM IMAGE] 4 AIM INTERNATIONAL GROWTH FUND YOUR FUND'S LONG-TERM PERFORMANCE Below you will find a presentation of your Fund's performance record for periods ended April 30, 2005, the close of the six-month period covered by this report. Please read the important disclosure accompanying these tables, which explains how Fund performance is calculated and the sales charges, if any, that apply to the share class in which you are invested. In addition to returns as of the close of the reporting period, industry regulations require us to provide average annual total returns as of March 31, 2005, the most recent calendar quarter-end. ======================================== ======================================== AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS As of 4/30/05, including applicable As of 3/31/05, including applicable sales charges sales charges CLASS A SHARES CLASS A SHARES 10 Years 5.99% 10 Years 6.64% 5 Years -4.68 5 Years -5.69 1 Year 9.86 1 Year 10.86 CLASS B SHARES CLASS B SHARES 10 Years 5.96% 10 Years 6.60% 5 Years -4.63 5 Years -5.64 1 Year 10.41 1 Year 11.56 CLASS C SHARES CLASS C SHARES Inception (8/4/97) 2.13% Inception (8/4/97) 2.57% 5 Years -4.27 5 Years -5.29 1 Year 14.39 1 Year 15.48 CLASS R SHARES CLASS R SHARES 10 Years 6.34% 10 Years 7.00% 5 Years -3.86 5 Years -4.88 1 Year 15.98 1 Year 17.04 ======================================== ======================================== CLASS R SHARES' INCEPTION DATE IS JUNE REINVESTED DISTRIBUTIONS, CHANGES IN NET YEAR. THE CDSC ON CLASS C SHARES IS 1% 3, 2002. RETURNS SINCE THAT DATE ARE ASSET VALUE AND THE EFFECT OF THE FOR THE FIRST YEAR AFTER PURCHASE. CLASS HISTORICAL RETURNS. ALL OTHER RETURNS MAXIMUM SALES CHARGE UNLESS OTHERWISE R SHARES DO NOT HAVE A FRONT-END SALES ARE BLENDED RETURNS OF HISTORICAL CLASS STATED. PERFORMANCE FIGURES DO NOT CHARGE; RETURNS SHOWN ARE AT NET ASSET R SHARE PERFORMANCE AND RESTATED CLASS A REFLECT DEDUCTION OF TAXES A SHAREHOLDER VALUE AND DO NOT REFLECT A 0.75% CDSC SHARE PERFORMANCE (FOR PERIODS PRIOR TO WOULD PAY ON FUND DISTRIBUTIONS OR SALE THAT MAY BE IMPOSED ON A TOTAL THE INCEPTION DATE OF CLASS R SHARES) AT OF FUND SHARES. INVESTMENT RETURN AND REDEMPTION OF RETIREMENT PLAN ASSETS NET ASSET VALUE, ADJUSTED TO REFLECT THE PRINCIPAL VALUE WILL FLUCTUATE SO THAT WITHIN THE FIRST YEAR. HIGHER RULE 12b-1 FEES APPLICABLE TO YOU MAY HAVE A GAIN OR LOSS WHEN YOU CLASS R SHARES. SELL SHARES. THE PERFORMANCE OF THE FUND'S SHARE CLASSES WILL DIFFER DUE TO DIFFERENT THE PERFORMANCE DATA QUOTED REPRESENT CLASS A SHARE PERFORMANCE REFLECTS SALES CHARGE STRUCTURES AND CLASS PAST PERFORMANCE AND CANNOT GUARANTEE THE MAXIMUM 5.50% SALES CHARGE, AND EXPENSES. COMPARABLE FUTURE RESULTS; CURRENT CLASS B AND CLASS C SHARE PERFORMANCE PERFORMANCE MAY BE LOWER OR HIGHER. REFLECTS THE APPLICABLE CONTINGENT A REDEMPTION FEE OF 2% WILL BE PLEASE VISIT AIMINVESTMENTS.COM FOR THE DEFERRED SALES CHARGE (CDSC) FOR THE IMPOSED ON CERTAIN REDEMPTIONS OR MOST RECENT MONTH-END PERFORMANCE. PERIOD INVOLVED. THE CDSC ON CLASS B EXCHANGES OUT OF THE FUND WITHIN 30 DAYS PERFORMANCE FIGURES REFLECT SHARES DECLINES FROM 5% BEGINNING AT THE OF PURCHASE. EXCEPTIONS TO THE TIME OF PURCHASE TO 0% AT THE BEGINNING REDEMPTION FEE ARE LISTED IN THE FUND'S OF THE SEVENTH PROSPECTUS.
5 SUPPLEMENT TO SEMIANNUAL REPORT DATED 4/30/05 AIM INTERNATIONAL GROWTH FUND INSTITUTIONAL CLASS SHARES ======================================== PLEASE NOTE THAT PAST PERFORMANCE IS NOT AVERAGE ANNUAL TOTAL RETURNS INDICATIVE OF FUTURE RESULTS. MORE The following information has been For periods ended 4/30/05 RECENT RETURNS MAY BE MORE OR LESS THAN prepared to provide Institutional Class THOSE SHOWN. ALL RETURNS ASSUME shareholders with a performance overview Inception (3/15/02) 9.42% REINVESTMENT OF DISTRIBUTIONS AT NET specific to their holdings. 1 Year 16.89 ASSET VALUE. INVESTMENT RETURN AND Institutional Class shares are offered 6 Months* 8.29 PRINCIPAL VALUE WILL FLUCTUATE SO YOUR exclusively to institutional investors, ======================================== SHARES, WHEN REDEEMED, MAY BE WORTH MORE including defined contribution plans OR LESS THAN THEIR ORIGINAL COST. SEE that meet certain criteria. FULL REPORT FOR INFORMATION ON ======================================== COMPARATIVE BENCHMARKS. PLEASE CONSULT AVERAGE ANNUAL TOTAL RETURNS YOUR FUND PROSPECTUS FOR MORE For periods ended 3/31/05, most recent INFORMATION. FOR THE MOST CURRENT calendar quarter-end MONTH-END PERFORMANCE, PLEASE CALL 800-451-4246 OR VISIT Inception (3/15/02) 10.79% AIMINVESTMENTS.COM. 1 Year 17.98 6 Months* 16.11 *Cumulative total return that has not been annualized ======================================== INSTITUTIONAL CLASS SHARES HAVE NO SALES CHARGE; THEREFORE, PERFORMANCE IS AT NAV. INSTITUTIONAL CLASS SHARES WOULD HAVE HAD DIFFERENT RETURNS DUE TO DIFFERENCES IN THE EXPENSE STRUCTURE OF THE INSTITUTIONAL CLASS.
Over for information on your Fund's expenses. FOR INSTITUTIONAL INVESTOR USE ONLY This material is for institutional investor use only and may not be quoted, reproduced or shown to the public, nor used in written form as sales literature for public use. AIMINVESTMENTS.COM IGR-INS-2 [YOUR GOALS. OUR SOLUTIONS.] [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- --Registered Trademark--
INFORMATION ABOUT YOUR FUND'S EXPENSES CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE that you paid over the period. Simply ended April 30, 2005, appears in the divide your account value by $1,000 (for table on the front of this supplement. As a shareholder of the Fund, you incur example, an $8,600 account value divided The hypothetical account values and ongoing costs, including management by $1,000 = 8.6), then multiply the expenses may not be used to estimate the fees; and other Fund expenses. This result by the number in the table under actual ending account balance or example is intended to help you the heading entitled "Actual Expenses expenses you paid for the period. You understand your ongoing costs (in Paid During Period" to estimate the may use this information to compare the dollars) of investing in the Fund and to expenses you paid on your account during ongoing costs of investing in the Fund compare these costs with ongoing costs this period. and other funds. To do so, compare this of investing in other mutual funds. The 5% hypothetical example with the 5% example is based on an investment of HYPOTHETICAL EXAMPLE FOR COMPARISON hypothetical examples that appear in the $1,000 invested at the beginning of the PURPOSES shareholder reports of the other funds. period and held for the entire period November 1, 2004, through April 30, The table below also provides Please note that the expenses shown 2005. information about hypothetical account in the table are meant to highlight your values and hypothetical expenses based ongoing costs only. Therefore, the ACTUAL EXPENSES on the Fund's actual expense ratio and hypothetical information is useful in an assumed rate of return of 5% per year comparing ongoing costs only, and will The table below provides information before expenses, which is not the Fund's not help you determine the relative about actual account values and actual actual return. The Fund's actual total costs of owning different funds. expenses. You may use the information in cumulative total return after expenses this table, together with the amount you for the six months invested, to estimate the expenses ==================================================================================================================================== ACTUAL HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES) BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES ENDING ACCOUNT EXPENSES SHARE VALUE VALUE PAID DURING VALUE PAID DURING CLASS (11/1/04) (4/30/05)(1) PERIOD(2) (4/30/05) PERIOD(2) Institutional $1,000.00 $1,082.90 $5.42 $1,019.59 $5.26 (1) The actual ending account value is based on the actual total return of the Fund for the period November 1, 2004, to April 30, 2005, 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. The Fund's actual cumulative total return after expenses for the six months ended April 30, 2005, appears in the table on the front of this supplement. (2) Expenses are equal to the Fund's annualized expense ratio, 1.05% for the Institutional Class shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). ====================================================================================================================================
AIMINVESTMENTS.COM IGR-INS-2 FINANCIALS SCHEDULE OF INVESTMENTS April 30, 2005 (Unaudited)
MARKET SHARES VALUE --------------------------------------------------------------------------- FOREIGN STOCKS & OTHER EQUITY INTERESTS-95.10% AUSTRALIA-3.71% BHP Billiton Ltd. (Diversified Metals & Mining)(a) 2,031,300 $ 25,701,921 --------------------------------------------------------------------------- Brambles Industries Ltd. (Diversified Commercial Services)(a)(b) 1,586,000 9,745,040 --------------------------------------------------------------------------- Coca-Cola Amatil Ltd. (Soft Drinks)(a) 1,920,000 12,443,386 --------------------------------------------------------------------------- Promina Group Ltd. (Property & Casualty Insurance)(a)(b) 2,451,900 9,838,100 --------------------------------------------------------------------------- QBE Insurance Group Ltd. (Property & Casualty Insurance)(a) 908,000 10,621,106 =========================================================================== 68,349,553 =========================================================================== AUSTRIA-1.15% Bank Austria Creditanstalt (Diversified Banks)(a) 112,100 10,350,580 --------------------------------------------------------------------------- Erste Bank der oesterreichischen Sparkassen A.G. (Diversified Banks)(a) 222,824 10,810,291 =========================================================================== 21,160,871 =========================================================================== BELGIUM-1.27% KBC Groupe S.A. (Diversified Banks)(a)(b) 295,800 23,402,950 =========================================================================== BERMUDA-0.82% Esprit Holdings Ltd. (Apparel Retail)(a) 2,034,500 15,156,539 =========================================================================== BRAZIL-0.71% Companhia de Bebidas das Americas-Pfd.-ADR (Brewers)(b) 479,700 12,999,870 =========================================================================== CANADA-6.34% Canadian National Railway Co. (Railroads) 322,450 18,513,937 --------------------------------------------------------------------------- Canadian Natural Resources Ltd. (Oil & Gas Exploration & Production) 226,700 11,241,769 --------------------------------------------------------------------------- EnCana Corp. (Oil & Gas Exploration & Production) 205,500 13,152,915 --------------------------------------------------------------------------- Manulife Financial Corp. (Life & Health Insurance) 539,850 24,741,248 --------------------------------------------------------------------------- Power Corp. of Canada (Other Diversified Financial Services) 426,200 10,811,224 --------------------------------------------------------------------------- Shoppers Drug Mart Corp. (Drug Retail) 375,200 11,703,103 --------------------------------------------------------------------------- Shoppers Drug Mart Corp. (Drug Retail)(c) 138,500 4,320,042 --------------------------------------------------------------------------- Suncor Energy, Inc. (Integrated Oil & Gas) 607,500 22,429,729 =========================================================================== 116,913,967 =========================================================================== FRANCE-11.10% BNP Paribas S.A. (Diversified Banks)(a) 378,488 24,976,177 --------------------------------------------------------------------------- Bouygues S.A. (Wireless Telecommunication Services)(a)(b) 334,700 13,337,592 ---------------------------------------------------------------------------
MARKET SHARES VALUE ---------------------------------------------------------------------------
FRANCE-(CONTINUED) Lafarge S.A. (Construction Materials)(a) 126,778 $ 11,536,701 --------------------------------------------------------------------------- Pernod Ricard (Distillers & Vintners)(a)(b) 134,338 20,360,203 --------------------------------------------------------------------------- Renault S.A. (Automobile Manufacturers)(a)(b) 165,492 13,870,706 --------------------------------------------------------------------------- Sanofi-Aventis (Pharmaceuticals)(a) 197,280 17,469,698 --------------------------------------------------------------------------- Societe Generale (Diversified Banks)(a) 221,800 22,111,502 --------------------------------------------------------------------------- Technip (Oil & Gas Equipment & Services) (Acquired 12/16/04-12/20/04; Cost $9,419,069)(a)(b)(d) 52,900 8,984,426 --------------------------------------------------------------------------- TOTAL S.A. (Integrated Oil & Gas)(a) 173,649 38,614,266 --------------------------------------------------------------------------- Vinci S.A. (Construction & Engineering)(a) 222,230 33,398,973 =========================================================================== 204,660,244 =========================================================================== GERMANY-4.12% Adidas-Salomon A.G. (Apparel, Accessories & Luxury Goods)(a)(b) 131,600 20,442,908 --------------------------------------------------------------------------- Continental A.G. (Tires & Rubber)(a) 220,600 16,261,053 --------------------------------------------------------------------------- MAN A.G. (Industrial Machinery)(a) 215,400 9,066,072 --------------------------------------------------------------------------- Merck KGaA (Pharmaceuticals)(a)(b) 141,350 10,798,209 --------------------------------------------------------------------------- Puma A.G. Rudolf Dassler Sport (Footwear)(a)(b) 84,302 19,428,822 =========================================================================== 75,997,064 =========================================================================== GREECE-2.16% Alpha Bank A.E. (Diversified Banks)(a) 273,100 8,804,524 --------------------------------------------------------------------------- EFG Eurobank Ergasias (Diversified Banks)(a) 323,300 9,785,201 --------------------------------------------------------------------------- OPAP S.A. (Casinos & Gaming)(a) 809,600 21,220,815 =========================================================================== 39,810,540 =========================================================================== HONG KONG-1.68% Cheung Kong (Holdings) Ltd. (Real Estate Management & Development)(a) 999,000 9,443,597 --------------------------------------------------------------------------- Hutchison Whampoa Ltd. (Industrial Conglomerates)(a) 1,303,000 11,636,470 --------------------------------------------------------------------------- Sun Hung Kai Properties Ltd. (Real Estate Management & Development)(a) 1,038,000 9,940,626 =========================================================================== 31,020,693 =========================================================================== HUNGARY-1.34% OTP Bank Rt. (Diversified Banks)(a) 801,800 24,619,690 =========================================================================== INDIA-2.00% Housing Development Finance Corp. Ltd. (Thrifts & Mortgage Finance)(a) 554,736 9,357,253 --------------------------------------------------------------------------- Infosys Technologies Ltd. (IT Consulting & Other Services)(a) 633,288 27,512,552 =========================================================================== 36,869,805 ===========================================================================
F-1
MARKET SHARES VALUE --------------------------------------------------------------------------- IRELAND-2.56% Anglo Irish Bank Corp. PLC (Diversified Banks)(a) 2,693,902 $ 31,173,992 --------------------------------------------------------------------------- CRH PLC (Construction Materials)(a) 645,380 16,074,434 =========================================================================== 47,248,426 =========================================================================== ISRAEL-0.94% Teva Pharmaceutical Industries Ltd.-ADR (Pharmaceuticals) 555,900 17,366,316 =========================================================================== ITALY-4.87% Banca Intesa S.p.A. (Diversified Banks)(a)(b) 2,796,200 13,352,059 --------------------------------------------------------------------------- Banco Popolare di Verona e Novara Scrl (Diversified Banks)(a) 520,980 9,593,523 --------------------------------------------------------------------------- Eni S.p.A. (Integrated Oil & Gas)(a) 1,500,949 37,742,055 --------------------------------------------------------------------------- Mediaset S.p.A. (Broadcasting & Cable TV)(a) 2,245,500 29,159,978 =========================================================================== 89,847,615 =========================================================================== JAPAN-14.17% Astellas Pharma Inc. (Pharmaceuticals)(a) 581,000 21,037,597 --------------------------------------------------------------------------- Canon Inc. (Office Electronics)(a) 314,000 16,332,216 --------------------------------------------------------------------------- Daiwa House Industry Co., Ltd. (Homebuilding)(a) 987,000 11,068,291 --------------------------------------------------------------------------- Fanuc Ltd. (Industrial Machinery)(a) 252,200 14,842,211 --------------------------------------------------------------------------- Hoya Corp. (Electronic Equipment Manufacturers)(a) 215,600 22,510,302 --------------------------------------------------------------------------- JSR Corp. (Specialty Chemicals)(a) 492,000 9,940,796 --------------------------------------------------------------------------- Keyence Corp. (Electronic Equipment Manufacturers)(a) 95,200 21,003,379 --------------------------------------------------------------------------- Nidec Corp. (Electronic Equipment Manufacturers)(a) 102,500 12,033,339 --------------------------------------------------------------------------- Nissan Motor Co., Ltd. (Automobile Manufacturers)(a) 876,900 8,629,402 --------------------------------------------------------------------------- Nitto Denko Corp. (Specialty Chemicals)(a) 231,700 12,635,413 --------------------------------------------------------------------------- OMRON Corp. (Electronic Equipment Manufacturers)(a) 387,500 8,467,017 --------------------------------------------------------------------------- Orix Corp. (Consumer Finance)(a) 75,400 10,235,905 --------------------------------------------------------------------------- Sekisui Chemical Co., Ltd. (Homebuilding)(a) 1,521,000 10,990,565 --------------------------------------------------------------------------- SMC Corp. (Industrial Machinery)(a) 79,300 8,330,137 --------------------------------------------------------------------------- Suzuki Motor Corp. (Automobile Manufacturers)(a)(b) 491,000 8,362,602 --------------------------------------------------------------------------- Takeda Pharmaceutical Co. Ltd. (Pharmaceuticals)(a) 422,400 20,556,081 --------------------------------------------------------------------------- Toyota Motor Corp. (Automobile Manufacturers)(a) 593,000 21,517,298 --------------------------------------------------------------------------- Trend Micro Inc. (Application Software)(a) 289,900 10,475,641 --------------------------------------------------------------------------- Yamaha Motor Co., Ltd. (Motorcycle Manufacturers)(a) 697,000 12,173,273 =========================================================================== 261,141,465 ===========================================================================
MARKET SHARES VALUE ---------------------------------------------------------------------------
MEXICO-2.06% America Movil S.A. de C.V.-Series L-ADR (Wireless Telecommunication Services) 338,300 $ 16,796,595 --------------------------------------------------------------------------- Grupo Televisa S.A.-ADR (Broadcasting & Cable TV) 128,900 7,241,602 --------------------------------------------------------------------------- Wal-Mart de Mexico S.A. de C.V.-Series V (Hypermarkets & Super Centers) 3,740,400 13,870,374 =========================================================================== 37,908,571 =========================================================================== NETHERLANDS-2.16% DSM N.V. (Specialty Chemicals)(a)(b) 192,000 12,860,857 --------------------------------------------------------------------------- Royal Numico N.V. (Packaged Foods & Meats)(a)(e) 266,950 11,044,192 --------------------------------------------------------------------------- TNT N.V. (Air Freight & Logistics)(a) 586,050 15,910,171 =========================================================================== 39,815,220 =========================================================================== NORWAY-0.26% Telenor A.S.A. (Integrated Telecommunication Services)(a) 575,702 4,803,860 =========================================================================== SINGAPORE-2.15% DBS Group Holdings Ltd. (Diversified Banks)(a) 989,000 8,638,194 --------------------------------------------------------------------------- Keppel Corp. Ltd. (Industrial Conglomerates)(a) 2,021,000 13,242,135 --------------------------------------------------------------------------- Singapore Airlines Ltd. (Airlines)(a) 1,073,000 7,347,797 --------------------------------------------------------------------------- United Overseas Bank Ltd. (Diversified Banks)(a) 1,185,000 10,347,029 =========================================================================== 39,575,155 =========================================================================== SOUTH AFRICA-0.57% Standard Bank Group Ltd. (Diversified Banks)(a) 1,048,161 10,503,638 =========================================================================== SOUTH KOREA-1.87% Hana Bank (Diversified Banks)(a) 381,100 9,619,398 --------------------------------------------------------------------------- Samsung Electronics Co., Ltd. (Electronic Equipment Manufacturers)(a) 30,540 13,967,752 --------------------------------------------------------------------------- Shinhan Financial Group Co., Ltd. (Diversified Banks)(a) 420,000 10,961,223 =========================================================================== 34,548,373 =========================================================================== SPAIN-2.23% Grupo Ferrovial, S.A. (Construction & Engineering)(a) 218,500 12,441,746 --------------------------------------------------------------------------- Industria de Diseno Textil, S.A. (Apparel Retail)(a)(b) 663,000 19,674,168 --------------------------------------------------------------------------- Telefonica, S.A. (Integrated Telecommunication Services)(a) 525,700 8,936,068 =========================================================================== 41,051,982 =========================================================================== SWEDEN-2.37% Assa Abloy A.B.-Class B (Building Products)(a)(b) 561,400 7,266,180 --------------------------------------------------------------------------- Nordea Bank A.B. (Diversified Banks)(a)(b) 950,000 9,031,767 --------------------------------------------------------------------------- Volvo A.B.-Class B (Construction & Farm Machinery & Heavy Trucks)(a) 675,200 27,337,201 =========================================================================== 43,635,148 ===========================================================================
F-2
MARKET SHARES VALUE --------------------------------------------------------------------------- SWITZERLAND-6.34% Compagnie Financiere Richemont A.G.-Class A (Apparel, Accessories & Luxury Goods)(a) 598,800 $ 17,886,368 --------------------------------------------------------------------------- Roche Holding A.G. (Pharmaceuticals)(a) 227,175 27,486,289 --------------------------------------------------------------------------- Swatch Group A.G. (The)-Class B (Apparel, Accessories & Luxury Goods)(a) 69,130 8,882,966 --------------------------------------------------------------------------- Syngenta A.G. (Fertilizers & Agricultural Chemicals)(a)(e) 316,590 32,800,252 --------------------------------------------------------------------------- UBS A.G. (Diversified Capital Markets)(a)(b) 372,698 29,803,213 =========================================================================== 116,859,088 =========================================================================== TAIWAN-1.26% Hon Hai Precision Industry Co., Ltd. (Electronic Manufacturing Services)(a) 2,808,549 13,337,568 --------------------------------------------------------------------------- Taiwan Semiconductor Manufacturing Co. Ltd. (Semiconductors)(a) 5,926,396 9,855,207 =========================================================================== 23,192,775 =========================================================================== UNITED KINGDOM-14.89% Aviva PLC (Multi-line Insurance)(a) 1,677,540 18,950,497 --------------------------------------------------------------------------- BP PLC (Integrated Oil & Gas)(a) 902,400 9,196,040 --------------------------------------------------------------------------- Enterprise Inns PLC (Restaurants)(a) 1,094,900 15,267,778 --------------------------------------------------------------------------- GUS PLC (Catalog Retail)(a) 888,700 14,216,434 --------------------------------------------------------------------------- Imperial Tobacco Group PLC (Tobacco)(a) 1,268,400 36,338,332 --------------------------------------------------------------------------- International Power PLC (Multi-Utilities & Unregulated Power)(a)(e) 2,637,500 9,196,667 --------------------------------------------------------------------------- Next PLC (Department Stores)(a) 818,120 23,164,742 --------------------------------------------------------------------------- O2 PLC (Wireless Telecommunication Services)(e) 7,678,990 17,171,696 --------------------------------------------------------------------------- Reckitt Benckiser PLC (Household Products)(a) 929,330 30,180,636 --------------------------------------------------------------------------- Royal Bank of Scotland Group PLC (Diversified Banks)(a) 387,272 11,690,578 ---------------------------------------------------------------------------
MARKET SHARES VALUE ---------------------------------------------------------------------------
UNITED KINGDOM-(CONTINUED) Shire Pharmaceuticals Group PLC (Pharmaceuticals)(a) 1,753,880 $ 18,354,424 --------------------------------------------------------------------------- Tesco PLC (Food Retail)(a) 5,704,573 33,678,896 --------------------------------------------------------------------------- Vodafone Group PLC (Wireless Telecommunication Services)(a) 10,701,500 27,969,529 --------------------------------------------------------------------------- William Hill PLC (Casinos & Gaming)(a) 867,730 8,966,992 =========================================================================== 274,343,241 =========================================================================== Total Foreign Stocks & Other Equity Interests (Cost $1,222,851,688) 1,752,802,659 =========================================================================== MONEY MARKET FUNDS-3.25% Liquid Assets Portfolio-Institutional Class(f) 29,901,146 29,901,146 --------------------------------------------------------------------------- STIC Prime Portfolio-Institutional Class(f) 29,901,146 29,901,146 =========================================================================== Total Money Market Funds (Cost $59,802,292) 59,802,292 =========================================================================== TOTAL INVESTMENTS-98.35% (excluding investments purchased with cash collateral from securities loaned) (Cost $1,282,653,980) 1,812,604,951 =========================================================================== INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-9.32% STIC Prime Portfolio-Institutional Class(f)(g) 171,853,915 171,853,915 =========================================================================== Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $171,853,915) 171,853,915 =========================================================================== TOTAL INVESTMENTS-107.67% (Cost $1,454,507,895) 1,984,458,866 =========================================================================== OTHER ASSETS LESS LIABILITIES-(7.67%) (141,403,594) =========================================================================== NET ASSETS-100.00% $1,843,055,272 ___________________________________________________________________________ ===========================================================================
Investment Abbreviations: ADR - American Depositary Receipt Pfd. - Preferred
Notes to Schedule of Investments: (a) In accordance with the procedures established by the Board of Trustees, the foreign security is fair valued using adjusted closing market prices. The aggregate market value of these securities at April 30, 2005 was $1,550,442,239, which represented 78.13% of the Fund's Total Investments. See Note 1A. (b) All or a portion of this security has been pledged as collateral for securities lending transactions at April 30, 2005. (c) Security fair valued in good faith in accordance with the procedures established by the Board of Trustees. The market value of this security at April 30, 2005 represented 0.22% of the Fund's Total Investments. See Note 1A. (d) Security not registered under the Securities Act of 1933, as amended (e.g., the security was purchased in a Rule 144A transaction or a Regulation D transaction). The security may be resold only pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The Fund has no rights to demand registration of this security. The market value of this security at April 30, 2005 represented 0.49% of the Fund's Net Assets. Unless otherwise indicated, this security is not considered to be illiquid. (e) Non-income producing security. (f) The money market fund and the Fund are affiliated by having the same investment advisor. See Note 3. (g) The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 7. See accompanying notes which are an integral part of the financial statements. F-3 STATEMENT OF ASSETS AND LIABILITIES April 30, 2005 (Unaudited) ASSETS: Investments, at market value (cost $1,222,851,688)* $1,752,802,659 ------------------------------------------------------------ Investments in affiliated money market funds (cost $231,656,207) 231,656,207 ============================================================ Total investments (cost $1,454,507,895) 1,984,458,866 ============================================================ Foreign currencies, at market value (cost $15,863,997) 16,128,835 ------------------------------------------------------------ Receivables for: Investments sold 18,996,206 ------------------------------------------------------------ Fund shares sold 3,525,037 ------------------------------------------------------------ Dividends 4,264,365 ------------------------------------------------------------ Investment for trustee deferred compensation and retirement plans 107,410 ------------------------------------------------------------ Other assets 68,870 ============================================================ Total assets 2,027,549,589 ____________________________________________________________ ============================================================ LIABILITIES: Payables for: Investments purchased 5,156,733 ------------------------------------------------------------ Fund shares reacquired 5,312,988 ------------------------------------------------------------ Trustee deferred compensation and retirement plans 223,718 ------------------------------------------------------------ Collateral upon return of securities loaned 171,853,915 ------------------------------------------------------------ Accrued distribution fees 663,085 ------------------------------------------------------------ Accrued trustees' and officer's fees and benefits 3,520 ------------------------------------------------------------ Accrued transfer agent fees 1,034,731 ------------------------------------------------------------ Accrued operating expenses 245,627 ============================================================ Total liabilities 184,494,317 ============================================================ Net assets applicable to shares outstanding $1,843,055,272 ____________________________________________________________ ============================================================ NET ASSETS CONSIST OF: Shares of beneficial interest $1,610,874,865 ------------------------------------------------------------ Undistributed net investment income (loss) (466,158) ------------------------------------------------------------ Undistributed net realized gain (loss) from investment securities and foreign currencies (297,561,725) ------------------------------------------------------------ Unrealized appreciation of investment securities and foreign currencies 530,208,290 ============================================================ $1,843,055,272 ____________________________________________________________ ============================================================ NET ASSETS: Class A $1,404,216,805 ____________________________________________________________ ============================================================ Class B $ 273,430,098 ____________________________________________________________ ============================================================ Class C $ 124,511,521 ____________________________________________________________ ============================================================ Class R $ 4,016,958 ____________________________________________________________ ============================================================ Institutional Class $ 36,879,890 ____________________________________________________________ ============================================================ SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 71,612,918 ____________________________________________________________ ============================================================ Class B 14,963,076 ____________________________________________________________ ============================================================ Class C 6,807,484 ____________________________________________________________ ============================================================ Class R 206,519 ____________________________________________________________ ============================================================ Institutional Class 1,856,920 ____________________________________________________________ ============================================================ Class A: Net asset value per share $ 19.61 ------------------------------------------------------------ Offering price per share: (Net asset value of $19.61 divided by 94.50%) $ 20.75 ____________________________________________________________ ============================================================ Class B: Net asset value and offering price per share $ 18.27 ____________________________________________________________ ============================================================ Class C: Net asset value and offering price per share $ 18.29 ____________________________________________________________ ============================================================ Class R: Net asset value and offering price per share $ 19.45 ____________________________________________________________ ============================================================ Institutional Class: Net asset value and offering price per share $ 19.86 ____________________________________________________________ ============================================================
* At April 30, 2005, securities with an aggregate market value of $163,915,521 were on loan to brokers. See accompanying notes which are an integral part of the financial statements. F-4 STATEMENT OF OPERATIONS For the six months ended April 30, 2005 (Unaudited) INVESTMENT INCOME: Dividends (net of foreign withholding tax of $1,265,781) $ 16,425,640 -------------------------------------------------------------------------- Dividends from affiliated money market funds (including securities lending income of $208,417 after rebates of $424,770) 914,579 -------------------------------------------------------------------------- Interest 37,619 ========================================================================== Total investment income 17,377,838 ========================================================================== EXPENSES: Advisory fees 8,612,557 -------------------------------------------------------------------------- Administrative services fees 215,041 -------------------------------------------------------------------------- Custodian fees 879,161 -------------------------------------------------------------------------- Distribution fees: Class A 2,103,716 -------------------------------------------------------------------------- Class B 1,514,417 -------------------------------------------------------------------------- Class C 623,320 -------------------------------------------------------------------------- Class R 8,492 -------------------------------------------------------------------------- Transfer agent fees -- Class A, B, C and R 3,624,881 -------------------------------------------------------------------------- Transfer agent fees -- Institutional Class 1,126 -------------------------------------------------------------------------- Trustees' and officer's fees and benefits 37,665 -------------------------------------------------------------------------- Other 419,795 ========================================================================== Total expenses 18,040,171 ========================================================================== Less: Fees waived, expenses reimbursed and expense offset arrangement (471,143) ========================================================================== Net expenses 17,569,028 ========================================================================== Net investment income (loss) (191,190) ========================================================================== REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES AND FOREIGN CURRENCIES: Net realized gain from: Investment securities 72,066,921 -------------------------------------------------------------------------- Foreign currencies 1,967,165 ========================================================================== 74,034,086 ========================================================================== Change in net unrealized appreciation (depreciation) of: Investment securities 62,612,557 -------------------------------------------------------------------------- Foreign currencies (244,345) ========================================================================== 62,368,212 ========================================================================== Net gain from investment securities and foreign currencies 136,402,298 ========================================================================== Net increase in net assets resulting from operations $136,211,108 __________________________________________________________________________ ==========================================================================
See accompanying notes which are an integral part of the financial statements. F-5 STATEMENT OF CHANGES IN NET ASSETS For the six months ended April 30, 2005 and the year ended October 31, 2004 (Unaudited)
APRIL 30, OCTOBER 31, 2005 2004 ============================================================================================== OPERATIONS: Net investment income (loss) $ (191,190) $ 1,466,201 ---------------------------------------------------------------------------------------------- Net realized gain from investment securities and foreign currencies 74,034,086 154,523,642 ---------------------------------------------------------------------------------------------- Change in net unrealized appreciation of investment securities and foreign currencies 62,368,212 135,099,856 ============================================================================================== Net increase in net assets resulting from operations 136,211,108 291,089,699 ============================================================================================== Distributions to shareholders from net investment income: Class A -- (1,576,989) ---------------------------------------------------------------------------------------------- Institutional Class -- (477) ============================================================================================== Decrease in net assets resulting from distributions -- (1,577,466) ============================================================================================== Share transactions-net: Class A 12,816,754 (38,592,887) ---------------------------------------------------------------------------------------------- Class B (51,529,831) (118,039,680) ---------------------------------------------------------------------------------------------- Class C (353,402) (17,787,137) ---------------------------------------------------------------------------------------------- Class R 1,386,752 1,355,519 ---------------------------------------------------------------------------------------------- Institutional Class 22,664,283 12,408,997 ============================================================================================== Net increase (decrease) in net assets resulting from share transactions (15,015,444) (160,655,188) ============================================================================================== Net increase in net assets 121,195,664 128,857,045 ============================================================================================== NET ASSETS: Beginning of period 1,721,859,608 1,593,002,563 ============================================================================================== End of period (including undistributed net investment income (loss) of $(466,158) and $(274,968), respectively) $1,843,055,272 $1,721,859,608 ______________________________________________________________________________________________ ==============================================================================================
NOTES TO FINANCIAL STATEMENTS April 30, 2005 (Unaudited) NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM International Growth Fund (the "Fund") is a series portfolio of AIM International Mutual Funds (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 six separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The Fund currently offers multiple classes of shares. 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. Companies are listed in the Schedule of Investments based on the country in which they are organized. Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust (including the Trust's investment manager) 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 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. However, the Fund has not had prior claims or losses pursuant to these contracts. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. A. SECURITY VALUATIONS -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued F-6 on the basis of prices furnished by independent pricing services, which may be considered fair valued, or market makers. Each security reported on the NASDAQ National Market System 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 will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end registered investment companies 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 closed-end registered investment companies that trade on an exchange are valued at the last sales price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) 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 having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. 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. 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. 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 the close of the respective markets. Events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. 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 market value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current market 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, ADRs and domestic and foreign index futures. 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. 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. 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. 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 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 Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. E. 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. F-7 F. REDEMPTION FEES -- The Fund has instituted a 2% redemption fee on certain share classes 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, including exchanges of shares held less than 30 days. The redemption fee is accounted for as an addition to shares of beneficial interest by the Fund and is allocated among the share classes based on the relative net assets of each class. G. 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. H. 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. NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE --------------------------------------------------------------------- First $1 billion 0.95% --------------------------------------------------------------------- Over $1 billion 0.90% _____________________________________________________________________ =====================================================================
Effective January 1, 2005 through December 31, 2009, AIM has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund based on the Fund's average daily net assets do not exceed the annual rate of:
AVERAGE NET ASSETS RATE ---------------------------------------------------------------------- First $250 million 0.935% ---------------------------------------------------------------------- Next $250 million 0.91% ---------------------------------------------------------------------- Next $500 million 0.885% ---------------------------------------------------------------------- Next $1.5 billion 0.86% ---------------------------------------------------------------------- Next $2.5 billion 0.835% ---------------------------------------------------------------------- Next $2.5 billion 0.81% ---------------------------------------------------------------------- Next $2.5 billion 0.785% ---------------------------------------------------------------------- Over $10 billion 0.76% ______________________________________________________________________ ======================================================================
AIM has contractually agreed to waive 0.05% of advisory fees on the Fund's average daily net assets in excess of $500 million, through October 31, 2005. AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds on investments by the Fund in such affiliated money market funds (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the fund). AIM is also voluntarily waiving a portion of the advisory fee payable by the Fund equal to the difference between the income earned from investing in the affiliated money market fund and the hypothetical income earned from investing in an appropriate comparative benchmark. Voluntary fee waivers or reimbursements may be modified or discontinued at any time upon consultation with the Board of Trustees without further notice to investors. For the six months ended April 30, 2005, AIM waived fees of $389,422. For the six months ended April 30, 2005, at the request of the Trustees of the Trust, AMVESCAP PLC ("AMVESCAP") agreed to reimburse $59,897 of 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. F-8 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. Pursuant to such agreement, for the six months ended April 30, 2005, AIM was paid $215,041. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer agency and shareholder services to the Fund and reimburse AISI for certain expenses incurred by AISI in the course of providing such services. AISI may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. For the six months ended April 30, 2005, the Fund paid AISI $3,624,881 for Class A, Class B, Class C and Class R share classes and $1,126 for Institutional Class shares. The Trust has entered into master distribution agreements with A I M Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B, Class C, Class R 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 ADI compensation at the annual rate of 0.30% 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 these amounts, up to 0.25% of the average daily net assets of the Class A, Class B, Class C or Class R shares may be paid to selected dealers and financial institutions who 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. NASD Rules 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. Pursuant to the Plans, for the six months ended April 30, 2005, the Class A, Class B, Class C and Class R shares paid $2,103,716, $1,514,417, $623,320 and $8,492, respectively. Front-end sales commissions and contingent deferred sales charges ("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 six months ended April 30, 2005, ADI advised the Fund that it retained $92,863 in front-end sales commissions from the sale of Class A shares and $3,254, $27,861, $3,345 and $0 from Class A, Class B, 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 AIM, AISI and/or ADI. NOTE 3--INVESTMENTS IN AFFILIATES The Fund is permitted, pursuant to an exemptive order from the Securities and Exchange Commission ("SEC"), to invest daily available cash balances and cash collateral from securities lending transactions in affiliated money market funds. The Fund and the money market funds below have the same investment advisor and therefore, are considered to be affiliated. The tables below show the transactions in and earnings from investments in affiliated money market funds for the six months ended April 30, 2005. INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
UNREALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND REALIZED FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME GAIN (LOSS) ---------------------------------------------------------------------------------------------------------------------------------- Liquid Assets Portfolio- Institutional Class $ 2,582,491 $147,743,859 $(120,425,204) $ -- $ 29,901,146 $349,422 $ -- ---------------------------------------------------------------------------------------------------------------------------------- STIC Prime Portfolio- Institutional Class 2,582,491 147,743,859 (120,425,204) -- 29,901,146 356,740 -- ================================================================================================================================== SUBTOTAL $ 5,164,982 $295,487,718 $(240,850,408) $ -- $ 59,802,292 $706,162 $ -- ==================================================================================================================================
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
UNREALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND REALIZED FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME* GAIN (LOSS) ---------------------------------------------------------------------------------------------------------------------------------- STIC Prime Portfolio- Institutional Class $45,583,860 $467,514,970 $(341,244,915) $ -- $171,853,915 $208,417 $ -- ================================================================================================================================== TOTAL $50,748,842 $763,002,688 $(582,095,323) $ -- $231,656,207 $914,579 $ -- __________________________________________________________________________________________________________________________________ ==================================================================================================================================
* Net of rebates. NOTE 4--EXPENSE OFFSET ARRANGEMENT 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 six months ended April 30, 2005, the Fund received credits from this arrangement which resulted in the reduction of the Fund's total expenses of $21,824. F-9 NOTE 5--TRUSTEES' AND OFFICER'S FEES AND BENEFITS "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to each Trustee of the Fund who is not an "interested person" of the AIM Funds. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officer's 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, 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 Officer's 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. In addition to the above, "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to the Senior Officer of the AIM Funds. During the six months ended April 30, 2005, the Fund paid legal fees of $4,958 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 Pursuant to an exemptive order from the SEC, the Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. A loan will be secured by collateral if the Fund's aggregate borrowings from all sources exceeds 10% of the Fund's total assets. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. The Fund is a participant in an uncommitted unsecured revolving credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000, or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the credit facility can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the six months ended April 30, 2005, the Fund did not borrow or lend under the interfund lending facility or borrow under the uncommitted unsecured revolving credit facility. Additionally, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated at an amount equal to the Federal Funds rate plus 100 basis points. NOTE 7--PORTFOLIO SECURITIES LOANED 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. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds. 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. The Fund could also 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 a loss on the collateral invested. At April 30, 2005, securities with an aggregate value of $163,915,521 were on loan to brokers. The loans were secured by cash collateral of $171,853,915 received by the Fund and subsequently invested in an affiliated money market fund. For the six months ended April 30, 2005, the Fund received dividends on cash collateral of $208,417 for securities lending transactions, which are net of rebates. NOTE 8--TAX INFORMATION The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund's fiscal year-end. 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. F-10 The Fund had a capital loss carryforward as of October 31, 2004 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* ----------------------------------------------------------------------------- October 31, 2008 $ 5,430,111 ----------------------------------------------------------------------------- October 31, 2009 143,347,811 ----------------------------------------------------------------------------- October 31, 2010 221,461,388 ============================================================================= Total capital loss carryforward $370,239,310 _____________________________________________________________________________ =============================================================================
* 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 and money market funds) purchased and sold by the Fund during the six months ended April 30, 2005 was $288,587,508 and $327,010,628 respectively. For interim reporting periods, the cost of investments for tax purposes includes reversals of certain tax items, such as, wash sales that have occurred since the prior fiscal year-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS ------------------------------------------------------------------------------ Aggregate unrealized appreciation of investment securities $538,472,774 ------------------------------------------------------------------------------ Aggregate unrealized (depreciation) of investment securities (9,546,487) ============================================================================== Net unrealized appreciation of investment securities $528,926,287 ______________________________________________________________________________ ============================================================================== Cost of investments for tax purposes is $1,455,532,579.
NOTE 10--SHARE INFORMATION The Fund currently offers five different classes of shares: Class A shares, Class B shares, Class C shares, Class R shares and Institutional Class shares. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with a CDSC. Class R shares and Institutional Class shares are sold at net asset value. Under certain circumstances, Class A shares and Class R shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN SHARES OUTSTANDING(a) -------------------------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED APRIL 30, 2005 OCTOBER 31, 2004 ---------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT -------------------------------------------------------------------------------------------------------------------------- Sold: Class A 10,413,461 $ 206,988,781 16,594,554 $ 276,996,258 -------------------------------------------------------------------------------------------------------------------------- Class B 1,235,397 22,884,482 1,606,048 25,327,091 -------------------------------------------------------------------------------------------------------------------------- Class C 1,033,744 19,200,350 1,702,233 26,571,147 -------------------------------------------------------------------------------------------------------------------------- Class R 121,397 2,391,853 125,195 2,109,225 -------------------------------------------------------------------------------------------------------------------------- Institutional Class 1,146,422 23,009,235 727,969 12,499,824 ========================================================================================================================== Issued as reinvestment of dividends: Class A -- -- 94,013 1,482,529 ========================================================================================================================== Automatic conversion of Class B shares to Class A shares: Class A 2,019,530 40,233,021 3,753,177 63,985,626 -------------------------------------------------------------------------------------------------------------------------- Class B (2,163,692) (40,233,021) (4,001,836) (63,985,626) ========================================================================================================================== Reacquired:(b) Class A (11,759,847) (234,405,048) (22,889,869) (381,057,300) -------------------------------------------------------------------------------------------------------------------------- Class B (1,849,407) (34,181,292) (5,052,339) (79,381,145) -------------------------------------------------------------------------------------------------------------------------- Class C (1,056,316) (19,553,752) (2,824,116) (44,358,284) -------------------------------------------------------------------------------------------------------------------------- Class R (50,719) (1,005,101) (46,636) (753,706) -------------------------------------------------------------------------------------------------------------------------- Institutional Class (17,292) (344,952) (5,334) (90,827) ========================================================================================================================== (927,322) $ (15,015,444) (10,216,941) $(160,655,188) __________________________________________________________________________________________________________________________ ==========================================================================================================================
(a) There is one entity that is a record owner of more than 5% of the outstanding shares of the Fund and it owns 28% of the outstanding shares of the Fund. AIM Distributors has an agreement with this entity to sell Fund shares. The Fund, AIM, and/or AIM affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, AIM and/or AIM affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by this entity are also owned beneficially. (b) Amount is net of redemption fees of $8,804, $1,851, $782, $22 and $183 for Class A, Class B, Class C, Class R and Institutional Class shares, respectively, for the six months ended April 30, 2005 and $12,886, $3,679, $1,251, $15 and $20 for Class A, Class B, Class C, Class R and Institutional Class shares, respectively, for the year ended October 31, 2004. F-11 NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A -------------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, --------------------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 18.16 $ 15.23 $ 12.69 $ 14.45 $ 21.60 $ 21.73 --------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.01(a) 0.05(a) 0.01(a) (0.03)(a) (0.01) 0.08(a) --------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 1.44 2.90 2.53 (1.73) (5.66) 0.72 ================================================================================================================================= Total from investment operations 1.45 2.95 2.54 (1.76) (5.67) 0.80 ================================================================================================================================= Less distributions: Dividends from net investment income -- (0.02) -- -- -- -- --------------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains -- -- -- -- (1.48) (0.93) ================================================================================================================================= Total distributions -- (0.02) -- -- (1.48) (0.93) ================================================================================================================================= Redemption fees added to beneficial interest 0.00 0.00 -- -- -- -- ================================================================================================================================= Net asset value, end of period $ 19.61 $ 18.16 $ 15.23 $ 12.69 $ 14.45 $ 21.60 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Total return(b) 7.98% 19.40% 20.02% (12.18)% (27.96)% 3.16% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $1,404,217 $1,288,548 $1,117,420 $1,093,344 $1,404,269 $2,325,636 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.74%(c) 1.70% 1.74% 1.70% 1.57% 1.44% --------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.79%(c) 1.74% 1.82% 1.74% 1.61% 1.48% ================================================================================================================================= Ratio of net investment income (loss) to average net assets 0.13%(c) 0.27% 0.09% (0.21)% (0.04)% 0.30% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Portfolio turnover rate(d) 16% 54% 77% 77% 85% 87% _________________________________________________________________________________________________________________________________ =================================================================================================================================
(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. (c) Ratios are annualized and based on average daily net assets of $1,414,099,954. (d) Not annualized for periods less than one year. F-12 NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
CLASS B ---------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 16.99 $ 14.32 $ 12.02 $ 13.78 $ 20.81 $ 21.11 ---------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.05)(a) (0.07)(a) (0.08)(a) (0.12)(a) (0.13) (0.11)(a) ---------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 1.33 2.74 2.38 (1.64) (5.42) 0.74 ============================================================================================================================ Total from investment operations 1.28 2.67 2.30 (1.76) (5.55) 0.63 ============================================================================================================================ Less distributions from net realized gains -- -- -- -- (1.48) (0.93) ============================================================================================================================ Redemption fees added to beneficial interest 0.00 0.00 -- -- -- -- ============================================================================================================================ Net asset value, end of period $ 18.27 $ 16.99 $ 14.32 $ 12.02 $ 13.78 $ 20.81 ____________________________________________________________________________________________________________________________ ============================================================================================================================ Total return(b) 7.53% 18.64% 19.14% (12.77)% (28.48)% 2.42% ____________________________________________________________________________________________________________________________ ============================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $273,430 $301,380 $360,671 $401,288 $612,125 $997,843 ____________________________________________________________________________________________________________________________ ============================================================================================================================ Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.44%(c) 2.40% 2.44% 2.40% 2.27% 2.18% ---------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.49%(c) 2.44% 2.52% 2.44% 2.31% 2.22% ============================================================================================================================ Ratio of net investment income (loss) to average net assets (0.57)%(c) (0.43)% (0.61)% (0.91)% (0.75)% (0.44)% ____________________________________________________________________________________________________________________________ ============================================================================================================================ Portfolio turnover rate(d) 16% 54% 77% 77% 85% 87% ____________________________________________________________________________________________________________________________ ============================================================================================================================
(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. (c) Ratios are annualized and based on average daily net assets of $305,393,582. (d) Not annualized for periods less than one year. F-13 NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
CLASS C ---------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------------------- 2005 2004 2003 2002 2001 2000 ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 17.00 $ 14.33 $ 12.03 $ 13.79 $ 20.82 $ 21.13 ---------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.05)(a) (0.07)(a) (0.08)(a) (0.12)(a) (0.13) (0.11)(a) ---------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 1.34 2.74 2.38 (1.64) (5.42) 0.73 ============================================================================================================================ Total from investment operations 1.29 2.67 2.30 (1.76) (5.55) 0.62 ============================================================================================================================ Less distributions from net realized gains -- -- -- -- (1.48) (0.93) ============================================================================================================================ Redemption fees added to beneficial interest 0.00 0.00 -- -- -- -- ============================================================================================================================ Net asset value, end of period $ 18.29 $ 17.00 $ 14.33 $ 12.03 $ 13.79 $ 20.82 ____________________________________________________________________________________________________________________________ ============================================================================================================================ Total return(b) 7.59% 18.63% 19.12% (12.76)% (28.47)% 2.37% ____________________________________________________________________________________________________________________________ ============================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $124,512 $116,136 $113,965 $114,070 $165,857 $253,998 ____________________________________________________________________________________________________________________________ ============================================================================================================================ Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.44%(c) 2.40% 2.44% 2.40% 2.27% 2.18% ---------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.49%(c) 2.44% 2.52% 2.44% 2.31% 2.22% ============================================================================================================================ Ratio of net investment income (loss) to average net assets (0.57)%(c) (0.43)% (0.61)% (0.91)% (0.75)% (0.44)% ____________________________________________________________________________________________________________________________ ============================================================================================================================ Portfolio turnover rate(d) 16% 54% 77% 77% 85% 87% ____________________________________________________________________________________________________________________________ ============================================================================================================================
(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. (c) Ratios are annualized and based on average daily net assets of $125,697,083. (d) Not annualized for periods less than one year. F-14 NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
CLASS R -------------------------------------------------- JUNE 3, 2002 SIX MONTHS YEAR ENDED (DATE SALES ENDED OCTOBER 31, COMMENCED) TO APRIL 30, ---------------- OCTOBER 31, 2005 2004 2003 2002 ---------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $18.04 $15.14 $12.69 $ 15.27 ---------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.01)(a) 0.01(a) (0.01)(a) (0.02)(a) ---------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 1.42 2.89 2.46 (2.56) ================================================================================================================ Total from investment operations 1.41 2.90 2.45 (2.58) ================================================================================================================ Redemption fees added to beneficial interest 0.00 0.00 -- -- ================================================================================================================ Net asset value, end of period $19.45 $18.04 $15.14 $ 12.69 ________________________________________________________________________________________________________________ ================================================================================================================ Total return(b) 7.82% 19.15% 19.31% (16.90)% ________________________________________________________________________________________________________________ ================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $4,017 $2,450 $ 867 $ 49 ________________________________________________________________________________________________________________ ================================================================================================================ Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.94%(c) 1.90% 1.94% 1.89%(d) ---------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.99%(c) 1.94% 2.02% 1.93%(d) ================================================================================================================ Ratio of net investment income (loss) to average net assets (0.07)%(c) 0.07% (0.11)% (0.40)%(d) ________________________________________________________________________________________________________________ ================================================================================================================ Portfolio turnover rate(e) 16% 54% 77% 77% ________________________________________________________________________________________________________________ ================================================================================================================
(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. Not annualized for periods less than one year. (c) Ratios are annualized and based on average daily net assets of $3,424,853. (d) Annualized. (e) Not annualized for periods less than one year. F-15 NOTE 11--FINANCIAL HIGHLIGHTS--(CONTINUED)
INSTITUTIONAL CLASS ---------------------------------------------------- MARCH 15, 2002 (DATE SALES SIX MONTHS YEAR ENDED COMMENCED) TO ENDED OCTOBER 31, OCTOBER 31, APRIL 30, ----------------- -------------- 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 18.34 $ 15.37 $12.73 $ 15.09 ------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income 0.08(a) 0.15(a) 0.09(a) 0.03(a) ------------------------------------------------------------------------------------------------------------------ Net gains (losses) on securities (both realized and unrealized) 1.44 2.93 2.55 (2.39) ================================================================================================================== Total from investment operations 1.52 3.08 2.64 (2.36) ================================================================================================================== Less distributions from net realized gains -- (0.11) -- -- ================================================================================================================== Redemption fees added to beneficial interest 0.00 0.00 -- -- ================================================================================================================== Net asset value, end of period $ 19.86 $ 18.34 $15.37 $ 12.73 __________________________________________________________________________________________________________________ ================================================================================================================== Total return(b) 8.29% 20.15% 20.74% (15.64)% __________________________________________________________________________________________________________________ ================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $36,880 $13,345 $ 79 $ 74 __________________________________________________________________________________________________________________ ================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.05%(c) 1.13% 1.17% 1.16%(d) ------------------------------------------------------------------------------------------------------------------ Without fee waivers and/or expense reimbursements 1.10%(c) 1.17% 1.21% 1.20%(d) ================================================================================================================== Ratio of net investment income to average net assets 0.82%(c) 0.84% 0.66% 0.33%(d) __________________________________________________________________________________________________________________ ================================================================================================================== Portfolio turnover rate(e) 16% 54% 77% 77% __________________________________________________________________________________________________________________ ==================================================================================================================
(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. Not annualized for periods less than one year. (c) Ratios are annualized and based on average daily net assets of $25,591,613. (d) Annualized. (e) Not annualized for periods less than one year. NOTE 12--LEGAL PROCEEDINGS Terms used in the Legal Proceedings Note are defined terms solely for the purpose of this note. SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment advisor to certain AIM Funds), A I M Advisors, Inc. ("AIM") (the Fund's investment advisor) and A I M Distributors, Inc. ("ADI") (the distributor of the retail AIM Funds) reached final settlements with certain regulators, including, among others, the Securities and Exchange Commission ("SEC"), the New York Attorney General ("NYAG") and the Colorado Attorney General ("COAG"), to resolve civil enforcement actions and/or investigations related to market timing activity and related issues in the AIM Funds, including those formerly advised by IFG. As part of the settlements, IFG agreed to pay a total of $325 million (including $110 million in civil penalties). Additionally, AIM and ADI agreed to pay a total of $50 million (including $30 million in civil penalties). These settlement funds will be made available for distribution to the shareholders of the applicable AIM Funds that were harmed by market timing activity, and may (or may not) increase as a result of contributions from third parties who reach final settlements with the SEC or other regulators to resolve allegations of market timing and/or late trading. The settlement funds will be distributed in accordance with a methodology to be determined by AIM's independent distribution consultant, in consultation with AIM and the independent trustees of the AIM Funds and acceptable to the staff of the SEC. As the methodology is unknown at the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the distribution of these settlement funds may have on the Fund or whether such distribution will have an impact on the Fund's financial statements in the future. At the request of the trustees of the AIM Funds, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and AIM, has agreed to reimburse expenses incurred by the AIM Funds related to market timing matters. REGULATORY INQUIRIES AND PENDING LITIGATION IFG, AIM, ADI and/or related entities and individuals have received inquiries from numerous regulators in the form of subpoenas or other oral or written requests for information and/or documents related to one or more of the following issues, some of which concern one or more AIM Funds: market timing activity, late trading, fair value pricing, excessive or improper advisory and/or distribution fees, mutual fund sales practices, including revenue F-16 NOTE 12--LEGAL PROCEEDINGS--(CONTINUED) sharing and directed-brokerage arrangements, investments in securities of other registered investment companies, contractual plans, issues related to Section 529 college savings plans and procedures for locating lost securityholders. IFG, AIM and ADI are providing full cooperation with respect to these inquiries. As described more fully below, the AIM Funds, IFG, AIM, ADI and/or related entities and individuals are defendants in numerous civil lawsuits related to one or more of these issues. Regulatory actions and/or additional civil lawsuits related to these or other issues may be filed against the AIM Funds, IFG, AIM and/or related entities and individuals in the future. On April 12, 2005, the Attorney General of the State of West Virginia ("WVAG") filed civil proceedings against AIM, IFG and ADI, as well as numerous unrelated mutual fund complexes and financial institutions. None of the AIM Funds has been named as a defendant in these proceedings. The WVAG complaint, filed in the Circuit Court of Marshall County, West Virginia [Civil Action No. 05-C-81], alleges, in substance, that AIM, IFG and ADI engaged in unfair competition and/or unfair or deceptive trade practices by failing to disclose in the prospectuses for the AIM Funds, including those formerly advised by IFG, that they had entered into certain arrangements permitting market timing of such Funds. As a result of the foregoing, the WVAG alleges violations of W. Va. Code sec. 46A-1-101, et seq. (the West Virginia Consumer Credit and Protection Act). The WVAG complaint is seeking, among other things, injunctive relief, civil monetary penalties and a writ of quo warranto against the defendants. If AIM is unsuccessful in its defense of the WVAG proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could affect the ability of AIM or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any registered investment company, including the Fund. The Fund has been informed by AIM that, if these results occur, AIM will seek exemptive relief from the SEC to permit it to continue to serve as the Fund's investment advisor. There is no assurance that such exemptive relief will be granted. Civil lawsuits, including purported class action and shareholder derivative suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or related entities and individuals, depending on the lawsuit, alleging: - that the defendants permitted improper market timing and related issues in the AIM Funds; - that certain AIM Funds inadequately employed fair value pricing; - that the defendants charged excessive advisory and/or distribution fees and failed to pass on to shareholders the perceived savings generated by economies of scale and that the defendants adopted unlawful distribution plans; - that the defendants breached their fiduciary duties by charging distribution fees while funds and/or specific share classes were closed generally to new investors and/or while other share classes of the same fund were not charged the same distribution fees; - that the defendants improperly used the assets of the AIM Funds to pay brokers to aggressively promote the sale of the AIM Funds over other mutual funds and that the defendants concealed such payments from investors by disguising them as brokerage commissions; and - that the defendants breached their fiduciary duties by failing to ensure that the AIM Funds participated in class action settlements in which the AIM Funds were eligible to participate. These lawsuits allege as theories of recovery, depending on the lawsuit, violations of various provisions of the Federal and state securities laws and ERISA, negligence, breach of fiduciary duty and/or breach of contract. These lawsuits seek remedies that include, depending on the lawsuit, damages, restitution, injunctive relief, imposition of a constructive trust, removal of certain directors and/or employees, various corrective measures under ERISA, rescission of certain AIM Funds' advisory agreements and/or distribution plans and recovery of all fees paid, an accounting of all fund-related fees, commissions and soft dollar payments, restitution of all commissions and fees paid, and prospective relief in the form of reduced fees. At the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the outcome of the Regulatory Inquiries and Pending Litigation described above may have on AIM, ADI or the Fund. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * As a result of the matters discussed above, investors in the AIM Funds might react by redeeming their investments. This might require the AIM Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AIM Funds. F-17 OTHER INFORMATION BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND Bob R. Baker Robert H. Graham 11 Greenway Plaza Frank S. Bayley President Suite 100 James T. Bunch Houston, TX 77046-1173 Bruce L. Crockett Mark H. Williamson Chair Executive Vice President INVESTMENT ADVISOR Albert R. Dowden A I M Advisors, Inc. Edward K. Dunn Jr. Lisa O. Brinkley 11 Greenway Plaza Jack M. Fields Senior Vice President and Suite 100 Carl Frischling Chief Compliance Officer Houston, TX 77046-1173 Robert H. Graham Gerald J. Lewis Russell C. Burk TRANSFER AGENT Prema Mathai-Davis Senior Vice President (Senior Officer) AIM Investment Services, Inc. Lewis F. Pennock P.O. Box 4739 Ruth H. Quigley Kevin M. Carome Houston, TX 77210-4739 Larry Soll Senior Vice President, Secretary and Mark H. Williamson Chief Legal Officer CUSTODIAN State Street Bank and Trust Company Sidney M. Dilgren 225 Franklin Street Vice President and Treasurer Boston, MA 02110-2801 Robert G. Alley Vice President COUNSEL TO THE FUND Ballard Spahr J. Philip Ferguson Andrews & Ingersoll, LLP Vice President 1735 Market Street, 51st Floor Philadelphia, PA 19103-7599 Karen Dunn Kelley Vice President COUNSEL TO THE INDEPENDENT TRUSTEES Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714 DISTRIBUTOR A I M Distributors, Inc. 11 Greenway Plaza Suite 100 Houston, TX 77046-1173
DOMESTIC EQUITY SECTOR EQUITY AIM Aggressive Growth Fund AIM Advantage Health Sciences Fund(1) AIM Basic Balanced Fund* AIM Energy Fund(1) AIM Basic Value Fund AIM Financial Services Fund(1) AIM Blue Chip Fund AIM Global Health Care Fund AIM Capital Development Fund AIM Global Real Estate Fund AIM Charter Fund AIM Gold & Precious Metals Fund(1) AIM Constellation Fund AIM Leisure Fund(1) AIM Diversified Dividend Fund AIM Multi-Sector Fund(1) AIM Dynamics Fund(1) AIM Real Estate Fund(7) AIM Large Cap Basic Value Fund AIM Technology Fund(1) AIM Large Cap Growth Fund AIM Utilities Fund(1) AIM Mid Cap Basic Value Fund AIM Mid Cap Core Equity Fund(2) FIXED INCOME AIM Mid Cap Growth Fund AIM Opportunities I Fund TAXABLE AIM Opportunities II Fund AIM Opportunities III Fund AIM Floating Rate Fund AIM Premier Equity Fund AIM High Yield Fund AIM S&P 500 Index Fund(1) AIM Income Fund AIM Select Equity Fund AIM Intermediate Government Fund AIM Small Cap Equity Fund(3) AIM Limited Maturity Treasury Fund AIM Small Cap Growth Fund(4) AIM Money Market Fund AIM Small Company Growth Fund(1) AIM Short Term Bond Fund AIM Trimark Endeavor Fund AIM Total Return Bond Fund AIM Trimark Small Companies Fund Premier Portfolio AIM Weingarten Fund Premier U.S. Government Money Portfolio(1) *Domestic equity and income fund TAX-FREE AIM High Income Municipal Fund INTERNATIONAL/GLOBAL EQUITY AIM Municipal Bond Fund AIM Tax-Exempt Cash Fund AIM Asia Pacific Growth Fund AIM Tax-Free Intermediate Fund AIM Developing Markets Fund Premier Tax-Exempt Portfolio AIM European Growth Fund AIM European Small Company Fund(5) AIM ALLOCATION SOLUTIONS AIM Global Aggressive Growth Fund AIM Global Equity Fund AIM Conservative Allocation Fund AIM Global Growth Fund AIM Growth Allocation Fund(8) AIM Global Value Fund AIM Moderate Allocation Fund AIM International Core Equity Fund(1) AIM Moderate Growth Allocation Fund AIM International Growth Fund AIM Moderately Conservative Allocation Fund AIM International Small Company Fund(6) AIM Trimark Fund
(1) The following name changes became effective October 15, 2004: INVESCO Advantage Health Sciences Fund to AIM Advantage Health Sciences Fund, INVESCO Dynamics Fund to AIM Dynamics Fund, INVESCO Energy Fund to AIM Energy Fund, INVESCO Financial Services Fund to AIM Financial Services Fund, INVESCO Gold & Precious Metals Fund to AIM Gold & Precious Metals Fund, INVESCO International Core Equity Fund to AIM International Core Equity Fund, INVESCO Leisure Fund to AIM Leisure Fund, INVESCO Mid-Cap Growth Fund to AIM Mid Cap Stock Fund, INVESCO Multi-Sector Fund to AIM Multi-Sector Fund, INVESCO S&P 500 Index Fund to AIM S&P 500 Index Fund, INVESCO Small Company Growth Fund to AIM Small Company Growth Fund, INVESCO Technology Fund to AIM Technology Fund, INVESCO U.S. Government Money Fund to Premier U.S. Government Money Portfolio, INVESCO Utilities Fund to AIM Utilities Fund. (2) As of end of business on February 27, 2004, AIM Mid Cap Core Equity Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (3) Effective December 13, 2004, AIM Small Cap Equity Fund is open to all investors. (4) As of end of business on March 18, 2002, AIM Small Cap Growth Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (5) As of end of business on March 28, 2005, AIM European Small Company Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (6) Effective December 30, 2004, AIM International Emerging Growth Fund was renamed AIM International Small Company Fund. As of end of business on March 14, 2005, the Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (7) As of end of business on April 29, 2005, AIM Real Estate Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. (8) Effective April 29, 2005, AIM Aggressive Allocation Fund was renamed AIM Growth Allocation Fund. If used after July 20, 2005, this report must be accompanied by a Fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $131 billion in assets. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $375 billion in assets under management. Data as of March 31, 2005. ================================================================================ CONSIDER THE INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY. FOR THIS AND OTHER INFORMATION ABOUT AIM FUNDS, OBTAIN A PROSPECTUS FROM YOUR FINANCIAL ADVISOR AND READ IT CAREFULLY BEFORE INVESTING. ================================================================================ AIMinvestments.com IGR-SAR-1 A I M Distributors, Inc. [YOUR GOALS. OUR SOLUTIONS.] --Registered Trademark-- Mutual Retirement Annuities College Separately Offshore Cash Funds Products Savings Managed Products Management Plans Accounts [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- AIM INTERNATIONAL CORE EQUITY FUND Semiannual Report to Shareholders . April 30, 2005 [COVER IMAGE] FORMERLY INVESCO INTERNATIONAL CORE EQUITY FUND [YOUR GOALS. OUR SOLUTIONS.] - REGISTERED TRADEMARK - [AIM INVESTMENTS LOGO] - REGISTERED TRADEMARK - AIM INTERNATIONAL CORE EQUITY FUND SEEKS TOTAL RETURN THROUGH CAPITAL APPRECIATION AND CURRENT INCOME. . Unless otherwise stated, information presented in this report is as of April 30, 2005, and is based on total net assets. . On October 15, 2004, INVESCO International Core Equity Fund was renamed AIM International Core Equity Fund. ABOUT SHARE CLASSES . Effective September 30, 2003, Class B shares are not available as an investment for retirement plans maintained pursuant to Section 401 of the Internal Revenue Code, including 401(k) plans, money purchase pension plans and profit sharing plans. Plans that have existing accounts invested in Class B shares will continue to be allowed to make additional purchases. . Class R shares are available only to certain retirement plans. Please see the prospectus for more information. They are sold at net asset value, that is, without up-front sales charges. . Investor Class shares are closed to most investors. For more information on who may continue to invest in the Investor Class shares, please see the prospectus. PRINCIPAL RISKS OF INVESTING IN THE FUND . The Fund may invest 100% of its assets in the securities of non-U.S. issuers. 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 custody 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. . Investing in emerging markets involves greater risk and potential reward than investing in more established markets. ABOUT INDEXES USED IN THIS REPORT . The unmanaged MSCI Europe, Australasia and the Far East Index (the MSCI EAFE --REGISTERED TRADEMARK--) is a group of foreign securities tracked by Morgan Stanley Capital International. . The unmanaged Lipper International Large-Cap Core Fund Index represents an average of the performance of the 10 largest international large-cap core mutual funds tracked by Lipper, Inc., an independent mutual fund performance monitor. . The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes. . A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of an index of funds reflects fund expenses; performance of a market index does not. OTHER INFORMATION . The returns shown in management's discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. . 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 Morgan Stanley Capital International Inc. and Standard & Poor's. 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. Shareholders can look up the Fund's Forms N-Q on the SEC's Web site at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549-0102. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 1-202-942-8090 or 1-800-732-0330, or by electronic request at the following e-mail address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-6463 and 33-44611. The Fund's most recent portfolio holdings, as filed on Form N-Q, are also available at AIMinvestments.com. 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 AIM Web site, AIMinvestments.com. On the home page, scroll down and click on AIM Funds Proxy Policy. The information is also available on the SEC Web site, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2004, is available at our Web site. Go to AIMinvestments.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 Web site, sec.gov. -------------------------------------------------------------------------------- THIS REPORT 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. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE -------------------------------------------------------------------------------- AIMINVESTMENTS.COM AIM INTERNATIONAL CORE EQUITY FUND DEAR FELLOW SHAREHOLDERS: Most equity market and fund indexes, domestic and international, produced positive total returns for the six months ended April 30, 2005, but for the most part, those positive numbers reflected gains made during the latter months of 2004. Year-to-date as of April 30, 2005, the returns were far less attractive. [GRAHAM PHOTO] High oil prices remained a source of unease; crude oil remained near or above $50 per barrel throughout the reporting period. The Producer Price Index was up fairly sharply in April, largely due to energy costs. And central bank policy continued to focus on containing short-term inflation via increases in the overnight federal funds interest rate, the rate the Federal Reserve (the Fed) most directly controls. Shortly after the reporting period closed, the Fed raised that rate to 3%; it was the eighth increase since mid-2004. Should the Fed continue to raise rates, this could eventually dampen economic performance, which in fact has been quite good. Gross domestic product grew 4.4% for all of 2004 and the preliminary estimate of annualized growth for the first quarter of 2005 was 3.5%. ROBERT H. GRAHAM . Though the growth rate of the manufacturing sector slowed in April and again in May, manufacturing continued to grow, according to the Institute for Supply Management (ISM), whose purchasing manager surveys cover more than 80% of the U.S. economy. In May, manufacturing grew for the 24th consecutive month while the overall economy grew for the 43rd consecutive month, ISM reported. [WILLIAMSON PHOTO] . Though job growth during May was much slower than during April, the unemployment rate remained unchanged at 5.1% as May 2005 ended. MARK H. WILLIAMSON . For the first quarter of 2005, earnings for companies included in the Standard & Poor's Composite Index of 500 Stocks, an index of the broad U.S. stock market, were up more than 10%, on average, over a year earlier. . Bond yields have not risen as much as might be expected given eight increases in short-term interest rates in less than a year. This may indicate that the bond market is not anticipating a long-term inflationary pattern. After the slow start in 2005, domestic and many international markets began to rally after the close of the reporting period, demonstrating once again how changeable markets are in the short term. Given the elusiveness of accurate short-term market forecasts, as always, we urge our shareholders to: . keep a long-term investment perspective, . make sure their portfolio of investments is suitably diversified, and . contact their financial advisors when they have questions about their investments or the markets. YOUR FUND In the following pages you will find a discussion of your Fund's investment philosophy, an explanation of its performance for the reporting period, and a summary of its portfolio as of April 30. Further information about your Fund, The AIM Family of Funds --REGISTERED TRADEMARK--, and investing in general is always available on our widely praised Web site, AIMinvestments.com. Please visit frequently. We at AIM remain committed to building solutions to help you meet your investment goals. We thank you for your continued participation in AIM Investments --REGISTERED TRADEMARK--. If you have any questions, please contact our award-winning Client Service representatives at 800-959-4246. We are happy to be of help. Sincerely, /s/ ROBERT H. GRAHAM /s/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson President & Vice Chair, Chairman & President, AIM Funds AIM Advisors, Inc. June 17, 2005 AIM INVESTMENTS IS A REGISTERED SERVICE MARK OF A I M MANAGEMENT GROUP INC. A I M ADVISORS, INC. AND A I M CAPITAL MANAGEMENT, INC. ARE THE INVESTMENT ADVISORS AND A I M DISTRIBUTORS, INC. IS THE DISTRIBUTOR FOR THE RETAIL FUNDS REPRESENTED BY AIM INVESTMENTS. AIM INTERNATIONAL CORE EQUITY FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE PERFORMANCE SUMMARY The Fund remained well diversified across countries and industry sectors during the six-month period ended April 30, 2005. Stock selection continued to focus on large-capitalization companies that met our financial, valuation and global sector-based research criteria. The Fund's results at net asset value for the period surpassed the 3.28% return of the U.S. market as represented by the S&P 500 Index. During the period, the fund underperformed the MSCI EAFE Index, representing the broad European, Australasian and Far Eastern markets, as well as the Lipper International Large-Cap Core Fund Index, representing similar funds. The underperformance can be attributed to the continued strength of small-capitalization companies, which are not a focus of the Fund. Additionally, Fund holdings in Japan and the United Kingdom (U.K.) detracted from relative performance, as fears of a slowdown in global growth weighed heavily on Japanese equities and the U.K.'s tightening monetary policy showed its effects on the retail market. -------------------------------------------------------------------------------- FUND VS. INDEXES TOTAL RETURNS, 10/31/04-4/30/05, EXCLUDING APPLICABLE SALES CHARGES. IF SALES CHARGES WERE INCLUDED, RETURNS WOULD BE LOWER. Class A Shares 6.90% Class B Shares 6.48 Class C Shares 6.54 Class R Shares 6.84 Investor Class Shares 6.92 MSCI EAFE Index (Broad Market and Style-specific Index) 8.71 Lipper International Large-Cap Core Fund Index (Peer Group Index) 7.95 SOURCE: LIPPER, INC. -------------------------------------------------------------------------------- HOW WE INVEST Our international equity investment process is clearly delineated in three distinct investment steps: . a financial and valuation assessment . primary research driven by direct company contact . team-based portfolio decisions We take a bottom-up approach to investing, focusing on individual companies rather than trying to identify potential macroeconomic trends in the markets. Our stock selection method focuses on well-established companies with at least five years of trading history in the public markets. We favor buying companies with a history of financial strength at times when their stock price does not fully reflect that proven success. Since many companies compete on a global scale, we believe that a company's industry sector affects its stock price more than its geographic location does. Therefore, we take a sector-based perspective as we research companies on a global scope. Risk is explicitly controlled at the security level through a strong bias toward companies with proven financial strength, and at the portfolio level through statistical tools that ensure appropriate portfolio diversification and minimize risk relative to expected return. MARKET CONDITIONS AND YOUR FUND International markets generally continued to fare well relative to their U.S. counterparts during the period, continuing a trend that has been in place for several years. Fund results were buoyed by the fact that all ten sectors of the MSCI EAFE Index produced positive absolute returns during the period. The Fund benefited from an overweight position in the energy sector--which saw continued strength due to rising oil prices--as well as strong stock selection in that area. While the information technology sector was the weakest of the ten sectors, the Fund's strong stock selection in that area made it a positive contributor. Several of the Fund's strongest stocks over the period were in the financials sector, as Zurich Financial Services and Credit Suisse, both --------------------------------------------------------------------------------
TOP 5 COUNTRIES* PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* 1. United Kingdom 22.8% By sector 1. GlaxoSmithKline PLC-ADR 2. Japan 19.8 (United Kingdom) 3.2% 3. Netherlands 10.0 [PIE CHART] 2. Reed Elsevier PLC 4. Switzerland 8.9 (United Kingdom) 2.3 5. France 5.0 Materials 7.5% 3. Royal Bank of Scotland Group PLC Telecommunication Services 7.3% (United Kingdom) 2.3 TOTAL NET ASSETS $237.3 million Industrials 7.1% 4. Diageo PLC (United Kingdom) 2.2 TOTAL NUMBER OF HOLDINGS* 82 Information Technology 6.9% 5. Nokia Oyj (Finland) 2.2 Money Market Funds Plus 6. BAE Systems PLC (United Kingdom) 2.1 Other Assets Less Liabilities 4.5% 7. Cadbury Schweppes PLC Utilities 3.9% (United Kingdom) 2.1 Financials 21.2% 8. Danske Bank A.S. (Denmark) 2.0 Consumer Staples 12.4% 9. Compagnie Generale des Health Care 10.5% Etablissements Michelin-Class B Consumer Discretionary 10.3% (France) 2.0 Energy 8.4% 10. Zurich Financial Services A.G. (Switzerland) 1.8
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. -------------------------------------------------------------------------------- 2 financial institutions based in Switzerland, posted strong results after successfully executing strategic and operational initiatives and exiting non-core businesses to cut costs. The consumer staples sector proved to be a difficult area for the Fund despite strong performance from Cadbury Schweppes, a U.K.-based confectioner and soft-drink manufacturer. Other holdings in the consumer staples area lagged, such as our holding in Morrison Supermarkets, which underperformed due to profit warnings during the period. Morrison continued to trade at attractive valuations and we retained it because we felt it offered strong long-term potential. INTERNATIONAL MARKETS GENERALLY CONTINUED TO FARE WELL RELATIVE TO THEIR U.S. COUNTERPARTS. The Fund generally benefited from holdings in continental Europe and Canada. Europe continued to benefit from a favorable monetary policy instituted by the European Central Bank, which refrained from following the rising interest-rate trend set by the United States and the U.K. This favorable environment enabled many of the well-run companies to further improve profitability and enhance global competitiveness. Strong performance came from a variety of areas on the Continent, led by Fund holdings Michelin, a French tire manufacturer, and DSM, a Dutch specialty chemical company. Of the major developed markets, Japan fared the worst during the period, predominantly based on fears of a slowdown in both global and domestic growth. Due to these concerns, our holdings in Japan did not keep pace with the local market as automobile manufacturer Toyota, chemical producer Shin-Etsu and transportation provider East Japan Railway all underperformed the market. We retained these stocks because, in our opinion, these companies continued to offer attractive valuations and strong prospects for long-term success. Another area that detracted from the Fund's relative performance was the U.K. The rising interest-rate environment imposed by the Bank of England has been taking its toll on the U.K. consumer, pushing stocks such as the previously mentioned Morrison Supermarkets downward. On the whole, stocks in emerging markets continued their strong performance through the period, with Fund holdings in South Korea proving especially beneficial. IN CLOSING As of the end of the period, we believe non-U.S. equities continue to look more favorably valued than U.S. stocks, while also offering valuable diversification benefits to U.S.-based investors. We think prevailing conditions indicate there could be risks related to the effects of rising interest rates, additional inflationary pressures, or further deceleration in global growth. However, we remain committed to our disciplined strategy of selecting securities based on the strengths of the individual company, thus holding our course through the market's fluctuations. The Fund remains well diversified across regions and industries, with stock selection focused on well-capitalized companies meeting our financial, valuation and global sector-based research criteria. We welcome any new investors who have joined the Fund during the reporting period, and to all of our shareholders we would like to say thank you for your continued investment in AIM International Core Equity Fund. THE VIEWS AND OPINIONS EXPRESSED IN MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE ARE THOSE OF A I M ADVISORS, INC. THESE VIEWS AND OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE VIEWS AND OPINIONS MAY NOT BE RELIED UPON AS INVESTMENT ADVICE OR RECOMMENDATIONS, OR AS AN OFFER FOR A PARTICULAR SECURITY. THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET, COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES CONSIDERED RELIABLE, BUT A I M 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 inside front cover. -------------------------------------------------------------------------------- The Fund is team managed by INVESCO Global Asset Management (N.A.), Inc. The members of the team with the most significant responsibility within the investment team are as follows. ERIK B. GRANADE, Chartered Financial Analyst, is a manager of AIM International Core Equity Fund. He began his investment career in 1986 and has been a portfolio manager with INVESCO and its affiliates since 1996. He holds a B.A. in economics from Trinity College in Hartford, Connecticut. INGRID E. BAKER is a manager of AIM International Core Equity Fund. She began her investment career in 1990 and joined INVESCO in 1999. She holds a B.A. in international politics from Oberlin College and an M.B.A. in finance from the University of Navarra in Spain. W. LINDSAY DAVIDSON is a manager of AIM International Core Equity Fund. He began his investment career in 1974 and has served as portfolio manager with AMVESCAP PLC and affiliated companies since 1984. A native of St. Andrews, Scotland, he received his degree in economics with honors from Edinburgh University. MICHELE T. GARREN is a manager of AIM International Core Equity Fund. She began her investment career in 1987 and joined INVESCO in 1997. She holds a B.B.A. in finance from Southern Methodist University and an M.B.A. in finance from New York University. KENT A. STARKE is a manager of AIM International Core Equity Fund. He began his investment career in 1983 and joined INVESCO in 1992. He has been with the international equity product since its inception. He received a B.B.A. from the University of Georgia and an M.S. in finance from Georgia State University. -------------------------------------------------------------------------------- [RIGHT ARROW GRAPHIC] FOR A PRESENTATION OF YOUR FUND'S LONG-TERM PERFORMANCE RECORD, PLEASE TURN TO PAGE 5. 3 AIM INTERNATIONAL CORE EQUITY 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; contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 November 1, 2004, through April 30, 2005. 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 Fund's actual cumulative total returns at net asset value after expenses for the six months ended April 30, 2005, appear in the table "Fund vs. Indexes" on page 2. 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 transactional 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. --------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES) BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES ENDING ACCOUNT EXPENSES SHARE VALUE VALUE PAID DURING VALUE PAID DURING CLASS (11/1/04) (4/30/05)/1/ PERIOD/2/ (4/30/05) PERIOD/2/ A $ 1,000.00 $ 1,069.00 $ 7.69 $ 1,017.36 $ 7.50 B 1,000.00 1,064.80 11.01 1,014.13 10.74 C 1,000.00 1,065.40 11.01 1,014.13 10.74 R 1,000.00 1,068.40 8.46 1,016.61 8.25 Investor 1,000.00 1,069.20 7.18 1,017.85 7.00
/1/The actual ending account value is based on the actual total return of the Fund for the period, November 1, 2004, to April 30, 2005, 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. The Fund's actual cumulative total returns at net asset value after expenses for the six months ended April 30, 2005, appear in the table "Fund vs. Indexes" on page 2. /2/Expenses are equal to the Fund's annualized expense ratio, 1.50%, 2.15%, 2.15%, 1.65% and 1.40% for Class A, B, C, R and Investor Class shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). -------------------------------------------------------------------------------- [ARROW BUTTON For More Information Visit IMAGE] AIMINVESTMENTS.COM 4 AIM INTERNATIONAL CORE EQUITY FUND YOUR FUND'S LONG-TERM PERFORMANCE Below you will find a presentation of your Fund's performance record for periods ended April 30, 2005, the close of the six-month period covered by this report. Please read the important disclosure accompanying these tables, which explains how Fund performance is calculated and the sales charges, if any, that apply to the share class in which you are invested. In addition to returns as of the close of the reporting period, industry regulations require us to provide average annual total returns as of March 31, 2005, the most recent calendar quarter-end. AVERAGE ANNUAL TOTAL RETURNS As of 4/30/05, including applicable sales charges CLASS A SHARES Inception (3/28/02) 5.91% 1 Year 8.66 CLASS B SHARES Inception (3/28/02) 6.54% 1 Year 9.26 CLASS C SHARES Inception (2/14/00) -0.14% 5 Years 0.56 1 Year 13.24 CLASS R SHARES Inception (11/24/03) 17.89% 1 Year 14.82 INVESTOR CLASS SHARES Inception (10/28/98) 4.01% 5 Years 1.48 1 Year 15.14 AVERAGE ANNUAL TOTAL RETURNS As of 3/31/05, including applicable sales charges CLASS A SHARES Inception (3/28/02) 6.83% 1 Year 8.99 CLASS B SHARES Inception (3/28/02) 7.53% 1 Year 9.70 CLASS C SHARES Inception (2/14/00) 0.28% 5 Years -0.11 1 Year 13.72 CLASS R SHARES Inception (11/24/03) 20.97% 1 Year 15.28 INVESTOR CLASS SHARES Inception (10/28/98) 4.42% 5 Years 0.81 1 Year 15.47 The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit AIMinvestments.com for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares. 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. Class R shares do not have a front-end sales charge; returns shown are at net asset value and do not reflect a 0.75% CDSC that may be imposed on a total redemption of retirement plan assets within the first year. Investor Class shares do not have a front-end sales charge or CDSC; therefore, performance shown is at net asset value. The performance of the Fund's share classes will differ due to different sales charge structures and class expenses. Had the advisor not waived fees and/or reimbursed expenses in the past, performance would have been lower. A redemption fee of 2% will be imposed on certain redemptions or exchanges out of the Fund within 30 days of purchase. Exceptions to the redemption fee are listed in the Fund's prospectus. 5 SUPPLEMENT TO SEMIANNUAL REPORT DATED 4/30/05 AIM INTERNATIONAL CORE EQUITY FUND INSTITUTIONAL CLASS SHARES ======================================== PLEASE NOTE THAT PAST PERFORMANCE IS NOT AVERAGE ANNUAL TOTAL RETURNS INDICATIVE OF FUTURE RESULTS. MORE The following information has been For periods ended 4/30/05 RECENT RETURNS MAY BE MORE OR LESS THAN prepared to provide Institutional Class THOSE SHOWN. ALL RETURNS ASSUME shareholders with a performance overview Inception (4/30/04) 15.81% REINVESTMENT OF DISTRIBUTIONS AT NET specific to their holdings. 6 Months* 7.26 ASSET VALUE. INVESTMENT RETURN AND Institutional Class shares are offered ======================================== PRINCIPAL VALUE WILL FLUCTUATE SO YOUR exclusively to institutional investors, SHARES, WHEN REDEEMED, MAY BE WORTH MORE including defined contribution plans ======================================== OR LESS THAN THEIR ORIGINAL COST. SEE that meet certain criteria. AVERAGE ANNUAL TOTAL RETURNS FULL REPORT FOR INFORMATION ON For periods ended 3/31/05, most recent COMPARATIVE BENCHMARKS. PLEASE CONSULT calendar quarter-end YOUR FUND PROSPECTUS FOR MORE INFORMATION. FOR THE MOST CURRENT Inception (4/30/04) 18.19% MONTH-END PERFORMANCE, PLEASE CALL 6 Months* 13.44 800-525-8085 OR VISIT AIMINVESTMENTS.COM. *Cumulative total return that has not been annualized ======================================== INSTITUTIONAL CLASS SHARES HAVE NO SALES CHARGE; THEREFORE, PERFORMANCE IS AT NAV. INSTITUTIONAL CLASS SHARES WOULD HAVE HAD DIFFERENT RETURNS DUE TO DIFFERENCES IN THE EXPENSE STRUCTURE OF THE INSTITUTIONAL CLASS.
Over for information on your Fund's expenses. FOR INSTITUTIONAL INVESTOR USE ONLY This material is for institutional investor use only and may not be quoted, reproduced or shown to the public, nor used in written form as sales literature for public use. AIMINVESTMENTS.COM I-ICE-INS-2 [YOUR GOALS. OUR SOLUTIONS.] [AIM INVESTMENTS LOGO APPEARS HERE] --Registered Trademark-- --Registered Trademark--
INFORMATION ABOUT YOUR FUND'S EXPENSES CALCULATING YOUR ONGOING FUND EXPENSES EXAMPLE Simply divide your account value by the table on the front of this $1,000 (for example, an $8,600 account supplement. The hypothetical account As a shareholder of the Fund, you incur value divided by $1,000 = 8.6), then values and expenses may not be used to ongoing costs, including management multiply the result by the number in the estimate the actual ending account fees; and other Fund expenses. This table under the heading entitled "Actual balance or expenses you paid for the example is intended to help you Expenses Paid During Period" to estimate period. You may use this information to understand your ongoing costs (in the expenses you paid on your account compare the ongoing costs of investing dollars) of investing in the Fund and to during this period. in the Fund and other funds. To do so, compare these costs with ongoing costs compare this 5% hypothetical example of investing in other mutual funds. The HYPOTHETICAL EXAMPLE FOR with the 5% hypothetical examples that example is based on an investment of COMPARISON PURPOSES appear in the shareholder reports of the $1,000 invested at the beginning of the other funds. period and held for the entire period The table below also provides November 1, 2004, to April 30, 2005. information about hypothetical account Please note that the expenses shown values and hypothetical expenses based in the table are meant to highlight your ACTUAL EXPENSES on the Fund's actual expense ratio and ongoing costs only. Therefore, the an assumed rate of return of 5% per year hypothetical information is useful in The table below provides information before expenses, which is not the Fund's comparing ongoing costs only, and will about actual account values and actual actual return. The Fund's actual not help you determine the relative expenses. You may use the information in cumulative total return after expenses total costs of owning different funds. this table, together with the amount you for the six months ended April 30, 2005, invested, to estimate the expenses that appears in you paid over the period. ==================================================================================================================================== ACTUAL HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES) BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES ENDING ACCOUNT EXPENSES SHARE VALUE VALUE PAID DURING VALUE PAID DURING CLASS (11/1/04) (4/30/05)(1) PERIOD(2) (4/30/05) PERIOD(2) Institutional $1,000.00 $1,072.60 $4.93 $1,020.03 $4.81 (1) The actual ending account value is based on the actual total return of the Fund for the period November 1, 2004, to April 30, 2005, 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. The Fund's actual cumulative total return after expenses for the six months ended April 30, 2005, appears in the table on the front of this supplement. (2) Expenses are equal to the Fund's annualized expense ratio, 0.96% for the Institutional Class shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). ====================================================================================================================================
AIMINVESTMENTS.COM I-ICE-INS-2 FINANCIALS SCHEDULE OF INVESTMENTS April 30, 2005 (Unaudited)
MARKET SHARES VALUE ------------------------------------------------------------------------------- FOREIGN STOCKS & OTHER EQUITY INTERESTS-95.48% AUSTRALIA-1.60% National Australia Bank Ltd. (Diversified Banks)/(a)(b)/ 113,300 $ 2,590,556 ------------------------------------------------------------------------------- National Australia Bank Ltd.-ADR (Diversified Banks) 10,600 1,212,534 ------------------------------------------------------------------------------- 3,803,090 ------------------------------------------------------------------------------- BELGIUM-1.13% Belgacom S.A. (Integrated Telecommunication Services)/(b)/ 70,200 2,688,247 ------------------------------------------------------------------------------- CANADA-2.32% BCE Inc. (Integrated Telecommunication Services)/(a)/ 107,300 2,575,166 ------------------------------------------------------------------------------- EnCana Corp. (Oil & Gas Exploration & Production)/(a)/ 45,700 2,925,003 ------------------------------------------------------------------------------- 5,500,169 ------------------------------------------------------------------------------- CHINA-0.41% China Life Insurance Co., Ltd.-ADR (Life & Health Insurance)/(a)(c)/ 37,100 980,924 ------------------------------------------------------------------------------- DENMARK-1.99% Danske Bank A.S. (Diversified Banks)/(b)/ 160,900 4,712,959 ------------------------------------------------------------------------------- FINLAND-4.50% Nokia Oyj (Communications Equipment)/(b)/ 321,325 5,123,062 ------------------------------------------------------------------------------- Stora Enso Oyj-Class R (Paper Products)/(b)/ 247,700 3,283,148 ------------------------------------------------------------------------------- UPM-Kymmene Oyj (Paper Products)/(b)/ 113,800 2,265,721 ------------------------------------------------------------------------------- 10,671,931 ------------------------------------------------------------------------------- FRANCE-4.99% Compagnie Generale des Etablissements Michelin-Class B (Tires & Rubber)/(a)(b)/ 76,800 4,658,091 ------------------------------------------------------------------------------- Societe Generale-ADR (Diversified Banks)/(d)/ 191,500 3,802,213 ------------------------------------------------------------------------------- Total S.A.-ADR (Integrated Oil & Gas)/(a)/ 30,575 3,391,073 ------------------------------------------------------------------------------- 11,851,377 ------------------------------------------------------------------------------- GERMANY-2.37% BASF A.G. (Diversified Chemicals)/(a)(b)/ 26,725 1,751,023 ------------------------------------------------------------------------------- BASF A.G.-ADR (Diversified Chemicals) 29,750 1,930,775 ------------------------------------------------------------------------------- Deutsche Bank A.G. (Diversified Capital Markets)/(a)(b)/ 10,650 864,106 ------------------------------------------------------------------------------- Deutsche Bank A.G. (Diversified Capital Markets)/(a)/ 13,070 1,070,956 ------------------------------------------------------------------------------- 5,616,860 ------------------------------------------------------------------------------- HONG KONG-1.52% Cheung Kong (Holdings) Ltd. (Real Estate Management & Development)/(b)/ 117,000 1,106,007 ------------------------------------------------------------------------------- Hutchison Whampoa Ltd. (Industrial Conglomerates)/(a)(b)/ 280,100 2,501,439 ------------------------------------------------------------------------------- 3,607,446 ------------------------------------------------------------------------------- ITALY-2.64% Enel S.p.A. (Electric Utilities)/(a)(b)/ 293,000 2,779,364 ------------------------------------------------------------------------------- Eni S.p.A-ADR (Integrated Oil & Gas) 27,800 3,487,788 ------------------------------------------------------------------------------- 6,267,152 -------------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------------- JAPAN-19.83% Canon Inc. (Office Electronics)/(b)/ 19,000 $ 988,255 -------------------------------------------------------------------------------- Canon Inc.-ADR (Office Electronics) 41,500 2,159,660 -------------------------------------------------------------------------------- East Japan Railway Co. (Railroads)/(b)/ 640 3,330,219 -------------------------------------------------------------------------------- Eisai Co., Ltd. (Pharmaceuticals)/(b)/ 62,000 2,065,768 -------------------------------------------------------------------------------- Fuji Photo Film Co., Ltd. (Photographic Products)/(b)/ 57,000 1,880,305 -------------------------------------------------------------------------------- Fuji Photo Film Co., Ltd.-ADR (Photographic Products) 94,100 3,111,887 -------------------------------------------------------------------------------- Hitachi, Ltd.-ADR (Electronic Equipment Manufacturers) 30,600 1,796,832 -------------------------------------------------------------------------------- Ito-Yokado Co., Ltd. (Hypermarkets & Super Centers)/(b)/ 55,000 1,894,450 -------------------------------------------------------------------------------- Kao Corp. (Household Products)/(b)/ 137,000 3,169,482 -------------------------------------------------------------------------------- Millea Holdings, Inc. (Property & Casualty Insurance)/(b)/ 148 2,017,056 -------------------------------------------------------------------------------- NEC Electronics Corp. (Semiconductors)/(a)(b)/ 40,800 1,842,018 -------------------------------------------------------------------------------- Nintendo Co., Ltd. (Home Entertainment Software)/(b)/ 28,400 3,221,918 -------------------------------------------------------------------------------- Nippon Telegraph & Telephone Corp. (Integrated Telecommunication Services)/(b)/ 629 2,635,041 -------------------------------------------------------------------------------- Nippon Telegraph & Telephone Corp.-ADR (Integrated Telecommunication Services) 24,585 512,597 -------------------------------------------------------------------------------- Nomura Holdings, Inc. (Investment Banking & Brokerage)/(b)/ 164,000 2,086,425 -------------------------------------------------------------------------------- Olympus Corp. (Health Care Equipment)/(a)(b)/ 100,000 2,020,661 -------------------------------------------------------------------------------- Shin-Etsu Chemical Co., Ltd. (Specialty Chemicals)/(b)/ 87,100 3,211,149 -------------------------------------------------------------------------------- Sony Corp.-ADR (Consumer Electronics) 63,000 2,312,730 -------------------------------------------------------------------------------- Takeda Pharmaceutical Co. Ltd. (Pharmaceuticals)/(b)/ 88,300 4,297,116 -------------------------------------------------------------------------------- Toyota Motor Corp. (Automobile Manufacturers)/(b)/ 69,100 2,507,328 -------------------------------------------------------------------------------- 47,060,897 -------------------------------------------------------------------------------- MEXICO-2.10% Fomento Economico Mexicano, S.A. de C.V.-ADR (Soft Drinks) 26,700 1,363,035 -------------------------------------------------------------------------------- Telefonos de Mexico S.A. de C.V.-Series L-ADR (Integrated Telecommunication Services) 107,000 3,627,300 -------------------------------------------------------------------------------- 4,990,335 -------------------------------------------------------------------------------- NETHERLANDS-10.00% ABN AMRO Holding N.V. (Diversified Banks)/(a)(b)/ 122,641 2,973,742 -------------------------------------------------------------------------------- Aegon N.V. (Life & Health Insurance)/(b)/ 317,400 3,979,107 -------------------------------------------------------------------------------- DSM N.V. (Specialty Chemicals)/(b)/ 49,070 3,286,887 -------------------------------------------------------------------------------- Heineken N.V. (Brewers)/(a)(b)/ 106,200 3,372,602 -------------------------------------------------------------------------------- ING Groep N.V.-ADR (Other Diversified Financial Services) 105,000 2,878,050 -------------------------------------------------------------------------------- Koninklijke (Royal) Philips Electronics N.V.-New York Shares (Consumer Electronics) 76,950 1,907,590 -------------------------------------------------------------------------------- Royal Dutch Petroleum Co.-New York Shares (Integrated Oil & Gas)/(a)/ 29,450 1,715,462 -------------------------------------------------------------------------------- TNT N.V. (Air Freight & Logistics)/(b)/ 133,200 3,616,133 -------------------------------------------------------------------------------- 23,729,573 --------------------------------------------------------------------------------
F-1
MARKET SHARES VALUE ---------------------------------------------------------------------------------- NORWAY-1.15% Statoil A.S.A. (Integrated Oil & Gas)/(a)(b)/ 155,100 $ 2,721,629 ---------------------------------------------------------------------------------- PORTUGAL-1.00% Portugal Telecom, SGPS, S.A.-ADR (Integrated Telecommunication Services)/(c)/ 216,000 2,382,480 ---------------------------------------------------------------------------------- SOUTH KOREA-2.51% Kookmin Bank (Diversified Banks)/(b)/ 34,700 1,472,978 ---------------------------------------------------------------------------------- Korea Electric Power Corp.-ADR (Electric Utilities) 105,100 1,555,480 ---------------------------------------------------------------------------------- KT Corp.-ADR (Integrated Telecommunication Services) 145,125 2,930,074 ---------------------------------------------------------------------------------- 5,958,532 ---------------------------------------------------------------------------------- SPAIN-2.04% Endesa, S.A.-ADR (Electric Utilities) 109,700 2,396,945 ---------------------------------------------------------------------------------- Repsol YPF, S.A.-ADR (Integrated Oil & Gas) 96,900 2,450,601 ---------------------------------------------------------------------------------- 4,847,546 ---------------------------------------------------------------------------------- SWEDEN-1.23% Nordea Bank A.B. (Diversified Banks)/(a)(b)/ 306,600 2,914,884 ---------------------------------------------------------------------------------- SWITZERLAND-8.88% Credit Suisse Group (Diversified Capital Markets)/(a)(b)(c)/ 87,800 3,694,896 ---------------------------------------------------------------------------------- Nestle S.A. (Packaged Foods & Meats)/(a)(b)/ 7,525 1,980,342 ---------------------------------------------------------------------------------- Nestle S.A.-ADR (Packaged Foods & Meats)/(a)(d)/ 38,575 2,535,589 ---------------------------------------------------------------------------------- Novartis A.G. (Pharmaceuticals)/(b)/ 44,800 2,180,638 ---------------------------------------------------------------------------------- Novartis A.G.-ADR (Pharmaceuticals) 70,000 3,411,100 ---------------------------------------------------------------------------------- Roche Holding A.G. (Pharmaceuticals)/(a)(b)/ 23,900 2,891,702 ---------------------------------------------------------------------------------- Zurich Financial Services A.G. (Multi-Line Insurance)/(b)(c)/ 25,850 4,372,455 ---------------------------------------------------------------------------------- 21,066,722 ---------------------------------------------------------------------------------- TAIWAN-0.50% Taiwan Semiconductor Manufacturing Co. Ltd.-ADR (Semiconductors) 138,200 1,189,902 ---------------------------------------------------------------------------------- UNITED KINGDOM-22.77% Anglo American PLC (Diversified Metals & Mining)/(b)/ 97,700 2,173,142 ---------------------------------------------------------------------------------- BAA PLC (Airport Services)/(b)/ 208,000 2,306,933 ----------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------- UNITED KINGDOM-(continued) BAE Systems PLC (Aerospace & Defense)/(b)/ 1,038,500 $ 5,086,129 ------------------------------------------------------------------------------- Boots Group PLC (Drug Retail)/(b)/ 181,000 2,079,786 ------------------------------------------------------------------------------- BP PLC (Integrated Oil & Gas)/(b)/ 327,600 3,338,456 ------------------------------------------------------------------------------- Cadbury Schweppes PLC (Packaged Foods & Meats)/(b)/ 504,500 5,072,637 ------------------------------------------------------------------------------- Diageo PLC (Distillers & Vintners)/(b)/ 348,000 5,156,427 ------------------------------------------------------------------------------- GlaxoSmithKline PLC (Pharmaceuticals)/(b)/ 17,500 441,968 ------------------------------------------------------------------------------- GlaxoSmithKline PLC-ADR (Pharmaceuticals) 149,500 7,557,225 ------------------------------------------------------------------------------- HSBC Holdings PLC-ADR (Diversified Banks) 28,570 2,287,028 ------------------------------------------------------------------------------- Kingfisher PLC (Home Improvement Retail)/(b)/ 537,200 2,534,810 ------------------------------------------------------------------------------- Morrison (William) Supermarkets PLC (Food Retail)/(b)/ 736,500 2,740,317 ------------------------------------------------------------------------------- Reed Elsevier PLC (Publishing)/(b)/ 555,100 5,439,279 ------------------------------------------------------------------------------- Royal Bank of Scotland Group PLC (Diversified Banks)/(b)/ 178,700 5,394,416 ------------------------------------------------------------------------------- Scottish Power PLC (Electric Utilities)/(b)/ 301,000 2,435,359 ------------------------------------------------------------------------------- 54,043,912 ------------------------------------------------------------------------------- Total Foreign Stocks & Other Equity Interests (Cost $182,963,346) 226,606,567 ------------------------------------------------------------------------------- MONEY MARKET FUNDS-4.28% Premier Portfolio-Institutional Class (Cost $10,157,006)/(e)/ 10,157,006 10,157,006 ------------------------------------------------------------------------------- TOTAL INVESTMENTS-99.76% (excluding investments purchased with cash collateral from securities loaned) (Cost $193,120,352) 236,763,573 ------------------------------------------------------------------------------- INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-12.93% Premier Portfolio-Institutional Class/(e)(f)/ 30,682,180 30,682,180 ------------------------------------------------------------------------------- Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $30,682,180) 30,682,180 ------------------------------------------------------------------------------- TOTAL INVESTMENTS-112.69% (Cost $223,802,532) 267,445,753 ------------------------------------------------------------------------------- OTHER ASSETS LESS LIABILITIES-(12.69%) (30,122,427) ------------------------------------------------------------------------------- NET ASSETS-100.00% $237,323,326 -------------------------------------------------------------------------------
Investment Abbreviations: ADR- American Depositary Receipt Notes to Schedule of Investments: /(a)/All or a portion of this security has been pledged as collateral for securities lending transactions at April 30, 2005. /(b)/In accordance with the procedures established by the Board of Trustees, the foreign security is fair valued using adjusted closing market prices. The aggregate market value of these securities at April 30, 2005 was $155,148,568, which represented 58.01% of the Fund's Total Investments. See Note 1A. /(c)/Non-income producing security. /(d)/In accordance with the procedures established by the Board of Trustees, security fair valued based on an evaluated quote provided by an independent pricing service. The aggregate market value of these securities at April 30, 2005 was $6,337,802, which represented 2.37% of the Fund's Total Investments. See Note 1A. /(e)/The money market fund and the Fund are affiliated by having the same investment advisor. See Note 3. /(f)/The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 7. See accompanying notes which are an integral part of the financial statements. F-2 STATEMENT OF ASSETS AND LIABILITIES April 30, 2005 (Unaudited)
ASSETS: Investments, at market value (cost $182,963,346)* $226,606,567 ------------------------------------------------------------------------------- Investments in affiliated money market funds (cost $40,839,186) 40,839,186 ------------------------------------------------------------------------------- Total investments (cost $223,802,532) 267,445,753 ------------------------------------------------------------------------------- Foreign currencies, at market value (cost $73,364) 69,563 ------------------------------------------------------------------------------- Receivables for: Fund shares sold 651,544 ------------------------------------------------------------------------------- Dividends 1,223,460 ------------------------------------------------------------------------------- Investment for trustee deferred compensation and retirement plans 41,302 ------------------------------------------------------------------------------- Other assets 85,375 ------------------------------------------------------------------------------- Total assets 269,516,997 ------------------------------------------------------------------------------- LIABILITIES: Payables for: Investments purchased 783,303 ------------------------------------------------------------------------------- Fund shares reacquired 455,335 ------------------------------------------------------------------------------- Trustee deferred compensation and retirement plans 50,455 ------------------------------------------------------------------------------- Collateral upon return of securities loaned 30,682,180 ------------------------------------------------------------------------------- Accrued distribution fees 77,997 ------------------------------------------------------------------------------- Accrued trustees' and officer's fees and benefits 1,143 ------------------------------------------------------------------------------- Accrued transfer agent fees 80,045 ------------------------------------------------------------------------------- Accrued operating expenses 63,213 ------------------------------------------------------------------------------- Total liabilities 32,193,671 ------------------------------------------------------------------------------- Net assets applicable to shares outstanding $237,323,326 ------------------------------------------------------------------------------- NET ASSETS CONSIST OF: Shares of beneficial interest $197,639,772 ------------------------------------------------------------------------------- Undistributed net investment income 1,498,728 ------------------------------------------------------------------------------- Undistributed net realized gain (loss) from investment securities and foreign currencies (5,455,145) ------------------------------------------------------------------------------- Unrealized appreciation of investment securities and foreign currencies 43,639,971 ------------------------------------------------------------------------------- $237,323,326 -------------------------------------------------------------------------------
NET ASSETS: Class A $74,542,974 ----------------------------------------------------------- Class B $28,252,699 ----------------------------------------------------------- Class C $37,923,215 ----------------------------------------------------------- Class R $ 2,546,809 ----------------------------------------------------------- Investor Class $48,687,242 ----------------------------------------------------------- Institutional Class $45,370,387 ----------------------------------------------------------- SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED: Class A 6,672,477 ----------------------------------------------------------- Class B 2,542,375 ----------------------------------------------------------- Class C 3,485,659 ----------------------------------------------------------- Class R 228,188 ----------------------------------------------------------- Investor Class 4,307,143 ----------------------------------------------------------- Institutional Class 4,048,797 ----------------------------------------------------------- Class A: Net asset value per share $ 11.17 ----------------------------------------------------------- Offering price per share: (Net asset value of $11.17 / 94.50%) $ 11.82 ----------------------------------------------------------- Class B: Net asset value and offering price per share $ 11.11 ----------------------------------------------------------- Class C: Net asset value and offering price per share $ 10.88 ----------------------------------------------------------- Class R: Net asset value and offering price per share $ 11.16 ----------------------------------------------------------- Investor Class: Net asset value and offering price per share $ 11.30 ----------------------------------------------------------- Institutional Class: Net asset value and offering price per share $ 11.21 -----------------------------------------------------------
* At April 30, 2005, securities with an aggregate market value of $29,134,468 were on loan to brokers. See accompanying notes which are an integral part of the financial statements. F-3 STATEMENT OF OPERATIONS For the six months ended April 30, 2005 (Unaudited)
INVESTMENT INCOME: Dividends (net of foreign withholding tax of $352,636) $ 3,111,962 ----------------------------------------------------------------------------------- Dividends from affiliated money market funds (includes securities lending income of $46,355 after rebates of $336,499) 147,345 ----------------------------------------------------------------------------------- Total investment income 3,259,307 ----------------------------------------------------------------------------------- EXPENSES: Advisory fees 804,709 ----------------------------------------------------------------------------------- Administrative services fees 24,795 ----------------------------------------------------------------------------------- Custodian fees 42,697 ----------------------------------------------------------------------------------- Distribution fees: Class A 119,803 ----------------------------------------------------------------------------------- Class B 133,030 ----------------------------------------------------------------------------------- Class C 190,591 ----------------------------------------------------------------------------------- Class R 6,017 ----------------------------------------------------------------------------------- Investor Class 59,608 ----------------------------------------------------------------------------------- Transfer agent fees -- A, B, C, R and Investor Class 184,931 ----------------------------------------------------------------------------------- Transfer agent fees -- Institutional Class 1,372 ----------------------------------------------------------------------------------- Trustees' and officer's fees and benefits 10,082 ----------------------------------------------------------------------------------- Other 139,418 ----------------------------------------------------------------------------------- Total expenses 1,717,053 ----------------------------------------------------------------------------------- Less:Fees waived, expenses reimbursed and expense offset arrangement (5,197) ----------------------------------------------------------------------------------- Net expenses 1,711,856 ----------------------------------------------------------------------------------- Net investment income 1,547,451 ----------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES AND FOREIGN CURRENCIES: Net realized gain (loss) from: Investment securities 6,589,414 ----------------------------------------------------------------------------------- Foreign currencies (153,122) ----------------------------------------------------------------------------------- 6,436,292 ----------------------------------------------------------------------------------- Change in net unrealized appreciation (depreciation) of: Investment securities 4,166,851 ----------------------------------------------------------------------------------- Foreign currencies (10,871) ----------------------------------------------------------------------------------- 4,155,980 ----------------------------------------------------------------------------------- Net gain from investment securities and foreign currencies 10,592,272 ----------------------------------------------------------------------------------- Net increase in net assets resulting from operations $12,139,723 -----------------------------------------------------------------------------------
See accompanying notes which are an integral part of the financial statements. F-4 Statement of Changes in Net Assets For the six months ended April 30, 2005 and the year ended October 31, 2004 (Unaudited)
APRIL 30, 2005 -------------------------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 1,547,451 -------------------------------------------------------------------------------------------------------------------------- Net realized gain from investment securities and foreign currencies 6,436,292 -------------------------------------------------------------------------------------------------------------------------- Change in net unrealized appreciation of investment securities and foreign currencies 4,155,980 -------------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 12,139,723 -------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from net investment income: Class A (445,287) -------------------------------------------------------------------------------------------------------------------------- Class B (16,207) -------------------------------------------------------------------------------------------------------------------------- Class C (65,085) -------------------------------------------------------------------------------------------------------------------------- Class R (14,030) -------------------------------------------------------------------------------------------------------------------------- Investor Class (314,266) -------------------------------------------------------------------------------------------------------------------------- Institutional Class (244,538) -------------------------------------------------------------------------------------------------------------------------- Decrease in net assets resulting from distributions (1,099,413) -------------------------------------------------------------------------------------------------------------------------- Share transactions-net: Class A 10,308,473 -------------------------------------------------------------------------------------------------------------------------- Class B 2,934,637 -------------------------------------------------------------------------------------------------------------------------- Class C (902,056) -------------------------------------------------------------------------------------------------------------------------- Class R 302,412 -------------------------------------------------------------------------------------------------------------------------- Investor Class 1,627,956 -------------------------------------------------------------------------------------------------------------------------- Institutional Class 28,224,422 -------------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from share transactions 42,495,844 -------------------------------------------------------------------------------------------------------------------------- Net increase in net assets 53,536,154 -------------------------------------------------------------------------------------------------------------------------- NET ASSETS: Beginning of period 183,787,172 -------------------------------------------------------------------------------------------------------------------------- End of period (including undistributed net investment income of $1,498,728 and $1,050,690, respectively) $237,323,326 --------------------------------------------------------------------------------------------------------------------------
OCTOBER 31, 2004 ------------------------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 1,247,768 ------------------------------------------------------------------------------------------------------------------------- Net realized gain from investment securities and foreign currencies 10,968,871 ------------------------------------------------------------------------------------------------------------------------- Change in net unrealized appreciation of investment securities and foreign currencies 19,036,729 ------------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 31,253,368 ------------------------------------------------------------------------------------------------------------------------- Distributions to shareholders from net investment income: Class A (186,438) ------------------------------------------------------------------------------------------------------------------------- Class B (58,073) ------------------------------------------------------------------------------------------------------------------------- Class C (103,958) ------------------------------------------------------------------------------------------------------------------------- Class R (3,851) ------------------------------------------------------------------------------------------------------------------------- Investor Class (137,556) ------------------------------------------------------------------------------------------------------------------------- Institutional Class -- ------------------------------------------------------------------------------------------------------------------------- Decrease in net assets resulting from distributions (489,876) ------------------------------------------------------------------------------------------------------------------------- Share transactions-net: Class A 48,377,188 ------------------------------------------------------------------------------------------------------------------------- Class B 19,285,145 ------------------------------------------------------------------------------------------------------------------------- Class C 27,251,240 ------------------------------------------------------------------------------------------------------------------------- Class R 1,849,400 ------------------------------------------------------------------------------------------------------------------------- Investor Class (11,435,203) ------------------------------------------------------------------------------------------------------------------------- Institutional Class 15,561,946 ------------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from share transactions 100,889,716 ------------------------------------------------------------------------------------------------------------------------- Net increase in net assets 131,653,208 ------------------------------------------------------------------------------------------------------------------------- NET ASSETS: Beginning of period 52,133,964 ------------------------------------------------------------------------------------------------------------------------- End of period (including undistributed net investment income of $1,498,728 and $1,050,690, respectively) $183,787,172 -------------------------------------------------------------------------------------------------------------------------
See accompanying notes which are an integral part of the financial statements. F-5 NOTES TO FINANCIAL STATEMENTS April 30, 2005 (Unaudited) NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM International Core Equity Fund (the "Fund") is a series portfolio of AIM International Mutual Funds (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 six separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The Fund currently offers multiple classes of shares. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. The Fund's investment objective is to seek total return. Companies are listed in the Schedule of Investments based on the country in which they are organized. Under the Trust's organizational documents, each Trustee, officer, employee or other agent of the Trust (including the Trust's investment manager) 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 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. However, the Fund has not had prior claims or losses pursuant to these contracts. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. A. SECURITY VALUATIONS -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued on the basis of prices furnished by independent pricing services, which may be considered fair valued, or market makers. Each security reported on the NASDAQ National Market System 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 will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Investments in open-end registered investment companies 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 closed-end registered investment companies that trade on an exchange are valued at the last sales price as of the close of the customary trading session on the exchange where the security is principally traded. Debt obligations (including convertible bonds) 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 having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. 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. 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. 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 the close of the respective markets. Events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. 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 market value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current market 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, ADRs and domestic and foreign index futures. 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. 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. F-6 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. 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 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 Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. E. 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. F. REDEMPTION FEES -- The Fund has instituted a 2% redemption fee on certain share classes 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, including exchanges of shares held less than 30 days. The redemption fee is accounted for as an addition to shares of beneficial interest by the Fund and is allocated among the share classes based on the relative net assets of each class. G. 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. H. 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. NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES The Trust has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee based on the annual rate of the Fund's average daily net assets as follows:
AVERAGE NET ASSETS RATE ------------------------- First $500 million 0.75% ------------------------- Next $500 million 0.65% ------------------------- Next $1 billion 0.55% ------------------------- Next $2 billion 0.45% ------------------------- Next $2 billion 0.40% ------------------------- Next $2 billion 0.375% ------------------------- Over $8 billion 0.35% -------------------------
AIM has entered into a sub-advisory agreement with INVESCO Global Asset Management (N.A.) ("IGAM") whereby AIM pays INVESCO 40% of the fee paid by the Fund to AIM. AIM 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, Investor Class and Institutional Class shares to 2.10%, 2.75%, 2.75%, 2.25%, 2.00% and 1.75% of average daily net assets, respectively, through October 31, 2005. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following F-7 expenses are not taken into account, and could cause the total annual fund operating expenses to exceed the limits stated above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items (these are expenses that are not anticipated to arise from the Fund's day-to-day operations), or items designated as such by the Fund's Board of Trustees; (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 AMVESCAP PLC ("AMVESCAP") described more fully below, the only 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. To the extent that the annualized expense ratio does not exceed the expense limitation, AIM will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year. AIM did not waive fees and/or reimburse expenses during the period under this expense limitation. Further, AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds on investments by the Fund in such affiliated money market funds (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the fund). AIM is also voluntarily waiving a portion of the advisory fee payable by the Fund equal to the difference between the income earned from investing in the affiliated money market fund and the hypothetical income earned from investing in an appropriate comparative benchmark. Voluntary fee waivers or reimbursements may be modified or discontinued at any time upon consultation with the Board of Trustees without further notice to investors. For the six months ended April 30, 2005, AIM waived fees of $2,174. For the six months ended April 30, 2005, at the request of the Trustees of the Trust, AMVESCAP PLC ("AMVESCAP") agreed to reimburse $590 of 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. 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. Pursuant to such agreement, for the six months ended April 30, 2005, AIM was paid $24,795. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer agency and shareholder services to the Fund and reimburse AISI for certain expenses incurred by AISI in the course of providing such services. AISI may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. For the six months ended April 30, 2005, the Fund paid AISI $184,931 for Class A, Class B, Class C, Class R and Investor Class share classes and $1,372 for Institutional Class shares. The Trust has entered into master distribution agreements with A I M Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B, Class C, Class R, 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 ADI compensation at the annual rate of 0.35% 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 these amounts, up to 0.25% of the average daily net assets of the Class A, Class B, Class C, Class R or Investor Class 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. NASD Rules 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. Pursuant to the Plans, for the six months ended April 30, 2005, the Class A, Class B, Class C, Class R and Investor Class shares paid $119,803, $133,030, $190,591, $6,017, and $59,608, respectively. Front-end sales commissions and contingent deferred sales charges ("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. For the six months ended April 30, 2005, ADI advised the Fund that it retained $19,218 in front-end sales commissions from the sale of Class A shares and $48, $3,862, $1,859 and $0 from Class A, Class B, 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 AIM, AISI, IGAM and/or ADI. NOTE 3--INVESTMENTS IN AFFILIATES The Fund is permitted, pursuant to an exemptive order from the Securities and Exchange Commission ("SEC"), to invest daily available cash balances and cash collateral from securities lending transactions in affiliated money market funds. The Fund and the money market funds below have the same investment advisor and therefore, are considered to be affiliated. The tables below show the transactions in and earnings from investments in affiliated money market funds for the six months ended April 30, 2005. INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
UNREALIZED REALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND GAIN FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME (LOSS) ------------------------------------------------------------------------------------------------------------------------------ Premier Portfolio -- Institutional Class* $3,494,279 $40,209,748 $(33,547,021) $-- $10,157,006 $100,990 $-- ------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
UNREALIZED REALIZED MARKET VALUE PURCHASES PROCEEDS APPRECIATION MARKET VALUE DIVIDEND GAIN FUND 10/31/04 AT COST FROM SALES (DEPRECIATION) 04/30/05 INCOME** (LOSS) -------------------------------------------------------------------------------------------------------------------------------- Premier Portfolio -- Institutional Class* $38,945,109 $146,133,784 $(154,396,713) $-- $30,682,180 $ 46,355 $-- -------------------------------------------------------------------------------------------------------------------------------- Total $42,439,388 $186,343,532 $(187,943,734) $-- $40,839,186 $147,345 $-- --------------------------------------------------------------------------------------------------------------------------------
* On February 25, 2005, the Premier Portfolio investments were transferred from the original share class with no name designation to the newly structured share class designated as Institutional Class. **Net of rebates. F-8 NOTE 4--EXPENSE OFFSET ARRANGEMENT 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 six months ended April 30, 2005, the Fund received credits from this arrangement which resulted in the reduction of the Fund's total expenses of $2,433. NOTE 5--TRUSTEES' AND OFFICER'S FEES AND BENEFITS "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to each Trustee of the Fund who is not an "interested person" of the AIM Funds. Trustees have the option to defer compensation payable by the Fund, and "Trustees' and Officer's 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, 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 Officer's 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. In addition to the above, "Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund to pay remuneration to the Senior Officer of the AIM Funds. During the six months ended April 30, 2005, the Fund paid legal fees of $2,187 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 Pursuant to an exemptive order from the SEC, the Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. A loan will be secured by collateral if the Fund's aggregate borrowings from all sources exceeds 10% of the Fund's total assets. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. The Fund is a participant in an uncommitted unsecured revolving credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000, or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the credit facility can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the six months ended April 30, 2005, the Fund did not borrow or lend under the interfund lending facility or borrow under the uncommitted unsecured revolving credit facility. Additionally, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated at an amount equal to the Federal Funds rate plus 100 basis points. NOTE 7--PORTFOLIO SECURITIES LOANED 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. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds. 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. The Fund could also 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 a loss on the collateral invested. At April 30, 2005, securities with an aggregate value of $29,134,468 were on loan to brokers. The loans were secured by cash collateral of $30,682,180 received by the Fund and subsequently invested in an affiliated money market fund. For the six months ended April 30, 2005, the Fund received dividends on cash collateral of $46,355 for securities lending transactions, which are net of rebates. NOTE 8--TAX INFORMATION The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund's fiscal year-end. F-9 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 had a capital loss carryforward as of October 31, 2004 which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD* --------------------------------------------- October 31, 2008 $1,116,331 --------------------------------------------- October 31, 2009 3,338,725 --------------------------------------------- October 31, 2010 710,212 --------------------------------------------- Total capital loss carryforward $5,165,268 ---------------------------------------------
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. To the extent that unrealized gains as of November 24, 2003, the date of the reorganization of AIM International Core Equity Fund into the AIM International Core Equity Fund (formerly known as the INVESCO International Core Equity Fund), are realized on securities held in each fund at such date, the capital loss carryforward may be further limited for up to five years from the date of the reorganization. NOTE 9--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities and money market funds) purchased and sold by the Fund during the six months ended April 30, 2005 was $51,471,670 and $15,812,920, respectively. For interim reporting periods, the cost of investments for tax purposes includes reversals of certain tax items, such as, wash sales that have occurred since the prior fiscal year-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS ------------------------------------------------------------------------- Aggregate unrealized appreciation of investment securities $42,846,435 ------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (5,809,622) ------------------------------------------------------------------------- Net unrealized appreciation of investment securities $37,036,813 -------------------------------------------------------------------------
Cost of investments for tax purposes is $230,408,940. F-10 NOTE 10--SHARE INFORMATION The Fund currently offers six different classes of shares: Class A shares, Class B shares, Class C shares, Class R shares, Investor Class shares and Institutional Class shares. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with CDSC. Class R shares, Investor Class shares and Institutional Class shares are sold at net asset value. Under certain circumstances, Class A shares and Class R shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN SHARES OUTSTANDING/(a)/ ----------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED APRIL 30, OCTOBER 31, 2005 2004 ---------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------------------------------------------------------- Sold: Class A 1,628,974 $18,434,780 2,187,817 $ 21,070,438 ----------------------------------------------------------------------------------------------------------- Class B 593,665 6,689,249 726,386 6,786,146 ----------------------------------------------------------------------------------------------------------- Class C 360,004 3,958,235 607,932 5,844,662 ----------------------------------------------------------------------------------------------------------- Class R/(b)/ 50,105 565,913 111,406 1,094,858 ----------------------------------------------------------------------------------------------------------- Investor Class 663,901 7,597,652 1,427,600 14,079,460 ----------------------------------------------------------------------------------------------------------- Institutional Class/(c)/ 2,509,647 28,412,298 1,571,660 15,727,981 ----------------------------------------------------------------------------------------------------------- Issued as reinvestment of dividends: Class A 36,715 407,535 17,683 156,851 ----------------------------------------------------------------------------------------------------------- Class B 1,231 13,623 5,564 49,244 ----------------------------------------------------------------------------------------------------------- Class C 2,955 32,029 6,021 52,143 ----------------------------------------------------------------------------------------------------------- Class R/(b)/ 1,222 13,563 422 3,742 ----------------------------------------------------------------------------------------------------------- Investor Class 25,955 291,471 11,868 106,340 ----------------------------------------------------------------------------------------------------------- Institutional Class/(c)/ 21,991 244,538 -- -- ----------------------------------------------------------------------------------------------------------- Issued in connection with acquisitions:/(d)/ Class A -- -- 5,517,421 48,731,245 ----------------------------------------------------------------------------------------------------------- Class B -- -- 2,132,563 18,784,595 ----------------------------------------------------------------------------------------------------------- Class C -- -- 4,224,998 36,433,079 ----------------------------------------------------------------------------------------------------------- Class R/(b)/ -- -- 127,020 1,121,998 ----------------------------------------------------------------------------------------------------------- Automatic conversion of Class B shares to Class A shares: Class A 86,277 976,731 169,160 1,680,849 ----------------------------------------------------------------------------------------------------------- Class B (86,707) (976,731) (170,086) (1,680,849) ----------------------------------------------------------------------------------------------------------- Reacquired:/(e)/ Class A (840,640) (9,510,573) (2,363,667) (23,262,195) ----------------------------------------------------------------------------------------------------------- Class B (248,123) (2,791,504) (477,775) (4,653,991) ----------------------------------------------------------------------------------------------------------- Class C (445,970) (4,892,320) (1,576,001) (15,078,644) ----------------------------------------------------------------------------------------------------------- Class R/(b)/ (24,644) (277,064) (37,343) (371,198) ----------------------------------------------------------------------------------------------------------- Investor Class (551,385) (6,261,167) (2,585,961) (25,621,003) ----------------------------------------------------------------------------------------------------------- Institutional Class/(c)/ (38,091) (432,414) (16,410) (166,035) ----------------------------------------------------------------------------------------------------------- 3,747,082 $42,495,844 11,618,278 $100,889,716 -----------------------------------------------------------------------------------------------------------
/(a)/There is one entity that is a record owner of more than 5% of the outstanding shares of the Fund and it owns 11% of the outstanding shares of the Fund. ADI has an agreement with this entity to sell Fund shares. The Fund, AIM and/or AIM affiliates may make payments to this entity, which are considered to be related to the Fund, for providing services to the Fund, AIM and/or 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 this entity are also owned beneficially. 18% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are mutual funds advised by AIM. /(b)/Class R shares commenced sales on November 24, 2003. /(c)/Institutional Class shares commenced sales on April 30, 2004. /(d)/As of the opening of business on November 24, 2003, the AIM International Core Equity Fund (formerly INVESCO International Core Equity Fund) acquired all of the net assets of AIM International Core Equity Fund pursuant to a plan of reorganization approved by the Trustees of the Fund on June 9, 2003 and AIM International Core Equity Fund shareholders on October 28, 2003. The acquisition was accomplished by a tax-free exchange of 12,002,001 shares of the Fund for 7,980,438 shares of AIM International Core Equity Fund outstanding as of the close of business on November 21, 2003. AIM International Core Equity Fund's net assets at that date of $105,070,917, including $15,892,958 of unrealized appreciation, were combined with those of the Fund. The aggregate net assets of the Fund immediately before the acquisition were $59,505,921. /(e)/Amount is net of redemption fees of $2,541, $985, $1,433, $88, $1,796 and $1,032 for Class A, Class B, Class C, Class R, Investor Class and Institutional Class shares, respectively, for the six months ended April 30, 2005 and $1,154, $454, $725, $32, $1,030 and $86 for Class A, Class B, Class C, Class R, Investor Class and Institutional Class shares, respectively, for the year ended October 31, 2004. F-11 NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A ---------------------------------------------------- MARCH 28, SIX MONTHS YEAR ENDED 2002 (DATE ENDED OCTOBER 31, SALES COMMENCED APRIL 30, -------------------- TO OCTOBER 31, 2005 2004 2003 2002 ----------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.52 $ 8.74 $ 7.31 $ 8.96 ----------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income 0.08 0.09/(a)/ 0.07/(a)/ 0.01/(b)/ ----------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 0.65 1.72 1.39 (1.66) ----------------------------------------------------------------------------------------------------------------------------- Total from investment operations 0.73 1.81 1.46 (1.65) ----------------------------------------------------------------------------------------------------------------------------- Less dividends from net investment income (0.08) (0.03) (0.03) -- ----------------------------------------------------------------------------------------------------------------------------- Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 ----------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.17 $ 10.52 $ 8.74 $ 7.31 ----------------------------------------------------------------------------------------------------------------------------- Total return/(c)/ 6.90% 20.78% 19.96% (18.42)% ----------------------------------------------------------------------------------------------------------------------------- Ratios/supplemental data: Net assets, end of period (000s omitted) $74,543 $60,603 $2,033 $ 2,944 ----------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets 1.50%/(d)/ 1.84%/(e)/ 1.87% 1.48%/(f)/ ----------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets 1.54%/(d)/ 0.94% 0.91% 0.47%/(f)/ ----------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate/(g)/ 9% 69% 51% 44% -----------------------------------------------------------------------------------------------------------------------------
/(a)/Calculated using average shares outstanding. /(b)/The net investment income per share was calculated after permanent book tax differences, such as corporate actions which were reclassified from accumulated net investment income to paid in capital. Had net investment income per share been calculated using the current method, which is before reclassification of net operating losses, net investment income per share would have been $0.00. /(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)/Ratios are annualized and based on average daily net assets of $69,026,037. /(e)/After fee waivers and/or expense reimbursements. Ratio of expense to average net assets prior to fee waivers and/or expense reimbursements was 1.86%. /(f)/Annualized. /(g)/Not annualized for periods less than one year. F-12 NOTE 11--FINANCIAL HIGHLIGHTS-(continued)
CLASS B --------------------------------------------------- MARCH 28, SIX MONTHS YEAR ENDED 2002 (DATE ENDED OCTOBER 31, SALES COMMENCED APRIL 30, ------------------- TO OCTOBER 31, 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.43 $ 8.72 $ 7.31 $ 8.96 ------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.04 0.02/(a)/ 0.00/(a)/ (0.01)/(a)(b)/ ------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 0.65 1.71 1.43 (1.64) ------------------------------------------------------------------------------------------------------------------------------- Total from investment operations 0.69 1.73 1.43 (1.65) ------------------------------------------------------------------------------------------------------------------------------- Less dividends from net investment income (0.01) (0.02) (0.02) -- ------------------------------------------------------------------------------------------------------------------------------- Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 ------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.11 $ 10.43 $ 8.72 $ 7.31 ------------------------------------------------------------------------------------------------------------------------------- Total return/(c)/ 6.59% 19.92% 19.50% (18.42)% ------------------------------------------------------------------------------------------------------------------------------- Ratios/supplemental data: Net assets, end of period (000s omitted) $28,253 $23,812 $ 573 $ 84 ------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets: With fee waivers and /or expense reimbursements 2.15%/(d)/ 2.53% 2.75% 2.60%/(e)/ ------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and /or expense reimbursements 2.15%/(d)/ 2.57% 4.13% 2.60%/(e)/ ------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets 0.89%/(d)/ 0.25% 0.03% (0.14)%/(e)/ ------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate/(f)/ 9% 69% 51% 44% -------------------------------------------------------------------------------------------------------------------------------
/(a)/Calculated using average shares outstanding. /(b)/The net investment income per share was calculated after permanent book tax differences, such as net operating losses which were reclassified from accumulated net investment income to paid in capital. Had net investment income per share been calculated using the current method, which is before reclassification of net operating losses, net investment income per share would have been $(0.01). /(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)/Ratios are annualized and based on average daily net assets of $26,826,477. /(e)/Annualized. /(f)/Not annualized for periods less than one year. F-13 NOTE 11--FINANCIAL HIGHLIGHTS-(continued)
CLASS C ----------------------------------------------------- SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, -------------------------------------- 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.22 $ 8.53 $ 7.16 $ 8.06 ------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.05 0.04/(a)/ 0.00/(a)/ (0.02)/(b)/ ------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 0.63 1.67 1.37 (0.88) ------------------------------------------------------------------------------------------------------------------------- Total from investment operations 0.68 1.71 1.37 (0.90) ------------------------------------------------------------------------------------------------------------------------- Less distributions: Dividends from net investment income (0.02) (0.02) -- -- ------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains -- -- -- -- ------------------------------------------------------------------------------------------------------------------------- Total distributions (0.02) (0.02) -- -- ------------------------------------------------------------------------------------------------------------------------- Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.88 $ 10.22 $ 8.53 $ 7.16 ------------------------------------------------------------------------------------------------------------------------- Total return/(c)/ 6.64% 20.13% 19.13% (11.17)% ------------------------------------------------------------------------------------------------------------------------- Ratios/supplemental data: Net assets, end of period (000s omitted) $37,923 $36,490 $2,608 $ 1,115 ------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets: With fee waivers and /or expense reimbursements 2.15%/(d)/ 2.41% 2.75% 2.75% ------------------------------------------------------------------------------------------------------------------------- Without fee waivers and /or expense reimbursements 2.15%/(d)/ 2.46% 4.14% 3.52% ------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets 0.89%/(d)/ 0.37% 0.03% (0.43)% ------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate/(f)/ 9% 69% 51% 44% -------------------------------------------------------------------------------------------------------------------------
------------------------- FEBRUARY 14, 2000 (DATE SALES COMMENCED -------- TO OCTOBER 31, 2001 2000 ---------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.14 $12.06 ---------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.02)/(b)/ (0.04)/(a)(b)/ ---------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) (2.12) (0.88) ---------------------------------------------------------------------------------------------------- Total from investment operations (2.14) (0.92) ---------------------------------------------------------------------------------------------------- Less distributions: Dividends from net investment income (0.00) -- ---------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.94) -- ---------------------------------------------------------------------------------------------------- Total distributions (0.94) -- ---------------------------------------------------------------------------------------------------- Redemption fees added to shares of beneficial interest 0.00 0.00 ---------------------------------------------------------------------------------------------------- Net asset value, end of period $ 8.06 $11.14 ---------------------------------------------------------------------------------------------------- Total return/(c)/ (20.75)% (7.63)% ---------------------------------------------------------------------------------------------------- Ratios/supplemental data: Net assets, end of period (000s omitted) $ 1,272 $1,082 ---------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets: With fee waivers and /or expense reimbursements 2.76% 2.47%/(e)/ ---------------------------------------------------------------------------------------------------- Without fee waivers and /or expense reimbursements 3.02% 2.47%/(e)/ ---------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets (0.62)% (0.56)%/(e)/ ---------------------------------------------------------------------------------------------------- Portfolio turnover rate/(f)/ 54% 59% ----------------------------------------------------------------------------------------------------
/(a)/Calculated using average shares outstanding. /(b)/The net investment income (loss) per share was calculated after permanent book tax differences, such as net operating losses which were reclassified from accumulated net investment income (loss) to paid in capital. Had net investment income (loss) per share been calculated using the current method, which is before reclassification of net operating losses, net investment income (loss) per share would have been $(0.03), $(0.04) and $(0.04) for the years ended 2002, 2001 and 2000, respectively. /(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)/Ratios are annualized and based on average daily net assets of $38,434,176. /(e)/Annualized. /(f)/Not annualized for periods less than one year. F-14 NOTE 11--FINANCIAL HIGHLIGHTS-(continued)
---------------------------- SIX MONTHS ENDED APRIL 30, ------------- 2005 2004 ------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 10.64 $ 8.83 ------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income (loss) 0.09 0.09/(a)/ ------------------------------------------------------------------------------------------------ Net gains (losses) on securities (both realized and unrealized) 0.65 1.75 ------------------------------------------------------------------------------------------------ Total from investment operations 0.74 1.84 ------------------------------------------------------------------------------------------------ Less distributions: Dividends from net investment income (0.08) (0.03) ------------------------------------------------------------------------------------------------ Distributions from net realized gains -- -- ------------------------------------------------------------------------------------------------ Total distributions (0.08) (0.03) ------------------------------------------------------------------------------------------------ Redemption fees added to shares of beneficial interest 0.00 0.00 ------------------------------------------------------------------------------------------------ Net asset value, end of period $ 11.30 $ 10.64 ------------------------------------------------------------------------------------------------ Total return/(c)/ 6.92% 20.84% ------------------------------------------------------------------------------------------------ Ratios/supplemental data: Net assets, end of period (000s omitted) $48,687 $44,345 ------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets 1.40%/(d)/ 1.84%/(e)/ ------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average net assets 1.64%/(d)/ 0.94% ------------------------------------------------------------------------------------------------ Portfolio turnover rate/(f)/ 9% 69% ------------------------------------------------------------------------------------------------
INVESTOR CLASS ------------------------------------------------ YEAR ENDED OCTOBER 31, ------------------------------------------------ 2003 2002 2001 2000 ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 7.35 $ 8.17 $ 11.16 $ 11.23 ------------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income (loss) 0.06/(a)/ 0.05/(b)/ 0.03/(b)/ (0.01)/(b)/ ------------------------------------------------------------------------------------------------------------------------ Net gains (losses) on securities (both realized and unrealized) 1.44 (0.87) (2.07) 0.27 ------------------------------------------------------------------------------------------------------------------------ Total from investment operations 1.50 (0.82) (2.04) 0.26 ------------------------------------------------------------------------------------------------------------------------ Less distributions: Dividends from net investment income (0.02) -- (0.01) (0.05) ------------------------------------------------------------------------------------------------------------------------ Distributions from net realized gains -- -- (0.94) (0.28) ------------------------------------------------------------------------------------------------------------------------ Total distributions (0.02) -- (0.95) (0.33) ------------------------------------------------------------------------------------------------------------------------ Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 ------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 8.83 $ 7.35 $ 8.17 $ 11.16 ------------------------------------------------------------------------------------------------------------------------ Total return/(c)/ 20.42% (10.04)% (19.74)% 2.66% ------------------------------------------------------------------------------------------------------------------------ Ratios/supplemental data: Net assets, end of period (000s omitted) $46,920 $40,620 $46,562 $61,708 ------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets 2.00%/(e)/ 1.99% 1.89% 2.04% ------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average net assets 0.78% 0.42% 0.12% (0.37)% ------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate/(f)/ 51% 44% 54% 59% ------------------------------------------------------------------------------------------------------------------------
/(a)/Calculated using average shares outstanding. /(b)/The net investment income (loss) per share was calculated after permanent book tax differences, such as net operating losses which were reclassified from accumulated net investment income (loss) to paid in capital. Had net investment income (loss) per share been calculated using the current method, which is before reclassification of net operating losses, net investment income (loss) per share would have been $0.04, $0.01 and $(0.04) for the years ended 2002, 2001 and 2000, respectively. /(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. /(d)/Ratios are annualized and based on average daily net assets of $48,383,901. /(e)/After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 1.89% and 2.26% for the years ended 2004 and 2003, respectively. /(f)/Not annualized for periods less than one year. F-15 NOTE 11--FINANCIAL HIGHLIGHTS-(continued)
CLASS R -------------------------- NOVEMBER 24, SIX MONTHS 2003 (DATE ENDED SALES COMMENCED) APRIL 30, TO OCTOBER 31, 2005 2004 --------------------------------------------------------------------------------------------- Net asset value, beginning of period $10.51 $ 8.90 --------------------------------------------------------------------------------------------- Income from investment operations: Net investment income 0.07 0.08/(a)/ --------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 0.65 1.56 --------------------------------------------------------------------------------------------- Total from investment operations 0.72 1.64 --------------------------------------------------------------------------------------------- Less dividends from net investment income (0.07) (0.03) --------------------------------------------------------------------------------------------- Redemption fees added to shares of beneficial interest 0.00 0.00 --------------------------------------------------------------------------------------------- Net asset value, end of period $11.16 $10.51 --------------------------------------------------------------------------------------------- Total return/(b)/ 6.84% 18.49% --------------------------------------------------------------------------------------------- Ratios/supplemental data: Net assets, end of period (000s omitted) $2,547 $2,118 --------------------------------------------------------------------------------------------- Ratio of expenses to average net assets 1.65%/(c)/ 1.91%/(d)(e)/ --------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets 1.39%/(c)/ 0.87%/(d)/ --------------------------------------------------------------------------------------------- Portfolio turnover rate/(f)/ 9% 69% ---------------------------------------------------------------------------------------------
/(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. Not annualized for periods less than one year. /(c)/Ratios are annualized and based on average daily net assets of $2,426,776. /(d)/Annualized. /(e)/After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 1.93%. /(f)/Not annualized for periods less than one year.
INSTITUTIONAL CLASS -------------------------- APRIL 30, SIX MONTHS 2004 (DATE ENDED SALES COMMENCED) APRIL 30, TO OCTOBER 31, 2005 2004 ------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 10.56 $ 9.78 ------------------------------------------------------------------------------------------ Income from investment operations: Net investment income 0.10 0.09/(a)/ ------------------------------------------------------------------------------------------ Net gains on securities (both realized and unrealized) 0.67 0.69 ------------------------------------------------------------------------------------------ Total from investment operations 0.77 0.78 ------------------------------------------------------------------------------------------ Less dividends from net investment income (0.12) -- ------------------------------------------------------------------------------------------ Redemption fees added to shares of beneficial interest 0.00 0.00 ------------------------------------------------------------------------------------------ Net asset value, end of period $ 11.21 $ 10.56 ------------------------------------------------------------------------------------------ Total return/(b)/ 7.26% 7.97% ------------------------------------------------------------------------------------------ Ratios/supplemental data: Net assets, end of period (000s omitted) $45,370 $16,421 ------------------------------------------------------------------------------------------ Ratio of expenses to average net assets 0.96%/(c)/ 1.07%/(d)/ ------------------------------------------------------------------------------------------ Ratio of net investment income to average net assets 2.08%/(c)/ 1.71%/(d)/ ------------------------------------------------------------------------------------------ Portfolio turnover rate/(e)/ 9% 69% ------------------------------------------------------------------------------------------
/(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. Not annualized for periods less than one year. /(c)/Ratios are annualized and based on average daily net assets of $31,269,958. /(d)/Annualized. /(e)/Not annualized for periods less than one year. F-16 NOTE 12--LEGAL PROCEEDINGS Terms used in the Legal Proceedings Note are defined terms solely for the purpose of this note. SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment advisor to certain AIM Funds), A I M Advisors, Inc. ("AIM") (the Fund's investment advisor) and A I M Distributors, Inc. ("ADI") (the distributor of the retail AIM Funds) reached final settlements with certain regulators, including, among others, the Securities and Exchange Commission ("SEC"), the New York Attorney General ("NYAG") and the Colorado Attorney General ("COAG"), to resolve civil enforcement actions and/or investigations related to market timing activity and related issues in the AIM Funds, including those formerly advised by IFG. As part of the settlements, IFG agreed to pay a total of $325 million (including $110 million in civil penalties). Additionally, AIM and ADI agreed to pay a total of $50 million (including $30 million in civil penalties). These settlement funds will be made available for distribution to the shareholders of the applicable AIM Funds that were harmed by market timing activity, and may (or may not) increase as a result of contributions from third parties who reach final settlements with the SEC or other regulators to resolve allegations of market timing and/or late trading. The settlement funds will be distributed in accordance with a methodology to be determined by AIM's independent distribution consultant, in consultation with AIM and the independent trustees of the AIM Funds and acceptable to the staff of the SEC. As the methodology is unknown at the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the distribution of these settlement funds may have on the Fund or whether such distribution will have an impact on the Fund's financial statements in the future. At the request of the trustees of the AIM Funds, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and AIM, has agreed to reimburse expenses incurred by the AIM Funds related to market timing matters. REGULATORY INQUIRIES AND PENDING LITIGATION IFG, AIM, ADI and/or related entities and individuals have received inquiries from numerous regulators in the form of subpoenas or other oral or written requests for information and/or documents related to one or more of the following issues, some of which concern one or more AIM Funds: market timing activity, late trading, fair value pricing, excessive or improper advisory and/or distribution fees, mutual fund sales practices, including revenue sharing and directed-brokerage arrangements, investments in securities of other registered investment companies, contractual plans, issues related to Section 529 college savings plans and procedures for locating lost securityholders. IFG, AIM and ADI are providing full cooperation with respect to these inquiries. As described more fully below, the AIM Funds, IFG, AIM, ADI and/or related entities and individuals are defendants in numerous civil lawsuits related to one or more of these issues. Regulatory actions and/or additional civil lawsuits related to these or other issues may be filed against the AIM Funds, IFG, AIM and/or related entities and individuals in the future. On April 12, 2005, the Attorney General of the State of West Virginia ("WVAG") filed civil proceedings against AIM, IFG and ADI, as well as numerous unrelated mutual fund complexes and financial institutions. None of the AIM Funds has been named as a defendant in these proceedings. The WVAG complaint, filed in the Circuit Court of Marshall County, West Virginia [Civil Action No. 05-C-81], alleges, in substance, that AIM, IFG and ADI engaged in unfair competition and/or unfair or deceptive trade practices by failing to disclose in the prospectuses for the AIM Funds, including those formerly advised by IFG, that they had entered into certain arrangements permitting market timing of such Funds. As a result of the foregoing, the WVAG alleges violations of W. Va. Code (S) 46A-1-101, et seq. (the West Virginia Consumer Credit and Protection Act). The WVAG complaint is seeking, among other things, injunctive relief, civil monetary penalties and a writ of quo warranto against the defendants. If AIM is unsuccessful in its defense of the WVAG proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could affect the ability of AIM or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any registered investment company, including the Fund. The Fund has been informed by AIM that, if these results occur, AIM will seek exemptive relief from the SEC to permit it to continue to serve as the Fund's investment advisor. There is no assurance that such exemptive relief will be granted. Civil lawsuits, including purported class action and shareholder derivative suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or related entities and individuals, depending on the lawsuit, alleging: . that the defendants permitted improper market timing and related issues in the AIM Funds; . that certain AIM Funds inadequately employed fair value pricing; . that the defendants charged excessive advisory and/or distribution fees and failed to pass on to shareholders the perceived savings generated by economies of scale and that the defendants adopted unlawful distribution plans; . that the defendants breached their fiduciary duties by charging distribution fees while funds and/or specific share classes were closed generally to new investors and/or while other share classes of the same fund were not charged the same distribution fees; . that the defendants improperly used the assets of the AIM Funds to pay brokers to aggressively promote the sale of the AIM Funds over other mutual funds and that the defendants concealed such payments from investors by disguising them as brokerage commissions; and . that the defendants breached their fiduciary duties by failing to ensure that the AIM Funds participated in class action settlements in which the AIM Funds were eligible to participate. These lawsuits allege as theories of recovery, depending on the lawsuit, violations of various provisions of the Federal and state securities laws and ERISA, negligence, breach of fiduciary duty and/or breach of contract. These lawsuits seek remedies that include, depending on the lawsuit, damages, restitution, injunctive relief, imposition of a constructive trust, removal of certain directors and/or employees, various corrective measures under ERISA, rescission of certain AIM Funds' advisory agreements and/or distribution plans and recovery of all fees paid, an accounting of all fund-related fees, commissions and soft dollar payments, restitution of all commissions and fees paid, and prospective relief in the form of reduced fees. F-17 NOTE 12--LEGAL PROCEEDINGS-(continued) At the present time, management of AIM and the Fund are unable to estimate the impact, if any, that the outcome of the Regulatory Inquiries and Pending Litigation described above may have on AIM, ADI or the Fund. * * * * * * * * * * * * * * * * As a result of the matters discussed above, investors in the AIM Funds might react by redeeming their investments. This might require the AIM Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AIM Funds. F-18 OTHER INFORMATION TRUSTEES AND OFFICERS
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND Bob R. Baker Robert H. Graham 11 Greenway Plaza President Suite 100 Frank S. Bayley Houston, TX 77046-1173 Mark H. Williamson James T. Bunch Executive Vice President INVESTMENT ADVISOR A I M Advisors, Inc. Bruce L. Crockett Lisa O. Brinkley 11 Greenway Plaza Chair Senior Vice President and Chief Compliance Officer Suite 100 Houston, TX 77046-1173 Albert R. Dowden Russell C. Burk Senior Vice President (Senior Officer) SUB-ADVISOR Edward K. Dunn, Jr. INVESCO Global Asset Management (N.A.), Inc. Kevin M. Carome One Midtown Plaza Jack M. Fields Senior Vice President, Secretary and Chief Legal Officer 1360 Peachtree Street N.E. Suite 100 Carl Frischling Sidney M. Dilgren Atlanta, GA 30309 Vice President and Treasurer Robert H. Graham TRANSFER AGENT Robert G. Alley AIM Investment Services, Inc. Gerald J. Lewis Vice President P.O. Box 4739 Houston, TX 77210-4739 Prema Mathai-Davis J. Philip Ferguson Vice President CUSTODIAN Lewis F. Pennock State Street Bank and Trust Company Karen Dunn Kelley 225 Franklin Street Ruth H. Quigley Vice President Boston, MA 02110-2801 Larry Soll COUNSEL TO THE FUND Ballard Spahr Mark H. Williamson Andrews & Ingersoll, LLP 1735 Market Street, 51st Floor Philadelphia, PA 19103-7599 COUNSEL TO THE INDEPENDENT TRUSTEES Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714 DISTRIBUTOR A I M Distributors, Inc. 11 Greenway Plaza Suite 100 Houston, TX 77046-1173
Domestic Equity Sector Equity AIM Aggressive Growth Fund AIM Advantage Health Sciences Fund/1/ AIM Basic Balanced Fund* AIM Energy Fund/1/ AIM Basic Value Fund AIM Financial Services Fund/1/ AIM Blue Chip Fund AIM Global Health Care Fund AIM Capital Development Fund AIM Global Real Estate Fund AIM Charter Fund AIM Gold & Precious Metals Fund/1/ AIM Constellation Fund AIM Leisure Fund/1/ AIM Diversified Dividend Fund AIM Multi-Sector Fund/1/ AIM Dynamics Fund/1/ AIM Real Estate Fund/7/ AIM Large Cap Basic Value Fund AIM Technology Fund/1/ AIM Large Cap Growth Fund AIM Utilities Fund/1/ AIM Mid Cap Basic Value Fund AIM Mid Cap Core Equity Fund/2/ Fixed Income AIM Mid Cap Growth Fund AIM Opportunities I Fund TAXABLE AIM Opportunities II Fund AIM Opportunities III Fund AIM Floating Rate Fund AIM Premier Equity Fund AIM High Yield Fund AIM S&P 500 Index Fund/1/ AIM Income Fund AIM Select Equity Fund AIM Intermediate Government Fund AIM Small Cap Equity Fund/3/ AIM Limited Maturity Treasury Fund AIM Small Cap Growth Fund/4/ AIM Money Market Fund AIM Small Company Growth Fund/1/ AIM Short Term Bond Fund AIM Trimark Endeavor Fund AIM Total Return Bond Fund AIM Trimark Small Companies Fund Premier Portfolio AIM Weingarten Fund Premier U.S. Government Money Portfolio/1/ * Domestic equity and income fund TAX-FREE AIM High Income Municipal Fund International/Global Equity AIM Municipal Bond Fund AIM Tax-Exempt Cash Fund AIM Asia Pacific Growth Fund AIM Tax-Free Intermediate Fund AIM Developing Markets Fund Premier Tax-Exempt Portfolio AIM European Growth Fund AIM European Small Company Fund/5/ AIM Global Aggressive Growth Fund AIM Allocation Solutions AIM Global Equity Fund AIM Global Growth Fund AIM Conservative Allocation Fund AIM Global Value Fund AIM Growth Allocation Fund/8/ AIM International Core Equity Fund/1/ AIM Moderate Allocation Fund AIM International Growth Fund AIM Moderate Growth Allocation Fund AIM International Small Company Fund/6/ AIM Moderately Conservative AIM Trimark Fund Allocation Fund /1/The following name changes became effective October 15, 2004: INVESCO Advantage Health Sciences Fund to AIM Advantage Health Sciences Fund, INVESCO Dynamics Fund to AIM Dynamics Fund, INVESCO Energy Fund to AIM Energy Fund, INVESCO Financial Services Fund to AIM Financial Services Fund, INVESCO Gold & Precious Metals Fund to AIM Gold & Precious Metals Fund, INVESCO International Core Equity Fund to AIM International Core Equity Fund, INVESCO Leisure Fund to AIM Leisure Fund, INVESCO Mid-Cap Growth Fund to AIM Mid Cap Stock Fund, INVESCO Multi-Sector Fund to AIM Multi-Sector Fund, INVESCO S&P 500 Index Fund to AIM S&P 500 Index Fund, INVESCO Small Company Growth Fund to AIM Small Company Growth Fund, INVESCO Technology Fund to AIM Technology Fund, INVESCO U.S. Government Money Fund to Premier U.S. Government Money Portfolio, INVESCO Utilities Fund to AIM Utilities Fund. /2/As of end of business on February 27, 2004, AIM Mid Cap Core Equity Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. /3/Effective December 13, 2004, AIM Small Cap Equity Fund is open to all investors. /4/As of end of business on March 18, 2002, AIM Small Cap Growth Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. /5/As of end of business on March 28, 2005, AIM European Small Company Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. /6/Effective December 30, 2004, AIM International Emerging Growth Fund was renamed AIM International Small Company Fund. As of end of business on March 14, 2005, the Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. /7/As of end of business on April 29, 2005, AIM Real Estate Fund has limited public sales of its shares to certain investors. For more information on who may continue to invest in the Fund, please contact your financial advisor. /8/Effective April 29, 2005, AIM Aggressive Allocation Fund was renamed AIM Growth Allocation Fund. If used after July 20, 2005, this report must be accompanied by a Fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $131 billion in assets. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $375 billion in assets under management. Data as of March 31, 2005. -------------------------------------------------------------------------------- CONSIDER THE INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY. FOR THIS AND OTHER INFORMATION ABOUT AIM FUNDS, OBTAIN A PROSPECTUS FROM YOUR FINANCIAL ADVISOR AND READ IT CAREFULLY BEFORE INVESTING. -------------------------------------------------------------------------------- AIMinvestments.com I-ICE-SAR-1 A I M Distributors, Inc. [YOUR GOALS. OUR SOLUTIONS.] - REGISTERED TRADEMARK - Mutual Retirement Annuities College Separately Offshore Cash Funds Products Savings Managed Products Management Plans Accounts [AIM INVESTMENTS LOGO] - REGISTERED TRADEMARK - ITEM 2. CODE OF ETHICS. There were no amendments to the Code of Ethics (the "Code") that applies to the Registrant's Principal Executive Officer ("PEO") and Principal Financial Officer ("PFO") 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. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. 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 INVESTMENT 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 June 21, 2005, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the Principal Executive Officer ("PEO") and Principal Financial Officer ("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 June 21, 2005, 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 the report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 12. EXHIBITS. 12(a) (1) Not applicable. 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 International Mutual Funds By: /s/ Robert H. Graham ---------------------------------------- Robert H. Graham Principal Executive Officer Date: July 7, 2005 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/ Robert H. Graham ---------------------------------------- Robert H. Graham Principal Executive Officer Date: July 7, 2005 By: /s/ Sidney M. Dilgren ---------------------------------------- Sidney M. Dilgren Principal Financial Officer Date: July 7, 2005 EXHIBIT INDEX 12(a) (1) Not applicable. 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.