-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Er1RuMKkmhYbt23plh+TfGL+/16zKwzeTTqNc2NLvxj/hrqoBvl/AZECePjshJn4 9NnI7DeRN/QoQ6ofo53EOA== 0000950129-98-002881.txt : 19980703 0000950129-98-002881.hdr.sgml : 19980703 ACCESSION NUMBER: 0000950129-98-002881 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980430 FILED AS OF DATE: 19980702 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIM INTERNATIONAL FUNDS INC CENTRAL INDEX KEY: 0000880859 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 760352823 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06463 FILM NUMBER: 98660060 BUSINESS ADDRESS: STREET 1: 11 GREENWAY PLAZA STE 1919 CITY: HOUSTON STATE: TX ZIP: 77046 BUSINESS PHONE: 7136261919 MAIL ADDRESS: STREET 1: AIM INTERNATIONAL FUNDS INC STREET 2: 11 GREENWAY PLAZA SUITE 1919 CITY: HOUSTON STATE: TX ZIP: 77046 N-30D 1 AIF AIM EUROPEAN DEVELOPMENT FUND SEMI-ANNUAL RPT 1 [AIM LOGO AIM EUROPEAN APPEARS HERE] DEVELOPMENT FUND SEMIANNUAL REPORT APRIL 30, 1998 2 ------------------------------------ AIM EUROPEAN DEVELOPMENT FUND For shareholders who seek long-term growth of capital. The Fund invests in a diversified portfolio of equity securities of companies located in Europe with strong earnings momentum. ------------------------------------ ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT: o AIM European Development Fund's performance figures are historical and reflect reinvestment of all distributions and changes in net asset value. Unless otherwise indicated, the Fund's performance is computed without a sales charge. o When sales charges are included in performance figures, Class A share performance reflects the maximum 5.50% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. The performance of the Fund's Class B and Class C shares will differ from that of Class A shares due to differences in sales charge structure and Fund expenses. o Because the Fund's Class A, B, and C shares have been offered for less than one year (since 11/3/97), all total return figures reflect cumulative total returns that have not been annualized. o The Fund's investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. o Past performance cannot guarantee comparable future results. o International investing presents certain risks not associated with investing solely in the U.S. These include risks relating to fluctuations in the value of the U.S. dollar relative to the value 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. o The Fund's portfolio composition is subject to change, and there is no assurance the Fund will continue to hold any particular security. ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT: o Morgan Stanley Capital International (MSCI) Europe Index is a group of unmanaged European securities tracked by Morgan Stanley Capital International. o An investment cannot be made in any index listed. Unless otherwise indicated, index results include reinvested dividends and do not reflect sales charges. MUTUAL FUNDS, ANNUITIES, AND OTHER INVESTMENTS ARE NOT INSURED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY; ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK OR ANY AFFILIATE; AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. This report may be distributed only to current shareholders or to persons who have received a current prospectus of the Fund. 3 The Chairman's Letter Dear Fellow Shareholder: Last October, equity markets worldwide had just been shaken by the currency crisis in Southeast Asia. By the April 30, [PHOTO OF 1998, end of this reporting period, most markets had Charles T. recovered nicely, with domestic equities reaching new highs Bauer, and European markets outdoing even the U.S.'s heady pace. Chairman of Only Asian markets remained in the doldrums. Bonds have the Board of turned in a solid performance with generous real returns, THE FUND though not as spectacular as some had predicted when the APPEARS HERE] Asian crisis first broke. However, by the close of this reporting period, many market participants were uneasy. Some participants fretted about signs of speculative fever, particularly in U.S. stock markets, where equity prices continued to rise despite evidence that earnings growth, especially for larger companies, had slowed considerably. The growth of European markets also exceeded everyone's expectations, and some wondered how long the rise could continue. All were aware that the Asian story was not yet completed, and no one was certain how serious its ultimate impact would be. Of course, bull markets do end, and markets became less ebullient shortly after this reporting period closed. For investors, the best course is to remain realistic and ready. A well-diversified portfolio is still one of the most effective tools for coping with shifts in a market's direction because different asset classes and different national markets tend to move independently of one another. Of course, your financial consultant remains your best source of information about how to allocate your investments based on your particular goals and situation. AIM FURTHER DIVERSIFIES ITS OFFERINGS Shortly after the close of this reporting period, AIM broadened its offerings to shareholders through the addition of the GT Global group of mutual funds. During the next few months you will be receiving more details about this transaction and the products it adds to The AIM Family of Funds--Registered Trademark--. In addition to making a more varied group of investments available to our shareholders, this transaction helps strengthen AIM's position as a major participant in the money-management industry worldwide. Such strength will enable us to continue expanding both the scope of our fund offerings and our menu of services for our shareholders. YOUR FUND MANAGERS COMMENT On the pages that follow, the managers of your AIM Fund discuss how the Fund performed during the period covered by this report and give their near-term market outlook. We hope you will find their discussion informative. We are pleased to send you this report on your fund. If you have any questions or comments, please contact our Client Services department at 800-959-4246 or visit our Web site at www.aimfunds.com. You can access information about your account on our Web site and also on our automated AIM Investor Line, 800-246-5463. Thank you for your continued participation in The AIM Family of Funds--Registered Trademark--. Sincerely, /s/ CHARLES T. BAUER Charles T. Bauer Chairman ------------------------------------ The growth of European markets also exceeded everyone's expectations, and some wondered how long the rise could continue. ------------------------------------ 4 The Managers' Overview NEW FUND DELIVERS STRONG OPENING PERFORMANCE A roundtable discussion with the Fund management team for AIM European Development Fund for the period ended April 30, 1998. - -------------------------------------------------------------------------------- Q. AIM EUROPEAN DEVELOPMENT FUND BEGAN OPERATIONS ON NOVEMBER 3, 1997. HOW DID IT PERFORM DURING ITS FIRST FIVE MONTHS? A. The Fund has produced superior results in the short time since its inception. At the end of the reporting period, cumulative total return was 36.60% for Class A shares; Class B and C shares each achieved a cumulative total return of 36.10%. In comparison, the Morgan Stanley Capital International Europe Index produced a total return of 26.26% for the same period. ================================================================================ CUMULATIVE TOTAL RETURNS - -------------------------------------------------------------------------------- For the period 11/3/97 to 4/30/98 36.60% 26.26% AIM EUROPEAN DEVELOPMENT MSCI FUND, A SHARES EUROPE INDEX ================================================================================ Q. WHAT WERE EUROPEAN MARKETS LIKE DURING THE REPORTING PERIOD? A. The European markets have been very strong. The prospect of European Economic and Monetary Union, or EMU, was the push that got the markets rolling. The EMU has forced governments to meet strict budgetary guidelines and to improve finances. As a result, growth has increased, interest rates have dropped, and inflation has dipped dramatically. Eleven countries are expected to join EMU in January 1999. Specifically, we've identified four fundamental long-term themes that have contributed to the growth of the markets for the last year and a half: privatization, increased economic freedom in Eastern Europe, corporate restructuring, and the broadening of the equity markets. Many state-run companies and industries are moving into private hands, introducing a new level of competition to Europe. In Eastern Europe, Western management and accounting procedures are slowly being adopted. The changes in the region have benefited Western Europe as well. With more than 300 million people, Eastern Europe is becoming a production center for Western companies and serving as a market for their goods. On the corporate side, a wave of restructuring is making companies leaner and more globally competitive. The results are already visible--earnings growth was extremely strong during the reporting period. And finally, the stock markets themselves are getting broader, larger, and more liquid. There is a greater array of choices for investors now, especially in the small-capitalization arena. Q. WAS THE FUND ABLE TO INVEST IN ALL OF THESE OPPORTUNITIES? A. We've found opportunities in each of the four themes. One holding that shows the effects of privatization is Magyar Tavkozlesis, a Hungarian telephone company that has experienced excellent earnings growth since its recent privatization. In Eastern Europe, our strategy has been to focus on Western Europe companies that are benefiting from market exposure to Eastern Europe. For instance, Hartwall OY A.B., a Finnish brewery has found a new market in its eastern neighbors. Corporate restructurings have benefited a number of the holdings in the portfolio. For instance, the financial industry in Europe has experienced a wave of mergers. Union Bank of Switzerland and Swiss Bank Corporation, two of the three key Swiss banks, recently merged to become one of the largest banks in the world. ------------------------------------ The prospect of European Economic and Monetary Union, or EMU, was the push that got the markets rolling. ------------------------------------ See important fund and index disclosures inside front cover. 2 5 The Managers' Overview One sign of the broadening equity markets is the recent opening of a new over-the-counter market in Germany--the Neuer Markt (New Market). That has given us access to small growth companies like SAP A.G., a German software company. Q. DID THE ASIAN FINANCIAL CRISIS AFFECT EUROPE SIGNIFICANTLY? A. For much of the fourth quarter, investors around the world watched warily to see the global effects of events in the Asian economies. Rapid economic expansion in that region had resulted in an overheating that, in some Asian countries--such as Indonesia--led to economic meltdown. While there certainly were European companies that felt the heat from Asia, in general, the slowing effect caused by Asia was more than offset by faster than expected growth in Europe during the first quarter of 1998. ================================================================================ FOUR FORCES DRIVING GROWTH IN EUROPE 1. PRIVATIZATION OF STATE-RUN COMPANIES. 2. MORE ECONOMIC FREEDOM IN EASTERN EUROPE. 3. CORPORATE RESTRUCTURING. 4. EXPANDING EQUITY MARKETS. ================================================================================ Q. HOW DO YOU SELECT STOCKS FOR THE PORTFOLIO? A. We follow an earnings momentum discipline. Rather than making "big picture" forecasts for entire countries, we focus on selecting stocks of individual companies with increasing earnings. Even though Europe is economically "developed," the markets themselves are still developing, especially in the way information is disseminated and used. In this regard, they are like the U.S. markets of the 1970s. Our style of analysis allows us to react quickly to changes in the markets and to flows of information about companies. Q. THE FUND CAN SELECT STOCKS OF ANY CAPITALIZATION SIZE. WHAT HAS YOUR STRATEGY BEEN? A. The Fund is able to invest broadly because it is an all-capitalization fund. The four themes we've identified as growth engines have created opportunities at every capitalization size, and we've been able to take advantage of that. At one end of the spectrum, the Fund can invest in very large-cap stocks of companies going through restructuring and privatization. For instance, Porsche A.G., one of the holdings in the portfolio as of April 30, 1998, is a great example of a large company that saw increases in earnings and growth as a result of restructuring. On the small-cap end of the spectrum, there are more and more interesting growth opportunities. In fact, 10% of the portfolio is in stocks with less than $250 million market capitalization. The entre preneurial spirit has hit Europe, and the results can be seen in places like the fast-food side of the restaurant industry. Telepizza S.A., a small pizza delivery service in Spain, and Leon de Bruxelles S.A., a restaurant serving fast-food mussels in France, were two examples in the Fund's portfolio during the reporting period. Q. HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD? A. The Fund's diversified portfolio contained over 100 holdings from companies across Europe and across a variety of industries. Compared to the MSCI Europe Index, the Fund was overweighted in continental Europe and slightly underweighted in the UK. That's because we're seeing stronger earnings growth opportunities on the Continent due to restructurings and privatizations. France, in particular, has beaten analysts' expectations, and we continue to be overweighted there. As for sectors, technology is a favorite. The technology sector in Europe is not as developed as in the U.S., so there are many new and growing companies to choose from. In contrast, we're underweighted in commodity cyclicals, where earnings and growth are not as pronounced. Q. WERE THERE ANY PARTICULAR DISAPPOINTMENTS IN THE FUND? A. Eastern Europe, in general, did not perform as well as we had expected. For instance, Lukoil, a Russian oil company that we held in the portfolio for a time during the reporting period, brought in disappointing results. At the close of the reporting period, less than 5% of the Fund ================================================================================ MARKET CAPITALIZATION OF THE PORTFOLIO For the period ended 4/30/98, based on total net assets GREATER THAN $5 BILLION 31% LESS THAN $1 BILLION 38% BETWEEN $1 BILLION AND $5 BILLION 31% ================================================================================ Please keep in mind that the Fund's portfolio is subject to change and there is no assurance the Fund will continue to hold any particular security. See important fund and index disclosures inside front cover. 3 6 The Managers' Overview PORTFOLIO COMPOSITION As of 4/30/98, based on total net assets
==================================================================================================================================== TOP 10 EQUITY HOLDINGS TOP 10 COUNTRIES TOP 10 INDUSTRIES - ------------------------------------------------------------------------------------------------------------------------------------ 1. ARM Holdings PLC (UK) 1.46% 1. United Kingdom 17.65% 1. Computers (Software & Services) 10.43% 2. Telepizza, S.A. (Spain) 0.92 2. France 16.91 2. Services (Commercial & Consumer) 9.69 3. Autogrill S.p.A. (Italy) 0.92 3. Germany 10.09 3. Banks (Major Regional) 5.18 4. Societe Generale (France) 0.92 4. Italy 6.18 4. Telecommunications (Cellular/Wireless) 5.00 5. Danone (France) 0.91 5. Sweden 5.19 5. Services (Computer Systems) 4.57 6. Entra Data A.B. (Sweden) 0.91 6. Switzerland 5.13 6. Machinery (Diversified) 4.11 7. Nokian Renkaat Oyj (Finland) 0.91 7. Netherlands 4.81 7. Foods 2.89 8. Telecom Italia Mobile S.p.A. (Italy) 0.91 8. Spain 3.91 8. Restaurants 2.57 9. ADB-Gruppen Mandator A.B. (Sweden) 0.90 9. Finland 3.18 9. Auto Parts & Equipment 2.52 10. Pirelli S.p.A. (Italy) 0.90 10. Norway 2.92 10. Insurance (Multi-Line) 2.40 ====================================================================================================================================
Please keep in mind that the Fund's portfolio is subject to change and there is no assurance the Fund will continue to hold any particular security. was in Eastern Europe. Eastern Europe will probably continue to be fairly volatile, affected by political uncertainties and by the difficulties of implementing more efficient "Western"-style practices. Nevertheless, the region is clearly going to play an important role in the future of Europe. While our exposure is limited now, we are watching this area with great interest. Q. WHAT IS YOUR MARKET OUTLOOK? A. European equities had their best quarter in 10 years during the first quarter of 1998. That doesn't mean we can always expect such great results, but we don't think it's a flash in the pan, either. The four engines we've identified as driving forces in the European markets are long-term structural changes that have far-reaching effects. So we expect the European story to stay interesting for some time. Going forward, we expect to continue to find good growth at attractive prices, although the gap between U.S. and European valuations is closing. Another factor to consider is the launching of the EMU. Anticipation of the EMU has brought about many positive changes, and we believe the overall effect of the union will be positive. However, during the transition period the market could experience some uncertainty and volatility as the new system is tested. WHERE THE FUND MAY INVEST The Fund seeks companies of all sizes: small, medium and large market capitalizations, and may invest in 33 countries--including emerging and developing nations. Examples: NETHERLANDS UK GERMANY FRANCE NORWAY SWEDEN FINLAND ITALY AUSTRIA ROMANIA GREECE SPAIN PORTUGAL POLAND SWITZERLAND CZECH REPUBLIC See important fund and index disclosures inside front cover. 4 7 SCHEDULE OF INVESTMENTS April 30, 1998 (Unaudited)
MARKET SHARES VALUE FOREIGN STOCKS & OTHER EQUITY INTERESTS-86.10% BELGIUM-1.48% Creyf's N.V. (Services-Commercial & Consumer) 870 $ 205,049 - ------------------------------------------------------------- Van De Velde N.V. (Retail-Specialty-Apparel) 2,500 273,664 - ------------------------------------------------------------- 478,713 - ------------------------------------------------------------- CROATIA-0.81% Pliva DD (Health Care-Drugs-Major Pharmaceuticals) 14,500 262,450 - ------------------------------------------------------------- DENMARK-0.66% EDB Gruppen A/S (Services-Commercial & Consumer) 5,650 214,708 - ------------------------------------------------------------- FINLAND-3.18% Hartwall OY A.B. (Beverages-Alcoholic) 7,300 226,760 - ------------------------------------------------------------- Nokia Oyj A.B.-Class A (Communications Equipment) 3,240 217,368 - ------------------------------------------------------------- Nokian Renkaat Oyj (Auto Parts & Equipment) 5,070 293,546 - ------------------------------------------------------------- Tieto Corp.-Class B (Computers-Software & Services) 1,580 290,412 - ------------------------------------------------------------- 1,028,086 - ------------------------------------------------------------- FRANCE-16.91% Accor S.A. (Lodging-Hotels) 820 223,587 - ------------------------------------------------------------- Alcatel Alsthom (Manufacturing-Diversified) 1,450 268,966 - ------------------------------------------------------------- Altran Technologies, S.A. (Services-Commercial & Consumer) 1,350 215,380 - ------------------------------------------------------------- Banque Nationale de Paris (Banks-Major Regional) 2,430 204,960 - ------------------------------------------------------------- Cap Gemini Sogeti S.A. (Computer-Software & Services) 1,725 224,128 - ------------------------------------------------------------- Coflexip S.A. (Metal Fabricators) 1,720 244,081 - ------------------------------------------------------------- Compagnie Generale de Geophysique S.A. (Services-Commercial & Consumer)(a) 1,580 229,732 - ------------------------------------------------------------- Danone (Foods) 1,250 295,292 - ------------------------------------------------------------- Elf Aquitaine S.A. (Oil & Gas-Refining & Marketing) 1,650 216,579 - ------------------------------------------------------------- Equipements et Composants pour l'Industrie Automobile (Auto Parts & Equipment) 900 283,280 - ------------------------------------------------------------- Galeries Lafayette (Retail-Department Stores) 250 219,597 - ------------------------------------------------------------- Infogrames Entertainment S.A. (Computers-Software & Services)(a) 5,700 285,333 - ------------------------------------------------------------- Le Carbone-Lorraine (Housewares) 700 287,057 - ------------------------------------------------------------- Leon de Bruxelles (Restaurants)(a) 2,220 234,520 - ------------------------------------------------------------- Montupet (Auto Parts & Equipment) 700 238,263 - ------------------------------------------------------------- Pinault-Printemps-Redoute S.A. (Retail-General Merchandise) 390 290,537 - ------------------------------------------------------------- Renault S.A. (Automobiles)(a) 6,125 284,291 - ------------------------------------------------------------- Societe Generale (Banks-Major Regional) 1,430 297,847 - -------------------------------------------------------------
MARKET SHARES VALUE FRANCE-(CONTINUED) Sopra S.A. (Services-Commercial & Consumer) 680 $ 228,514 - ------------------------------------------------------------- Suez Lyonnaise des Eaux (Manufacturing-Diversified) 1,300 220,595 - ------------------------------------------------------------- Total S.A.-Class B (Oil & Gas-Refining & Marketing) 1,770 210,539 - ------------------------------------------------------------- UBI SOFT ENTERTAINMENT (Computers-Software & Services)(a) 2,060 270,051 - ------------------------------------------------------------- 5,473,129 - ------------------------------------------------------------- GERMANY-10.09% Allianz A.G. (Insurance-Multi-Line) 880 270,754 - ------------------------------------------------------------- Data Modul A.G. (Computers-Hardware) 3,400 215,094 - ------------------------------------------------------------- Dresdner Bank A.G. (Banks-Major Regional) 5,020 271,692 - ------------------------------------------------------------- Kamps A.G. (Retail-Food Chains)(a) 750 21,110 - ------------------------------------------------------------- Krones A.G. (Machinery-Diversified) 770 266,094 - ------------------------------------------------------------- Mannesmann A.G. (Machinery-Diversified) 330 261,927 - ------------------------------------------------------------- MobilCom A.G. (Telecommunications-Cellular/ Wireless) 360 266,874 - ------------------------------------------------------------- Pfeiffer Vacuum Technology A.G.-ADR (Machinery-Diversified)(a) 3,700 262,238 - ------------------------------------------------------------- Porsche A.G. (Automobiles) 113 282,800 - ------------------------------------------------------------- SAP A.G. (Computers-Software & Services) 530 251,100 - ------------------------------------------------------------- Sartorius A.G.-Preferred (Electronics-Instrumentation) 345 160,568 - ------------------------------------------------------------- Sartorius A.G. (Electronics-Instrumentation) 85 44,534 - ------------------------------------------------------------- SER Systeme A.G. (Computers-Software & Services) 1,000 231,314 - ------------------------------------------------------------- Sixt A.G. (Financial-Diversified) 2,050 260,522 - ------------------------------------------------------------- Volkswagen A.G. (Automobiles) 250 199,124 - ------------------------------------------------------------- 3,265,745 - ------------------------------------------------------------- HUNGARY-1.43% Richter Gedeon-GDR (Health Care-Drugs-Major Pharmaceuticals) 2,450 260,925 - ------------------------------------------------------------- Magyar Tavkozlesis ADR (Telecommunications-Long Distance)(a) 6,900 203,550 - ------------------------------------------------------------- 464,475 - ------------------------------------------------------------- IRELAND-2.37% Allied Irish Banks PLC (Banks-Regional) 20,160 280,946 - ------------------------------------------------------------- Bank of Ireland (Banks-Major Regional) 9,700 198,085 - ------------------------------------------------------------- Kingspan Group PLC (Engineering & Construction) 65,100 288,531 - ------------------------------------------------------------- 767,562 - ------------------------------------------------------------- ITALY-6.18% Assicurazioni Generali (Insurance-Multi-Line) 9,600 287,532 - ------------------------------------------------------------- Autogrill S.p.A (Restaurants) 43,100 298,209 - ------------------------------------------------------------- Credito Italiano S.p.A. (Banks-Major Regional) 54,600 285,799 - -------------------------------------------------------------
5 8
MARKET SHARES VALUE ITALY-(CONTINUED) Ericsson S.p.A. (Communications Equipment) 4,100 $ 260,906 - ------------------------------------------------------------- Merloni Elettrodomestici S.p.A. (Household Furniture & Appliances) 35,000 282,058 - ------------------------------------------------------------- Pirelli S.p.A. (Electrical Equipment)(a) 88,400 291,996 - ------------------------------------------------------------- Telecom Italia Mobile S.p.A. (Telecommunications-Cellular/Wireless) 51,200 293,322 - ------------------------------------------------------------- 1,999,822 - ------------------------------------------------------------- NETHERLANDS-4.81% CMG PLC (Computers-Software & Services) 4,900 219,277 - ------------------------------------------------------------- Fugro N.V. (Services-Commercial & Consumer) 6,200 245,532 - ------------------------------------------------------------- Getronics N.V. (Computers-Software & Services) 4,700 208,000 - ------------------------------------------------------------- Melia Inversiones Americanas, N.V.-ADR (Lodging-Hotels)(a) 2,500 62,500 - ------------------------------------------------------------- Ordina N.V. (Services-Commercial & Consumer)(a) 12,000 281,570 - ------------------------------------------------------------- Philips Electronics N.V. (Household Furniture & Appliances) 3,100 273,154 - ------------------------------------------------------------- Prolion Holding N.V. (Machinery-Diversified)(a) 2,080 266,370 - ------------------------------------------------------------- 1,556,403 - ------------------------------------------------------------- NORWAY-2.92% EDB-Elektronisk Databehandling A.S.A. (Services-Computer Systems) 48,900 219,692 - ------------------------------------------------------------- Elkjop Norge A.S.A. (Retail-General Merchandise) 4,690 229,576 - ------------------------------------------------------------- Merkantildata A.S.A. (Services-Commercial & Consumer) 20,500 258,430 - ------------------------------------------------------------- Tomra Systems A.S.A. (Manufacturing-Specialized) 7,420 238,823 - ------------------------------------------------------------- 946,521 - ------------------------------------------------------------- PORTUGAL-2.71% Banco Comercial Portugues, S.A. (Banks-Major Regional) 6,070 212,840 - ------------------------------------------------------------- Cimpor-Cimentos de Portugal S.A. (Construction-Cement & Aggregates) 5,600 207,137 - ------------------------------------------------------------- Portugal Telecom S.A. (Telephone) 5,350 287,542 - ------------------------------------------------------------- Telecel-Comunicacaoes Pessoais, S.A. (Telecommunications-Cellular/Wireless)(a) 960 172,248 - ------------------------------------------------------------- 879,767 - ------------------------------------------------------------- RUSSIA-0.67% Vimpel-Communications-ADR (Telecommunications-Cellular/Wireless)(a) 4,000 216,000 - ------------------------------------------------------------- SPAIN-3.91% Campofrio Alimentacion S.A. (Foods) 2,500 205,022 - ------------------------------------------------------------- Corp. Financiera Reunida, S.A. (Investment Management)(a) 23,350 263,703 - ------------------------------------------------------------- Telepizza, S.A. (Restaurants)(a) 2,080 299,093 - ------------------------------------------------------------- Telefonica de Espana (Telephone) 4,950 206,710 - ------------------------------------------------------------- Telefonica de Espana-Rights, expiring 05/30/98 (Telephone) 3,550 2,797 - -------------------------------------------------------------
MARKET SHARES VALUE SPAIN-(CONTINUED) Viscofan Industria Navarra De Envolturas Celulosicas S.A. (Paper & Forest Products) 7,050 $ 286,999 - ------------------------------------------------------------- 1,264,324 - ------------------------------------------------------------- SWEDEN-5.19% ADB-Gruppen Mandator A.B. (Services-Computer Systems) 10,100 292,224 - ------------------------------------------------------------- Entra Data A.B. (Computers-Software & Services) 17,000 294,239 - ------------------------------------------------------------- Europolitan Holdings A.B. (Telecommunications-Cellular & Wireless) 3,600 223,198 - ------------------------------------------------------------- Modul 1 Data A.B. (Services-Computer Systems) 9,700 280,650 - ------------------------------------------------------------- OM Grupppen A.B. (Investment Banking/Brokerage) 12,800 255,437 - ------------------------------------------------------------- Resco A.B (Computers-Software & Services) 4,800 117,799 - ------------------------------------------------------------- WM-Data A.B. (Computers-Software & Services) 7,200 216,688 - ------------------------------------------------------------- 1,680,235 - ------------------------------------------------------------- SWITZERLAND-5.13% Clariant A.G. (Chemicals-Specialty) 270 290,565 - ------------------------------------------------------------- Disetronic Holding A.G. (Health Care-Medical Products & Supplies) 76 214,220 - ------------------------------------------------------------- Kudelski S.A. (Electronics-Semiconductors)(a) 30 243,888 - ------------------------------------------------------------- Nestle S.A. (Foods) 110 213,300 - ------------------------------------------------------------- Rieter Holdings Ltd. (Machinery-Diversified) 455 273,175 - ------------------------------------------------------------- Schweizerischer Bankverein (Banks-Major Regional) 590 204,833 - ------------------------------------------------------------- Zurich Versicherungs-Gesellschaft (Insurance-Multi-Line) 360 219,257 - ------------------------------------------------------------- 1,659,238 - ------------------------------------------------------------- UNITED KINGDOM-17.65% Admiral PLC (Services-Computer Systems) 11,500 208,205 - ------------------------------------------------------------- ARM Holdings PLC-ADR (Electronics-Semiconductors)(a) 11,700 472,388 - ------------------------------------------------------------- Cable & Wireless Communications PLC (Broadcasting-Television, Radio, & Cable)(a) 30,150 219,102 - ------------------------------------------------------------- Capita Group PLC (Services-Commercial & Consumer) 25,100 211,998 - ------------------------------------------------------------- DIAGONAL PLC (Services-Computer Systems) 16,800 274,658 - ------------------------------------------------------------- Druid Group PLC (Computers-Software & Services) 12,500 210,736 - ------------------------------------------------------------- Eidos PLC-ADR (Computers-Software & Services)(a) 16,500 264,000 - ------------------------------------------------------------- Electronics Boutique PLC (Retail-Specialty)(a) 204,300 287,885 - ------------------------------------------------------------- F.I. Group PLC (Services-Computer Systems) 9,120 205,155 - ------------------------------------------------------------- Firth Rixson PLC (Metal Fabricators) 82,450 194,435 - ------------------------------------------------------------- Independent Insurance Group PLC (Insurance-Property-Casualty) 9,600 258,100 - ------------------------------------------------------------- Jarvis PLC (Engineering & Construction) 20,950 232,482 - ------------------------------------------------------------- JJB Sports PLC (Retail-General Merchandise) 9,750 82,350 - ------------------------------------------------------------- Kingfisher PLC (Retail-Department Stores) 11,050 200,705 - ------------------------------------------------------------- Kwik-Fit Holdings PLC (Services-Commercial & Consumer) 24,500 213,076 - -------------------------------------------------------------
6 9
MARKET SHARES VALUE UNITED KINGDOM-(CONTINUED) Micro Focus Group PLC-ADR (Computer-Software & Services)(a) 4,700 $ 213,850 - ------------------------------------------------------------- Misys PLC (Services-Commercial & Consumer) 5,940 285,622 - ------------------------------------------------------------- Nestor Healthcare Group PLC (Services-Commercial & Consumer) 54,000 230,305 - ------------------------------------------------------------- Parity PLC (Services-Commercial & Consumer) 15,300 198,573 - ------------------------------------------------------------- PSD Group PLC (Services-Employment) 21,200 234,020 - ------------------------------------------------------------- Robert Walters PLC (Services-Employment) 32,050 249,794 - ------------------------------------------------------------- Sage Group PLC (The) (Computers-Software & Services) 9,400 197,305 - ------------------------------------------------------------- Serco Group PLC (Services-Commercial & Consumer) 5,960 117,922 - ------------------------------------------------------------- Unilever PLC (Foods) 20,800 221,600 - -------------------------------------------------------------
MARKET SHARES VALUE UNITED KINGDOM-(CONTINUED) Vodafone Group PLC (Telecommunications-Cellular/ Wireless) 20,890 $ 228,848 - ------------------------------------------------------------- 5,713,114 - ------------------------------------------------------------- Total Foreign Stocks & Other Equity Interests (cost $24,819,944) 27,870,292 - -------------------------------------------------------------
PRINCIPAL AMOUNT REPURCHASE AGREEMENT-12.96%(b) Goldman Sachs & Co. 5.53%, 05/01/98(c) $4,195,631 4,195,631 - --------------------------------------------------------------- TOTAL INVESTMENTS-99.06% 32,065,923 - --------------------------------------------------------------- OTHER ASSETS LESS LIABILITIES-0.94% 305,201 - --------------------------------------------------------------- NET ASSETS-100.00% $32,371,124 ===============================================================
Investment Abbreviations: ADR - American Depositary Receipt GDR - Global Depositary Receipt Notes to Schedule of Investments: (a) Non-income producing security. (b) Collateral on repurchase agreements, including the Fund's pro-rata interest in joint repurchase agreements, is taken into possession by the Fund upon entering into the repurchase agreement. The collateral is marked to market daily to ensure its market value as being 102% of the sales price of the repurchase agreement. The investments in some repurchase agreements are through participation in joint accounts with other mutual funds, private accounts and certain non-registered investment companies managed by the investment advisor or its affiliates. (c) Joint repurchase agreement entered into 04/30/98 with a maturing value of $500,076,806. Collateralized by $495,889,000 U.S. Government obligations, 0% to 7.75% due 07/23/98 to 01/15/08 with an aggregate market value at 04/30/98 of $510,500,080. See Notes to Financial Statements. 7 10 STATEMENT OF ASSETS AND LIABILITIES April 30, 1998 (Unaudited) ASSETS: Investments, at market value (cost $24,819,945) $ 27,870,292 - ----------------------------------------------------------- Repurchase agreement (cost $4,195,631) 4,195,631 - ----------------------------------------------------------- Foreign currencies, at value (cost $1,659,194) 1,666,891 - ----------------------------------------------------------- Receivables for: Investments sold 460,398 - ----------------------------------------------------------- Capital stock sold 1,741,210 - ----------------------------------------------------------- Dividends and interest 21,685 - ----------------------------------------------------------- Reimbursement from advisor 76,000 - ----------------------------------------------------------- Other assets 36,429 - ----------------------------------------------------------- Total assets 36,068,536 - ----------------------------------------------------------- LIABILITIES: Payables for: Investments purchased 3,627,847 - ----------------------------------------------------------- Capital stock reacquired 17,952 - ----------------------------------------------------------- Accrued administrative services fees 6,197 - ----------------------------------------------------------- Accrued directors' fees 1,200 - ----------------------------------------------------------- Accrued distribution fees 10,723 - ----------------------------------------------------------- Accrued transfer agent fees 7,677 - ----------------------------------------------------------- Accrued operating expenses 25,816 - ----------------------------------------------------------- Total liabilities 3,697,412 - ----------------------------------------------------------- Net assets applicable to shares outstanding $ 32,371,124 - ----------------------------------------------------------- NET ASSETS: Class A $ 21,932,185 =========================================================== Class B $ 9,125,707 =========================================================== Class C $ 1,313,232 =========================================================== CAPITAL STOCK, $0.001 PAR VALUE PER SHARE: Class A: Authorized 200,000,000 - ----------------------------------------------------------- Outstanding 1,605,897 =========================================================== Class B: Authorized 200,000,000 - ----------------------------------------------------------- Outstanding 670,315 =========================================================== Class C: Authorized 200,000,000 - ----------------------------------------------------------- Outstanding 96,456 =========================================================== Class A: Net asset value and redemption price per share $ 13.66 - ----------------------------------------------------------- Offering price per share: (Net asset value of $13.66 divided by 94.50%) $ 14.46 =========================================================== Class B: Net asset value and offering price per share $ 13.61 =========================================================== Class C: Net asset value and offering price per share $ 13.61 ===========================================================
STATEMENT OF OPERATIONS For the period November 3, 1997 (date operations commenced) through April 30, 1998 (Unaudited) INVESTMENT INCOME: Dividends (net of $6,838 foreign withholding tax) $ 37,983 - ----------------------------------------------------------- Interest 31,268 - ----------------------------------------------------------- Total investment income 69,251 - ----------------------------------------------------------- EXPENSES: Advisory fees 38,009 - ----------------------------------------------------------- Administrative services fees 33,432 - ----------------------------------------------------------- Custodian fees 47,156 - ----------------------------------------------------------- Directors' fees 3,152 - ----------------------------------------------------------- Distribution fees-Class A 10,996 - ----------------------------------------------------------- Distribution fees-Class B 7,727 - ----------------------------------------------------------- Distribution fees-Class C 873 - ----------------------------------------------------------- Transfer agent fees-Class A 12,601 - ----------------------------------------------------------- Transfer agent fees-Class B 3,338 - ----------------------------------------------------------- Transfer agent fees-Class C 378 - ----------------------------------------------------------- Printing 9,349 - ----------------------------------------------------------- Other 12,644 - ----------------------------------------------------------- Total expenses 179,655 - ----------------------------------------------------------- Less: Fees waived and reimbursed by advisor (94,790) - ----------------------------------------------------------- Expenses paid indirectly (521) - ----------------------------------------------------------- Net expenses 84,344 - ----------------------------------------------------------- Net investment income (loss) (15,093) - ----------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES AND FOREIGN CURRENCIES: Net realized gain (loss) from: Investment securities 165,301 - ----------------------------------------------------------- Foreign currencies (16,808) - ----------------------------------------------------------- 148,493 - ----------------------------------------------------------- Net unrealized appreciation (depreciation) of: Investment securities 3,050,347 - ----------------------------------------------------------- Foreign currencies (4,799) - ----------------------------------------------------------- 3,045,548 - ----------------------------------------------------------- Net gain from investment securities and foreign currencies 3,194,041 - ----------------------------------------------------------- Net increase in net assets resulting from operations $3,178,948 ===========================================================
See Notes to Financial Statements. 8 11 STATEMENT OF CHANGES IN NET ASSETS For the period November 3, 1997 (date operations commenced) through April 30, 1998 (Unaudited) OPERATIONS: Net investment income (loss) $ (15,093) - ------------------------------------------------------------------------- Net realized gain from investment securities and foreign currencies 148,493 - ------------------------------------------------------------------------- Net unrealized appreciation of investment securities and foreign currencies 3,045,548 - ------------------------------------------------------------------------- Net increase in net assets resulting from operations 3,178,948 - ------------------------------------------------------------------------- Share transactions-net: Class A 19,433,495 - ------------------------------------------------------------------------- Class B 8,504,529 - ------------------------------------------------------------------------- Class C 1,254,152 - ------------------------------------------------------------------------- Net increase in net assets 32,371,124 - ------------------------------------------------------------------------- NET ASSETS: Beginning of period -- - ------------------------------------------------------------------------- End of period $32,371,124 ========================================================================= NET ASSETS CONSIST OF: Capital (par value and additional paid-in) $29,192,176 - ------------------------------------------------------------------------- Undistributed net investment income (loss) (15,093) - ------------------------------------------------------------------------- Undistributed net realized gain from investment securities and foreign currencies 148,493 - ------------------------------------------------------------------------- Unrealized appreciation of investment securities and foreign currencies 3,045,548 - ------------------------------------------------------------------------- $32,371,124 =========================================================================
NOTES TO FINANCIAL STATEMENTS April 30, 1998 (Unaudited) NOTE 1-SIGNIFICANT ACCOUNTING POLICIES AIM European Development Fund (the "Fund") is a series portfolio of AIM International Funds, Inc. (the "Company"). The Company is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of six separate portfolios: AIM European Development Fund, AIM Asian Growth Fund, AIM Global Aggressive Growth Fund, AIM Global Growth Fund, AIM Global Income Fund and AIM International Equity Fund. The Fund commenced operations on November 3, 1997. The Fund currently offers three different classes of shares: Class A shares, Class B shares and Class C shares. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with a contingent deferred sales charge. Matters affecting each portfolio or class are 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 provide long-term growth of capital. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. A. Security Valuations-A security listed or traded on an exchange (except convertible bonds) is valued at the last sales price on the exchange where the security is principally traded or, lacking any sales on a particular day, at the mean between the closing bid and asked prices on that day. If a mean is not available, as is the case in some foreign markets, the closing bid will be used absent a last sales price. Securities traded in the over-the- counter market (but not including securities reported on the NASDAQ National Market System) are valued at the mean between the last bid and asked prices based upon quotes furnished by market makers for such securities. Securities reported on the NASDAQ National Market System are valued at the last sales price on the valuation date or absent a last sales price, at the mean of the closing bid and asked prices. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors, such as yield, type of issue, coupon rate and maturity date. Securities for which market quotations are either not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Company's officers in a manner specifically authorized by 9 12 the Board of Directors. Investments with maturities of 60 days or less are valued on the basis of amortized cost which approximates market value. Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of the New York Stock Exchange. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of the New York Stock Exchange which would not be reflected in the computation of the Fund's net asset value. If events materially affecting the value of such securities occur during such period, then these securities will be valued at their fair value as determined in good faith by or under the supervision of the Board of Directors. B. Foreign Currency Translations--Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. C. 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. D. Securities Transactions, Investment Income and Distributions--Securities transactions are accounted for on a trade date basis. Realized gains or losses are computed on the basis of specific identification of the securities sold. Interest income is recorded as earned from settlement date and is recorded on an accrual basis. Dividend income and distributions to shareholders are recorded on the ex-dividend date. E. Federal Income Taxes--The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. F. Expenses--Distribution and transfer agency expenses directly attributable to a class of shares are charged to that class' operations. All other expenses which are attributable to more than one class are allocated among the classes. NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Company has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the master investment advisory agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.95% of the first $500 million of the Fund's average daily net assets, plus 0.90% of the Fund's average daily net assets in excess of $500 million. Under the terms of a sub-advisory agreement between AIM and INVESCO Global Asset Management Limited ("IGAM"), AIM pays IGAM a fee at an annual rate of 0.20% of the first $500 million of the Fund's average daily net assets and 0.175% of the Fund's average daily net assets over $500 million. During the period November 3, 1997 (date operations commenced) through April 30, 1998, AIM waived fees of $18,790 and reimbursed expenses of $76,000. The Fund, pursuant to a master administrative services agreement with AIM, has agreed to reimburse AIM for certain administrative costs incurred in providing accounting services to the Fund. During the period November 3, 1997 (date operations commenced) through April 30, 1998, AIM was reimbursed $33,432 for such services. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay A I M Fund Services, Inc. ("AFS") for certain costs incurred in providing transfer agency services to the Fund. During the period November 3, 1997 (date operations commenced) through April 30, 1998, AFS was paid $6,472 for such services. The Company has entered into master distribution agreements with A I M Distributors, Inc. ("AIM Distributors") to serve as the distributor of the Class A, Class B and Class C shares of the Fund. The Company has adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A shares and Class C shares (the "Class A and Class C Plan"), and the Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The Fund, pursuant to the Class A and Class C Plan, pays AIM Distributors compensation at the annual rate of 0.35% of the average daily net assets of Class A shares and 1.00% of the average daily net assets of Class C shares. The Fund, pursuant to the Class B Plan, pays AIM Distributors compensation at an annual rate of 1.00% of the average daily net assets attributable to the Class B shares. Of these amounts, the Fund may pay a service fee of 0.25% of the average daily net assets of the Class A, Class B or C shares to selected dealers and financial institutions who furnish continuing personal shareholder services to their customers who purchase and own the appropriate class of shares of the Fund. Any amounts not paid as a service fee under the Plans would constitute an asset- based sales charge. The Plans also impose a cap on the total sales charges, including asset-based sales charges that may be paid by the respective classes. AIM Distributors may, from time to time, assign, transfer, or pledge to one or more designees, its rights to all or a designated portion of (a) compensation received by AIM Distributors from the Fund pursuant to the Class B Plan (but not AIM Distributors' duties and obligations pursuant to Class B Plan) and (b) any contingent deferred sales charges received by AIM Distributors related to the Class B shares. During the period November 3, 1997 (date operations commenced) through April 30, 1998, the Class A, Class B, and Class C shares paid AIM Distributors $10,996, $7,727 and $873, respectively, as compensation under the Plans. AIM Distributors received commissions of $33,901 from sales of the Class A shares of the Fund during the period November 3, 1997 (date operations commenced) through April 30, 1998. Such commissions are not an expense of the Fund. They are deducted 10 13 from, and are not included in, the proceeds from sales of Class A shares. During the period November 3, 1997 (date operations commenced) through April 30, 1998, AIM Distributors received commissions of $32 in contingent deferred sales charges imposed on redemptions of Fund shares. Certain officers and directors of the Company are officers and directors of AIM, AFS and AIM Distributors. During the period November 3, 1997 (date operations commenced) through April 30, 1998, the Fund incurred legal fees of $416 for services rendered by the law firm of Kramer, Levin, Naftalis & Frankel as counsel to the Company's directors. A member of that firm is a director of the Company. NOTE 3-INDIRECT EXPENSES During the period November 3, 1997 (date operations commenced) through April 30, 1998, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of $45 and $476, respectively, under expense offset arrangements. The effect of the above arrangements resulted in a reduction of the Fund's total expenses of $521 during the period November 3, 1997 (date operations commenced) through April 30, 1998. NOTE 4-DIRECTORS' FEES Directors' fees represent remuneration paid or accrued to each director who is not an "interested person" of AIM. The Company may invest directors' fees, if so elected by a director, in mutual fund shares in accordance with a deferred compensation plan. NOTE 5-BANK BORROWINGS The Fund is a participant in a committed line of credit facility with a syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit may borrow on a first come, first served basis. Interest on borrowings under the line of credit is payable on maturity or prepayment date. During the period November 3, 1997 (date operations commenced) through April 30, 1998, the Fund did not borrow under the line of credit agreement. The funds which are party to the line of credit are charged a commitment fee of 0.05% on the unused balance of the committed line. The commitment fee is allocated among the funds based on their respective average net assets for the period. Pursuant to an amendment to the line of credit agreement effective May 1, 1998, the Fund may borrow up to the lesser of (i) $1,000,000,000 or (ii) the limits set by the prospectus for borrowings. NOTE 6-INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities) purchased and sold by the Fund during the period November 3, 1997 (date operations commenced) through April 30, 1998 was $27,827,590 and $3,172,946, respectively. The amount of unrealized appreciation (depreciation) of investment securities, on a tax basis, as of April 30, 1998 is as follows: Aggregate unrealized appreciation of investment securities $3,222,333 - ------------------------------------------------------------ Aggregate unrealized (depreciation) of investment securities (171,986) - ------------------------------------------------------------ Net unrealized appreciation of investment securities $3,050,347 ============================================================ Investments have the same cost for tax and financial statement purposes.
NOTE 7-CAPITAL STOCK Changes in the Fund's capital stock outstanding during the period November 3, 1997 (date operations commenced) through April 30, 1998 were as follows:
APRIL 30, 1998 ------------------------ SHARES AMOUNT --------- ----------- Sold: Class A 1,835,083 $22,327,241 - ------------------------------------------------------------------ Class B 696,395 8,841,939 - ------------------------------------------------------------------ Class C 97,012 1,261,222 - ------------------------------------------------------------------ Reacquired: Class A (229,186) (2,893,746) - ------------------------------------------------------------------ Class B (26,080) (337,410) - ------------------------------------------------------------------ Class C (556) (7,070) - ------------------------------------------------------------------ 2,372,668 $29,192,176 ==================================================================
11 14 NOTE 8-FINANCIAL HIGHLIGHTS Shown below are the financial highlights for a share of Class A, Class B and Class C capital stock outstanding during the period November 3, 1997 (date operations commenced) through April 30, 1998.
CLASS A CLASS B CLASS C ------- ------- ------- Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 - ------------------------------------------------------------ ------- ------- ------- Income from investment operations: Net investment income (loss) (0.01)(a) (0.06)(a) (0.06)(a) - ------------------------------------------------------------ ------- ------- ------- Net gains on securities (both realized and unrealized) 3.67 3.67 3.67 - ------------------------------------------------------------ ------- ------- ------- Total from investment operations 3.66 3.61 3.61 - ------------------------------------------------------------ ------- ------- ------- Net asset value, end of period $ 13.66 $ 13.61 $ 13.61 ============================================================ ======= ======= ======= Total return(b) 36.60% 36.10% 36.10% ============================================================ ======= ======= ======= Ratios/supplemental data: Net assets, end of period (000s omitted) $21,932 $ 9,126 $ 1,313 ============================================================ ======= ======= ======= Ratio of expenses to average net assets(c)(d)(e) 1.99% 2.67% 2.67% ============================================================ ======= ======= ======= Ratio of net investment income (loss) to average net assets(d)(f) (0.25)% (0.93)% (0.93)% ============================================================ ======= ======= ======= Portfolio turnover rate 36% 36% 36% ============================================================ ======= ======= ======= Average brokerage commission rate(g) $0.0402 $0.0402 $0.0402 ============================================================ ======= ======= =======
(a) Calculated using average shares outstanding. (b) Does not deduct sales charges and are not annualized for periods less than one year. (c) After fee waivers and/or expense reimbursements. Ratios of expenses to average net assets prior to fee waivers and/or expense reimbursements were 4.37% (annualized) and 5.05% (annualized) and 5.05% (annualized) for Class A, Class B and Class C, respectively. (d) Ratios are annualized and based on average net assets of $6,404,995, $1,575,744 and $177,746, for Class A, Class B and Class C shares, respectively. (e) Ratios include indirectly paid expenses. Excluding indirectly paid expenses, the ratios of expenses to net assets would have been 1.97% (annualized), 2.65% (annualized) and 2.65% (annualized) for Class A, Class B and Class C, respectively. (f) After fee waivers and/or expense reimbursements. Ratios of net investment income (loss) to average net assets prior to fee waivers and/or expense reimbursements were (2.63)% (annualized), (3.31)% (annualized) and (3.31)% (annualized) for Class A, Class B and Class C, respectively. (g) The average commission rate paid is the total brokerage commissions paid on applicable purchases and sales of securities for the period divided by the total number of related shares purchased and sold. 12 15 Directors & Officers
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND Charles T. Bauer Charles T. Bauer 11 Greenway Plaza Chairman Chairman Suite 100 A I M Management Group Inc. Houston, TX 77046 Robert H. Graham Bruce L. Crockett President INVESTMENT ADVISOR Director Ace Limited; John J. Arthur A I M Advisors, Inc. Formerly Director, President, and Senior Vice President and Treasurer 11 Greenway Plaza Chief Executive Officer Suite 100 COMSAT Corporation Carol F. Relihan Houston, TX 77046 Senior Vice President and Secretary Owen Daly II SUB-ADVISOR Director Gary T. Crum Cortland Trust Inc. Senior Vice President INVESCO Global Asset Management Limited Cedar House Edward K. Dunn Jr. Dana R. Sutton 41 Cedar Ave. Chairman, Mercantile Mortgage Corp.; Vice President and Assistant Treasurer Hamilton, HM12 Bermuda Formerly Vice Chairman and President, Mercantile-Safe Deposit & Trust Co.; and Robert G. Alley TRANSFER AGENT President, Mercantile Bankshares Vice President A I M Fund Services, Inc. Jack Fields Melville B. Cox P.O. Box 4739 Chief Executive Officer Vice President Houston, TX 77210-4739 Texana Global, Inc. Formerly Member of the Jonathan C. Schoolar CUSTODIAN U.S. House of Representatives Vice President State Street Bank and Trust Company Carl Frischling Renee A. Bamford 225 Franklin Street Partner Assistant Secretary Boston, MA 02110 Kramer, Levin, Naftalis & Frankel P. Michelle Grace COUNSEL TO THE FUND Robert H. Graham Assistant Secretary President and Chief Executive Officer Ballard Spahr A I M Management Group Inc. Jeffrey H. Kupor Andrews & Ingersoll Assistant Secretary 1735 Market Street John F. Kroeger Philadelphia, PA 19103 Formerly Consultant Nancy L. Martin Wendell & Stockel Associates, Inc. Assistant Secretary COUNSEL TO THE DIRECTORS Lewis F. Pennock Ofelia M. Mayo Kramer, Levin, Naftalis & Frankel Attorney Assistant Secretary 919 Third Avenue New York, NY 10022 Ian W. Robinson Lisa A. Moss Consultant; Formerly Executive Assistant Secretary DISTRIBUTOR Vice President and Chief Financial Officer Kathleen J. Pflueger A I M Distributors, Inc. Bell Atlantic Management Assistant Secretary 11 Greenway Plaza Services, Inc. Suite 100 Samuel D. Sirko Houston, TX 77046 Louis S. Sklar Assistant Secretary Executive Vice President Hines Interests Stephen I. Winer Limited Partnership Assistant Secretary Mary J. Benson Assistant Treasurer
16 THE AIM FAMILY OF FUNDS--Registered Trademark-- FOR AGGRESSIVE GROWTH AIM Aggressive Growth Fund* AIM Asian Growth Fund AIM Capital Development Fund AIM Constellation Fund AIM European Development Fund AIM Global Aggressive Growth Fund FOR GROWTH OF CAPITAL AIM Advisor International Value Fund AIM Blue Chip Fund [PHOTO OF AIM Global Growth Fund 11 GREENWAY PLAZA AIM International Equity Fund APPEARS HERE] AIM Select Growth Fund** AIM Value Fund AIM Weingarten Fund FOR GROWTH AND INCOME OR INCOME WITH CAPITAL GROWTH AIM Advisor Flex Fund AIM Advisor Large Cap Value Fund AIM Advisor MultiFlex Fund AIM Advisor Real Estate Fund AIM Balanced Fund AIM Charter Fund AIM Global Utilities Fund FOR HIGH CURRENT INCOME OR CURRENT INCOME AIM High Yield Fund AIM Global Income Fund AIM Income Fund FOR CURRENT TAX-FREE INCOME AIM High Income Municipal Fund AIM Municipal Bond Fund AIM Tax-Exempt Bond Fund of Connecticut AIM Tax-Free Intermediate Fund FOR CURRENT INCOME AND HIGH DEGREE OF SAFETY AIM Intermediate Government Fund AIM Limited Maturity Treasury Fund AIM Money Market Fund AIM Tax-Exempt Cash Fund *AIM Aggressive Growth Fund was closed to new A I M Management Group Inc. has provided leadership in the mutual investors on June 5, 1997. fund industry since 1976 and managed approximately $89 billion in ** On May 1, 1998, AIM Growth Fund was renamed AIM assets for more than 4.4 million shareholders, including individual Select Growth Fund. For more complete information investors, corporate clients, and financial institutions, as of about any AIM Fund(s), including sales charges and March 31, 1998. The AIM Family of Funds--Registered Trademark-- is expenses, ask your financial consultant or distributed nationwide, and AIM today ranks among the nation's top 15 securities dealer for a free prospectus(es). Please mutual fund companies in assets under management, according to Lipper read the prospectus(es) carefully before you invest Analytical Services, Inc. or send money. Invest with DISCIPLINE-SM-
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