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 811-05328
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CIM High Yield Securities
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(Exact name of registrant as specified in charter)
400 W. Market Street, Suite 3300
Louisville, KY 40202
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(Address of principal executive offices) (Zip code)
Cindy Cameron
INVESCO Institutional, (N.A.) Inc.
400 W. Market Street, Suite 3300
Louisville, KY 40202
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(Name and address of agent for service)
registrant's telephone number, including area code: 502-561-3210
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Date of fiscal year end: December 31
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Date of reporting period: June 30, 2005
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ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is as follows:
CIM
================================================================================
HIGH YIELD SECURITIES
Semi-Annual Report
June 30, 2005
(Unaudited)
(LOGO)
INVESCO
[GRAPHIC OMITTED]
CIM HIGH YIELD SECURITIES -- 2005 SEMI-ANNUAL REPORT -- FIRST SIX MONTHS OF 2005
We are pleased to provide this annual report for CIM High Yield Securities
(the "Fund") as of June 30th 2005. The following pages contain a listing of the
Fund's holdings as well as the financial statements for the first six months of
2005.
REVIEW
During the first six months of 2005, the Fund's return at net asset value
was -1.44%, versus an average return of -0.07% for its peer group (Lipper High
Current Yield Leverage Funds).
The high yield market rebounded in June to shrug off a poor May and April
to near positive performing territory year to date. By the end of June, the
market had reached levels achieved earlier in the year and we are optimistic
that positive technicals have reasserted themselves.
Performance in the market ended the first six months of 2005 on a strong
note as all but one of the 23 industries that comprise the benchmark was
positive in June. Because of the downturn in April, however, returns were
relatively mixed in the second quarter and, in this environment, we
underperformed our benchmark. We have also been challenged with the increased
expenses incurred by the Fund in the current regulatory environment.
Spreads closed the first six months of the year at 405, while yields in the
5 and 10 year Treasury declined. There has been strong new issuance in the high
yield market -- while the second quarter saw fewer new issues than the first
quarter, they have been strong relative to historic issuance. There have
continued to be outflows from US high yield mutual funds over the course of the
year, but the trend reversed in June, and outflows have been less dramatic than
in 2004.
PROPOSAL TO LIQUIDATE
As you may know, on August 4, 2005, the Board of Trustees of the Fund
approved a plan of complete liquidation and dissolution for the Fund. The plan
must be approved by the shareholders of the Fund. A proxy statement regarding
the proposal to liquidate the Fund and other matters to be considered at the
Annual Meeting of Shareholders scheduled for October 7, 2005 will be mailed to
you on or around September 6, 2005.
INVESCO Institutional (N.A.) Inc.
INVESCO PRIVACY NOTICE
At INVESCO(1), we recognize that you have entrusted with us your personal and
financial data and we recognize our obligation to keep this information secure.
Maintaining your privacy is important to us and we have established a policy to
maintain the privacy of the information you share with us.
PERSONAL INFORMATION WE COLLECT
In the normal course of serving clients, we collect personal information about
you, which may include:
o Information we receive from you (such as your name and address) from
your account application, investment management agreement or other
documents you may deliver to us.
o Information about your investment transactions with us.
PERSONAL INFORMATION WE MAY DISCLOSE
We do not sell any information to any third parties. However, we occasionally
disclose nonpublic personal information about you to affiliates and
non-affiliates only as permitted by law or regulation. Specifically, we may
disclose nonpublic personal information including:
o Information to service providers in order to process your account
transactions.
o Your name and address to companies that assist us with mailing
statements to you.
o Information in connection with legal proceedings, such as responding to
a subpoena.
The organizations that receive client information act on our behalf and use the
information only to provide the services that we have asked them to perform for
you and us. As emphasized above, we do not provide client or former client
information including names, addresses, or client lists to outside companies
except in furtherance of our business relationship with you, or as otherwise
permitted by law.
Access to nonpublic personal information is restricted to employees who need to
access that information to provide products or services to clients. To guard our
clients' nonpublic personal information, physical, electronic, and procedural
safeguards are in place that comply with federal standards. A client's right to
privacy extends to all forms of contact with us, including telephone, written
correspondence, and electronic media.
We consider privacy a fundamental right of clients and take seriously the
obligation to safeguard client information. We will adhere to the policies and
practices above for both current and former clients.
(1) This Privacy Notice applies to members of INVESCO Institutional (N.A.), Inc.
of AMVESCAP PLC's family of investment adviser subsidiaries: INVESCO
Institutional (N.A.), Inc., INVESCO Private Capital, Inc., INVESCO Senior
Secured Management, Inc., and INVESCO Global Asset Management (N.A.), Inc.
CIM HIGH YIELD SECURITIES
PORTFOLIO SUMMARY (% OF TOTAL INVESTMENTS)
JUNE 30, 2005 (UNAUDITED)
CORPORATE BONDS AND NOTES
Chemicals and Plastics......................................... 7.3%
Lodging and Casinos............................................ 6.4%
Wireline....................................................... 6.2%
Utilities...................................................... 5.9%
Cable and satellite Television................................. 5.2%
Building and Development....................................... 4.9%
Publishing & Printing.......................................... 4.8%
Financial Intermediaries....................................... 4.7%
Pipe Lines/Ex Natural Gas...................................... 4.4%
Industrial Machinery/Components................................ 4.3%
Wireless Communications........................................ 4.1%
Consumer Products.............................................. 3.6%
Oil and Gas.................................................... 3.3%
Health Care.................................................... 3.3%
Auto Parts & Accessories....................................... 3.2%
Food/Drug Retailers............................................ 2.6%
Paper & Forest Products........................................ 2.3%
Containers/Packaging........................................... 2.0%
Electronics/Electric........................................... 1.9%
Leisure Goods, Activities, Movies.............................. 1.6%
Ecological Services and Equipment.............................. 1.2%
Food Service................................................... 1.1%
Aerospace/Defense.............................................. 1.1%
Retail......................................................... 1.0%
Office/Business Equipment...................................... 1.0%
Broadcasting................................................... 1.0%
Steel.......................................................... 0.8%
Equipment Leasing.............................................. 0.8%
Software/Services.............................................. 0.6%
Personal Services.............................................. 0.6%
Marine Transportation.......................................... 0.6%
Agricultural Production - Crops................................ 0.6%
Support Services............................................... 0.5%
Property - Casualty Insurance.................................. 0.5%
Metals/Minerals................................................ 0.4%
Insurance...................................................... 0.4%
Airlines....................................................... 0.4%
Apparel/Textiles............................................... 0.3%
Telecommunication Equipment.................................... 0.2%
FOREIGN BONDS..................................................... 4.9%
---------
TOTAL............................................................. 100.0%
=========
3
CIM HIGH YIELD SECURITIES
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------- -----------
CORPORATE BONDS AND NOTES -- 125.5%
CHEMICALS AND PLASTICS -- 9.6%
$162,000 BCP Crystal US Holdings Corp., Sr. Sub. Notes, 9.625%, 06/15/14...................... $ 182,250
275,000 Equistar Chemical Funding, Sr. Notes, 10.625%, 05/01/11.............................. 304,906
300,000 Hercules Inc., Sr. Sub. Notes, 6.750%, 10/15/29...................................... 292,500
213,000 Huntsman ICI Chemicals Ltd., Sr. Sub. Notes, 10.125%, 07/01/09....................... 220,189
75,000 Huntsman International LLC., Sr. Sub. Notes, 7.375%, 01/01/15**...................... 74,437
175,000 Innophos Inc., Sr. Sub. Notes, 8.875%, 08/15/14**.................................... 179,375
350,000 Lyondell Chemical Co., Sr. Sub. Notes, 10.875%, 05/01/09............................. 364,875
250,000 Nalco Company, Sr. Sub. Notes, 8.875%, 11/15/13...................................... 269,375
100,000 Nova Chemicals Corp., Sr. Notes, 6.500%, 01/15/12.................................... 97,500
300,000 Rhodia SA, Sr. Sub. notes, 8.875%, 06/01/11.......................................... 290,250
100,000 Rockwood Specialties GRP., Sr. Sub. Notes, 10.625%, 05/15/11......................... 110,750
200,000 Rockwood Specialties GRP., Sr. Sub. Notes, 7.500%, 11/15/14**........................ 199,500
-----------
2,585,907
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LODGING AND CASINOS -- 8.4%
100,000 Aztar Corp., Sr. Sub. Notes, 7.875%, 06/15/14........................................ 106,250
200,000 Felcor Lodging LP., Sr. Notes, 9.000%, 06/01/11...................................... 219,500
275,000 Global Cash Account Finance, Sr. Sub Notes, 8.750%, 03/15/12......................... 300,437
100,000 Hard Rock Hotel, Inc., Sr. Notes, 8.875%, 06/01/13................................... 109,250
200,000 Host Marriott LP., Sr. Notes, 7.125%, 11/01/13....................................... 209,500
200,000 Jacobs Entertainment, Sr. Notes, 11.875%, 02/01/09................................... 216,750
175,000 Majestic Star Casino LLC., Sr. Notes, 9.500%, 10/15/10............................... 181,125
150,000 Resort International Hotel/Casino, Sr. Notes, 11.500%, 03/15/09...................... 171,563
175,000 River Rock Entertainment, Sr. Notes, 9.750%, 11/01/11................................ 192,938
140,000 Riviera Holdings Corp., Sr. Notes, 11.000%, 06/15/10................................. 155,400
175,000 Seneca Gaming Corp., Sr. Notes, 7.250%, 05/01/12..................................... 181,781
200,000 Wheeling Island Gaming, Sr. Notes, 10.125%, 12/15/09................................. 213,000
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2,257,494
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WIRELINE -- 8.2%
75,000 American Cellular Corp., Sr. Notes, Series B, 10.000%, 08/01/11...................... 76,500
200,000 AT & T Corp., Sr. Notes, 9.050%, 11/15/11............................................ 231,500
200,000 Cincinnati Bell, Inc., Sr. Sub. Notes, 8.375%, 01/15/14.............................. 206,000
75,000 Dobson Cellular Systems, Sr. Notes, 9.875%, 11/01/12**............................... 79,500
75,000 Dobson Cellular Systems, Sr. Notes, 8.375%, 11/01/11**............................... 79,125
150,000 Level 3 Communications, Sr. Notes, 11.250%, 03/15/10................................. 119,250
250,000 MCI Inc., Sr. Sr. Notes, 8.735%, 05/01/14............................................ 280,937
179,000 Panamsat Corp., Sr. Notes, 9.000%, 08/15/14.......................................... 196,229
200,000 Qwest Capital Funding, Sr. Notes, 7.900%, 08/15/10................................... 200,000
200,000 Qwest Capital Funding, Sr. Notes, 7.000%, 08/03/09................................... 196,500
125,000 Qwest Communications International, Sr. Notes, 7.250%, 02/15/11...................... 121,563
150,000 Qwest Corporation, Sr. Notes, 7.875%, 09/01/11**..................................... 157,125
See Notes to Financial Statements.
4
CIM HIGH YIELD SECURITIES -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------- -----------
CORPORATE BONDS AND NOTES -- (CONTINUED)
WIRELINE -- (CONTINUED)
$125,000 Qwest Corporation, Sr. Notes, 7.625%, 06/15/15**..................................... $ 128,281
100,000 Qwest Services Corp. Sr. Notes, 13.500%, 12/15/10.................................... 116,000
-----------
2,188,510
-----------
UTILITIES -- 7.7%
200,000 AES Corporation, Sr. Notes, 9.000%, 05/15/15**....................................... 225,500
104,000 AES Corporation, Sr. Notes, 8.750%, 06/15/08......................................... 112,580
200,000 Allegheny Energy Supply, Sr. Notes, 8.250%, 04/15/12**............................... 225,000
150,000 Aquila Inc., Sr. Notes, 9.950%, 02/01/11............................................. 163,500
300,000 Calpine Corp., Sr. Notes, 8.500%, 07/15/10**......................................... 232,500
200,000 CMS Energy Corp., Sr. Notes, 9.875%, 10/15/07........................................ 219,000
75,000 Dynegy Holdings, Inc., Sr. Notes, 10.125%, 07/15/13**................................ 85,125
100,000 Dynegy Holdings, Inc., Sr. Notes, 8.750%, 02/15/12................................... 109,500
200,000 Midwest Generation LLC., Sr. Notes, 8.750%, 05/01/34................................. 225,000
273,000 NRG Energy, Inc., Sr. Notes, 8.000%, 12/15/13**...................................... 289,380
75,000 PSEG Energy Holding, Sr. Notes, 10.000%, 10/01/09.................................... 84,562
100,000 Texas Genco LLC Financing, Sr. Notes, 6.875%, 12/15/14**............................. 105,750
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2,077,397
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CABLE AND SATELLITE TELEVISION -- 6.9%
250,000 Cablevision Systems, Corp., Sr. Notes. Series B, 8.000%, 04/15/12.................... 246,250
350,000 Charter Communications Holdings II, Sr. Notes, 10.250%, 09/15/10..................... 355,687
50,000 Charter Communications Holdings, Sr. Notes, 10.750%, 10/01/09........................ 38,875
350,000 Charter Communications Holdings, Sr. Notes, 10.250%, 01/15/10........................ 261,625
100,000 CSC Holdings, Inc., Sr. Notes, 7.250%, 07/15/08...................................... 100,750
100,000 DIRECTV Holdings Finance, Sr. Notes, 6.375%, 06/15/15**.............................. 100,000
150,000 GCI, Inc., Sr. Notes, 7.250%, 02/15/14............................................... 144,750
125,000 Insight Midwest, Sr. Notes, 10.500%, 11/01/10........................................ 133,125
150,000 Lodgenet Entertainment, Sr. Sub. Notes, 9.500%, 06/15/13............................. 164,250
100,000 Mediacom LLC., Sr. Notes, 9.500%, 01/15/13........................................... 100,250
200,000 NTL Cable PLC., Sr. Notes, 8.750%, 04/15/14.......................................... 209,250
-----------
1,854,812
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BUILDING AND DEVELOPMENT -- 6.5%
200,000 Associated Materials, Inc., Sr. Sub. Notes, 9.750%, 04/15/12......................... 208,000
200,000 Builders Firstsource, Inc., Sr. Notes, 7.518%, 02/15/12**^........................... 200,000
200,000 D.R. Horton, Inc., Sr. Notes, 6.875%, 05/01/13....................................... 217,421
50,000 KB Home, Sr. Notes, 6.250%, 06/15/15................................................. 51,084
325,000 Ply Gem Industries, Inc., Sr. Sub Notes, 9.000%, 02/15/12............................ 276,250
275,000 THL Buildco (Nortek, Inc.) Sr. Sub. Notes, 8.500%, 09/01/14.......................... 257,125
300,000 WCI Communities, Inc., Sr. Sub. Notes, 9.125%, 05/01/12.............................. 316,500
200,000 William Lyon Homes, Sr. Notes, 10.750%, 04/01/13..................................... 218,000
-----------
1,744,380
-----------
See Notes to Financial Statements.
5
CIM HIGH YIELD SECURITIES -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------- -----------
CORPORATE BONDS AND NOTES -- (CONTINUED)
PUBLISHING & PRINTING -- 6.3%
$100,000 American Media Operation, Sr. Sub. Notes, 8.875%, 01/15/11........................... $ 95,250
100,000 American Media Operation, Sr. Sub. Notes, Series B, 10.250%, 05/01/09................ 100,500
250,000 Cenveo Corp., Sr. Sub. Notes, 7.875%, 12/01/13....................................... 238,750
147,000 Dex Media West, Sr. Sub Notes, Series B, 9.875%, 08/15/13............................ 168,315
200,000 Dex Media, Inc., Sr. Notes, 8.000%, 11/15/13......................................... 213,500
200,000 Houghton Mifflin Co., Sr. Sub. Notes, 9.875%, 02/01/13............................... 214,500
100,000 Mail Well I, Corp.(Cenveo Corp.), Sr. Notes, 9.625%, 03/15/12........................ 108,500
275,000 Vertis, Inc., Sr. Notes, Series B, 10.875%, 06/15/09................................. 264,000
300,000 WDAC Subsidiary Corp., Sr. Notes, 8.375%, 12/01/14**................................. 288,000
-----------
1,691,315
-----------
FINANCIAL INTERMEDIARIES -- 6.2%
300,000 Americredit Corp., Sr. Notes, 9.250%, 05/01/09....................................... 321,000
100,000 Athena Neuro Finance LLC., 7.250%, 02/21/08.......................................... 93,500
600,000 General Motors Accept Corp., Sr. Sub. Notes, 6.750%, 12/01/14........................ 537,702
75,000 General Motors Accept Corp., Sr. Sub. Notes, 5.850%, 01/14/09........................ 70,360
200,000 Refco Finance Holdings, 9.000%, 08/01/12............................................. 213,000
200,000 Thornburg Mortgage, Sr. Sub. Notes, 8.000%, 05/15/13................................. 206,000
200,000 Western Financial Bank, Sr. Sub. Notes, 9.625%, 05/15/12............................. 219,000
-----------
1,660,562
-----------
PIPE LINES/EX NATURAL GAS -- 5.8%
100,000 El Paso CGP. Co., Sr. Notes, 7.750%, 06/15/10........................................ 102,500
100,000 El Paso CGP. Co., Sr. Notes, 7.625%, 09/01/08........................................ 102,750
350,000 El Paso Corp., Sr. Notes, 7.875%, 06/15/12........................................... 362,250
275,000 El Paso Production Holding, Sr. Notes, 7.750%, 06/01/13.............................. 294,937
150,000 Sonat, Inc., Sr. Notes, 7.625%, 07/15/11............................................. 151,875
200,000 Williams Cos., Inc., Sr. Notes, 8.125%, 03/15/12..................................... 228,000
275,000 Williams Cos., Inc., Sr. Notes, 7.625%, 07/15/19..................................... 310,750
-----------
1,553,062
-----------
INDUSTRIAL MACHINERY/COMPONENTS -- 5.6%
260,000 Case New Holland, Inc., Sr. Notes, 9.250%, 08/01/11**................................ 274,300
50,000 Dresser Rand Group, Inc., Sr. Sub. Notes, 7.375%, 11/01/14**......................... 52,250
150,000 Dresser, Inc., Sr. Sub. Notes, 9.375%, 04/15/11...................................... 158,625
65,000 JLG Industries, Inc., Sr. Sub Notes, 8.375%, 06/15/12................................ 68,087
250,000 Mueller Group, Inc.., Sr. Sub. Notes, 10.000%, 05/01/12.............................. 263,750
275,000 Sensus Metering Systems, Sr. Sub. Notes, 8.625%, 12/15/13............................ 257,125
200,000 Trimas Corp. Sr., Sub. Notes, 9.875%, 06/15/12....................................... 169,000
260,000 Wesco Distribution, Inc., Sr. Sub. Notes, Series B, 9.125%, 06/01/08................. 265,200
-----------
1,508,337
-----------
See Notes to Financial Statements.
6
CIM HIGH YIELD SECURITIES -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------- -----------
CORPORATE BONDS AND NOTES -- (CONTINUED)
WIRELESS COMMUNICATIONS -- 5.4%
$250,000 Alamosa Delaware, Inc., Sr. Notes, 8.500%, 01/31/12.................................. $ 263,438
100,000 American Tower Corp., Sr. Notes, 7.250%, 12/01/11.................................... 106,000
100,000 American Tower Corp., Sr. Notes., 7.125%, 10/15/12................................... 106,250
175,000 Centennial Communications, Sr. Notes, 8.125%, 02/01/14............................... 187,250
225,000 Nextel Communications, Sr. Notes, 7.375%, 08/01/15................................... 244,125
25,000 Nextel Partners, Inc., Sr. Notes, 12.500%, 11/15/09.................................. 27,281
75,000 Nextel Partners, Inc., Sr. Notes, 8.125%, 07/01/11................................... 81,750
150,000 Rogers Wireless, Inc., Sr. Sub. Notes, 8.000%, 12/15/12.............................. 162,375
150,000 Rural Cellular Corp., Sr. Notes, 8.250%, 03/15/12.................................... 157,500
100,000 Western Wireless Corp., Sr. Notes, 9.250%, 07/15/13.................................. 114,375
-----------
1,450,344
-----------
CONSUMER PRODUCTS -- 4.8%
250,000 Amscan Holdings, Inc., Sr. Sub. Notes, 8.750%, 05/01/14.............................. 230,000
175,000 Chattem, Inc., Sr. Sub. Notes, 7.000%, 03/01/14...................................... 181,562
275,000 Playtex Products, Inc., Sr. Sub Notes, 9.375%, 06/01/11.............................. 290,812
325,000 Samsonite Corp., Sr. Sub. Notes, 8.875%, 06/01/11.................................... 346,938
225,000 Sealy Mattress Co., Sr. Sub. Notes, 8.250%, 06/15/14................................. 228,375
-----------
1,277,687
-----------
OIL AND GAS -- 4.4%
175,000 Chesapeake Energy Corp., Sr. Notes, 7.000%, 08/15/14................................. 186,375
250,000 Ferrellgas Partners LP., Sr. Notes, 8.750%, 06/15/12................................. 251,250
100,000 Kerr-McGee Corp., Sr. Notes, 6.875%, 09/15/11........................................ 107,277
250,000 Sesi LLC., Sr. Notes, 8.875%, 05/15/11............................................... 268,125
300,000 Transmontaigne, Inc., Sr. Sub. Notes, 9.125%, 06/01/10............................... 313,500
50,000 Whiting Petroleum Corp., Sr. Sub. Notes, 7.250%, 05/01/13............................ 51,250
-----------
1,177,777
-----------
HEALTH CARE -- 4.4%
275,000 HCA, Inc., Sub. Notes, 6.750%, 07/15/13.............................................. 290,742
100,000 Insight Health Services, Sr. Sub. Notes, Series B, 9.875%, 11/01/11.................. 78,500
225,000 Tenet Healthcare Corp., Sr. Notes, 9.875%, 07/01/14.................................. 242,437
150,000 Tenet Healthcare Corp., Sr. Notes, 9.250%, 02/01/15**................................ 156,375
100,000 Triad Hospitals, Inc., Sr. Sub. Notes, 7.000%, 11/15/13.............................. 103,250
100,000 Vanguard Health Holdings II, Sr. Sub. Notes, 9.000%, 10/01/14........................ 108,500
200,000 VWR International, Inc., Sr. Sub. Notes, 8.000%, 04/15/14............................ 191,500
-----------
1,171,304
-----------
AUTO PARTS & ACCESSORIES -- 4.2%
100,000 CSK Auto, Inc., Sr. Notes, 7.000%, 01/15/14.......................................... 96,000
200,000 Delco Remy International, Inc., Sr. Sub. Notes, 11.000%, 05/01/09.................... 185,000
150,000 Dura Operating Corp., Sr. Sub. Notes, Series B, 8.625%, 04/15/12..................... 135,750
See Notes to Financial Statements.
7
CIM HIGH YIELD SECURITIES -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------- -----------
CORPORATE BONDS AND NOTES -- (CONTINUED)
AUTO PARTS & ACCESSORIES -- (CONTINUED)
$275,000 Goodyear Tire & Rubber, Sr. Notes, 7.857%, 08/15/11.................................. $ 268,812
125,000 Navistar International, Sr. Notes, 7.500%, 06/15/11.................................. 128,125
50,000 Tenneco Automotive, Inc., Sr. Notes, Series B, 10.250%, 07/15/13..................... 56,750
200,000 Tenneco Automotive, Inc., Sr. Sub. Notes, 8.625%, 11/15/14........................... 202,000
200,000 Venture Holdings Trust, Sr. Notes, 11.000%, 06/01/07+................................ 1,500
75,000 Visteon Corp., Sr. Notes, 7.000%, 03/10/14........................................... 62,250
-----------
1,136,187
-----------
FOOD/DRUG RETAILERS -- 3.4%
100,000 B&G Foods Holding Corp., Sr. Notes, 8.000%, 10/01/11................................. 103,875
275,000 Great Atlantic & Pacific Tea Co., Sr. Notes, 9.125%, 12/15/11........................ 290,812
100,000 Ingles Markets, Inc., Sr. Sub. Notes, 8.875%, 12/01/11............................... 102,125
225,000 Jean Coutu Group PJC., Inc., Sr. Sub. Notes, 8.500%, 08/01/14........................ 223,313
200,000 Stater Bros Holdings, Inc., Sr. Notes, 8.125%, 06/15/12.............................. 196,000
-----------
916,125
-----------
PAPER & FOREST PRODUCTS -- 3.1%
200,000 Appleton Papers, Inc., Sr. Notes, 8.125%, 06/15/11................................... 196,000
100,000 Boise Cascade LLC., Sr. Sub. Notes, 7.125%, 10/15/14**............................... 98,750
175,000 Graphic Packaging International, Sr. Sub. Notes, 9.500%, 08/15/13.................... 177,187
125,000 Millar Western Forest, Sr. Notes, 7.750%, 11/15/13................................... 117,813
75,000 Newpage Corp., 9.460%, 05/01/12**^................................................... 75,563
100,000 Tembec Industries, Inc., Sr. Notes, 8.625%, 06/30/09................................. 82,000
100,000 Tembec Industries, Inc., Sr. Notes, 8.500%, 02/01/11................................. 77,750
-----------
825,063
-----------
CONTAINERS/PACKAGING -- 2.7%
200,000 Berry Plastic, Sr. Sub. Notes, 10.750%, 07/15/12..................................... 219,250
125,000 Constar International, Sr. Sub Notes, 11.000%, 12/01/12.............................. 100,000
100,000 Graham Packaging Co., Sr. Notes, 8.500%, 10/15/12**.................................. 101,500
100,000 Plastipak Holdings, Inc., Sr. Notes, 10.750%, 09/01/11............................... 110,750
200,000 Solo Cup Company, Sr. Sub. Notes, 8.500%, 02/15/14................................... 188,000
-----------
719,500
-----------
ELECTRONICS/ELECTRIC -- 2.5%
225,000 Amkor Technologies, Inc., Sr. Notes, 7.125%, 03/15/11................................ 195,750
200,000 Celestica, Inc., Sr. Sub. Notes, 7.875%, 07/01/11.................................... 206,000
125,000 New Asat Finance LTD., Sr. Notes, 9.250%, 02/01/11................................... 105,000
75,000 Sanmina-Sci Corp., Sr. Notes, 10.375%, 01/15/10...................................... 83,625
75,000 Stats Chippac LTD., Sr. Notes, 6.750%, 11/15/11...................................... 72,375
-----------
662,750
-----------
See Notes to Financial Statements.
8
CIM HIGH YIELD SECURITIES -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------- -----------
CORPORATE BONDS AND NOTES -- (CONTINUED)
LEISURE GOODS, ACTIVITIES, MOVIES -- 2.1%
$100,000 LCE Acquisition Corp., Sr. Notes, 9.000%, 08/01/14**................................. $ 97,250
175,000 NCL Corp., Sr. Notes, 11.625%, 07/15/14**............................................ 185,063
300,000 Six Flags, Inc., Sr. Notes, 9.625%, 06/01/14......................................... 282,000
-----------
564,313
-----------
ECOLOGICAL SERVICES AND EQUIPMENT -- 1.6%
200,000 Allied Waste North America, Inc., Sr. Notes, Series B, Sr. Notes, 9.250%, 09/01/12... 217,000
100,000 Allied Waste North America, Sr. Notes, 7.875%, 04/15/13.............................. 102,750
100,000 Casella Waste Systems, Sr. Sub. Notes, 9.750%, 02/01/13.............................. 108,500
-----------
428,250
-----------
AEROSPACE/DEFENSE -- 1.4%
100,000 BE Aerospace, Inc., Sr. Sub. Notes, Series B, 8.875%, 05/01/11....................... 105,000
150,000 BE Aerospace, Sr. Sub. Notes, Series B, 8.000%, 03/01/08............................. 150,750
125,000 K & F Acquisition, Inc., 7.750%, 11/15/14............................................ 128,438
-----------
384,188
-----------
FOOD SERVICE -- 1.4%
200,000 Buffets, Inc., Sr. Sub. Notes, 11.250%, 07/15/10..................................... 202,500
175,000 Friendly Ice Cream Corp., Sr. Notes, 8.375%, 06/15/12................................ 170,625
-----------
373,125
-----------
RETAIL -- 1.3%
100,000 Finlay Fine Jewelry Corp., Sr. Notes, 8.375%, 06/01/12............................... 90,625
75,000 Penney (JC) Co., Inc., Sr. Notes, 9.000%, 08/01/12................................... 89,063
175,000 Petro Shopping Center, Sr. Notes, 9.000%, 02/15/12................................... 176,750
-----------
356,438
-----------
BROADCASTING -- 1.3%
200,000 Rainbow National Services LLC., Sr. Notes, 8.750%, 09/01/12**........................ 219,500
125,000 Sinclair Broadcast Group, Sr. Sub. Notes, 8.000%, 03/15/12........................... 128,750
-----------
348,250
-----------
OFFICE/BUSINESS EQUIPMENT -- 1.3%
300,000 Xerox Corp., Sr. Notes, 9.750%, 01/15/09............................................. 342,375
-----------
STEEL -- 1.1%
100,000 Ak Steel Corp., Sr. Notes, 7.750%, 06/15/12.......................................... 85,000
100,000 International Steel Group, Sr. Notes, 6.500%, 04/15/14............................... 96,500
125,000 Ryerson Tull, Inc., Sr. Notes, 8.250%, 12/15/11...................................... 109,375
-----------
290,875
-----------
See Notes to Financial Statements.
9
CIM HIGH YIELD SECURITIES -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------- -----------
CORPORATE BONDS AND NOTES -- (CONTINUED)
EQUIPMENT LEASING -- 1.0%
$125,000 United Rentals, Inc., Sr. Sub. Notes, 7.000%, 02/15/14............................... $ 119,688
150,000 United Rentals, N.A. Inc., Sr. Sub. Notes, 7.750%, 11/15/13.......................... 148,125
-----------
267,813
-----------
MARINE TRANSPORTATION -- 0.8%
100,000 Great Lakes Dredge & Dock, Sr. Sub Notes, 7.750%, 12/15/13........................... 76,250
150,000 Omi Corp., Sr. Notes, 7.625%, 12/01/13............................................... 150,188
-----------
226,438
-----------
SOFTWARE/SERVICES -- 0.8%
200,000 UGS Corp., Sr. Sub. Notes, 10.000%, 06/01/12......................................... 223,000
-----------
PERSONAL SERVICES -- 0.8%
100,000 Service Corp. International, Sr. Notes, 7.700%, 04/15/09............................. 107,500
100,000 Service Corp. International, Sr. Notes, 7.700%, 04/15/09............................. 107,500
-----------
215,000
-----------
AGRICULTURAL PRODUCTION - CROPS -- 0.8%
200,000 Hines Nurseries, Inc., Sr. Notes, 10.250%, 10/01/11.................................. 207,000
-----------
SUPPORT SERVICES -- 0.7%
200,000 Geo Group, Inc., Sr. Notes, 8.250%, 07/15/13......................................... 194,000
-----------
PROPERTY - CASUALTY INSURANCE -- 0.7%
175,000 Crum & Forster Holding Corp., Sr. Notes, 10.375%, 06/15/13........................... 190,750
-----------
INSURANCE -- 0.6%
175,000 Fairfax Financial Holdings, Sr. Notes, 7.750%, 04/26/12.............................. 167,125
-----------
METALS/MINERALS -- 0.5%
135,000 Novelis, Inc., Sr. Notes, 7.250%, 02/15/15**......................................... 136,181
-----------
AIRLINES -- 0.5%
100,000 AMR Corp., Sr. Notes, 9.000%, 08/01/12............................................... 79,000
100,000 Northwest Airlines, Inc., Sr. Notes, 9.875%, 03/15/07................................ 50,500
-----------
129,500
-----------
APPAREL & TEXTILES -- 0.4%
100,000 Phillips Van-Heusen, Sr. Notes, 8.125%, 05/01/13..................................... 108,750
-----------
TELECOMMUNICATIONS EQUIPMENT -- 0.3%
75,000 Lucent Technologies, Sr. Notes, 6.450%, 03/15/29..................................... 67,500
-----------
TOTAL CORPORATE BONDS AND NOTES
(Cost $33,388,427)................................................................. 33,679,384
-----------
See Notes to Financial Statements.
10
CIM HIGH YIELD SECURITIES -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------- -----------
FOREIGN BONDS -- 6.4%
OIL & GAS -- 1.9%
$200,000 Gazprom International SA., Sr. Notes, 7.201%, 02/01/20** (Luxembourg)................ $ 216,000
100,000 Morgan Stanley (Gazprom), Sr. Notes, 9.625%, 03/01/13** (Denmark).................... 123,125
175,000 Petrobras International Finance, Sr. Notes, 7.750%, 09/15/14 (Kyrgyzstan)............ 184,625
-----------
523,750
-----------
FOREST PRODUCTS & PAPER -- 1.1%
300,000 Kappa Beheer BV, Sr. Sub. Notes, 10.625%, 07/15/09 (Netherlands)..................... 310,500
-----------
CABLE AND SATELLITE TELEVISION -- 1.1%
175,000 Intelsat Bermuda LTD., Sr. Notes, 8.625%, 01/15/15** (Bermuda)....................... 185,500
100,000 Intelsat Bermuda LTD., Sr. Notes, 7.794%, 01/15/12**^ (Bermuda)...................... 102,250
-----------
287,750
-----------
CONTAINERS/PACKAGING -- 1.0%
225,000 Crown Euro Holdings SA., Sr. Notes, 10.875%, 03/01/13 (France)....................... 265,500
-----------
UTILITIES -- 0.7%
250,000 Calpine Corp., Sr. Notes, 8.500%, 05/01/08 (Canada).................................. 181,250
-----------
CHEMICALS AND PLASTICS -- 0.6%
150,000 Acetex Corp., Sr. Notes, 10.875%, 08/01/09 (Canada).................................. 158,250
-----------
TOTAL FOREIGN BONDS
(Cost $1,695,113).................................................................. 1,727,000
-----------
TOTAL INVESTMENTS (Cost $35,083,540)................................................. 131.9% 35,406,384
OTHER ASSETS AND LIABILITIES (NET)................................................... (31.9%) (8,565,713)
------- -----------
NET ASSETS............................................................................ 100.0% $26,840,671
======== ===========
<FN>
** Security purchased in a transaction exempt from registration under Rule 144A of the Securities Act of 1933.
These securities may be resold in transactions exempt from registration, normally to qualified institutional
buyers. The market value of these securities is $4,672,206.
*** Rate represents annualized yield at date of purchase.
+ Securities in default.
^ Variable rate security - the interest rate shown is the rate at June 30, 2005.
</FN>
At June 30, 2005, the Fund's credit quality allocation was as follows:
STANDARD & POOR'S CREDIT RATING (UNAUDITED)
- -------------------------------
BBB................................................................. 0.62%
BB.................................................................. 18.46%
B................................................................... 65.67%
CCC................................................................. 14.89%
CC.................................................................. 0.35%
Not Rated........................................................... 0.01%
See Notes to Financial Statements.
11
CIM HIGH YIELD SECURITIES
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ASSETS:
Investments, at value (Cost $35,083,540).................................. $ 35,406,384
Receivable for investments sold........................................... 179,613
Interest receivable....................................................... 730,041
Prepaid expenses.......................................................... 8,935
------------
Total Assets........................................................... 36,324,973
------------
LIABILITIES:
Notes payable (including accrued interest of $84,158)..................... $8,974,158
Cash overdraft............................................................ 21,618
Payables for securities purchased......................................... 444,842
Investment advisory fee payable........................................... 11,125
Administration fee payable................................................ 3,671
Custodian fees payable.................................................... 1,069
Accrued expenses and other payables....................................... 27,819
----------
Total Liabilities...................................................... 9,484,302
------------
NET ASSETS..................................................................... $ 26,840,671
============
NET ASSETS consist of:
Shares of beneficial interest, $0.01 per share par value,
issued and outstanding 6,134,216........................................ $ 61,342
Paid-in capital in excess of par value.................................... 45,575,764
Accumulated undistributed net investment income........................... 25,291
Accumulated net realized loss on investments sold......................... (19,144,570)
Unrealized appreciation of investments.................................... 322,844
------------
Total Net Assets....................................................... $ 26,840,671
============
NET ASSET VALUE PER SHARE
($26,840,670 / 6,134,216 shares of beneficial interest outstanding)......... $ 4.38
============
MARKET VALUE PER SHARE......................................................... $ 4.06
============
See Notes to Financial Statements.
12
CIM HIGH YIELD SECURITIES
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
INVESTMENT INCOME:
Interest.................................................................. $ 1,552,690
-----------
EXPENSES:
Interest expense.......................................................... $156,977
Miscellaneous............................................................. 74,290
Investment advisory fee................................................... 67,621
Legal and audit fees...................................................... 51,364
Trustees' fees and expenses............................................... 25,108
Administration fee........................................................ 19,930
Shareholder servicing agent fees.......................................... 10,251
Custodian fees............................................................ 7,538
--------
Total Expenses......................................................... 413,079
-----------
NET INVESTMENT INCOME.......................................................... 1,139,611
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments sold during the period................... 301,881
Net change in unrealized depreciation of investments
during the period.... (1,886,372)
-----------
(1,584,491)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ (444,880)
===========
See Notes to Financial Statements.
13
CIM HIGH YIELD SECURITIES
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
NET DECREASE IN CASH:
Cash flows from operating activities:
Interest received......................................................... $ 1,481,072
Operating expenses paid................................................... (245,792)
Decrease in short-term securities, net.................................... 1,236,275
Purchases of long-term securities......................................... (8,579,038)
Proceeds from sales of long-term securities............................... 7,138,530
Interest payments on notes payable........................................ (137,226)
-----------
Net cash provided by operating activities...................................... $ 893,821
-----------
Cash flows from financing activities:
Principal payments on loan................................................ (300,000)
Distributions paid........................................................ (1,122,577)
-----------
Net cash used in financing activities.......................................... (1,422,577)
-----------
Net decrease in cash........................................................... (528,756)
Cash -- beginning of period..................................................... 507,138
-----------
Cash -- end of period........................................................... $ (21,618)
===========
RECONCILIATION OF NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
Net decrease in net assets resulting from operations........................... $ (444,880)
Increase in interest receivable........................................... (28,222)
Decrease in prepaid expenses.............................................. 10,135
Increase in receivable for securities sold................................ (179,613)
Increase in accrued interest.............................................. 19,752
Decrease in investment advisory fee payable............................... (1,111)
Decrease in administration fee payable.................................... (15)
Decrease in custodian fee payable......................................... (91)
Increase in accrued expenses and other payables........................... 1,391
Increase in payable for securities purchased.............................. 444,842
Amortization of discount/premium.......................................... (30,621)
Decrease in short-term securities, net.................................... 1,236,275
Purchases of long-term securities......................................... (9,023,880)
Proceeds from sales of long-term securities............................... 7,305,368
Net realized gain on investments sold..................................... (301,881)
Net change in unrealized appreciation/depreciation of investments......... 1,886,372
-----------
Total adjustments.................................................... 1,338,701
-----------
Net cash provided by operating activities...................................... $ 893,821
===========
See Notes to Financial Statements.
14
CIM HIGH YIELD SECURITIES
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
-------------- -----------------
Increase in net assets from operations:
Net investment income ................................................................ $ 1,139,611 $ 2,606,657
Net realized gain on investments sold during the period .............................. 301,881 449,306
Net change in unrealized depreciation of investments during the period ............... (1,886,372) (118,636)
----------- -----------
Net increase/(decrease) in net assets resulting from operations ...................... (444,880) 2,937,327
----------- -----------
Distributions to shareholders from:
Net investment income ........................................................... (1,122,577) (2,602,643)
----------- -----------
Total distributions .......................................................... (1,122,577) (2,602,643)
----------- -----------
Fund share transactions:
Shares issued as reinvestment of dividends ...................................... -- 190,864
----------- -----------
Net increase in net assets from Fund share transactions .............................. -- 190,864
----------- -----------
Net increase/(decrease) in net assets ................................................ (1,567,457) 525,548
NET ASSETS:
Beginning of period .................................................................. 28,408,128 27,882,580
----------- -----------
End of period ........................................................................ $26,840,671 $28,408,128
=========== ===========
Accumulated undistributed net investment income ...................................... $ 25,291 $ 8,257
See Notes to Financial Statements.
15
CIM HIGH YIELD SECURITIES
FINANCIAL HIGHLIGHTS
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR YEAR YEAR
6/30/05 ENDED ENDED ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98*
----------- -------- -------- -------- -------- -------- -------- ---------
Operating performance:
Net asset value, beginning
of period .................... $ 4.63 $ 4.58 $ 3.68 $ 4.25 $ 4.71 $ 6.53 $ 6.91 $ 7.96
------- ------- ------- ------- ------- ------- ------- -------
Net investment income .......... 0.19 0.43 0.48 0.48 0.51 0.69 0.72 0.71
Net realized and
unrealized gain/(loss)
on investments ............... (0.26) 0.05 0.90 (0.57) (0.46) (1.82) (0.39) (1.07)
------- ------- ------- ------- ------- ------- ------- -------
Net increase/(decrease)
in net assets resulting
from investment
operations ................... (0.07) 0.48 1.38 (0.09) 0.05 (1.13) 0.33 (0.36)
Distributions:
Dividends from net
investment income ............ (0.18) (0.43) (0.48) (0.48) (0.51) (0.63) (0.71) (0.69)
Return of capital .............. -- -- -- --# --# (0.06) -- --
------- ------- ------- ------- ------- ------- ------- -------
Total from distributions ....... (0.18) (0.43) (0.48) (0.48) (0.51) (0.69) (0.71) (0.69)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period** ..................... $ 4.38 $ 4.63 $ 4.58 $ 3.68 $ 4.25 $ 4.71 $ 6.53 $ 6.91
======= ======= ======= ======= ======= ======= ======= =======
Market value, end of
period** ..................... $ 4.06 $ 4.28 $ 4.77 $ 3.64 $ 4.29 $ 4.87 $ 5.25 $ 7.19
======= ======= ======= ======= ======= ======= ======= =======
Total investment return
(net asset value) ............ (1.42)% 11.19% 39.39% (2.06)% 0.72% (18.76)% 4.93% (4.95)%
======= ======= ======= ======= ======= ======= ======= =======
Total investment return
(market value) ............... (0.80)% (1.20)% 46.15% (4.12)% (1.78)% 4.58% (18.89)% (5.45)%
======= ======= ======= ======= ======= ======= ======= =======
Ratios to average net
assets/supplemental data:
Net assets, end of period
(in 000's) ................... $26,841 $28,408 $27,883 $22,111 $25,293 $27,707 $38,389 $40,567
Ratio of net investment
income to average
net assets ................... 9.61% 9.52% 11.47% 12.22% 11.11% 11.10% 10.76% 9.37%
Ratio of operating expenses
to average net assets (2) .... 1.89% 1.93% 1.58% 1.55% 1.44% 1.22% 1.02% 1.02%
Portfolio turnover rate (1) .... 20.2% 55.1% 70.1% 40.2% 75.2% 118.8% 98.0% 62.4%
YEAR YEAR YEAR
ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95
-------- -------- --------
Operating performance:
Net asset value, beginning
of period .................... $ 7.69 $ 7.32 $ 7.11
------- ------- -------
Net investment income .......... 0.78 0.78 0.77
Net realized and
unrealized gain/(loss)
on investments ............... 0.30 0.36 0.23
------- ------- -------
Net increase/(decrease)
in net assets resulting
from investment
operations ................... 1.08 1.14 1.00
Distributions:
Dividends from net
investment income ............ (0.78) (0.77) (0.79)
Return of capital .............. (0.03) -- --
------- ------- -------
Total from distributions ....... (0.81) (0.77) (0.79)
------- ------- -------
Net asset value, end of
period** ..................... $ 7.96 $ 7.69 $ 7.32
======= ======= =======
Market value, end of
period** ..................... $ 8.31 $ 8.12 $ 7.87
======= ======= =======
Total investment return
(net asset value) ............ 14.50% 16.46% 14.31%
======= ======= =======
Total investment return
(market value) ............... 13.31% 14.38% 22.72%
======= ======= =======
Ratios to average net
assets/supplemental data:
Net assets, end of period
(in 000's) ................... $45,848 $43,495 $40,636
Ratio of net investment
income to average
net assets ................... 10.08% 10.46% 10.32%
Ratio of operating expenses
to average net assets (2) .... 1.06% 1.10% 1.14%
Portfolio turnover rate (1) .... 154.5% 172.2% 79.9%
<FN>
- ----------
(1) This rate is, in general, the percentage computed by taking the lesser of
the cost of purchases or proceeds from the sales of portfolio securities for
a period and dividing it by the monthly average value of such securities
during the last 13 months, excluding short term securities.
(2) The annualized operating expense ratio excludes interest expense. The
annualized ratios including interest expense were 3.05%, 2.64%, 2.21%,
2.37%, 3.17%, 3.89%, 3.13%, 2.98%, 3.06%, 3.19% and 3.52% for the six months
ended June 30, 2005 and the years ended December 31, 2004, 2003, 2002, 2001,
2000, 1999, 1998, 1997, 1996 and 1995, respectively.
* On May 29, 1998 the Fund entered into a new investment advisory agreement
with INVESCO (NY), Inc. (now known as INVESCO Institutional (N.A.), Inc.)
due to the acquisition of Chancellor LGT Asset Management, Inc. by AMVESCAP
PLC.
** Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purpose of this calculation, to be reinvested at prices obtained under
the Fund's dividend reinvestment plan. Generally, total investment return
based on net asset value will be higher than total investment return based
on market value in periods where there is an increase in the discount or
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in periods where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods.
# Amount rounds to less than $0.005 per share.
</FN>
See Notes to Financial Statements.
16
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2005
1. SIGNIFICANT ACCOUNTING POLICIES
CIM High Yield Securities (the "Fund") was organized under the laws of the
Commonwealth of Massachusetts on September 11, 1987 and is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a diversified, closed-end management investment
company. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
PORTFOLIO VALUATION: Fixed-income securities (other than short-term
obligations, but including listed issues) are valued based on prices obtained by
one or more of the independent pricing services approved by the Board of
Trustees. Such securities are valued at the mean of the closing bid and closing
ask prices on the exchange where primarily traded.
Portfolio securities for which there are no such valuations are valued at
fair value as determined in good faith by or at the direction of the Board of
Trustees. Short-term obligations with maturities of less than 60 days are valued
at amortized cost which approximates market value.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Interest income,
including, where applicable, amortization of premium and accretion of discount
on investments, is recorded on the accrual basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund distributes monthly
to shareholders substantially all of its net investment income. Capital gains,
if any, net of capital losses, are distributed annually. Income distributions
and capital gain distributions are determined in accordance with income tax
regulations which may differ from accounting principles generally accepted in
the United States. These differences are primarily due to differing treatments
of income and gains on various investment securities held by the Fund, timing
differences and differing characterization of distributions made by the Fund.
FEDERAL INCOME TAXES: It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no Federal income tax should be payable by the Fund.
CASH FLOW INFORMATION: Cash, as used in the Statement of Cash Flows, is the
amount reported in the Statement of Assets and Liabilities. The Fund invests in
securities and distributes dividends from net investment income and net realized
gains (which are either paid in cash or reinvested at the discretion of
shareholders). These activities are reported in the Statements of Changes in Net
Assets. Information on cash payments is presented in the Statement of Cash
Flows. Accounting practices that do not affect reporting activities on a cash
basis include unrealized gain or loss on investment securities and accretion
income recognized on investment securities.
USE OF ESTIMATES: The preparation of financial statements in conformity
with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reported period. Actual results could differ from those estimates.
17
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER RELATED PARTY
TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with INVESCO Institutional (N.A.), Inc. (the "Adviser"). The
Advisory Agreement provides that the Fund will pay the Adviser a fee, computed
and payable monthly, at the annual rate of 0.50% of the Fund's average weekly
net assets.
The Fund has also entered into an Administration and Support Agreement with
PFPC Inc. ("PFPC"), to provide all administrative services to the Fund other
than those related to the investment decisions. PFPC is paid a fee computed and
payable monthly at an annual rate of 0.09% of the Fund's average weekly net
assets, but no less than $40,000 per annum.
The Fund pays each Trustee not affiliated with the Adviser $6,000 per year
plus $1,000 per board meeting and committee meeting attended, and reimburses
each such Trustee for travel and out-of-pocket expenses relating to their
attendance at such meetings.
Boston Safe Deposit & Trust Company, an indirect wholly-owned subsidiary of
Mellon Bank Corporation, serves as the Fund's custodian. PFPC serves as the
Fund's shareholder servicing agent (transfer agent).
3. PURCHASE AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of investment securities,
excluding U.S. Government and short-term investments, during the six months
ended June 30, 2005, amounted to $8,675,671 and $7,158,690, respectively.
As of June 30, 2005, net unrealized appreciation was $309,647, of which
$1,394,733 related to unrealized appreciation of investments and $1,085,086
related to unrealized depreciation of investments. The cost of securities on a
federal tax basis at June 30, 2005 was $35,096,737.
The difference between book-basis and tax-basis unrealized depreciation is
attributable to the tax deferral of losses on wash sales.
4. FUND SHARES
The Fund has one class of shares of beneficial interest, par value $0.01
per share, of which an unlimited number of shares are authorized. Transactions
in shares of beneficial interest were as follows:
PERIOD ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, 2004
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ --------
Issued as reinvestment of dividends.................. -- $ -- 42,292 $190,864
------ ------ ------ --------
Net increase......................................... -- $ -- 42,292 $190,864
====== ====== ====== ========
18
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. NOTES PAYABLE
The Fund currently has an $11 million ("commitment amount") line of credit
provided by Fleet National Bank (the "Bank") under an Amended and Restated
Credit Agreement (the "Agreement") dated as of September 18, 1992 and amended
and restated as of May 23, 2002, as amended, primarily to leverage its
investment portfolio. Under this Agreement, the Fund may borrow up to the lesser
of $11 million or 25% of its total assets. Interest is payable at either the
federal funds rate plus 0.75% or its applicable LIBOR rate plus 0.75%, as
selected by the Fund from time to time in its loan requests. The Fund is charged
a commitment fee of one tenth of one percent per annum of the average daily
unused commitment amount. At June 30, 2005, the Fund had borrowings of
$8,890,000 outstanding under this Agreement. During the six months ended June
30, 2005, the Fund had an average outstanding daily balance of $9,096,668 with
an average rate of 3.46% and average debt per share of $1.48. For the six months
ended June 30, 2005, interest expense totaled $156,977 under this Agreement.
6. CAPITAL LOSS CARRYFORWARD
Capital loss carryforwards are available to offset future realized capital
gains. To the extent that these carryforwards are used to offset future capital
gains, it is probable that the amount which is offset will not be distributed to
shareholders.
At December 31, 2004, the Fund had available for Federal tax purposes
unused capital loss carryforwards of $2,303,012, $133,391, $4,838,652,
$7,509,786, $4,573,327 and $87,693 expiring in 2006, 2007, 2008, 2009, 2010 and
2011, respectively.
7. RISK FACTORS
The Fund invests in securities offering high current income which generally
will be in the lower rating categories of recognized ratings agencies (below
investment-grade bonds). These securities generally involve more credit risk
than securities in the higher rating categories. In addition, the trading market
for high yield securities may be relatively less liquid than the market for
higher-rated securities. The Fund will provide notice to shareholders at least
60 days prior to any change in its policy of investing primarily (at least 80%
of its total assets under normal circumstances) in "high yield", high risk fixed
income securities. The Fund's use of leverage also increases exposure to capital
risk. The Fund may invest 2-3% of its assets in emerging markets. Emerging
markets may be subject to a substantially greater degree of social, political,
and economic instability than is the case in domestic markets.
19
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the six months ended June 30,
2005 and year ended 2004 are as follows:
2005 2004
---- ----
DISTRIBUTIONS PAID FROM:
Ordinary income.................................. $1,122,557 $2,602,643
---------- ----------
Total............................................ $1,122,557 $2,602,643
========== ==========
As of June 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Capital loss carryforwards .................................... $(19,131,373)
Undistributed net investment income ........................... 25,291
Unrealized appreciation ....................................... 309,647
------------
Total accumulated deficit...................................... $(18,796,435)
============
The components of accumulated earnings/deficit on a tax basis differ from
book basis as a result of wash sales.
9. INDEMNIFICATION CONTINGENCIES
In the normal course of business, the Fund enters into contracts that
provide for general indemnifications to the counterparties to those contracts.
The Fund's maximum exposure under these arrangements is dependent upon claims
that may be made against the Fund in the future and, therefore, cannot be
estimated; however, based on experience, the risk of material loss from such
claims is considered remote.
20
CIM HIGH YIELD SECURITIES
ADDITIONAL INFORMATION FOR SHAREHOLDERS
PROXY VOTING POLICY AND VOTING RECORD
A description of the policies and procedures used by the adviser in
determining how to vote proxies relating to the Fund's portfolio securities is
available without charge, upon request, by calling 1-800-331-1710. It is also
available on the SEC's website at WWW.SEC.GOV.
In addition, the Fund's complete proxy voting record for the 12 months
ended June 30, 2005 is available without charge, upon request, by calling toll
free 1-800-331-1710. It is also available on the SEC's website at WWW.SEC.GOV.
QUARTERLY PORTFOLIO DISCLOSURE
The Fund files its complete schedule of portfolio holdings with the SEC for
the first and third quarters of each fiscal year on Form N-Q within 60 days of
the end of the fiscal quarter. The Fund's Form N-Q is available on the SEC's
website at WWW.SEC.GOV, and may be reviewed and copied at the SEC's Public
Reference Room in Washington, D.C. Information on the Public Reference Room may
be obtained by calling 1-800-SEC-0330. In addition, the Fund's Form N-Q is
available, without charge, upon request, by calling toll free 1-800-331-1710.
21
CIM HIGH YIELD SECURITIES
ADDITIONAL INFORMATION FOR SHAREHOLDERS
BOARD APPROVAL OF THE CONTINUATION OF THE INVESTMENT ADVISORY AGREEMENT
The Board of Trustees (the "Board") of CIM High Yield Securities ("CIM" or
the "Fund") recently considered the renewal of the investment advisory agreement
between INVESCO (N.A.), Inc. ("INVESCO") and CIM (the "Agreement"). All of the
Trustees are not "interested person" of the Fund, as that term is defined in the
Investment Company Act of 1940, as amended (the "Independent Trustees"). The
Agreement was approved by the Board for an additional one-year term at a meeting
of the Trustees held on April 21, 2005. The Trustees' decision to approve the
Agreement reflects the exercise of their business judgment to continue the
existing arrangement. In approving the Agreement, the Trustees considered
information provided by INVESCO, with the assistance and advice of counsel to
the Fund.
In advance of the April 21, 2005 meeting, the Independent Trustees, through
their counsel, had submitted to INVESCO a written request for information in
connection with their consideration of the Fund's Agreement with INVESCO. The
Trustees consideration of various factors and their conclusions with respect to
such factors formed the basis for the Trustees' determination to continue the
Agreement. The materials reviewed by the Trustees included, but were not limited
to: (i) a Lipper Inc. report comparing the Fund's fees, expenses, performance
and certain other characteristics to those of a peer group for the Fund selected
by Lipper; and (ii) reports and presentations by INVESCO that described (a) the
nature, extent and quality of the services provided by INVESCO to the Fund, (b)
the fees and other amounts paid under the Agreement, and information as to the
fees charged and services provided by INVESCO to other clients, (c) certain
information about INVESCO's compliance program and procedures and any regulatory
issues, (d) brokerage practices, including soft dollar practices, (e) proxy
voting policies and procedures, (f) INVESCO's code of ethics and (g) certain
financial information, including a profitability analysis concerning the
relationship with the Fund. The Independent Trustees had also received from
their counsel a memorandum outlining the legal standards and certain other
considerations relevant to the Trustees' deliberations.
The Independent Trustees conferred separately with their counsel regarding
the continuance of the Agreement and their duties, under federal and state
securities laws, with respect to approving the continuation of the Agreement.
The Independent Trustees also reviewed the materials provided to them and
discussed the investment advisory arrangements with INVESCO at the April 21,
2005 meeting.
After discussion with INVESCO and meeting separately with counsel, the
Trustees concluded that INVESCO had the capabilities, resources and personnel
necessary to manage the Fund. The Trustees further concluded that the advisory
fee payable by the Fund to INVESCO represents reasonable compensation to INVESCO
in light of the services provided to the Fund, the costs to INVESCO of providing
those services, the fees paid by similar funds, and such other matters as the
Trustees considered relevant in the exercise of their reasonable judgment. The
Trustees were continuing to discuss with INVESCO the long-term viability of the
Fund and considered that retaining a different investment adviser in the face of
a possible liquidation would not be practicable under the circumstances, and
could be costly to shareholders (both in terms of tax impact and transaction
costs) and disruptive to the management of the Fund's portfolio. On August 4,
2005 the Trustees approved a plan of complete liquidation for the Fund. The plan
will be considered by shareholders at the annual meeting scheduled for October
7, 2005.
22
CIM HIGH YIELD SECURITIES
ADDITIONAL INFORMATION FOR SHAREHOLDERS (CONTINUED)
In reaching the conclusions, the Trustees considered a variety of factors
they believed relevant and balanced a number of considerations, including, among
others, the following: (i) the nature, extent and quality of the investment
advisory services rendered to the Fund by INVESCO; (ii) the professional
experience and qualifications of the Fund's portfolio management team and other
senior personnel at INVESCO; (iii) the costs borne by, and profitability of,
INVESCO in providing services to the Fund; (iv) the payments received by INVESCO
from all sources in respect of the Fund; (v) the brokerage practices of INVESCO,
including the extent to which it benefits from soft dollar arrangements; (vi)
fall-out benefits which INVESCO receives from its relationship to the Fund;
(vii) information comparing the performance of the Fund to other leveraged
closed-end funds with similar investment objectives; (viii) information
comparing the advisory fee and total expense ratio of the Fund to other
leveraged closed-end funds with similar investment objectives; (ix) information
about fees charged by INVESCO to other clients with similar investment
objectives; and (x) the terms of the Investment Advisory Agreement. The Trustees
noted that no one factor was determinative.
NATURE, QUALITY AND EXTENT OF SERVICES PROVIDED
The Trustees considered that pursuant to the Agreement, INVESCO, subject to
the direction of the Trustees, is responsible for providing an investment
program for the Fund and for determining what securities are to be purchased,
sold or exchanged and what portion of the assets of the Fund are to be held
uninvested. The Trustees considered the scope and quality of services provided
by INVESCO under the Agreement and noted that the scope of such services had
expanded over time as a result of regulatory and other developments. The
Trustees noted, by way of example, INVESCO's additional obligations involving
its compliance policies and procedures and the substantial commitment of time
and resources that INVESCO had made in that regard. The Trustees also considered
the information they received regarding the professional experience, education,
background and qualifications of the Fund's portfolio management team and
concluded that the team had appropriate experience and qualifications with
respect to high yield fixed income securities. The Trustees also considered that
the portfolio manager of the Fund has managed the Fund for a number of years and
that the overall stability of the portfolio management team was beneficial to
the Fund. The Trustees concluded that, overall, they were satisfied with the
nature, extent and quality of the services provided to the Fund under the
Agreement.
FEES AND OTHER EXPENSES
The Trustees considered the advisory fees to be paid by the Fund to INVESCO
and the comparative cost of similar services being paid by other similar funds.
The Trustees reviewed and discussed the comparative information prepared by
Lipper. It was noted that the advisory fee for the Fund was lower than the
average advisory fee for the Lipper peer group. The Trustees considered that,
although INVESCO did not manage any other high yield fund clients, the Trustees
had received information showing what INVESCO charged its other similarly
managed non-fund clients, and had determined that the Fund's advisory fee was
within the general fee range charged to comparable non-fund clients and appeared
reasonable in relation to those fees, and that the services equaled or exceeded
those provided to non-mutual fund clients.
23
CIM HIGH YIELD SECURITIES
ADDITIONAL INFORMATION FOR SHAREHOLDERS (CONTINUED)
The Trustees also considered the total annual operating expenses paid by
the Fund and the total annual operating expenses being paid by other similar
funds, as reflected in the Lipper materials. It was noted that total expenses
exceeded the median total expense ratio of the peer group. The Trustees noted
that the Fund is the smallest fund in its Lipper peer group and considered the
impact that its asset size had on its expense ratio, particularly given the
increased costs incurred by the Fund in 2004 in response to new regulations. The
Trustees determined that the fees charged by INVESCO were reasonable in
comparison to the Fund's peers.
COSTS OF SERVICES PROVIDED AND PROFITABILITY
The Trustees reviewed information provided to them by INVESCO concerning
the profitability to INVESCO of its advisory relationship with the Fund for the
2004 calendar year, along with a description of the methodology used by INVESCO
in preparing the profitability information. The Trustees noted that there
appeared to be a reasonable basis for the methodology used by INVESCO in its
profitability analysis. The Trustees considered that, based on such information,
INVESCO did not make a profit in the 2004 calendar year in respect of the
investment advisory services it provided to the Fund.
OTHER BENEFITS TO INVESCO
The Trustees considered that none of INVESCO or its affiliates received any
compensation from the Fund other than the payment to INVESCO of the investment
advisory fee. The Trustees also considered that, according to the information
provided by INVESCO, the Fund did not generate any soft dollar commissions. The
Trustees further considered that the Fund benefited from INVESCO's larger high
yield mandates in that such mandates provided INVESCO with increased leverage in
negotiating with brokers and access to alpha sources.
INVESTMENT RESULTS
The Trustees reviewed comparative performance information for the Fund
obtained from Lipper. The information compared the investment performance of the
Fund to the investment performance of twenty-eight leveraged closed-end funds
with similar investment objectives as determined by Lipper. The Trustees
reviewed information showing the performance of the Fund compared to its Lipper
peer group over the 3 month, 1-, 3-, 5-, and 10- year periods ended February 28,
2005. The Trustees considered that the comparative information showed that the
performance of the Fund was in the fourth quartile for the three month and
1-year periods and in the third quartile for the 3-, 5-, and 10- year periods.
The Trustees also reviewed the Fund's annual yield, both at market value and at
net asset value for the period from February 29, 2004 through February 28, 2005,
and compared such annual yield information to the average annual yield (both at
market value and at net asset value) of the Fund's Lipper peer group. The
Trustees considered that the Fund's annual yield for the period ranked 22nd out
of the 28 funds in the Lipper peer group on a net asset value basis and 15th out
of 28 on a market value basis.
The Trustees considered the reasons for the relative performance of the
Fund as compared to its Lipper peer group. They considered that, as explained to
them by INVESCO, the Fund invested substantially less of its assets in emerging
market debt than most of the funds in its Lipper peer group and that emerging
market debt had generally performed well in the past year. The Trustees also
considered that the Fund uses less leverage than many of the funds in its Lipper
peer group, according to INVESCO, and that increased leverage may have improved
the Fund's performance. The Trustees considered that the restrictions outlined
24
CIM HIGH YIELD SECURITIES
ADDITIONAL INFORMATION FOR SHAREHOLDERS (CONTINUED)
in the Fund's prospectus prevented the Fund from increasing its exposure to
emerging market debt or increasing its use of leverage. The Trustees also
considered the impact of the Fund's expense ratio on its investment performance.
They also considered the Fund's low default rate over the past twelve months as
compared to the Moody's trailing twelve month default rate over the same period.
Based on their review and the information provided by INVESCO, the Trustees
concluded that the performance of the Fund over time had been acceptable, that
the Fund's relative performance compared to its peer group was satisfactorily
explained by INVESCO, and that they retained confidence in INVESCO's overall
ability to manage the Fund. They also noted that they would continue to closely
monitor the Fund's investment performance.
ECONOMIES OF SCALE
The Trustees noted that the advisory fee payable to INVESCO does not
decrease as assets in the Fund increase. The Trustees noted that, because the
Fund is a closed-end fund, there were limited ways that the Fund could increase
its capital, none of which were currently being contemplated for the Fund. The
Trustees determined that, given the Fund's asset size and prospects for raising
additional capital, it would not be necessary to add breakpoints to the advisory
fee.
Based on all of the information presented to the Board and its
consideration of relevant factors, the Board, in the exercise of its reasonable
business judgement, determined to approve the continuation of the Agreement and
determined that the fees payable to INVESCO thereunder are reasonable in light
of the services provided.
25
To Shareholders of CIM High Yield Securities (the "Fund")
About the Fund's Dividend Reinvestment Plan
Pursuant to the Fund's Dividend Reinvestment Plan (the "Plan"),
shareholders of the Fund ("Shareholders") whose shares are registered in their
own name will automatically have all dividends and other distributions
reinvested in additional shares of the Fund by PFPC (the "Agent") as agent under
the Plan, unless such Shareholder terminates participation in the Plan as
provided below. Shareholders whose shares are registered in the name of a
broker-dealer or other nominee (i.e., in "Street Name") will not participate in
the Plan unless the requisite election is made by the broker-dealer and only if
such a service is provided by the broker-dealer. Shareholders who own Fund
shares registered in Street Name and who desire that their distributions be
reinvested should consult their broker-dealers. Shareholders who do not
participate in the Plan will receive all distributions by check mailed directly
to the Shareholder by the Agent.
Whenever the Fund declares a capital gains distribution or an income
dividend payable in shares or cash, participating Shareholders will take such
distribution or dividend entirely in shares and the Agent shall automatically
receive such shares, including fractions, for the Shareholder's account, except
in the circumstances described in the paragraph below.
Whenever the market price of the shares on the record date for the dividend
or distribution is equal to or exceeds their net asset value, participants will
be issued shares of the Fund at the higher of net asset value or 95% of the
market price. This discount reflects savings in underwriting or other costs
which the Fund would otherwise be required to incur to raise additional capital.
If net asset value exceeds the market price of Fund shares at such time or if
the Fund should declare a dividend or other distribution payable only in cash,
the Agent will buy Fund shares in the open market, on the American Stock
Exchange (the "Exchange") or elsewhere, for the Shareholder's account. If before
the Agent has completed its purchases, the market price exceeds the net asset
value of the Fund's shares, the average per share purchase price paid by the
Agent may exceed the net asset value of the Fund's shares, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the Fund.
For all purposes of the Plan: (a) the market price of the Fund shares on a
particular date shall be the last sales price on the Exchange on the close of
the previous trading day or, if there is no sale on the Exchange on that date,
then the mean between the closing bid and asked quotations for such stock on the
Exchange on such date and (b) net asset value per Fund shares on a particular
date shall be as determined by or on behalf of the Fund.
The Fund will not charge participants for reinvesting dividends or
distributions. The Agent's service fee for handling capital gains distributions
or income dividends will be paid by the Fund. There will be no brokerage
commissions charged with respect to shares issued directly by the Fund. However,
Shareholders will be charged a pro rata share of brokerage commissions incurred
by the Agent on all open market purchases. In addition, Shareholders requesting
certificates or redeeming shares issued under the Plan will be charged a $5.00
service fee by the Agent.
The automatic reinvestment of dividends and capital gains distributions
does not relieve Plan participants of any income tax that may be payable on the
dividends or capital gains distributions. Distributions of net investment income
and net realized capital gains, if any, will be taxable, whether received in
cash or reinvested in shares under the Plan. When distributions are received in
the form of shares issued by the Fund (as opposed to purchased on the
26
open market) under such Plan, however, the amount of the distribution deemed to
have been received by participating Shareholders is the fair market value of the
shares received rather than the amount of cash which would otherwise have been
received. In such case, participating Shareholders will have a basis for federal
income tax purposes in each share received from the Fund equal to the fair
market value of such share on the payment date.
A Shareholder may terminate participation in the Plan at any time by
notifying the Agent in writing. Such termination will become effective
immediately if notice is received by the Agent not less than 10 business days
before the next following dividend or distribution record date. Otherwise, the
termination will be effective, with respect to any subsequent dividend or
distributions, on the first trading day after the dividend paid for such record
date has been credited to the Shareholder's account. Upon any termination the
Agent will, upon the request of the Shareholder, cause a certificate or
certificates for the full shares held for the Shareholder under the Plan and
cash adjustment for any fraction to be delivered to her or him. If, upon
termination, the Shareholder requests a certificate for shares held in the
account, a $5.00 service fee will be charged to the Shareholder by the Agent. If
the Shareholder elects by notice to the Agent in writing in advance of such
termination to have the Agent sell part or all of her or his shares and remit
the proceeds to her or him, the Agent is authorized to deduct a $5.00 fee plus
brokerage commissions for this transaction from the proceeds.
The Fund reserves the right to amend or terminate the Plan as applied to
any dividend or distribution for which the record date is at least 90 days after
written notice of the change is sent to the participants in the Plan.
Information concerning the Plan may be obtained by calling PFPC Inc. at
1-800-331-1710, or by writing the Fund, c/o PFPC Inc., 101 Federal Street,
Boston, MA 02110.
27
This report is sent toshareholders of CIM High YieldSecurities for their
information.It is not a Prospectus,circular or representationintended for use in
thepurchase or sale of sharesof the Fund or any securitiesmentioned in the
report.
For Additional Information about CIM High Yield Securities Call 1-800-331-1710.
CIM 3192 6/05
ITEM 2. CODE OF ETHICS.
Not applicable for semi-annual reports on Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual reports on Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual reports on Form N-CSR.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable for semi-annual reports on Form N-CSR.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable for semi-annual reports on Form N-CSR.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not yet 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.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of trustees, since the
registrant last provided disclosure in response to the requirements of Item
7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section
302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section
906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
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) CIM High Yield Securities
--------------------------------------------------------------------
By (Signature and Title)* /s/ George Baumann
-------------------------------------------------------
George Baumann, President
(principal executive officer)
Date August 30, 2005
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities 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 (Signature and Title)* /s/ George Baumann
-------------------------------------------------------
George Baumann, President
(principal executive officer)
Date August 30, 2005
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Cindy Cameron
-------------------------------------------------------
Cindy Cameron, Treasurer
(principal financial officer)
Date August 30, 2005
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.