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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 811-03826
AIM Sector Funds
(Exact name of registrant as specified in charter)
11 Greenway Plaza, Suite 100 Houston, Texas 77046
(Address of principal executive offices) (Zip code)
Philip A. Taylor 11 Greenway Plaza, Suite 100 Houston, Texas 77046
(Name and address of agent for service)
Registrant's telephone number, including area code: (713) 626-1919
Date of fiscal year end: 3/31
Date of reporting period: 3/31/09
Item 1. Reports to Stockholders.
[INVESCO AIM LOGO] AIM ENERGY FUND
--SERVICE MARK-- Annual Report to shareholders o March 31, 2009
[MOUNTAIN GRAPHIC]
2 Letters to Shareholders
4 Performance Summary
4 Management Discussion
6 Long-Term Fund Performance
8 Supplemental Information
9 Schedule of Investments
10 Financial Statements
13 Notes to Financial Statements
19 Financial Highlights
21 Auditor's Report
22 Fund Expenses
23 Tax Information
24 Trustees and Officers
Dear Shareholders:
The past year was difficult to say the least for virtually all investors. Market indexes in the U.S.
and around the globe nosedived in 2008, and the vast majority of us have seen sharp declines in the
value of our investments. As I write this letter, "market experts" remain divided on the outlook for
the market. While some argue the worst of the decline is over, others say we have farther to fall.
[TAYLOR There is widespread agreement, however, that markets are likely to remain volatile for some time to
PHOTO] come.
Philip Taylor We've all read about subprime lending, government bailouts and investment scandals -- but we know
that as individuals, we have little control over such matters. Rather, I'd like to discuss with you
actions you may have already taken, or can take now, that may benefit you going forward.
BOOMS AND BUSTS
Recent history should have reminded all of us that investor sentiment can be fickle. The
technology-driven bull market of the late 1990s gave way to a sharp decline from 2000 to 2002 when the "tech bubble" burst. More
recently, the 2003 to 2007 bull market, driven largely by financial stocks and a housing boom, among other factors, gave way to the
current market decline when the "housing bubble" burst.
These market downturns hurt nearly all investors. But they were particularly painful for investors who, seeking high, short-term
returns, abandoned their long-term, diversified investment plans and decided to chase performance -- i.e., allocate a large portion
of their assets into the "hot" investments du jour. Many of those investors discovered they had unwittingly bought at the top of the
market, and they saw the value of their assets decline significantly as market leadership changed. History has shown that seeking
the highest short-term returns possible has often led to long-term disappointment.
This is why we believe investors should work with their financial advisors to devise a goal-based financial strategy -- a
long-term plan with a reasonable prospect of achieving predetermined financial goals in line with individual risk tolerance. Such a
strategy cannot guarantee a profit or protect against loss in a declining market, but it may help investors avoid emotion-driven,
short-term investment mistakes.
WHAT TO DO NOW
None of us can control the markets, but we can control our own reaction to the unsettling volatility we're currently experiencing.
Here are some steps that may help position you for whatever the market brings next:
o REVISIT YOUR GOALS. Work with your financial advisor to create specific, concrete investment goals consistent with your risk
tolerance. Scared by market volatility, many investors fled to cash in recent months. While that may be entirely appropriate for
investors approaching retirement, other investors may need the growth potential of equities to achieve their long-term goals.
Your financial advisor can suggest investments that match your goals and risk tolerance.
o RESIST LOOKING OVER THE FENCE. Every investor's needs, goals and risk tolerance are different. Your neighbor's, co-worker's or
relative's investments have no relevance to yours because their circumstances, goals and risk tolerances are as individual as
yours.
o LET LOGIC BE YOUR GUIDE. Market volatility is a fact of life for investors. Market declines can be painful, but historically
they haven't proved permanent. Your financial advisor can help you approach your investment plan logically, not emotionally.
WHAT WE'RE DOING
Invesco Aim has worked on behalf of investors in both bull markets and bear markets. That is why we're committed to good
stewardship, good communication and sound investment management.
To be good stewards, we've established best practice risk-management and investment oversight processes, further enhancing our
compliance oversight and our transparency to our shareholders and our independent fund board.
To be good communicators, we've revamped our website to put Investment Perspectives front and center on the home page of
invescoaim.com and on your account balance page. Our chief investment officers, portfolio managers and I are eager to communicate
with you directly about your investments, market conditions and other topics that may be helpful to you.
To be good investment managers, we've focused on doing one thing well: managing your money. At Invesco Aim, managing your money
is all we do. We believe mutual funds should have well-defined, clearly articulated and repeatable investment strategies. Our funds
have stayed true to their investment strategies even during this current period of market volatility.
CONTACT US
If you have questions about this report or your account, please contact one of our client service representatives at 800 959 4246.
I also invite you to visit invescoaim.com, where you can check on your individual account, obtain long-term performance
information for your fund and read market commentaries from our investment professionals.
As always, I welcome your comments and questions. Please contact me at phil@invescoaim.com and let me know what's on your mind.
Thank you for investing with us. All of us at Invesco Aim look forward to serving you.
Sincerely,
/S/ PHILIP TAYLOR
Philip Taylor
Senior Managing Director, Invesco Ltd.
CEO, Invesco Aim
2 AIM ENERGY FUND
Dear Fellow Shareholders:
Since my last letter, continuing troubles in the global economy and financial markets have negatively
affected all investors. The new government promises to move quickly with a stimulus package, yet
[CROCKETT considerable anxiety remains about how, when and what kind of a recovery will occur. However, mutual
PHOTO] funds generally are more diversified than other investments; as shareholders we invest not in a single
security but in a portfolio of multiple securities. The benefits of diversification have been
Bruce Crockett reiterated by the stories of investors who "lost everything" because they had too many of their assets
in one place, whether that place was a single money manager or their employer's stock. Mutual fund
investors also have the opportunity to diversify further among different types of funds that each
deploy a different strategy and focus on different kinds of securities. These include conservatively
managed money market funds, which, relative to other securities, continue to offer a more safe,
liquid, and convenient way to invest short-term assets.
In addition to diversification, investing discipline is essential during challenging times such as these. Strategies such as
dollar cost averaging, where individuals invest a consistent amount at regular intervals, can help investors acquire more fund
shares when prices are low. Periodic rebalancing of asset allocation plans achieves the same effect. "Buy low, sell high" has long
been the mantra of investment success, but the advice is not always easy to follow because it requires the discipline to resist
prevailing trends. Of course, investment strategies, such as dollar cost averaging and portfolio rebalancing do not guarantee a
profit or eliminate the risk of loss. Investors should consider their ability to continue investing regardless of fluctuating
security prices.
A long-term view is also important, particularly for assets that are not needed right away. In the past, it has often proven
better to keep long-term assets invested through a downturn than to miss the beginning of the upward trend. To develop a diversified
and disciplined investing plan that is right for your individual goals, I encourage you to consult an experienced and trustworthy
investment professional who has the knowledge and the tools to help you establish and implement the plan, monitor its results and
adapt it to changing goals and circumstances.
Even when working with a personal financial advisor, investors should supplement the relationship with their own knowledge and
awareness of the investments they hold. Visit the Invesco Aim website at invescoaim.com regularly to find out what is happening in
your AIM funds and to read timely market commentary from Invesco Aim management, strategists and portfolio managers. The site's
"Education and Planning" section can also help you clarify basic investment concepts, learn how to choose a financial advisor,
evaluate different investment choices and make more informed investment decisions. Invesco Aim's redesigned public home page
recently received a Gold Award for its user-friendly navigation and graphics from The Mutual Funds Monitor Awards, sponsored by
Corporate Insight.
As always, your Board of Trustees and Invesco Aim are committed to putting your interests first by controlling costs, monitoring
investment performance and streamlining the investment management process during these difficult times. Your Board has already begun
the annual review and management contract renewal process with the continuing goal of making AIM funds one of the best and most
cost-effective ways for you to invest your hard-earned money.
While the investing climate may remain uncertain for a while, economies and markets are dynamic, and no stage is ever permanent.
Please feel free to contact me in writing with your questions or concerns. You can send an email to me at bruce@brucecrockett.com.
Best regards,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Trustees
3 AIM ENERGY FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
======================================================================================= Typically, we hold 30 to 50 stocks. The
limited number of positions allows us to
PERFORMANCE SUMMARY know our companies, their managements,
their business structures and how their
Energy prices were quite volatile during the fiscal year ended March 31, 2009. Oil, as products and services fit into the energy
measured by West Texas Intermediate Crude, fell from $102 to $50 per barrel and gas value chain -- the process that moves oil
prices were similarly beaten down.(triangle) This, coupled with continued stock market and natural gas from the ground to the
deleveraging, caused energy stocks in general to underperform the broad market for the consumer.
year.(square)
We may sell or reduce our position in a
Accordingly, AIM Energy Fund underperformed its broad market index, the S&P 500 stock when:
Index. The Fund also underperformed its style-specific index, the Dow Jones U.S. Oil &
Gas Index, largely due to the index's heavy weighting to integrated oil and gas stocks, o A company reaches its price target.
which are generally not as dependent on commodity prices as other energy
sub-sectors.(square) o A change in fundamentals occurs --
either company specific or industry
On January 23, 2009, Andrew Lees became the Fund's lead manager, replacing John wide.
Segner, and Tyler Dann II became a manager of the Fund.
o A change in management occurs.
Your Fund's long-term performance appears later in this report.
o A more attractive investment opportunity
FUND VS. INDEXES is identified.
Total returns, 3/31/08 to 3/31/09, at net asset value (NAV). Performance shown does not MARKET CONDITIONS AND YOUR FUND
include applicable contingent deferred sales charges (CDSC) or front-end sales charges,
which would have reduced performance. Stock markets around the world were
volatile over the past year. The chief
Class A Shares -44.39% catalyst was the ongoing credit crisis
Class B Shares -44.79 that began in late 2007. The unfortunate
Class C Shares -44.82 consequences included tightened credit,
Class Y Shares* -44.31 increased unemployment and sharply reduced
Investor Class Shares -44.40 consumer spending. Governments around the
S&P 500 Index(square) (Broad Market Index) -38.06 world responded with expansionary monetary
Dow Jones U.S. Oil & Gas Index(square) (Style-Specific Index) -38.72 and fiscal policies. Most major central
Lipper Natural Resource Funds Index(square) (Peer Group Index) -50.45 banks have set interest rates below 1%,(1)
and government spending initiatives are
(triangle) Bloomberg L.P.; well under way.
(square) Lipper Inc. Evidence of economic weakness abounded
in the United States. Real gross domestic
* Share class incepted during the fiscal year. See page 7 for a detailed explanation product, a broad measure of economic
of Fund performance. activity, contracted at an annual rate of
======================================================================================= 6.3% in the fourth quarter of 2008.(2)
HOW WE INVEST We combine bottom-up fundamental Inflation, as measured by the
analysis with top-down macroeconomic seasonally-adjusted Consumer Price Index,
Your Fund invests in companies involved in industry analysis in our stock selection was virtually nil following sharp declines
the exploration, production, process. We focus on companies that have in energy prices in the second half of
transportation, refining and marketing of the following characteristics: 2008.(3) Unemployment trended higher
oil, natural gas and other forms of during the fiscal year and reached a
energy. We seek to own firms that have the o Cash flow and free cash flow seasonally adjusted rate of 8.5% in March
potential to increase unit output through 2009.(3)
exploration, development or innovation. We o Sustainable growth potential in
believe companies with a rising volume revenues and earnings
profile that can control costs may earn a
high rate of return, enabling them to grow o High returns on capital
earnings independent of oil and natural
gas prices. o Cost control
o Low relative price-to-earnings (P/E)
ratios within their sub-sector with
greater-than-expected growth
opportunities
o Rising volume profiles
========================================== ========================================== ==========================================
PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* Total Net Assets $1.0 billion
By sector Total Number of Holdings* 36
1. Occidental Petroleum Corp. 5.1% ==========================================
Energy 83.0% 2. Sempra Energy 4.4
Utilities 6.1 3. Total S.A.-ADR 4.4
Money Market Funds 4. BPPLC-ADR 4.1
Plus Other Assets Less Liabilities 10.9 5. Apache Corp. 3.4
========================================== 6. Weatherford International Ltd. 3.2
7. Anadarko Petroleum Corp. 3.0
8. Southwestern Energy Co. 2.9
9. XTO Energy, Inc. 2.9
10. Range Resources Corp. 2.9
==========================================
The Fund's holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* Excluding money market fund holdings.
4 AIM ENERGY FUND
Against this backdrop, all stock market North American natural gas emerged during ANDREW LEES
sectors delivered double-digit losses for the fiscal year, we used this pullback as
the fiscal year.(4) Health care, consumer an opportunity to migrate our holdings [LEES Portfolio manager, is lead
staples, telecommunication services and towards the highly productive PHOTO] manager of AIM Energy Fund. He
utilities -- traditionally more defensive Fayetteville, Haynesville and Marcellus began his investment career in
sectors -- were among the better shales over Rocky Mountain natural gas. 1994 and joined Invesco Aim in
performing sectors of the S&P 500 Part of this process involved decreasing 2005. Mr. Lees earned a B.A. in economics
Index.(4) Financials, industrials and our exposure to QUESTAR and BILL BARRETT from the University of Western Ontario and
materials were the worst performing during the fiscal year and using the an M.B.A. with concentrations in finance
sectors.(4) proceeds to initiate a position in and accounting from McGill University.
Petrohawk Energy.
All energy sub-sectors detracted from TYLER DANN II
Fund performance during the fiscal year. Historically, demand growth for both
Fund performance was most negatively oil and gas has been driven by improving [DANN Chartered Financial Analyst,
affected by holdings within our three economic conditions. Oil prices, however, PHOTO] portfolio manager, is manager
largest sub-sectors: will be affected by continued compliance of AIM Energy Fund. He joined
by the Organization of the Petroleum Invesco Aim in 2004.
o Oil and gas exploration and production Exporting Countries in limiting production
and exhausting excess supply available in He serves on the board of directors of the
o Oil and gas equipment and services the market. We therefore believe oil National Association of Petroleum
prices are likely to recover before gas Investment Analysts and is a member of the
o Integrated oil and gas prices. As such, we have positioned the CFA Society of San Francisco. Mr. Dann
Fund with more exposure to oil-levered earned an A.B. from Princeton University.
The Fund's underweight position in holdings. And in the case of gas-levered
integrated oil and gas, a sub-sector which holdings, we have focused coverage on the Assisted by the Energy Team
is generally more defensive and less shale areas we believe hold the most
leveraged to commodity prices, hurt the opportunity.
Fund's performance relative to the Dow
Jones U.S. Oil & Gas Index. Integrated oil While energy prices remain headline
and gas accounted for approximately 56% of news, we continue to seek out companies
the Dow Jones U.S. Oil & Gas Index at the with rising unit output and an ability to
close of the fiscal year.(5) The Fund, on control costs. It is our belief that these
the other hand, had a 28% exposure to the companies will be able grow earnings
sub-sector. independent of oil and natural gas prices
over time.
Drillers HERCULES OFFSHORE, which
focuses on shallow-water operations in the As always, thank you for your continued
Gulf of Mexico, and NABORS INDUSTRIES, one investment in AIM Energy Fund.
of the world's largest land rig drillers
with significant exposure in North (1) FXStreet.com
America, also detracted from Fund
performance. As commodity prices fell (2) Bureau of Economic Analysis
significantly during the fiscal year,
capital expenditures for drilling activity (3) Bureau of Labor Statistics
declined, and the outlook for these stocks
worsened. We reduced our exposure to (4) Lipper, Inc.
Hercules Offshore and invested the
proceeds in TRANSOCEAN, WEATHERFORD and (5) Dow Jones & Co.
HALLIBURTON as we favored deep-water
drillers and diversified service providers The views and opinions expressed in
to land and shallow-water drillers. Along management's discussion of Fund
the same lines, we sold our position in performance are those of Invesco Aim
Nabors as fundamentals for North American Advisors, Inc. These views and opinions
natural gas overall became less are subject to change at any time based on
compelling. factors such as market and economic
conditions. These views and opinions may
On the other hand, exploration- and not be relied upon as investment advice or
production-driven gas companies, such as recommendations, or as an offer for a
PETROHAWK ENERGY and SOUTHWESTERN ENERGY, particular security. The information is
were among the top contributors to Fund not a complete analysis of every aspect of
performance for the fiscal year. any market, country, industry, security or
Southwestern Energy, for example, holds the Fund. Statements of fact are from
the largest land position in the sources considered reliable, but Invesco
Fayetteville Shale in northwest Arkansas Aim Advisors, Inc. makes no representation
and has been particularly successful at or warranty as to their completeness or
growing production in this unconventional accuracy. Although historical performance
gas shale. Although headwinds to is no guarantee of future results, these
insights may help you understand our
investment management philosophy.
See important Fund and index disclosures
later in this report.
5 AIM ENERGY FUND
====================================================================================================================================
YOUR FUND'S LONG-TERM PERFORMANCE
Past performance cannot guarantee Class C shares. The performance of the taxes a shareholder would pay on Fund
comparable future results. Fund's other share classes will differ distributions or sale of Fund shares.
primarily due to different sales charge
The performance data shown in the first structures and class expenses and may be Both charts above are logarithmic
chart above is that of the Fund's Investor greater than or less than the performance charts, which present the fluctuations in
class shares. The performance of the of the Fund's Class C shares. The data the value of the Fund's share class and
Fund's other share classes will differ shown in the second chart above includes its indexes. We believe that a logarithmic
primarily due to different sales charge reinvested distributions, Fund expenses chart is more effective than other types
structures and class expenses and may be and management fees. Index results include of charts in illustrating changes in value
greater than or less than the performance reinvested dividends, but they do not during the early years shown in the chart.
of the Fund's Investor Class shares. The reflect sales charges. The vertical axis, the one that indicates
data shown in this chart includes the dollar value of an investment, is
reinvested distributions, Fund expenses Performance of an index of funds constructed with each segment representing
and management fees. Index results include reflects fund expenses and management a percent change in the value of the
reinvested dividends. fees; performance of a market index does investment. In both charts, each segment
not. Performance shown in the charts and represents a doubling, or 100% change, in
The performance data shown in the table does not reflect deduction of the value of the investment.
second chart above is that of the Fund's
6 AIM ENERGY FUND
AIM ENERGY FUND- INVESTOR CLASS SHARES
================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITHOUT SALES CHARGES
SINCE INCEPTION
Fund data from 1/19/84, index data from 1/31/84
AIM Energy Fund-
DATE INVESTOR CLASS SHARES S&P 500 INDEX(1)
- ------- --------------------- ----------------
1/19/84 $10000
1/84 10000 $10000
2/84 9975 9648
3/84 10013 9815
4/84 10125 9908
5/84 9737 9360
6/84 9324 9563
7/84 8337 9444
8/84 9412 10488
9/84 9686 10490
10/84 9449 10531
11/84 9551 10413
12/84 9487 10687
1/85 9767 11520
2/85 10162 11661
3/85 10429 11668
4/85 10429 11658
5/85 10289 12331
6/85 10175 12524
7/85 10633 12506
8/85 10658 12385
9/85 10264 12011
10/85 10741 12566
11/85 11117 13428
12/85 10780 14078
1/86 10145 14157
2/86 9977 15214
3/86 9912 16063
4/86 10029 15883
5/86 10638 16727
6/86 10573 17010
7/86 9808 16059
8/86 11221 17250
9/86 11091 15823
10/86 11186 16736
11/86 11186 17143
12/86 11549 16705
1/87 12851 18955
2/87 13026 19704
3/87 14731 20272
4/87 14624 20092
5/87 15523 20266
6/87 16369 21290
7/87 17376 22369
8/87 16879 23203
9/87 16033 22694
10/87 11898 17807
11/87 10971 16340
12/87 12117 17582
1/88 12985 18321
2/88 13383 19172
================================================================================
(1) Lipper Inc.
================================================================================
[MOUNTAIN CHART]
3/88 13942 18580
4/88 14266 18786
5/88 13928 18946
6/88 13618 19815
7/88 13854 19739
8/88 14105 19070
9/88 13737 19882
10/88 13884 20435
11/88 13614 20143
12/88 13927 20494
1/89 14720 21994
2/89 14885 21447
3/89 15617 21947
4/89 16274 23085
5/89 16872 24016
6/89 16946 23881
7/89 18022 26035
8/89 18516 26542
9/89 18410 26434
10/89 17821 25821
11/89 19072 26345
12/89 19988 26977
1/90 18736 25167
2/90 18905 25491
3/90 18950 26166
4/90 17730 25514
5/90 19668 27996
6/90 18814 27808
7/90 20385 27719
8/90 20018 25216
9/90 20203 23991
10/90 18570 23890
11/90 17924 25431
12/90 16693 26139
1/91 15891 27274
2/91 17523 29222
3/91 16768 29929
4/91 16584 30000
5/91 16552 31290
6/91 15490 29858
7/91 16721 31248
8/91 17507 31986
9/91 17183 31451
10/91 17537 31873
11/91 16153 30592
12/91 16106 34085
1/92 15328 33450
2/92 15157 33883
3/92 14317 33225
4/92 14349 34200
5/92 14940 34367
6/92 13385 33856
7/92 14287 35238
8/92 14675 34518
9/92 14753 34924
10/92 14240 35043
11/92 14022 36233
12/92 13975 36678
1/93 14412 36984
2/93 15564 37488
3/93 16609 38279
4/93 17295 37353
5/93 18011 38350
6/93 18292 38462
7/93 17981 38307
8/93 19119 39757
9/93 18620 39453
================================================================================
================================================================================
[MOUNTAIN CHART]
10/93 18121 40268
11/93 16329 39884
12/93 16311 40366
1/94 16924 41738
2/94 16469 40605
3/94 15792 38838
4/94 16547 39336
5/94 16547 39979
6/94 16721 39001
7/94 16642 40280
8/94 16501 41928
9/94 16626 40904
10/94 17025 41821
11/94 15792 40300
12/94 15129 40897
1/95 14528 41957
2/95 14892 43590
3/95 15556 44874
4/95 16172 46195
5/95 16741 48038
6/95 16236 49152
7/95 16520 50781
8/95 16551 50908
9/95 16851 53055
10/95 16097 52866
11/95 16896 55184
12/95 18124 56247
1/96 17773 58159
2/96 18187 58700
3/96 19143 59265
4/96 20899 60138
5/96 20803 61686
6/96 21042 61922
7/96 20147 59187
8/96 21487 60438
9/96 22555 63836
10/96 24035 65596
11/96 25378 70550
12/96 25160 69153
1/97 25925 73471
2/97 23262 74047
3/97 24447 71011
4/97 24185 75246
5/97 26935 79847
6/97 27110 83396
7/97 30032 90030
8/97 32225 84990
9/97 34764 89642
10/97 33805 86652
11/97 30492 90660
12/97 29964 92216
1/98 26842 93235
2/98 28018 99955
3/98 30113 105070
4/98 31161 106146
5/98 29195 104324
6/98 28681 108558
7/98 24425 107411
8/98 19655 91893
9/98 23419 97784
10/98 24168 105726
11/98 22114 112131
12/98 21625 118588
1/99 20040 123546
2/99 19162 119706
3/99 24322 124495
4/99 28326 129316
================================================================================
================================================================================
[MOUNTAIN CHART]
5/99 28326 126265
6/99 29847 133254
7/99 30617 129111
8/99 32264 128472
9/99 31109 124954
10/99 29289 132858
11/99 29096 135558
12/99 30682 143531
1/00 30768 136321
2/00 31152 133743
3/00 37255 146819
4/00 37449 142403
5/00 42718 139484
6/00 41774 142919
7/00 40445 140687
8/00 47127 149420
9/00 48069 141534
10/00 43210 140933
11/00 38958 129831
12/00 48534 130468
1/01 46699 135094
2/01 46559 122783
3/01 45860 115009
4/01 50882 123940
5/01 50882 124771
6/01 43189 121735
7/01 42075 120537
8/01 40169 112998
9/01 35891 103874
10/01 38564 105856
11/01 37381 113974
12/01 40378 114973
1/02 38101 113296
2/02 39518 111111
3/02 44774 115290
4/02 46055 108303
5/02 45056 107508
6/02 41915 99853
7/02 37267 92071
8/02 37941 92674
9/02 35919 82612
10/02 36709 89876
11/02 37686 95160
12/02 38639 89573
1/03 37824 87231
2/03 39337 85920
3/03 39081 86752
4/03 38546 93894
5/03 43638 98837
6/03 42521 100099
7/03 39872 101865
8/03 42475 103848
9/03 41337 102748
10/03 41734 108558
11/03 42522 109512
12/03 47357 115251
1/04 47963 117366
2/04 50846 118997
3/04 51588 117202
4/04 52125 115364
5/04 51661 116944
6/04 56011 119217
7/04 57893 115272
8/04 56127 115734
9/04 62054 116988
10/04 62004 118775
11/04 66791 123579
================================================================================
================================================================================
[MOUNTAIN CHART]
12/04 64701 127783
1/05 67580 124669
2/05 77318 127291
3/05 76205 125039
4/05 70878 122669
5/05 74386 126568
6/05 80732 126750
7/05 88772 131461
8/05 96140 130263
9/05 100438 131317
10/05 92795 129127
11/05 96098 134006
12/05 99606 134054
1/06 113939 137603
2/06 101577 137976
3/06 105873 139693
4/06 112416 141567
5/06 109932 137498
6/06 111801 137680
7/06 113030 138529
8/06 108114 141820
9/06 101940 145472
10/06 105090 150210
11/06 114359 153062
12/06 109225 155209
1/07 109596 157554
2/07 109738 154482
3/07 116970 156206
4/07 124000 163123
5/07 132630 168810
6/07 134315 166007
7/07 134033 160867
8/07 132197 163274
9/07 144742 169374
10/07 153152 172068
11/07 145724 164872
12/07 158518 163730
1/08 143300 153910
2/08 155624 148915
3/08 154768 148271
4/08 173139 155490
5/08 190159 157503
6/08 196567 144238
7/08 160360 143025
8/08 156735 145095
9/08 127598 132181
10/08 98953 109984
11/08 91709 102089
12/08 88830 103166
1/09 88394 94480
2/09 81279 84453
3/09 86065 91837
================================================================================
AIM ENERGY FUND - CLASS C SHARES
================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITH SALES CHARGES SINCE
INCEPTION
Index data from 1/31/00, Fund data from 2/14/00
DOW JONES
AIM ENERGY FUND- U.S. OIL & GAS LIPPER NATURAL
DATE CLASS C SHARES S&P 500 Index(1) INDEX(1) RESOURCE FUNDS INDEX(1)
- ------- ---------------- --------------- -------------- -----------------------
1/31/00 $10000 $10000 $10000
2/00 $10146 9811 9694 10147
3/00 12111 10770 10877 11679
4/00 12174 10446 10776 11564
5/00 13875 10232 11850 12682
6/00 13568 10484 11212 12126
7/00 13129 10320 10937 11676
8/00 15296 10961 12023 13012
9/00 15582 10382 12430 12994
10/00 14001 10338 12012 12315
11/00 12616 9524 11471 11647
12/00 15704 9571 12600 13498
1/01 15106 9910 12145 13193
2/01 15053 9007 12107 13255
3/01 14818 8437 11931 12832
4/01 16431 9092 13167 14136
5/01 16422 9153 13057 13990
6/01 13933 8930 11865 12453
7/01 13562 8842 11593 12229
8/01 12934 8289 11105 11727
9/01 11557 7620 10292 10522
10/01 12412 7765 10897 11268
11/01 12019 8361 10455 11053
12/01 12980 8434 11131 11800
1/02 12239 8311 10702 11438
2/02 12686 8151 11183 11956
3/02 14366 8457 12109 12980
4/02 14767 7945 11562 13002
5/02 14435 7886 11296 12916
6/02 13420 7325 11017 12184
7/02 11929 6754 9696 10756
8/02 12119 6798 9754 10988
9/02 11483 6060 8940 10178
10/02 11733 6593 9246 10437
11/02 12036 6981 9587 10793
12/02 12331 6571 9626 10947
1/03 12065 6399 9357 10619
2/03 12542 6303 9605 10962
3/03 12452 6364 9677 10816
4/03 12277 6888 9677 10860
5/03 13889 7250 10603 12125
6/03 13534 7343 10447 11886
7/03 12679 7472 10110 11391
8/03 13504 7618 10775 12162
9/03 13141 7537 10508 11871
10/03 13262 7963 10616 12173
11/03 13504 8033 10658 12368
12/03 15041 8454 12104 13820
1/04 15223 8610 12274 13920
2/04 16132 8729 12846 14701
3/04 16351 8597 12776 14755
================================================================================
(1) Lipper Inc.
================================================================================
[MOUNTAIN CHART]
4/04 16510 8463 13012 14566
5/04 16358 8579 13022 14475
6/04 17712 8745 13799 15503
7/04 18295 8456 14257 15900
8/04 17728 8490 14066 15697
9/04 19598 8582 15300 17361
10/04 19569 8713 15343 17427
11/04 21068 9065 16364 18967
12/04 20394 9374 16030 18691
1/05 21287 9145 16501 19018
2/05 24337 9338 19497 21683
3/05 23982 9172 18847 21266
4/05 22286 8999 17804 19900
5/05 23376 9285 18194 20632
6/05 25352 9298 19327 22234
7/05 27864 9644 20537 24167
8/05 30157 9556 21679 25896
9/05 31481 9633 23052 27593
10/05 29066 9472 20934 25575
11/05 30081 9830 21290 26429
12/05 31161 9834 21494 27365
1/06 35623 10094 24533 31567
2/06 31747 10121 22421 28573
3/06 33071 10247 23404 30176
4/06 35085 10385 24599 32152
5/06 34292 10086 23864 30793
6/06 34854 10100 24414 31054
7/06 35206 10162 25513 30996
8/06 33657 10403 24524 30014
9/06 31725 10671 23734 28343
10/06 32680 11019 24844 29930
11/06 35537 11228 26990 32243
12/06 33923 11386 26389 31480
1/07 34018 11558 26038 31594
2/07 34039 11332 25615 31690
3/07 36258 11459 27222 33446
4/07 38423 11966 28659 35319
5/07 41066 12383 30717 38016
6/07 41567 12178 31216 38399
7/07 41447 11801 31364 38167
8/07 40862 11977 31554 37666
9/07 44720 12425 34096 41318
10/07 47269 12622 34591 43864
11/07 44952 12094 33155 41484
12/07 48868 12011 35583 43959
1/08 44147 11290 31765 40008
2/08 47917 10924 34138 43573
3/08 47630 10877 33367 42448
4/08 53241 11406 37009 46777
5/08 58447 11554 38415 50135
6/08 60376 10581 39441 52662
7/08 49225 10492 33786 43629
8/08 48083 10644 33637 42557
9/08 39120 9696 29450 34059
10/08 30310 8068 23881 25905
11/08 28073 7489 23849 24011
12/08 27181 7568 22855 22421
1/09 27034 6931 22263 22204
2/09 24841 6195 19675 20087
3/09 26276 6737 20446 21034
================================================================================
==========================================
AVERAGE ANNUAL TOTAL RETURNS THE NET ANNUAL FUND OPERATING EXPENSE
As of 3/31/09, including maximum RATIO SET FORTH IN THE MOST RECENT FUND
applicable sales charges PROSPECTUS AS OF THE DATE OF THIS REPORT FOR
CLASS A, CLASS B, CLASS C, CLASS Y AND
CLASS A SHARES INVESTOR CLASS SHARES WAS 1.12%, 1.87%,
Inception (3/28/02) 8.93% 1.87%, 0.87% AND 1.12%, RESPECTIVELY.(1) THE
5 Years 9.51 TOTAL ANNUAL FUND OPERATING EXPENSE RATIO SET
1 Year -47.44 FORTH IN THE MOST RECENT FUND PROSPECTUS AS
CLASS B SHARES OF THE DATE OF THIS REPORT FOR CLASS A, CLASS
Inception (3/28/02) 9.02% B, CLASS C, CLASS Y AND INVESTOR CLASS SHARES
5 Years 9.69 WAS 1.13%, 1.88%, 1.88%, 0.88% AND 1.13%,
1 Year -47.50 RESPECTIVELY. THE EXPENSE RATIOS PRESENTED
CLASS C SHARES ABOVE MAY VARY FROM THE EXPENSE RATIOS
Inception (2/14/00) 11.17% PRESENTED IN OTHER SECTIONS OF THIS REPORT
5 Years 9.96 THAT ARE BASED ON EXPENSES INCURRED DURING
1 Year -45.36 THE PERIOD COVERED BY THIS REPORT.
CLASS Y SHARES
10 Years 13.49% CLASS A SHARE PERFORMANCE REFLECTS THE
5 Years 10.82 MAXIMUM 5.50% SALES CHARGE, AND CLASS B
1 Year -44.31 AND CLASS C SHARE PERFORMANCE REFLECTS THE
INVESTOR CLASS SHARES APPLICABLE CONTINGENT DEFERRED SALES
Inception (1/19/84) 8.92% CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE
10 Years 13.47 CDSC ON CLASS B SHARES DECLINES FROM 5%
5 Years 10.78 BEGINNING AT THE TIME OF PURCHASE TO 0% AT
1 Year -44.40 THE BEGINNING OF THE SEVENTH YEAR. THE
========================================== CDSC ON CLASS C SHARES IS 1% FOR THE FIRST
YEAR AFTER PURCHASE. CLASS Y AND INVESTOR
CLASS Y SHARES' INCEPTION DATE IS OCTOBER CLASS SHARES DO NOT HAVE A FRONT-END SALES
3, 2008; RETURNS SINCE THAT DATE ARE ACTUAL CHARGE OR A CDSC; THEREFORE, PERFORMANCE
RETURNS. ALL OTHER RETURNS ARE BLENDED IS AT NET ASSET VALUE.
RETURNS OF ACTUAL CLASS Y SHARE
PERFORMANCE AND RESTATED INVESTOR CLASS THE PERFORMANCE OF THE FUND'S SHARE
SHARE PERFORMANCE (FOR PERIODS PRIOR TO CLASSES WILL DIFFER PRIMARILY DUE TO
THE INCEPTION DATE OF CLASS Y SHARES) AT DIFFERENT SALES CHARGE STRUCTURES AND
NET ASSET VALUE. THE RESTATED INVESTOR CLASS EXPENSES.
CLASS SHARE PERFORMANCE REFLECTS THE RULE
12B-1 FEES APPLICABLE TO INVESTOR CLASS HAD THE ADVISOR NOT WAIVED FEES AND/OR
SHARES AS WELL AS ANY FEE WAIVERS OR REIMBURSED EXPENSES ON CLASS B AND CLASS C
EXPENSE REIMBURSEMENTS RECEIVED BY SHARES IN THE PAST, PERFORMANCE WOULD HAVE
INVESTOR CLASS SHARES. INVESTOR CLASS BEEN LOWER.
SHARES' INCEPTION DATE IS JANUARY 19,
1984. (1) Total annual operating expenses less
any contractual fee waivers and/or
THE PERFORMANCE DATA QUOTED REPRESENT expense reimbursements by the advisor
PAST PERFORMANCE AND CANNOT GUARANTEE in effect through at least June 30,
COMPARABLE FUTURE RESULTS; CURRENT 2009. See current prospectus for more
PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE information.
VISIT invescoaim.com FOR THE MOST RECENT
MONTH-END PERFORMANCE. PERFORMANCE FIGURES
REFLECT REINVESTED DISTRIBUTIONS, CHANGES
IN NET ASSET VALUE AND THE EFFECT OF THE
MAXIMUM SALES CHARGE UNLESS OTHERWISE
STATED. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL SHARES.
7 AIM ENERGY FUND
====================================================================================================================================
AIM ENERGY FUND'S INVESTMENT OBJECTIVE IS CAPITAL GROWTH.
o Unless otherwise stated, information presented in this report is as of March 31, 2009, and is based on total net assets.
o Unless otherwise noted, all data provided by Invesco Aim.
ABOUT SHARE CLASSES o The prices of securities held by the OTHER INFORMATION
Fund may decline in response to market
o Effective September 30, 2003, only risks. o The Chartered Financial
previously established qualified plans Analyst--REGISTERED TRADEMARK--
are eligible to purchase Class B shares o The Fund's investments are concentrated (CFA--REGISTERED TRADEMARK--)
of any AIM fund. in a comparatively narrow segment of designation is a globally recognized
the economy. Consequently, the Fund may standard for measuring the competence
o Class Y shares are available to only tend to be more volatile than other and integrity of investment
certain investors. Please see the mutual funds, and the value of the professionals.
prospectus for more information. Fund's investments may tend to rise and
fall more rapidly. o The returns shown in management's
o All Investor Class shares are closed to discussion of Fund performance are
new investors. Contact your financial ABOUT INDEXES USED IN THIS REPORT based on net asset values calculated
advisor about purchasing our other for shareholder transactions. Generally
share classes. o The S&P 500--REGISTERED TRADEMARK-- accepted accounting principles require
INDEX is a market adjustments to be made to the net
PRINCIPAL RISKS OF INVESTING IN THE FUND capitalization-weighted index covering assets of the Fund at period end for
all major areas of the U.S. economy. It financial reporting purposes, and as
o Since a large percentage of the Fund's is not the 500 largest companies, but such, the net asset values for
assets may be invested in securities of rather the most widely held 500 shareholder transactions and the
a limited number of companies, each companies chosen with respect to market returns based on those net asset values
investment has a greater effect on the size, liquidity, and their industry. may differ from the net asset values
Fund's overall performance, and any and returns reported in the Financial
change in the value of those securities o The DOW JONES U.S. OIL & GAS INDEX Highlights.
could significantly affect the value of measures the performance of energy
your investment in the Fund. companies within the United States. The o Industry classifications used in this
index maintains an approximate report are generally according to the
o The businesses in which the Fund weighting of 95% in U.S. coal, oil and Global Industry Classification
invests may be adversely affected by drilling, and pipeline companies. Standard, which was developed by and is
foreign government, federal or state the exclusive property and a service
regulations on energy production, o The LIPPER NATURAL RESOURCE FUNDS INDEX mark of MSCI Inc. and Standard &
distribution and sale. Short-term is an equally weighted representation Poor's.
fluctuations in commodity prices may of the largest funds in the Lipper
influence Fund returns and increase Natural Resource Funds category. These
price fluctuations of the Fund's funds invest primarily in the equity
shares. securities of domestic companies
engaged in natural resources.
o Prices of equity securities change in
response to many factors including the o The Fund is not managed to track the
historical and prospective earnings of performance of any particular index,
the issuer, the value of its assets, including the indexes defined here, and
general economic conditions, interest consequently, the performance of the
rates, investor perceptions and market Fund may deviate significantly from the
liquidity. performance of the indexes.
o Foreign securities have additional o A direct investment cannot be made in
risks, including exchange rate changes, an index. Unless otherwise indicated,
political and economic upheaval, the index results include reinvested
relative lack of information, dividends, and they do not reflect
relatively low market liquidity, and sales charges. Performance of an index
the potential lack of strict financial of funds reflects fund expenses;
and accounting controls and standards. performance of a market index does not.
o There is no guarantee that the
investment techniques and risk analyses
used by the Fund's portfolio managers
will produce the desired results.
=======================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, ==========================================
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. FUND NASDAQ SYMBOLS
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
======================================================================================= Class A Shares IENAX
Class B Shares IENBX
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Class C Shares IEFCX
Class Y Shares IENYX
Investor Class Shares FSTEX
==========================================
8 AIM ENERGY FUND
Supplement to Annual Report dated 3/31/09
AIM ENERGY FUND
==========================================
INSTITUTIONAL CLASS SHARES AVERAGE ANNUAL TOTAL RETURNS Please note that past performance is
For periods ended 3/31/09 not indicative of future results. More
The following information has been recent returns may be more or less than
prepared to provide Institutional Class Inception (1/31/06) -8.08% those shown. All returns assume
shareholders with a performance overview 1 Year -44.11 reinvestment of distributions at NAV.
specific to their holdings. Institutional ========================================== Investment return and principal value will
Class shares are offered exclusively to fluctuate so your shares, when redeemed,
institutional investors, including defined Institutional Class shares have no sales may be worth more or less than their
contribution plans that meet certain charge; therefore, performance is at net original cost. See full report for
criteria. asset value (NAV). Performance of information on comparative benchmarks.
Institutional Class shares will differ Please consult your Fund prospectus for
from performance of other share classes more information. For the most current
primarily due to differing sales charges month-end performance, please call 800 451
and class expenses. 4246 or visit invescoaim.com.
The net annual Fund operating expense (1) Total annual operating expenses less
ratio set forth in the most recent Fund any contractual fee waivers and/or
prospectus as of the date of this expense reimbursements by the advisor
supplement for Institutional Class shares in effect through at least June 30,
was 0.69%.(1) The total annual Fund 2009. See current prospectus for more
operating expense ratio set forth in the information.
most recent Fund prospectus as of the date
of this supplement for Institutional Class
shares was 0.70%.The expense ratios
presented above may vary from the expense
ratios presented in other sections of the
actual report that are based on expenses
incurred during the period covered by the
report.
==========================================
NASDAQ SYMBOL IENIX
==========================================
Over for information on your Fund's expenses.
THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND
PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND
EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
FOR INSTITUTIONAL INVESTOR USE ONLY
[INVESCO AIM LOGO]
This material is for institutional investor use only and may not be quoted, reproduced - SERVICE MARK -
or shown to the public, nor used in written form as sales literature for public use.
invescoaim.com I-ENE-INS-1 Invesco Aim Distributors, Inc.
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with ongoing costs of investing in other mutual funds. The example is based on
an investment of $1,000 invested at the beginning of the period and held for the
entire period October 1, 2008, through March 31, 2009.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/01/08) (03/31/09)(1) PERIOD(2) (03/31/09) PERIOD(2) RATIO
- -----------------------------------------------------------------------------------------------------------
Institutional $1,000.00 $676.50 $3.34 $1,020.94 $4.03 0.80%
- -----------------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period October 1, 2008, through March 31, 2009, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
182/365 to reflect the most recent fiscal half year.
AIM ENERGY FUND
SCHEDULE OF INVESTMENTS(a)
March 31, 2009
<Table>
<Caption>
SHARES VALUE
- ---------------------------------------------------------------------------------
COMMON STOCKS-89.11%
GAS UTILITIES-1.74%
EQT Corp. 283,000 $ 8,866,390
- ---------------------------------------------------------------------------------
Questar Corp. 291,000 8,564,130
=================================================================================
17,430,520
=================================================================================
INTEGRATED OIL & GAS-28.27%
BP PLC-ADR (United Kingdom) 1,014,000 40,661,400
- ---------------------------------------------------------------------------------
Exxon Mobil Corp. 262,000 17,842,200
- ---------------------------------------------------------------------------------
Hess Corp. 500,000 27,100,000
- ---------------------------------------------------------------------------------
Marathon Oil Corp. 1,000,000 26,290,000
- ---------------------------------------------------------------------------------
Murphy Oil Corp. 323,000 14,460,710
- ---------------------------------------------------------------------------------
Occidental Petroleum Corp. 911,000 50,697,150
- ---------------------------------------------------------------------------------
Petroleo Brasileiro S.A.-ADR (Brazil) 907,000 27,636,290
- ---------------------------------------------------------------------------------
Royal Dutch Shell PLC-ADR (United Kingdom) 520,000 23,036,000
- ---------------------------------------------------------------------------------
Suncor Energy, Inc. (Canada) 527,000 11,704,670
- ---------------------------------------------------------------------------------
Total S.A.-ADR (France) 890,000 43,663,400
=================================================================================
283,091,820
=================================================================================
MULTI-UTILITIES-4.36%
Sempra Energy 945,000 43,696,800
=================================================================================
OIL & GAS DRILLING-2.63%
Hercules Offshore, Inc.(b) 453,008 715,753
- ---------------------------------------------------------------------------------
Transocean Ltd. (Switzerland)(b) 435,000 25,595,400
=================================================================================
26,311,153
=================================================================================
OIL & GAS EQUIPMENT & SERVICES-15.68%
Cameron International Corp.(b) 1,150,000 25,219,500
- ---------------------------------------------------------------------------------
Halliburton Co. 1,740,000 26,917,800
- ---------------------------------------------------------------------------------
National-Oilwell Varco Inc.(b) 940,000 26,987,400
- ---------------------------------------------------------------------------------
Oceaneering International, Inc.(b) 700,000 25,809,000
- ---------------------------------------------------------------------------------
Schlumberger Ltd. 493,000 20,025,660
- ---------------------------------------------------------------------------------
Weatherford International Ltd. (Switzerland)(b) 2,899,000 32,091,930
=================================================================================
157,051,290
=================================================================================
OIL & GAS EXPLORATION & PRODUCTION-32.61%
Anadarko Petroleum Corp. 775,000 30,139,750
- ---------------------------------------------------------------------------------
Apache Corp. 525,000 33,647,250
- ---------------------------------------------------------------------------------
Bill Barrett Corp.(b) 810,000 18,014,400
- ---------------------------------------------------------------------------------
Chesapeake Energy Corp. 500,000 8,530,000
- ---------------------------------------------------------------------------------
Continental Resources, Inc.(b) 1,302,000 27,615,420
- ---------------------------------------------------------------------------------
Devon Energy Corp. 530,000 23,685,700
- ---------------------------------------------------------------------------------
Noble Energy, Inc. 515,000 27,748,200
- ---------------------------------------------------------------------------------
Petrohawk Energy Corp.(b) 1,200,000 23,076,000
- ---------------------------------------------------------------------------------
Plains Exploration & Production Co.(b) 1,500,000 25,845,000
- ---------------------------------------------------------------------------------
Range Resources Corp. 696,000 28,647,360
- ---------------------------------------------------------------------------------
Southwestern Energy Co.(b) 995,000 29,541,550
- ---------------------------------------------------------------------------------
Talisman Energy Inc. (Canada) 2,004,000 21,042,000
- ---------------------------------------------------------------------------------
XTO Energy, Inc. 950,000 29,089,000
=================================================================================
326,621,630
=================================================================================
OIL & GAS STORAGE & TRANSPORTATION-3.82%
El Paso Corp. 2,300,000 14,375,000
- ---------------------------------------------------------------------------------
Williams Cos., Inc. (The) 2,100,000 23,898,000
=================================================================================
38,273,000
=================================================================================
Total Common Stocks (Cost $1,222,915,450) 892,476,213
=================================================================================
MONEY MARKET FUNDS-10.56%
Liquid Assets Portfolio-Institutional Class(c) 52,895,712 52,895,712
- ---------------------------------------------------------------------------------
Premier Portfolio-Institutional Class(c) 52,895,712 52,895,712
=================================================================================
Total Money Market Funds (Cost $105,791,424) 105,791,424
=================================================================================
TOTAL INVESTMENTS-99.67% (Cost $1,328,706,874) 998,267,637
=================================================================================
OTHER ASSETS LESS LIABILITIES-0.33% 3,257,787
=================================================================================
NET ASSETS-100.00% $1,001,525,424
_________________________________________________________________________________
=================================================================================
</Table>
Investment Abbreviations:
<Table>
ADR - American Depositary Receipt
</Table>
Notes to Schedule of Investments:
(a) Industry and/or sector classifications used in this report are generally
according to the Global Industry Classification Standard, which was
developed by and is the exclusive property and a service mark of MSCI Inc.
and Standard & Poor's.
(b) Non-income producing security.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
9 AIM ENERGY FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2009
<Table>
ASSETS:
Investments, at value (Cost $1,222,915,450) $ 892,476,213
- ----------------------------------------------------------------------------------
Investments in affiliated money market funds, at value and cost 105,791,424
==================================================================================
Total investments (Cost $1,328,706,874) 998,267,637
==================================================================================
Receivables for:
Investments sold 121,693
- ----------------------------------------------------------------------------------
Fund shares sold 5,185,758
- ----------------------------------------------------------------------------------
Dividends 1,712,991
- ----------------------------------------------------------------------------------
Investment for trustee deferred compensation and retirement plans 23,562
- ----------------------------------------------------------------------------------
Other assets 64,882
==================================================================================
Total assets 1,005,376,523
__________________________________________________________________________________
==================================================================================
LIABILITIES:
Payables for:
Fund shares reacquired 2,215,152
- ----------------------------------------------------------------------------------
Amount due custodian 603,410
- ----------------------------------------------------------------------------------
Accrued fees to affiliates 802,560
- ----------------------------------------------------------------------------------
Accrued other operating expenses 121,415
- ----------------------------------------------------------------------------------
Trustee deferred compensation and retirement plans 108,562
==================================================================================
Total liabilities 3,851,099
==================================================================================
Net assets applicable to shares outstanding $1,001,525,424
__________________________________________________________________________________
==================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $1,445,959,462
- ----------------------------------------------------------------------------------
Undistributed net investment income 747,168
- ----------------------------------------------------------------------------------
Undistributed net realized gain (loss) (114,741,969)
- ----------------------------------------------------------------------------------
Unrealized appreciation (depreciation) (330,439,237)
==================================================================================
$1,001,525,424
__________________________________________________________________________________
==================================================================================
NET ASSETS:
Class A $ 453,132,787
__________________________________________________________________________________
==================================================================================
Class B $ 78,085,182
__________________________________________________________________________________
==================================================================================
Class C $ 122,123,235
__________________________________________________________________________________
==================================================================================
Class Y $ 8,893,629
__________________________________________________________________________________
==================================================================================
Investor Class $ 335,874,489
__________________________________________________________________________________
==================================================================================
Institutional Class $ 3,416,102
__________________________________________________________________________________
==================================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 18,952,103
__________________________________________________________________________________
==================================================================================
Class B 3,508,542
__________________________________________________________________________________
==================================================================================
Class C 5,624,149
__________________________________________________________________________________
==================================================================================
Class Y 372,770
__________________________________________________________________________________
==================================================================================
Investor Class 14,098,026
__________________________________________________________________________________
==================================================================================
Institutional Class 140,464
__________________________________________________________________________________
==================================================================================
Class A:
Net asset value per share $ 23.91
- ----------------------------------------------------------------------------------
Maximum offering price per share
(Net asset value of $23.91 divided by 94.50%) $ 25.30
__________________________________________________________________________________
==================================================================================
Class B:
Net asset value and offering price per share $ 22.26
__________________________________________________________________________________
==================================================================================
Class C:
Net asset value and offering price per share $ 21.71
__________________________________________________________________________________
==================================================================================
Class Y:
Net asset value and offering price per share $ 23.86
__________________________________________________________________________________
==================================================================================
Investor Class:
Net asset value and offering price per share $ 23.82
__________________________________________________________________________________
==================================================================================
Institutional Class:
Net asset value and offering price per share $ 24.32
__________________________________________________________________________________
==================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
10 AIM ENERGY FUND
STATEMENT OF OPERATIONS
For the year ended March 31, 2009
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $714,522) $ 19,703,661
- ------------------------------------------------------------------------------------------------
Dividends from affiliated money market funds (includes securities lending income
of $175,250) 1,992,462
================================================================================================
Total investment income 21,696,123
================================================================================================
EXPENSES:
Advisory fees 9,832,652
- ------------------------------------------------------------------------------------------------
Administrative services fees 402,439
- ------------------------------------------------------------------------------------------------
Custodian fees 44,905
- ------------------------------------------------------------------------------------------------
Distribution fees:
Class A 1,764,596
- ------------------------------------------------------------------------------------------------
Class B 1,354,660
- ------------------------------------------------------------------------------------------------
Class C 1,894,709
- ------------------------------------------------------------------------------------------------
Investor Class 1,398,262
- ------------------------------------------------------------------------------------------------
Transfer agent fees -- A, B, C, Y and Investor 3,564,091
- ------------------------------------------------------------------------------------------------
Transfer agent fees -- Institutional 601
- ------------------------------------------------------------------------------------------------
Trustees' and officers' fees and benefits 65,630
- ------------------------------------------------------------------------------------------------
Other 711,391
================================================================================================
Total expenses 21,033,936
================================================================================================
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (155,681)
================================================================================================
Net expenses 20,878,255
================================================================================================
Net investment income 817,868
================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from investment securities (113,798,555)
================================================================================================
Change in net unrealized appreciation (depreciation) of investment securities (753,545,845)
================================================================================================
Net realized and unrealized gain (loss) (867,344,400)
================================================================================================
Net increase (decrease) in net assets resulting from operations $(866,526,532)
________________________________________________________________________________________________
================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11 AIM ENERGY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2009 and 2008
<Table>
<Caption>
2009 2008
- -----------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $ 817,868 $ (2,512,792)
- -----------------------------------------------------------------------------------------------------------
Net realized gain (loss) (113,798,555) 356,132,842
- -----------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) (753,545,845) 93,475,428
===========================================================================================================
Net increase (decrease) in net assets resulting from operations (866,526,532) 447,095,478
===========================================================================================================
Distributions to shareholders from net realized gains:
Class A (7,219,093) (158,355,876)
- -----------------------------------------------------------------------------------------------------------
Class B (1,429,499) (36,010,926)
- -----------------------------------------------------------------------------------------------------------
Class C (2,088,406) (47,398,822)
- -----------------------------------------------------------------------------------------------------------
Class Y (31,895) --
- -----------------------------------------------------------------------------------------------------------
Investor Class (5,580,498) (132,884,871)
- -----------------------------------------------------------------------------------------------------------
Institutional Class (50,596) (366,456)
===========================================================================================================
Total distributions from net realized gains (16,399,987) (375,016,951)
===========================================================================================================
Share transactions-net:
Class A (6,569,055) 281,663,485
- -----------------------------------------------------------------------------------------------------------
Class B (19,581,568) 29,756,451
- -----------------------------------------------------------------------------------------------------------
Class C (3,460,678) 71,768,967
- -----------------------------------------------------------------------------------------------------------
Class Y 9,345,797 --
- -----------------------------------------------------------------------------------------------------------
Investor Class (37,993,135) 158,109,710
- -----------------------------------------------------------------------------------------------------------
Institutional Class 4,195,770 2,236,260
===========================================================================================================
Net increase (decrease) in net assets resulting from share
transactions (54,062,869) 543,534,873
===========================================================================================================
Net increase (decrease) in net assets (936,989,388) 615,613,400
===========================================================================================================
NET ASSETS:
Beginning of year 1,938,514,812 1,322,901,412
===========================================================================================================
End of year (includes undistributed net investment income (loss) of
$747,168 and $(101,639), respectively) $1,001,525,424 $1,938,514,812
___________________________________________________________________________________________________________
===========================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12 AIM ENERGY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Energy Fund (the "Fund") is a series portfolio of AIM Sector Funds (the
"Trust"). The Trust is a Delaware statutory trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of six separate portfolios, each
authorized to issue an unlimited number of shares of beneficial interest. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund. Matters affecting each portfolio or class will be voted on exclusively
by the shareholders of such portfolio or class.
The Fund's investment objective is capital growth.
The Fund currently consists of six different classes of shares: Class A, Class
B, Class C, Class Y, Investor Class and Institutional Class. Investor Class
shares of the Fund are offered only to certain grandfathered investors. Class A
shares are sold with a front-end sales charge unless certain waiver criteria are
met and under certain circumstances load waiver shares may be subject to
contingent deferred sales charges ("CDSC"). Class B shares and Class C shares
are sold with a CDSC. Class Y, Investor Class and Institutional Class shares are
sold at net asset value. Generally, Class B shares will automatically convert to
Class A shares on or the about month-end which is at least eight years after the
date of purchase.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements.
A. SECURITY VALUATIONS -- Securities, including restricted securities, are
valued according to the following policy.
A security listed or traded on an exchange (except convertible bonds) is
valued at its last sales price or official closing price as of the close
of the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on
that day. Securities traded in the over-the-counter market are valued
based on prices furnished by independent pricing services or market
makers. When such securities are valued by an independent pricing service
they may be considered fair valued. Futures contracts are valued at the
final settlement price set by an exchange on which they are principally
traded. Listed options are valued at the mean between the last bid and the
ask prices from the exchange on which they are principally traded. Options
not listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last
sales price or official closing price as of the close of the customary
trading session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as institution-size trading in similar groups of
securities, developments related to specific securities, dividend rate,
yield, quality, type of issue, coupon rate, maturity, individual trading
characteristics and other market data. Short-term obligations, including
commercial paper, having 60 days or less to maturity are recorded at
amortized cost which approximates value. Debt securities are subject to
interest rate and credit risks. In addition, all debt securities involve
some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued
at the market quotations. Because trading hours for certain foreign
securities end before the close of the NYSE, closing market quotations may
become unreliable. If between the time trading ends on a particular
security and the close of the customary trading session on the NYSE,
events occur that are significant and may make the closing price
unreliable, the Fund may fair value the security. If the event is likely
to have affected the closing price of the security, the security will be
valued at fair value in good faith using procedures approved by the Board
of Trustees. Adjustments to closing prices to reflect fair value may also
be based on a screening process of an independent pricing service to
indicate the degree of certainty, based on historical data, that the
closing price in the principal market where a foreign security trades is
not the current value as of the close of the NYSE. Foreign securities
meeting the approved degree of certainty that the price is not reflective
of current value will be priced at the indication of fair value from the
independent pricing service. Multiple factors may be considered by the
independent pricing service in determining adjustments to reflect fair
value and may include information relating to sector indices, American
Depositary Receipts and domestic and foreign index futures. Foreign
securities may have additional risks including exchange rate changes,
potential for sharply devalued currencies and high inflation, political
and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be valued based upon quotes furnished by independent sources.
The last bid price may be used to value equity securities and Corporate
Loans. The mean between the last bid and asked prices may be used to value
debt obligations other than Corporate Loans.
Securities for which market quotations are not readily available or are
unreliable are valued at fair value as determined in good faith by or
under the supervision of the Trust's officers following procedures
approved by the Board of Trustees. Issuer specific events, market trends,
bid/ask quotes of brokers and information providers and other market data
may be reviewed in the course of making a good faith determination of a
security's fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity. Because of the inherent uncertainties of valuation, the
values reflected in the financial statements may materially differ from
the value received upon actual sale of those investments.
13 AIM ENERGY FUND
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income is recorded on the accrual basis from settlement
date. Dividend income is recorded on the ex-dividend date.
The Fund may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
The Fund allocates income and realized and unrealized capital gains and
losses to a class based on the relative net assets of each class.
C. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, the investment
advisor may determine the country in which an issuer is located and/or
credit risk exposure based on various factors. These factors include the
laws of the country under which the issuer is organized, where the issuer
maintains a principal office, the country in which the issuer derives 50%
or more of its total revenues and the country that has the primary market
for the issuer's securities, as well as other criteria. Among the other
criteria that may be evaluated for making this determination are the
country in which the issuer maintains 50% or more of its assets, the type
of security, financial guarantees and enhancements, the nature of the
collateral and the sponsor organization. Country of issuer and/or credit
risk exposure has been determined to be the United States of America,
unless otherwise noted.
D. DISTRIBUTIONS -- Distributions from income and net realized capital gain,
if any, are generally paid annually and recorded on ex-dividend date. The
Fund may elect to treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements
of Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial
statements.
The Fund files tax returns in the U.S. Federal jurisdiction and certain
other jurisdictions. Generally the Fund is subject to examinations by such
taxing authorities for up to three years after the filing of the return
for the tax period.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund are charged to the operations of such class. Transfer
agency fees and expenses and other shareholder recordkeeping fees and
expenses attributable to the Institutional Class are charged to such
class. Transfer agency fees and expenses and other shareholder
recordkeeping fees and expenses relating to all other classes are
allocated among those classes based on relative net assets. All other
expenses are allocated among the classes based on relative net assets.
G. ACCOUNTING ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period including estimates and assumptions related to
taxation. Actual results could differ from those estimates by a
significant amount.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust is indemnified
against certain liabilities that may arise out of performance of their
duties to the Fund. Additionally, in the normal course of business, the
Fund enters into contracts, including the Fund's servicing agreements,
that contain a variety of indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown as this would involve future
claims that may be made against the Fund that have not yet occurred. The
risk of material loss as a result of such indemnification claims is
considered remote.
I. OTHER RISKS -- The Fund's investments are concentrated in a comparatively
narrow segment of the economy. Consequently, the Fund may tend to be more
volatile than other mutual funds, and the value of the Fund's investments
may tend to rise and fall more rapidly.
The businesses in which the Fund invests may be adversely affected by
foreign government, federal or state regulations on energy production,
distribution and sale. Short-term fluctuations in commodity prices may
influence Fund returns and increase price fluctuations of the Fund's
shares.
J. SECURITIES LENDING -- The Fund may lend portfolio securities having a
market value up to one-third of the Fund's total assets. Such loans are
secured by collateral equal to no less than the market value of the loaned
securities determined daily by the securities lending provider. Such
collateral will be cash or debt securities issued or guaranteed by the
U.S. Government or any of its sponsored agencies. Cash collateral received
in connection with these loans is invested in short-term money market
instruments or affiliated money market funds and is shown as such on the
Schedule of Investments. It is the Fund's policy to obtain additional
collateral from or return excess collateral to the borrower by the end of
the next business day, following the valuation date of the securities
loaned. Therefore, the value of the collateral held may be temporarily
less than the value of the securities on loan. Lending securities entails
a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase
the collateral accordingly, and the borrower fails to return the
securities. Upon the failure of the borrower to return the securities,
collateral may be liquidated and the securities may be purchased on the
open market to replace the loaned securities. The Fund could experience
delays and costs in gaining access to the collateral. The Fund bears the
risk of any deficiency in the amount of the collateral available for
return to the borrower due to any loss on the collateral invested.
Dividends received on cash collateral investments for securities lending
transactions, which are net of compensation to counterparties, is included
in Dividends from affiliates on the Statement of Operations. The aggregate
value of securities out on loan is shown as a footnote on the Statement of
Assets and Liabilities, if any.
14 AIM ENERGY FUND
K. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close
of the NYSE based on quotations posted by banks and major currency
dealers. Portfolio securities and other assets and liabilities denominated
in foreign currencies are translated into U.S. dollar amounts at date of
valuation. Purchases and sales of portfolio securities (net of foreign
taxes withheld on disposition) and income items denominated in foreign
currencies are translated into U.S. dollar amounts on the respective dates
of such transactions. The Fund does not separately account for the portion
of the results of operations resulting from changes in foreign exchange
rates on investments and the fluctuations arising from changes in market
prices of securities held. The combined results of changes in foreign
exchange rates and the fluctuation of market prices on investments (net of
estimated foreign tax withholding) are included with the net realized and
unrealized gain or loss from investments in the Statement of Operations.
Reported net realized foreign currency gains or losses arise from (i)
sales of foreign currencies, (ii) currency gains or losses realized
between the trade and settlement dates on securities transactions, and
(iii) the difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized
foreign currency gains and losses arise from changes in the fair values of
assets and liabilities, other than investments in securities at fiscal
period end, resulting from changes in exchange rates.
The Fund may invest in foreign securities which may be subject to
foreign taxes on income, gains on investments or currency repatriation, a
portion of which may be recoverable.
L. 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. Fluctuations in the value of these contracts are recorded as
unrealized appreciation (depreciation) until the contracts are closed.
When these contracts are closed, realized gains (losses) are recorded.
Realized and unrealized gains and losses on these contracts are included
in the Statement of Operations. The Fund could be exposed to risk, which
may be in excess of the amount reflected in the Statement of Assets and
Liabilities, if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with Invesco
Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the
investment advisory agreement, the Fund pays an advisory fee to the Advisor
based on the annual rate of the Fund's average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $350 million 0.75%
- -------------------------------------------------------------------
Next $350 million 0.65%
- -------------------------------------------------------------------
Next $1.3 billion 0.55%
- -------------------------------------------------------------------
Next $2 billion 0.45%
- -------------------------------------------------------------------
Next $2 billion 0.40%
- -------------------------------------------------------------------
Next $2 billion 0.375%
- -------------------------------------------------------------------
Over $8 billion 0.35%
___________________________________________________________________
===================================================================
</Table>
Under the terms of a master sub-advisory agreement the Advisor and each of
Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited,
Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco
Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco
Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco
Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the
Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-
Advisor(s) that provide discretionary investment management services to the Fund
based on the percentage of assets allocated to such Sub-Advisor(s).
The Advisor has contractually agreed, through at least June 30, 2009, to waive
the advisory fee payable by the Fund in an amount equal to 100% of the net
advisory fees the Advisor receives from the affiliated money market funds on
investments by the Fund of uninvested cash (excluding investments of cash
collateral from securities lending) in such affiliated money market funds.
For the year ended March 31, 2009, the Advisor waived advisory fees of
$110,829.
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") agreed
to reimburse expenses incurred by the Fund in connection with market timing
matters in the AIM Funds, which may include legal, audit, shareholder reporting,
communications and trustee expenses. These expenses along with the related
expense reimbursement are included in the Statement of Operations. For the year
ended March 31, 2009, Invesco reimbursed expenses of the Fund in the amount of
$5,496.
The Trust has entered into a master administrative services agreement with
Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain
administrative costs incurred in providing accounting services to the Fund. For
the year ended March 31, 2009, expenses incurred under the agreement are shown
in the Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with
Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has
agreed to pay IAIS a fee for providing transfer agency and shareholder services
to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the
course of providing such services. IAIS may make payments to intermediaries that
provide omnibus account services, sub-accounting services and/or networking
services. All fees payable by IAIS to intermediaries that provide omnibus
account services or sub-accounting are charged back to the Fund, subject to
certain limitations approved by the Trust's Board of Trustees. For the year
ended March 31, 2009, expenses incurred under the agreement are shown in the
Statement of Operations as transfer agent fees.
15 AIM ENERGY FUND
The Trust has entered into master distribution agreements with Invesco Aim
Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class
B, Class C, Class Y, Investor Class and Institutional Class shares of the Fund.
The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with
respect to the Fund's Class A, Class B, Class C and Investor Class shares
(collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI
compensation at the annual rate of 0.25% of the Fund's average daily net assets
of Class A shares, 1.00% of the average daily net assets of Class B and Class C
shares and 0.25% of the average daily net assets of Investor Class shares. Of
the Plan payments, up to 0.25% of the average daily net assets of each class of
shares may be paid to furnish continuing personal shareholder services to
customers who purchase and own shares of such classes. Any amounts not paid as a
service fee under the Plans would constitute an asset-based sales charge. Rules
of the Financial Industry Regulatory Authority ("FINRA") impose a cap on the
total sales charges, including asset-based sales charges that may be paid by any
class of shares of the Fund. For the year ended March 31, 2009, expenses
incurred under the Plan are shown in the Statement of Operations as distribution
fees.
Front-end sales commissions and CDSC (collectively the "sales charges") are
not recorded as expenses of the Fund. Front-end sales commissions are deducted
from proceeds from the sales of Fund shares prior to investment in Class A
shares of the Fund. CDSC are deducted from redemption proceeds prior to
remittance to the shareholder. During the year ended March 31, 2009, IADI
advised the Fund that IADI retained $449,436 in front-end sales commissions from
the sale of Class A shares and $18,448, $332,850 and $94,909 from Class A, Class
B and Class C shares, respectively, for CDSC imposed on redemptions by
shareholders.
Certain officers and trustees of the Trust are officers and directors of
Invesco Aim, IAIS and/or IADI.
NOTE 3--SUPPLEMENTAL INFORMATION
The Fund adopted the provisions of Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of
the Fund's fiscal year. SFAS 157 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation methods giving
the highest priority to readily available unadjusted quoted prices in an active
market for identical assets (Level 1) and the lowest priority to significant
unobservable inputs (Level 3) generally when market prices are not readily
available or are unreliable. Based on the valuation inputs the securities or
other investments are tiered into one of three levels. Changes in valuation
methods may result in transfers in or out of an investment's assigned level:
Level 1 -- Prices are determined using quoted prices in an active market for
identical assets.
Level 2 -- Prices are determined using other significant observable inputs.
Observable inputs are inputs that other market participants may use in pricing
a security. These may include quoted prices for similar securities, interest
rates, prepayment speeds, credit risk and others.
Level 3 -- Prices are determined using significant unobservable inputs. In
situations where quoted prices or observable inputs are unavailable (for
example, when there is little or no market activity for an investment at the
end of the period), unobservable inputs may be used. Unobservable inputs
reflect the Fund's own assumptions about the factors market participants would
use in determining fair value of the securities or instruments and would be
based on the best available information.
Below is a summary of the tiered valuation input levels, as of the end of the
reporting period, March 31, 2009. The level assigned to the securities
valuations may not be an indication of the risk or liquidity associated with
investing in those securities. Because of the inherent uncertainties of
valuation, the values reflected in the financial statements may materially
differ from the value received upon actual sale of those investments.
<Table>
<Caption>
INVESTMENTS IN
INPUT LEVEL SECURITIES
- --------------------------------------
Level 1 $998,267,637
- --------------------------------------
Level 2 --
- --------------------------------------
Level 3 --
======================================
$998,267,637
______________________________________
======================================
</Table>
NOTE 4--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM Funds under specified conditions outlined in procedures adopted by the Board
of Trustees of the Trust. The procedures have been designed to ensure that any
purchase or sale of securities by the Fund from or to another fund or portfolio
that is or could be considered an affiliate by virtue of having a common
investment advisor (or affiliated investment advisors), common Trustees and/or
common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined
under the procedures, each transaction is effected at the current market price.
Pursuant to these procedures, for the year ended March 31, 2009, the Fund
engaged in securities purchases of $1,177,400.
NOTE 5--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions and (ii) custodian credits which
result from periodic overnight cash balances at the custodian. For the year
ended March 31, 2009, the Fund received credits from these arrangements, which
resulted in the reduction of the Fund's total expenses of $39,356.
16 AIM ENERGY FUND
NOTE 6--TRUSTEES' AND OFFICERS' FEES AND BENEFITS
"Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officers' Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officers'
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended March 31, 2009, the Fund paid legal fees of $9,561 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7--CASH BALANCES
The Fund is permitted to temporarily carry a negative or overdrawn balance in
its account with The State Street Bank and Trust Company, the custodian bank. To
compensate the custodian bank for such overdrafts, the overdrawn Fund may either
(i) leave funds as a compensating balance in the account so the custodian bank
can be compensated by earning the additional interest; or (ii) compensate by
paying the custodian bank at a rate agreed upon by the custodian bank and
Invesco Aim, not to exceed the contractually agreed upon rate.
NOTE 8--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED MARCH
31, 2009 AND 2008:
<Table>
<Caption>
2009 2008
- --------------------------------------------------------------------------------------------------------
Ordinary income $ 14,915 $ --
- --------------------------------------------------------------------------------------------------------
Long-term capital gain 16,385,072 375,016,951
========================================================================================================
Total distributions $16,399,987 $375,016,951
________________________________________________________________________________________________________
========================================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
<Table>
<Caption>
2009
- -------------------------------------------------------------------------------------------------
Undistributed ordinary income $ 862,433
- -------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) -- investments (333,395,008)
- -------------------------------------------------------------------------------------------------
Temporary book/tax differences (115,265)
- -------------------------------------------------------------------------------------------------
Post-October deferrals (98,622,027)
- -------------------------------------------------------------------------------------------------
Capital loss carryforward (13,164,171)
- -------------------------------------------------------------------------------------------------
Shares of beneficial interest 1,445,959,462
=================================================================================================
Total net assets $1,001,525,424
_________________________________________________________________________________________________
=================================================================================================
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation (depreciation) difference is attributable primarily to wash sales.
The temporary book/tax differences are a result of timing differences between
book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of the trustee deferral of compensation and
retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund has a capital loss carryforward as of March 31, 2009 which expires as
follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------------------------
March 31, 2017 $13,164,171
_______________________________________________________________________________________________
===============================================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
17 AIM ENERGY FUND
NOTE 9--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended March 31, 2009 was $935,605,219 and
$1,058,324,444, respectively. Cost of investments on a tax basis includes the
adjustments for financial reporting purposes as of the most recently completed
Federal income tax reporting period-end.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $ 56,035,888
- ------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (389,430,896)
================================================================================================
Net unrealized appreciation (depreciation) of investment securities $(333,395,008)
________________________________________________________________________________________________
================================================================================================
Cost of investments for tax purposes is $1,331,662,645.
</Table>
NOTE 10--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of expired capital loss
carryforward, on March 31, 2009, undistributed net investment income was
increased by $30,939, undistributed net realized gain (loss) was increased by
$1,251,271 and shares of beneficial interest decreased by $1,282,210. This
reclassification had no effect on the net assets of the Fund.
NOTE 11--SHARE INFORMATION
<Table>
<Caption>
SUMMARY OF SHARE ACTIVITY
- --------------------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
--------------------------------------------------------------
2009(a) 2008
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 10,398,527 $ 382,101,561 8,248,687 $ 379,458,746
- --------------------------------------------------------------------------------------------------------------------------
Class B 1,269,221 45,942,470 1,109,300 48,759,257
- --------------------------------------------------------------------------------------------------------------------------
Class C 2,572,358 84,211,834 1,865,868 80,927,664
- --------------------------------------------------------------------------------------------------------------------------
Class Y(b) 403,637 10,086,132 -- --
- --------------------------------------------------------------------------------------------------------------------------
Investor Class 6,023,554 241,173,477 4,277,962 195,272,865
- --------------------------------------------------------------------------------------------------------------------------
Institutional Class 188,427 8,951,224 42,822 1,998,259
==========================================================================================================================
Issued as reinvestment of dividends:
Class A 285,778 6,898,558 3,426,215 147,430,044
- --------------------------------------------------------------------------------------------------------------------------
Class B 58,006 1,306,286 811,669 32,864,458
- --------------------------------------------------------------------------------------------------------------------------
Class C 91,070 2,000,845 1,127,524 44,509,062
- --------------------------------------------------------------------------------------------------------------------------
Class Y 1,297 31,212 -- --
- --------------------------------------------------------------------------------------------------------------------------
Investor Class 226,831 5,455,427 3,029,454 129,902,978
- --------------------------------------------------------------------------------------------------------------------------
Institutional Class 2,059 50,466 8,316 361,641
==========================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 391,494 14,947,875 282,180 12,864,317
- --------------------------------------------------------------------------------------------------------------------------
Class B (418,552) (14,947,875) (297,730) (12,864,317)
==========================================================================================================================
Reacquired:
Class A(b) (11,596,146) (410,517,049) (5,604,431) (258,089,622)
- --------------------------------------------------------------------------------------------------------------------------
Class B (1,595,886) (51,882,449) (900,401) (39,002,947)
- --------------------------------------------------------------------------------------------------------------------------
Class C (2,827,045) (89,673,357) (1,264,793) (53,667,759)
- --------------------------------------------------------------------------------------------------------------------------
Class Y (32,164) (771,547) -- --
- --------------------------------------------------------------------------------------------------------------------------
Investor Class(b) (7,789,962) (284,622,039) (3,693,645) (167,066,133)
- --------------------------------------------------------------------------------------------------------------------------
Institutional Class (100,663) (4,805,920) (2,944) (123,640)
==========================================================================================================================
Net increase (decrease) in share activity (2,448,159) $ (54,062,869) 12,466,053 $ 543,534,873
__________________________________________________________________________________________________________________________
==========================================================================================================================
</Table>
(a) There are entities that are record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate own 24% of the
outstanding shares of the Fund. IADI has an agreement with these entities
to sell Fund shares. The Fund, Invesco Aim and/or Invesco Aim affiliates
may make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, Invesco Aim and/or Invesco
Aim affiliates including but not limited to services such as securities
brokerage, distribution, third party record keeping and account servicing.
The Trust has no knowledge as to whether all or any portion of the shares
owned of record by these entities are also owned beneficially.
(b) Effective upon the commencement date of Class Y shares, October 3, 2008,
the following shares were converted from Class A and Investor Class into
Class Y shares of the Fund:
<Table>
<Caption>
CLASS SHARES AMOUNT
----------------------------------------------------------------------------------------------------
Class Y 73,065 $ 2,274,502
----------------------------------------------------------------------------------------------------
Class A (47,663) (1,489,020)
----------------------------------------------------------------------------------------------------
Investor Class (25,232) (785,482)
____________________________________________________________________________________________________
====================================================================================================
</Table>
18 AIM ENERGY FUND
NOTE 12--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
NET GAINS
NET ASSET NET (LOSSES) ON DISTRIBUTIONS
VALUE, INVESTMENT SECURITIES (BOTH TOTAL FROM FROM NET NET ASSET
BEGINNING OF INCOME REALIZED AND INVESTMENT REALIZED VALUE, END TOTAL
PERIOD (LOSS)(a) UNREALIZED) OPERATIONS GAINS OF PERIOD RETURN(b)
- -----------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 $43.71 $ 0.07 $(19.47) $(19.40) $ (0.40) $23.91 (44.39)%
Year ended 03/31/08 41.02 0.00 13.10 13.10 (10.41) 43.71 32.35
Year ended 03/31/07 43.17 (0.04) 4.44 4.40 (6.55) 41.02 10.48
Year ended 03/31/06 32.86 (0.06) 12.73 12.67 (2.36) 43.17 38.90
Year ended 03/31/05 22.27 (0.09) 10.68 10.59 -- 32.86 47.55
- -----------------------------------------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 41.04 (0.19) (18.19) (18.38) (0.40) 22.26 (44.79)
Year ended 03/31/08 39.28 (0.32) 12.49 12.17 (10.41) 41.04 31.35
Year ended 03/31/07 41.90 (0.34) 4.27 3.93 (6.55) 39.28 9.64
Year ended 03/31/06 32.17 (0.35) 12.44 12.09 (2.36) 41.90 37.92
Year ended 03/31/05 21.94 (0.25) 10.48 10.23 -- 32.17 46.63
- -----------------------------------------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 40.06 (0.19) (17.76) (17.95) (0.40) 21.71 (44.82)
Year ended 03/31/08 38.53 (0.32) 12.26 11.94 (10.41) 40.06 31.37
Year ended 03/31/07 41.22 (0.34) 4.20 3.86 (6.55) 38.53 9.63
Year ended 03/31/06 31.68 (0.35) 12.25 11.90 (2.36) 41.22 37.91
Year ended 03/31/05 21.60 (0.25) 10.33 10.08 -- 31.68 46.67
- -----------------------------------------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(e) 31.13 0.04 (6.91) (6.87) (0.40) 23.86 (22.08)
- -----------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 43.56 0.07 (19.41) (19.34) (0.40) 23.82 (44.40)
Year ended 03/31/08 40.91 0.00 13.06 13.06 (10.41) 43.56 32.34
Year ended 03/31/07 43.07 (0.04) 4.43 4.39 (6.55) 40.91 10.48
Year ended 03/31/06 32.78 (0.06) 12.71 12.65 (2.36) 43.07 38.94
Year ended 03/31/05 22.19 (0.06) 10.65 10.59 -- 32.78 47.72
- -----------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Year ended 03/31/09 44.23 0.24 (19.75) (19.51) (0.40) 24.32 (44.11)
Year ended 03/31/08 41.25 0.20 13.19 13.39 (10.41) 44.23 32.90
Year ended 03/31/07 43.20 0.16 4.44 4.60 (6.55) 41.25 10.95
Year ended 03/31/06(e) 46.46 0.02 (3.28) (3.26) -- 43.20 (7.02)
_______________________________________________________________________________________________________________________
=======================================================================================================================
<Caption>
RATIO OF RATIO OF
EXPENSES EXPENSES
TO AVERAGE TO AVERAGE NET RATIO OF NET
NET ASSETS ASSETS WITHOUT INVESTMENT
NET ASSETS, WITH FEE WAIVERS FEE WAIVERS INCOME (LOSS)
END OF PERIOD AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO
(000S OMITTED) ABSORBED ABSORBED NET ASSETS TURNOVER(c)
- --------------------------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 $453,133 1.16%(d) 1.17%(d) 0.20%(d) 61%
Year ended 03/31/08 851,105 1.11 1.12 0.01 64
Year ended 03/31/07 538,155 1.17 1.17 (0.08) 52
Year ended 03/31/06 525,619 1.19 1.19 (0.16) 72
Year ended 03/31/05 161,529 1.47 1.48 (0.32) 45
- --------------------------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 78,085 1.91(d) 1.92(d) (0.55)(d) 61
Year ended 03/31/08 172,190 1.86 1.87 (0.74) 64
Year ended 03/31/07 136,404 1.92 1.92 (0.83) 52
Year ended 03/31/06 147,270 1.93 1.93 (0.90) 72
Year ended 03/31/05 55,559 2.12 2.13 (0.97) 45
- --------------------------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 122,123 1.91(d) 1.92(d) (0.55)(d) 61
Year ended 03/31/08 231,832 1.86 1.87 (0.74) 64
Year ended 03/31/07 156,394 1.92 1.92 (0.83) 52
Year ended 03/31/06 171,500 1.93 1.93 (0.90) 72
Year ended 03/31/05 58,626 2.12 2.13 (0.97) 45
- --------------------------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(e) 8,894 1.04(d)(f) 1.05(d)(f) 0.32(d)(f) 61
- --------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 335,874 1.16(d) 1.17(d) 0.20(d) 61
Year ended 03/31/08 681,147 1.11 1.12 0.01 64
Year ended 03/31/07 491,847 1.17 1.17 (0.08) 52
Year ended 03/31/06 568,579 1.18 1.18 (0.15) 72
Year ended 03/31/05 378,915 1.37 1.38 (0.22) 45
- --------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Year ended 03/31/09 3,416 0.70(d) 0.71(d) 0.66(d) 61
Year ended 03/31/08 2,240 0.68 0.69 0.44 64
Year ended 03/31/07 101 0.72 0.72 0.37 52
Year ended 03/31/06(e) 67 0.80(f) 0.80(f) 0.23(f) 72
________________________________________________________________________________________________________
========================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset value
for financial reporting purposes and the returns based upon those net asset
values may differ from the net asset value and returns for shareholder
transactions. Does not include sales charges and is not annualized for
periods less than one year, if applicable.
(c) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year, if applicable.
(d) Ratios are based on average daily net assets (000's omitted) of $705,838,
$135,466, $189,471, $3,349, $559,305 and $5,142 for Class A, Class B, Class
C, Class Y, Investor Class and Institutional Class shares, respectively.
(e) Commencement date of Class Y and Institutional Class shares was October 3,
2008 and January 31, 2006, respectively.
(f) Annualized.
19 AIM ENERGY FUND
NOTE 13--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On May 23, 2008, the Securities and Exchange Commission ("SEC") publicly posted
its final approval of the Distribution Plans ("Distribution Plans") for the
distribution of monies placed into two separate Fair Funds created pursuant to a
settlement reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"),
Invesco Aim Advisors, Inc. ("Invesco Aim") and Invesco Aim Distributors, Inc.
("IADI") and the SEC (the "Order"). One of the Fair Funds consists of $325
million, plus interest and any contributions by other settling parties, for
distribution to shareholders of certain mutual funds formerly advised by IFG who
may have been harmed by market timing and related activity. The second Fair Fund
consists of $50 million, plus interest and any contributions by other settling
parties, for distribution to shareholders of certain mutual funds advised by
Invesco Aim who may have been harmed by market timing and related activity. The
Distribution Plans provide for the distribution to all eligible investors to
compensate such investors for injury they may have suffered as a result of
market timing in the affected funds. The Distribution Plans include a provision
for any residual amounts in the Fair Funds to be distributed in the future to
the affected funds. Because the distribution of the Fair Funds has not yet
commenced, management of Invesco Aim and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"), the
parent company of IFG and Invesco Aim, has agreed to reimburse expenses incurred
by the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, Invesco Aim, IADI
and/or related entities and individuals alleging that the defendants permitted
improper market timing and related activity in the AIM Funds.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
negligence, breach of fiduciary duty and/or breach of contract. These lawsuits
seek remedies that include, depending on the lawsuit, damages, restitution,
injunctive relief, imposition of a constructive trust, removal of certain
directors and/or employees, various corrective measures under ERISA, rescission
of certain AIM Funds' advisory agreements and/or distribution plans and recovery
of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues were transferred to the United States District Court for the District of
Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court, plaintiffs in
these lawsuits consolidated their claims for pre-trial purposes into three
amended complaints against various Invesco Aim- and IFG-related parties: (i) a
Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of ERISA purportedly
brought on behalf of participants in the Invesco 401(k) plan. Based on orders
issued by the MDL Court, all claims asserted against the AIM Funds that have
been transferred to the MDL Court have been dismissed, although certain Funds
remain nominal defendants in the Consolidated Amended Fund Derivative Complaint.
On January 5, 2008, the parties reached an agreement in principle to settle both
the Consolidated Amended Class Action Complaint and Consolidated Amended Fund
Derivative Complaint, subject to the MDL Court approval. Individual class
members have the right to object. On December 15, 2008, the parties reached an
agreement in principle to settle the Amended Class Action Complaint for
Violations of ERISA, subject to the MDL Court approval. Individual class members
have the right to object. No payments are required under the settlement;
however, the parties agreed that certain limited changes to benefit plans and
participants' accounts would be made.
IFG, Invesco Aim, IADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, Invesco Aim and IADI have advised the Fund that they are providing
full cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, Invesco Aim, IADI and/or related entities and individuals in
the future.
Management of Invesco Aim and the Fund believe that the outcome of the Pending
Litigation and Regulatory Inquiries described above will have no material
adverse affect on the Fund or on the ability of Invesco Aim and IADI to provide
ongoing services to the Fund.
20 AIM ENERGY FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM Sector Funds
and Shareholders of AIM Energy Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of AIM Energy Fund (one of the funds
constituting AIM Sector Funds, hereafter referred to as the "Fund") at March 31,
2009, the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 2009 by
correspondence with the custodian and broker, provide a reasonable basis for our
opinion.
PRICEWATERHOUSECOOPERS LLP
May 15, 2009
Houston, Texas
21 AIM ENERGY FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. With
the exception of the actual ending account value and expenses of the Class Y
shares, the example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period October 1, 2008, through
March 31, 2009. The actual ending account and expenses of the Class Y shares in
the below example are based on an investment of $1,000 invested as of close of
business October 3, 2008 (commencement date) and held through March 31, 2009.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period (as of close of business
October 3, 2008 through March 31, 2009 for the Class Y shares). Because the
actual ending account value and expense information in the example is not based
upon a six month period for the Class Y shares, the ending account value and
expense information may not provide a meaningful comparison to mutual funds that
provide such information for a full six month period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/01/08) (03/31/09)(1) PERIOD(2) (03/31/09) PERIOD(2,3) RATIO
- ---------------------------------------------------------------------------------------------------
A $1,000.00 $674.70 $5.55 $1,018.30 $ 6.69 1.33%
- ---------------------------------------------------------------------------------------------------
B 1,000.00 672.10 8.67 1,014.56 10.45 2.08
- ---------------------------------------------------------------------------------------------------
C 1,000.00 671.90 8.67 1,014.56 10.45 2.08
- ---------------------------------------------------------------------------------------------------
Y 1,000.00 779.20 4.56 1,019.75 5.24 1.04
- ---------------------------------------------------------------------------------------------------
Investor 1,000.00 674.40 5.55 1,018.30 6.69 1.33
- ---------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period October 1, 2008, through March 31, 2009 (as of close of
business October 3, 2008, through March 31, 2009 for the Class Y shares),
after actual expenses and will differ from the hypothetical ending account
value which is based on the Fund's expense ratio and a hypothetical annual
return of 5% before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
182/365 to reflect the most recent fiscal half year. For the Class Y shares
actual expenses are equal to the annualized expense ratio indicated above
multiplied by the average account value over the period, multiplied by 180
(as of close of business October 3, 2008, through March 31, 2009)/365.
Because the Class Y shares have not been in existence for a full six month
period, the actual ending account value and expense information shown may
not provide a meaningful comparison to fund expense information of classes
that show such data for a full six month period and, because the actual
ending account value and expense information in the expense example covers a
short time period, return and expense data may not be indicative of return
and expense data for longer time periods.
(3) Hypothetical expenses are equal to the annualized expense ratio indicated
above multiplied by the average account value over the period, multiplied by
182/365 to reflect a one-half year period. The hypothetical ending account
value and expenses may be used to compare ongoing costs of investing in
Class Y shares of the Fund and other funds because such data is based on a
full six month period.
22 AIM ENERGY FUND
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year-end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to be
different, the maximum amount allowable for its fiscal year ended March 31,
2009:
<Table>
<Caption>
FEDERAL AND STATE INCOME TAX
----------------------------
Long-Term Capital Gain Dividends $16,385,072
Qualified Dividend Income* 100%
Corporate Dividends Received Deduction* 100%
</Table>
* The above percentages are based on ordinary income dividends paid to
shareholders during the Fund's fiscal year.
NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended June 30, 2008, September 30, 2008, December 31, 2008 and
March 31, 2009 were 20.97%, 22.72%, 25.41%, and 30.54%, respectively.
23 AIM ENERGY FUND
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM Sector Funds (the "Trust"), is 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 102
portfolios in the AIM Funds complex. The trustees serve for the life of the
Trust, subject to their earlier death, incapacitation, resignation, retirement
or removal as more specifically provided in the Trust's organizational
documents. Each officer serves for a one year term or until their successors are
elected and qualified. Column two below includes length of time served with
predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------------
Martin L. 2007 Executive Director, Chief Executive Officer and President, None
Flanagan(1) -- 1960 Invesco Ltd. (ultimate parent of Invesco Aim and a global
Trustee investment management firm); Chairman, Invesco Aim Advisors,
Inc. (registered investment advisor); Trustee, The AIM
Family of Funds--Registered Trademark--; Vice Chairman,
Investment Company Institute; and Member of Executive Board,
SMU Cox School of Business
Formerly: Director, Chairman, Chief Executive Officer and
President, IVZ Inc. (holding company); INVESCO Group
Services, Inc. (service provider); and Invesco North
American Holdings, Inc. (holding company); Director, Chief
Executive Officer and President, Invesco Holding Company
Limited (parent of Invesco Aim and a global investment
management firm); Chairman, Investment Company Institute;
President, Co-Chief Executive Officer, Co-President, Chief
Operating Officer and Chief Financial Officer, Franklin
Resources, Inc. (global investment management organization)
- --------------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None
Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and
Principal President, Invesco Trimark Dealer Inc. (formerly AIM Mutual
Executive Officer Fund Dealer Inc.) (registered broker dealer), Invesco Aim
Advisors, Inc., and 1371 Preferred Inc. (holding company);
Director, Chairman, Chief Executive Officer and President,
Invesco Aim Management Group, Inc. (financial services
holding company) and Invesco Aim Capital Management, Inc.
(registered investment advisor); Director and President,
INVESCO Funds Group, Inc. (registered investment advisor and
register transfer agent) and AIM GP Canada Inc. (general
partner for a limited partnership); Director, Invesco Aim
Distributors, Inc. (registered broker dealer); Director and
Chairman, Invesco Aim Investment Services, Inc. (registered
transfer agent) and INVESCO Distributors, Inc. (registered
broker dealer); Director, President and Chairman, INVESCO
Inc. (holding company) and Invesco Canada Holdings Inc.
(holding company); Chief Executive Officer, AIM Trimark
Corporate Class Inc. (corporate mutual fund company) and AIM
Trimark Canada Fund Inc. (corporate mutual fund company);
Director and Chief Executive Officer, Invesco Trimark
Ltd./Invesco Trimark Ltee (formerly AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services) (registered
investment advisor and registered transfer agent) and
Invesco Trimark Dealer Inc. (formerly AIM Mutual Fund Dealer
Inc.) (registered broker dealer); Trustee, President and
Principal Executive Officer of The AIM Family of Funds--
Registered Trademark-- (other than AIM Treasurer's Series
Trust and Short-Term Investments Trust); Trustee and
Executive Vice President, The AIM Family of Funds--
Registered Trademark-- (AIM Treasurer's Series Trust and
Short-Term Investments Trust only); and Manager, Invesco
PowerShares Capital Management LLC
Formerly: President, Invesco Trimark Dealer Inc.; Director
and President, AIM Trimark Corporate Class Inc. and AIM
Trimark Canada Fund Inc.; Director and President, Invesco
Trimark Ltd./Invesco Trimark Ltee (formerly AIM Funds
Management Inc. d/b/a INVESCO Enterprise Services); Senior
Managing Director, Invesco Holding Company Limited; Trustee
and Executive Vice President, Tax-Free Investments Trust;
Director and Chairman, Fund Management Company (registered
broker dealer); President and Principal Executive Officer,
The AIM Family of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term Investments Trust and
Tax-Free Investments Trust only); President, AIM Trimark
Global Fund Inc. and AIM Trimark Canada Fund Inc.; and
Director, Trimark Trust (federally regulated Canadian Trust
Company)
- --------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited
Trustee and Chair consulting company) (insurance company);
Captaris, Inc.
(unified messaging
provider); and
Investment Company
Institute
- --------------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 1983 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2003 Retired
Trustee
Formerly: Partner, law firm of Baker & McKenzie; and None
Director, Badgley Funds, Inc. (registered investment
company) (2 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Director, Van Gilder
Trustee firm) Insurance Company,
Board of Governors,
Western Golf
Association/Evans
Scholars Foundation
and Executive
Committee, United
States Golf
Association
- --------------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2003 Director of a number of public and private business None
Trustee corporations, including the Boss Group Ltd. (private
investment and management); Continental Energy Services, LLC
(oil and gas pipeline service); Reich & Tang Funds
(registered investment company); Annuity and Life Re
(Holdings), Ltd. (reinsurance company), and Homeowners of
America Holding Corporation/Homeowners of America Insurance
Company (property casualty company)
Formerly: Director, CompuDyne Corporation (provider of
product and services to the public security market);
Director, President and Chief Executive Officer, Volvo Group
North America, Inc.; Senior Vice President, AB Volvo;
Director of various public and private corporations
- --------------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff
Trustee (government affairs company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate
entertainment)
Formerly: Chief Executive Officer, Texana Timber LP
(sustainable forestry company); and Discovery Global
Education Fund (non-profit)
- --------------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich &
Trustee Tang Funds (16
portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 2003 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 1997 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired
Trustee
Formerly: Partner, Director, Mainstay VP Series Funds, Inc. None
(25 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan is considered an interested person of the Trust because he is
an officer of the advisor to the Trust, and an officer and a director of
Invesco Ltd., ultimate parent of the advisor to the Trust.
(2) Mr. Taylor is considered an interested person of the Trust because he is an
officer and a director of the advisor to, and a director of the principal
underwriter of, the Trust.
24 AIM ENERGY FUND
TRUSTEES AND OFFICERS--(CONTINUED)
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- --------------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family of N/A
Senior Vice President and Funds--Registered Trademark--
Senior Officer
Formerly: Director of Compliance and Assistant General Counsel,
ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General
Counsel and Director of Compliance, ALPS Mutual Funds, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General Counsel, N/A
Senior Vice President, Chief Invesco Aim Management Group, Inc., Invesco Aim Advisors, Inc.
Legal Officer and Secretary and Invesco Aim Capital Management, Inc.; Director, Senior Vice
President and Secretary, Invesco Aim Distributors, Inc.;
Director, Vice President and Secretary, Invesco Aim Investment
Services, Inc. and INVESCO Distributors, Inc.; Director and Vice
President, INVESCO Funds Group Inc.; Senior Vice President, Chief
Legal Officer and Secretary, The AIM Family of Funds--Registered
Trademark--; and Manager, Invesco PowerShares Capital Management
LLC
Formerly: Director, Vice President and Secretary, Fund Management
Company; Vice President, Invesco Aim Capital Management, Inc.;
Chief Operating Officer, Senior Vice President, General Counsel
and Secretary, Liberty Ridge Capital, Inc. (an investment
adviser); Vice President and Secretary, PBHG Funds (an investment
company); Vice President and Secretary, PBHG Insurance Series
Fund (an investment company); Chief Operating Officer, General
Counsel and Secretary, Old Mutual Investment Partners (a broker-
dealer); General Counsel and Secretary, Old Mutual Fund Services
(an administrator); General Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder servicing center); Executive
Vice President, General Counsel and Secretary, Old Mutual
Capital, Inc. (an investment adviser); and Vice President and
Secretary, Old Mutual Advisors Funds (an investment company)
- --------------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice President, The N/A
Vice President AIM Family of Funds--Registered Trademark--
Formerly: Senior Vice President, Invesco Aim Management Group,
Inc.; Senior Vice President and Chief Compliance Officer, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark--; Vice President and Chief Compliance Officer, Invesco
Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.;
Vice President, Invesco Aim Investment Services, Inc. and Fund
Management Company
- --------------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, Invesco N/A
Vice President Ltd.; Director and Secretary, Invesco Holding Company Limited,
and INVESCO Funds Group, Inc.; Director and Executive Vice
President, IVZ Inc., Invesco Group Services, Inc., Invesco North
American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.;
and Vice President, The AIM Family of Funds--Registered
Trademark--
Formerly: Secretary, IVZ, Inc., Invesco Group Services, Inc., and
Invesco North American Holdings, Inc.; Senior Managing Director
and Secretary, Invesco Holding Company Limited; Director, Senior
Vice President, Secretary and General Counsel, Invesco Aim
Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior
Vice President, Invesco Aim Distributors, Inc.; Director, General
Counsel and Vice President, Fund Management Company; Vice
President, Invesco Aim Capital Management, Inc., Invesco Aim
Investment Services, Inc., Invesco Group Services, Inc. and IVZ
Inc.; Senior Vice President, Chief Legal Officer and Secretary,
The AIM Family of Funds--Registered Trademark--; Director and
Vice President, INVESCO Distributors, Inc. and Chief Executive
Officer and President, INVESCO Funds Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Sheri Morris -- 1964 1999 Vice President, Treasurer and Principal Financial Officer, The N/A
Vice President, Treasurer AIM Family of Funds--Registered Trademark--; and Vice President,
and Principal Financial Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc.
Officer and Invesco Aim Private Asset Management Inc.
Formerly: Assistant Vice President and Assistant Treasurer, The
AIM Family of Funds--Registered Trademark-- and Assistant Vice
President, Invesco Aim Advisors, Inc., Invesco Aim Capital
Management, Inc. and Invesco Aim Private Asset Management, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash Management N/A
Vice President Group; Director of Cash Management and Senior Vice President,
Invesco Aim Advisors, Inc. and Invesco Aim Capital Management,
Inc; Executive Vice President, Invesco Aim Distributors, Inc.;
Senior Vice President, Invesco Aim Management Group, Inc.; Vice
President, The AIM Family of Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust and Short-Term Investments
Trust); and President and Principal Executive Officer, The AIM
Family of Funds--Registered Trademark-- (AIM Treasurer's Series
Trust and Short-Term Investments Trust only)
Formerly President and Principal Executive Officer, Tax-Free
Investments Trust; Director and President, Fund Management
Company; Chief Cash Management Officer and Managing Director,
Invesco Aim Capital Management, Inc.; and Vice President, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark-- (AIM Treasurer's Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust only)
- --------------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim Advisors, N/A
Anti-Money Laundering Inc., Invesco Aim Capital Management, Inc., Invesco Aim
Compliance Officer Distributors, Inc., Invesco Aim Investment Services, Inc.,
Invesco Aim Private Asset Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering Compliance Officer, Fund
Management Company; and Manager of the Fraud Prevention
Department, Invesco Aim Investment Services, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; Senior N/A
Chief Compliance Officer Vice President and Chief Compliance Officer, Invesco Aim
Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief
Compliance Officer, The AIM Family of Funds--Registered
Trademark--, Invesco Global Asset Management (N.A.), Inc.
(registered investment advisor), Invesco Institutional (N.A.),
Inc., (registered investment advisor), INVESCO Private Capital
Investments, Inc. (holding company), Invesco Private Capital,
Inc. (registered investment advisor) and Invesco Senior Secured
Management, Inc. (registered investment advisor); and Vice
President, Invesco Aim Distributors, Inc. and Invesco Aim
Investment Services, Inc.
Formerly: Vice President, Invesco Aim Capital Management, Inc.
and Fund Management Company; and Global Head of Product
Development, AIG-Global Investment Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
The Statement of Additional Information of the Trust includes additional
information about the Fund's Trustees and is available upon request, without
charge, by calling 1.800.959.4246.
Please refer to the Fund's prospectus for information on the Fund's sub-
advisors.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza Invesco Aim Advisors, Invesco Aim Distributors, PricewaterhouseCoopers
Suite 100 Inc. Inc. LLP
Houston, TX 77046-1173 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street
Suite 100 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Stradley Ronon Stevens INDEPENDENT TRUSTEES Invesco Aim Investment State Street Bank and
& Young, LLP Kramer, Levin, Naftalis & Services, Inc. Trust Company
2600 One Commerce Square Frankel LLP P.O. Box 4739 225 Franklin Street
Philadelphia, PA 19103 1177 Avenue of the Houston, TX 77210-4739 Boston, MA 02110-2801
Americas
New York, NY 10036-2714
25 AIM ENERGY FUND
====================================================================================================================================
[GO PAPERLESS GRAPHIC]
====================================================================================================================================
GO PAPERLESS WITH EDELIVERY
Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all
about eeees:
o ENVIRONMENTALLY FRIENDLY. Go green by reducing the number of o EFFICIENT. Stop waiting for regular mail. Your documents will
trees used to produce paper. be sent via email as soon as they're available.
o ECONOMICAL. Help reduce your fund's printing and delivery o EASY. Download, save and print files using your home computer
expenses and put more capital back in your fund's returns. with a few clicks of your mouse.
This service is provided by Invesco Aim Investment Services, Inc.
====================================================================================================================================
FUND HOLDINGS AND PROXY VOTING INFORMATION
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund
files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is
available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your
Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC
website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C.
You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by
calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file
numbers for the Fund are 811 -03826 and 002-85905.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities
is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website,
invescoaim. com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website,
sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2008, is
available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting
Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov.
If used after July 20, 2009, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for
the most recent quarter-end. Invesco Aim--SERVICE MARK-- is a service mark of Invesco Aim Management Group, Inc. Invesco Aim
Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and
Invesco PowerShares Capital Management LLC are the investment advisors for the products and services
represented by Invesco Aim; they each provide investment advisory services to individual and
institutional clients and do not sell securities. Please refer to each fund's prospectus for
information on the fund's subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the
retail mutual funds, exchange-traded funds and institutional money market funds and the subdistributor [INVESCO AIM LOGO]
for the STIC Global Funds represented by Invesco Aim. All entities are indirect, wholly owned -- SERVICE MARK --
subsidiaries of invesco Ltd.
It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors,
Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global
Asset Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the
consolidated adviser firm will be renamed Invesco Advisers, Inc. Additional information will be posted
at invescoaim.com on or about the end of the fourth quarter of 2009.
invescoaim.com I-ENE-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] AIM FINANCIAL SERVICES FUND
--SERVICE MARK-- Annual Report to Shareholders o March 31, 2009
[MOUNTAIN GRAPHIC]
2 Letters to Shareholders
4 Performance Summary
4 Management Discussion
6 Long-Term Fund Performance
8 Supplemental Information
9 Schedule of Investments
10 Financial Statements
13 Notes to Financial Statements
19 Financial Highlights
21 Auditor's Report
22 Fund Expenses
23 Tax Information
24 Trustees and Officers
Dear Shareholders:
The past year was difficult to say the least for virtually all investors. Market indexes in the
[TAYLOR PHOTO] U.S. and around the globe nosedived in 2008, and the vast majority of us have seen sharp declines in
the value of our investments. As I write this letter, "market experts" remain divided on the outlook
for the market. While some argue the worst of the decline is over, others say we have farther to fall.
There is widespread agreement, however, that markets are likely to remain volatile for some time to
come.
We've all read about subprime lending, government bailouts and investment scandals -- but we know
Philip Taylor that as individuals, we have little control over such matters. Rather, I'd like to discuss with you
actions you may have already taken, or can take now, that may benefit you going forward.
BOOMS AND BUSTS
Recent history should have reminded all of us that investor sentiment can be fickle. The
technology-driven bull market of the late 1990s gave way to a sharp decline from 2000 to 2002 when the
"tech bubble" burst. More recently, the 2003 to 2007 bull market, driven largely by financial stocks
and a housing boom, among other factors, gave way to the current market decline when the "housing bubble" burst.
These market downturns hurt nearly all investors. But they were particularly painful for investors who, seeking high, short-term
returns, abandoned their long-term, diversified investment plans and decided to chase performance -- i.e., allocate a large portion
of their assets into the "hot" investments du jour. Many of those investors discovered they had unwittingly bought at the top of the
market, and they saw the value of their assets decline significantly as market leadership changed. History has shown that seeking
the highest short-term returns possible has often led to long-term disappointment.
This is why we believe investors should work with their financial advisors to devise a goal-based financial strategy -- a
long-term plan with a reasonable prospect of achieving predetermined financial goals in line with individual risk tolerance. Such a
strategy cannot guarantee a profit or protect against loss in a declining market, but it may help investors avoid emotion-driven,
short-term investment mistakes.
WHAT TO DO NOW
None of us can control the markets, but we can control our own reaction to the unsettling volatility we're currently experiencing.
Here are some steps that may help position you for whatever the market brings next:
o REVISIT YOUR GOALS. Work with your financial advisor to create specific, concrete investment goals consistent with your risk
tolerance. Scared by market volatility, many investors fled to cash in recent months. While that may be entirely appropriate for
investors approaching retirement, other investors may need the growth potential of equities to achieve their long-term goals.
Your financial advisor can suggest investments that match your goals and risk tolerance.
o RESIST LOOKING OVER THE FENCE. Every investor's needs, goals and risk tolerance are different. Your neighbor's, co-worker's or
relative's investments have no relevance to yours because their circumstances, goals and risk tolerances are as individual as
yours.
o LET LOGIC BE YOUR GUIDE. Market volatility is a fact of life for investors. Market declines can be painful, but historically they
haven't proved permanent. Your financial advisor can help you approach your investment plan logically, not emotionally.
WHAT WE'RE DOING
Invesco Aim has worked on behalf of investors in both bull markets and bear markets. That is why we're committed to good
stewardship, good communication and sound investment management.
To be good stewards, we've established best practice risk-management and investment oversight processes, further enhancing our
compliance oversight and our transparency to our shareholders and our independent fund board.
To be good communicators, we've revamped our website to put Investment Perspectives front and center on the home page of
invescoaim.com and on your account balance page. Our chief investment officers, portfolio managers and I are eager to communicate
with you directly about your investments, market conditions and other topics that may be helpful to you.
To be good investment managers, we've focused on doing one thing well: managing your money. At Invesco Aim, managing your money
is all we do. We believe mutual funds should have well-defined, clearly articulated and repeatable investment strategies. Our funds
have stayed true to their investment strategies even during this current period of market volatility.
CONTACT US
If you have questions about this report or your account, please contact one of our client service representatives at 800 959 4246.
I also invite you to visit invescoaim.com, where you can check on your individual account, obtain long-term performance
information for your fund and read market commentaries from our investment professionals.
As always, I welcome your comments and questions. Please contact me at phil@invescoaim.com and let me know what's on your mind.
Thank you for investing with us. All of us at Invesco Aim look forward to serving you.
Sincerely,
/S/ PHILIP TAYLOR
Philip Taylor
Senior Managing Director, Invesco Ltd.
CEO, Invesco Aim
2 AIM FINANCIAL SERVICES FUND
Dear Fellow Shareholders:
Since my last letter, continuing troubles in the global economy and financial markets have negatively
affected all investors. The new government promises to move quickly with a stimulus package, yet
considerable anxiety remains about how, when and what kind of a recovery will occur. However, mutual
[CROCKETT funds generally are more diversified than other investments; as shareholders we invest not in a single
PHOTO] security but in a portfolio of multiple securities. The benefits of diversification have been
reiterated by the stories of investors who "lost everything" because they had too many of their assets
in one place, whether that place was a single money manager or their employer's stock. Mutual fund
investors also have the opportunity to diversify further among different types of funds that each
Bruce Crockett deploy a different strategy and focus on different kinds of securities. These include conservatively
managed money market funds, which, relative to other securities, continue to offer a more safe,
liquid, and convenient way to invest short-term assets.
In addition to diversification, investing discipline is essential during challenging times such as these. Strategies such as
dollar cost averaging, where individuals invest a consistent amount at regular intervals, can help investors acquire more fund
shares when prices are low. Periodic rebalancing of asset allocation plans achieves the same effect. "Buy low, sell high" has long
been the mantra of investment success, but the advice is not always easy to follow because it requires the discipline to resist
prevailing trends. Of course, investment strategies, such as dollar cost averaging and portfolio rebalancing do not guarantee a
profit or eliminate the risk of loss. Investors should consider their ability to continue investing regardless of fluctuating
security prices.
A long-term view is also important, particularly for assets that are not needed right away. In the past, it has often proven
better to keep long-term assets invested through a downturn than to miss the beginning of the upward trend. To develop a diversified
and disciplined investing plan that is right for your individual goals, I encourage you to consult an experienced and trustworthy
investment professional who has the knowledge and the tools to help you establish and implement the plan, monitor its results and
adapt it to changing goals and circumstances.
Even when working with a personal financial advisor, investors should supplement the relationship with their own knowledge and
awareness of the investments they hold. Visit the Invesco Aim website at invescoaim.com regularly to find out what is happening in
your AIM funds and to read timely market commentary from Invesco Aim management, strategists and portfolio managers. The site's
"Education and Planning" section can also help you clarify basic investment concepts, learn how to choose a financial advisor,
evaluate different investment choices and make more informed investment decisions. Invesco Aim's redesigned public home page
recently received a Gold Award for its user-friendly navigation and graphics from The Mutual Funds Monitor Awards, sponsored by
Corporate Insight.
As always, your Board of Trustees and Invesco Aim are committed to putting your interests first by controlling costs, monitoring
investment performance and streamlining the investment management process during these difficult times. Your Board has already begun
the annual review and management contract renewal process with the continuing goal of making AIM funds one of the best and most
cost-effective ways for you to invest your hard-earned money.
While the investing climate may remain uncertain for a while, economies and markets are dynamic, and no stage is ever permanent.
Please feel free to contact me in writing with your questions or concerns. You can send an email to me at bruce@brucecrockett.com.
Best regards,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Trustees
3 AIM FINANCIAL SERVICES FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
======================================================================================= capital discipline perspective. In
PERFORMANCE SUMMARY constructing a portfolio, we attempt to
mitigate risk in multiple ways, including
For the year ended March 31, 2009, all share classes of AIM Financial Services Fund by diversifying holdings across industries
underperformed the S&P 500 Index, the S&P Financials Index and the Lipper Financial and businesses that react in different
Services Funds Index.(triangle) ways to changes in interest rates and
economic cycles.
Given the mandate of the Fund -- to invest in the financials sector -- the Fund's
performance relative to its broad market index was heavily influenced by the We believe a portfolio of undervalued
performance of the financials sector, which underperformed the broad market. Specific and capital-disciplined quality financial
stocks such as CITIGROUP contributed to the Fund's underperformance versus its companies that profitably grow cash flows
style-specific and peer group indexes. over time provides the best opportunity
for superior long-term investment results.
Your Fund's long-term performance appears later in this report.
MARKET CONDITIONS AND YOUR FUND
FUND VS. INDEXES
Financial stocks broadly declined by more
Total returns, 3/31/08 to 3/31/09, at net asset value (NAV). Performance shown does not than 60% for the fiscal year, making this
include applicable contingent deferred sales charges (CDSC) or front-end sales charges, one of the worst years on record.(1)
which would have reduced performance. Losses on mortgage loans, originally
resulting from years of loose lending
Class A Shares -65.84% standards, worsened as home prices
Class B Shares -66.10 continued to decline. Houses are the
Class C Shares -66.13 largest asset of most consumers and
Class Y Shares* -65.79 mortgage loans are the largest asset held
Investor Class Shares -65.79 by banks. Thus, the decline in their value
S&P 500 Index(triangle) (Broad Market Index) -38.06 created a huge problem for the financial
S&P 500 Financials Index(triangle) (Style-Specific Index) -63.03 system and the economy. In addition, the
Lipper Financial Services Funds Index(triangle) (Peer Group Index) -53.98 increased complexity in the capital
markets made it difficult for investors to
(triangle)Lipper Inc. ascertain which financial institutions
were most exposed to losses. As a result,
* Share class incepted during the fiscal year. See page 7 for a detailed explanation trust in the system collapsed, eroding
of Fund performance. confidence in a number of large,
======================================================================================= high-profile financial companies.
HOW WE INVEST In response, the government, led by the
U.S. Treasury Department, placed Fannie
We seek to create wealth for our We maintain a proprietary database of Mae and Freddie Mac into U.S. government
shareholders by maintaining a long-term intrinsic value estimates and screen conservatorship and provided assistance
investment horizon and investing in two financial companies for those we deem to with the sale or restructuring of several
primary opportunities we believe have be of acceptable quality. Purchase other financial companies, all at
historically resulted in superior candidates are subject to exhaustive substantial losses to equity investors of
investment returns within the financials fundamental analysis. We focus on the those companies. Also, Lehman Brothers
sector: drivers of estimated intrinsic value such went bankrupt and did not receive a
as normalized earnings power, marginal financial lifeline from the government. In
o Financial companies trading at a returns on economic equity (which adjusts our view these government actions had the
significant discount to our estimate of for distortions present in accounting unintended consequence of scaring private
intrinsic value because of excessive numbers) and sustainable growth. capital away from financial companies at
short-term investor pessimism. Additionally, we strive to understand a the precise time that attracting capital
Estimated intrinsic value is a measure company's ability and willingness to grow was crucial to the stability of the
based primarily on the estimated future capital returned to shareholders in the overall system.
cash flows generated by the businesses. future. Finally, we focus on quality,
including competitive position, manage- The U.S. Federal Reserve (the Fed) and
o Reasonably valued financial companies ment and financial strength. the Treasury mounted a coordinated
that demonstrate superior capital response to stabilize the financial system
discipline by returning excess capital The result is normally a 35- to by cutting interest rate targets to all
to shareholders in the form of 50-stock portfolio of investments that we time low levels(2), recapitalizing banks
dividends and share repurchases. believe are attractive from a valuation (through the Troubled Asset Relief
and/or a Program), and guaranteeing various
financial instruments in an attempt to
========================================== ========================================== restore liquidity. Despite these efforts,
PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* the economy plunged into recession. The
By sector wealth destruction from falling home
1. JPMorgan Chase & Co. 8.1% prices caused consumers to reduce
Financials 78.2% 2. Moody's Corp. 6.9 spending. Falling revenues and a lack of
Information Technology 6.4 3. Automatic Data Processing, Inc. 4.9 credit availability forced businesses to
Health Care 4.7 4. Morgan Stanley 4.5 retrench. Economic weakness caused
Consumer Discretionary 2.7 5. Marsh & McLennan Cos., Inc. 4.4 unemploy-
Money Market Funds Plus Other 6. State Street Corp. 4.0
Plus Other Assets Less Liabilities 8.0 7. Federated Investors, Inc. 3.9
========================================== 8. American Express Co. 3.7
========================================== 9. UnitedHealth Group Inc. 3.6
Total Net Assets $121.1 million 10. Capital One Financial Corp. 3.4
Total Number of Holdings* 35
========================================== ==========================================
The Fund's holdings are subject to change, and there is no assurance that the Fund will
continue to hold any particular security
* Excluding money market fund holdings.
4 AIM FINANCIAL SERVICES FUND
ment to rise and loan losses to spread We added a number of new holdings MICHAEL J. SIMON Chartered
beyond home mortgages into credit cards during the fiscal year. One was GOLDMAN Financial Analyst, senior
and business lending. As the fiscal year SACHS, the largest positive contributor to [SIMON portfolio manager, is lead
ended, the liquidity crisis exhibited Fund performance. Goldman Sachs became a PHOTO] manager of AIM Financial
signs early signs of stabilizing, the bank holding company regulated by the Fed Services Fund. He started
government continued to support during the fiscal year. We believed its his investment career in
systemically important companies and shares were a compelling value at a time 1989 and joined Invesco Aim in 2001.
financial stocks bounced off of the lows when balance sheet risks had been Mr. Simon earned a B.B.A. in finance from
of early March.(1) substantially reduced. The Fund continued Texas Christian University and an M.B.A.
to hold Goldman Sachs at the end of the with high honors from the Graduate School
In this incredibly difficult investment fiscal year. of Business at the University of Chicago.
backdrop for financial stocks, we were
very disappointed with the Fund's As expected, the exposure of the credit MEGGAN M. WALSH Chartered
performance. The largest detractors from cycle drove greater dispersion of Financial Analyst, senior
performance were Citigroup and a valuation within the sector. We believe [WALSH portfolio manager, is
collection of regional banks that included financial stocks will remain volatile as PHOTO] manager of AIM Financial
CAPITAL ONE FINANCIAL, ZIONS the economy goes through a recession and Services Fund. She began
BANCORPORATION, and FIFTH THIRD BANCORP. credit losses peak, the timing of which is her investment career in
impossible to pinpoint. Financial stocks 1987 and joined Invesco Aim in 1991. Ms.
The shares of our regional bank fell significantly during the fiscal year, Walsh earned a bachelor's degree in
holdings fell sharply during the year for credit concerns were widespread, stressed finance from the University of Maryland
two primary reasons in our opinion. First, companies were raising capital and risks and an M.B.A. from Loyola College.
the weakening economy caused investor were spreading beyond the financials
concerns about credit quality to spread sector. Historically, all of these have Assisted by the Financial Services Team
beyond residential mortgages to commercial been hallmarks of forming a bottom.
real estate loans and loans to businesses,
both significant loan categories for Fund turnover increased during the
regional banks. Second, the evolving fiscal year as we took advantage of
regulatory response to the financial opportunities created by the current bear
crisis resulted in uncertainty regarding market in financial stocks. Investors in
the recognition of loan losses and minimum the Fund should expect additional turnover
capital standards that could be demanded of portfolio holdings as we continue to
of regional banks during periods of capitalize on this opportunity, which is
economic stress. The results of an ongoing among the broadest we have seen in our
bank stress test being conducted by the careers.
U.S. Treasury are critical to achieving a
higher degree of policy certainty. Regardless of the macroeconomic
environment, we remain focused on
We continued to hold the regional banks identifying financial companies that we
mentioned because we believed their believe are undervalued and that exhibit
depressed stock prices represented an capital discipline.
attractive value opportunity even under a
scenario of severe credit loss with high Thank you for your investment in AIM
capital requirements. Financial Services Fund and for sharing
our long-term investment horizon.
The largest single detractor from Fund
performance was Citigroup. Citigroup 1 Lipper Inc.
struggled with credit-related losses
during the fiscal year and lacked an 2 U.S. Federal Reserve
excess capital cushion to absorb the
sizable losses. In an effort to restore The views and opinions expressed in
market confidence, the company received management's discussion of Fund
capital infusions under government performance are those of Invesco Aim
programs twice during 2008, both times at Advisors, Inc. These views and opinions
reasonable terms. Then in February 2009, are subject to change at any time based on
the company took the dramatic step of factors such as market and economic
recapitalizing the company via a preferred conditions. These views and opinions may
stock for common stock exchange. The not be relied upon as investment advice or
result bolstered Citigroup's capital recommendations, or as an offer for a
position to among the strongest in the particular security. The information is
world, but diluted our estimate of not a complete analysis of every aspect of
intrinsic value severely. While we are any market, country, industry, security or
cautious about the approximately 30% the Fund. Statements of fact are from
government ownership upon completion of sources considered reliable, but Invesco
the exchange offer, we believed Aim Advisors, Inc. makes no representation
Citigroup's shares offered significant or warranty as to their completeness or
upside potential, especially considering accuracy. Although historical performance
the capital cushion now in place. The Fund is no guarantee of future results, these
continued to own shares of Citigroup at insights may help you understand our
fiscal year end. investment management philosophy.
See important Fund and index disclosures
later in this report.
5 AIM FINANCIAL SERVICES FUND
YOUR FUND'S LONG-TERM PERFORMANCE
Past performance cannot guarantee Class C shares. The performance of the taxes a shareholder would pay on Fund
comparable future results. Fund's other share classes will differ distributions or sale of Fund shares.
primarily due to different sales charge
The performance data shown in the first structures and class expenses and may be Both charts above are logarithmic
chart above is that of the Fund's Investor greater than or less than the performance charts, which present the fluctuations in
class shares. The performance of the of the Fund's Class C shares. The data the value of the Fund's share class and
Fund's other share classes will differ shown in the second chart above includes its indexes. We believe that a logarithmic
primarily due to different sales charge reinvested distributions, Fund expenses chart is more effective than other types
structures and class expenses and may be and management fees. Index results include of charts in illustrating changes in value
greater than or less than the performance reinvested dividends, but they do not during the early years shown in the chart.
of the Fund's Investor Class shares. The reflect sales charges. The vertical axis, the one that indicates
data shown in this chart includes the dollar value of an investment, is
reinvested distributions, Fund expenses Performance of an index of funds constructed with each segment representing
and management fees. Index results include reflects fund expenses and management a percent change in the value of the
reinvested dividends. fees; performance of a market index does investment. In both charts, each segment
not. Performance shown in the charts and represents a doubling, or 100% change, in
The performance data shown in the table does not reflect deduction of the value of the investment.
second chart above is that of the Fund's
6 AIM FINANCIAL SERVICES FUND
AIM FINANCIAL SERVICES FUND - INVESTOR CLASS SHARES
====================================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITHOUT SALES CHARGES SINCE INCEPTION
Index data from 5/31/86, Fund data from 6/02/86
AIM
Financial
Services Fund-
Investor Class
Date Shares S&P 500 Index(1)
5/31/86 $10000
6/02/86 $10000
6/86 10163 10169
7/86 9913 9601
8/86 10401 10312
9/86 9313 9460
10/86 9707 10006
11/86 9355 10249
12/86 9293 9987
1/87 9794 11332
2/87 10346 11779
3/87 10082 12119
4/87 9618 12012
5/87 9468 12116
6/87 9769 12728
7/87 9807 13373
8/87 10133 13871
9/87 9807 13567
10/87 8217 10646
11/87 7843 9768
12/87 8269 10511
1/88 8979 10953
2/88 9186 11461
3/88 9186 11108
4/88 9173 11231
5/88 9432 11326
6/88 9935 11846
7/88 9871 11801
8/88 9703 11401
9/88 9910 11886
10/88 9910 12217
11/88 9700 12042
12/88 9686 12252
1/89 10316 13149
2/89 10237 12822
3/89 10670 13120
4/89 11248 13801
5/89 11785 14357
6/89 11877 14276
7/89 12823 15564
8/89 13203 15868
9/89 13532 15803
10/89 13045 15437
11/89 13464 15750
12/89 13262 16128
1/90 12035 15046
2/90 12439 15239
3/90 12483 15643
4/90 12382 15253
5/90 13349 16737
6/90 13349 16624
====================================================================================================================================
(1) Lipper Inc.
====================================================================================================================================
[MOUNTAIN CHART]
7/90 12569 16571
8/90 11415 15075
9/90 10607 14343
10/90 10416 14282
11/90 11444 15203
12/90 12313 15626
1/91 13313 16305
2/91 14719 17470
3/91 15718 17892
4/91 16399 17935
5/91 17847 18706
6/91 16485 17850
7/91 18470 18681
8/91 19803 19122
9/91 20572 18802
10/91 21516 19054
11/91 19713 18289
12/91 21428 20377
1/92 22662 19998
2/92 22852 20256
3/92 22455 19863
4/92 22720 20445
5/92 23381 20545
6/92 23248 20240
7/92 23527 21066
8/92 22350 20636
9/92 22893 20878
10/92 24036 20950
11/92 25718 21661
12/92 27161 21927
1/93 28848 22110
2/93 29935 22411
3/93 31103 22884
4/93 29653 22331
5/93 29449 22927
6/93 30315 22994
7/93 31148 22901
8/93 32441 23768
9/93 33197 23586
10/93 32284 24073
11/93 31328 23844
12/93 32187 24132
1/94 33278 24952
2/94 32266 24275
3/94 30366 23219
4/94 30812 23516
5/94 31561 23901
6/94 30914 23316
7/94 31662 24081
8/94 32390 25066
9/94 31380 24453
10/94 31562 25002
11/94 29974 24093
12/94 30295 24449
1/95 31082 25083
2/95 32385 26059
3/95 32550 26827
4/95 32963 27617
5/95 35096 28719
6/95 35303 29385
7/95 37146 30359
8/95 38947 30434
9/95 40229 31718
10/95 39706 31605
11/95 42116 32991
12/95 42356 33626
1/96 44338 34769
====================================================================================================================================
====================================================================================================================================
[MOUNTAIN CHART]
2/96 46032 35093
3/96 46253 35431
4/96 45564 35952
5/96 45855 36878
6/96 45475 37019
7/96 44474 35384
8/96 46213 36132
9/96 48954 38163
10/96 52214 39215
11/96 56177 42177
12/96 55194 41342
1/97 58622 43923
2/97 61054 44268
3/97 56310 42452
4/97 59937 44984
5/97 62994 47735
6/97 66893 49857
7/97 73201 53823
8/97 68831 50810
9/97 74420 53591
10/97 72998 51803
11/97 75575 54199
12/97 79913 55129
1/98 77812 55739
2/98 84153 59756
3/98 88731 62814
4/98 90745 63457
5/98 89321 62368
6/98 92474 64899
7/98 92418 64213
8/98 74027 54936
9/98 75648 58458
10/98 81587 63206
11/98 86718 67035
12/98 90664 70896
1/99 90537 73859
2/99 89695 71564
3/99 93956 74427
4/99 100298 77309
5/99 92254 75485
6/99 95169 79663
7/99 88774 77186
8/99 82559 76804
9/99 80727 74701
10/99 92626 79426
11/99 89754 81041
12/99 91334 85807
1/00 88932 81497
2/00 79567 79956
3/00 93181 87773
4/00 90162 85133
5/00 94247 83388
6/00 91598 85441
7/00 99806 84107
8/00 107670 89328
9/00 112440 84613
10/00 112856 84254
11/00 105001 77617
12/00 115711 77997
1/01 112483 80763
2/01 106713 73404
3/01 103661 68756
4/01 106460 74095
5/01 111453 74592
6/01 110773 72777
7/01 108546 72060
8/01 102446 67554
====================================================================================================================================
====================================================================================================================================
[MOUNTAIN CHART]
9/01 96781 62099
10/01 94516 63284
11/01 101917 68137
12/01 103955 68734
1/02 102770 67732
2/02 101475 66425
3/02 107624 68924
4/02 104266 64747
5/02 104266 64272
6/02 99574 59695
7/02 91867 55043
8/02 93282 55403
9/02 83898 49388
10/02 89771 53730
11/02 92060 56890
12/02 87770 53549
1/03 86322 52149
2/03 83499 51366
3/03 83524 51863
4/03 92160 56133
5/03 97073 59088
6/03 97461 59842
7/03 102490 60898
8/03 101260 62083
9/03 101564 61426
10/03 108582 64899
11/03 108017 65469
12/03 113677 68900
1/04 117758 70165
2/04 120914 71140
3/04 119221 70067
4/04 113403 68968
5/04 114708 69913
6/04 115442 71272
7/04 112175 68913
8/04 115338 69189
9/04 115027 69939
10/04 114486 71007
11/04 118104 73879
12/04 123383 76393
1/05 119842 74531
2/05 119590 76098
3/05 115118 74752
4/05 114530 73335
5/05 117909 75666
6/05 119513 75775
7/05 121580 78592
8/05 118541 77875
9/05 118884 78505
10/05 123783 77196
11/05 129563 80113
12/05 129913 80141
1/06 132459 82263
2/06 134300 82486
3/06 133965 83512
4/06 139203 84633
5/06 133259 82200
6/06 131553 82309
7/06 133960 82817
8/06 136278 84784
9/06 140762 86968
10/06 144351 89800
11/06 144640 91505
12/06 151076 92789
1/07 151560 94191
2/07 147452 92354
3/07 146391 93385
====================================================================================================================================
====================================================================================================================================
[MOUNTAIN CHART]
4/07 153417 97520
5/07 157299 100920
6/07 151384 99244
7/07 139016 96171
8/07 139823 97610
9/07 141794 101257
10/07 137526 102867
11/07 123141 98565
12/07 116442 97883
1/08 117257 92012
2/08 102752 89026
3/08 99783 88641
4/08 107287 92956
5/08 100409 94160
6/08 79093 86230
7/08 83190 85505
8/08 84579 86742
9/08 75808 79022
10/08 57963 65752
11/08 47680 61032
12/08 46274 61676
1/09 35348 56483
2/09 28675 50488
3/09 34116 54903
====================================================================================================================================
AIM FINANCIAL SERVICES FUND - CLASS C SHARES
====================================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITH SALES CHARGES SINCE
INCEPTION
Index data from 1/31/00, Fund data from 2/14/00
AIM Financial
Services Lipper
Fund- Class S&P 500 Financial Services
Date C Shares S&P 500 Index(1) Financials Index(1) Funds Index(1)
1/31/00 $10000 $10000 $10000
2/00 $ 9797 9811 8917 9031
3/00 11471 10770 10572 10500
4/00 11094 10446 10239 10115
5/00 11590 10232 10926 10710
6/00 11259 10484 10263 10318
7/00 12264 10320 11324 11120
8/00 13227 10961 12412 12136
9/00 13815 10382 12707 12527
10/00 13870 10338 12651 12598
11/00 12901 9524 11905 12071
12/00 14206 9571 12981 13281
1/01 13813 9910 12945 13139
2/01 13100 9007 12095 12531
3/01 12718 8437 11730 12105
4/01 13050 9092 12167 12491
5/01 13656 9153 12657 12990
6/01 13563 8930 12653 12987
7/01 13284 8842 12448 12833
8/01 12527 8289 11689 12205
9/01 11823 7620 11000 11572
10/01 11539 7765 10795 11249
11/01 12435 8361 11566 12024
12/01 12675 8434 11819 12379
1/02 12520 8311 11634 12352
2/02 12356 8151 11465 12309
3/02 13097 8457 12227 12960
4/02 12679 7945 11901 12843
5/02 12666 7886 11881 12874
6/02 12083 7325 11317 12270
7/02 11144 6754 10420 11389
8/02 11299 6798 10633 11686
9/02 10153 6060 9390 10432
10/02 10858 6593 10239 10984
11/02 11126 6981 10660 11391
12/02 10602 6571 10089 10893
1/03 10414 6399 9920 10693
2/03 10067 6303 9610 10413
3/03 10057 6364 9573 10351
4/03 11083 6888 10746 11345
5/03 11666 7250 11313 12071
6/03 11704 7343 11342 12164
7/03 12296 7472 11862 12661
8/03 12136 7618 11743 12727
9/03 12164 7537 11821 12789
10/03 12992 7963 12635 13732
11/03 12914 8033 12600 13863
12/03 13578 8454 13219 14377
1/04 14053 8610 13641 14827
2/04 14416 8729 14002 15240
3/04 14208 8597 13864 15086
====================================================================================================================================
(1) Lipper Inc.
====================================================================================================================================
[MOUNTAIN CHART]
4/04 13508 8463 13224 14282
5/04 13654 8579 13467 14552
6/04 13734 8745 13534 14671
7/04 13335 8456 13257 14344
8/04 13707 8490 13702 14714
9/04 13655 8582 13585 14873
10/04 13584 8713 13654 15094
11/04 14002 9065 14058 15738
12/04 14617 9374 14659 16385
1/05 14190 9145 14342 15965
2/05 14149 9338 14267 15949
3/05 13615 9172 13724 15471
4/05 13539 8999 13739 15228
5/05 13924 9285 14116 15708
6/05 14103 9298 14318 16096
7/05 14340 9644 14544 16584
8/05 13976 9556 14289 16259
9/05 14007 9633 14421 16312
10/05 14577 9472 14877 16520
11/05 15244 9830 15574 17284
12/05 15276 9834 15608 17356
1/06 15568 10094 15749 17774
2/06 15774 10121 16067 17983
3/06 15728 10247 16115 18188
4/06 16335 10385 16813 18724
5/06 15624 10086 16194 18001
6/06 15412 10100 16094 17905
7/06 15682 10162 16493 18067
8/06 15945 10403 16684 18239
9/06 16460 10671 17380 18858
10/06 16867 11019 17801 19278
11/06 16889 11228 17912 19514
12/06 17633 11386 18604 20116
1/07 17679 11558 18769 20278
2/07 17184 11332 18209 19847
3/07 17055 11459 18075 19679
4/07 17860 11966 18822 20246
5/07 18305 12383 19256 20756
6/07 17609 12178 18457 20076
7/07 16155 11801 17018 18618
8/07 16245 11977 17281 18794
9/07 16458 12425 17671 19201
10/07 15956 12622 17351 19050
11/07 14282 12094 16009 17932
12/07 13488 12011 15138 17339
1/08 13579 11290 15086 16991
2/08 11896 10924 13390 15663
3/08 11548 10877 13025 15309
4/08 12405 11406 13876 15940
5/08 11601 11554 13032 15476
6/08 9129 10581 10638 12780
7/08 9591 10492 11398 13246
8/08 9758 10644 11275 13359
9/08 8742 9696 10724 12374
10/08 6680 8068 8313 10151
11/08 5490 7489 6784 8887
12/08 5328 7568 6764 9059
1/09 4067 6931 4985 7283
2/09 3299 6195 4082 6354
3/09 3910 6737 4815 7045
====================================================================================================================================
==========================================
AVERAGE ANNUAL TOTAL RETURNS HIGHER. PLEASE VISIT INVESCOAIM.COM FOR
As of 3/31/09, including maximum THE MOST RECENT MONTH-END PERFORMANCE.
applicable sales charges PERFORMANCE FIGURES REFLECT REINVESTED
DISTRIBUTIONS, CHANGES IN NET ASSET VALUE
CLASS A SHARES AND THE EFFECT OF THE MAXIMUM SALES CHARGE
Inception (3/28/02) -15.81% UNLESS OTHERWISE STATED. INVESTMENT RETURN
5 Years -23.03 AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT
1 Year -67.71 YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL
CLASS B SHARES SHARES.
Inception (3/28/02) -15.68%
5 Years -22.90 THE TOTAL ANNUAL FUND OPERATING EXPENSE
1 Year -67.52 RATIO SET FORTH IN THE MOST RECENT FUND
CLASS C SHARES PROSPECTUS AS OF THE DATE OF THIS REPORT
Inception (2/14/00) -9.78% FOR CLASS A, CLASS B, CLASS C, CLASS Y AND
5 Years -22.74 INVESTOR CLASS SHARES WAS 1.31%, 2.06%,
1 Year -66.41 2.06%, 1.06% AND 1.31%, RESPECTIVELY. THE
CLASS Y SHARES EXPENSE RATIOS PRESENTED ABOVE MAY VARY
10 Years -9.63% FROM THE EXPENSE RATIOS PRESENTED IN OTHER
5 Years -22.13 SECTIONS OF THIS REPORT THAT ARE BASED ON
1 Year -65.79 EXPENSES INCURRED DURING THE PERIOD
INVESTOR CLASS SHARES COVERED BY THIS REPORT.
Inception (6/2/86) 5.52%
10 Years -9.63 CLASS A SHARE PERFORMANCE REFLECTS THE
5 Years -22.13 MAXIMUM 5.50% SALES CHARGE, AND CLASS B
1 Year -65.79 AND CLASS C SHARE PERFORMANCE REFLECTS THE
========================================== APPLICABLE CONTINGENT DEFERRED SALES
CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE
CLASS Y SHARES' INCEPTION DATE IS OCTOBER CDSC ON CLASS B SHARES DECLINES FROM 5%
3, 2008; RETURNS SINCE THAT DATE ARE BEGINNING AT THE TIME OF PURCHASE TO 0% AT
ACTUAL RETURNS. ALL OTHER RETURNS ARE THE BEGINNING OF THE SEVENTH YEAR. THE
BLENDED RETURNS OF ACTUAL CLASS Y SHARE CDSC ON CLASS C SHARES IS 1% FOR THE FIRST
PERFORMANCE AND RESTATED INVESTOR CLASS YEAR AFTER PURCHASE. CLASS Y AND INVESTOR
SHARE PERFORMANCE (FOR PERIODS PRIOR TO CLASS SHARES DO NOT HAVE A FRONT-END SALES
THE INCEPTION DATE OF CLASS Y SHARES) AT CHARGE OR A CDSC; THEREFORE, PERFORMANCE
NET ASSET VALUE. THE RESTATED INVESTOR IS AT NET ASSET VALUE.
CLASS SHARE PERFORMANCE REFLECTS THE RULE
12B-1 FEES APPLICABLE TO INVESTOR CLASS THE PERFORMANCE OF THE FUND'S SHARE
SHARES AS WELL AS ANY FEE WAIVERS OR CLASSES WILL DIFFER PRIMARILY DUE TO
EXPENSE REIMBURSEMENTS RECEIVED BY DIFFERENT SALES CHARGE STRUCTURES AND
INVESTOR CLASS SHARES. INVESTOR CLASS CLASS EXPENSES.
SHARES' INCEPTION DATE IS JUNE 2, 1986.
HAD THE ADVISOR NOT WAIVED FEES AND/OR
THE PERFORMANCE DATA QUOTED REPRESENT REIMBURSED EXPENSES IN THE PAST FOR THE
PAST PERFORMANCE AND CANNOT GUARANTEE FUND'S CLASS A AND CLASS B SHARES,
COMPARABLE FUTURE RESULTS; CURRENT PERFORMANCE WOULD HAVE BEEN LOWER.
PERFORMANCE MAY BE LOWER OR
7 AIM FINANCIAL SERVICES FUND
AIM FINANCIAL SERVICES FUND'S INVESTMENT OBJECTIVE IS CAPITAL GROWTH.
o Unless otherwise stated, information presented in this report is as of March 31, 2009, and is based
on total net assets.
o Unless otherwise noted, all data provided by Invesco Aim.
ABOUT SHARE CLASSES o There is no guarantee that the o The Fund is not managed to track the
investment techniques and risk performance of any particular index,
o Effective September 30, 2003, only analyses used by the Fund's portfolio including the indexes defined here,
previously established qualified managers will produce the desired and consequently, the performance of
plans are eligible to purchase Class results. the Fund may deviate significantly
B shares of any AIM fund. from the performance of the indexes.
o The prices of securities held by the
o Class Y shares are available to only Fund may decline in response to o A direct investment cannot be made in
certain investors. Please see the market risks. an index. Unless otherwise indicated,
prospectus for more information. index results include reinvested
o Nondiversification increases the risk dividends, and they do not reflect
o All Investor Class shares are closed that the value of the Fund's shares sales charges. Performance of an
to new investors. Contact your may vary more widely, and the Fund index of funds reflects fund
financial advisor about purchasing may be subject to greater investment expenses; performance of a market
our other share classes. and credit risk than if it invested index does not.
more broadly.
PRINCIPAL RISKS OF INVESTING IN THE FUND OTHER INFORMATION
o The Fund's investments are concen-
o Since a large percentage of the trated in a comparatively narrow o The Chartered Financial
Fund's assets may be invested in segment of the economy. Consequent Analyst--REGISTERED TRADEMARK--
securities of a limited number of ly, the Fund may tend to be more (CFA--REGISTERED TRADEMARK--)
companies, each investment has a volatile than other mutual funds, and designation is a globally recognized
greater effect on the Fund's overall the value of the Fund's investments standard for measuring the competence
performance, and any change in the may tend to rise and fall more and integrity of investment
value of those securities could rapidly. professionals.
significantly affect the value of
your investment in the Fund. ABOUT INDEXES USED IN THIS REPORT o The returns shown in the management's
discussion of Fund performance are
o Prices of equity securities change in o THE S&P 500--REGISTERED TRADEMARK-- based on net asset values calculated
response to many factors including INDEX is a market for shareholder transactions.
the historical and prospective capitalization-weighted index Generally accepted accounting
earnings of the issuer, the value of covering all major areas of the U.S. principles require adjustments to be
its assets, general economic economy. It is not the 500 largest made to the net assets of the Fund at
conditions, interest rates, investor companies, but rather the most widely period end for financial reporting
perceptions and market liquidity. held 500 companies chosen with purposes, and as such, the net asset
respect to market size, liquidity and values for shareholder transactions
o The financial services sector is their industry. and the returns based on those net
subject to extensive government asset values may differ from the net
regulation, which may change o The S&P 500 FINANCIALS INDEX is a asset values and returns reported in
frequently. The profitability of market capitalization-weighted index the Financial Highlights.
businesses in this sector depends of companies involved in activities
heavily on the availability and cost such as banking, consumer finance, o Industry classifications used in this
of money and may fluctuate investment banking and brokerage, report are generally according to the
significantly in response to changes asset management, insurance and Global Industry Classification
to interest rates and general investment and real estate, including Standard, which was developed by and
economic conditions. REITs. is the exclusive property and a
service mark of MSCI Inc. and
o Foreign securities have additional o The LIPPER FINANCIAL SERVICES FUNDS Standard & Poor's.
risks, including exchange rate INDEX is an equally weighted
changes, political and economic representation of the largest funds
upheaval, the relative lack of in the Lipper Financial Services
information, relatively low market Funds category. These funds invest
liquidity, and the potential lack of primarily in equity securities of
strict financial and accounting domestic companies engaged in
controls and standards providing financial services,
including but not limited to banks,
finance companies, insurance
companies, and securities/brokerage
firms.
======================================================================================= ==========================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. Class A Shares IFSAX
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class B Shares IFSBX
======================================================================================= Class C Shares IFSCX
Class Y Shares IFSYX
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Investor Class Shares FSFSX
==========================================
8 AIM FINANCIAL SERVICES FUND
SCHEDULE OF INVESTMENTS(a)
March 31, 2009
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------------------------
COMMON STOCKS-92.01%
ASSET MANAGEMENT & CUSTODY BANKS-11.33%
Blackstone Group L.P. (The) 157,057 $ 1,138,663
- ------------------------------------------------------------------------------
Federated Investors, Inc.-Class B 213,744 4,757,941
- ------------------------------------------------------------------------------
Legg Mason, Inc. 185,200 2,944,680
- ------------------------------------------------------------------------------
State Street Corp. 158,796 4,887,741
==============================================================================
13,729,025
==============================================================================
CONSUMER FINANCE-11.61%
American Express Co. 332,400 4,530,612
- ------------------------------------------------------------------------------
AmeriCredit Corp.(b) 387,354 2,269,894
- ------------------------------------------------------------------------------
Capital One Financial Corp. 337,194 4,127,255
- ------------------------------------------------------------------------------
SLM Corp.(b) 634,031 3,138,453
==============================================================================
14,066,214
==============================================================================
DATA PROCESSING & OUTSOURCED SERVICES-6.37%
Automatic Data Processing, Inc. 169,281 5,951,920
- ------------------------------------------------------------------------------
VeriFone Holdings, Inc.(b) 171,362 1,165,262
- ------------------------------------------------------------------------------
Western Union Co. 47,871 601,738
==============================================================================
7,718,920
==============================================================================
DIVERSIFIED BANKS-0.23%
U.S. Bancorp 19,319 282,251
==============================================================================
DIVERSIFIED CAPITAL MARKETS-2.71%
UBS AG (Switzerland)(b) 348,753 3,288,741
==============================================================================
INSURANCE BROKERS-5.40%
Marsh & McLennan Cos., Inc. 261,650 5,298,412
- ------------------------------------------------------------------------------
National Financial Partners Corp. 387,650 1,240,480
==============================================================================
6,538,892
==============================================================================
INVESTMENT BANKING & BROKERAGE-10.44%
FBR Capital Markets Corp.(b) 1,034,310 3,402,880
- ------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 36,000 3,816,720
- ------------------------------------------------------------------------------
Morgan Stanley 238,241 5,424,747
==============================================================================
12,644,347
==============================================================================
LIFE & HEALTH INSURANCE-3.16%
Prudential Financial, Inc. 28,117 534,785
- ------------------------------------------------------------------------------
StanCorp Financial Group, Inc. 144,375 3,288,863
==============================================================================
3,823,648
==============================================================================
MANAGED HEALTH CARE-4.75%
Coventry Health Care, Inc.(b) 106,497 1,378,071
- ------------------------------------------------------------------------------
UnitedHealth Group Inc. 208,800 4,370,184
==============================================================================
5,748,255
==============================================================================
OTHER DIVERSIFIED FINANCIAL SERVICES-13.52%
Bank of America Corp. 574,617 3,918,888
- ------------------------------------------------------------------------------
Citigroup Inc. 1,064,301 2,692,682
- ------------------------------------------------------------------------------
JPMorgan Chase & Co. 367,371 9,764,721
==============================================================================
16,376,291
==============================================================================
PROPERTY & CASUALTY INSURANCE-3.70%
Allstate Corp. (The) 24,165 462,760
- ------------------------------------------------------------------------------
XL Capital Ltd.-Class A 737,191 4,025,063
==============================================================================
4,487,823
==============================================================================
REAL ESTATE SERVICES-0.23%
Jones Lang LaSalle Inc. 11,868 276,050
==============================================================================
REGIONAL BANKS-6.56%
Fifth Third Bancorp 769,820 2,247,874
- ------------------------------------------------------------------------------
First Horizon National Corp. 31,894 342,537
- ------------------------------------------------------------------------------
SunTrust Banks, Inc. 203,924 2,394,068
- ------------------------------------------------------------------------------
Zions Bancorp 300,932 2,958,162
==============================================================================
7,942,641
==============================================================================
SPECIALIZED CONSUMER SERVICES-2.69%
H&R Block, Inc. 179,016 3,256,301
==============================================================================
SPECIALIZED FINANCE-9.31%
CIT Group, Inc. 1,024,035 2,918,500
- ------------------------------------------------------------------------------
Moody's Corp. 364,672 8,358,282
==============================================================================
11,276,782
==============================================================================
Total Common Stocks (Cost $293,056,056) 111,456,181
==============================================================================
MONEY MARKET FUNDS-7.22%
Liquid Assets Portfolio-Institutional Class(c) 4,373,958 4,373,958
- ------------------------------------------------------------------------------
Premier Portfolio-Institutional Class(c) 4,373,957 4,373,957
==============================================================================
Total Money Market Funds (Cost $8,747,915) 8,747,915
==============================================================================
TOTAL INVESTMENTS-99.23% (Cost $301,803,971) 120,204,096
==============================================================================
OTHER ASSETS LESS LIABILITIES-0.77% 935,956
==============================================================================
NET ASSETS-100.00% $121,140,052
______________________________________________________________________________
==============================================================================
</Table>
Notes to Schedule of Investments:
(a) Industry and/or sector classifications used in this report are generally
according to the Global Industry Classification Standard, which was
developed by and is the exclusive property and a service mark of MSCI Inc.
and Standard & Poor's.
(b) Non-income producing security.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
9 AIM FINANCIAL SERVICES FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2009
<Table>
ASSETS:
Investments, at value (Cost $293,056,056) $ 111,456,181
- ---------------------------------------------------------------------------------
Investments in affiliated money market funds, at value and cost 8,747,915
=================================================================================
Total investments, at value (Cost $301,803,971) 120,204,096
=================================================================================
Receivables for:
Investments sold 25,615
- ---------------------------------------------------------------------------------
Fund shares sold 1,091,670
- ---------------------------------------------------------------------------------
Dividends 167,854
- ---------------------------------------------------------------------------------
Investment for trustee deferred compensation and retirement plans 55,565
- ---------------------------------------------------------------------------------
Other assets 36,861
=================================================================================
Total assets 121,581,661
_________________________________________________________________________________
=================================================================================
LIABILITIES:
Payables for:
Fund shares reacquired 122,828
- ---------------------------------------------------------------------------------
Accrued fees to affiliates 135,827
- ---------------------------------------------------------------------------------
Accrued other operating expenses 70,040
- ---------------------------------------------------------------------------------
Trustee deferred compensation and retirement plans 112,914
=================================================================================
Total liabilities 441,609
=================================================================================
Net assets applicable to shares outstanding $ 121,140,052
_________________________________________________________________________________
=================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 414,709,054
- ---------------------------------------------------------------------------------
Undistributed net investment income 5,066,304
- ---------------------------------------------------------------------------------
Undistributed net realized gain (loss) (117,035,431)
- ---------------------------------------------------------------------------------
Unrealized appreciation (depreciation) (181,599,875)
=================================================================================
$ 121,140,052
_________________________________________________________________________________
=================================================================================
NET ASSETS:
Class A $ 23,242,479
_________________________________________________________________________________
=================================================================================
Class B $ 5,624,404
_________________________________________________________________________________
=================================================================================
Class C $ 6,280,583
_________________________________________________________________________________
=================================================================================
Class Y $ 323,395
_________________________________________________________________________________
=================================================================================
Investor Class $ 85,669,191
_________________________________________________________________________________
=================================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 5,210,915
_________________________________________________________________________________
=================================================================================
Class B 1,262,833
_________________________________________________________________________________
=================================================================================
Class C 1,465,847
_________________________________________________________________________________
=================================================================================
Class Y 71,847
_________________________________________________________________________________
=================================================================================
Investor Class 19,054,857
_________________________________________________________________________________
=================================================================================
Class A:
Net asset value per share $ 4.46
- ---------------------------------------------------------------------------------
Maximum offering price per share
(Net asset value of $4.46 divided by 94.50%) $ 4.72
_________________________________________________________________________________
=================================================================================
Class B:
Net asset value and offering price per share $ 4.45
_________________________________________________________________________________
=================================================================================
Class C:
Net asset value and offering price per share $ 4.28
_________________________________________________________________________________
=================================================================================
Class Y:
Net asset value and offering price per share $ 4.50
_________________________________________________________________________________
=================================================================================
Investor Class:
Net asset value and offering price per share $ 4.50
_________________________________________________________________________________
=================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
10 AIM FINANCIAL SERVICES FUND
STATEMENT OF OPERATIONS
For the year ended March 31, 2009
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $9,294) $ 8,907,713
- ------------------------------------------------------------------------------------------------
Dividends from affiliated money market funds (includes securities lending income
of $183,487) 364,204
================================================================================================
Total investment income 9,271,917
================================================================================================
EXPENSES:
Advisory fees 1,789,865
- ------------------------------------------------------------------------------------------------
Administrative services fees 89,739
- ------------------------------------------------------------------------------------------------
Custodian fees 12,393
- ------------------------------------------------------------------------------------------------
Distribution fees:
Class A 90,066
- ------------------------------------------------------------------------------------------------
Class B 125,187
- ------------------------------------------------------------------------------------------------
Class C 97,680
- ------------------------------------------------------------------------------------------------
Investor Class 450,514
- ------------------------------------------------------------------------------------------------
Transfer agent fees 1,065,463
- ------------------------------------------------------------------------------------------------
Trustees' and officers' fees and benefits 25,559
- ------------------------------------------------------------------------------------------------
Other 333,275
================================================================================================
Total expenses 4,079,741
================================================================================================
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (30,003)
================================================================================================
Net expenses 4,049,738
================================================================================================
Net investment income 5,222,179
================================================================================================
Net realized gain (loss) from investment securities (116,790,102)
- ------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investment securities (126,271,125)
- ------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (243,061,227)
================================================================================================
Net increase (decrease) in net assets resulting from operations $(237,839,048)
________________________________________________________________________________________________
================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11 AIM FINANCIAL SERVICES FUND
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2009 and 2008
<Table>
<Caption>
2009 2008
- ---------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 5,222,179 $ 8,705,468
- ---------------------------------------------------------------------------------------------------------
Net realized gain (loss) (116,790,102) 63,119,405
- ---------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) (126,271,125) (241,062,714)
=========================================================================================================
Net increase (decrease) in net assets resulting from operations (237,839,048) (169,237,841)
=========================================================================================================
Distributions to shareholders from net investment income:
Class A (488,373) (921,203)
- ---------------------------------------------------------------------------------------------------------
Class B (107,092) (256,005)
- ---------------------------------------------------------------------------------------------------------
Class C (94,940) (105,032)
- ---------------------------------------------------------------------------------------------------------
Class Y (5,176) --
- ---------------------------------------------------------------------------------------------------------
Investor Class (2,146,172) (6,973,459)
=========================================================================================================
Total distributions from net investment income (2,841,753) (8,255,699)
=========================================================================================================
Distributions to shareholders from net realized gains:
Class A (3,967,466) (6,062,162)
- ---------------------------------------------------------------------------------------------------------
Class B (1,236,068) (3,484,045)
- ---------------------------------------------------------------------------------------------------------
Class C (1,095,804) (1,429,404)
- ---------------------------------------------------------------------------------------------------------
Class Y (42,046) --
- ---------------------------------------------------------------------------------------------------------
Investor Class (17,435,194) (45,890,448)
=========================================================================================================
Total distributions from net realized gains (23,776,578) (56,866,059)
=========================================================================================================
Share transactions-net:
Class A 22,229,179 (96,847)
- ---------------------------------------------------------------------------------------------------------
Class B 159,218 (10,083,120)
- ---------------------------------------------------------------------------------------------------------
Class C 5,758,712 2,126,236
- ---------------------------------------------------------------------------------------------------------
Class Y 568,238 --
- ---------------------------------------------------------------------------------------------------------
Investor Class 4,266,378 (41,970,173)
=========================================================================================================
Net increase (decrease) in net assets resulting from share
transactions 32,981,725 (50,023,904)
=========================================================================================================
Net increase (decrease) in net assets (231,475,654) (284,383,503)
=========================================================================================================
NET ASSETS:
Beginning of year 352,615,706 636,999,209
=========================================================================================================
End of year (includes undistributed net investment income of
$5,066,304 and $2,687,218, respectively) $ 121,140,052 $ 352,615,706
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12 AIM FINANCIAL SERVICES FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Financial Services Fund (the "Fund") is a series portfolio of AIM Sector
Funds (the "Trust"). The Trust is a Delaware statutory trust registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of six separate portfolios, each
authorized to issue an unlimited number of shares of beneficial interest. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund. Matters affecting each portfolio or class will be voted on exclusively
by the shareholders of such portfolio or class.
The Fund's investment objective is capital growth.
The Fund currently consists of five different classes of shares: Class A,
Class B, Class C, Class Y and Investor Class. Investor Class shares of the Fund
are offered only to certain grandfathered investors. Class A shares are sold
with a front-end sales charge unless certain waiver criteria are met and under
certain circumstances load waiver shares may be subject to contingent deferred
sales charges ("CDSC"). Class B shares and Class C shares are sold with a CDSC.
Class Y and Investor Class shares are sold at net asset value. Generally, Class
B shares will automatically convert to Class A shares on or about the month-end
which is at least eight years after the date of purchase.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements.
A. SECURITY VALUATIONS -- Securities, including restricted securities, are
valued according to the following policy.
A security listed or traded on an exchange (except convertible bonds) is
valued at its last sales price or official closing price as of the close
of the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on
that day. Securities traded in the over-the-counter market are valued
based on prices furnished by independent pricing services or market
makers. When such securities are valued by an independent pricing service
they may be considered fair valued. Futures contracts are valued at the
final settlement price set by an exchange on which they are principally
traded. Listed options are valued at the mean between the last bid and the
ask prices from the exchange on which they are principally traded. Options
not listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last
sales price or official closing price as of the close of the customary
trading session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as institution-size trading in similar groups of
securities, developments related to specific securities, dividend rate,
yield, quality, type of issue, coupon rate, maturity, individual trading
characteristics and other market data. Short-term obligations, including
commercial paper, having 60 days or less to maturity are recorded at
amortized cost which approximates value. Debt securities are subject to
interest rate and credit risks. In addition, all debt securities involve
some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued
at the market quotations. Because trading hours for certain foreign
securities end before the close of the NYSE, closing market quotations may
become unreliable. If between the time trading ends on a particular
security and the close of the customary trading session on the NYSE,
events occur that are significant and may make the closing price
unreliable, the Fund may fair value the security. If the event is likely
to have affected the closing price of the security, the security will be
valued at fair value in good faith using procedures approved by the Board
of Trustees. Adjustments to closing prices to reflect fair value may also
be based on a screening process of an independent pricing service to
indicate the degree of certainty, based on historical data, that the
closing price in the principal market where a foreign security trades is
not the current value as of the close of the NYSE. Foreign securities
meeting the approved degree of certainty that the price is not reflective
of current value will be priced at the indication of fair value from the
independent pricing service. Multiple factors may be considered by the
independent pricing service in determining adjustments to reflect fair
value and may include information relating to sector indices, American
Depositary Receipts and domestic and foreign index futures. Foreign
securities may have additional risks including exchange rate changes,
potential for sharply devalued currencies and high inflation, political
and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be valued based upon quotes furnished by independent sources.
The last bid price may be used to value equity securities and Corporate
Loans. The mean between the last bid and asked prices may be used to value
debt obligations other than Corporate Loans.
Securities for which market quotations are not readily available or are
unreliable are valued at fair value as determined in good faith by or
under the supervision of the Trust's officers following procedures
approved by the Board of Trustees. Issuer specific events, market trends,
bid/ask quotes of brokers and information providers and other market data
may be reviewed in the course of making a good faith determination of a
security's fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity. Because of the inherent uncertainties of valuation, the
values reflected in the financial statements may materially differ from
the value received upon actual sale of those investments.
13 AIM FINANCIAL SERVICES FUND
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income is recorded on the accrual basis from settlement
date. Dividend income is recorded on the ex-dividend date.
The Fund may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
The Fund allocates income and realized and unrealized capital gains and
losses to a class based on the relative net assets of each class.
C. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, the investment
advisor may determine the country in which an issuer is located and/or
credit risk exposure based on various factors. These factors include the
laws of the country under which the issuer is organized, where the issuer
maintains a principal office, the country in which the issuer derives 50%
or more of its total revenues and the country that has the primary market
for the issuer's securities, as well as other criteria. Among the other
criteria that may be evaluated for making this determination are the
country in which the issuer maintains 50% or more of its assets, the type
of security, financial guarantees and enhancements, the nature of the
collateral and the sponsor organization. Country of issuer and/or credit
risk exposure has been determined to be the United States of America,
unless otherwise noted.
D. DISTRIBUTIONS -- Distributions from income and net realized capital gain,
if any, are generally paid annually and recorded on ex-dividend date. The
Fund may elect to treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements
of Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial
statements.
The Fund files tax returns in the U.S. Federal jurisdiction and certain
other jurisdictions. Generally the Fund is subject to examinations by such
taxing authorities for up to three years after the filing of the return
for the tax period.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
G. ACCOUNTING ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period including estimates and assumptions related to
taxation. Actual results could differ from those estimates by a
significant amount.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust is indemnified
against certain liabilities that may arise out of performance of their
duties to the Fund. Additionally, in the normal course of business, the
Fund enters into contracts, including the Fund's servicing agreements,
that contain a variety of indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown as this would involve future
claims that may be made against the Fund that have not yet occurred. The
risk of material loss as a result of such indemnification claims is
considered remote.
I. OTHER RISKS -- The Fund's investments are concentrated in a comparatively
narrow segment of the economy. Consequently, the Fund may tend to be more
volatile than other mutual funds, and the value of the Fund's investments
may tend to rise and fall more rapidly.
The financial services sector is subject to extensive government
regulation, which may change frequently. The profitability of businesses
in this sector depends heavily on the availability and cost of money and
may fluctuate significantly in response to changes to interest rates and
general economic conditions.
J. SECURITIES LENDING -- The Fund may lend portfolio securities having a
market value up to one-third of the Fund's total assets. Such loans are
secured by collateral equal to no less than the market value of the loaned
securities determined daily by the securities lending provider. Such
collateral will be cash or debt securities issued or guaranteed by the
U.S. Government or any of its sponsored agencies. Cash collateral received
in connection with these loans is invested in short-term money market
instruments or affiliated money market funds and is shown as such on the
Schedule of Investments. It is the Fund's policy to obtain additional
collateral from or return excess collateral to the borrower by the end of
the next business day, following the valuation date of the securities
loaned. Therefore, the value of the collateral held may be temporarily
less than the value of the securities on loan. Lending securities entails
a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase
the collateral accordingly, and the borrower fails to return the
securities. Upon the failure of the borrower to return the securities,
collateral may be liquidated and the securities may be purchased on the
open market to replace the loaned securities. The Fund could experience
delays and costs in gaining access to the collateral. The Fund bears the
risk of any deficiency in the amount of the collateral available for
return to the borrower due to any loss on the collateral invested.
Dividends received on cash collateral investments for securities lending
transactions, which are net of compensation to counterparties, is included
in Dividends from affiliates on the Statement of Operations. The aggregate
value of securities out on loan is shown as a footnote on the Statement of
Assets and Liabilities, if any.
14 AIM FINANCIAL SERVICES FUND
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with Invesco
Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the
investment advisory agreement, the Fund pays an advisory fee to the Advisor
based on the annual rate of the Fund's average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $350 million 0.75%
- -------------------------------------------------------------------
Next $350 million 0.65%
- -------------------------------------------------------------------
Next $1.3 billion 0.55%
- -------------------------------------------------------------------
Next $2 billion 0.45%
- -------------------------------------------------------------------
Next $2 billion 0.40%
- -------------------------------------------------------------------
Next $2 billion 0.375%
- -------------------------------------------------------------------
Over $8 billion 0.35%
___________________________________________________________________
===================================================================
</Table>
Under the terms of a master sub-advisory agreement the Advisor and each of
Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited,
Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco
Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco
Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco
Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the
Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-
Advisor(s) that provide discretionary investment management services to the Fund
based on the percentage of assets allocated to such Sub-Advisor(s).
The Advisor has contractually agreed, through at least June 30, 2009, to waive
the advisory fee payable by the Fund in an amount equal to 100% of the net
advisory fees the Advisor receives from the affiliated money market funds on
investments by the Fund of uninvested cash (excluding investments of cash
collateral from securities lending) in such affiliated money market funds.
For the year ended March 31, 2009, the Advisor waived advisory fees of
$10,947.
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") agreed
to reimburse expenses incurred by the Fund in connection with market timing
matters in the AIM Funds, which may include legal, audit, shareholder reporting,
communications and trustee expenses. These expenses along with the related
expense reimbursement are included in the Statement of Operations. For the year
ended March 31, 2009, Invesco reimbursed expenses of the Fund in the amount of
$2,367.
The Trust has entered into a master administrative services agreement with
Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain
administrative costs incurred in providing accounting services to the Fund. For
the year ended March 31, 2009, expenses incurred under the agreement are shown
in the Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with
Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has
agreed to pay IAIS a fee for providing transfer agency and shareholder services
to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the
course of providing such services. IAIS may make payments to intermediaries that
provide omnibus account services, sub-accounting services and/or networking
services. All fees payable by IAIS to intermediaries that provide omnibus
account services or sub-accounting are charged back to the Fund, subject to
certain limitations approved by the Trust's Board of Trustees. For the year
ended March 31, 2009, expenses incurred under the agreement are shown in the
Statement of Operations as transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Aim
Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class
B, Class C, Class Y and Investor Class shares of the Fund. The Trust has adopted
plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class
A, Class B, Class C and Investor Class shares (collectively the "Plans"). The
Fund, pursuant to the Plans, pays IADI compensation at the annual rate of 0.25%
of the Fund's average daily net assets of Class A shares, 1.00% of the average
daily net assets of Class B and Class C shares and 0.25% of the average daily
net assets of Investor Class shares. Of the Plan payments, up to 0.25% of the
average daily net assets of each class of shares may be paid to furnish
continuing personal shareholder services to customers who purchase and own
shares of such classes. Any amounts not paid as a service fee under the Plans
would constitute an asset-based sales charge. Rules of the Financial Industry
Regulatory Authority ("FINRA") impose a cap on the total sales charges,
including asset-based sales charges that may be paid by any class of shares of
the Fund. For the year ended March 31, 2009, expenses incurred under the Plans
are shown in the Statement of Operations as distribution fees.
Front-end sales commissions and CDSC (collectively the "sales charges") are
not recorded as expenses of the Fund. Front-end sales commissions are deducted
from proceeds from the sales of Fund shares prior to investment in Class A
shares of the Fund. CDSC are deducted from redemption proceeds prior to
remittance to the shareholder. During the year ended March 31, 2009, IADI
advised the Fund that IADI retained $60,508 in front-end sales commissions from
the sale of Class A shares and $2,072 $14,986 and $9,523 from Class A, Class B
and Class C shares, respectively, for CDSC imposed on redemptions by
shareholders.
Certain officers and trustees of the Trust are officers and directors of
Invesco Aim, IAIS and/or IADI.
15 AIM FINANCIAL SERVICES FUND
NOTE 3--SUPPLEMENTAL INFORMATION
The Fund adopted the provisions of Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of
the Fund's fiscal year. SFAS 157 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation methods giving
the highest priority to readily available unadjusted quoted prices in an active
market for identical assets (Level 1) and the lowest priority to significant
unobservable inputs (Level 3) generally when market prices are not readily
available or are unreliable. Based on the valuation inputs, the securities or
other investments are tiered into one of three levels. Changes in valuation
methods may result in transfers in or out of an investment's assigned level:
Level 1 -- Prices are determined using quoted prices in an active market for
identical assets.
Level 2 -- Prices are determined using other significant observable inputs.
Observable inputs are inputs that other market participants may use in pricing
a security. These may include quoted prices for similar securities, interest
rates, prepayment speeds, credit risk and others.
Level 3 -- Prices are determined using significant unobservable inputs. In
situations where quoted prices or observable inputs are unavailable (for
example, when there is little or no market activity for an investment at the
end of the period), unobservable inputs may be used. Unobservable inputs
reflect the Fund's own assumptions about the factors market participants would
use in determining fair value of the securities or instruments and would be
based on the best available information.
Below is a summary of the tiered valuation input levels, as of the end of the
reporting period, March 31, 2009. The level assigned to the securities
valuations may not be an indication of the risk or liquidity associated with
investing in those securities. Because of the inherent uncertainties of
valuation, the values reflected in the financial statements may materially
differ from the value received upon actual sale of those investments.
<Table>
<Caption>
INVESTMENTS IN
INPUT LEVEL SECURITIES
- --------------------------------------
Level 1 $120,204,096
- --------------------------------------
Level 2 --
- --------------------------------------
Level 3 --
======================================
$120,204,096
______________________________________
======================================
</Table>
NOTE 4--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions and (ii) custodian credits which
result from periodic overnight cash balances at the custodian. For the year
ended March 31, 2009, the Fund received credits from these arrangements, which
resulted in the reduction of the Fund's total expenses of $16,689.
NOTE 5--TRUSTEES' AND OFFICERS' FEES AND BENEFITS
"Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officers' Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officers'
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended March 31, 2009, the Fund paid legal fees of $5,136 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 6--CASH BALANCES
The Fund is permitted to temporarily carry a negative or overdrawn balance in
its account with The State Street Bank and Trust Company, the custodian bank. To
compensate the custodian bank for such overdrafts, the overdrawn Fund may either
(i) leave funds as a compensating balance in the account so the custodian bank
can be compensated by earning the additional interest; or (ii) compensate by
paying the custodian bank at a rate agreed upon by the custodian bank and
Invesco Aim, not to exceed the contractually agreed upon rate.
16 AIM FINANCIAL SERVICES FUND
NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED MARCH
31, 2009 AND 2008:
<Table>
<Caption>
2009 2008
- --------------------------------------------------------------------------------------------------------
Ordinary income $ 2,852,868 $ 8,537,133
- --------------------------------------------------------------------------------------------------------
Long-term capital gain 23,765,463 56,584,625
========================================================================================================
Total distributions $26,618,331 $65,121,758
________________________________________________________________________________________________________
========================================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
<Table>
<Caption>
2009
- ------------------------------------------------------------------------------------------------
Undistributed ordinary income $ 5,206,776
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) -- investments (181,704,822)
- ------------------------------------------------------------------------------------------------
Temporary book/tax differences (116,754)
- ------------------------------------------------------------------------------------------------
Capital loss carryforward (96,153,846)
- ------------------------------------------------------------------------------------------------
Post-October deferrals (20,800,356)
- ------------------------------------------------------------------------------------------------
Shares of beneficial interest 414,709,054
================================================================================================
Total net assets $ 121,140,052
________________________________________________________________________________________________
================================================================================================
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation (depreciation) difference is attributable primarily to wash sales
and the treatment of partnership investments.
The temporary book/tax differences are a result of timing differences between
book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of the trustee deferral of compensation and
retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund has a capital loss carryforward as of March 31, 2009 which expires as
follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------------------------
March 31, 2017 $96,153,846
_______________________________________________________________________________________________
===============================================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
NOTE 8--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended March 31, 2009 was $110,685,818 and $88,426,997,
respectively. Cost of investments on a tax basis includes the adjustments for
financial reporting purposes as of the most recently completed Federal income
tax reporting period-end.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $ 2,086,230
- ------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (183,791,052)
================================================================================================
Net unrealized appreciation (depreciation) of investment securities $(181,704,822)
________________________________________________________________________________________________
================================================================================================
Cost of investments for tax purposes is $301,908,918.
</Table>
NOTE 9--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of proxy costs,
distributions and partnership investments, on March 31, 2009, undistributed net
investment income was decreased by $1,340, undistributed net realized gain
(loss) was increased by $18,460 and shares of beneficial interest decreased by
$17,120. This reclassification had no effect on the net assets of the Fund.
17 AIM FINANCIAL SERVICES FUND
NOTE 10--SHARE INFORMATION
<Table>
<Caption>
Summary of Share Activity
- -------------------------------------------------------------------------------------------------------------------------
Year ended March 31,
------------------------------------------------------------
2009(a) 2008
--------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 3,938,345 $ 38,542,783 1,138,690 $ 22,265,893
- -------------------------------------------------------------------------------------------------------------------------
Class B 660,762 6,947,393 181,565 3,634,892
- -------------------------------------------------------------------------------------------------------------------------
Class C 1,084,835 10,073,182 414,149 7,534,708
- -------------------------------------------------------------------------------------------------------------------------
Class Y(b) 67,733 545,825 -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class 3,603,191 35,568,011 1,347,709 27,632,919
=========================================================================================================================
Issued as reinvestment of dividends:
Class A 724,329 4,208,363 359,056 6,570,724
- -------------------------------------------------------------------------------------------------------------------------
Class B 220,767 1,282,657 190,330 3,492,554
- -------------------------------------------------------------------------------------------------------------------------
Class C 200,646 1,121,610 82,188 1,461,296
- -------------------------------------------------------------------------------------------------------------------------
Class Y 7,756 45,375 -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class 3,238,461 18,944,918 2,777,724 51,193,823
=========================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 358,188 3,306,169 131,481 2,755,853
- -------------------------------------------------------------------------------------------------------------------------
Class B (358,674) (3,306,169) (131,664) (2,755,853)
=========================================================================================================================
Reacquired:
Class A(b) (2,619,421) (23,828,136) (1,377,995) (31,689,317)
- -------------------------------------------------------------------------------------------------------------------------
Class B (495,525) (4,764,663) (607,631) (14,454,713)
- -------------------------------------------------------------------------------------------------------------------------
Class C (604,184) (5,436,080) (305,602) (6,869,768)
- -------------------------------------------------------------------------------------------------------------------------
Class Y (3,642) (22,962) -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class(b) (5,296,436) (50,246,551) (5,103,730) (120,796,915)
=========================================================================================================================
Net increase (decrease) in share activity 4,727,131 $ 32,981,725 (903,730) $ (50,023,904)
_________________________________________________________________________________________________________________________
=========================================================================================================================
</Table>
(a) There is an entity that is a record owner of more than 5% of the
outstanding shares of the Fund and owns 15% of the outstanding shares of
the Fund. IADI has an agreement with this entity to sell Fund shares. The
Fund, Invesco Aim and/or Invesco Aim affiliates may make payments to this
entity, which is considered to be related to the Fund, for providing
services to the Fund, Invesco Aim and/or Invesco Aim affiliates including
but not limited to services such as, securities brokerage, distribution,
third party record keeping and account servicing. The Trust has no
knowledge as to whether all or any portion of the shares owned of record
by this entity is owned beneficially.
(b) Effective upon the commencement date of Class Y shares, October 3, 2008,
the following shares were converted from Class A and Investor Class shares
into Class Y shares of the Fund:
<Table>
<Caption>
CLASS SHARES AMOUNT
--------------------------------------------------------------------------------------------------
Class Y 33,662 $ 385,767
--------------------------------------------------------------------------------------------------
Class A (25,595) (291,276)
--------------------------------------------------------------------------------------------------
Investor Class (8,245) (94,491)
__________________________________________________________________________________________________
==================================================================================================
</Table>
18 AIM FINANCIAL SERVICES FUND
NOTE 11--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
NET GAINS
(LOSSES)
NET ASSET ON SECURITIES DIVIDENDS DISTRIBUTIONS
VALUE, NET (BOTH TOTAL FROM FROM NET FROM NET NET ASSET
BEGINNING INVESTMENT REALIZED AND INVESTMENT INVESTMENT REALIZED TOTAL VALUE, END
OF PERIOD INCOME(a) UNREALIZED) OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 $15.72 $0.22 $(10.29) $(10.07) $(0.13) $(1.06) $(1.19) $ 4.46
Year ended 03/31/08 27.30 0.42 (8.61) (8.19) (0.45) (2.94) (3.39) 15.72
Year ended 03/31/07 28.22 0.38 2.32 2.70 (0.39) (3.23) (3.62) 27.30
Year ended 03/31/06 27.16 0.32 4.05 4.37 (0.39) (2.92) (3.31) 28.22
Year ended 03/31/05 30.83 0.23 (1.19) (0.96) (0.20) (2.51) (2.71) 27.16
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 15.72 0.15 (10.27) (10.12) (0.09) (1.06) (1.15) 4.45
Year ended 03/31/08 27.22 0.24 (8.58) (8.34) (0.22) (2.94) (3.16) 15.72
Year ended 03/31/07 28.15 0.16 2.30 2.46 (0.16) (3.23) (3.39) 27.22
Year ended 03/31/06 27.10 0.11 4.03 4.14 (0.17) (2.92) (3.09) 28.15
Year ended 03/31/05 30.82 0.04 (1.19) (1.15) (0.06) (2.51) (2.57) 27.10
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 15.23 0.14 (9.94) (9.80) (0.09) (1.06) (1.15) 4.28
Year ended 03/31/08 26.48 0.23 (8.32) (8.09) (0.22) (2.94) (3.16) 15.23
Year ended 03/31/07 27.47 0.16 2.24 2.40 (0.16) (3.23) (3.39) 26.48
Year ended 03/31/06 26.51 0.11 3.94 4.05 (0.17) (2.92) (3.09) 27.47
Year ended 03/31/05 30.20 0.04 (1.16) (1.12) (0.06) (2.51) (2.57) 26.51
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(e) 11.46 0.06 (5.83) (5.77) (0.13) (1.06) (1.19) 4.50
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 15.82 0.23 (10.36) (10.13) (0.13) (1.06) (1.19) 4.50
Year ended 03/31/08 27.47 0.42 (8.68) (8.26) (0.45) (2.94) (3.39) 15.82
Year ended 03/31/07 28.37 0.38 2.34 2.72 (0.39) (3.23) (3.62) 27.47
Year ended 03/31/06 27.30 0.33 4.06 4.39 (0.40) (2.92) (3.32) 28.37
Year ended 03/31/05 30.96 0.27 (1.19) (0.92) (0.23) (2.51) (2.74) 27.30
_________________________________________________________________________________________________________________________________
=================================================================================================================================
<Caption>
Ratio of Ratio of
expenses expenses
to average to average net Ratio of net
net assets assets without investment
Net assets, with fee waivers fee waivers income
TOTAL end of period and/or expenses and/or expenses to average Portfolio
RETURN(b) (000s omitted) absorbed absorbed net assets turnover(c)
- ------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 (65.84)% $ 23,242 1.64%(d) 1.65%(d) 2.25%(d) 38%
Year ended 03/31/08 (31.76) 44,151 1.31 1.31 1.76 15
Year ended 03/31/07 9.24 69,846 1.28 1.28 1.33 5
Year ended 03/31/06 16.36 71,297 1.32 1.32 1.12 3
Year ended 03/31/05 (3.57) 81,761 1.38 1.39 0.79 53
- ------------------------------------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 (66.10) 5,624 2.39(d) 2.40(d) 1.50(d) 38
Year ended 03/31/08 (32.32) 19,428 2.06 2.06 1.01 15
Year ended 03/31/07 8.41 43,639 2.03 2.03 0.58 5
Year ended 03/31/06 15.51 52,773 2.04 2.04 0.40 3
Year ended 03/31/05 (4.19) 65,390 2.03 2.04 0.14 53
- ------------------------------------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 (66.13) 6,281 2.39(d) 2.40(d) 1.50(d) 38
Year ended 03/31/08 (32.28) 11,948 2.06 2.06 1.01 15
Year ended 03/31/07 8.39 15,727 2.03 2.03 0.58 5
Year ended 03/31/06 15.51 18,872 2.04 2.04 0.40 3
Year ended 03/31/05 (4.18) 23,932 2.03 2.04 0.14 53
- ------------------------------------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(e) (52.77) 323 1.70(d)(f) 1.70(d)(f) 2.19(d)(f) 38
- ------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 (65.79) 85,669 1.64(d) 1.65(d) 2.25(d) 38
Year ended 03/31/08 (31.83) 277,089 1.31 1.31 1.76 15
Year ended 03/31/07 9.27 507,787 1.28 1.28 1.33 5
Year ended 03/31/06 16.36 563,294 1.30 1.30 1.14 3
Year ended 03/31/05 (3.44) 632,450 1.28 1.29 0.89 53
__________________________________________________________________________________________________________________
==================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset value
for financial reporting purposes and the returns based upon those net asset
values may differ from the net asset value and returns for shareholder
transactions. Does not include sales charges and is not annualized for
periods less than one year, if applicable.
(c) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year, if applicable.
(d) Ratios are based on average daily net assets (000's omitted) of $36,026,
$12,519, $9,768, $268 and $180,205 for Class A, Class B, Class C, Class Y,
and Investor Class shares, respectively.
(e) Commencement date of October 3, 2008.
(f) Annualized.
19 AIM FINANCIAL SERVICES FUND
NOTE 12--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On May 23, 2008, the Securities and Exchange Commission ("SEC") publicly posted
its final approval of the Distribution Plans ("Distribution Plans") for the
distribution of monies placed into two separate Fair Funds created pursuant to a
settlement reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"),
Invesco Aim Advisors, Inc. ("Invesco Aim") and Invesco Aim Distributors, Inc.
("IADI") and the SEC (the "Order"). One of the Fair Funds consists of $325
million, plus interest and any contributions by other settling parties, for
distribution to shareholders of certain mutual funds formerly advised by IFG who
may have been harmed by market timing and related activity. The second Fair Fund
consists of $50 million, plus interest and any contributions by other settling
parties, for distribution to shareholders of certain mutual funds advised by
Invesco Aim who may have been harmed by market timing and related activity. The
Distribution Plans provide for the distribution to all eligible investors to
compensate such investors for injury they may have suffered as a result of
market timing in the affected funds. The Distribution Plans include a provision
for any residual amounts in the Fair Funds to be distributed in the future to
the affected funds. Because the distribution of the Fair Funds has not yet
commenced, management of Invesco Aim and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"), the
parent company of IFG and Invesco Aim, has agreed to reimburse expenses incurred
by the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, Invesco Aim, IADI
and/or related entities and individuals alleging that the defendants permitted
improper market timing and related activity in the AIM Funds.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
negligence, breach of fiduciary duty and/or breach of contract. These lawsuits
seek remedies that include, depending on the lawsuit, damages, restitution,
injunctive relief, imposition of a constructive trust, removal of certain
directors and/or employees, various corrective measures under ERISA, rescission
of certain AIM Funds' advisory agreements and/or distribution plans and recovery
of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues were transferred to the United States District Court for the District of
Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court, plaintiffs in
these lawsuits consolidated their claims for pre-trial purposes into three
amended complaints against various Invesco Aim- and IFG-related parties: (i) a
Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of ERISA purportedly
brought on behalf of participants in the Invesco 401(k) plan. Based on orders
issued by the MDL Court, all claims asserted against the AIM Funds that have
been transferred to the MDL Court have been dismissed, although certain Funds
remain nominal defendants in the Consolidated Amended Fund Derivative Complaint.
On January 5, 2008, the parties reached an agreement in principle to settle both
the Consolidated Amended Class Action Complaint and Consolidated Amended Fund
Derivative Complaint, subject to the MDL Court approval. Individual class
members have the right to object. On December 15, 2008, the parties reached an
agreement in principle to settle the Amended Class Action Complaint for
Violations of ERISA, subject to the MDL Court approval. Individual class members
have the right to object. No payments are required under the settlement;
however, the parties agreed that certain limited changes to benefit plans and
participants' accounts would be made.
IFG, Invesco Aim, IADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, Invesco Aim and IADI have advised the Fund that they are providing
full cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, Invesco Aim, IADI and/or related entities and individuals in
the future.
Management of Invesco Aim and the Fund believe that the outcome of the Pending
Litigation and Regulatory Inquiries described above will have no material
adverse affect on the Fund or on the ability of Invesco Aim and IADI to provide
ongoing services to the Fund.
20 AIM FINANCIAL SERVICES FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM Sector Funds
and Shareholders of AIM Financial Services Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of AIM Financial Services Fund (one of
the funds constituting AIM Sector Funds, hereafter referred to as the "Fund") at
March 31, 2009, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 2009 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PRICEWATERHOUSECOOPERS LLP
May 15, 2009
Houston, Texas
21 AIM FINANCIAL SERVICES FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. With
the exception of the actual ending account value and expenses of the Class Y
shares, the example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period October 1, 2008, through
March 31, 2009. The actual ending account and expenses of the Class Y shares in
the below example are based on an investment of $1,000 invested as of close of
business October 3, 2008 (commencement date) and held through March 31, 2009.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period (as of close of business
October 3, 2008 through March 31, 2009 for the Class Y shares). Because the
actual ending account value and expense information in the example is not based
upon a six month period for the Class Y shares, the ending account value and
expense information may not provide a meaningful comparison to mutual funds that
provide such information for a full six month period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/01/08) (03/31/09)(1) PERIOD(1) (03/31/09) PERIOD(2,3) RATIO
- ---------------------------------------------------------------------------------------------------
A $1,000.00 $449.80 $7.05 $1,015.21 $ 9.80 1.95%
- ---------------------------------------------------------------------------------------------------
B 1,000.00 447.40 9.74 1,011.47 13.54 2.70
- ---------------------------------------------------------------------------------------------------
C 1,000.00 447.40 9.74 1,011.47 13.54 2.70
- ---------------------------------------------------------------------------------------------------
Y 1,000.00 472.30 6.17 1,016.45 8.55 1.70
- ---------------------------------------------------------------------------------------------------
Investor 1,000.00 450.30 7.05 1,015.21 9.80 1.95
- ---------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period October 1, 2008, through March 31, 2009 (as of close of
business October 3, 2008, through March 31, 2009 for the Class Y shares),
after actual expenses and will differ from the hypothetical ending account
value which is based on the Fund's expense ratio and a hypothetical annual
return of 5% before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
182/365 to reflect the most recent fiscal half year. For the Class Y shares
actual expenses are equal to the annualized expense ratio indicated above
multiplied by the average account value over the period, multiplied by 180
(as of close of business October 3, 2008, through March 31, 2009)/365.
Because the Class Y shares have not been in existence for a full six month
period, the actual ending account value and expense information shown may
not provide a meaningful comparison to fund expense information of classes
that show such data for a full six month period and, because the actual
ending account value and expense information in the expense example covers a
short time period, return and expense data may not be indicative of return
and expense data for longer time periods.
(3) Hypothetical expenses are equal to the annualized expense ratio indicated
above multiplied by the average account value over the period, multiplied by
182/365 to reflect a one-half year period. The hypothetical ending account
value and expenses may be used to compare ongoing costs of investing in
Class Y shares of the Fund and other funds because such data is based on a
full six month period.
22 AIM FINANCIAL SERVICES FUND
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year-end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to be
different, the maximum amount allowable for its fiscal year ended March 31,
2009:
<Table>
<Caption>
FEDERAL AND STATE INCOME TAX
----------------------------
Long-Term Capital Gain Dividends $23,765,463
Qualified Dividend Income* 100%
Corporate Dividends Received Deduction* 100%
</Table>
* The above percentages are based on ordinary income dividends paid to
shareholders during the Fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended June 30, 2008, September 30, 2008, December 31, 2008 and
March 31, 2009 were 3.60%, 4.80%, 4.72%, and 9.92%, respectively.
23 AIM FINANCIAL SERVICES FUND
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM Sector Funds (the "Trust"), is 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 102
portfolios in the AIM Funds complex. The trustees serve for the life of the
Trust, subject to their earlier death, incapacitation, resignation, retirement
or removal as more specifically provided in the Trust's organizational
documents. Each officer serves for a one year term or until their successors are
elected and qualified. Column two below includes length of time served with
predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------------
Martin L. 2007 Executive Director, Chief Executive Officer and President, None
Flanagan(1) -- 1960 Invesco Ltd. (ultimate parent of Invesco Aim and a global
Trustee investment management firm); Chairman, Invesco Aim Advisors,
Inc. (registered investment advisor); Trustee, The AIM
Family of Funds--Registered Trademark--; Vice Chairman,
Investment Company Institute; and Member of Executive Board,
SMU Cox School of Business
Formerly: Director, Chairman, Chief Executive Officer and
President, IVZ Inc. (holding company); INVESCO Group
Services, Inc. (service provider); and Invesco North
American Holdings, Inc. (holding company); Director, Chief
Executive Officer and President, Invesco Holding Company
Limited (parent of Invesco Aim and a global investment
management firm); Chairman, Investment Company Institute;
President, Co-Chief Executive Officer, Co-President, Chief
Operating Officer and Chief Financial Officer, Franklin
Resources, Inc. (global investment management organization)
- --------------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None
Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and
Principal President, Invesco Trimark Dealer Inc. (formerly AIM Mutual
Executive Officer Fund Dealer Inc.) (registered broker dealer), Invesco Aim
Advisors, Inc., and 1371 Preferred Inc. (holding company);
Director, Chairman, Chief Executive Officer and President,
Invesco Aim Management Group, Inc. (financial services
holding company) and Invesco Aim Capital Management, Inc.
(registered investment advisor); Director and President,
INVESCO Funds Group, Inc. (registered investment advisor and
register transfer agent) and AIM GP Canada Inc. (general
partner for a limited partnership); Director, Invesco Aim
Distributors, Inc. (registered broker dealer); Director and
Chairman, Invesco Aim Investment Services, Inc. (registered
transfer agent) and INVESCO Distributors, Inc. (registered
broker dealer); Director, President and Chairman, INVESCO
Inc. (holding company) and Invesco Canada Holdings Inc.
(holding company); Chief Executive Officer, AIM Trimark
Corporate Class Inc. (corporate mutual fund company) and AIM
Trimark Canada Fund Inc. (corporate mutual fund company);
Director and Chief Executive Officer, Invesco Trimark
Ltd./Invesco Trimark Ltee (formerly AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services) (registered
investment advisor and registered transfer agent) and
Invesco Trimark Dealer Inc. (formerly AIM Mutual Fund Dealer
Inc.) (registered broker dealer); Trustee, President and
Principal Executive Officer of The AIM Family of Funds--
Registered Trademark-- (other than AIM Treasurer's Series
Trust and Short-Term Investments Trust); Trustee and
Executive Vice President, The AIM Family of Funds--
Registered Trademark-- (AIM Treasurer's Series Trust and
Short-Term Investments Trust only); and Manager, Invesco
PowerShares Capital Management LLC
Formerly: President, Invesco Trimark Dealer Inc.; Director
and President, AIM Trimark Corporate Class Inc. and AIM
Trimark Canada Fund Inc.; Director and President, Invesco
Trimark Ltd./Invesco Trimark Ltee (formerly AIM Funds
Management Inc. d/b/a INVESCO Enterprise Services); Senior
Managing Director, Invesco Holding Company Limited; Trustee
and Executive Vice President, Tax-Free Investments Trust;
Director and Chairman, Fund Management Company (registered
broker dealer); President and Principal Executive Officer,
The AIM Family of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term Investments Trust and
Tax-Free Investments Trust only); President, AIM Trimark
Global Fund Inc. and AIM Trimark Canada Fund Inc.; and
Director, Trimark Trust (federally regulated Canadian Trust
Company)
- --------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited
Trustee and Chair consulting company) (insurance company);
Captaris, Inc.
(unified messaging
provider); and
Investment Company
Institute
- --------------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 1983 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2003 Retired
Trustee
Formerly: Partner, law firm of Baker & McKenzie; and None
Director, Badgley Funds, Inc. (registered investment
company) (2 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Director, Van Gilder
Trustee firm) Insurance Company,
Board of Governors,
Western Golf
Association/Evans
Scholars Foundation
and Executive
Committee, United
States Golf
Association
- --------------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2003 Director of a number of public and private business None
Trustee corporations, including the Boss Group Ltd. (private
investment and management); Continental Energy Services, LLC
(oil and gas pipeline service); Reich & Tang Funds
(registered investment company); Annuity and Life Re
(Holdings), Ltd. (reinsurance company), and Homeowners of
America Holding Corporation/Homeowners of America Insurance
Company (property casualty company)
Formerly: Director, CompuDyne Corporation (provider of
product and services to the public security market);
Director, President and Chief Executive Officer, Volvo Group
North America, Inc.; Senior Vice President, AB Volvo;
Director of various public and private corporations
- --------------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff
Trustee (government affairs company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate
entertainment)
Formerly: Chief Executive Officer, Texana Timber LP
(sustainable forestry company); and Discovery Global
Education Fund (non-profit)
- --------------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich &
Trustee Tang Funds (16
portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 2003 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 1997 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired
Trustee
Formerly: Partner, Director, Mainstay VP Series Funds, Inc. None
(25 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan is considered an interested person of the Trust because he is
an officer of the advisor to the Trust, and an officer and a director of
Invesco Ltd., ultimate parent of the advisor to the Trust.
(2) Mr. Taylor is considered an interested person of the Trust because he is an
officer and a director of the advisor to, and a director of the principal
underwriter of, the Trust.
24 AIM FINANCIAL SERVICES FUND
TRUSTEES AND OFFICERS--(CONTINUED)
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- --------------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family of N/A
Senior Vice President and Funds--Registered Trademark--
Senior Officer
Formerly: Director of Compliance and Assistant General Counsel,
ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General
Counsel and Director of Compliance, ALPS Mutual Funds, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General Counsel, N/A
Senior Vice President, Chief Invesco Aim Management Group, Inc., Invesco Aim Advisors, Inc.
Legal Officer and Secretary and Invesco Aim Capital Management, Inc.; Director, Senior Vice
President and Secretary, Invesco Aim Distributors, Inc.;
Director, Vice President and Secretary, Invesco Aim Investment
Services, Inc. and INVESCO Distributors, Inc.; Director and Vice
President, INVESCO Funds Group Inc.; Senior Vice President, Chief
Legal Officer and Secretary, The AIM Family of Funds--Registered
Trademark--; and Manager, Invesco PowerShares Capital Management
LLC
Formerly: Director, Vice President and Secretary, Fund Management
Company; Vice President, Invesco Aim Capital Management, Inc.;
Chief Operating Officer, Senior Vice President, General Counsel
and Secretary, Liberty Ridge Capital, Inc. (an investment
adviser); Vice President and Secretary, PBHG Funds (an investment
company); Vice President and Secretary, PBHG Insurance Series
Fund (an investment company); Chief Operating Officer, General
Counsel and Secretary, Old Mutual Investment Partners (a broker-
dealer); General Counsel and Secretary, Old Mutual Fund Services
(an administrator); General Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder servicing center); Executive
Vice President, General Counsel and Secretary, Old Mutual
Capital, Inc. (an investment adviser); and Vice President and
Secretary, Old Mutual Advisors Funds (an investment company)
- --------------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice President, The N/A
Vice President AIM Family of Funds--Registered Trademark--
Formerly: Senior Vice President, Invesco Aim Management Group,
Inc.; Senior Vice President and Chief Compliance Officer, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark--; Vice President and Chief Compliance Officer, Invesco
Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.;
Vice President, Invesco Aim Investment Services, Inc. and Fund
Management Company
- --------------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, Invesco N/A
Vice President Ltd.; Director and Secretary, Invesco Holding Company Limited,
and INVESCO Funds Group, Inc.; Director and Executive Vice
President, IVZ Inc., Invesco Group Services, Inc., Invesco North
American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.;
and Vice President, The AIM Family of Funds--Registered
Trademark--
Formerly: Secretary, IVZ, Inc., Invesco Group Services, Inc., and
Invesco North American Holdings, Inc.; Senior Managing Director
and Secretary, Invesco Holding Company Limited; Director, Senior
Vice President, Secretary and General Counsel, Invesco Aim
Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior
Vice President, Invesco Aim Distributors, Inc.; Director, General
Counsel and Vice President, Fund Management Company; Vice
President, Invesco Aim Capital Management, Inc., Invesco Aim
Investment Services, Inc., Invesco Group Services, Inc. and IVZ
Inc.; Senior Vice President, Chief Legal Officer and Secretary,
The AIM Family of Funds--Registered Trademark--; Director and
Vice President, INVESCO Distributors, Inc. and Chief Executive
Officer and President, INVESCO Funds Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Sheri Morris -- 1964 1999 Vice President, Treasurer and Principal Financial Officer, The N/A
Vice President, Treasurer AIM Family of Funds--Registered Trademark--; and Vice President,
and Principal Financial Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc.
Officer and Invesco Aim Private Asset Management Inc.
Formerly: Assistant Vice President and Assistant Treasurer, The
AIM Family of Funds--Registered Trademark-- and Assistant Vice
President, Invesco Aim Advisors, Inc., Invesco Aim Capital
Management, Inc. and Invesco Aim Private Asset Management, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash Management N/A
Vice President Group; Director of Cash Management and Senior Vice President,
Invesco Aim Advisors, Inc. and Invesco Aim Capital Management,
Inc; Executive Vice President, Invesco Aim Distributors, Inc.;
Senior Vice President, Invesco Aim Management Group, Inc.; Vice
President, The AIM Family of Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust and Short-Term Investments
Trust); and President and Principal Executive Officer, The AIM
Family of Funds--Registered Trademark-- (AIM Treasurer's Series
Trust and Short-Term Investments Trust only)
Formerly President and Principal Executive Officer, Tax-Free
Investments Trust; Director and President, Fund Management
Company; Chief Cash Management Officer and Managing Director,
Invesco Aim Capital Management, Inc.; and Vice President, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark-- (AIM Treasurer's Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust only)
- --------------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim Advisors, N/A
Anti-Money Laundering Inc., Invesco Aim Capital Management, Inc., Invesco Aim
Compliance Officer Distributors, Inc., Invesco Aim Investment Services, Inc.,
Invesco Aim Private Asset Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering Compliance Officer, Fund
Management Company; and Manager of the Fraud Prevention
Department, Invesco Aim Investment Services, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; Senior N/A
Chief Compliance Officer Vice President and Chief Compliance Officer, Invesco Aim
Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief
Compliance Officer, The AIM Family of Funds--Registered
Trademark--, Invesco Global Asset Management (N.A.), Inc.
(registered investment advisor), Invesco Institutional (N.A.),
Inc., (registered investment advisor), INVESCO Private Capital
Investments, Inc. (holding company), Invesco Private Capital,
Inc. (registered investment advisor) and Invesco Senior Secured
Management, Inc. (registered investment advisor); and Vice
President, Invesco Aim Distributors, Inc. and Invesco Aim
Investment Services, Inc.
Formerly: Vice President, Invesco Aim Capital Management, Inc.
and Fund Management Company; and Global Head of Product
Development, AIG-Global Investment Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
The Statement of Additional Information of the Trust includes additional
information about the Fund's Trustees and is available upon request, without
charge, by calling 1.800.959.4246.
Please refer to the Fund's prospectus for information on the Fund's sub-
advisors.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. PricewaterhouseCoopers LLP
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Stradley Ronon Stevens INDEPENDENT TRUSTEES Invesco Aim Investment Services, Inc. State Street Bank and Trust
& Young, LLP Kramer, Levin, Naftalis & P.O. Box 4739 Company
2600 One Commerce Square Frankel LLP Houston, TX 77210-4739 225 Franklin Street
Philadelphia, PA 19103 1177 Avenue of the Americas Boston, MA 02110-2801
New York, NY 10036-2714
25 AIM FINANCIAL SERVICES FUND
[GO PAPERLESS GRAPHIC]
====================================================================================================================================
GO PAPERLESS WITH EDELIVERY
Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all
about eeees:
o ENVIRONMENTALLY FRIENDLY. Go green by reducing the number of o EFFICIENT. Stop waiting for regular mail. Your documents
trees used to produce paper. will be sent via email as soon as they're available.
o ECONOMICAL. Help reduce your fund's printing and delivery o EASY. Download, save and print files using your home
expenses and put more capital back in your fund's returns. computer with a few clicks of your mouse.
This service is provided by Invesco Aim Investment Services, Inc.
====================================================================================================================================
FUND HOLDINGS AND PROXY VOTING INFORMATION
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund
files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is
available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your
Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC
website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C.
You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by
calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file
numbers for the Fund are 811-03826 and 002-85905.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio
securities is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim
website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC
website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2008,
is available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting
Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov.
If used after July 20, 2009, this report must be accompanied by a Fund fact sheet or Invesco Aim
Quarterly Performance Review for the most recent quarter-end. Invesco Aim--SERVICE MARK-- is a service
mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management,
Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the
investment advisors for the products and services represented by Invesco Aim; they each provide
investment advisory services to individual and institutional clients and do not sell securities. Please
refer to each fund's prospectus for information on the fund's subadvisors. Invesco Aim Distributors, Inc. [INVESCO AIM LOGO]
is the U.S. distributor for the retail mutual funds, exchange-traded funds and institutional money market --SERVICE MARK--
funds and the subdistributor for the STIC Global Funds represented by Invesco Aim. All entities are
indirect, wholly owned subsidiaries of Invesco Ltd.
It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors, Inc.,
Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset
Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the consolidated
adviser firm will be renamed Invesco Advisers, Inc. Additional information will be posted at
invescoaim.com on or about the end of the fourth quarter of 2009.
invescoaim.com I-FSE-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] AIM GOLD & PRECIOUS METALS FUND
--SERVICE MARK-- Annual Report to Shareholders o March 31, 2009
[MOUNTAIN GRAPHIC]
2 Letters to Shareholders
4 Performance Summary
4 Management Discussion
6 Long-Term Fund Performance
8 Supplemental Information
9 Schedule of Investments
10 Financial Statements
13 Notes to Financial Statements
20 Financial Highlights
22 Auditor's Report
23 Fund Expenses
24 Tax Information
25 Trustees and Officers
Dear Shareholders:
The past year was difficult to say the least for virtually all investors. Market indexes in the U.S.
[TAYLOR and around the globe nosedived in 2008, and the vast majority of us have seen sharp declines in the
PHOTO] value of our investments. As I write this letter, "market experts" remain divided on the outlook for
the market. While some argue the worst of the decline is over, others say we have farther to fall.
There is widespread agreement, however, that markets are likely to remain volatile for some time to
come.
Philip Taylor We've all read about subprime lending, government bailouts and investment scandals -- but we know
that as individuals, we have little control over such matters. Rather, I'd like to discuss with you
actions you may have already taken, or can take now, that may benefit you going forward.
BOOMS AND BUSTS
Recent history should have reminded all of us that investor sentiment can be fickle. The
technology-driven bull market of the late 1990s gave way to a sharp decline from 2000 to 2002 when the "tech bubble" burst. More
recently, the 2003 to 2007 bull market, driven largely by financial stocks and a housing boom, among other factors, gave way to the
current market decline when the "housing bubble" burst.
These market downturns hurt nearly all investors. But they were particularly painful for investors who, seeking high, short-term
returns, abandoned their long-term, diversified investment plans and decided to chase performance -- i.e., allocate a large portion
of their assets into the "hot" investments du jour. Many of those investors discovered they had unwittingly bought at the top of the
market, and they saw the value of their assets decline significantly as market leadership changed. History has shown that seeking
the highest short-term returns possible has often led to long-term disappointment.
This is why we believe investors should work with their financial advisors to devise a goal-based financial strategy -- a
long-term plan with a reasonable prospect of achieving predetermined financial goals in line with individual risk tolerance. Such a
strategy cannot guarantee a profit or protect against loss in a declining market, but it may help investors avoid emotion-driven,
short-term investment mistakes.
WHAT TO DO NOW
None of us can control the markets, but we can control our own reaction to the unsettling volatility we're currently experiencing.
Here are some steps that may help position you for whatever the market brings next:
o REVISIT YOUR GOALS. Work with your financial advisor to create specific,
concrete investment goals consistent with your risk tolerance. Scared by
market volatility, many investors fed to cash in recent months. While that
may be entirely appropriate for investors approaching retirement, other
investors may need the growth potential of equities to achieve their
long-term goals. Your financial advisor can suggest investments that match
your goals and risk tolerance.
o RESIST LOOKING OVER THE FENCE. Every investor's needs, goals and risk
tolerance are different. Your neighbor's, co-worker's or relative's
investments have no relevance to yours because their circumstances, goals
and risk tolerances are as individual as yours.
o LET LOGIC BE YOUR GUIDE. Market volatility is a fact of life for
investors. Market declines can be painful, but historically they haven't
proved permanent. Your financial advisor can help you approach your
investment plan logically, not emotionally.
WHAT WE'RE DOING
Invesco Aim has worked on behalf of investors in both bull markets and bear markets. That is why we're committed to good
stewardship, good communication and sound investment management.
To be good stewards, we've established best practice risk-management and investment oversight processes, further enhancing our
compliance oversight and our transparency to our shareholders and our independent fund board.
To be good communicators, we've revamped our website to put Investment Perspectives front and center on the home page of
invescoaim.com and on your account balance page. Our chief investment officers, portfolio managers and I are eager to communicate
with you directly about your investments, market conditions and other topics that may be helpful to you.
To be good investment managers, we've focused on doing one thing well: managing your money. At Invesco Aim, managing your money
is all we do. We believe mutual funds should have well-defined, clearly articulated and repeatable investment strategies. Our funds
have stayed true to their investment strategies even during this current period of market volatility.
CONTACT US
If you have questions about this report or your account, please contact one of our client service representatives at 800 959 4246.
I also invite you to visit invescoaim.com, where you can check on your individual account, obtain long-term performance
information for your fund and read market commentaries from our investment professionals.
As always, I welcome your comments and questions. Please contact me at phil@invescoaim.com and let me know what's on your mind.
Thank you for investing with us. All of us at Invesco Aim look forward to serving you.
Sincerely,
/S/ PHILIP TAYLOR
Philip Taylor
Senior Managing Director, Invesco Ltd.
CEO, Invesco Aim
2 AIM GOLD & PRECIOUS METALS FUND
Dear Fellow Shareholders:
Since my last letter, continuing troubles in the global economy and financial markets have
negatively affected all investors. The new government promises to move quickly with a stimulus
[CROCKETT package, yet considerable anxiety remains about how, when and what kind of a recovery will occur.
PHOTO] However, mutual funds generally are more diversified than other investments; as shareholders we
invest not in a single security but in a portfolio of multiple securities. The benefits of
diversification have been reiterated by the stories of investors who "lost everything" because they
had too many of their assets in one place, whether that place was a single money manager or their
Bruce Crockett employer's stock. Mutual fund investors also have the opportunity to diversify further among
different types of funds that each deploy a different strategy and focus on different kinds of
securities. These include conservatively managed money market funds, which, relative to other
securities, continue to offer a more safe, liquid, and convenient way to invest short-term assets.
In addition to diversification, investing discipline is essential during challenging times such as these. Strategies such as
dollar cost averaging, where individuals invest a consistent amount at regular intervals, can help investors acquire more fund
shares when prices are low. Periodic rebalancing of asset allocation plans achieves the same effect. "Buy low, sell high" has long
been the mantra of investment success, but the advice is not always easy to follow because it requires the discipline to resist
prevailing trends. Of course, investment strategies, such as dollar cost averaging and portfolio rebalancing do not guarantee a
profit or eliminate the risk of loss. Investors should consider their ability to continue investing regardless of fluctuating
security prices.
A long-term view is also important, particularly for assets that are not needed right away. In the past, it has often proven
better to keep long-term assets invested through a downturn than to miss the beginning of the upward trend. To develop a diversified
and disciplined investing plan that is right for your individual goals, I encourage you to consult an experienced and trustworthy
investment professional who has the knowledge and the tools to help you establish and implement the plan, monitor its results and
adapt it to changing goals and circumstances.
Even when working with a personal financial advisor, investors should supplement the relationship with their own knowledge and
awareness of the investments they hold. Visit the Invesco Aim website at invescoaim.com regularly to find out what is happening in
your AIM funds and to read timely market commentary from Invesco Aim management, strategists and portfolio managers. The site's
"Education and Planning" section can also help you clarify basic investment concepts, learn how to choose a financial advisor,
evaluate different investment choices and make more informed investment decisions. Invesco Aim's redesigned public home page
recently received a Gold Award for its user-friendly navigation and graphics from The Mutual Funds Monitor Awards, sponsored by
Corporate Insight.
As always, your Board of Trustees and Invesco Aim are committed to putting your interests first by controlling costs, monitoring
investment performance and streamlining the investment management process during these difficult times. Your Board has already begun
the annual review and management contract renewal process with the continuing goal of making AIM funds one of the best and most
cost-effective ways for you to invest your hard-earned money.
While the investing climate may remain uncertain for a while, economies and markets are dynamic, and no stage is ever permanent.
Please feel free to contact me in writing with your questions or concerns. You can send an email to me at bruce@brucecrockett.com.
Best regards,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Trustees
3 AIM GOLD & PRECIOUS METALS FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
======================================================================================= o a company is adversely affected by a
geopolitical or economic event
PERFORMANCE SUMMARY
MARKET CONDITIONS AND YOUR FUND
Commodity prices and stocks of commodity companies declined sharply during the second
half of 2008 as the outlook for the global economy deteriorated. The magnitude of the Stock markets around the world were
decline in the materials sector during this period was likely exaggerated by hedge fund volatile over the past year. The chief
deleveraging. catalyst was the ongoing credit crisis
that began in late 2007 with unfortunate
Gold prices, in particular, were quite volatile during the fiscal year ended March consequences that included tightened
31, 2009, but ultimately ended essentially unchanged.(triangle) The Fund's focus on credit, increased unemployment and sharply
gold stocks caused it to outperform the broad market, as represented by the S&P 500 reduced consumer spending. Governments
Index.(square) Additionally, the Fund performed roughly in line with its style-specifc around the world responded with
index, the Philadelphia Gold & Silver Index.(square) expansionary monetary and fiscal policies.
Most major central banks have set interest
On January 23, 2009, Andrew Lees became the lead portfolio manager of AIM Gold & rates below 1%,(1) and government spending
Precious Metals Fund, replacing lead portfolio manager John Segner. initiatives are well under way.
Your Fund's long-term performance appears later in this report. Evidence of economic weakness abounded
in the United States. Real gross domestic
FUND VS. INDEXES product, a broad measure of economic
activity, contracted at an annual rate of
Total returns, 3/31/08 to 3/31/09, at net asset value (NAV). Performance shown does not 6.3% in the fourth quarter of 2008.(2)
include applicable contingent deferred sales charges (CDSC) or front-end sales charges, Inflation, as measured by the
which would have reduced performance. seasonally-adjusted Consumer Price Index,
was virtually nil following sharp declines
Class A Shares -23.51% in energy prices in the second half of
Class B Shares -24.22 2008.(3) Unemployment trended higher
Class C Shares -24.30 during the fiscal year and reached a
Class Y Shares* -23.48 seasonally adjusted rate of 8.5% in March
Investor Class Shares -23.61 2009.(3)
S&P 500 Index(square) (Broad Market Index) -38.06
Philadelphia Gold & Silver Index(square) (Price Only) (Style-Specifc Index) -23.91 Against this backdrop, all stock market
Lipper Gold Funds Index(square) (Peer Group Index) -28.47 sectors delivered double-digit losses for
the fiscal year.(4) Health care, consumer
(triangle) Bloomberg L.P.; (square) Lipper Inc. staples, telecommunication services and
utilities -- traditionally more defensive
* Share class incepted during the fiscal year. See page 7 for a detailed explanation sectors -- were among the better
of Fund performance. performing sectors of the S&P 500
======================================================================================= Index.(4) Financials, industrials and
materials were the worst performing
HOW WE INVEST The portfolio will typically include sectors.(4)
"core companies," which are major gold and
We invest in companies involved in the precious metals firms with proven The latest expansionary monetary
discovery, mining, processing and exchange production reserves, and "emerging effort, which the U.S. Federal Reserve
of gold and other precious metals. We companies" -- mid- to small-sized Board began in September 2007, lowered the
select stocks based on analysis of exploration companies we believe can make federal funds target rate to a range of
individual companies, focusing on significant precious metal discoveries. zero to 0.25%(5) in an effort to inject
companies we believe have the ability to: liquidity into weakening credit
We may sell a stock for any of the
o increase production capacity at a low following reasons: ==========================================
cost. Total Net Assets $302.1 million
o a better investment option becomes
o make major gold and precious metals available Total Number of Holdings* 35
discoveries on a global basis. ==========================================
o valuation becomes too high
o benefit from rising gold and precious
metal prices. o corporate management changes the
company's strategic direction to the
detriment of shareholders
========================================== ==========================================
PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS*
By industry
Gold Mining Shares 59.9% 1. Agnico-Eagle Mines Ltd. 5.0%
Precious Metals & Minerals 15.5 2. Yamana Gold Inc. 4.9
Diversified Metals & Minerals 7.4 3. Goldcorp, Inc. 4.8
Investment Companies - 4. Silver Wheaton Corp. 4.7
Exchange Traded Funds 4.3 5. Newmont Mining Corp. 4.6
Coal & Consumable Fuels 1.8 6. Randgold Resources Ltd.-ADR 4.4
Money Market Funds 7. Franco-Nevada Corp. 4.2
Plus Other Assets Less Liabilities 11.1 8. IAMGOLD Corp. 4.1
========================================== 9. Barrick Gold Corp. 4.0
10. Gold Fields Ltd.-ADR 3.6
==========================================
The Fund's holdings are subject to change, and there is no assurance that the Fund will
continue to hold any particular security.
* Excluding money market fund holdings.
4 AIM GOLD & PRECIOUS METALS FUND
markets. The value of the U.S. dollar, as GOLD and TECK COMINCO. Freeport McMoRan, ANDREW LEES
measured by the U.S. Dollar Index, rose although heavily exposed to copper, also Portfolio manager, is lead
dramatically relative to other major operates the lowest cost gold mine. We [LEES manager of AIM Gold &
currencies as the U.S. dollar was viewed reduced our exposure to Freeport McMoRan PHOTO] Precious Metals Fund. He
as a relative safe haven compared with during the fiscal year, but still believe began his investment career
other currencies during the fiscal in the company's long-term prospects. in 1994 and joined Invesco
year.(6) Aim in 2005. Mr. Lees earned a B.A. in
Changes in portfolio holdings are economics from the University of Western
Investors tend to view gold and gold typically the result of insights gleaned Ontario and an M.B.A. with concentrations
stocks as "stores of value" during periods from our bottom-up investment approach. in finance and accounting from McGill
of U.S. dollar weakness, rising inflation During the fiscal year, we purchased University.
and geopolitical or economic uncertainty. AURIZON MINES, ALAMOS GOLD, OSISKO MINING,
The price of gold was quite volatile ANDINA MINERALS and DETOUR GOLD, all of Assisted by the Gold & Precious Metals
during the fiscal year, reaching a high of which we believe are takeover candidates. Team
$1,006 per ounce in February 2009, but Merger and acquisition activity is a large
ending essentially unchanged for the part of the gold business cycle as senior
fiscal year at $919 per ounce.(6) gold producers tend to spend little on
exploration.
On an absolute basis, gold stocks and
gold bullion positively affected Fund We continued to view gold as a
performance during the fiscal year. potentially attractive investment, given
Alternatively, holdings in the precious current economic uncertainty.
metals and mineral industry and the Additionally, interest rates remained low,
diversified metals and mining industry providing support for gold. Although we
detracted from absolute Fund performance. were not overly concerned about inflation
during the fiscal year, we believed the
Relative to the Philadelphia Gold & U.S. government's spending initiatives may
Silver Index, our security selection and ultimately debase the value of the U.S.
underweight position in diversified metals dollar over the long term, which we
and mining industry stocks benefited Fund believed may lend support to gold prices.
performance. Additionally, cash and gold
bullion holdings, which the index lacks, As always, thank you for your continued
helped relative Fund performance during a investment in AIM Gold & Precious Metals
particularly volatile market. An Fund.
overweight position in precious metals and
minerals industry stocks had the greatest 1 FXStreet.com
negative impact on Fund performance 2 Bureau of Economic Analysis
relative to the index. 3 Bureau of Labor Statistics
4 Lipper, Inc.
Stocks of gold producers had the 5 U.S. Federal Reserve
greatest positive effect on Fund 6 Bloomberg L.P.
performance. Indeed, ELDORADO GOLD, a
relatively low-cost producer with The views and opinions expressed in
expanding operations in Turkey, China and management's discussion of Fund
Brazil, was one of the strongest performance are those of Invesco Aim
performing stocks and was the top Advisors, Inc. These views and opinions
contributor to Fund performance during the are subject to change at any time based on
fiscal year. factors such as market and economic
conditions. These views and opinions may
Additionally, our gold bullion not be relied upon as investment advice or
exchange-traded fund (ETF) holdings recommendations, or as an offer for a
produced positive results during the particular security. The information is
fiscal year, although they represented not a complete analysis of every aspect of
only a small portion of the Fund's assets. any market, country, industry, security or
Our prospectus limits us to a 10% the Fund. Statements of fact are from
investment in the underlying metal, and sources considered reliable, but Invesco
the advent of gold bullion ETFs created a Aim Advisors, Inc. makes no representation
more liquid and less expensive way to own or warranty as to their completeness or
the underlying metal. accuracy. Although historical performance
is no guarantee of future results, these
As a result of continued deterioration insights may help you understand our
in global copper and industrial metals investment management philosophy.
markets, detractors from performance
included FREEPORT MCMORAN COPPER & See important Fund and index disclosures
later in this report.
5 AIM GOLD & PRECIOUS METALS FUND
YOUR FUND'S LONG-TERM PERFORMANCE
Past performance cannot guarantee Class C shares. The performance of the taxes a shareholder would pay on Fund
comparable future results. Fund's other share classes will differ distributions or sale of Fund shares.
primarily due to different sales charge
The performance data shown in the first structures and class expenses and may be Both charts above are logarithmic
chart above is that of the Fund's Investor greater than or less than the performance charts, which present the fluctuations in
class shares. The performance of the of the Fund's Class C shares. The data the value of the Fund's share class and
Fund's other share classes will differ shown in the second chart above includes its indexes. We believe that a logarithmic
primarily due to different sales charge reinvested distributions, Fund expenses chart is more effective than other types
structures and class expenses and may be and management fees. Index results include of charts in illustrating changes in value
greater than or less than the performance reinvested dividends, but they do not during the early years shown in the chart.
of the Fund's Investor Class shares. The reflect sales charges. The vertical axis, the one that indicates
data shown in this chart includes the dollar value of an investment, is
reinvested distributions, Fund expenses Performance of an index of funds constructed with each segment representing
and management fees. Index results include reflects fund expenses and management fees; a percent change in the value of the
reinvested dividends. performance of a market index does not. investment. In both charts, each segment
Performance shown in the charts and table represents a doubling, or 100% change, in
The performance data shown in the does not reflect deduction of the value of the investment.
second chart above is that of the Fund's
6 AIM GOLD & PRECIOUS METALS FUND
AIM GOLD & PRECIOUS METALS FUND - INVESTOR CLASS SHARES
================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITHOUT SALES CHARGES
SINCE INCEPTION
Fund data from 1/19/84, index data from 1/31/84
AIM
GOLD & PRECIOUS
METALS FUND- PHILADELPHIA
INVESTOR CLASS GOLD & SILVER INDEX LIPPER
DATE SHARES S&P 500 INDEX(1) (PRICE ONLY)(1) GOLD FUNDS INDEX(1)
- ---- --------------- ---------------- ------------------- -------------------
1/19/84 $10000
1/84 10000 $ 10000 $10000 $10000
2/84 10075 9648 11412 11795
3/84 9475 9815 11435 11523
4/84 9250 9908 10423 11232
5/84 9275 9360 10021 11100
6/84 8525 9563 9122 10320
7/84 6324 9444 7314 8179
8/84 7199 10488 8357 9365
9/84 6837 10490 8722 8952
10/84 6212 10531 8075 8251
11/84 6415 10413 7796 8563
12/84 5517 10687 6797 7558
1/85 5466 11520 7477 7640
2/85 5264 11661 6988 7309
3/85 6567 11668 8346 8802
4/85 6314 11658 7729 8531
5/85 6289 12331 7653 8405
6/85 6074 12524 7469 8084
7/85 5959 12506 8289 7698
8/85 5846 12385 8164 7577
9/85 5580 12011 7480 7300
10/85 5181 12566 7326 6717
11/85 5701 13428 7569 7445
12/85 5272 14078 7281 6982
1/86 6194 14157 7985 8394
2/86 5974 15214 7153 8419
3/86 5883 16063 6628 7898
4/86 5519 15883 6054 7510
5/86 5117 16727 6063 6845
6/86 5286 17010 5579 6970
7/86 5234 16059 5756 6910
8/86 5949 17250 6492 8168
9/86 6910 15823 6929 9378
10/86 6763 16736 7001 8712
11/86 7122 17143 7107 9513
12/86 7308 16705 6815 9543
1/87 8120 18955 7677 10676
2/87 8972 19704 8353 11427
3/87 11581 20272 10194 14865
4/87 12327 20092 11589 16023
5/87 11235 20266 10682 14503
6/87 10743 21290 10214 14152
7/87 12740 22369 12328 16993
8/87 12341 23203 13182 16645
9/87 12820 22694 13702 16998
10/87 7593 17807 8649 12021
11/87 8800 16340 10109 13854
12/87 8474 17582 9805 13054
1/88 6820 18321 7954 10810
2/88 6698 19172 8668 10683
================================================================================
(1) Lipper Inc.
==================================================================================
[MOUNTAIN CHART]
3/88 7539 18580 8828 11860
4/88 7525 18786 8841 11623
5/88 7877 18946 9151 11806
6/88 7687 19815 9226 11576
7/88 7877 19739 9244 11650
8/88 7308 19070 8404 10996
9/88 6644 19882 8181 10288
10/88 6847 20435 8179 10733
11/88 6969 20143 8282 11059
12/88 6779 20494 7776 10603
1/89 7054 21994 8071 11061
2/89 7150 21447 9003 11350
3/89 6930 21947 8458 11329
4/89 6518 23085 7949 11050
5/89 6106 24016 7725 10482
6/89 6546 23881 8261 11154
7/89 6792 26035 8529 11498
8/89 6929 26542 9127 11794
9/89 7218 26434 9276 12142
10/89 7276 25821 9425 12221
11/89 8210 26345 10667 13837
12/89 8224 26977 10718 14153
1/90 8582 25167 11643 15036
2/90 8265 25491 10788 13706
3/90 7866 26166 10072 12950
4/90 6999 25514 8889 11636
5/90 7481 27996 9595 12318
6/90 6833 27808 9066 11508
7/90 7233 27719 9736 12332
8/90 6971 25216 9656 12133
9/90 6916 23991 9682 11902
10/90 5917 23890 8023 10510
11/90 5779 25431 7618 10226
12/90 6331 26139 8672 10718
1/91 5380 27274 7177 9520
2/91 5904 29222 7685 10384
3/91 5835 29929 7533 10181
4/91 5669 30000 7200 10166
5/91 5821 31290 7357 10626
6/91 6290 29858 8057 11201
7/91 6193 31248 7860 11267
8/91 5421 31986 6784 10130
9/91 5517 31451 7045 10373
10/91 5876 31873 7408 10992
11/91 6042 30592 7518 11221
12/91 5876 34085 7220 10653
1/92 6083 33450 7465 10890
2/92 5793 33883 7274 10440
3/92 5449 33225 6438 9972
4/92 5062 34200 6249 9533
5/92 5449 34367 6704 10151
6/92 5752 33856 7017 10336
7/92 6056 35238 7384 10483
8/92 5849 34518 7048 10018
9/92 5766 34924 7189 9681
10/92 5503 35043 6757 9022
11/92 5117 36233 5881 8361
12/92 5393 36678 6372 8618
1/93 5489 36984 6392 8629
2/93 5861 37488 6790 9400
3/93 6647 38279 7759 10685
4/93 7530 37353 8830 12140
5/93 8289 38350 9929 13853
6/93 8440 38462 10406 14148
7/93 9130 38307 11519 15651
8/93 8371 39757 10534 14026
9/93 7240 39453 9304 12702
==================================================================================
==================================================================================
[MOUNTAIN CHART]
10/93 8592 40268 11032 14403
11/93 8758 39884 10609 14257
12/93 9309 40366 11788 16117
1/94 9599 41738 11782 15601
2/94 9213 40605 11474 14765
3/94 9420 38838 11948 14766
4/94 8359 39336 10226 14388
5/94 8538 39979 10752 14571
6/94 7904 39001 10299 14441
7/94 7449 40280 9987 14969
8/94 7779 41928 10592 16014
9/94 8538 40904 11817 17463
10/94 7834 41821 10492 16643
11/94 6662 40300 9178 14648
12/94 6718 40897 9770 15155
1/95 5821 41957 8702 12565
2/95 6028 43590 9279 13084
3/95 6662 44874 10900 14287
4/95 7117 46195 10450 14365
5/95 7462 48038 10724 14273
6/95 7530 49152 10741 14437
7/95 7847 50781 10608 15102
8/95 7806 50908 10962 15213
9/95 7875 53055 11099 15292
10/95 7197 52866 9578 13537
11/95 7294 55184 10823 14297
12/95 7570 56247 10761 14563
1/96 9159 58159 12605 17344
2/96 10361 58700 12874 17723
3/96 11065 59265 12853 17780
4/96 11853 60138 12817 18154
5/96 13317 61686 13306 19304
6/96 10900 61922 11060 16567
7/96 10790 59187 11113 16224
8/96 11923 60438 11130 17126
9/96 11411 63836 10293 16237
10/96 11052 65596 10331 16074
11/96 10734 70550 10741 15544
12/96 10647 69153 10433 15250
1/97 10110 73471 9848 14382
2/97 11432 74047 10944 16212
3/97 9268 71011 9305 13941
4/97 8788 75246 8388 12985
5/97 8980 79847 9322 13482
6/97 8004 83396 8543 12283
7/97 7315 90030 8751 11800
8/97 7296 84990 8836 11852
9/97 7583 89642 9786 12416
10/97 6147 86652 7856 10378
11/97 4519 90660 6329 8180
12/97 4738 92216 6630 8549
1/98 4894 93235 6700 9045
2/98 4719 99955 6743 8769
3/98 5010 105070 7298 9278
4/98 5166 106146 7858 9925
5/98 4370 104324 6676 8458
6/98 3826 108558 6409 7566
7/98 3554 107411 5623 7109
8/98 2641 91893 4369 5462
9/98 3884 97784 6702 7870
10/98 3690 105726 6737 7753
11/98 3515 112131 6341 7494
12/98 3671 118588 5806 7455
1/99 3573 123546 5653 7282
2/99 3612 119706 5412 7101
3/99 3593 124495 5340 7136
4/99 4001 129316 6561 8163
==================================================================================
==================================================================================
[MOUNTAIN CHART]
5/99 3534 126265 5440 6989
6/99 3612 133254 5981 7275
7/99 3282 129111 5618 6905
8/99 3379 128472 6018 7155
9/99 4078 124954 7172 8736
10/99 3554 132858 6215 7873
11/99 3379 135558 5991 7657
12/99 3340 143531 6074 7782
1/00 3126 136321 5360 7013
2/00 3204 133743 5340 7002
3/00 3107 146819 5049 6613
4/00 3068 142403 4893 6258
5/00 3068 139484 5029 6339
6/00 3243 142919 5166 6693
7/00 3010 140687 4544 6229
8/00 3126 149420 4677 6640
9/00 2874 141534 4461 6190
10/00 2583 140933 3920 5640
11/00 2602 129831 4207 5884
12/00 2906 130468 4594 6432
1/01 2886 135094 4366 6424
2/01 2966 122783 4693 6688
3/01 2846 115009 4251 6077
4/01 3185 123940 4927 6977
5/01 3264 124771 5105 7299
6/01 3245 121735 4759 7347
7/01 3125 120537 4742 6956
8/01 3285 112998 5055 7351
9/01 3424 103874 5164 7592
10/01 3344 105856 4873 7433
11/01 3284 113974 4698 7436
12/01 3404 114973 4864 7799
1/02 3802 113296 5481 8681
2/02 4160 111111 5823 9558
3/02 4558 115290 6335 10482
4/02 4857 108303 6609 11111
5/02 5772 107508 7528 13171
6/02 5016 99853 6386 11560
7/02 4280 92071 5410 9583
8/02 4937 92674 6207 11129
9/02 4956 82612 6232 11219
10/02 4498 89876 5669 10284
11/02 4498 95160 5664 10301
12/02 5434 89573 6860 12535
1/03 5494 87231 6881 12656
2/03 5175 85920 6433 11887
3/03 4777 86752 5980 11012
4/03 4738 93894 5836 10980
5/03 5295 98837 6565 12237
6/03 5454 100099 7029 12600
7/03 5693 101865 7249 13301
8/03 6350 103848 8132 15206
9/03 6450 102748 8143 15748
10/03 7166 108558 8765 17623
11/03 8062 109512 9800 19107
12/03 8010 115251 9727 19350
1/04 7308 117366 8542 17540
2/04 7618 118997 8919 17881
3/04 7928 117202 9379 18951
4/04 6359 115364 7323 15001
5/04 6875 116944 8026 16131
6/04 6793 119217 7711 15633
7/04 6690 115272 7772 15350
8/04 7144 115734 8471 16353
9/04 7742 116988 9111 17874
10/04 7742 118775 9242 18228
11/04 8155 123579 9540 19213
==================================================================================
==================================================================================
[MOUNTAIN CHART]
12/04 7619 127783 8878 18158
1/05 7244 124669 8168 17207
2/05 7870 127291 8845 18547
3/05 7452 125039 8376 17573
4/05 6722 122669 7463 15897
5/05 6889 126568 7710 16121
6/05 7473 126750 8312 17470
7/05 7473 131461 8111 17475
8/05 7870 130263 8559 18285
9/05 8976 131317 10091 21195
10/05 8392 129127 9637 19822
11/05 9164 134006 10242 21837
12/05 10103 134054 11441 24228
1/06 11794 137603 13779 28782
2/06 10918 137976 11917 26893
3/06 11900 139693 12656 29555
4/06 13236 141567 14130 33127
5/06 12130 137498 12744 30266
6/06 11921 137680 12830 30086
7/06 11899 138529 12676 30100
8/06 12630 141820 13112 31116
9/06 11377 145472 11476 28304
10/06 12170 150210 12271 30416
11/06 13443 153062 13340 33408
12/06 12982 155209 12712 32691
1/07 13025 157554 12501 32485
2/07 13175 154482 12481 33122
3/07 13133 156206 12244 33442
4/07 13154 163123 12248 34058
5/07 13346 168810 12490 34231
6/07 13175 166007 12149 33768
7/07 13687 160867 13290 34627
8/07 13004 163274 12580 32647
9/07 15353 169374 15080 39535
10/07 17253 172068 16810 44465
11/07 15887 164872 15288 40131
12/07 15947 163730 15489 40698
1/08 17065 153910 16649 43498
2/08 18398 148915 17567 47222
3/08 16807 148271 15795 42984
4/08 16119 155490 15302 40585
5/08 17301 157503 16214 43324
6/08 18097 144238 17449 44088
7/08 16012 143025 15087 38808
8/08 14315 145095 13335 34311
9/08 12488 132181 11726 30078
10/08 8039 109984 7244 18635
11/08 9371 102089 9079 21925
12/08 11370 103166 11068 27434
1/09 11349 94480 11082 27496
2/09 11413 84453 10645 27417
3/09 12837 91837 12019 30746
==================================================================================
AIM GOLD & PRECIOUS METALS FUND - CLASS C SHARES
=======================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITH SALES CHARGES SINCE
INCEPTION
Index data from 1/31/00, Fund data from 2/14/00
AIM
GOLD & PRECIOUS
METALS FUND- PHILADELPHIA
CLASS C GOLD & SILVER INDEX LIPPER
DATE SHARES S&P 500 INDEX(1) (PRICE ONLY)(1) GOLD FUNDS INDEX(1)
- ---- --------------- ---------------- ------------------- -------------------
1/31/00 $10000 $10000 $10000
2/00 $ 9429 9811 9963 9985
3/00 9143 10770 9420 9430
4/00 9029 10446 9128 8924
5/00 9029 10232 9383 9040
6/00 9544 10484 9638 9545
7/00 8801 10320 8478 8883
8/00 9144 10961 8726 9469
9/00 8344 10382 8323 8827
10/00 7487 10338 7314 8042
11/00 7544 9524 7849 8391
12/00 9259 9571 8571 9173
1/01 9141 9910 8146 9161
2/01 9435 9007 8755 9537
3/01 8966 8437 7931 8667
4/01 10080 9092 9191 9950
5/01 10373 9153 9525 10408
6/01 10315 8930 8878 10477
7/01 9904 8842 8846 9919
8/01 10373 8289 9430 10483
9/01 10842 7620 9635 10826
10/01 10490 7765 9091 10600
11/01 10256 8361 8765 10603
12/01 10667 8434 9075 11121
1/02 11898 8311 10225 12379
2/02 13011 8151 10864 13630
3/02 14183 8457 11819 14947
4/02 15121 7945 12331 15845
5/02 17933 7886 14045 18781
6/02 15647 7325 11914 16484
7/02 13303 6754 10093 13665
8/02 15354 6798 11581 15870
9/02 15354 6060 11627 15998
10/02 13948 6593 10577 14665
11/02 13948 6981 10567 14690
12/02 16820 6571 12798 17876
1/03 16996 6399 12838 18048
2/03 16000 6303 12002 16952
3/03 14770 6364 11157 15704
4/03 14653 6888 10887 15658
5/03 16353 7250 12247 17450
6/03 16822 7343 13113 17968
7/03 17584 7472 13525 18967
8/03 19577 7618 15172 21685
9/03 19929 7537 15192 22457
10/03 22097 7963 16352 25131
11/03 24853 8033 18283 27246
12/03 24689 8454 18146 27593
1/04 22462 8610 15935 25012
2/04 23426 8729 16639 25498
3/04 24330 8597 17498 27024
=======================================================================================
1 Lipper Inc.
==================================================================================
[MOUNTAIN CHART]
4/04 19513 8463 13661 21392
5/04 21138 8579 14973 23003
6/04 20838 8745 14386 22292
7/04 20477 8456 14500 21889
8/04 21862 8490 15804 23320
9/04 23729 8582 16997 25488
10/04 23729 8713 17242 25993
11/04 24934 9065 17798 27398
12/04 23276 9374 16564 25894
1/05 22124 9145 15238 24538
2/05 24002 9338 16501 26448
3/05 22730 9172 15627 25059
4/05 20486 8999 13923 22669
5/05 21031 9285 14383 22989
6/05 22729 9298 15507 24912
7/05 22729 9644 15132 24920
8/05 23881 9556 15967 26075
9/05 27274 9633 18826 30224
10/05 25455 9472 17979 28266
11/05 27820 9830 19108 31139
12/05 30669 9834 21345 34549
1/06 35698 10094 25707 41044
2/06 33032 10121 22232 38350
3/06 36001 10247 23611 42146
4/06 40001 10385 26360 47239
5/06 36669 10086 23775 43160
6/06 36002 10100 23936 42903
7/06 35940 10162 23650 42923
8/06 38122 10403 24461 44372
9/06 34302 10671 21410 40362
10/06 36666 11019 22893 43374
11/06 40483 11228 24888 47640
12/06 39017 11386 23716 46618
1/07 39200 11558 23323 46324
2/07 39569 11332 23284 47232
3/07 39446 11459 22843 47688
4/07 39509 11966 22851 48567
5/07 40066 12383 23301 48814
6/07 39510 12178 22666 48153
7/07 40991 11801 24793 49379
8/07 38954 11977 23469 46555
9/07 45931 12425 28134 56377
10/07 51548 12622 31360 63408
11/07 47476 12094 28521 57227
12/07 47637 12011 28896 58035
1/08 50972 11290 31060 62028
2/08 54866 10924 32774 67339
3/08 50109 10877 29468 61296
4/08 48009 11406 28548 57874
5/08 51471 11554 30250 61780
6/08 53880 10581 32553 62870
7/08 47576 10492 28146 55340
8/08 42509 10644 24878 48927
9/08 37072 9696 21876 42892
10/08 23848 8068 13515 26574
11/08 27741 7489 16937 31266
12/08 33655 7568 20649 39122
1/09 33594 6931 20675 39210
2/09 33779 6195 19860 39097
3/09 37921 6737 22422 43844
==================================================================================
==========================================
AVERAGE ANNUAL TOTAL RETURNS THE NET ANNUAL FUND OPERATING EXPENSE
As of 3/31/09, including maximum RATIO SET FORTH IN THE MOST RECENT FUND
applicable sales charges PROSPECTUS AS OF THE DATE OF THIS REPORT
FOR CLASS A, CLASS B, CLASS C, CLASS Y AND
CLASS A SHARES INVESTOR CLASS SHARES WAS 1.38%, 2.13%,
Inception (3/28/02) 14.88% 2.13%, 1.13% AND 1.38%, RESPECTIVELY.(1)
5 Years 8.93 THE TOTAL ANNUAL FUND OPERATING EXPENSE
1 Year -27.69 RATIO SET FORTH IN THE MOST RECENT FUND
PROSPECTUS AS OF THE DATE OF THIS REPORT
CLASS B SHARES FOR CLASS A, CLASS B, CLASS C, CLASS Y AND
Inception (3/28/02) 15.18% INVESTOR CLASS SHARES WAS 1.39%, 2.14%,
5 Years 9.04 2.14%, 1.14% AND 1.39%, RESPECTIVELY. THE
1 Year -28.00 EXPENSE RATIOS PRESENTED ABOVE MAY VARY
FROM THE EXPENSE RATIOS PRESENTED IN OTHER
CLASS C SHARES SECTIONS OF THIS REPORT THAT ARE BASED ON
Inception (2/14/00) 15.73% EXPENSES INCURRED DURING THE PERIOD
5 Years 9.29 COVERED BY THIS REPORT.
1 Year -25.05
CLASS A SHARE PERFORMANCE REFECTS THE
CLASS Y SHARES MAXIMUM 5.50% SALES CHARGE, AND CLASS B
10 Years 13.60% AND CLASS C SHARE PERFORMANCE REFECTS THE
5 Years 10.16 APPLICABLE CONTINGENT DEFERRED SALES
1 Year -23.48 CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE
CDSC ON CLASS B SHARES DECLINES FROM 5%
INVESTOR CLASS SHARES BEGINNING AT THE TIME OF PURCHASE TO 0% AT
Inception (1/19/84) 1.00% THE BEGINNING OF THE SEVENTH YEAR. THE
10 Years 13.58 CDSC ON CLASS C SHARES IS 1% FOR THE FIRST
5 Years 10.12 YEAR AFTER PURCHASE. CLASS Y AND INVESTOR
1 Year -23.61 CLASS SHARES DO NOT HAVE A FRONT-END SALES
========================================== CHARGE OR A CDSC; THEREFORE, PERFORMANCE
IS AT NET ASSET VALUE.
CLASS Y SHARES' INCEPTION DATE IS OCTOBER
3, 2008; RETURNS SINCE THAT DATE ARE THE PERFORMANCE OF THE FUND'S SHARE
ACTUAL RETURNS. ALL OTHER RETURNS ARE CLASSES WILL DIFFER PRIMARILY DUE TO
BLENDED RETURNS OF ACTUAL CLASS Y SHARE DIFFERENT SALES CHARGE STRUCTURES AND
PERFORMANCE AND RESTATED INVESTOR CLASS CLASS EXPENSES.
SHARE PERFORMANCE (FOR PERIODS PRIOR TO
THE INCEPTION DATE OF CLASS Y SHARES) AT A REDEMPTION FEE OF 2% WILL BE IMPOSED
NET ASSET VALUE. THE RESTATED INVESTOR ON CERTAIN REDEMPTIONS OR EXCHANGES OUT OF
CLASS SHARE PERFORMANCE REFECTS THE RULE THE FUND WITHIN 31 DAYS OF PURCHASE.
12B-1 FEES APPLICABLE TO INVESTOR CLASS EXCEPTIONS TO THE REDEMPTION FEE ARE
SHARES AS WELL AS ANY FEE WAIVERS OR LISTED IN THE FUND'S PROSPECTUS.
EXPENSE REIMBURSEMENTS RECEIVED BY
INVESTOR CLASS SHARES. INVESTOR CLASS 1 Total annual operating expenses less
SHARES' INCEPTION DATE IS JANUARY 19, any contractual fee waivers and/or
1984. expense reimbursements by the advisor
in effect through at least June 30,
THE PERFORMANCE DATA QUOTED REPRESENT 2009. See current prospectus for more
PAST PERFORMANCE AND CANNOT GUARANTEE information.
COMPARABLE FUTURE RESULTS; CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE
VISIT INVESCOAIM.COM FOR THE MOST RECENT
MONTH-END PERFORMANCE. PERFORMANCE FIGURES
REFECT REINVESTED DISTRIBUTIONS, CHANGES
IN NET ASSET VALUE AND THE EFFECT OF THE
MAXIMUM SALES CHARGE UNLESS OTHERWISE
STATED. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL SHARES.
7 AIM GOLD & PRECIOUS METALS FUND
AIM GOLD & PRECIOUS METALS FUND'S INVESTMENT OBJECTIVE IS CAPITAL GROWTH.
o Unless otherwise stated, information presented in this report is as of March 31, 2009, and is based on total net assets.
o Unless otherwise noted, all data provided by Invesco Aim.
ABOUT SHARE CLASSES o The Fund's investments directly in gold o The U.S. DOLLAR INDEX measures the
bullion will earn no income return. performance of the U.S. dollar against
o Effective September 30, 2003, only Appreciation in the market price of a basket of currencies: the euro,
previously established qualified plans gold is the sole manner in which the Japanese yen, British pound sterling,
are eligible to purchase Class B shares Fund can realize gains on gold bullion. Canadian dollar, Swedish krona and
of any AIM fund. The Fund may have higher storage and Swiss franc.
custody costs in connection with its
o Class Y shares are available to only ownership of gold bullion. o The Fund is not managed to track the
certain investors. Please see the performance of any particular index,
prospectus for more information. o There is no guarantee that the including the indexes defined here, and
investment techniques and risk analyses consequently, the performance of the
o All Investor Class shares are closed to used by the Fund's portfolio managers Fund may deviate significantly from the
new investors. Contact your financial will produce the desired results. performance of the indexes.
advisor about purchasing our other
share classes. o The prices of securities held by the o A direct investment cannot be made in
Fund may decline in response to market an index. Unless otherwise indicated,
PRINCIPAL RISKS OF INVESTING IN THE FUND risks. index results include reinvested
dividends, and they do not reflect
o Since a large percentage of the Fund's o The Fund's investments are concentrated sales charges. Performance of an index
assets may be invested in securities of in a comparatively narrow segment of of funds reflects fund expenses;
a limited number of companies, each the economy. Consequently, the Fund may performance of a market index does not.
investment has a greater effect on the tend to be more volatile than other
Fund's overall performance, and any mutual funds, and the value of the OTHER INFORMATION
change in the value of those securities Fund's investments may tend to rise and
could significantly affect the value of fall more rapidly. o The returns shown in management's
your investment in the Fund. discussion of Fund performance are
ABOUT INDEXES USED IN THIS REPORT based on net asset values calculated
o Prices of equity securities change in for shareholder transactions. Generally
response to many factors including the o The S&P 500--REGISTERED TRADEMARK-- accepted accounting principles require
historical and prospective earnings of INDEX is a market adjustments to be made to the net
the issuer, the value of its assets, capitalization-weighted index covering assets of the Fund at period end for
general economic conditions, interest all major areas of the U.S. economy. It financial reporting purposes, and as
rates, investor perceptions and market is not the 500 largest companies, but such, the net asset values for
liquidity. rather the most widely held 500 shareholder transactions and the
companies chosen with respect to market returns based on those net asset values
o Foreign securities have additional size, liquidity, and their industry. may differ from the net asset values
risks, including exchange rate changes, and returns reported in the Financial
political and economic upheaval, the o The PHILADELPHIA GOLD & SILVER INDEX Highlights.
relative lack of information, (price-only) is a
relatively low market liquidity, and capitalization-weighted index on the o Industry classifications used in this
the potential lack of strict financial Philadelphia Stock Exchange that report are generally according to the
and accounting controls and standards. includes the leading companies involved Global Industry Classification
in the mining of gold and silver. Standard, which was developed by and is
o Fluctuations in the price of gold and the exclusive property and a service
precious metals often dramatically o The LIPPER GOLD FUNDS INDEX is an mark of MSCI Inc. and Standard &
affect the profitability of companies equally weighted representation of the Poor's.
in the gold and precious metals sector. largest funds in the Lipper Gold Funds
Changes in the political or economic Category. These funds invest primarily
climate for the two largest gold in shares of gold mines, gold-oriented
producers, South Africa and the former mining finance houses, gold coins or
Soviet Union, may have a direct impact bullion.
on the price of gold worldwide.
======================================================================================= ==========================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. Class A Shares IGDAX
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class B Shares IGDBX
======================================================================================= Class C Shares IGDCX
Class Y Shares IGDYX
Investor Class Shares FGLDX
==========================================
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
8 AIM GOLD & PRECIOUS METALS FUND
SCHEDULE OF INVESTMENTS
March 31, 2009
<Table>
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS & OTHER EQUITY
INTERESTS-88.90%
AUSTRALIA-5.97%
BHP Billiton Ltd.-ADR(a) 162,000 $ 7,225,200
- -------------------------------------------------------------------------------
Newcrest Mining Ltd. 475,000 10,805,769
===============================================================================
18,030,969
===============================================================================
CANADA-52.61%
Agnico-Eagle Mines Ltd. 264,000 15,026,880
- -------------------------------------------------------------------------------
Alamos Gold Inc.(b) 654,000 4,699,960
- -------------------------------------------------------------------------------
Andina Minerals Inc.(b) 2,000,000 2,617,593
- -------------------------------------------------------------------------------
Barrick Gold Corp. 370,000 11,995,400
- -------------------------------------------------------------------------------
Cameco Corp.(a) 310,000 5,322,700
- -------------------------------------------------------------------------------
Detour Gold Corp.(a)(b) 465,000 4,090,466
- -------------------------------------------------------------------------------
Eldorado Gold Corp.(b) 1,058,000 9,567,066
- -------------------------------------------------------------------------------
Franco-Nevada Corp. 582,000 12,663,013
- -------------------------------------------------------------------------------
Goldcorp, Inc.(a) 437,000 14,560,840
- -------------------------------------------------------------------------------
Harry Winston Diamond Corp.(b) 300,000 861,426
- -------------------------------------------------------------------------------
IAMGOLD Corp. 1,432,000 12,267,470
- -------------------------------------------------------------------------------
Kinross Gold Corp. 425,000 7,618,783
- -------------------------------------------------------------------------------
Minefinders Corp. Ltd.(a)(b) 737,000 5,674,900
- -------------------------------------------------------------------------------
Osisko Mining Corp.(a)(b) 1,082,000 4,934,957
- -------------------------------------------------------------------------------
Pan American Silver Corp.(b) 425,000 7,403,500
- -------------------------------------------------------------------------------
Seabridge Gold Inc.(a)(b) 400,000 9,060,000
- -------------------------------------------------------------------------------
Silver Wheaton Corp.(a)(b) 1,729,000 14,229,670
- -------------------------------------------------------------------------------
Teck Cominco Ltd.-Class B 300,000 1,660,982
- -------------------------------------------------------------------------------
Yamana Gold Inc. 1,586,000 14,670,500
===============================================================================
158,926,106
===============================================================================
PERU-3.10%
Compania de Minas Buenaventura S.A.-ADR 390,000 9,352,200
===============================================================================
SOUTH AFRICA-10.85%
Gold Fields Ltd.-ADR 953,000 10,807,020
- -------------------------------------------------------------------------------
Harmony Gold Mining Co. Ltd.-ADR(a)(b) 300,000 3,282,000
- -------------------------------------------------------------------------------
Impala Platinum Holdings Ltd. 320,000 5,367,584
- -------------------------------------------------------------------------------
Randgold Resources Ltd.-ADR(a) 245,000 13,315,750
===============================================================================
32,772,354
===============================================================================
UNITED KINGDOM-1.11%
Rio Tinto PLC 100,000 3,347,977
===============================================================================
UNITED STATES-15.26%
Aurizon Mines Ltd.(b) 1,109,000 4,990,500
- -------------------------------------------------------------------------------
Coeur d'Alene Mines Corp.(b) 2,215,000 2,082,100
- -------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc. 270,000 10,289,700
- -------------------------------------------------------------------------------
Hecla Mining Co.(a)(b) 500,000 1,000,000
- -------------------------------------------------------------------------------
iShares COMEX Gold Trust(a)(b) 57,000 5,152,230
- -------------------------------------------------------------------------------
Newmont Mining Corp.(a) 311,000 13,920,360
- -------------------------------------------------------------------------------
Solitario Exploration & Royalty Corp.(b) 767,000 906,504
- -------------------------------------------------------------------------------
SPDR Gold Trust(b) 86,000 7,764,080
===============================================================================
46,105,474
===============================================================================
Total Common Stocks & Other Equity Interests
(Cost $339,949,325) 268,535,080
===============================================================================
MONEY MARKET FUNDS-10.90%
Liquid Assets Portfolio-Institutional Class(c) 16,470,096 16,470,096
- -------------------------------------------------------------------------------
Premier Portfolio-Institutional Class(c) 16,470,096 16,470,096
===============================================================================
Total Money Market Funds (Cost $32,940,192) 32,940,192
===============================================================================
TOTAL INVESTMENTS (excluding investments purchased
with cash collateral from securities on
loan)-99.80% (Cost $372,889,517) 301,475,272
===============================================================================
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES ON LOAN
MONEY MARKET FUNDS-16.42%
Liquid Assets Portfolio-Institutional Class (Cost
$49,590,780)(c)(d) 49,590,780 49,590,780
===============================================================================
TOTAL INVESTMENTS-116.22% (Cost $422,480,297) 351,066,052
===============================================================================
OTHER ASSETS LESS LIABILITIES-(16.22)% (49,001,966)
===============================================================================
NET ASSETS-100.00% $302,064,086
_______________________________________________________________________________
===============================================================================
</Table>
Investment Abbreviations:
<Table>
ADR - American Depositary Receipt
</Table>
Notes to Schedule of Investments:
(a) All or a portion of this security was out on loan at March 31, 2009.
(b) Non-income producing security.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
(d) The security has been segregated to satisfy the commitment to return the
cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 1K.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
9 AIM GOLD & PRECIOUS METALS FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2009
<Table>
ASSETS:
Investments, at value (Cost $339,949,325)* $268,535,080
- --------------------------------------------------------------------------------
Investments in affiliated money market funds, at value and cost 82,530,972
================================================================================
Total investments (Cost $422,480,297) 351,066,052
================================================================================
Cash 13,050
- --------------------------------------------------------------------------------
Receivables for:
Investments sold 74,129
- --------------------------------------------------------------------------------
Fund shares sold 1,116,955
- --------------------------------------------------------------------------------
Dividends 112,792
- --------------------------------------------------------------------------------
Investment for trustee deferred compensation and retirement plans 13,067
- --------------------------------------------------------------------------------
Other assets 49,934
================================================================================
Total assets 352,445,979
________________________________________________________________________________
================================================================================
LIABILITIES:
Payables for:
Fund shares reacquired 405,251
- --------------------------------------------------------------------------------
Collateral upon return of securities loaned 49,590,780
- --------------------------------------------------------------------------------
Accrued fees to affiliates 265,722
- --------------------------------------------------------------------------------
Accrued other operating expenses 89,687
- --------------------------------------------------------------------------------
Trustee deferred compensation and retirement plans 30,453
================================================================================
Total liabilities 50,381,893
================================================================================
Net assets applicable to shares outstanding $302,064,086
________________________________________________________________________________
================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $376,361,793
- --------------------------------------------------------------------------------
Undistributed net investment income (loss) (1,074,343)
- --------------------------------------------------------------------------------
Undistributed net realized gain (loss) (1,809,561)
- --------------------------------------------------------------------------------
Unrealized appreciation (depreciation) (71,413,803)
================================================================================
$302,064,086
________________________________________________________________________________
================================================================================
NET ASSETS:
Class A $ 97,401,723
________________________________________________________________________________
================================================================================
Class B $ 31,583,590
________________________________________________________________________________
================================================================================
Class C $ 35,563,392
________________________________________________________________________________
================================================================================
Class Y $ 1,364,516
________________________________________________________________________________
================================================================================
Investor Class $136,150,865
________________________________________________________________________________
================================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES AUTHORIZED:
Class A 16,483,018
________________________________________________________________________________
================================================================================
Class B 5,469,276
________________________________________________________________________________
================================================================================
Class C 5,806,631
________________________________________________________________________________
================================================================================
Class Y 229,172
________________________________________________________________________________
================================================================================
Investor Class 22,906,631
________________________________________________________________________________
================================================================================
Class A:
Net asset value per share $ 5.91
- --------------------------------------------------------------------------------
Maximum offering price per share
(Net asset value of $5.91 divided by 94.50%) $ 6.25
________________________________________________________________________________
================================================================================
Class B:
Net asset value and offering price per share $ 5.77
________________________________________________________________________________
================================================================================
Class C:
Net asset value and offering price per share $ 6.12
________________________________________________________________________________
================================================================================
Class Y:
Net asset value and offering price per share $ 5.95
________________________________________________________________________________
================================================================================
Investor Class:
Net asset value and offering price per share $ 5.94
________________________________________________________________________________
================================================================================
</Table>
* At March 31, 2009, securities with an aggregate value of $48,168,962 were on
loan to brokers.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
10 AIM GOLD & PRECIOUS METALS FUND
STATEMENT OF OPERATIONS
For the year ended March 31, 2009
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $154,503) $ 2,383,341
- ------------------------------------------------------------------------------------------------
Dividends from affiliated money market funds (includes securities lending income
of $1,086,092) 1,424,096
================================================================================================
Total investment income 3,807,437
================================================================================================
EXPENSES:
Advisory fees 2,233,296
- ------------------------------------------------------------------------------------------------
Administrative services fees 103,337
- ------------------------------------------------------------------------------------------------
Custodian fees 42,944
- ------------------------------------------------------------------------------------------------
Distribution fees:
Class A 233,446
- ------------------------------------------------------------------------------------------------
Class B 322,373
- ------------------------------------------------------------------------------------------------
Class C 320,841
- ------------------------------------------------------------------------------------------------
Investor Class 349,307
- ------------------------------------------------------------------------------------------------
Transfer agent fees 933,190
- ------------------------------------------------------------------------------------------------
Trustees' and officers' fees and benefits 25,959
- ------------------------------------------------------------------------------------------------
Other 300,554
================================================================================================
Total expenses 4,865,247
================================================================================================
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (40,515)
================================================================================================
Net expenses 4,824,732
================================================================================================
Net investment income (loss) (1,017,295)
================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from:
Investment securities 26,521,397
- ------------------------------------------------------------------------------------------------
Foreign currencies (178,413)
================================================================================================
26,342,984
================================================================================================
Change in net unrealized appreciation (depreciation) of:
Investment securities (121,840,538)
- ------------------------------------------------------------------------------------------------
Foreign currencies 15,220
================================================================================================
(121,825,318)
================================================================================================
Net realized and unrealized gain (loss) (95,482,334)
================================================================================================
Net increase (decrease) in net assets resulting from operations $ (96,499,629)
________________________________________________________________________________________________
================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11 AIM GOLD & PRECIOUS METALS FUND
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2009 and 2008
<Table>
<Caption>
2009 2008
- ---------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $ (1,017,295) $ (1,835,612)
- ---------------------------------------------------------------------------------------------------------
Net realized gain 26,342,984 13,393,838
- ---------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) (121,825,318) 51,860,589
=========================================================================================================
Net increase (decrease) in net assets resulting from operations (96,499,629) 63,418,815
=========================================================================================================
Distributions to shareholders from net investment income:
Class A (372,546) (484,836)
- ---------------------------------------------------------------------------------------------------------
Class B (76,405) (24,584)
- ---------------------------------------------------------------------------------------------------------
Class C (73,494) (20,948)
- ---------------------------------------------------------------------------------------------------------
Class Y (3,230) --
- ---------------------------------------------------------------------------------------------------------
Investor Class (578,999) (1,017,005)
=========================================================================================================
Total distributions from net investment income (1,104,674) (1,547,373)
=========================================================================================================
Share transactions-net:
Class A 5,823,923 50,104,917
- ---------------------------------------------------------------------------------------------------------
Class B (843,741) 11,645,581
- ---------------------------------------------------------------------------------------------------------
Class C 4,746,051 14,871,636
- ---------------------------------------------------------------------------------------------------------
Class Y 1,210,419 --
- ---------------------------------------------------------------------------------------------------------
Investor Class (136,888) (2,048,147)
=========================================================================================================
Net increase in net assets resulting from share transactions 10,799,764 74,573,987
=========================================================================================================
Net increase (decrease) in net assets (86,804,539) 136,445,429
=========================================================================================================
NET ASSETS:
Beginning of year 388,868,625 252,423,196
=========================================================================================================
End of year (includes undistributed net investment income (loss) of
$(1,074,343) and $(460,870), respectively) $ 302,064,086 $388,868,625
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12 AIM GOLD & PRECIOUS METALS FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Gold & Precious Metals Fund (the "Fund") is a series portfolio of AIM Sector
Funds (the "Trust"). The Trust is a Delaware statutory trust registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of six separate portfolios, each
authorized to issue an unlimited number of shares of beneficial interest. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund. Matters affecting each portfolio or class will be voted on exclusively
by the shareholders of such portfolio or class.
The Fund's investment objective is capital growth.
The Fund currently consists of five different classes of shares: Class A,
Class B, Class C, Class Y and Investor Class. Investor Class shares of the Fund
are offered only to certain grandfathered investors. Class A shares are sold
with a front-end sales charge unless certain waiver criteria are met and under
certain circumstances load waiver shares may be subject to contingent deferred
sales charges ("CDSC"). Class B shares and Class C shares are sold with a CDSC.
Class Y and Investor Class shares are sold at net asset value. Generally, Class
B shares will automatically convert to Class A shares on or about the month-end
which is at least eight years after the date of purchase.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements.
A. SECURITY VALUATIONS -- Securities, including restricted securities, are
valued according to the following policy.
A security listed or traded on an exchange (except convertible bonds) is
valued at its last sales price or official closing price as of the close
of the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on
that day. Securities traded in the over-the-counter market are valued
based on prices furnished by independent pricing services or market
makers. When such securities are valued by an independent pricing service
they may be considered fair valued. Futures contracts are valued at the
final settlement price set by an exchange on which they are principally
traded. Listed options are valued at the mean between the last bid and the
ask prices from the exchange on which they are principally traded. Options
not listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last
sales price or official closing price as of the close of the customary
trading session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as institution-size trading in similar groups of
securities, developments related to specific securities, dividend rate,
yield, quality, type of issue, coupon rate, maturity, individual trading
characteristics and other market data. Short-term obligations, including
commercial paper, having 60 days or less to maturity are recorded at
amortized cost which approximates value. Debt securities are subject to
interest rate and credit risks. In addition, all debt securities involve
some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued
at the market quotations. Because trading hours for certain foreign
securities end before the close of the NYSE, closing market quotations may
become unreliable. If between the time trading ends on a particular
security and the close of the customary trading session on the NYSE,
events occur that are significant and may make the closing price
unreliable, the Fund may fair value the security. If the event is likely
to have affected the closing price of the security, the security will be
valued at fair value in good faith using procedures approved by the Board
of Trustees. Adjustments to closing prices to reflect fair value may also
be based on a screening process of an independent pricing service to
indicate the degree of certainty, based on historical data, that the
closing price in the principal market where a foreign security trades is
not the current value as of the close of the NYSE. Foreign securities
meeting the approved degree of certainty that the price is not reflective
of current value will be priced at the indication of fair value from the
independent pricing service. Multiple factors may be considered by the
independent pricing service in determining adjustments to reflect fair
value and may include information relating to sector indices, American
Depositary Receipts and domestic and foreign index futures. Foreign
securities may have additional risks including exchange rate changes,
potential for sharply devalued currencies and high inflation, political
and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be valued based upon quotes furnished by independent sources.
The last bid price may be used to value equity securities and Corporate
Loans. The mean between the last bid price and asked prices may be used to
value debit obligations other than Corporate Loans.
Securities for which market quotations are not readily available or are
unreliable are valued at fair value as determined in good faith by or
under the supervision of the Trust's officers following procedures
approved by the Board of Trustees. Issuer specific events, market trends,
bid/ask quotes of brokers and information providers and other market data
may be reviewed in the course of making a good faith determination of a
security's fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity. Because of the inherent uncertainties of valuation, the
values reflected in the financial statements may materially differ from
the value received upon actual sale of those investments.
13 AIM GOLD & PRECIOUS METALS FUND
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income is recorded on the accrual basis from settlement
date. Dividend income is recorded on the ex-dividend date.
The Fund may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
The Fund allocates income and realized and unrealized capital gains and
losses to a class based on the relative net assets of each class.
C. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, the investment
advisor may determine the country in which an issuer is located and/or
credit risk exposure based on various factors. These factors include the
laws of the country under which the issuer is organized, where the issuer
maintains a principal office, the country in which the issuer derives 50%
or more of its total revenues and the country that has the primary market
for the issuer's securities, as well as other criteria. Among the other
criteria that may be evaluated for making this determination are the
country in which the issuer maintains 50% or more of its assets, the type
of security, financial guarantees and enhancements, the nature of the
collateral and the sponsor organization. Country of issuer and/or credit
risk exposure has been determined to be the United States of America,
unless otherwise noted.
D. DISTRIBUTIONS -- Distributions from income and net realized capital gain,
if any, are generally paid annually and recorded on ex-dividend date. The
Fund may elect to treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements
of Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial
statements.
The Fund files tax returns in the U.S. Federal jurisdiction and certain
other jurisdictions. Generally the Fund is subject to examinations by such
taxing authorities for up to three years after the filing of the return
for the tax period.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
G. ACCOUNTING ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period including estimates and assumptions related to
taxation. Actual results could differ from those estimates by a
significant amount.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust is indemnified
against certain liabilities that may arise out of performance of their
duties to the Fund. Additionally, in the normal course of business, the
Fund enters into contracts, including the Fund's servicing agreements,
that contain a variety of indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown as this would involve future
claims that may be made against the Fund that have not yet occurred. The
risk of material loss as a result of such indemnification claims is
considered remote.
I. OTHER RISKS -- The Fund's investments are concentrated in a comparatively
narrow segment of the economy. Consequently, the Fund may tend to be more
volatile than other mutual funds, and the value of the Fund's investments
may tend to rise and fall more rapidly.
The Fund may invest a large percentage of assets in securities of a
limited number of companies, such that each investment may have a greater
effect on the Fund's overall performance, and any change in the value of
those securities could significantly affect the value of your investment
in the Fund.
Fluctuations in the price of gold and precious metals often dramatically
affect the profitability of companies in the gold and precious metals
sector. Changes in the political or economic climate for the two largest
gold producers, South Africa and the former Soviet Union, may have a
direct impact on the price of gold worldwide.
J. REDEMPTION FEES -- The Fund has a 2% redemption fee that is to be retained
by the Fund to offset transaction costs and other expenses associated with
short-term redemptions and exchanges. The fee, subject to certain
exceptions, is imposed on certain redemptions or exchanges of shares
within 31 days of purchase. The redemption fee is recorded as an increase
in shareholder capital and is allocated among the share classes based on
the relative net assets of each class.
K. SECURITIES LENDING -- The Fund may lend portfolio securities having a
market value up to one-third of the Fund's total assets. Such loans are
secured by collateral equal to no less than the market value of the loaned
securities determined daily by the securities lending provider. Such
collateral will be cash or debt securities issued or guaranteed by the
U.S. Government or any of its sponsored agencies. Cash collateral received
in connection with these loans is invested in short-term money market
instruments or affiliated money market funds and is shown as such on the
Schedule of Investments. It is the Fund's policy to obtain additional
collateral from or return excess collateral to the borrower by the end of
the next business day, following the valuation date of the securities
loaned. Therefore, the value of the collateral held may be temporarily
less than the value of the securities on loan. Lending securities entails
a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase
the collateral accordingly, and the borrower fails to return the
securities. Upon the failure of the borrower to return the securities,
collateral may be liquidated
14 AIM GOLD & PRECIOUS METALS FUND
and the securities may be purchased on the open market to replace the
loaned securities. The Fund could experience delays and costs in gaining
access to the collateral. The Fund bears the risk of any deficiency in the
amount of the collateral available for return to the borrower due to any
loss on the collateral invested. Dividends received on cash collateral
investments for securities lending transactions, which are net of
compensation to counterparties, is included in Dividends from affiliates
on the Statement of Operations. The aggregate value of securities out on
loan is shown as a footnote on the Statement of Assets and Liabilities, if
any.
L. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close
of the NYSE based on quotations posted by banks and major currency
dealers. Portfolio securities and other assets and liabilities denominated
in foreign currencies are translated into U.S. dollar amounts at date of
valuation. Purchases and sales of portfolio securities (net of foreign
taxes withheld on disposition) and income items denominated in foreign
currencies are translated into U.S. dollar amounts on the respective dates
of such transactions. The Fund does not separately account for the portion
of the results of operations resulting from changes in foreign exchange
rates on investments and the fluctuations arising from changes in market
prices of securities held. The combined results of changes in foreign
exchange rates and the fluctuation of market prices on investments (net of
estimated foreign tax withholding) are included with the net realized and
unrealized gain or loss from investments in the Statement of Operations.
Reported net realized foreign currency gains or losses arise from (i)
sales of foreign currencies, (ii) currency gains or losses realized
between the trade and settlement dates on securities transactions, and
(iii) the difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized
foreign currency gains and losses arise from changes in the fair values of
assets and liabilities, other than investments in securities at fiscal
period end, resulting from changes in exchange rates.
The Fund may invest in foreign securities which may be subject to
foreign taxes on income, gains on investments or currency repatriation, a
portion of which may be recoverable.
M. 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. Fluctuations in the value of these contracts are recorded as
unrealized appreciation (depreciation) until the contracts are closed.
When these contracts are closed, realized gains (losses) are recorded.
Realized and unrealized gains and losses on these contracts are included
in the Statement of Operations. The Fund could be exposed to risk, which
may be in excess of the amount reflected in the Statement of Assets and
Liabilities, if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with Invesco
Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the
investment advisory agreement, the Fund pays an advisory fee to the Advisor
based on the annual rate of the Fund's average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $350 million 0.75%
- -------------------------------------------------------------------
Next $350 million 0.65%
- -------------------------------------------------------------------
Next $1.3 billion 0.55%
- -------------------------------------------------------------------
Next $2 billion 0.45%
- -------------------------------------------------------------------
Next $2 billion 0.40%
- -------------------------------------------------------------------
Next $2 billion 0.375%
- -------------------------------------------------------------------
Over $8 billion 0.35%
___________________________________________________________________
===================================================================
</Table>
Through at least June 30, 2009, the Advisor has contractually agreed to waive
advisory fees to the extent necessary so that the advisory fees payable by the
Fund (based on the Fund's average daily net assets) do not exceed the annual
rate of:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $250 million 0.75%
- -------------------------------------------------------------------
Next $250 million 0.74%
- -------------------------------------------------------------------
Next $500 million 0.73%
- -------------------------------------------------------------------
Next $1.5 billion 0.72%
- -------------------------------------------------------------------
Next $2.5 billion 0.71%
- -------------------------------------------------------------------
Next $2.5 billion 0.70%
- -------------------------------------------------------------------
Next $2.5 billion 0.69%
- -------------------------------------------------------------------
Over $10 billion 0.68%
___________________________________________________________________
===================================================================
</Table>
Under the terms of a master sub-advisory agreement the Advisor and each of
Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited,
Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco
Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco
Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco
Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not
15 AIM GOLD & PRECIOUS METALS FUND
the Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated
Sub-Advisor(s) that provide discretionary investment management services to the
Fund based on the percentage of assets allocated to such Sub-Advisor(s).
The Advisor has contractually agreed, through at least June 30, 2009, to waive
the advisory fee payable by the Fund in an amount equal to 100% of the net
advisory fees the Advisor receives from the affiliated money market funds on
investments by the Fund of uninvested cash (excluding investments of cash
collateral from securities lending) in such affiliated money market funds.
For the year ended March 31, 2009, the Advisor waived advisory fees of
$25,070.
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") agreed
to reimburse expenses incurred by the Fund in connection with market timing
matters in the AIM Funds, which may include legal, audit, shareholder reporting,
communications and trustee expenses. These expenses along with the related
expense reimbursement are included in the Statement of Operations. For the year
ended March 31, 2009, Invesco reimbursed expenses of the Fund in the amount of
$1,720.
The Trust has entered into a master administrative services agreement with
Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain
administrative costs incurred in providing accounting services to the Fund. For
the year ended March 31, 2009, expenses incurred under the agreement are shown
in the Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with
Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has
agreed to pay IAIS a fee for providing transfer agency and shareholder services
to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the
course of providing such services. IAIS may make payments to intermediaries that
provide omnibus account services, sub-accounting services and/or networking
services. All fees payable by IAIS to intermediaries that provide omnibus
account services or sub-accounting are charged back to the Fund, subject to
certain limitations approved by the Trust's Board of Trustees. For the year
ended March 31, 2009, expenses incurred under the agreement are shown in the
Statement of Operations as transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Aim
Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class
B, Class C, Class Y and Investor Class shares of the Fund. The Trust has adopted
plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class
A, Class B, Class C and Investor Class shares (collectively the "Plans"). The
Fund, pursuant to the Plans, pays IADI compensation at the annual rate of 0.25%
of the Fund's average daily net assets of Class A shares, 1.00% of the average
daily net assets of Class B and Class C shares and 0.25% of the average daily
net assets of Investor Class shares. Of the Plan payments, up to 0.25% of the
average daily net assets of each class of shares may be paid to furnish
continuing personal shareholder services to customers who purchase and own
shares of such classes. Any amounts not paid as a service fee under the Plans
would constitute an asset-based sales charge. Rules of the Financial Industry
Regulatory Authority ("FINRA") impose a cap on the total sales charges,
including asset-based sales charges that may be paid by any class of shares of
the Fund. For the year ended March 31, 2009, expenses incurred under the Plans
are shown in the Statement of Operations as distribution fees.
Front-end sales commissions and CDSC (collectively the "sales charges") are
not recorded as expenses of the Fund. Front-end sales commissions are deducted
from proceeds from the sales of Fund shares prior to investment in Class A
shares of the Fund. CDSC are deducted from redemption proceeds prior to
remittance to the shareholder. During the year ended March 31, 2009, IADI
advised the Fund that IADI retained $102,872 in front-end sales commissions from
the sale of Class A shares and $4,930, $135,669 and $17,711 from Class A, Class
B and Class C shares, respectively, for CDSC imposed on redemptions by
shareholders.
Certain officers and trustees of the Trust are officers and directors of
Invesco Aim, IAIS and/or IADI.
NOTE 3--SUPPLEMENTAL INFORMATION
The Fund adopted the provisions of Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of
the Fund's fiscal year. SFAS 157 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation methods giving
the highest priority to readily available unadjusted quoted prices in an active
market for identical assets (Level 1) and the lowest priority to significant
unobservable inputs (Level 3) generally when market prices are not readily
available or are unreliable. Based on the valuation inputs, the securities or
other investments are tiered into one of three levels. Changes in valuation
methods may result in transfers in or out of an investment's assigned level:
Level 1 -- Prices are determined using quoted prices in an active market for
identical assets.
Level 2 -- Prices are determined using other significant observable inputs.
Observable inputs are inputs that other market participants may use in pricing
a security. These may include quoted prices for similar securities, interest
rates, prepayment speeds, credit risk and others.
Level 3 -- Prices are determined using significant unobservable inputs. In
situations where quoted prices or observable inputs are unavailable (for
example, when there is little or no market activity for an investment at the
end of the period), unobservable inputs may be used. Unobservable inputs
reflect the Fund's own assumptions about the factors market participants would
use in determining fair value of the securities or instruments and would be
based on the best available information.
Below is a summary of the tiered valuation input levels, as of the end of the
reporting period, March 31, 2009. The level assigned to the securities
valuations may not be an indication of the risk or liquidity associated with
investing in those securities. Because of the inherent uncertainties of
valuation, the values reflected in the financial statements may materially
differ from the value received upon actual sale of those investments.
<Table>
<Caption>
INVESTMENTS IN
INPUT LEVEL SECURITIES
- --------------------------------------
Level 1 $342,350,491
- --------------------------------------
Level 2 8,715,561
- --------------------------------------
Level 3 --
======================================
$351,066,052
______________________________________
======================================
</Table>
16 AIM GOLD & PRECIOUS METALS FUND
NOTE 4--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions and (ii) custodian credits which
result from periodic overnight cash balances at the custodian. For the year
ended March 31, 2009, the Fund received credits from these arrangements, which
resulted in the reduction of the Fund's total expenses of $13,725.
NOTE 5--TRUSTEES' AND OFFICERS' FEES AND BENEFITS
"Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officers' Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officers'
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended March 31, 2009, the Fund paid legal fees of $4,993 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 6--CASH BALANCES
The Fund is permitted to temporarily carry a negative or overdrawn balance in
its account with The State Street Bank and Trust Company, the custodian bank. To
compensate the custodian bank for such overdrafts, the overdrawn Fund may either
(i) leave funds as a compensating balance in the account so the custodian bank
can be compensated by earning the additional interest; or (ii) compensate by
paying the custodian bank at a rate agreed upon by the custodian bank and
Invesco Aim, not to exceed the contractually agreed upon rate.
NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED MARCH
31, 2009 AND 2008:
<Table>
<Caption>
2009 2008
- -------------------------------------------------------------------------------------------------------
Distributions paid from ordinary income $1,104,674 $1,547,373
_______________________________________________________________________________________________________
=======================================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
<Table>
<Caption>
2009
- ------------------------------------------------------------------------------------------------
Undistributed ordinary income $ 1,734,987
- ------------------------------------------------------------------------------------------------
Undistributed appreciation (depreciation) -- investments (74,496,773)
- ------------------------------------------------------------------------------------------------
Net undistributed appreciation -- other investments 442
- ------------------------------------------------------------------------------------------------
Temporary book/tax differences (33,676)
- ------------------------------------------------------------------------------------------------
Post-October loss deferrals (893,575)
- ------------------------------------------------------------------------------------------------
Capital loss carryforward (609,112)
- ------------------------------------------------------------------------------------------------
Shares of beneficial interest 376,361,793
================================================================================================
Total net assets $302,064,086
________________________________________________________________________________________________
================================================================================================
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation (depreciation) difference is attributable primarily to wash sales.
The temporary book/tax differences are a result of timing differences between
book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of the trustee deferral of compensation and
retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund utilized $25,736,967 of capital loss carryforward in the current
period to offset net realized capital gain for federal income tax purposes. The
Fund has a capital loss carryforward as of March 31, 2009 which expires as
follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------------------------
March 31, 2010 $609,112
_______________________________________________________________________________________________
===============================================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
17 AIM GOLD & PRECIOUS METALS FUND
NOTE 8--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended March 31, 2009 was $113,365,467 and $121,305,121,
respectively. Cost of investments on a tax basis includes the adjustments for
financial reporting purposes as of the most recently completed Federal income
tax reporting period-end.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $ 15,864,722
- ------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (90,361,495)
================================================================================================
Net unrealized appreciation (depreciation) of investment securities $(74,496,773)
________________________________________________________________________________________________
================================================================================================
Cost of investments for tax purposes is $425,562,825.
</Table>
NOTE 9--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of passive foreign
investment companies, foreign currency transactions exchange traded funds and
proxy costs, on March 31, 2009, undistributed net investment income (loss) was
increased by $1,508,496, undistributed net realized gain (loss) was decreased by
$1,499,592 and shares of beneficial interest decreased by $8,904. This
reclassification had no effect on the net assets of the Fund.
18 AIM GOLD & PRECIOUS METALS FUND
NOTE 10--SHARE INFORMATION
<Table>
<Caption>
SUMMARY OF SHARE ACTIVITY
- -------------------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------
2009(a) 2008
---------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 10,734,474 $ 66,134,463 11,476,276 $ 87,862,985
- -------------------------------------------------------------------------------------------------------------------------
Class B 2,697,569 16,256,748 2,811,006 21,216,411
- -------------------------------------------------------------------------------------------------------------------------
Class C 3,583,461 22,435,885 3,296,989 26,640,384
- -------------------------------------------------------------------------------------------------------------------------
Class Y(b) 256,843 1,323,207 -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class 8,725,762 53,390,818 7,039,354 52,476,392
=========================================================================================================================
Issued as reinvestment of dividends:
Class A 73,836 332,261 63,063 438,490
- -------------------------------------------------------------------------------------------------------------------------
Class B 14,700 64,682 2,964 20,597
- -------------------------------------------------------------------------------------------------------------------------
Class C 14,997 70,034 2,629 19,402
- -------------------------------------------------------------------------------------------------------------------------
Class Y 626 2,835 -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class 122,389 553,201 135,274 960,441
=========================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 447,699 2,864,267 248,859 1,797,850
- -------------------------------------------------------------------------------------------------------------------------
Class B (457,051) (2,864,267) (253,219) (1,797,850)
=========================================================================================================================
Reacquired:(c)
Class A(b) (10,571,755) (63,507,068) (5,598,670) (39,994,408)
- -------------------------------------------------------------------------------------------------------------------------
Class B (2,476,972) (14,300,904) (1,126,157) (7,793,577)
- -------------------------------------------------------------------------------------------------------------------------
Class C (2,842,888) (17,759,868) (1,566,445) (11,788,150)
- -------------------------------------------------------------------------------------------------------------------------
Class Y (28,297) (115,623) -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class(b) (9,185,199) (54,080,907) (7,836,101) (55,484,980)
=========================================================================================================================
Net increase in share activity 1,110,194 $ 10,799,764 8,695,822 $ 74,573,987
_________________________________________________________________________________________________________________________
=========================================================================================================================
</Table>
(a) There are entities that are record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate own 24% of the
outstanding shares of the Fund. IADI has an agreement with these entities
to sell Fund shares. The Fund, Invesco Aim and/or Invesco Aim affiliates
may make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, Invesco Aim and/or Invesco
Aim affiliates including but not limited to services such as securities
brokerage, distribution, third party record keeping and account servicing.
The Trust has no knowledge as to whether all or any portion of the shares
owned of record by these entities are also owned beneficially.
(b) Effective upon the commencement date of Class Y shares, October 3, 2008,
the following shares were converted from Class A and Investor Class into
Class Y shares of the Fund:
<Table>
<Caption>
CLASS SHARES AMOUNT
--------------------------------------------------------------------------------------------------
Class Y 136,499 $ 694,780
--------------------------------------------------------------------------------------------------
Class A (96,942) (490,527)
--------------------------------------------------------------------------------------------------
Investor Class (40,128) (204,253)
__________________________________________________________________________________________________
==================================================================================================
</Table>
(c) Net of redemption fees of $267,230 and $118,342 which were allocated among
the classes based on relative net assets of each class for the years ended
March 31, 2009 and 2008, respectively.
19 AIM GOLD & PRECIOUS METALS FUND
NOTE 11--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
NET GAINS
ON SECURITIES
NET ASSET NET (LOSSES) DIVIDENDS
VALUE, INVESTMENT (BOTH TOTAL FROM FROM NET NET ASSET NET ASSETS,
BEGINNING INCOME REALIZED AND INVESTMENT INVESTMENT VALUE, END TOTAL END OF PERIOD
OF PERIOD (LOSS) UNREALIZED) OPERATIONS INCOME OF PERIOD(a) RETURN(b) (000S OMITTED)
- --------------------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 $7.77 $(0.01)(d) $(1.82) $(1.83) $(0.03) $5.91 (23.51)% $ 97,402
Year ended 03/31/08 6.11 (0.02) 1.73 1.71 (0.05) 7.77 28.00 122,756
Year ended 03/31/07 5.67 (0.00)(d) 0.58 0.58 (0.14) 6.11 10.24 58,702
Year ended 03/31/06 3.55 (0.00)(d) 2.12 2.12 -- 5.67 59.72 41,200
Year ended 03/31/05 3.81 (0.03)(d) (0.20) (0.23) (0.03) 3.55 (5.89) 10,609
- --------------------------------------------------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 7.64 (0.06)(d) (1.80) (1.86) (0.01) 5.77 (24.22) 31,584
Year ended 03/31/08 6.01 (0.07) 1.71 1.64 (0.01) 7.64 27.23 43,462
Year ended 03/31/07 5.60 (0.05)(d) 0.58 0.53 (0.12) 6.01 9.45 25,599
Year ended 03/31/06 3.54 (0.04)(d) 2.10 2.06 -- 5.60 58.19 19,103
Year ended 03/31/05 3.82 (0.05)(d) (0.20) (0.25) (0.03) 3.54 (6.48) 8,593
- --------------------------------------------------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 8.11 (0.06)(d) (1.92) (1.98) (0.01) 6.12 (24.30) 35,563
Year ended 03/31/08 6.39 (0.07) 1.80 1.73 (0.01) 8.11 27.02 40,939
Year ended 03/31/07 5.94 (0.05)(d) 0.62 0.57 (0.12) 6.39 9.59 21,188
Year ended 03/31/06 3.75 (0.04)(d) 2.23 2.19 -- 5.94 58.40 14,758
Year ended 03/31/05 4.04 (0.05)(d) (0.22) (0.27) (0.02) 3.75 (6.58) 6,993
- --------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(f) 5.09 (0.00)(d) 0.89 0.89 (0.03) 5.95 17.56 1,365
- --------------------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 7.82 (0.01)(d) (1.84) (1.85) (0.03) 5.94 (23.61) 136,151
Year ended 03/31/08 6.15 (0.03) 1.75 1.72 (0.05) 7.82 27.98 181,711
Year ended 03/31/07 5.70 (0.00)(d) 0.59 0.59 (0.14) 6.15 10.36 146,934
Year ended 03/31/06 3.57 (0.00)(d) 2.13 2.13 -- 5.70 59.66 149,160
Year ended 03/31/05 3.84 (0.02)(d) (0.21) (0.23) (0.04) 3.57 (6.00) 100,838
________________________________________________________________________________________________________________________________
================================================================================================================================
<Caption>
RATIO OF RATIO OF
EXPENSES EXPENSES
TO AVERAGE TO AVERAGE NET RATIO OF NET
NET ASSETS ASSETS WITHOUT INVESTMENT
WITH FEE WAIVERS FEE WAIVERS INCOME (LOSS)
AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO
ABSORBED ABSORBED NET ASSETS TURNOVER(c)
- ----------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 1.46%(e) 1.47%(e) (0.18)%(e) 39%
Year ended 03/31/08 1.35 1.36 (0.48) 43
Year ended 03/31/07 1.41 1.41 (0.04) 85
Year ended 03/31/06 1.45 1.45 (0.10) 155
Year ended 03/31/05 1.69 1.71 (0.78) 51
- ----------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 2.21(e) 2.22(e) (0.93)(e) 39
Year ended 03/31/08 2.10 2.11 (1.23) 43
Year ended 03/31/07 2.16 2.16 (0.79) 85
Year ended 03/31/06 2.19 2.19 (0.84) 155
Year ended 03/31/05 2.34 2.36 (1.43) 51
- ----------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 2.21(e) 2.22(e) (0.93)(e) 39
Year ended 03/31/08 2.10 2.11 (1.23) 43
Year ended 03/31/07 2.16 2.16 (0.79) 85
Year ended 03/31/06 2.19 2.19 (0.84) 155
Year ended 03/31/05 2.34 2.36 (1.43) 51
- ----------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(f) 1.44(e)(g) 1.45(e)(g) (0.16)(e)(g) 39
- ----------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 1.46(e) 1.47(e) (0.18)(e) 39
Year ended 03/31/08 1.35 1.36 (0.48) 43
Year ended 03/31/07 1.41 1.41 (0.04) 85
Year ended 03/31/06 1.44 1.44 (0.09) 155
Year ended 03/31/05 1.59 1.61 (0.68) 51
________________________________________________________________________________________
========================================================================================
</Table>
(a) For the years ended March 31, 2009, 2008 and 2007, redemption fees were
added to shares of beneficial interest which were less than $0.01 per
share.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset value
for financial reporting purposes and the returns based upon those net asset
values may differ from the net asset value and returns for shareholder
transactions. Does not include sales charges and is not annualized for
periods less than one year, if applicable.
(c) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year, if applicable.
(d) Calculated using average shares outstanding.
(e) Ratios are based on average daily net assets (000's omitted) of $93,379,
$32,237, $32,084, $722 and $139,723 for Class A, Class B, Class C, Class Y
and Investor Class shares, respectively.
(f) Commencement date of October 3, 2008.
(g) Annualized.
20 AIM GOLD & PRECIOUS METALS FUND
NOTE 12--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On May 23, 2008, the Securities and Exchange Commission ("SEC") publicly posted
its final approval of the Distribution Plans ("Distribution Plans") for the
distribution of monies placed into two separate Fair Funds created pursuant to a
settlement reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"),
Invesco Aim Advisors, Inc. ("Invesco Aim") and Invesco Aim Distributors, Inc.
("IADI") and the SEC (the "Order"). One of the Fair Funds consists of $325
million, plus interest and any contributions by other settling parties, for
distribution to shareholders of certain mutual funds formerly advised by IFG who
may have been harmed by market timing and related activity. The second Fair Fund
consists of $50 million, plus interest and any contributions by other settling
parties, for distribution to shareholders of certain mutual funds advised by
Invesco Aim who may have been harmed by market timing and related activity. The
Distribution Plans provide for the distribution to all eligible investors to
compensate such investors for injury they may have suffered as a result of
market timing in the affected funds. The Distribution Plans include a provision
for any residual amounts in the Fair Funds to be distributed in the future to
the affected funds. Because the distribution of the Fair Funds has not yet
commenced, management of Invesco Aim and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"), the
parent company of IFG and Invesco Aim, has agreed to reimburse expenses incurred
by the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, Invesco Aim, IADI
and/or related entities and individuals alleging that the defendants permitted
improper market timing and related activity in the AIM Funds.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
negligence, breach of fiduciary duty and/or breach of contract. These lawsuits
seek remedies that include, depending on the lawsuit, damages, restitution,
injunctive relief, imposition of a constructive trust, removal of certain
directors and/or employees, various corrective measures under ERISA, rescission
of certain AIM Funds' advisory agreements and/or distribution plans and recovery
of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues were transferred to the United States District Court for the District of
Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court, plaintiffs in
these lawsuits consolidated their claims for pre-trial purposes into three
amended complaints against various Invesco Aim- and IFG-related parties: (i) a
Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of ERISA purportedly
brought on behalf of participants in the Invesco 401(k) plan. Based on orders
issued by the MDL Court, all claims asserted against the AIM Funds that have
been transferred to the MDL Court have been dismissed, although certain Funds
remain nominal defendants in the Consolidated Amended Fund Derivative Complaint.
On January 5, 2008, the parties reached an agreement in principle to settle both
the Consolidated Amended Class Action Complaint and Consolidated Amended Fund
Derivative Complaint, subject to the MDL Court approval. Individual class
members have the right to object. On December 15, 2008, the parties reached an
agreement in principle to settle the Amended Class Action Complaint for
Violations of ERISA, subject to the MDL Court approval. Individual class members
have the right to object. No payments are required under the settlement;
however, the parties agreed that certain limited changes to benefit plans and
participants' accounts would be made.
IFG, Invesco Aim, IADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, Invesco Aim and IADI have advised the Fund that they are providing
full cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, Invesco Aim, IADI and/or related entities and individuals in
the future.
Management of Invesco Aim and the Fund believe that the outcome of the Pending
Litigation and Regulatory Inquiries described above will have no material
adverse affect on the Fund or on the ability of Invesco Aim and IADI to provide
ongoing services to the Fund.
21 AIM GOLD & PRECIOUS METALS FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM Sector Funds
and Shareholders of AIM Gold & Precious Metals Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of AIM Gold & Precious Metals Fund
(one of the funds constituting AIM Sector Funds, hereafter referred to as the
"Fund") at March 31, 2009, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 2009, by
correspondence with the custodian and broker, provide a reasonable basis for our
opinion.
PRICEWATERHOUSECOOPERS LLP
May 15, 2009
Houston, Texas
22 AIM GOLD & PRECIOUS METALS FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. With
the exception of the actual ending account value and expenses of the Class Y
shares, the example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period October 1, 2008, through
March 31, 2009. The actual ending account and expenses of the Class Y shares in
the below example are based on an investment of $1,000 invested as of close of
business October 3, 2008 (commencement date) and held through March 31, 2009.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period (as of close of business
October 3, 2008 through March 31, 2009 for the Class Y shares). Because the
actual ending account value and expense information in the example is not based
upon a six month period for the Class Y shares, the ending account value and
expense information may not provide a meaningful comparison to mutual funds that
provide such information for a full six month period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/01/08) (03/31/09)(1) PERIOD(2) (03/31/09) PERIOD(2,3) RATIO
- ---------------------------------------------------------------------------------------------------
A $1,000.00 $1,030.10 $ 8.55 $1,016.50 $ 8.50 1.69%
- ---------------------------------------------------------------------------------------------------
B 1,000.00 1,024.70 12.32 1,012.76 12.24 2.44
- ---------------------------------------------------------------------------------------------------
C 1,000.00 1,023.30 12.31 1,012.76 12.24 2.44
- ---------------------------------------------------------------------------------------------------
Y 1,000.00 1,175.60 7.72 1,017.75 7.24 1.44
- ---------------------------------------------------------------------------------------------------
Investor 1,000.00 1,028.20 8.55 1,016.50 8.50 1.69
- ---------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period October 1, 2008, through March 31, 2009 (as of close of
business October 3, 2008, through March 31, 2009 for the Class Y shares),
after actual expenses and will differ from the hypothetical ending account
value which is based on the Fund's expense ratio and a hypothetical annual
return of 5% before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
182/365 to reflect the most recent fiscal half year. For the Class Y shares
actual expenses are equal to the annualized expense ratio indicated above
multiplied by the average account value over the period, multiplied by 180
(as of close of business October 3, 2008, through March 31, 2009)/365.
Because the Class Y shares have not been in existence for a full six month
period, the actual ending account value and expense information shown may
not provide a meaningful comparison to fund expense information of classes
that show such data for a full six month period and, because the actual
ending account value and expense information in the expense example covers a
short time period, return and expense data may not be indicative of return
and expense data for longer time periods.
(3) Hypothetical expenses are equal to the annualized expense ratio indicated
above multiplied by the average account value over the period, multiplied by
182/365 to reflect a one-half year period. The hypothetical ending account
value and expenses may be used to compare ongoing costs of investing in
Class Y shares of the Fund and other funds because such data is based on a
full six month period.
23 AIM GOLD & PRECIOUS METALS FUND
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year-end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to be
different, the maximum amount allowable for its fiscal year ended March 31,
2009:
<Table>
<Caption>
FEDERAL AND STATE INCOME TAX
----------------------------
Qualified Dividend Income* 100.00%
Corporate Dividends Received Deduction* 36.48%
</Table>
* The above percentages are based on ordinary income dividends paid to
shareholders during the Fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended June 30, 2008, September 30, 2008, December 31, 2008 and
March 31, 2009 were 74.93%, 75.63%, 75.01%, and 77.41%, respectively.
24 AIM GOLD & PRECIOUS METALS FUND
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM Sector Funds (the "Trust"), is 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 102
portfolios in the AIM Funds complex. The trustees serve for the life of the
Trust, subject to their earlier death, incapacitation, resignation, retirement
or removal as more specifically provided in the Trust's organizational
documents. Each officer serves for a one year term or until their successors are
elected and qualified. Column two below includes length of time served with
predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------------
Martin L. 2007 Executive Director, Chief Executive Officer and President, None
Flanagan(1) -- 1960 Invesco Ltd. (ultimate parent of Invesco Aim and a global
Trustee investment management firm); Chairman, Invesco Aim Advisors,
Inc. (registered investment advisor); Trustee, The AIM
Family of Funds--Registered Trademark--; Vice Chairman,
Investment Company Institute; and Member of Executive Board,
SMU Cox School of Business
Formerly: Director, Chairman, Chief Executive Officer and
President, IVZ Inc. (holding company); INVESCO Group
Services, Inc. (service provider); and Invesco North
American Holdings, Inc. (holding company); Director, Chief
Executive Officer and President, Invesco Holding Company
Limited (parent of Invesco Aim and a global investment
management firm); Chairman, Investment Company Institute;
President, Co-Chief Executive Officer, Co-President, Chief
Operating Officer and Chief Financial Officer, Franklin
Resources, Inc. (global investment management organization)
- --------------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None
Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and
Principal President, Invesco Trimark Dealer Inc. (formerly AIM Mutual
Executive Officer Fund Dealer Inc.) (registered broker dealer), Invesco Aim
Advisors, Inc., and 1371 Preferred Inc. (holding company);
Director, Chairman, Chief Executive Officer and President,
Invesco Aim Management Group, Inc. (financial services
holding company) and Invesco Aim Capital Management, Inc.
(registered investment advisor); Director and President,
INVESCO Funds Group, Inc. (registered investment advisor and
register transfer agent) and AIM GP Canada Inc. (general
partner for a limited partnership); Director, Invesco Aim
Distributors, Inc. (registered broker dealer); Director and
Chairman, Invesco Aim Investment Services, Inc. (registered
transfer agent) and INVESCO Distributors, Inc. (registered
broker dealer); Director, President and Chairman, INVESCO
Inc. (holding company) and Invesco Canada Holdings Inc.
(holding company); Chief Executive Officer, AIM Trimark
Corporate Class Inc. (corporate mutual fund company) and AIM
Trimark Canada Fund Inc. (corporate mutual fund company);
Director and Chief Executive Officer, Invesco Trimark
Ltd./Invesco Trimark Ltee (formerly AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services) (registered
investment advisor and registered transfer agent) and
Invesco Trimark Dealer Inc. (formerly AIM Mutual Fund Dealer
Inc.) (registered broker dealer); Trustee, President and
Principal Executive Officer of The AIM Family of Funds--
Registered Trademark-- (other than AIM Treasurer's Series
Trust and Short-Term Investments Trust); Trustee and
Executive Vice President, The AIM Family of Funds--
Registered Trademark-- (AIM Treasurer's Series Trust and
Short-Term Investments Trust only); and Manager, Invesco
PowerShares Capital Management LLC
Formerly: President, Invesco Trimark Dealer Inc.; Director
and President, AIM Trimark Corporate Class Inc. and AIM
Trimark Canada Fund Inc.; Director and President, Invesco
Trimark Ltd./Invesco Trimark Ltee (formerly AIM Funds
Management Inc. d/b/a INVESCO Enterprise Services); Senior
Managing Director, Invesco Holding Company Limited; Trustee
and Executive Vice President, Tax-Free Investments Trust;
Director and Chairman, Fund Management Company (registered
broker dealer); President and Principal Executive Officer,
The AIM Family of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term Investments Trust and
Tax-Free Investments Trust only); President, AIM Trimark
Global Fund Inc. and AIM Trimark Canada Fund Inc.; and
Director, Trimark Trust (federally regulated Canadian Trust
Company)
- --------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited
Trustee and Chair consulting company) (insurance company);
Captaris, Inc.
(unified messaging
provider); and
Investment Company
Institute
- --------------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 1983 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2003 Retired
Trustee
Formerly: Partner, law firm of Baker & McKenzie; and None
Director, Badgley Funds, Inc. (registered investment
company) (2 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Director, Van Gilder
Trustee firm) Insurance Company,
Board of Governors,
Western Golf
Association/Evans
Scholars Foundation
and Executive
Committee, United
States Golf
Association
- --------------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2003 Director of a number of public and private business None
Trustee corporations, including the Boss Group Ltd. (private
investment and management); Continental Energy Services, LLC
(oil and gas pipeline service); Reich & Tang Funds
(registered investment company); Annuity and Life Re
(Holdings), Ltd. (reinsurance company), and Homeowners of
America Holding Corporation/Homeowners of America Insurance
Company (property casualty company)
Formerly: Director, CompuDyne Corporation (provider of
product and services to the public security market);
Director, President and Chief Executive Officer, Volvo Group
North America, Inc.; Senior Vice President, AB Volvo;
Director of various public and private corporations
- --------------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff
Trustee (government affairs company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate
entertainment)
Formerly: Chief Executive Officer, Texana Timber LP
(sustainable forestry company); and Discovery Global
Education Fund (non-profit)
- --------------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich &
Trustee Tang Funds (16
portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 2003 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 1997 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired
Trustee
Formerly: Partner, Director, Mainstay VP Series Funds, Inc. None
(25 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan is considered an interested person of the Trust because he is
an officer of the advisor to the Trust, and an officer and a director of
Invesco Ltd., ultimate parent of the advisor to the Trust.
(2) Mr. Taylor is considered an interested person of the Trust because he is an
officer and a director of the advisor to, and a director of the principal
underwriter of, the Trust.
25 AIM GOLD & PRECIOUS METALS FUND
TRUSTEES AND OFFICERS--(CONTINUED)
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- --------------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family of N/A
Senior Vice President and Funds--Registered Trademark--
Senior Officer
Formerly: Director of Compliance and Assistant General Counsel,
ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General
Counsel and Director of Compliance, ALPS Mutual Funds, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General Counsel, N/A
Senior Vice President, Chief Invesco Aim Management Group, Inc., Invesco Aim Advisors, Inc.
Legal Officer and Secretary and Invesco Aim Capital Management, Inc.; Director, Senior Vice
President and Secretary, Invesco Aim Distributors, Inc.;
Director, Vice President and Secretary, Invesco Aim Investment
Services, Inc. and INVESCO Distributors, Inc.; Director and Vice
President, INVESCO Funds Group Inc.; Senior Vice President, Chief
Legal Officer and Secretary, The AIM Family of Funds--Registered
Trademark--; and Manager, Invesco PowerShares Capital Management
LLC
Formerly: Director, Vice President and Secretary, Fund Management
Company; Vice President, Invesco Aim Capital Management, Inc.;
Chief Operating Officer, Senior Vice President, General Counsel
and Secretary, Liberty Ridge Capital, Inc. (an investment
adviser); Vice President and Secretary, PBHG Funds (an investment
company); Vice President and Secretary, PBHG Insurance Series
Fund (an investment company); Chief Operating Officer, General
Counsel and Secretary, Old Mutual Investment Partners (a broker-
dealer); General Counsel and Secretary, Old Mutual Fund Services
(an administrator); General Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder servicing center); Executive
Vice President, General Counsel and Secretary, Old Mutual
Capital, Inc. (an investment adviser); and Vice President and
Secretary, Old Mutual Advisors Funds (an investment company)
- --------------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice President, The N/A
Vice President AIM Family of Funds--Registered Trademark--
Formerly: Senior Vice President, Invesco Aim Management Group,
Inc.; Senior Vice President and Chief Compliance Officer, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark--; Vice President and Chief Compliance Officer, Invesco
Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.;
Vice President, Invesco Aim Investment Services, Inc. and Fund
Management Company
- --------------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, Invesco N/A
Vice President Ltd.; Director and Secretary, Invesco Holding Company Limited,
and INVESCO Funds Group, Inc.; Director and Executive Vice
President, IVZ Inc., Invesco Group Services, Inc., Invesco North
American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.;
and Vice President, The AIM Family of Funds--Registered
Trademark--
Formerly: Secretary, IVZ, Inc., Invesco Group Services, Inc., and
Invesco North American Holdings, Inc.; Senior Managing Director
and Secretary, Invesco Holding Company Limited; Director, Senior
Vice President, Secretary and General Counsel, Invesco Aim
Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior
Vice President, Invesco Aim Distributors, Inc.; Director, General
Counsel and Vice President, Fund Management Company; Vice
President, Invesco Aim Capital Management, Inc., Invesco Aim
Investment Services, Inc., Invesco Group Services, Inc. and IVZ
Inc.; Senior Vice President, Chief Legal Officer and Secretary,
The AIM Family of Funds--Registered Trademark--; Director and
Vice President, INVESCO Distributors, Inc. and Chief Executive
Officer and President, INVESCO Funds Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Sheri Morris -- 1964 1999 Vice President, Treasurer and Principal Financial Officer, The N/A
Vice President, Treasurer AIM Family of Funds--Registered Trademark--; and Vice President,
and Principal Financial Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc.
Officer and Invesco Aim Private Asset Management Inc.
Formerly: Assistant Vice President and Assistant Treasurer, The
AIM Family of Funds--Registered Trademark-- and Assistant Vice
President, Invesco Aim Advisors, Inc., Invesco Aim Capital
Management, Inc. and Invesco Aim Private Asset Management, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash Management N/A
Vice President Group; Director of Cash Management and Senior Vice President,
Invesco Aim Advisors, Inc. and Invesco Aim Capital Management,
Inc; Executive Vice President, Invesco Aim Distributors, Inc.;
Senior Vice President, Invesco Aim Management Group, Inc.; Vice
President, The AIM Family of Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust and Short-Term Investments
Trust); and President and Principal Executive Officer, The AIM
Family of Funds--Registered Trademark-- (AIM Treasurer's Series
Trust and Short-Term Investments Trust only)
Formerly President and Principal Executive Officer, Tax-Free
Investments Trust; Director and President, Fund Management
Company; Chief Cash Management Officer and Managing Director,
Invesco Aim Capital Management, Inc.; and Vice President, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark-- (AIM Treasurer's Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust only)
- --------------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim Advisors, N/A
Anti-Money Laundering Inc., Invesco Aim Capital Management, Inc., Invesco Aim
Compliance Officer Distributors, Inc., Invesco Aim Investment Services, Inc.,
Invesco Aim Private Asset Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering Compliance Officer, Fund
Management Company; and Manager of the Fraud Prevention
Department, Invesco Aim Investment Services, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; Senior N/A
Chief Compliance Officer Vice President and Chief Compliance Officer, Invesco Aim
Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief
Compliance Officer, The AIM Family of Funds--Registered
Trademark--, Invesco Global Asset Management (N.A.), Inc.
(registered investment advisor), Invesco Institutional (N.A.),
Inc., (registered investment advisor), INVESCO Private Capital
Investments, Inc. (holding company), Invesco Private Capital,
Inc. (registered investment advisor) and Invesco Senior Secured
Management, Inc. (registered investment advisor); and Vice
President, Invesco Aim Distributors, Inc. and Invesco Aim
Investment Services, Inc.
Formerly: Vice President, Invesco Aim Capital Management, Inc.
and Fund Management Company; and Global Head of Product
Development, AIG-Global Investment Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
The Statement of Additional Information of the Trust includes additional
information about the Fund's Trustees and is available upon request, without
charge, by calling 1.800.959.4246.
Please refer to the Fund's prospectus for information on the Fund's sub-
advisors.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. PricewaterhouseCoopers LLP
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Stradley Ronon Stevens INDEPENDENT TRUSTEES Invesco Aim Investment Services, Inc. State Street Bank and Trust
& Young, LLP Kramer, Levin, Naftalis & P.O. Box 4739 Company
2600 One Commerce Square Frankel LLP Houston, TX 77210-4739 225 Franklin Street
Philadelphia, PA 19103 1177 Avenue of the Americas Boston, MA 02110-2801
New York, NY 10036-2714
26 AIM GOLD & PRECIOUS METALS FUND
[GO PAPERLESS
GRAPHIC]
====================================================================================================================================
GO PAPERLESS WITH EDELIVERY
Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all
about eeees:
o ENVIRONMENTALLY FRIENDLY. Go green by reducing the number of o EFFICIENT. Stop waiting for regular mail. Your documents
trees used to produce paper. will be sent via email as soon as they're available.
o ECONOMICAL. Help reduce your fund's printing and delivery o EASY. Download, save and print files using your home
expenses and put more capital back in your fund's returns. computer with a few clicks of your mouse.
This service is provided by Invesco Aim Investment Services, Inc.
====================================================================================================================================
FUND HOLDINGS AND PROXY VOTING INFORMATION
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund
files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is
available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your
Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC
website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C.
You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by
calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file
numbers for the Fund are 811-03826 and 002-85905.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities
is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website,
invescoaim. com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website,
sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2008, is
available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting
Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov.
If used after July 20, 2009, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for
the most recent quarter-end. Invesco Aim--SERVICE MARK-- is a service mark of Invesco Aim Management Group, Inc. Invesco Aim
Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset
Management, Inc. and Invesco PowerShares Capital Management LLC are the investment
advisors for the products and services represented by Invesco Aim; they each provide [INVESCO AIM LOGO]
investment advisory services to individual and institutional clients and do not sell -- SERVICE MARK --
securities. Please refer to each fund's prospectus for information on the fund's
subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the retail
mutual funds, exchange-traded funds and institutional money market funds and the
subdistributor for the STIC Global Funds represented by Invesco Aim. All entities are
indirect, wholly owned subsidiaries of Invesco Ltd.
It is anticipated that on or about the end of the fourth quarter of 2009, Invesco
Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset
Management, Inc. and Invesco Global Asset Management (N.A.), Inc. will be merged into
Invesco Institutional (N.A.), Inc., and the consolidated adviser firm will be renamed
Invesco Advisers, Inc. Additional information will be posted at invescoaim.com on or
about the end of the fourth quarter of 2009.
invescoaim.com I-GPM-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] AIM LEISURE FUND
- -- SERVICE MARK -- Annual Report to Shareholders o March 31, 2009
[MOUNTAIN GRAPHIC]
2 Letters to Shareholders
4 Performance Summary
4 Management Discussion
6 Long-Term Fund Performance
8 Supplemental Information
9 Schedule of Investments
11 Financial Statements
14 Notes to Financial Statements
20 Financial Highlights
22 Auditor's Report
23 Fund Expenses
24 Tax Information
25 Trustees and Officers
Dear Shareholders:
The past year was difficult to say the least for virtually all investors. Market indexes in the U.S. and around
the globe nosedived in 2008, and the vast majority of us have seen sharp declines in the value of our
[TAYLOR investments. As I write this letter, "market experts" remain divided on the outlook for the market. While some
PHOTO] argue the worst of the decline is over, others say we have farther to fall. There is widespread agreement,
however, that markets are likely to remain volatile for some time to come.
Philip Taylor We've all read about subprime lending, government bailouts and investment scandals -- but we know that as
individuals, we have little control over such matters. Rather, I'd like to discuss with you actions you may have
already taken, or can take now, that may benefit you going forward.
BOOMS AND BUSTS
Recent history should have reminded all of us that investor sentiment can be fickle. The technology-driven bull market of the late
1990s gave way to a sharp decline from 2000 to 2002 when the "tech bubble" burst. More recently, the 2003 to 2007 bull market,
driven largely by financial stocks and a housing boom, among other factors, gave way to the current market decline when the "housing
bubble" burst.
These market downturns hurt nearly all investors. But they were particularly painful for investors who, seeking high, short-term
returns, abandoned their long-term, diversified investment plans and decided to chase performance -- i.e., allocate a large portion
of their assets into the "hot" investments du jour. Many of those investors discovered they had unwittingly bought at the top of the
market, and they saw the value of their assets decline significantly as market leadership changed. History has shown that seeking
the highest short-term returns possible has often led to long-term disappointment.
This is why we believe investors should work with their financial advisors to devise a goal-based financial strategy -- a
long-term plan with a reasonable prospect of achieving predetermined financial goals in line with individual risk tolerance. Such a
strategy cannot guarantee a profit or protect against loss in a declining market, but it may help investors avoid emotion-driven,
short-term investment mistakes.
WHAT TO DO NOW
None of us can control the markets, but we can control our own reaction to the unsettling volatility we're currently experiencing.
Here are some steps that may help position you for whatever the market brings next:
o REVISIT YOUR GOALS. Work with your financial advisor to create specific, concrete investment goals consistent with your
risk tolerance. Scared by market volatility, many investors fled to cash in recent months. While that may be entirely
appropriate for investors approaching retirement, other investors may need the growth potential of equities to achieve
their long-term goals. Your financial advisor can suggest investments that match your goals and risk tolerance.
o RESIST LOOKING OVER THE FENCE. Every investor's needs, goals and risk tolerance are different. Your neighbor's,
co-worker's or relative's investments have no relevance to yours because their circumstances, goals and risk tolerances
are as individual as yours.
o LET LOGIC BE YOUR GUIDE. Market volatility is a fact of life for investors. Market declines can be painful, but
historically they haven't proved permanent. Your financial advisor can help you approach your investment plan logically,
not emotionally.
WHAT WE'RE DOING
Invesco Aim has worked on behalf of investors in both bull markets and bear markets. That is why we're committed to good
stewardship, good communication and sound investment management.
To be good stewards, we've established best practice risk-management and investment oversight processes, further enhancing our
compliance oversight and our transparency to our shareholders and our independent fund board.
To be good communicators, we've revamped our website to put Investment Perspectives front and center on the home page of
invescoaim.com and on your account balance page. Our chief investment officers, portfolio managers and I are eager to communicate
with you directly about your investments, market conditions and other topics that may be helpful to you.
To be good investment managers, we've focused on doing one thing well: managing your money. At Invesco Aim, managing your money
is all we do. We believe mutual funds should have well-defined, clearly articulated and repeatable investment strategies. Our funds
have stayed true to their investment strategies even during this current period of market volatility.
CONTACT US
If you have questions about this report or your account, please contact one of our client service representatives at 800 959 4246.
I also invite you to visit invescoaim.com, where you can check on your individual account, obtain long-term performance
information for your fund and read market commentaries from our investment professionals.
As always, I welcome your comments and questions. Please contact me at phil@invescoaim.com and let me know what's on your mind.
Thank you for investing with us. All of us at Invesco Aim look forward to serving you.
Sincerely,
/s/ Philip Taylor
Philip Taylor
Senior Managing Director, Invesco Ltd.
CEO, Invesco Aim
2 AIM LEISURE FUND
Dear Fellow Shareholders:
Since my last letter, continuing troubles in the global economy and financial markets have negatively affected
all investors. The new government promises to move quickly with a stimulus package, yet considerable anxiety
[CROCKETT remains about how, when and what kind of a recovery will occur. However, mutual funds generally are more
PHOTO] diversified than other investments; as shareholders we invest not in a single security but in a portfolio of
multiple securities. The benefits of diversification have been reiterated by the stories of investors who "lost
everything" because they had too many of their assets in one place, whether that place was a single money
Bruce Crockett manager or their employer's stock. Mutual fund investors also have the opportunity to diversify further among
different types of funds that each deploy a different strategy and focus on different kinds of securities. These
include conservatively managed money market funds, which, relative to other securities, continue to offer a more
safe, liquid, and convenient way to invest short-term assets.
In addition to diversification, investing discipline is essential during challenging times such as these. Strategies such as
dollar cost averaging, where individuals invest a consistent amount at regular intervals, can help investors acquire more fund
shares when prices are low. Periodic rebalancing of asset allocation plans achieves the same effect. "Buy low, sell high" has long
been the mantra of investment success, but the advice is not always easy to follow because it requires the discipline to resist
prevailing trends. Of course, investment strategies, such as dollar cost averaging and portfolio rebalancing do not guarantee a
profit or eliminate the risk of loss. Investors should consider their ability to continue investing regardless of fluctuating
security prices.
A long-term view is also important, particularly for assets that are not needed right away. In the past, it has often proven
better to keep long-term assets invested through a downturn than to miss the beginning of the upward trend. To develop a diversified
and disciplined investing plan that is right for your individual goals, I encourage you to consult an experienced and trustworthy
investment professional who has the knowledge and the tools to help you establish and implement the plan, monitor its results and
adapt it to changing goals and circumstances.
Even when working with a personal financial advisor, investors should supplement the relationship with their own knowledge and
awareness of the investments they hold. Visit the Invesco Aim website at invescoaim.com regularly to find out what is happening in
your AIM funds and to read timely market commentary from Invesco Aim management, strategists and portfolio managers. The site's
"Education and Planning" section can also help you clarify basic investment concepts, learn how to choose a financial advisor,
evaluate different investment choices and make more informed investment decisions. Invesco Aim's redesigned public home page
recently received a Gold Award for its user-friendly navigation and graphics from The Mutual Funds Monitor Awards, sponsored by
Corporate Insight.
As always, your Board of Trustees and Invesco Aim are committed to putting your interests first by controlling costs, monitoring
investment performance and streamlining the investment management process during these difficult times. Your Board has already begun
the annual review and management contract renewal process with the continuing goal of making AIM funds one of the best and most
cost-effective ways for you to invest your hard-earned money.
While the investing climate may remain uncertain for a while, economies and markets are dynamic, and no stage is ever permanent.
Please feel free to contact me in writing with your questions or concerns. You can send an email to me at bruce@brucecrockett.com.
Best regards,
/s/ Bruce L. Crockett
Bruce L. Crockett
Independent Chair
AIM Funds Board of Trustees
3 AIM LEISURE FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
======================================================================================= o Attractive revenue growth profile
PERFORMANCE SUMMARY
o Strong free cash flow generation
On January 23, 2009, Juan Hartsfield and Jonathan Mueller became the lead manager and
manager, respectively, of AIM Leisure Fund, replacing lead portfolio manager Mark o Returns on invested capital in excess
Greenberg. of weighted-average cost of capital
Consumer discretionary equities were negatively affected by credit contraction and o Operating in low capital intensity
reduced consumer spending during the reporting period. As a result, AIM Leisure Fund businesses
underperformed the broad market, as measured by the S&P 500 Index, for the fiscal year
ended March 31, 2009. The Fund's performance was most significantly affected by o Lead by management teams that are
holdings in the movies and entertainment industry and the hotels, resorts and cruise good stewards of capital
lines industry.
Rigorous fundamental analysis is used
Your Fund's long-term performance can be found later in this report. to build detailed financial models to
review historical performance and forecast
FUND VS. INDEXES growth over the next two to three years.
Using internally generated estimates, we
Total returns, 3/31/08 to 3/31/09, at net asset value (NAV). Performance shown does not establish valuation targets and seek to
include applicable contingent deferred sales charges (CDSC) or front-end sales charges, invest in companies with at least 25%
which would have reduced performance. upside potential over our typical holding
period (18 to 24 months).
Class A Shares -42.67%
Class B Shares -43.08 Macroeconomic and industry trends are
Class C Shares -43.09 taken into consideration when constructing
Class R Shares -42.79 the portfolio of approximately 50 stocks.
Class Y Shares* -42.57 This, along with sub-sector
Investor Class Shares -42.65 diversification, helps to manage portfolio
S&P 500 Index(triangle) (Broad Market/Style-Specific Index) -38.06 risk.
Lipper Consumer Services Funds Category Average(triangle) (Peer Group) -35.86
We consider selling or trimming a
(triangle)Lipper Inc. stock when:
* Share class incepted during the fiscal year. See page 7 for a detailed explanation of o Price target is reached.
Fund performance.
======================================================================================= o There is a change in the company's
fundamental business prospects.
HOW WE INVEST For the first 10 months of the
reporting period and under the former o A more attractive opportunity is
We focus on companies that profit from investment manager, the investment process identified.
consumer spending on leisure activities -- focused on the following factors:
products or services purchased with MARKET CONDITIONS AND YOUR FUND
consumers' discretionary dollars. The Fund o Attractive valuation relative to
emphasizes companies in industries such as estimated fair value Stock markets around the world were
cable television, satellite programming, extremely volatile over the past year. The
publishers, cruise lines, advertising, o Potential to capitalize on all chief catalyst was the ongoing credit
hotels, casinos, electronic game and toy identified themes crisis that began in late 2007 with
manufacturers, restaurants, retailers and unfortunate consequences that included
entertainment companies. We use a top-down o Improving industry or company tightened credit, increased unemployment
portfolio construction approach to manage dynamics and sharply reduced consumer spending.
risk along with a research oriented Governments around the world responded in
bottom-up investment approach focusing on o Identifiable competitive advantage kind with dual expansionary monetary and
company fundamentals and growth prospects fiscal policies. Most major central banks
to add alpha (excess returns). o A management team that fosters set interest rates below 1% and government
innovation spending initiatives are well under
way.(1)
The investment process under the new
management team seeks to identify In the U.S., Congress passed several
attractively valued leisure-related pieces of legislation designed to
companies exhibiting the following stimulate economic growth and resuscitate
characteristics: ailing banks. The measures, while
controversial, were deemed necessary to
========================================== ========================================== mitigate the crisis which has had
PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* significant effects on the economy. In the
By sector fourth quarter of 2008, real gross
domestic product declined at an annualized
Consumer Discretionary 72.2% rate of 6.3%, driven by a significant
Consumer Staples 18.0 1. Comcast Corp. 4.8% decrease in durable goods consumption and
Information Technology 4.0 2. Walt Disney Co. (The) 4.1 investments.(2) Inflation, as measured by
Financials 2.1 3. Omnicom Group Inc. 4.0 the seasonally-adjusted Consumer Price
Money Market Funds 4. PepsiCo, Inc. 3.4 Index, virtually ground to a halt
Plus Other Assets Less Liabilities 3.7 5. Best Buy Co., Inc. 3.4 following sharp declines in energy prices
========================================== 6. McDonald's Corp. 3.2 towards the second half of 2008.(3)
========================================== 7. Cablevision Systems Corp. 2.9 However, unemployment trended higher
Total Net Assets $285.5 million 8. Google Inc. 2.8 during the fiscal year and
9. PetSmart, Inc. 2.8
Total Number of Holdings* 53 10. Diageo PLC 2.7
========================================== ==========================================
The Fund's holdings are subject to change, and there is no assurance that the Fund will
continue to hold any particular security
* Excluding money market fund holdings.
4 AIM LEISURE FUND
ultimately reached a seasonally-adjusted Price-point general merchandise JUAN HARTSFIELD
rate of 8.5% by the end of March.(3) stores also did well in this climate; thus Chartered Financial Analyst,
FAMILY DOLLAR STORES was also among our portfolio manager, is lead
Against this backdrop, all stock top contributors this fiscal year. We [HARTSFIELD manager of AIM Leisure Fund.
market sectors delivered double-digit added Family Dollar when we took over PHOTO] Mr. Hartsfield began his
losses for the fiscal year ended March 31, management of the Fund. We believed investment career in 2000 as
2009.(4) The traditionally more defensive consumers would be driven to the stores an equity analyst and then
sectors of health care, consumer staples, which generally offer a large mix of later became a portfolio manager. He
telecommunication services and utilities consumable products at an attractive price joined Invesco Aim in 2004. Mr. Hartsfield
were among the better performing sectors to value. Additionally, we believed Family earned a B.S. in petroleum engineering
of the S&P 500 Index.(4) Conversely, Dollar has the ability to improve margins from The University of Texas at Austin and
financial services, industrials and by implementing several internal an M.B.A. from the University of Michigan.
materials were the worst performing initiatives such as installing systems to
sectors.(4) accept credit cards, optimizing pricing JONATHAN MUELLER
and reducing inventory shrinkage. Chartered Financial Analyst,
As for the Fund itself, most [MUELLER portfolio manager, is
sub-sectors detracted from absolute At the close of the fiscal year, we PHOTO] manager of AIM Leisure Fund.
performance during the fiscal year. The began to see signs of stabilization in Mr. Mueller served as a
Fund was most negatively affected by advertising rates, retail sales and senior equity analyst before
holdings within: automobile sales in the U.S. We believed being promoted to portfolio manager in
three major themes would affect consumer 2009. He joined Invesco Aim in 2001. Mr.
o Movies and entertainment discretionary stocks in the near term. Mueller earned a B.B.A. in accounting from
Consumers are likely to purchase small Texas Christian University and an M.B.A.
o Hotels, resorts and cruise lines ticket items over larger ticket items; in finance from The University of Texas at
consumers will seek to purchase products Austin. He is a Certified Public
o Cable and satellite which offer the most attractive price to Accountant.
value relationship as opposed to simply
Conversely, holdings in computer and looking for the lowest price; and lastly, Assisted by the Leisure Team
electronics retail, department stores and luxury purchases will lag general
restaurants contributed positively to discretionary purchases due to the
fiscal year Fund performance. negative wealth effect from stock market
and home value losses.
Consumer spending continued to weaken
as the global economic outlook As always, we thank you for your
deteriorated during the fiscal year. As a continued investment in AIM Leisure Fund.
result, the Fund's media stocks were among
the top detractors from performance. 1 FXstreet.com
OMNICOM, a diversified advertising, 2 Bureau of Economic Analysis
marketing and communications company, 3 Bureau of Labor Statistics
suffered as forecasters called for sharp 4 Lipper Inc.
declines in advertising and marketing
spending. NEWS CORP., a diversified media The views and opinions expressed in
company with resources in filmed management's discussion of Fund
entertainment, the Internet, television performance are those of Invesco Aim
and newspapers, also detracted Advisors, Inc. These views and opinions
significantly from Fund performance. Both are subject to change at any time based on
Omnicom and News Corp. are long-time Fund factors such as market and economic
holdings. Although we significantly conditions. These views and opinions may
trimmed exposure to the two companies, the not be relied upon as investment advice or
Fund continued to hold these stocks at the recommendations, or as an offer for a
fiscal year-end. particular security. The information is
not a complete analysis of every aspect of
ANHEUSER-BUSCH, the top contributor any market, country, industry, security or
to Fund performance, received an the Fund. Statements of fact are from
unsolicited offer from Belgian brewer sources considered reliable, but Invesco
INBEV and Brazilian brewer AMBEV (which Aim Advisors, Inc. makes no representation
were also Fund holdings) during the fiscal or warranty as to their completeness or
year. We believed the merger, which closed accuracy. Although historical performance
in November 2008, would accelerate cost is no guarantee of future results, these
savings at InBev and AmBev and leverage insights may help you understand our
the Anheuser-Busch portfolio through their investment management philosophy.
international distribution network.
See important Fund and index disclosures
Restaurants, in general, performed later in this report.
well relative to the broad market for the
fiscal year. In fact, DARDEN RESTAURANTS,
one of the largest casual dining companies
with chains such as Olive Garden, Red
Lobster and LongHorn Steakhouse, was
another top contributor to Fund
performance. Darden generated
better-than-expected earnings driven by a
stabilization of sales coupled with more
favorable costs and labor productivity.
5 AIM LEISURE FUND
YOUR FUND'S LONG-TERM PERFORMANCE
Past performance cannot guarantee Class C shares. The performance of the a shareholder would pay on Fund
comparable future results. Fund's other share classes will differ distributions or sale of Fund shares.
primarily due to different sales charge
The performance data shown in the structures and class expenses and may be Both charts above are logarithmic
first chart above is that of the Fund's greater than or less than the performance charts, which present the fluctuations in
Investor class shares. The performance of of the Fund's Class C shares. The data the value of the Fund's share class and
the Fund's other share classes will differ shown in the second chart above includes its indexes. We believe that a logarithmic
primarily due to different sales charge reinvested distributions, Fund expenses chart is more effective than other types
structures and class expenses and may be and management fees. Index results include of charts in illustrating changes in value
greater than or less than the performance reinvested dividends, but they do not during the early years shown in the chart.
of the Fund's Investor Class shares. The reflect sales charges. The vertical axis, the one that indicates
data shown in this chart includes the dollar value of an investment, is
reinvested distributions, Fund expenses Performance of the peer group constructed with each segment representing
and management fees. Index results include reflects fund expenses and management a percent change in the value of the
reinvested dividends. fees; performance of a market index does investment. In both charts, each segment
not. Performance shown in the charts and represents a doubling, or 100% change, in
The performance data shown in the table does not reflect deduction of taxes the value of the investment.
second chart above is that of the Fund's
6 AIM LEISURE FUND
AIM LEISURE FUND - INVESTOR CLASS SHARES
====================================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITHOUT SALES CHARGES SINCE INCEPTION
Fund data from 1/19/84, index data from 1/31/84
AIM Lipper
Leisure Fund- Consumer Services
Investor Class Funds Category
Date Shares S&P 500 Index(1) Average(1,2)
1/19/84 $ 10000
2/84 9975 $ 9648 $ 9975
3/84 9850 9815 9850
4/84 9901 9908 9901
5/84 9601 9360 9513
6/84 10126 9563 10033
7/84 9913 9444 9891
8/84 10700 10488 10911
9/84 10500 10490 10744
10/84 10663 10531 10907
11/84 10424 10413 10699
12/84 10689 10687 11118
1/85 11595 11520 12356
2/85 12262 11661 13027
3/85 12602 11668 13452
4/85 12299 11658 13214
5/85 12703 12331 13819
6/85 12904 12524 14333
7/85 12904 12506 14296
8/85 12917 12385 14464
9/85 12087 12011 13502
10/85 12679 12566 14184
11/85 13348 13428 15166
12/85 14132 14078 16002
1/86 14271 14157 16280
2/86 16027 15214 17892
3/86 17064 16063 19284
4/86 17696 15883 19833
5/86 18794 16727 21424
6/86 19730 17010 22120
7/86 17467 16059 19974
8/86 17771 17250 20508
9/86 16558 15823 19015
10/86 17877 16736 20281
11/86 17546 17143 20304
12/86 16792 16705 19351
1/87 18520 18955 21339
2/87 20405 19704 23724
3/87 20405 20272 23964
4/87 19871 20092 23374
5/87 19588 20266 23917
6/87 20515 21290 25034
7/87 22275 22369 26829
8/87 22558 23203 27199
9/87 22102 22694 26266
10/87 16387 17807 19395
11/87 15312 16340 18068
12/87 16913 17582 20206
1/88 17405 18321 20832
====================================================================================================================================
(1) Lipper Inc.
(2) The AIM Leisure fund was the only fund in the Lipper Consumer Services Category from January 1984 through May 1984, at which
time one other fund joined the category.
====================================================================================================================================
[MOUNTAIN CHART]
2/88 18662 19172 22615
3/88 19299 18580 23314
4/88 19607 18786 23696
5/88 19262 18946 23170
6/88 20955 19815 24776
7/88 20936 19739 24756
8/88 19990 19070 23986
9/88 21591 19882 25612
10/88 21829 20435 25889
11/88 20956 20143 25242
12/88 21739 20494 26284
1/89 23450 21994 28471
2/89 23851 21447 28369
3/89 24779 21947 29648
4/89 26890 23085 31617
5/89 28111 24016 33296
6/89 27510 23881 33219
7/89 29985 26035 35966
8/89 31077 26542 36793
9/89 31459 26434 36801
10/89 30452 25821 34780
11/89 30620 26345 35038
12/89 30054 26977 34971
1/90 26931 25167 31159
2/90 27330 25491 31281
3/90 28483 26166 32235
4/90 28463 25514 31426
5/90 31315 27996 34653
6/90 31208 27808 34335
7/90 29888 27719 33129
8/90 25803 25216 29147
9/90 23393 23991 26571
10/90 22747 23890 26082
11/90 25101 25431 28580
12/90 26760 26139 30164
1/91 28556 27274 31949
2/91 30958 29222 34537
3/91 33177 29929 36385
4/91 33111 30000 36658
5/91 35488 31290 38439
6/91 33157 29858 36271
7/91 34390 31248 38100
8/91 36344 31986 39566
9/91 36322 31451 40089
10/91 38076 31873 41227
11/91 37155 30592 39566
12/91 40874 34085 43981
1/92 41618 33450 45116
2/92 43079 33883 46993
3/92 43079 33225 46264
4/92 41795 34200 45885
5/92 41924 34367 46238
6/92 41157 33856 45115
7/92 42079 35238 46044
8/92 41721 34518 45409
9/92 42977 34924 46158
10/92 44297 35043 47446
11/92 48890 36233 50943
12/92 50440 36678 52068
1/93 52422 36984 52948
2/93 51604 37488 52016
3/93 54974 38279 55059
4/93 53699 37353 53573
5/93 56556 38350 57082
6/93 55769 38462 57322
7/93 56857 38307 58445
8/93 62543 39757 62712
====================================================================================================================================
====================================================================================================================================
[MOUNTAIN CHART]
9/93 66814 39453 65151
10/93 69260 40268 67933
11/93 67224 39884 65970
12/93 68460 40366 67692
1/94 67050 41738 67028
2/94 67198 40605 67236
3/94 64637 38838 63941
4/94 64082 39336 64389
5/94 62967 39979 63694
6/94 61172 39001 61700
7/94 63613 40280 63514
8/94 65935 41928 66798
9/94 65935 40904 66196
10/94 66554 41821 66892
11/94 65024 40300 64470
12/94 65056 40897 65050
1/95 64230 41957 65050
2/95 67448 43590 67255
3/95 69505 44874 69394
4/95 68706 46195 69443
5/95 69592 48038 70471
6/95 72598 49152 73057
7/95 76802 50781 77287
8/95 77508 50908 78168
9/95 75733 53055 79583
10/95 73196 52866 77848
11/95 75012 55184 81016
12/95 75334 56247 80238
1/96 77451 58159 80559
2/96 79287 58700 84015
3/96 80381 59265 85923
4/96 83845 60138 89746
5/96 84868 61686 93094
6/96 84308 61922 91613
7/96 77884 59187 83405
8/96 79753 60438 86683
9/96 82752 63836 91025
10/96 80997 65596 90407
11/96 83614 70550 93209
12/96 82167 69153 90991
1/97 83769 73471 93766
2/97 83367 74047 94441
3/97 81108 71011 91882
4/97 82487 75246 93278
5/97 86636 79847 100144
6/97 91514 83396 105431
7/97 95046 90030 111652
8/97 93734 84990 108927
9/97 99227 89642 116759
10/97 99058 86652 114296
11/97 100406 90660 118867
12/97 103900 92216 121708
1/98 103453 93235 121562
2/98 110933 99955 130910
3/98 119963 105070 138844
4/98 120047 106146 138830
5/98 117886 104324 138899
6/98 123650 108558 145747
7/98 122303 107411 142934
8/98 102355 91893 121451
9/98 108036 97784 123200
10/98 114086 105726 135532
11/98 121764 112131 145602
12/98 134841 118588 159158
1/99 145952 123546 164935
2/99 142902 119706 163286
3/99 152362 124495 168674
====================================================================================================================================
====================================================================================================================================
[MOUNTAIN CHART]
4/99 164871 129316 171441
5/99 164953 126265 166606
6/99 175329 133254 174670
7/99 174768 129111 168154
8/99 169192 128472 159595
9/99 177787 124954 159819
10/99 188384 132858 168065
11/99 198801 135558 171864
12/99 223293 143531 185321
1/00 208467 136321 171014
2/00 207341 133743 163558
3/00 221046 146819 177035
4/00 207054 142403 169953
5/00 198006 139484 164889
6/00 209827 142919 165829
7/00 210016 140687 162844
8/00 220201 149420 163137
9/00 213309 141534 161049
10/00 213821 140933 160694
11/00 196052 129831 151680
12/00 205502 130468 157292
1/01 226032 135094 169277
2/01 219567 122783 162286
3/01 208874 115009 153198
4/01 224185 123940 163294
5/01 231717 124771 168127
6/01 229702 121735 166412
7/01 216540 120537 164416
8/01 209177 112998 153942
9/01 174454 103874 133252
10/01 183682 105856 136397
11/01 203979 113974 150296
12/01 213934 114973 155857
1/02 211195 113296 156683
2/02 214722 111111 157560
3/02 221422 115290 162272
4/02 217790 108303 161509
5/02 217681 107508 160298
6/02 192953 99853 148275
7/02 179022 92071 133344
8/02 183050 92674 134904
9/02 172597 82612 125474
10/02 176740 89876 131246
11/02 190260 95160 137743
12/02 180938 89573 128294
1/03 177011 87231 124304
2/03 170763 85920 120674
3/03 175203 86752 123618
4/03 190498 93894 134262
5/03 201528 98837 142492
6/03 202999 100099 145941
7/03 206470 101865 149560
8/03 211921 103848 156619
9/03 207195 102748 151263
10/03 219129 108558 162940
11/03 224936 109512 165417
12/03 235778 115251 168874
1/04 237830 117366 169803
2/04 242491 118997 175322
3/04 242952 117202 175427
4/04 239040 115364 171199
5/04 238753 116944 171045
6/04 239732 119217 172208
7/04 225756 115272 163598
8/04 224221 115734 161487
9/04 234333 116988 166687
10/04 242628 118775 172171
====================================================================================================================================
====================================================================================================================================
[MOUNTAIN CHART]
11/04 254954 123579 180487
12/04 267880 127783 189493
1/05 259924 124669 184926
2/05 263693 127291 185481
3/05 260819 125039 185444
4/05 251325 122669 175931
5/05 258362 126568 186012
6/05 262263 126750 187872
7/05 267928 131461 194447
8/05 262998 130263 186844
9/05 259632 131317 183070
10/05 249428 129127 180946
11/05 259730 134006 189704
12/05 264561 134054 189723
1/06 269878 137603 194694
2/06 270337 137976 195492
3/06 278042 139693 200947
4/06 287078 141567 203197
5/06 281882 137498 196553
6/06 280219 137680 195983
7/06 270103 138529 187477
8/06 279476 141820 192576
9/06 290515 145472 202455
10/06 307510 150210 214137
11/06 317658 153062 216578
12/06 328712 155209 220260
1/07 339067 157554 227595
2/07 334354 154482 223612
3/07 338901 156206 225468
4/07 344900 163123 229211
5/07 361041 168810 236545
6/07 354975 166007 231743
7/07 348408 160867 219577
8/07 348060 163274 221114
9/07 353559 169374 222087
10/07 360312 172068 224241
11/07 339198 164872 210787
12/07 325698 163730 202503
1/08 309934 153910 196326
2/08 305409 148915 188218
3/08 298568 148271 186374
4/08 304808 155490 192748
5/08 311575 157503 195041
6/08 273407 144238 171227
7/08 266353 143025 171227
8/08 279511 145095 180952
9/08 247199 132181 164142
10/08 192791 109984 131543
11/08 173473 102089 116179
12/08 186518 103166 124405
1/09 169209 94480 113221
2/09 157382 84453 106008
3/09 171184 91837 118348
====================================================================================================================================
AIM LEISURE FUND - CLASS C SHARES
====================================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITH SALES CHARGES SINCE INCEPTION
Index data from 1/31/00, Fund data from 2/14/00
AIM Lipper Consumer
Leisure Fund- Services Funds
Date Class C Shares S&P 500 Index(1) Category Average(1)
1/31/00 $10000 $10000
2/00 $ 9710 9811 9564
3/00 10347 10770 10352
4/00 9688 10446 9938
5/00 9258 10232 9642
6/00 9805 10484 9697
7/00 9807 10320 9522
8/00 10275 10961 9539
9/00 9947 10382 9417
10/00 9967 10338 9397
11/00 9133 9524 8869
12/00 9568 9571 9198
1/01 10518 9910 9898
2/01 10212 9007 9490
3/01 9709 8437 8958
4/01 10414 9092 9549
5/01 10759 9153 9831
6/01 10656 8930 9731
7/01 10041 8842 9614
8/01 9690 8289 9002
9/01 8075 7620 7792
10/01 8498 7765 7976
11/01 9426 8361 8789
12/01 9879 8434 9114
1/02 9746 8311 9162
2/02 9903 8151 9213
3/02 10204 8457 9489
4/02 10030 7945 9444
5/02 10017 7886 9373
6/02 8871 7325 8670
7/02 8226 6754 7797
8/02 8405 6798 7888
9/02 7915 6060 7337
10/02 8098 6593 7675
11/02 8711 6981 8054
12/02 8277 6571 7502
1/03 8091 6399 7269
2/03 7800 6303 7056
3/03 7995 6364 7229
4/03 8685 6888 7851
5/03 9184 7250 8332
6/03 9245 7343 8534
7/03 9395 7472 8745
8/03 9634 7618 9158
9/03 9414 7537 8845
10/03 9949 7963 9528
11/03 10208 8033 9673
12/03 10691 8454 9875
1/04 10777 8610 9929
2/04 10979 8729 10252
3/04 10992 8597 10258
====================================================================================================================================
(1) Lipper Inc.
====================================================================================================================================
[MOUNTAIN CHART]
4/04 10805 8463 10011
5/04 10789 8579 10002
6/04 10824 8745 10070
7/04 10186 8456 9566
8/04 10109 8490 9443
9/04 10559 8582 9747
10/04 10926 8713 10068
11/04 11475 9065 10554
12/04 12046 9374 11081
1/05 11680 9145 10814
2/05 11843 9338 10846
3/05 11710 9172 10844
4/05 11276 8999 10288
5/05 11584 9285 10877
6/05 11750 9298 10986
7/05 11999 9644 11370
8/05 11770 9556 10926
9/05 11612 9633 10705
10/05 11150 9472 10581
11/05 11604 9830 11093
12/05 11809 9834 11094
1/06 12039 10094 11385
2/06 12051 10121 11431
3/06 12386 10247 11750
4/06 12781 10385 11882
5/06 12542 10086 11493
6/06 12461 10100 11460
7/06 12002 10162 10963
8/06 12409 10403 11261
9/06 12892 10671 11839
10/06 13637 11019 12522
11/06 14075 11228 12664
12/06 14559 11386 12880
1/07 15006 11558 13309
2/07 14787 11332 13076
3/07 14979 11459 13184
4/07 15240 11966 13403
5/07 15941 12383 13832
6/07 15660 12178 13551
7/07 15361 11801 12840
8/07 15337 11977 12930
9/07 15574 12425 12986
10/07 15861 12622 13112
11/07 14922 12094 12326
12/07 14318 12011 11841
1/08 13619 11290 11480
2/08 13413 10924 11006
3/08 13102 10877 10898
4/08 13368 11406 11271
5/08 13654 11554 11405
6/08 11975 10581 10012
7/08 11661 10492 10012
8/08 12226 10644 10581
9/08 10804 9696 9598
10/08 8425 8068 7692
11/08 7576 7489 6794
12/08 8140 7568 7275
1/09 7381 6931 6621
2/09 6858 6195 6199
3/09 7456 6737 6920
====================================================================================================================================
==========================================
AVERAGE ANNUAL TOTAL RETURNS THE MOST RECENT MONTH-END PERFORMANCE.
As of 3/31/09, including maximum PERFORMANCE FIGURES REFLECT REINVESTED
applicable sales charges DISTRIBUTIONS, CHANGES IN NET ASSET VALUE
AND THE EFFECT OF THE MAXIMUM SALES CHARGE
CLASS A SHARES UNLESS OTHERWISE STATED. INVESTMENT RETURN
Inception (3/28/02) -4.37% AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT
5 Years -7.84 YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL
1 Year -45.82 SHARES.
CLASS B SHARES THE TOTAL ANNUAL FUND OPERATING EXPENSE
Inception (3/28/02) -4.29% RATIO SET FORTH IN THE MOST RECENT FUND
5 Years -7.71 PROSPECTUS AS OF THE DATE OF THIS REPORT
1 Year -45.61 FOR CLASS A, CLASS B, CLASS C, CLASS R,
CLASS Y AND INVESTOR CLASS SHARES WAS
CLASS C SHARES 1.19%, 1.94%, 1.94%, 1.44%, 0.94% AND
Inception (2/14/00) -3.17% 1.19%, RESPECTIVELY. THE EXPENSE RATIOS
5 Years -7.46 PRESENTED ABOVE MAY VARY FROM THE EXPENSE
1 Year -43.60 RATIOS PRESENTED IN OTHER SECTIONS OF THIS
REPORT THAT ARE BASED ON EXPENSES INCURRED
CLASS R SHARES DURING THE PERIOD COVERED BY THIS REPORT.
Inception (10/25/05) -10.79%
1 Year -42.79 CLASS A SHARE PERFORMANCE REFLECTS THE
MAXIMUM 5.50% SALES CHARGE, AND CLASS B
CLASS Y SHARES AND CLASS C SHARE PERFORMANCE REFLECTS THE
10 Years 1.19% APPLICABLE CONTINGENT DEFERRED SALES
5 Years -6.73 CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE
1 Year -42.57 CDSC ON CLASS B SHARES DECLINES FROM 5%
BEGINNING AT THE TIME OF PURCHASE TO 0% AT
INVESTOR CLASS SHARES THE BEGINNING OF THE SEVENTH YEAR. THE
Inception (1/19/84) 11.93% CDSC ON CLASS C SHARES IS 1% FOR THE FIRST
10 Years 1.17 YEAR AFTER PURCHASE. CLASS R SHARES DO NOT
5 Years -6.76 HAVE A FRONT-END SALES CHARGE; RETURNS
1 Year -42.65 SHOWN ARE AT NET ASSET VALUE AND DO NOT
========================================== REFLECT A 0.75% CDSC THAT MAY BE IMPOSED
ON A TOTAL REDEMPTION OF RETIREMENT PLAN
CLASS Y SHARES' INCEPTION DATE IS OCTOBER ASSETS WITHIN THE FIRST YEAR. INVESTOR
3, 2008; RETURNS SINCE THAT DATE ARE CLASS SHARES DO NOT HAVE A FRONT-END SALES
ACTUAL RETURNS. ALL OTHER RETURNS ARE CHARGE OR A CDSC; THEREFORE, PERFORMANCE
BLENDED RETURNS OF ACTUAL CLASS Y SHARE IS AT NET ASSET VALUE. CLASS Y SHARES DO
PERFORMANCE AND RESTATED INVESTOR CLASS NOT HAVE A FRONT-END SALES CHARGE OR A
SHARE PERFORMANCE (FOR PERIODS PRIOR TO CDSC; THEREFORE, PERFORMANCE IS AT NET
THE INCEPTION DATE OF CLASS Y SHARES) AT ASSET VALUE.
NET ASSET VALUE. THE RESTATED INVESTOR
CLASS SHARE PERFORMANCE REFLECTS THE RULE THE PERFORMANCE OF THE FUND'S SHARE
12B-1 FEES APPLICABLE TO INVESTOR CLASS CLASSES WILL DIFFER PRIMARILY DUE TO
SHARES AS WELL AS ANY FEE WAIVERS OR DIFFERENT SALES CHARGE STRUCTURES AND
EXPENSE REIMBURSEMENTS RECEIVED BY CLASS EXPENSES.
INVESTOR CLASS SHARES. INVESTOR CLASS
SHARES' INCEPTION DATE IS JANUARY 19,
1984.
THE PERFORMANCE DATA QUOTED REPRESENT
PAST PERFORMANCE AND CANNOT GUARANTEE
COMPARABLE FUTURE RESULTS; CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE
VISIT invescoaim.com FOR
7 AIM LEISURE FUND
AIM LEISURE FUND'S INVESTMENT OBJECTIVE IS CAPITAL GROWTH.
o Unless otherwise stated, information presented in this report is as of March 31, 2009, and is based on total net assets.
o Unless otherwise noted, all data provided by Invesco Aim.
ABOUT SHARE CLASSES o The prices of securities held by the OTHER INFORMATION
Fund may decline in response to
o Effective September 30, 2003, only market risks. o The Chartered Financial
previously established qualified Analyst--REGISTERED TRADEMARK--
plans are eligible to purchase Class o The Fund's investments are (CFA--REGISTERED TRADEMARK--)
B shares of any AIM fund. concentrated in a comparatively designation is a globally recognized
narrow segment of the economy. standard for measuring the competence
o Class R shares are available only to Consequently, the Fund may tend to be and integrity of investment
certain retirement plans. Please see more volatile than other mutual professionals.
the prospectus for more information. funds, and the value of the Fund's
investments may tend to rise and fall o CPA--REGISTERED TRADEMARK-- and
o Class Y shares are available to only more rapidly. Certified Public
certain investors. Please see the Accountant--REGISTERED TRADEMARK--
prospectus for more information. ABOUT INDEXES USED IN THIS REPORT are trademarks owned by the American
Institute of Certified Public
o All Investor Class shares are closed o The S&P 500--REGISTERED TRADEMARK-- Accountants.
to new investors. Contact your INDEX is a market
financial advisor about purchasing capitalization-weighted index o The returns shown in the management's
our other share classes. covering all major areas of the U.S. discussion of Fund performance are
economy. It is not the 500 largest based on net asset values calculated
PRINCIPAL RISKS OF INVESTING IN THE FUND companies, but rather the most widely for shareholder transactions.
held 500 companies chosen with Generally accepted accounting
o Since a large percentage of the respect to market size, liquidity, principles require adjustments to be
Fund's assets may be invested in and their industry. made to the net assets of the Fund at
securities of a limited number of period end for financial reporting
companies, each investment has a o The LIPPER CONSUMER SERVICES FUNDS purposes, and as such, the net asset
greater effect on the Fund's overall CATEGORY AVERAGE represents an values for shareholder transactions
performance, and any change in the average of all of the funds in the and the returns based on those net
value of those securities could Lipper Consumer Services Funds asset values may differ from the net
significantly affect the value of category. These funds invest asset values and returns reported in
your investment in the Fund. primarily in the equity securities of the Financial Highlights.
domestic and foreign companies
o Prices of equity securities change in engaged in providing consumer o Industry classifications used in this
response to many factors including services, including the services report are generally according to the
the historical and prospective segment of hotels, restaurants, and Global Industry Classification
earnings of the issuer, the value of other leisure facilities; media Standard, which was developed by and
its assets, general economic production and services; and consumer is the exclusive property and a
conditions, interest rates, investor retail and services. service mark of MSCI Inc. and
perceptions and market liquidity. Standard & Poor's.
o The Fund is not managed to track the
o Foreign securities have additional performance of any particular index,
risks, including exchange rate including the indexes defined here,
changes, political and economic and consequently, the performance of
upheaval, the relative lack of the Fund may deviate significantly
information, relatively low market from the performance of the indexes.
liquidity, and the potential lack of
strict financial and accounting o A direct investment cannot be made in
controls and standards. an index. Unless otherwise indicated,
index results include reinvested
o The leisure sector depends on dividends, and they do not reflect
consumer discretionary spending, sales charges. Performance of the
which generally falls during economic peer group reflects fund expenses;
downturns. performance of a market index does
not.
o There is no guarantee that the
investment techniques and risk
analyses used by the Fund's portfolio
managers will produce the desired
results.
======================================================================================= ==========================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class A Shares ILSAX
======================================================================================= Class B Shares ILSBX
Class C Shares IVLCX
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Class R Shares ILSRX
Class Y Shares ILSYX
Investor Class Shares FLISX
==========================================
8 AIM LEISURE FUND
SCHEDULE OF INVESTMENTS(a)
March 31, 2009
<Table>
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS & OTHER EQUITY INTERESTS-96.27%
ADVERTISING-6.54%
Omnicom Group Inc. 490,865 $ 11,486,241
- -------------------------------------------------------------------------------
WPP PLC (United Kingdom) 1,277,960 7,200,773
===============================================================================
18,687,014
===============================================================================
APPAREL RETAIL-2.51%
Abercrombie & Fitch Co.-Class A(b) 301,614 7,178,413
===============================================================================
APPAREL, ACCESSORIES & LUXURY GOODS-5.98%
Coach, Inc.(c) 295,834 4,940,428
- -------------------------------------------------------------------------------
Compagnie Financiere Richemont S.A.-Class A
(Switzerland) 147,735 2,308,345
- -------------------------------------------------------------------------------
Hanesbrands, Inc.(c) 445,428 4,262,746
- -------------------------------------------------------------------------------
Polo Ralph Lauren Corp.(b) 131,632 5,561,452
===============================================================================
17,072,971
===============================================================================
BREWERS-5.95%
Anheuser-Busch InBev N.V. (Belgium) 234,380 6,457,744
- -------------------------------------------------------------------------------
Anheuser-Busch InBev N.V.-Ctfs. (Belgium)(c) 59,200 236
- -------------------------------------------------------------------------------
Companhia de Bebidas das Americas-ADR (Brazil)(b) 128,100 4,947,222
- -------------------------------------------------------------------------------
Heineken N.V. (Netherlands)(b) 196,085 5,573,204
===============================================================================
16,978,406
===============================================================================
CABLE & SATELLITE-11.57%
Cablevision Systems Corp.-Class A(b) 636,779 8,239,920
- -------------------------------------------------------------------------------
Comcast Corp.-Class A(b) 998,857 13,624,410
- -------------------------------------------------------------------------------
Liberty Media Corp.-Entertainment-Series
A-Tracking Stock(c) 372,352 7,428,422
- -------------------------------------------------------------------------------
Scripps Networks Interactive, Inc.-Class A(b) 166,915 3,757,257
- -------------------------------------------------------------------------------
Time Warner Cable Inc. 1 24
===============================================================================
33,050,033
===============================================================================
CASINOS & GAMING-0.93%
International Game Technology 289,432 2,668,563
===============================================================================
COMPUTER & ELECTRONICS RETAIL-4.65%
Best Buy Co., Inc. 254,928 9,677,067
- -------------------------------------------------------------------------------
GameStop Corp.-Class A(c) 128,115 3,589,782
===============================================================================
13,266,849
===============================================================================
DEPARTMENT STORES-3.17%
Kohl's Corp.(c) 131,320 5,557,462
- -------------------------------------------------------------------------------
Nordstrom, Inc.(b) 208,661 3,495,072
===============================================================================
9,052,534
===============================================================================
DISTILLERS & VINTNERS-3.69%
Diageo PLC (United Kingdom) 692,131 7,809,670
===============================================================================
Pernod Ricard S.A. (France)(b) 48,915 2,733,076
===============================================================================
10,542,746
===============================================================================
FOOTWEAR-1.76%
NIKE, Inc.-Class B(b) 106,942 5,014,510
===============================================================================
GENERAL MERCHANDISE STORES-2.85%
Family Dollar Stores, Inc.(b) 112,622 3,758,196
- -------------------------------------------------------------------------------
Target Corp. 127,013 4,367,977
===============================================================================
8,126,173
===============================================================================
HOME ENTERTAINMENT SOFTWARE-1.17%
Nintendo Co., Ltd. (Japan) 11,400 3,342,507
===============================================================================
HOME IMPROVEMENT RETAIL-2.21%
Home Depot, Inc. (The) 267,780 6,308,897
===============================================================================
HOTELS, RESORTS & CRUISE LINES-3.64%
Choice Hotels International, Inc.(b) 165,897 4,283,460
- -------------------------------------------------------------------------------
Marriott International, Inc.-Class A 282,647 4,624,105
- -------------------------------------------------------------------------------
Regal Hotels International Holdings Ltd. (Hong
Kong) 7,827,800 1,484,642
===============================================================================
10,392,207
===============================================================================
HYPERMARKETS & SUPER CENTERS-1.63%
Wal-Mart Stores, Inc. 89,043 4,639,140
===============================================================================
INTERNET SOFTWARE & SERVICES-2.86%
Google Inc.-Class A(c) 23,499 8,179,062
===============================================================================
INVESTMENT COMPANIES-EXCHANGE TRADED FUNDS-2.07%
iShares Russell 3000 Index Fund 42,820 1,968,864
- -------------------------------------------------------------------------------
iShares S&P 500 Index Fund 24,752 1,970,754
- -------------------------------------------------------------------------------
S&P 500 Depositary Receipts Trust-Series 1 24,849 1,974,004
===============================================================================
5,913,622
===============================================================================
MOVIES & ENTERTAINMENT-9.74%
News Corp.-Class A 911,979 6,037,301
- -------------------------------------------------------------------------------
Time Warner Inc. 312,167 6,024,817
- -------------------------------------------------------------------------------
Viacom Inc.-Class A(b)(c) 131,424 2,453,686
- -------------------------------------------------------------------------------
Viacom Inc.-Class B(c) 95,100 1,652,838
- -------------------------------------------------------------------------------
Walt Disney Co. (The)(b) 640,558 11,632,533
===============================================================================
27,801,175
===============================================================================
PUBLISHING-1.52%
McGraw-Hill Cos., Inc. (The) 189,800 4,340,726
===============================================================================
RESTAURANTS-12.30%
Brinker International, Inc. 378,512 5,715,531
- -------------------------------------------------------------------------------
Burger King Holdings Inc. 263,864 6,055,679
- -------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
9 AIM LEISURE FUND
<Table>
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------------
RESTAURANTS-(CONTINUED)
Darden Restaurants, Inc. 205,492 $ 7,040,156
- -------------------------------------------------------------------------------
Jack in the Box Inc.(b)(c) 110,913 2,583,164
- -------------------------------------------------------------------------------
McDonald's Corp. 165,582 9,035,810
- -------------------------------------------------------------------------------
Yum! Brands, Inc. 170,800 4,693,584
===============================================================================
35,123,924
===============================================================================
SOFT DRINKS-6.03%
Coca-Cola Co. (The) 103,302 4,540,123
- -------------------------------------------------------------------------------
Coca-Cola Femsa, S.A.B. de C.V.-ADR (Mexico)(b) 84,858 2,890,263
- -------------------------------------------------------------------------------
PepsiCo, Inc. 190,312 9,797,262
===============================================================================
17,227,648
===============================================================================
SPECIALTY STORES-2.77%
PetSmart, Inc. 376,898 7,899,782
===============================================================================
TOBACCO-0.73%
British American Tobacco PLC (United Kingdom) 90,316 2,089,993
===============================================================================
Total Common Stocks & Other Equity Interests
(Cost $313,936,667) 274,896,895
===============================================================================
MONEY MARKET FUNDS-2.84%
Liquid Assets Portfolio-Institutional Class(d) 4,052,096 4,052,096
- -------------------------------------------------------------------------------
Premier Portfolio-Institutional Class(d) 4,052,097 4,052,097
- -------------------------------------------------------------------------------
Total Money Market Funds (Cost $8,104,193) 8,104,193
===============================================================================
TOTAL INVESTMENTS (excluding investments purchased
with cash collateral from securities on
loan)-99.11% (Cost $322,040,860) 283,001,088
===============================================================================
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES ON
LOAN
MONEY MARKET FUNDS-14.43%
Liquid Assets Portfolio-Institutional Class (Cost
$41,197,415)(d)(e) 41,197,415 41,197,415
===============================================================================
TOTAL INVESTMENTS-113.54% (Cost $363,238,275) 324,198,503
===============================================================================
OTHER ASSETS LESS LIABILITIES-(13.54)% (38,649,831)
===============================================================================
NET ASSETS-100.00% $285,548,672
_______________________________________________________________________________
===============================================================================
</Table>
Investment Abbreviations:
<Table>
ADR - American Depositary Receipt
Ctfs. - Certificates
</Table>
Notes to Schedule of Investments:
(a) Industry and/or sector classifications used in this report are generally
according to the Global Industry Classification Standard, which was
developed by and is the exclusive property and a service mark of MSCI Inc.
and Standard & Poor's.
(b) All or a portion of this security was out on loan at March 31, 2009.
(c) Non-income producing security.
(d) The money market fund and the Fund are affiliated by having the same
investment advisor.
(e) The security has been segregated to satisfy the commitment to return the
cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 1J.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
10 AIM LEISURE FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2009
<Table>
ASSETS:
Investments, at value (Cost $313,936,667)* $274,896,895
- --------------------------------------------------------------------------------
Investments in affiliated money market funds, at value and cost 49,301,608
================================================================================
Total investments (Cost $363,238,275) 324,198,503
================================================================================
Foreign currencies, at value (Cost $155,234) 153,160
- --------------------------------------------------------------------------------
Receivables for:
Investments sold 9,108,779
- --------------------------------------------------------------------------------
Fund shares sold 78,161
- --------------------------------------------------------------------------------
Dividends 669,416
- --------------------------------------------------------------------------------
Investment for trustee deferred compensation and retirement plans 26,760
- --------------------------------------------------------------------------------
Other assets 40,338
================================================================================
Total assets 334,275,117
________________________________________________________________________________
================================================================================
LIABILITIES:
Payables for:
Investments purchased 6,639,877
- --------------------------------------------------------------------------------
Fund shares reacquired 477,958
- --------------------------------------------------------------------------------
Collateral upon return of securities loaned 41,197,415
- --------------------------------------------------------------------------------
Accrued fees to affiliates 239,351
- --------------------------------------------------------------------------------
Accrued other operating expenses 85,432
- --------------------------------------------------------------------------------
Trustee deferred compensation and retirement plans 86,412
================================================================================
Total liabilities 48,726,445
================================================================================
Net assets applicable to shares outstanding $285,548,672
________________________________________________________________________________
================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $395,175,262
- --------------------------------------------------------------------------------
Undistributed net investment income 5,185,302
- --------------------------------------------------------------------------------
Undistributed net realized gain (loss) (75,772,345)
- --------------------------------------------------------------------------------
Unrealized appreciation (depreciation) (39,039,547)
================================================================================
$285,548,672
________________________________________________________________________________
================================================================================
NET ASSETS:
Class A $ 46,321,694
________________________________________________________________________________
================================================================================
Class B $ 9,454,388
________________________________________________________________________________
================================================================================
Class C $ 11,231,727
________________________________________________________________________________
================================================================================
Class R $ 599,445
________________________________________________________________________________
================================================================================
Class Y $ 576,406
________________________________________________________________________________
================================================================================
Investor Class $217,365,012
________________________________________________________________________________
================================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 2,279,314
________________________________________________________________________________
================================================================================
Class B 484,699
________________________________________________________________________________
================================================================================
Class C 596,098
________________________________________________________________________________
================================================================================
Class R 29,639
________________________________________________________________________________
================================================================================
Class Y 28,387
________________________________________________________________________________
================================================================================
Investor Class 10,720,286
________________________________________________________________________________
================================================================================
Class A:
Net asset value per share $ 20.32
- --------------------------------------------------------------------------------
Maximum offering price per share
(Net asset value of $20.32 divided by 94.50%) $ 21.50
________________________________________________________________________________
================================================================================
Class B:
Net asset value and offering price per share $ 19.51
________________________________________________________________________________
================================================================================
Class C:
Net asset value and offering price per share $ 18.84
________________________________________________________________________________
================================================================================
Class R:
Net asset value and offering price per share $ 20.22
________________________________________________________________________________
================================================================================
Class Y:
Net asset value and offering price per share $ 20.31
________________________________________________________________________________
================================================================================
Investor Class:
Net asset value and offering price per share $ 20.28
________________________________________________________________________________
================================================================================
</Table>
* At March 31, 2009, securities with an aggregate value of $39,866,305 were on
loan to brokers.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11 AIM LEISURE FUND
STATEMENT OF OPERATIONS
For the year ended March 31, 2009
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $312,626) $ 10,998,662
- ------------------------------------------------------------------------------------------------
Dividends from affiliated money market funds (includes securities lending income
of $499,810) 752,140
================================================================================================
Total investment income 11,750,802
================================================================================================
EXPENSES:
Advisory fees 3,378,658
- ------------------------------------------------------------------------------------------------
Administrative services fees 152,017
- ------------------------------------------------------------------------------------------------
Custodian fees 54,534
- ------------------------------------------------------------------------------------------------
Distribution fees:
Class A 214,873
- ------------------------------------------------------------------------------------------------
Class B 177,009
- ------------------------------------------------------------------------------------------------
Class C 210,004
- ------------------------------------------------------------------------------------------------
Class R 3,859
- ------------------------------------------------------------------------------------------------
Investor Class 850,737
- ------------------------------------------------------------------------------------------------
Transfer agent fees 1,188,654
- ------------------------------------------------------------------------------------------------
Trustees' and officers' fees and benefits 32,049
- ------------------------------------------------------------------------------------------------
Other 375,711
================================================================================================
Total expenses 6,638,105
================================================================================================
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (30,998)
================================================================================================
Net expenses 6,607,107
================================================================================================
Net investment income 5,143,695
================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from:
Investment securities (69,064,377)
- ------------------------------------------------------------------------------------------------
Foreign currencies (157,402)
================================================================================================
(69,221,779)
================================================================================================
Change in net unrealized appreciation (depreciation) of:
Investment securities (193,347,286)
- ------------------------------------------------------------------------------------------------
Foreign currencies (4,216)
================================================================================================
(193,351,502)
================================================================================================
Net realized and unrealized gain (loss) (262,573,281)
================================================================================================
Net increase (decrease) in net assets resulting from operations $(257,429,586)
________________________________________________________________________________________________
================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12 AIM LEISURE FUND
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2009 and 2008
<Table>
<Caption>
2009 2008
- ---------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 5,143,695 $ 3,553,844
- ---------------------------------------------------------------------------------------------------------
Net realized gain (loss) (69,221,779) 96,845,698
- ---------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) (193,351,502) (199,895,503)
=========================================================================================================
Net increase (decrease) in net assets resulting from operations (257,429,586) (99,495,961)
=========================================================================================================
Distributions to shareholders from net investment income:
Class A -- (1,345,441)
- ---------------------------------------------------------------------------------------------------------
Class B -- (63,987)
- ---------------------------------------------------------------------------------------------------------
Class C -- (90,212)
- ---------------------------------------------------------------------------------------------------------
Class R -- (5,153)
- ---------------------------------------------------------------------------------------------------------
Investor Class -- (4,424,117)
=========================================================================================================
Total distributions from net investment income -- (5,928,910)
=========================================================================================================
Distributions to shareholders from net realized gains:
Class A (6,005,872) (12,691,032)
- ---------------------------------------------------------------------------------------------------------
Class B (1,293,343) (2,602,624)
- ---------------------------------------------------------------------------------------------------------
Class C (1,558,409) (3,669,233)
- ---------------------------------------------------------------------------------------------------------
Class R (66,149) (65,360)
- ---------------------------------------------------------------------------------------------------------
Class Y (50,847) --
- ---------------------------------------------------------------------------------------------------------
Investor Class (26,637,952) (41,728,893)
=========================================================================================================
Total distributions from net realized gains (35,612,572) (60,757,142)
=========================================================================================================
Share transactions-net:
Class A (36,048,526) (11,218,798)
- ---------------------------------------------------------------------------------------------------------
Class B (6,811,861) (3,024,982)
- ---------------------------------------------------------------------------------------------------------
Class C (8,672,930) (4,515,553)
- ---------------------------------------------------------------------------------------------------------
Class R 194,885 904,707
- ---------------------------------------------------------------------------------------------------------
Class Y 772,263 --
- ---------------------------------------------------------------------------------------------------------
Investor Class (50,886,198) (32,786,115)
=========================================================================================================
Net increase (decrease) in net assets resulting from share
transactions (101,452,367) (50,640,741)
=========================================================================================================
Net increase (decrease) in net assets (394,494,525) (216,822,754)
=========================================================================================================
NET ASSETS:
Beginning of year 680,043,197 896,865,951
=========================================================================================================
End of year (includes undistributed net investment income of
$5,185,302 and $(6,773,777), respectively) $ 285,548,672 $ 680,043,197
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
13 AIM LEISURE FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Leisure Fund (the "Fund") is a series portfolio of AIM Sector Funds (the
"Trust"). The Trust is a Delaware statutory trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of six separate portfolios, each
authorized to issue an unlimited number of shares of beneficial interest. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund. Matters affecting each portfolio or class will be voted on exclusively
by the shareholders of such portfolio or class.
The Fund's investment objective is capital growth.
The Fund currently consists of six different classes of shares: Class A, Class
B, Class C, Class R, Class Y and Investor Class. Investor Class shares of the
Fund are offered only to certain grandfathered investors. Class A shares are
sold with a front-end sales charge unless certain waiver criteria are met and
under certain circumstances load waiver shares may be subject to contingent
deferred sales charges ("CDSC"). Class B shares and Class C shares are sold with
a CDSC. Class R, Class Y and Investor Class shares are sold at net asset value.
Under certain circumstances, Class R shares are subject to a CDSC. Generally,
Class B shares will automatically convert to Class A shares on or about the
month-end which is at least eight years after the date of purchase.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements.
A. SECURITY VALUATIONS -- Securities, including restricted securities, are
valued according to the following policy.
A security listed or traded on an exchange (except convertible bonds) is
valued at its last sales price or official closing price as of the close
of the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on
that day. Securities traded in the over-the-counter market are valued
based on prices furnished by independent pricing services or market
makers. When such securities are valued by an independent pricing service
they may be considered fair valued. Futures contracts are valued at the
final settlement price set by an exchange on which they are principally
traded. Listed options are valued at the mean between the last bid and the
ask prices from the exchange on which they are principally traded. Options
not listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last
sales price or official closing price as of the close of the customary
trading session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as institution-size trading in similar groups of
securities, developments related to specific securities, dividend rate,
yield, quality, type of issue, coupon rate, maturity, individual trading
characteristics and other market data. Short-term obligations, including
commercial paper, having 60 days or less to maturity are recorded at
amortized cost which approximates value. Debt securities are subject to
interest rate and credit risks. In addition, all debt securities involve
some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued
at the market quotations. Because trading hours for certain foreign
securities end before the close of the NYSE, closing market quotations may
become unreliable. If between the time trading ends on a particular
security and the close of the customary trading session on the NYSE,
events occur that are significant and may make the closing price
unreliable, the Fund may fair value the security. If the event is likely
to have affected the closing price of the security, the security will be
valued at fair value in good faith using procedures approved by the Board
of Trustees. Adjustments to closing prices to reflect fair value may also
be based on a screening process of an independent pricing service to
indicate the degree of certainty, based on historical data, that the
closing price in the principal market where a foreign security trades is
not the current value as of the close of the NYSE. Foreign securities
meeting the approved degree of certainty that the price is not reflective
of current value will be priced at the indication of fair value from the
independent pricing service. Multiple factors may be considered by the
independent pricing service in determining adjustments to reflect fair
value and may include information relating to sector indices, American
Depositary Receipts and domestic and foreign index futures. Foreign
securities may have additional risks including exchange rate changes,
potential for sharply devalued currencies and high inflation, political
and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be valued based upon quotes furnished by independent sources.
The last bid price may be used to value equity securities and Corporate
Loans. The mean between the last bid and asked prices may be used to value
debt obligations other than Corporate Loans.
Securities for which market quotations are not readily available or are
unreliable are valued at fair value as determined in good faith by or
under the supervision of the Trust's officers following procedures
approved by the Board of Trustees. Issuer specific events, market trends,
bid/ask quotes of brokers and information providers and other market data
may be reviewed in the course of making a good faith determination of a
security's fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity. Because of the inherent uncertainties of valuation, the
values reflected in the financial statements may materially differ from
the value received upon actual sale of those investments.
14 AIM LEISURE FUND
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income is recorded on the accrual basis from settlement
date. Dividend income is recorded on the ex-dividend date.
The Fund may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
The Fund allocates income and realized and unrealized capital gains and
losses to a class based on the relative net assets of each class.
C. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, the investment
advisor may determine the country in which an issuer is located and/or
credit risk exposure based on various factors. These factors include the
laws of the country under which the issuer is organized, where the issuer
maintains a principal office, the country in which the issuer derives 50%
or more of its total revenues and the country that has the primary market
for the issuer's securities, as well as other criteria. Among the other
criteria that may be evaluated for making this determination are the
country in which the issuer maintains 50% or more of its assets, the type
of security, financial guarantees and enhancements, the nature of the
collateral and the sponsor organization. Country of issuer and/or credit
risk exposure has been determined to be the United States of America,
unless otherwise noted.
D. DISTRIBUTIONS -- Distributions from income and net realized capital gain,
if any, are generally paid annually and recorded on ex-dividend date. The
Fund may elect to treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements
of Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial
statements.
The Fund files tax returns in the U.S. Federal jurisdiction and certain
other jurisdictions. Generally the Fund is subject to examinations by such
taxing authorities for up to three years after the filing of the return
for the tax period.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
G. ACCOUNTING ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period including estimates and assumptions related to
taxation. Actual results could differ from those estimates by a
significant amount.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust is indemnified
against certain liabilities that may arise out of performance of their
duties to the Fund. Additionally, in the normal course of business, the
Fund enters into contracts, including the Fund's servicing agreements,
that contain a variety of indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown as this would involve future
claims that may be made against the Fund that have not yet occurred. The
risk of material loss as a result of such indemnification claims is
considered remote.
I. OTHER RISKS -- The Fund's investments are concentrated in a comparatively
narrow segment of the economy. Consequently, the Fund may tend to be more
volatile than other mutual funds, and the value of the Fund's investments
may tend to rise and fall more rapidly.
The leisure sector depends on consumer discretionary spending, which
generally falls during economic downturns.
J. SECURITIES LENDING -- The Fund may lend portfolio securities having a
market value up to one-third of the Fund's total assets. Such loans are
secured by collateral equal to no less than the market value of the loaned
securities determined daily by the securities lending provider. Such
collateral will be cash or debt securities issued or guaranteed by the
U.S. Government or any of its sponsored agencies. Cash collateral received
in connection with these loans is invested in short-term money market
instruments or affiliated money market funds and is shown as such on the
Schedule of Investments. It is the Fund's policy to obtain additional
collateral from or return excess collateral to the borrower by the end of
the next business day, following the valuation date of the securities
loaned. Therefore, the value of the collateral held may be temporarily
less than the value of the securities on loan. Lending securities entails
a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase
the collateral accordingly, and the borrower fails to return the
securities. Upon the failure of the borrower to return the securities,
collateral may be liquidated and the securities may be purchased on the
open market to replace the loaned securities. The Fund could experience
delays and costs in gaining access to the collateral. The Fund bears the
risk of any deficiency in the amount of the collateral available for
return to the borrower due to any loss on the collateral invested.
Dividends received on cash collateral investments for securities lending
transactions, which are net of compensation to counterparties, is included
in Dividends from affiliates on the Statement of Operations. The aggregate
value of securities out on loan is shown as a footnote on the Statement of
Assets and Liabilities, if any.
K. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close
of the NYSE based on quotations posted by banks and major currency
dealers. Portfolio securities and other assets and liabilities denominated
in foreign currencies are translated into U.S. dollar amounts at date of
valuation. Purchases and sales of portfolio securities (net of foreign
taxes withheld on disposition) and income items denominated in foreign
currencies are translated
15 AIM LEISURE FUND
into U.S. dollar amounts on the respective dates of such transactions. The
Fund does not separately account for the portion of the results of
operations resulting from changes in foreign exchange rates on investments
and the fluctuations arising from changes in market prices of securities
held. The combined results of changes in foreign exchange rates and the
fluctuation of market prices on investments (net of estimated foreign tax
withholding) are included with the net realized and unrealized gain or
loss from investments in the Statement of Operations. Reported net
realized foreign currency gains or losses arise from (i) sales of foreign
currencies, (ii) currency gains or losses realized between the trade and
settlement dates on securities transactions, and (iii) the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign currency gains and
losses arise from changes in the fair values of assets and liabilities,
other than investments in securities at fiscal period end, resulting from
changes in exchange rates.
The Fund may invest in foreign securities which may be subject to
foreign taxes on income, gains on investments or currency repatriation, a
portion of which may be recoverable.
L. 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. Fluctuations in the value of these contracts are recorded as
unrealized appreciation (depreciation) until the contracts are closed.
When these contracts are closed, realized gains (losses) are recorded.
Realized and unrealized gains and losses on these contracts are included
in the Statement of Operations. The Fund could be exposed to risk, which
may be in excess of the amount reflected in the Statement of Assets and
Liabilities, if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with Invesco
Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the
investment advisory agreement, the Fund pays an advisory fee to the Advisor
based on the annual rate of the Fund's average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $350 million 0.75%
- -------------------------------------------------------------------
Next $350 million 0.65%
- -------------------------------------------------------------------
Next $1.3 billion 0.55%
- -------------------------------------------------------------------
Next $2 billion 0.45%
- -------------------------------------------------------------------
Next $2 billion 0.40%
- -------------------------------------------------------------------
Next $2 billion 0.375%
- -------------------------------------------------------------------
Over $8 billion 0.35%
___________________________________________________________________
===================================================================
</Table>
Under the terms of a master sub-advisory agreement the Advisor and each of
Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited,
Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco
Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco
Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco
Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the
Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-
Advisor(s) that provide discretionary investment management services to the Fund
based on the percentage of assets allocated to such Sub-Advisor(s).
The Advisor has contractually agreed, through at least June 30, 2009, to waive
the advisory fee payable by the Fund in an amount equal to 100% of the net
advisory fees the Advisor receives from the affiliated money market funds on
investments by the Fund of uninvested cash (excluding investments of cash
collateral from securities lending) in such affiliated money market funds.
For the year ended March 31, 2009, the Advisor waived advisory fees of
$15,083.
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") agreed
to reimburse expenses incurred by the Fund in connection with market timing
matters in the AIM Funds, which may include legal, audit, shareholder reporting,
communications and trustee expenses. These expenses along with the related
expense reimbursement are included in the Statement of Operations. For the year
ended March 31, 2009, Invesco reimbursed expenses of the Fund in the amount of
$2,192.
The Trust has entered into a master administrative services agreement with
Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain
administrative costs incurred in providing accounting services to the Fund. For
the year ended March 31, 2009, expenses incurred under the agreement are shown
in the Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with
Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has
agreed to pay IAIS a fee for providing transfer agency and shareholder services
to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the
course of providing such services. IAIS may make payments to intermediaries that
provide omnibus account services, sub-accounting services and/or networking
services. All fees payable by IAIS to intermediaries that provide omnibus
account services or sub-accounting are charged back to the Fund, subject to
certain limitations approved by the Trust's Board of Trustees. For the year
ended March 31, 2009, expenses incurred under the agreement are shown in the
Statement of Operations as transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Aim
Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class
B, Class C, Class R, Class Y and Investor Class shares of the Fund. The Trust
has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A, Class B, Class C, Class R and Investor Class shares
(collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI
compensation at the annual rate of 0.25% of the Fund's average daily net assets
of Class A shares, 1.00% of the average daily net assets of Class B and Class C
shares, 0.50% of the
16 AIM LEISURE FUND
average daily net assets of Class R shares and 0.25% of the average daily net
assets of Investor Class shares. Of Plan payments, up to 0.25% of the average
daily net assets of each class of shares may be paid to furnish continuing
personal shareholder services to customers who purchase and own shares of such
classes. Any amounts not paid as a service fee under the Plans would constitute
an asset-based sales charge. Rules of the Financial Industry Regulatory
Authority ("FINRA") impose a cap on the total sales charges, including asset-
based sales charges that may be paid by any class of shares of the Fund. For the
year ended March 31, 2009, expenses incurred under the Plans are shown in the
Statement of Operations as distribution fees.
Front-end sales commissions and CDSC (collectively the "sales charges") are
not recorded as expenses of the Fund. Front-end sales commissions are deducted
from proceeds from the sales of Fund shares prior to investment in Class A
shares of the Fund. CDSC are deducted from redemption proceeds prior to
remittance to the shareholder. During the year ended March 31, 2009, IADI
advised the Fund that IADI retained $8,626 in front-end sales commissions from
the sale of Class A shares and $3,202, $36,514, $3,668 and $0 from Class A,
Class B, Class C and Class R shares, respectively, for CDSC imposed on
redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
Invesco Aim, IAIS and/or IADI.
NOTE 3--SUPPLEMENTAL INFORMATION
The Fund adopted the provisions of Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of
the Fund's fiscal year. SFAS 157 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation methods giving
the highest priority to readily available unadjusted quoted prices in an active
market for identical assets (Level 1) and the lowest priority to significant
unobservable inputs (Level 3) generally when market prices are not readily
available or are unreliable. Based on the valuation inputs, the securities or
other investments are tiered into one of three levels. Changes in valuation
methods may result in transfers in or out of an investment's assigned level:
Level 1 -- Prices are determined using quoted prices in an active market for
identical assets.
Level 2 -- Prices are determined using other significant observable inputs.
Observable inputs are inputs that other market participants may use in pricing
a security. These may include quoted prices for similar securities, interest
rates, prepayment speeds, credit risk and others.
Level 3 -- Prices are determined using significant unobservable inputs. In
situations where quoted prices or observable inputs are unavailable (for
example, when there is little or no market activity for an investment at the
end of the period), unobservable inputs may be used. Unobservable inputs
reflect the Fund's own assumptions about the factors market participants would
use in determining fair value of the securities or instruments and would be
based on the best available information.
Below is a summary of the tiered valuation input levels, as of the end of the
reporting period, March 31, 2009. The level assigned to the securities
valuations may not be an indication of the risk or liquidity associated with
investing in those securities. Because of the inherent uncertainties of
valuation, the values reflected in the financial statements may materially
differ from the value received upon actual sale of those investments.
<Table>
<Caption>
INVESTMENTS IN
INPUT LEVEL SECURITIES
- --------------------------------------
Level 1 $318,122,920
- --------------------------------------
Level 2 6,075,583
- --------------------------------------
Level 3 --
======================================
$324,198,503
______________________________________
======================================
</Table>
NOTE 4--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions and (ii) custodian credits which
result from periodic overnight cash balances at the custodian. For the year
ended March 31, 2009, the Fund received credits from these arrangements, which
resulted in the reduction of the Fund's total expenses of $13,723.
NOTE 5--TRUSTEES' AND OFFICERS' FEES AND BENEFITS
"Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officers' Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officers'
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended March 31, 2009, the Fund paid legal fees of $6,086 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
17 AIM LEISURE FUND
NOTE 6--CASH BALANCES
The Fund is permitted to temporarily carry a negative or overdrawn balance in
its account with The State Street Bank and Trust Company, the custodian bank. To
compensate the custodian bank for such overdrafts, the overdrawn Fund may either
(i) leave funds as a compensating balance in the account so the custodian bank
can be compensated by earning the additional interest; or (ii) compensate by
paying the custodian bank at a rate agreed upon by the custodian bank and
Invesco Aim, not to exceed the contractually agreed upon rate.
NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED MARCH
31, 2009 AND 2008:
<Table>
<Caption>
2009 2008
- --------------------------------------------------------------------------------------------------------
Ordinary income $ 288,805 $ 9,205,826
- --------------------------------------------------------------------------------------------------------
Long-term capital gain 35,323,767 57,480,226
========================================================================================================
Total distributions $35,612,572 $66,686,052
________________________________________________________________________________________________________
========================================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
<Table>
<Caption>
2009
- ------------------------------------------------------------------------------------------------
Undistributed ordinary income $ 5,333,992
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) -- investments (39,240,815)
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation -- other investments 225
- ------------------------------------------------------------------------------------------------
Temporary book/tax differences (88,929)
- ------------------------------------------------------------------------------------------------
Post-October loss deferrals (66,817,422)
- ------------------------------------------------------------------------------------------------
Capital loss carryforward (8,813,641)
- ------------------------------------------------------------------------------------------------
Shares of beneficial interest 395,175,262
================================================================================================
Total net assets $285,548,672
________________________________________________________________________________________________
================================================================================================
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation (depreciation) difference is attributable primarily to wash sales.
The temporary book/tax differences are a result of timing differences between
book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of the trustee deferral of compensation and
retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund has a capital loss carryforward as of March 31, 2009 which expires as
follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------------------------
March 31, 2017 $8,813,641
_______________________________________________________________________________________________
===============================================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
NOTE 8--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended March 31, 2009 was $77,961,901 and $205,652,344,
respectively. Cost of investments on a tax basis includes the adjustments for
financial reporting purposes as of the most recently completed Federal income
tax reporting period-end.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $ 33,237,412
- ------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (72,478,227)
================================================================================================
Net unrealized appreciation (depreciation) of investment securities $(39,240,815)
________________________________________________________________________________________________
================================================================================================
Cost of investments for tax purposes is $363,439,318.
</Table>
NOTE 9--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of passive foreign
investment companies, foreign currency transactions and proxy costs, on March
31, 2009, undistributed net investment income was increased by $6,815,384,
undistributed net realized gain (loss) was decreased by $6,793,006 and shares of
beneficial interest decreased by $22,378. This reclassification had no effect on
the net assets of the Fund.
18 AIM LEISURE FUND
NOTE 10--SHARE INFORMATION
<Table>
<Caption>
SUMMARY OF SHARE ACTIVITY
- -------------------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-------------------------------------------------------------
2009(a) 2008
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 540,995 $ 17,884,731 1,218,138 $ 60,114,679
- -------------------------------------------------------------------------------------------------------------------------
Class B 45,136 1,489,097 113,125 5,466,526
- -------------------------------------------------------------------------------------------------------------------------
Class C 57,806 1,685,687 279,528 13,041,452
- -------------------------------------------------------------------------------------------------------------------------
Class R 12,634 376,338 21,533 1,059,768
- -------------------------------------------------------------------------------------------------------------------------
Class Y(b) 30,062 812,085 -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class 601,761 18,058,729 1,251,137 60,865,111
=========================================================================================================================
Issued as reinvestment of dividends:
Class A 278,451 5,783,432 300,832 13,188,486
- -------------------------------------------------------------------------------------------------------------------------
Class B 61,039 1,219,540 58,543 2,498,623
- -------------------------------------------------------------------------------------------------------------------------
Class C 76,246 1,471,550 66,579 2,755,684
- -------------------------------------------------------------------------------------------------------------------------
Class R 3,198 66,144 1,609 70,504
- -------------------------------------------------------------------------------------------------------------------------
Class Y 2,377 49,265 -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class 1,247,505 25,848,311 1,024,002 44,800,164
=========================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 56,271 1,712,364 52,410 2,453,729
- -------------------------------------------------------------------------------------------------------------------------
Class B (58,215) (1,712,364) (53,906) (2,453,729)
=========================================================================================================================
Reacquired:
Class A(b) (2,007,205) (61,429,053) (1,855,057) (86,975,692)
- -------------------------------------------------------------------------------------------------------------------------
Class B (274,172) (7,808,134) (189,973) (8,536,402)
- -------------------------------------------------------------------------------------------------------------------------
Class C (419,708) (11,830,167) (483,709) (20,312,689)
- -------------------------------------------------------------------------------------------------------------------------
Class R (8,900) (247,597) (4,575) (225,565)
- -------------------------------------------------------------------------------------------------------------------------
Class Y (4,052) (89,087) -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class(b) (3,277,521) (94,793,238) (2,953,141) (138,451,390)
=========================================================================================================================
Net increase (decrease) in share activity (3,036,292) $(101,452,367) (1,152,925) $ (50,640,741)
_________________________________________________________________________________________________________________________
=========================================================================================================================
</Table>
(a) There are entities that are record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate own 22% of the
outstanding shares of the Fund. IADI has an agreement with these entities
to sell Fund shares. The Fund, Invesco Aim and/or Invesco Aim affiliates
may make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, Invesco Aim and/or Invesco
Aim affiliates including but not limited to services such as securities
brokerage, distribution, third party record keeping and account servicing.
The Trust has no knowledge as to whether all or any portion of the shares
owned of record by these entities are also owned beneficially.
(b) Effective upon the commencement date of Class Y shares, October 3, 2008,
the following shares were converted from Class A and Investor Class into
Class Y shares of the Fund:
<Table>
<Caption>
CLASS SHARES AMOUNT
--------------------------------------------------------------------------------------------------
Class Y 20,792 $ 631,856
--------------------------------------------------------------------------------------------------
Class A (2,736) (83,298)
--------------------------------------------------------------------------------------------------
Investor Class (18,051) (548,558)
__________________________________________________________________________________________________
==================================================================================================
</Table>
19 AIM LEISURE FUND
NOTE 11--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
NET GAINS
(LOSSES)
NET ASSET NET ON SECURITIES DIVIDENDS DISTRIBUTIONS
VALUE, INVESTMENT (BOTH TOTAL FROM FROM NET FROM NET NET ASSET
BEGINNING INCOME REALIZED AND INVESTMENT INVESTMENT REALIZED TOTAL VALUE, END
OF PERIOD (LOSS)(a) UNREALIZED) OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 $39.82 $ 0.36 $(17.29) $(16.93) $ -- $(2.57) $(2.57) $20.32
Year ended 03/31/08 49.19 0.23 (5.72) (5.49) (0.37) (3.51) (3.88) 39.82
Year ended 03/31/07 43.45 0.15 9.20(e) 9.35 (1.05) (2.56) (3.61) 49.19
Year ended 03/31/06 45.61 0.15 2.60 2.75 (0.47) (4.44) (4.91) 43.45
Year ended 03/31/05 42.83 (0.05) 3.15 3.10 (0.32) -- (0.32) 45.61
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 38.68 0.13 (16.73) (16.60) -- (2.57) (2.57) 19.51
Year ended 03/31/08 47.95 (0.13) (5.55) (5.68) (0.08) (3.51) (3.59) 38.68
Year ended 03/31/07 42.46 (0.19) 8.96(e) 8.77 (0.72) (2.56) (3.28) 47.95
Year ended 03/31/06 44.86 (0.17) 2.54 2.37 (0.33) (4.44) (4.77) 42.46
Year ended 03/31/05 42.22 (0.32) 3.08 2.76 (0.12) -- (0.12) 44.86
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 37.51 0.12 (16.22) (16.10) -- (2.57) (2.57) 18.84
Year ended 03/31/08 46.62 (0.12) (5.40) (5.52) (0.08) (3.51) (3.59) 37.51
Year ended 03/31/07 41.35 (0.19) 8.74(e) 8.55 (0.72) (2.56) (3.28) 46.62
Year ended 03/31/06 43.82 (0.17) 2.47 2.30 (0.33) (4.44) (4.77) 41.35
Year ended 03/31/05 41.24 (0.31) 3.01 2.70 (0.12) -- (0.12) 43.82
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS R
Year ended 03/31/09 39.75 0.27 (17.23) (16.96) -- (2.57) (2.57) 20.22
Year ended 03/31/08 49.14 0.10 (5.71) (5.61) (0.27) (3.51) (3.78) 39.75
Year ended 03/31/07 43.41 0.04 9.19(e) 9.23 (0.94) (2.56) (3.50) 49.14
Year ended 03/31/06(f) 43.91 0.02 4.38 4.40 (0.46) (4.44) (4.90) 43.41
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(f) 30.39 0.14 (7.65) (7.51) -- (2.57) (2.57) 20.31
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 39.74 0.35 (17.24) (16.89) -- (2.57) (2.57) 20.28
Year ended 03/31/08 49.10 0.23 (5.71) (5.48) (0.37) (3.51) (3.88) 39.74
Year ended 03/31/07 43.37 0.15 9.19(e) 9.34 (1.05) (2.56) (3.61) 49.10
Year ended 03/31/06 45.54 0.16 2.59 2.75 (0.48) (4.44) (4.92) 43.37
Year ended 03/31/05 42.75 (0.00) 3.14 3.14 (0.35) -- (0.35) 45.54
_________________________________________________________________________________________________________________________________
=================================================================================================================================
<Caption>
RATIO OF RATIO OF
EXPENSES EXPENSES
TO AVERAGE TO AVERAGE NET RATIO OF NET
NET ASSETS ASSETS WITHOUT INVESTMENT
NET ASSETS, WITH FEE WAIVERS FEE WAIVERS INCOME (LOSS)
TOTAL END OF PERIOD AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO
RETURN(b) (000S OMITTED) ABSORBED ABSORBED NET ASSETS TURNOVER(c)
- -------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 (42.67)% $ 46,322 1.36%(d) 1.36%(d) 1.16%(d) 17%
Year ended 03/31/08 (11.89) 135,813 1.18 1.18 0.48 14
Year ended 03/31/07 21.86(e) 181,748 1.23 1.23 0.33 20
Year ended 03/31/06 6.58 132,515 1.29 1.29 0.34 20
Year ended 03/31/05 7.23 87,068 1.42 1.43 (0.11) 8
- -------------------------------------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 (43.08) 9,454 2.11(d) 2.11(d) 0.41(d) 17
Year ended 03/31/08 (12.54) 27,495 1.93 1.93 (0.27) 14
Year ended 03/31/07 20.95(e) 37,553 1.98 1.98 (0.42) 20
Year ended 03/31/06 5.81 34,272 2.02 2.02 (0.39) 20
Year ended 03/31/05 6.54 28,776 2.07 2.08 (0.76) 8
- -------------------------------------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 (43.09) 11,232 2.11(d) 2.11(d) 0.41(d) 17
Year ended 03/31/08 (12.56) 33,073 1.93 1.93 (0.27) 14
Year ended 03/31/07 20.98(e) 47,521 1.98 1.98 (0.42) 20
Year ended 03/31/06 5.78 33,549 2.02 2.02 (0.39) 20
Year ended 03/31/05 6.55 29,706 2.07 2.08 (0.76) 8
- -------------------------------------------------------------------------------------------------------------------
CLASS R
Year ended 03/31/09 (42.82) 599 1.61(d) 1.61(d) 0.91(d) 17
Year ended 03/31/08 (12.12) 903 1.43 1.43 0.23 14
Year ended 03/31/07 21.59(e) 203 1.48 1.48 0.08 20
Year ended 03/31/06(f) 10.57 22 1.52(g) 1.52(g) 0.11(g) 20
- -------------------------------------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(f) (24.90) 576 1.27(d)(g) 1.28(d)(g) 1.25(d)(g) 17
- -------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 (42.65) 217,365 1.36(d) 1.36(d) 1.16(d) 17
Year ended 03/31/08 (11.89) 482,760 1.18 1.18 0.48 14
Year ended 03/31/07 21.88(e) 629,840 1.23 1.23 0.33 20
Year ended 03/31/06 6.60 568,321 1.27 1.27 0.36 20
Year ended 03/31/05 7.35 659,978 1.32 1.33 (0.01) 8
___________________________________________________________________________________________________________________
===================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset value
for financial reporting purposes and the returns based upon those net asset
values may differ from the net asset value and returns for shareholder
transactions. Does not include sales charges and is not annualized for
periods less than one year, if applicable.
(c) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year, if applicable.
(d) Ratios are based on average daily net assets (000's omitted) of $85,949,
$17,701, $21,000, $772, $475 and $340,295 for Class A, Class B, Class C,
Class R, Class Y, and Investor Class shares, respectively.
(e) Net gains (losses) on securities (both realized and unrealized) per share
and total return includes a special dividend received of $10.00 per share
owned of Cablevision Systems Corp. -- Class A on April 24, 2006. Net gains
(losses) on securities (both realized and unrealized) per share excluding
the special dividend are $8.81, $8.57, $8.35, $8.80 and $8.80 for Class A,
Class B, Class C, Class R and Investor Class shares, respectively. Total
returns excluding the special dividend are 20.89%, 19.97%, 19.97%, 20.62%
and 20.90% for Class A, Class B, Class C, Class R and Investor Class
shares, respectively.
(f) Commencement date of October 25, 2005 and October 3, 2008 for Class R and
Class Y shares, respectively.
(g) Annualized.
20 AIM LEISURE FUND
NOTE 12--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On May 23, 2008, the Securities and Exchange Commission ("SEC") publicly posted
its final approval of the Distribution Plans ("Distribution Plans") for the
distribution of monies placed into two separate Fair Funds created pursuant to a
settlement reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"),
Invesco Aim Advisors, Inc. ("Invesco Aim") and Invesco Aim Distributors, Inc.
("IADI") and the SEC (the "Order"). One of the Fair Funds consists of $325
million, plus interest and any contributions by other settling parties, for
distribution to shareholders of certain mutual funds formerly advised by IFG who
may have been harmed by market timing and related activity. The second Fair Fund
consists of $50 million, plus interest and any contributions by other settling
parties, for distribution to shareholders of certain mutual funds advised by
Invesco Aim who may have been harmed by market timing and related activity. The
Distribution Plans provide for the distribution to all eligible investors to
compensate such investors for injury they may have suffered as a result of
market timing in the affected funds. The Distribution Plans include a provision
for any residual amounts in the Fair Funds to be distributed in the future to
the affected funds. Because the distribution of the Fair Funds has not yet
commenced, management of Invesco Aim and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"), the
parent company of IFG and Invesco Aim, has agreed to reimburse expenses incurred
by the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, Invesco Aim, IADI
and/or related entities and individuals alleging that the defendants permitted
improper market timing and related activity in the AIM Funds.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
negligence, breach of fiduciary duty and/or breach of contract. These lawsuits
seek remedies that include, depending on the lawsuit, damages, restitution,
injunctive relief, imposition of a constructive trust, removal of certain
directors and/or employees, various corrective measures under ERISA, rescission
of certain AIM Funds' advisory agreements and/or distribution plans and recovery
of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues were transferred to the United States District Court for the District of
Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court, plaintiffs in
these lawsuits consolidated their claims for pre-trial purposes into three
amended complaints against various Invesco Aim- and IFG-related parties: (i) a
Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of ERISA purportedly
brought on behalf of participants in the Invesco 401(k) plan. Based on orders
issued by the MDL Court, all claims asserted against the AIM Funds that have
been transferred to the MDL Court have been dismissed, although certain Funds
remain nominal defendants in the Consolidated Amended Fund Derivative Complaint.
On January 5, 2008, the parties reached an agreement in principle to settle both
the Consolidated Amended Class Action Complaint and Consolidated Amended Fund
Derivative Complaint, subject to the MDL Court approval. Individual class
members have the right to object. On December 15, 2008, the parties reached an
agreement in principle to settle the Amended Class Action Complaint for
Violations of ERISA, subject to the MDL Court approval. Individual class members
have the right to object. No payments are required under the settlement;
however, the parties agreed that certain limited changes to benefit plans and
participants' accounts would be made.
IFG, Invesco Aim, IADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, Invesco Aim and IADI have advised the Fund that they are providing
full cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, Invesco Aim, IADI and/or related entities and individuals in
the future.
Management of Invesco Aim and the Fund believe that the outcome of the Pending
Litigation and Regulatory Inquiries described above will have no material
adverse affect on the Fund or on the ability of Invesco Aim and IADI to provide
ongoing services to the Fund.
21 AIM LEISURE FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM Sector Funds
and Shareholders of AIM Leisure Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of AIM Leisure Fund (one of the funds
constituting AIM Sector Funds, hereafter referred to as the "Fund") at March 31,
2009, the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 2009, by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PRICEWATERHOUSECOOPERS LLP
May 15, 2009
Houston, Texas
22 AIM LEISURE FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. With
the exception of the actual ending account value and expenses of the Class Y
shares, the example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period October 1, 2008, through
March 31, 2009. The actual ending account and expenses of the Class Y shares in
the below example are based on an investment of $1,000 invested as of close of
business October 3, 2008 (commencement date) and held through March 31, 2009.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period (as of close of business
October 3, 2008 through March 31, 2009 for the Class Y shares). Because the
actual ending account value and expense information in the example is not based
upon a six month period for the Class Y shares, the ending account value and
expense information may not provide a meaningful comparison to mutual funds that
provide such information for a full six month period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/01/08) (03/31/09)(1) PERIOD(2) (03/31/09) PERIOD(2,3) RATIO
- ---------------------------------------------------------------------------------------------------
A $1,000.00 $692.70 $6.41 $1,017.35 $ 7.64 1.52%
- ---------------------------------------------------------------------------------------------------
B 1,000.00 690.10 9.57 1,013.61 11.40 2.27
- ---------------------------------------------------------------------------------------------------
C 1,000.00 690.10 9.57 1,013.61 11.40 2.27
- ---------------------------------------------------------------------------------------------------
R 1,000.00 692.00 7.47 1,016.11 8.90 1.77
- ---------------------------------------------------------------------------------------------------
Y 1,000.00 751.00 5.48 1,018.60 6.39 1.27
- ---------------------------------------------------------------------------------------------------
Investor 1,000.00 692.70 6.41 1,017.35 7.64 1.52
- ---------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period October 1, 2008, through March 31, 2009 (as of close of
business October 3, 2008, through March 31, 2009 for the Class Y shares),
after actual expenses and will differ from the hypothetical ending account
value which is based on the Fund's expense ratio and a hypothetical annual
return of 5% before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
182/365 to reflect the most recent fiscal half year. For the Class Y shares
actual expenses are equal to the annualized expense ratio indicated above
multiplied by the average account value over the period, multiplied by 180
(as of close of business October 3, 2008, through March 31, 2009)/365.
Because the Class Y shares have not been in existence for a full six month
period, the actual ending account value and expense information shown may
not provide a meaningful comparison to fund expense information of classes
that show such data for a full six month period and, because the actual
ending account value and expense information in the expense example covers a
short time period, return and expense data may not be indicative of return
and expense data for longer time periods.
(3) Hypothetical expenses are equal to the annualized expense ratio indicated
above multiplied by the average account value over the period, multiplied by
182/365 to reflect a one-half year period. The hypothetical ending account
value and expenses may be used to compare ongoing costs of investing in
Class Y shares of the Fund and other funds because such data is based on a
full six month period.
23 AIM LEISURE FUND
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year-end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to be
different, the maximum amount allowable for its fiscal year ended March 31,
2009:
<Table>
<Caption>
FEDERAL AND STATE INCOME TAX
----------------------------
Long-Term Capital Gain Dividends $35,523,768
Qualified Dividend Income* 60.44%
Corporate Dividends Received Deduction* 100.00%
</Table>
* The above percentages are based on ordinary income dividends paid to
shareholders during the Fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended June 30, 2008, September 30, 2008, December 31, 2008 and
March 31, 2009 were 23.65%, 23.30%, 26.45%, and 22.72%, respectively.
24 AIM LEISURE FUND
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM Sector Funds (the "Trust"), is 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 102
portfolios in the AIM Funds complex. The trustees serve for the life of the
Trust, subject to their earlier death, incapacitation, resignation, retirement
or removal as more specifically provided in the Trust's organizational
documents. Each officer serves for a one year term or until their successors are
elected and qualified. Column two below includes length of time served with
predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------------
Martin L. 2007 Executive Director, Chief Executive Officer and President, None
Flanagan(1) -- 1960 Invesco Ltd. (ultimate parent of Invesco Aim and a global
Trustee investment management firm); Chairman, Invesco Aim Advisors,
Inc. (registered investment advisor); Trustee, The AIM
Family of Funds--Registered Trademark--; Vice Chairman,
Investment Company Institute; and Member of Executive Board,
SMU Cox School of Business
Formerly: Director, Chairman, Chief Executive Officer and
President, IVZ Inc. (holding company); INVESCO Group
Services, Inc. (service provider); and Invesco North
American Holdings, Inc. (holding company); Director, Chief
Executive Officer and President, Invesco Holding Company
Limited (parent of Invesco Aim and a global investment
management firm); Chairman, Investment Company Institute;
President, Co-Chief Executive Officer, Co-President, Chief
Operating Officer and Chief Financial Officer, Franklin
Resources, Inc. (global investment management organization)
- --------------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None
Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and
Principal President, Invesco Trimark Dealer Inc. (formerly AIM Mutual
Executive Officer Fund Dealer Inc.) (registered broker dealer), Invesco Aim
Advisors, Inc., and 1371 Preferred Inc. (holding company);
Director, Chairman, Chief Executive Officer and President,
Invesco Aim Management Group, Inc. (financial services
holding company) and Invesco Aim Capital Management, Inc.
(registered investment advisor); Director and President,
INVESCO Funds Group, Inc. (registered investment advisor and
register transfer agent) and AIM GP Canada Inc. (general
partner for a limited partnership); Director, Invesco Aim
Distributors, Inc. (registered broker dealer); Director and
Chairman, Invesco Aim Investment Services, Inc. (registered
transfer agent) and INVESCO Distributors, Inc. (registered
broker dealer); Director, President and Chairman, INVESCO
Inc. (holding company) and Invesco Canada Holdings Inc.
(holding company); Chief Executive Officer, AIM Trimark
Corporate Class Inc. (corporate mutual fund company) and AIM
Trimark Canada Fund Inc. (corporate mutual fund company);
Director and Chief Executive Officer, Invesco Trimark
Ltd./Invesco Trimark Ltee (formerly AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services) (registered
investment advisor and registered transfer agent) and
Invesco Trimark Dealer Inc. (formerly AIM Mutual Fund Dealer
Inc.) (registered broker dealer); Trustee, President and
Principal Executive Officer of The AIM Family of Funds--
Registered Trademark-- (other than AIM Treasurer's Series
Trust and Short-Term Investments Trust); Trustee and
Executive Vice President, The AIM Family of Funds--
Registered Trademark-- (AIM Treasurer's Series Trust and
Short-Term Investments Trust only); and Manager, Invesco
PowerShares Capital Management LLC
Formerly: President, Invesco Trimark Dealer Inc.; Director
and President, AIM Trimark Corporate Class Inc. and AIM
Trimark Canada Fund Inc.; Director and President, Invesco
Trimark Ltd./Invesco Trimark Ltee (formerly AIM Funds
Management Inc. d/b/a INVESCO Enterprise Services); Senior
Managing Director, Invesco Holding Company Limited; Trustee
and Executive Vice President, Tax-Free Investments Trust;
Director and Chairman, Fund Management Company (registered
broker dealer); President and Principal Executive Officer,
The AIM Family of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term Investments Trust and
Tax-Free Investments Trust only); President, AIM Trimark
Global Fund Inc. and AIM Trimark Canada Fund Inc.; and
Director, Trimark Trust (federally regulated Canadian Trust
Company)
- --------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited
Trustee and Chair consulting company) (insurance company);
Captaris, Inc.
(unified messaging
provider); and
Investment Company
Institute
- --------------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 1983 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2003 Retired
Trustee
Formerly: Partner, law firm of Baker & McKenzie; and None
Director, Badgley Funds, Inc. (registered investment
company) (2 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Director, Van Gilder
Trustee firm) Insurance Company,
Board of Governors,
Western Golf
Association/Evans
Scholars Foundation
and Executive
Committee, United
States Golf
Association
- --------------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2003 Director of a number of public and private business None
Trustee corporations, including the Boss Group Ltd. (private
investment and management); Continental Energy Services, LLC
(oil and gas pipeline service); Reich & Tang Funds
(registered investment company); Annuity and Life Re
(Holdings), Ltd. (reinsurance company), and Homeowners of
America Holding Corporation/Homeowners of America Insurance
Company (property casualty company)
Formerly: Director, CompuDyne Corporation (provider of
product and services to the public security market);
Director, President and Chief Executive Officer, Volvo Group
North America, Inc.; Senior Vice President, AB Volvo;
Director of various public and private corporations
- --------------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff
Trustee (government affairs company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate
entertainment)
Formerly: Chief Executive Officer, Texana Timber LP
(sustainable forestry company); and Discovery Global
Education Fund (non-profit)
- --------------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich &
Trustee Tang Funds (16
portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 2003 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 1997 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired
Trustee
Formerly: Partner, Director, Mainstay VP Series Funds, Inc. None
(25 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan is considered an interested person of the Trust because he is
an officer of the advisor to the Trust, and an officer and a director of
Invesco Ltd., ultimate parent of the advisor to the Trust.
(2) Mr. Taylor is considered an interested person of the Trust because he is an
officer and a director of the advisor to, and a director of the principal
underwriter of, the Trust.
25 AIM LEISURE FUND
TRUSTEES AND OFFICERS--(CONTINUED)
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- --------------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family of N/A
Senior Vice President and Funds--Registered Trademark--
Senior Officer
Formerly: Director of Compliance and Assistant General Counsel,
ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General
Counsel and Director of Compliance, ALPS Mutual Funds, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General Counsel, N/A
Senior Vice President, Chief Invesco Aim Management Group, Inc., Invesco Aim Advisors, Inc.
Legal Officer and Secretary and Invesco Aim Capital Management, Inc.; Director, Senior Vice
President and Secretary, Invesco Aim Distributors, Inc.;
Director, Vice President and Secretary, Invesco Aim Investment
Services, Inc. and INVESCO Distributors, Inc.; Director and Vice
President, INVESCO Funds Group Inc.; Senior Vice President, Chief
Legal Officer and Secretary, The AIM Family of Funds--Registered
Trademark--; and Manager, Invesco PowerShares Capital Management
LLC
Formerly: Director, Vice President and Secretary, Fund Management
Company; Vice President, Invesco Aim Capital Management, Inc.;
Chief Operating Officer, Senior Vice President, General Counsel
and Secretary, Liberty Ridge Capital, Inc. (an investment
adviser); Vice President and Secretary, PBHG Funds (an investment
company); Vice President and Secretary, PBHG Insurance Series
Fund (an investment company); Chief Operating Officer, General
Counsel and Secretary, Old Mutual Investment Partners (a broker-
dealer); General Counsel and Secretary, Old Mutual Fund Services
(an administrator); General Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder servicing center); Executive
Vice President, General Counsel and Secretary, Old Mutual
Capital, Inc. (an investment adviser); and Vice President and
Secretary, Old Mutual Advisors Funds (an investment company)
- --------------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice President, The N/A
Vice President AIM Family of Funds--Registered Trademark--
Formerly: Senior Vice President, Invesco Aim Management Group,
Inc.; Senior Vice President and Chief Compliance Officer, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark--; Vice President and Chief Compliance Officer, Invesco
Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.;
Vice President, Invesco Aim Investment Services, Inc. and Fund
Management Company
- --------------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, Invesco N/A
Vice President Ltd.; Director and Secretary, Invesco Holding Company Limited,
and INVESCO Funds Group, Inc.; Director and Executive Vice
President, IVZ Inc., Invesco Group Services, Inc., Invesco North
American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.;
and Vice President, The AIM Family of Funds--Registered
Trademark--
Formerly: Secretary, IVZ, Inc., Invesco Group Services, Inc., and
Invesco North American Holdings, Inc.; Senior Managing Director
and Secretary, Invesco Holding Company Limited; Director, Senior
Vice President, Secretary and General Counsel, Invesco Aim
Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior
Vice President, Invesco Aim Distributors, Inc.; Director, General
Counsel and Vice President, Fund Management Company; Vice
President, Invesco Aim Capital Management, Inc., Invesco Aim
Investment Services, Inc., Invesco Group Services, Inc. and IVZ
Inc.; Senior Vice President, Chief Legal Officer and Secretary,
The AIM Family of Funds--Registered Trademark--; Director and
Vice President, INVESCO Distributors, Inc. and Chief Executive
Officer and President, INVESCO Funds Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Sheri Morris -- 1964 1999 Vice President, Treasurer and Principal Financial Officer, The N/A
Vice President, Treasurer AIM Family of Funds--Registered Trademark--; and Vice President,
and Principal Financial Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc.
Officer and Invesco Aim Private Asset Management Inc.
Formerly: Assistant Vice President and Assistant Treasurer, The
AIM Family of Funds--Registered Trademark-- and Assistant Vice
President, Invesco Aim Advisors, Inc., Invesco Aim Capital
Management, Inc. and Invesco Aim Private Asset Management, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash Management N/A
Vice President Group; Director of Cash Management and Senior Vice President,
Invesco Aim Advisors, Inc. and Invesco Aim Capital Management,
Inc; Executive Vice President, Invesco Aim Distributors, Inc.;
Senior Vice President, Invesco Aim Management Group, Inc.; Vice
President, The AIM Family of Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust and Short-Term Investments
Trust); and President and Principal Executive Officer, The AIM
Family of Funds--Registered Trademark-- (AIM Treasurer's Series
Trust and Short-Term Investments Trust only)
Formerly President and Principal Executive Officer, Tax-Free
Investments Trust; Director and President, Fund Management
Company; Chief Cash Management Officer and Managing Director,
Invesco Aim Capital Management, Inc.; and Vice President, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark-- (AIM Treasurer's Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust only)
- --------------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim Advisors, N/A
Anti-Money Laundering Inc., Invesco Aim Capital Management, Inc., Invesco Aim
Compliance Officer Distributors, Inc., Invesco Aim Investment Services, Inc.,
Invesco Aim Private Asset Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering Compliance Officer, Fund
Management Company; and Manager of the Fraud Prevention
Department, Invesco Aim Investment Services, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; Senior N/A
Chief Compliance Officer Vice President and Chief Compliance Officer, Invesco Aim
Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief
Compliance Officer, The AIM Family of Funds--Registered
Trademark--, Invesco Global Asset Management (N.A.), Inc.
(registered investment advisor), Invesco Institutional (N.A.),
Inc., (registered investment advisor), INVESCO Private Capital
Investments, Inc. (holding company), Invesco Private Capital,
Inc. (registered investment advisor) and Invesco Senior Secured
Management, Inc. (registered investment advisor); and Vice
President, Invesco Aim Distributors, Inc. and Invesco Aim
Investment Services, Inc.
Formerly: Vice President, Invesco Aim Capital Management, Inc.
and Fund Management Company; and Global Head of Product
Development, AIG-Global Investment Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
The Statement of Additional Information of the Trust includes additional
information about the Fund's Trustees and is available upon request, without
charge, by calling 1.800.959.4246.
Please refer to the Fund's prospectus for information on the Fund's sub-
advisors.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza Invesco Aim Advisors, Invesco Aim Distributors, PricewaterhouseCoopers
Suite 100 Inc. Inc. LLP
Houston, TX 77046-1173 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street
Suite 100 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Stradley Ronon Stevens INDEPENDENT TRUSTEES Invesco Aim Investment State Street Bank and
& Young, LLP Kramer, Levin, Naftalis & Services, Inc. Trust Company
2600 One Commerce Square Frankel LLP P.O. Box 4739 225 Franklin Street
Philadelphia, PA 19103 1177 Avenue of the Houston, TX 77210-4739 Boston, MA 02110-2801
Americas
New York, NY 10036-2714
26 AIM LEISURE FUND
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====================================================================================================================================
FUND HOLDINGS AND PROXY VOTING INFORMATION
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund
files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is
available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your
Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC
website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C.
You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by
calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file
numbers for the Fund are 811-03826 and 002-85905.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio
securities is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim
website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC
website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2008,
is available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting
Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov.
If used after July 20, 2009, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for
the most recent quarter-end. Invesco Aim--SERVICE MARK-- is a service mark of Invesco Aim Management Group, Inc. Invesco Aim
Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital
Management LLC are the investment advisors for the products and services represented by Invesco Aim; they each provide investment
advisory services to individual and institutional clients and do not sell securities. Please refer to each fund's prospectus for
information on the fund's subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the retail mutual funds,
exchange-traded funds and institutional money market funds and the subdistributor for the STIC Global Funds represented by Invesco
Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd.
It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital
Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. will be merged into
Invesco Institutional (N.A.), Inc., and the consolidated adviser firm will be renamed Invesco Advisers, Inc. Additional information
will be posted at invescoaim.com on or about the end of the fourth quarter of 2009.
[INVESCO AIM LOGO]
-- SERVICE MARK --
invescoaim.com I-LEI-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] AIM TECHNOLOGY FUND
--SERVICE MARK-- Annual Report to Shareholders o March 31, 2009
[MOUNTAIN GRAPHIC]
2 Letters to Shareholders
4 Performance Summary
4 Management Discussion
6 Long-Term Fund Performance
8 Supplemental Information
9 Schedule of Investments
11 Financial Statements
14 Notes to Financial Statements
21 Financial Highlights
23 Auditor's Report
24 Fund Expenses
25 Tax Information
26 Trustees and Officers
Dear Shareholders:
The past year was difficult to say the least for virtually all investors. Market indexes in the U.S.
[TAYLOR and around the globe nosedived in 2008, and the vast majority of us have seen sharp declines in the
PHOTO] value of our investments. As I write this letter, "market experts" remain divided on the outlook for
the market. While some argue the worst of the decline is over, others say we have farther to fall.
There is widespread agreement, however, that markets are likely to remain volatile for some time to
come.
We've all read about subprime lending, government bailouts and investment scandals -- but we know
that as individuals, we have little control over such matters. Rather, I'd like to discuss with you
actions you may have already taken, or can take now, that may benefit you going forward.
Philip Taylor
BOOMS AND BUSTS
Recent history should have reminded all of us that investor sentiment can be fickle. The
technology-driven bull market of the late 1990s gave way to a sharp decline from 2000 to 2002 when the
"tech bubble" burst. More recently, the 2003 to 2007 bull market, driven largely by financial stocks and a housing boom, among other
factors, gave way to the current market decline when the "housing bubble" burst.
These market downturns hurt nearly all investors. But they were particularly painful for investors who, seeking high, short-term
returns, abandoned their long-term, diversified investment plans and decided to chase performance -- i.e., allocate a large portion
of their assets into the "hot" investments du jour. Many of those investors discovered they had unwittingly bought at the top of the
market, and they saw the value of their assets decline significantly as market leadership changed. History has shown that seeking
the highest short-term returns possible has often led to long-term disappointment.
This is why we believe investors should work with their financial advisors to devise a goal-based financial strategy -- a
long-term plan with a reasonable prospect of achieving predetermined financial goals in line with individual risk tolerance. Such a
strategy cannot guarantee a profit or protect against loss in a declining market, but it may help investors avoid emotion-driven,
short-term investment mistakes.
WHAT TO DO NOW
None of us can control the markets, but we can control our own reaction to the unsettling volatility we're currently experiencing.
Here are some steps that may help position you for whatever the market brings next:
o REVISIT YOUR GOALS. Work with your financial advisor to create specific, concrete investment goals consistent with your risk
tolerance. Scared by market volatility, many investors fled to cash in recent months. While that may be entirely appropriate
for investors approaching retirement, other investors may need the growth potential of equities to achieve their long-term
goals. Your financial advisor can suggest investments that match your goals and risk tolerance.
o RESIST LOOKING OVER THE FENCE. Every investor's needs, goals and risk tolerance are different. Your neighbor's, co-worker's or
relative's investments have no relevance to yours because their circumstances, goals and risk tolerances are as individual as
yours.
o LET LOGIC BE YOUR GUIDE. Market volatility is a fact of life for investors. Market declines can be painful, but historically
they haven't proved permanent. Your financial advisor can help you approach your investment plan logically, not emotionally.
WHAT WE'RE DOING
Invesco Aim has worked on behalf of investors in both bull markets and bear markets. That is why we're committed to good
stewardship, good communication and sound investment management.
To be good stewards, we've established best practice risk-management and investment oversight processes, further enhancing our
compliance oversight and our transparency to our shareholders and our independent fund board.
To be good communicators, we've revamped our website to put Investment Perspectives front and center on the home page of
invescoaim.com and on your account balance page. Our chief investment officers, portfolio managers and I are eager to communicate
with you directly about your investments, market conditions and other topics that may be helpful to you.
To be good investment managers, we've focused on doing one thing well: managing your money. At Invesco Aim, managing your money
is all we do. We believe mutual funds should have well-defined, clearly articulated and repeatable investment strategies. Our funds
have stayed true to their investment strategies even during this current period of market volatility.
CONTACT US
If you have questions about this report or your account, please contact one of our client service representatives at 800 959 4246.
I also invite you to visit invescoaim.com, where you can check on your individual account, obtain long-term performance
information for your fund and read market commentaries from our investment professionals.
As always, I welcome your comments and questions. Please contact me at phil@invescoaim.com and let me know what's on your mind.
Thank you for investing with us. All of us at Invesco Aim look forward to serving you.
Sincerely,
/s/ PHILIP TAYLOR
Philip Taylor
Senior Managing Director, Invesco Ltd.
CEO, Invesco Aim
2 AIM TECHNOLOGY FUND
Dear Fellow Shareholders:
Since my last letter, continuing troubles in the global economy and financial markets have negatively
affected all investors. The new government promises to move quickly with a stimulus package, yet
considerable anxiety remains about how, when and what kind of a recovery will occur. However, mutual
[CROCKETT funds generally are more diversified than other investments; as shareholders we invest not in a single
PHOTO] security but in a portfolio of multiple securities. The benefits of diversification have been
reiterated by the stories of investors who "lost everything" because they had too many of their assets
Bruce Crockett in one place, whether that place was a single money manager or their employer's stock. Mutual fund
investors also have the opportunity to diversify further among different types of funds that each
deploy a different strategy and focus on different kinds of securities. These include conservatively
managed money market funds, which, relative to other securities, continue to offer a more safe,
liquid, and convenient way to invest short-term assets.
In addition to diversification, investing discipline is essential during challenging times such as these. Strategies such as
dollar cost averaging, where individuals invest a consistent amount at regular intervals, can help investors acquire more fund
shares when prices are low. Periodic rebalancing of asset allocation plans achieves the same effect. "Buy low, sell high" has long
been the mantra of investment success, but the advice is not always easy to follow because it requires the discipline to resist
prevailing trends. Of course, investment strategies, such as dollar cost averaging and portfolio rebalancing do not guarantee a
profit or eliminate the risk of loss. Investors should consider their ability to continue investing regardless of fluctuating
security prices.
A long-term view is also important, particularly for assets that are not needed right away. In the past, it has often proven
better to keep long-term assets invested through a downturn than to miss the beginning of the upward trend. To develop a diversified
and disciplined investing plan that is right for your individual goals, I encourage you to consult an experienced and trustworthy
investment professional who has the knowledge and the tools to help you establish and implement the plan, monitor its results and
adapt it to changing goals and circumstances.
Even when working with a personal financial advisor, investors should supplement the relationship with their own knowledge and
awareness of the investments they hold. Visit the Invesco Aim website at invescoaim.com regularly to find out what is happening in
your AIM funds and to read timely market commentary from Invesco Aim management, strategists and portfolio managers. The site's
"Education and Planning" section can also help you clarify basic investment concepts, learn how to choose a financial advisor,
evaluate different investment choices and make more informed investment decisions. Invesco Aim's redesigned public home page
recently received a Gold Award for its user-friendly navigation and graphics from The Mutual Funds Monitor Awards, sponsored by
Corporate Insight.
As always, your Board of Trustees and Invesco Aim are committed to putting your interests first by controlling costs, monitoring
investment performance and streamlining the investment management process during these difficult times. Your Board has already begun
the annual review and management contract renewal process with the continuing goal of making AIM funds one of the best and most
cost-effective ways for you to invest your hard-earned money.
While the investing climate may remain uncertain for a while, economies and markets are dynamic, and no stage is ever permanent.
Please feel free to contact me in writing with your questions or concerns. You can send an email to me at bruce@brucecrockett.com.
Best regards,
/s/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Trustees
3 AIM TECHNOLOGY FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
======================================================================================= business drivers of companies in which we
PERFORMANCE SUMMARY invest. The portfolio is constructed with
the goal of holding approximately 40-60
The economy was negatively affected by credit contraction and reduced business and individual stocks best suited to
consumer spending. Information technology (IT) companies were not immune; however, the capitalize on secular trends prevalent in
sector rallied during the first quarter of 2009. As a result, the IT sector, in the IT sector.
general, and AIM Technology Fund outperformed the broad market, as measured by the S&P
500 Index, for the year ended March 31, 2009. The Fund performed in line with its We may reduce or eliminate a stock
style-specific index, the S&P North American Technology Sector Index, and Lipper peers when:
during the fiscal year. (triangle)On an absolute basis, holdings in communications
equipment, application software, Internet software and services, and semiconductors o A stock's price reaches its valuation
had the greatest negative affect on Fund performance. target.
Your Fund's long-term performance appears later in this report. o A company's fundamentals change or
deteriorate.
FUND VS. INDEXES
o It no longer meets our investment
Total returns, 3/31/08 to 3/31/09, at net asset value (NAV). Performance shown does not criteria.
include applicable contingent deferred sales charges (CDSC) or front-end sales charges,
which would have reduced performance. MARKET CONDITIONS AND YOUR FUND
Class A Shares -30.53% Stock markets around the world were
Class B Shares -31.07 extremely volatile over the past year. The
Class C Shares -31.03 chief catalyst was the ongoing credit
Class Y Shares* -30.45 crisis that began in late 2007 with
Investor Class Shares -30.53 unfortunate consequences that included
S&P 500 Index (triangle) (Broad Market Index) -38.06 tightened credit, increased unemployment
S&P North American Technology Sector Index (triangle)(Style-Specific Index) -30.27 and sharply reduced consumer spending.
Lipper Science and Technology Funds Index (triangle)(Peer Group Index) -30.82 Governments around the world responded
with expansionary monetary and fiscal
(triangle) Lipper Inc. policies. Most major central banks set
interest rates below 1% and government
* Share class incepted during the fiscal year. See page 7 for a detailed explanation spending initiatives are well under
of Fund performance. way.(1)
=======================================================================================
HOW WE INVEST We place great emphasis on companies Evidence of economic weakness abounded
exhibiting high returns on invested in the U.S. Real gross domestic product, a
We seek to grow capital by investing in capital and generating free cash flow, broad measure of economic activity,
companies we believe are generating metrics the team believes are good contracted at an annual rate of 6.3% in
sustainable, superior earnings and cash indicators of financial health and the the fourth quarter of 2008.(2) Inflation,
flow growth that is not fully reflected in potential for growth. Also, we seek as measured by the seasonally-adjusted
investor expectations or equity management teams that maintain high Consumer Price Index, was virtually nil
valuations. The Fund emphasizes companies quality balance sheets and manageable debt following sharp declines in energy prices
believed to have a strategic advantage levels. Valuation also plays a critical in the second half of 2008.(3)
over their competition and operating in role in stock selection. Unemployment trended higher during the
industries believed to benefit from fiscal year and reached a seasonally
secular trends. The Fund invests in Risk management plays an important role adjusted rate of 8.5% by the end of March
industries such as hardware, software, in portfolio construction, as our target 2009.(3)
telecommunications equipment and services, portfolio attempts to limit volatility and
semiconductors and service-related downside risk. Only stocks that represent Against this backdrop, all stock market
companies in the IT sector. We use a a proper risk and reward profile are sectors delivered double-digit losses for
research oriented bottom-up investment chosen for inclusion in the portfolio. We the fiscal year.(4) Health care, consumer
approach focusing on company fundamentals seek to accomplish this goal by thoroughly staples, telecommunication services and
and growth prospects. understanding the key utilities -- traditionally more defensive
========================================== ========================================== ==========================================
PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* Total Net Assets $412.7 million
By sector 1. Intel Corp. 3.8% Total Number of Holdings* 57
2. Microsoft Corp. 3.8 ==========================================
Information Technology 87.2% 3. Hewlett-Packard Co. 3.7
Telecommunication Services 4.5 4. QUALCOMM Inc. 3.4
Financials 1.8 5. McAfee Inc. 3.3
Consumer Discretionary 0.7 6. Check Point Software 3.2
U.S. Treasury Notes, Money Market Technologies Ltd.
Funds Plus Other Assets Less 7. Google Inc. 3.1
Liabilities 5.8 8. Cisco Systems, Inc. 3.1
========================================== 9. Apple Inc. 3.0
10. NICE Systems Ltd.-ADR 3.0
==========================================
The Fund's holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* Excluding money market fund holdings.
4 AIM TECHNOLOGY FUND
sectors -- were among the better year. A significant portion of its WARREN TENNANT
performing sectors of the S&P 500 business comes from the advertising
Index.(4) Financials, industrials and industry, which has seen slowing demand in Chartered Financial
materials were the worst performing the face of continued global economic [TENNANT Analyst, portfolio manager,
sectors.(4) weakness. We continued to hold these PHOTO] is lead manager of AIM
stocks at the end of the fiscal year. Technology Fund. Mr.
As for the Fund itself, most IT Tennant joined Invesco Aim
sub-sectors detracted from performance Changes in the Fund's holdings during in 2000. He earned both his B.B.A. in
during the fiscal year. The Fund was most the fiscal year were partially the result finance and M.B.A. from The University of
negatively affected by holdings within: of management changes with more emphasis Texas at Austin.
being placed on risk and return analysis
o Communications equipment in an effort to limit volatility and BRIAN NELSON
mitigate downside risk. Although we sought
o Application software to take advantage of extreme dislocations Chartered Financial
in valuation, the macroeconomic [NELSON Analyst, portfolio manager,
o Internet software and services environment caused us to be cautious. PHOTO] is manager of AIM
Technology Fund. Mr. Nelson
o Semiconductors As always, we thank you for your began his investment career
continued investment in AIM Technology in 1988 and joined Invesco Aim in 2004. He
On an absolute basis, holdings in Fund. earned a B.A. from the University of
integrated telecommunication services California-Santa Barbara and is a member
contributed the most to Fund performance (1) FXstreet.com of the Securities Analyst Society of San
during the fiscal year, while holdings in Francisco.
communications equipment, application (2) Bureau of Economic Analysis
software, Internet software and services, Assisted by the Technology Team
and semiconductors were the primary (3) Bureau of Labor Statistics
detractors from performance. Other
contributors to performance included (4) Lipper Inc.
litigation settlements, cash and Nasdaq
futures. In declining markets, items such The views and opinions expressed in
as litigation settlements and cash -- management's discussion of Fund
which do not typically lose value -- can performance are those of Invesco Aim
very easily become top performance Advisors, Inc. These views and opinions
contributors. As is customary, the Fund are subject to change at any time based on
held a small amount of cash in a defensive factors such as market and economic
effort to avoid volatility in the stock conditions. These views and opinions may
market. Occasionally, this cash was not be relied upon as investment advice or
deployed quickly through the use of Nasdaq recommendations, or as an offer for a
futures, which are a derivative instrument particular security. The information is
that allows an efficient way to gain broad not a complete analysis of every aspect of
exposure to the companies within the any market, country, industry, security or
Nasdaq 100 Index, providing predominately the Fund. Statements of fact are from
technology sector exposure. sources considered reliable, but Invesco
Aim Advisors, Inc. makes no representation
Relative to the S&P North American or warranty as to their completeness or
Technology Sector Index, our security accuracy. Although historical performance
selection within the systems software is no guarantee of future results, these
industry had the greatest positive affect insights may help you understand our
on Fund performance. Additionally, our investment management philosophy.
exposure to BLUESTREAM VENTURES, a private
venture capital firm not owned by the See important Fund and index disclosures
index, contributed positively to Fund later in this report.
performance. On the other hand, our
security selection in the communications
equipment industry, as well as our
security selection and underweight
exposure to the data processing and
outsourced services industry, detracted
from relative performance.
Top contributors to Fund performance
during the fiscal year included
INTERNATIONAL BUSINESS MACHINES (IBM),
while top detractors included ADOBE
SYSTEMS. IBM was an opportunistic addition
to the portfolio as it declined with the
market in early 2009 and reached a price
level at which we were comfortable
investing. Adobe Systems, on the other
hand, suffered as a result of the cyclical
downturn in advertising during the fiscal
5 AIM TECHNOLOGY FUND
====================================================================================================================================
YOUR FUND'S LONG-TERM PERFORMANCE
Past performance cannot guarantee Class C shares. The performance of the taxes a shareholder would pay on Fund
comparable future results. Fund's other share classes will differ distributions or sale of Fund shares.
primarily due to different sales charge
The performance data shown in the first structures and class expenses and may be Both charts above are logarithmic
chart above is that of the Fund's Investor greater than or less than the performance charts, which present the fluctuations in
class shares. The performance of the of the Fund's Class C shares. The data the value of the Fund's share class and
Fund's other share classes will differ shown in the second chart above includes its indexes. We believe that a logarithmic
primarily due to different sales charge reinvested distributions, Fund expenses chart is more effective than other types
structures and class expenses and may be and management fees. Index results include of charts in illustrating changes in value
greater than or less than the performance reinvested dividends, but they do not during the early years shown in the chart.
of the Fund's Investor Class shares. The reflect sales charges. The vertical axis, the one that indicates
data shown in this chart includes the dollar value of an investment, is
reinvested distributions, Fund expenses Performance of an index of funds constructed with each segment representing
and management fees. Index results include reflects fund expenses and management a percent change in the value of the
reinvested dividends. fees; performance of a market index does investment. In both charts, each segment
not. Performance shown in the charts and represents a doubling, or 100% change, in
The performance data shown in the table does not reflect deduction of the value of the investment.
second chart above is that of the Fund's
6 AIM TECHNOLOGY FUND
AIM TECHNOLOGY FUND - INVESTOR CLASS SHARES
================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITHOUT SALES CHARGES
SINCE INCEPTION
Fund data from 1/19/84, index data from 1/31/84
AIM
TECHNOLOGY FUND-
INVESTOR CLASS
DATE SHARES S&P 500 INDEX(1)
- ------- ---------------- ----------------
1/19/84 $10000
1/84 10000 $10000
2/84 9975 9648
3/84 9925 9815
4/84 9787 9908
5/84 9412 9360
6/84 9488 9563
7/84 8563 9444
8/84 9762 10488
9/84 9137 10490
10/84 8913 10531
11/84 8123 10413
12/84 8712 10687
1/85 10091 11520
2/85 10580 11661
3/85 10129 11668
4/85 9590 11658
5/85 9903 12331
6/85 9665 12524
7/85 10141 12506
8/85 10078 12385
9/85 9439 12011
10/85 9515 12566
11/85 10706 13428
12/85 11095 14078
1/86 11358 14157
2/86 11634 15214
3/86 12624 16063
4/86 13025 15883
5/86 13602 16727
6/86 12838 17010
7/86 11685 16059
8/86 12625 17250
9/86 11898 15823
10/86 12986 16736
11/86 13265 17143
12/86 13517 16705
1/87 16032 18955
2/87 17724 19704
3/87 18101 20272
4/87 19220 20092
5/87 19583 20266
6/87 18032 21290
7/87 17823 22369
8/87 18383 23203
9/87 18747 22694
10/87 11880 17807
11/87 10788 16340
12/87 12803 17582
1/88 12216 18321
2/88 13573 19172
================================================================================
(1) Lipper Inc.
================================================================================
[MOUNTAIN CHART]
3/88 14049 18580
4/88 14693 18786
5/88 14427 18946
6/88 15799 19815
7/88 15058 19739
8/88 14330 19070
9/88 14527 19882
10/88 14149 20435
11/88 13869 20143
12/88 14625 20494
1/89 15227 21994
2/89 15031 21447
3/89 15395 21947
4/89 16137 23085
5/89 17355 24016
6/89 15829 23881
7/89 17159 26035
8/89 18041 26542
9/89 18447 26434
10/89 17720 25821
11/89 18154 26345
12/89 17762 26977
1/90 17105 25167
2/90 18574 25491
3/90 19639 26166
4/90 19778 25514
5/90 22620 27996
6/90 22901 27808
7/90 21362 27719
8/90 18450 25216
9/90 16365 23991
10/90 16254 23890
11/90 18214 25431
12/90 19293 26139
1/91 22190 27274
2/91 23520 29222
3/91 25998 29929
4/91 25200 30000
5/91 26279 31290
6/91 23940 29858
7/91 26669 31248
8/91 28867 31986
9/91 29568 31451
10/91 31481 31873
11/91 30090 30592
12/91 34125 34085
1/92 36230 33450
2/92 37415 33883
3/92 34631 33225
4/92 32180 34200
5/92 33135 34367
6/92 31220 33856
7/92 32369 35238
8/92 31136 34518
9/92 32805 34924
10/92 35134 35043
11/92 38907 36233
12/92 40541 36678
1/93 40160 36984
2/93 36787 37488
3/93 37846 38279
4/93 36942 37353
5/93 41201 38350
6/93 41860 38462
7/93 42032 38307
8/93 45268 39757
9/93 46853 39453
================================================================================
================================================================================
[MOUNTAIN CHART]
10/93 46942 40268
11/93 44923 39884
12/93 46635 40366
1/94 47740 41738
2/94 47821 40605
3/94 44598 38838
4/94 45369 39336
5/94 44993 39979
6/94 42739 39001
7/94 43410 40280
8/94 46791 41928
9/94 47287 40904
10/94 49302 41821
11/94 47660 40300
12/94 49090 40897
1/95 49006 41957
2/95 51966 43590
3/95 53702 44874
4/95 56274 46195
5/95 56787 48038
6/95 61750 49152
7/95 66566 50781
8/95 67179 50908
9/95 69120 53055
10/95 70101 52866
11/95 72268 55184
12/95 71574 56247
1/96 71767 58159
2/96 75004 58700
3/96 73504 59265
4/96 80148 60138
5/96 83258 61686
6/96 77963 61922
7/96 74361 59187
8/96 80273 60438
9/96 86157 63836
10/96 84106 65596
11/96 88968 70550
12/96 87135 69153
1/97 91945 73471
2/97 85334 74047
3/97 80862 71011
4/97 85698 75246
5/97 92108 79847
6/97 94752 83396
7/97 104511 90030
8/97 104793 84990
9/97 108838 89642
10/97 101514 86652
11/97 99422 90660
12/97 94839 92216
1/98 93255 93235
2/98 100165 99955
3/98 106085 105070
4/98 109045 106146
5/98 103331 104324
6/98 109748 108558
7/98 107981 107411
8/98 88901 91893
9/98 98600 97784
10/98 98984 105726
11/98 108012 112131
12/98 123392 118588
1/99 136793 123546
2/99 123428 119706
3/99 141696 124495
4/99 144969 129316
================================================================================
================================================================================
[MOUNTAIN CHART]
5/99 144055 126265
6/99 164756 133254
7/99 162104 129111
8/99 175931 128472
9/99 181227 124954
10/99 205130 132858
11/99 240618 135558
12/99 302216 143531
1/00 301038 136321
2/00 407394 133743
3/00 381280 146819
4/00 337776 142403
5/00 297952 139484
6/00 349021 142919
7/00 338062 140687
8/00 395735 149420
9/00 366570 141534
10/00 330096 140933
11/00 234368 129831
12/00 233431 130468
1/01 252292 135094
2/01 175393 122783
3/01 139034 115009
4/01 174307 123940
5/01 161844 124771
6/01 158332 121735
7/01 145127 120537
8/01 123808 112998
9/01 92720 103874
10/01 108770 105856
11/01 127870 113974
12/01 127205 114973
1/02 126467 113296
2/02 107130 111111
3/02 118765 115290
4/02 103064 108303
5/02 97045 107508
6/02 83614 99853
7/02 73145 92071
8/02 70373 92674
9/02 58501 82612
10/02 67598 89876
11/02 77907 95160
12/02 67125 89573
1/03 66541 87231
2/03 67206 85920
3/03 65996 86752
4/03 71969 93894
5/03 79778 98837
6/03 79076 100099
7/03 82555 101865
8/03 89118 103848
9/03 85723 102748
10/03 95169 108558
11/03 96892 109512
12/03 96107 115251
1/04 99894 117366
2/04 98175 118997
3/04 95633 117202
4/04 89503 115364
5/04 94032 116944
6/04 95433 119217
7/04 85517 115272
8/04 82002 115734
9/04 85832 116988
10/04 91454 118775
11/04 96612 123579
================================================================================
================================================================================
[MOUNTAIN CHART]
12/04 99346 127783
1/05 93683 124669
2/05 94273 127291
3/05 91266 125039
4/05 87241 122669
5/05 94779 126568
6/05 92940 126750
7/05 97550 131461
8/05 96458 130263
9/05 97548 131317
10/05 95636 129127
11/05 101728 134006
12/05 101138 134054
1/06 107540 137603
2/06 106410 137976
3/06 110082 139693
4/06 111568 141567
5/06 102040 137498
6/06 100672 137680
7/06 95790 138529
8/06 101221 141820
9/06 106566 145472
10/06 108473 150210
11/06 112335 153062
12/06 111245 155209
1/07 111835 157554
2/07 110817 154482
3/07 110230 156206
4/07 113393 163123
5/07 117147 168810
6/07 118634 166007
7/07 118207 160867
8/07 122037 163274
9/07 127895 169374
10/07 133676 172068
11/07 120362 164872
12/07 119459 163730
1/08 104144 153910
2/08 100395 148915
3/08 98990 148271
4/08 107265 155490
5/08 114795 157503
6/08 104647 144238
7/08 101759 143025
8/08 104608 145095
9/08 89105 132181
10/08 73057 109984
11/08 64502 102089
12/08 66218 103166
1/09 64073 94480
2/09 61849 84453
3/09 68734 91837
================================================================================
AIM TECHNOLOGY FUND - CLASS C SHARES
================================================================================
[MOUNTAIN CHART]
Results of a $10,000 Investment -- Oldest Share Class with Sales Charges
since Inception
Index data from 1/31/00, Fund data from 2/14/00
S&P
NORTH LIPPER
AIM AMERICAN SCIENCE &
TECHNOLOGY TECHNOLOGY TECHNOLOGY
FUND- CLASS C S&P 500 SECTOR FUNDS
DATE SHARES INDEX(1) INDEX(1) INDEX(1)
- -------- ------------- -------- ---------- ----------
01/31/00 $10000 $10000 $10000
2/00 $11399 9811 11814 12694
3/00 10663 10770 12345 12307
4/00 9442 10446 11269 10870
5/00 8324 10232 10027 9559
6/00 9744 10484 11261 11008
7/00 9433 10320 10735 10425
8/00 11031 10961 12132 12007
9/00 10198 10382 10167 10776
10/00 9179 10338 9399 9594
11/00 6512 9524 7246 7121
12/00 6480 9571 6625 7047
1/01 6998 9910 7712 7761
2/01 4863 9007 5574 5738
3/01 3851 8437 4800 4898
4/01 4823 9092 5716 5854
5/01 4475 9153 5488 5581
6/01 4373 8930 5503 5489
7/01 4005 8842 5111 5049
8/01 3412 8289 4445 4418
9/01 2553 7620 3546 3470
10/01 2991 7765 4115 3996
11/01 3513 8361 4817 4577
12/01 3490 8434 4732 4600
1/02 3468 8311 4727 4519
2/02 2933 8151 4095 3916
3/02 3250 8457 4387 4272
4/02 2816 7945 3849 3764
5/02 2649 7886 3692 3567
6/02 2277 7325 3170 3097
7/02 1989 6754 2849 2766
8/02 1914 6798 2813 2701
9/02 1591 6060 2311 2325
10/02 1838 6593 2815 2677
11/02 2118 6981 3308 3086
12/02 1824 6571 2826 2696
1/03 1808 6399 2801 2680
2/03 1826 6303 2844 2691
3/03 1792 6364 2812 2689
4/03 1954 6888 3105 2941
5/03 2165 7250 3452 3279
6/03 2144 7343 3443 3302
7/03 2238 7472 3641 3480
8/03 2415 7618 3893 3734
9/03 2321 7537 3836 3635
10/03 2577 7963 4210 4000
11/03 2623 8033 4291 4061
12/03 2601 8454 4357 4080
1/04 2703 8610 4562 4280
2/04 2655 8729 4433 4213
3/04 2584 8597 4311 4124
================================================================================
(1) Lipper Inc.
================================================================================
[MOUNTAIN CHART]
4/04 2418 8463 4059 3840
5/04 2540 8579 4284 4031
6/04 2576 8745 4390 4101
7/04 2307 8456 3974 3653
8/04 2212 8490 3776 3506
9/04 2314 8582 3907 3670
10/04 2464 8713 4114 3877
11/04 2602 9065 4346 4093
12/04 2674 9374 4484 4248
1/05 2520 9145 4188 3993
2/05 2534 9338 4196 4003
3/05 2452 9172 4094 3897
4/05 2343 8999 3885 3740
5/05 2544 9285 4238 4073
6/05 2493 9298 4156 4025
7/05 2615 9644 4436 4268
8/05 2584 9556 4402 4241
9/05 2612 9633 4447 4323
10/05 2559 9472 4368 4230
11/05 2720 9830 4660 4464
12/05 2704 9834 4575 4476
1/06 2872 10094 4745 4751
2/06 2841 10121 4672 4673
3/06 2937 10247 4777 4790
4/06 2974 10385 4746 4789
5/06 2719 10086 4397 4426
6/06 2681 10100 4337 4346
7/06 2550 10162 4151 4136
8/06 2693 10403 4476 4367
9/06 2834 10671 4656 4508
10/06 2881 11019 4842 4628
11/06 2982 11228 5017 4827
12/06 2952 11386 4986 4777
1/07 2965 11558 5067 4854
2/07 2936 11332 4963 4819
3/07 2919 11459 4986 4845
4/07 3001 11966 5236 5012
5/07 3098 12383 5461 5206
6/07 3135 12178 5505 5271
7/07 3122 11801 5466 5266
8/07 3222 11977 5624 5377
9/07 3374 12425 5858 5659
10/07 3523 12622 6249 6003
11/07 3172 12094 5759 5551
12/07 3145 12011 5831 5578
1/08 2739 11290 5092 4855
2/08 2639 10924 4918 4735
3/08 2601 10877 4963 4703
4/08 2816 11406 5324 5064
5/08 3013 11554 5661 5348
6/08 2744 10581 5122 4880
7/08 2667 10492 5087 4779
8/08 2740 10644 5198 4868
9/08 2333 9696 4480 4154
10/08 1910 8068 3658 3403
11/08 1686 7489 3246 3011
12/08 1730 7568 3304 3118
1/09 1672 6931 3232 3048
2/09 1614 6195 3094 2930
3/09 1793 6737 3460 3254
================================================================================
==========================================
AVERAGE ANNUAL TOTAL RETURNS MAXIMUM SALES CHARGE UNLESS OTHERWISE
As of 3/31/09, including maximum STATED. INVESTMENT RETURN AND PRINCIPAL
applicable sales charges VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL SHARES.
CLASS A SHARES
Inception (3/28/02) -8.12% THE NET ANNUAL FUND OPERATING EXPENSE
5 Years -7.44 RATIO SET FORTH IN THE MOST RECENT FUND
1 Year -34.36 PROSPECTUS AS OF THE DATE OF THIS REPORT
FOR CLASS A, CLASS B, CLASS C, CLASS Y AND
CLASS B SHARES INVESTOR CLASS SHARES WAS 1.56%, 2.31%,
Inception (3/28/02) -8.09% 2.31%, 1.31% AND 1.53%,
5 Years -7.44 RESPECTIVELY.(1) THE TOTAL ANNUAL FUND
1 Year -34.52 OPERATING EXPENSE RATIO SET FORTH IN THE
MOST RECENT FUND PROSPECTUS AS OF THE DATE
CLASS C SHARES OF THIS REPORT FOR CLASS A, CLASS B, CLASS
Inception (2/14/00) -17.16% C, CLASS Y AND INVESTOR CLASS SHARES WAS
5 Years -7.05 1.57%, 2.32%, 2.32%, 1.32% AND 1.54%,
1 Year -31.72 RESPECTIVELY. THE EXPENSE RATIOS PRESENTED
ABOVE MAY VARY FROM THE EXPENSE RATIOS
CLASS Y SHARES PRESENTED IN OTHER SECTIONS OF THIS REPORT
10 Years -6.96% THAT ARE BASED ON EXPENSES INCURRED DURING
5 Years -6.36 THE PERIOD COVERED BY THIS REPORT.
1 Year -30.45
CLASS A SHARE PERFORMANCE REFLECTS THE
INVESTOR CLASS SHARES MAXIMUM 5.50% SALES CHARGE, AND CLASS B
Inception (1/19/84) 7.95% AND CLASS C SHARE PERFORMANCE REFLECTS THE
10 Years -6.97 APPLICABLE CONTINGENT DEFERRED SALES
5 Years -6.38 CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE
1 Year -30.53 CDSC ON CLASS B SHARES DECLINES FROM 5%
========================================== BEGINNING AT THE TIME OF PURCHASE TO 0% AT
THE BEGINNING OF THE SEVENTH YEAR. THE
CLASS Y SHARES' INCEPTION DATE IS OCTOBER CDSC ON CLASS C SHARES IS 1% FOR THE
3, 2008; RETURNS SINCE THAT DATE ARE ACTUAL FIRST YEAR AFTER PURCHASE. CLASS Y SHARES
RETURNS. ALL OTHER RETURNS ARE BLENDED AND INVESTOR CLASS SHARES DO NOT HAVE A
RETURNS OF ACTUAL CLASS Y SHARE FRONT-END SALES CHARGE OR A CDSC;
PERFORMANCE AND RESTATED INVESTOR CLASS THEREFORE, PERFORMANCE IS AT NET ASSET
SHARE PERFORMANCE (FOR PERIODS PRIOR TO VALUE.
THE INCEPTION DATE OF CLASS Y SHARES) AT
NET ASSET VALUE. THE RESTATED INVESTOR THE PERFORMANCE OF THE FUND'S SHARE
CLASS SHARE PERFORMANCE REFLECTS THE RULE CLASSES WILL DIFFER PRIMARILY DUE TO
12B-1 FEES APPLICABLE TO INVESTOR CLASS DIFFERENT SALES CHARGE STRUCTURES AND
SHARES AS WELL AS ANY FEE WAIVERS OR CLASS EXPENSES.
EXPENSE REIMBURSEMENTS RECEIVED BY
INVESTOR CLASS SHARES. INVESTOR CLASS HAD THE ADVISOR NOT WAIVED FEES AND/OR
SHARES' INCEPTION DATE IS JANUARY 19, REIMBURSED EXPENSES, PERFORMANCE WOULD
1984. HAVE BEEN LOWER.
THE PERFORMANCE DATA QUOTED REPRESENT (1) TOTAL ANNUAL OPERATING EXPENSES LESS
PAST PERFORMANCE AND CANNOT GUARANTEE ANY CONTRACTUAL FEE WAIVERS AND/OR
COMPARABLE FUTURE RESULTS; CURRENT EXPENSE REIMBURSEMENTS BY THE ADVISOR
PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE IN EFFECT THROUGH AT LEAST JUNE
VISIT INVESCOAIM.COM FOR THE MOST RECENT 30, 2009. SEE CURRENT PROSPECTUS FOR
MONTH-END PERFORMANCE. PERFORMANCE FIGURES MORE INFORMATION.
REFLECT REINVESTED DISTRIBUTIONS, CHANGES
IN NET ASSET VALUE AND THE EFFECT OF THE
7 AIM TECHNOLOGY FUND
====================================================================================================================================
AIM TECHNOLOGY FUND'S INVESTMENT OBJECTIVE IS CAPITAL GROWTH.
o Unless otherwise stated, information presented in this report is as of March 31, 2009, and is based on total net assets.
o Unless otherwise noted, all data provided by Invesco Aim.
ABOUT SHARE CLASSES o Many of the products and services o The Fund is not managed to track the
offered in technology-related performance of any particular index,
o Effective September 30, 2003, only industries are subject to rapid including the indexes defined here, and
previously established qualified plans obsolescence, which may lower the value consequently, the performance of the
are eligible to purchase Class B shares of the securities of the companies in Fund may deviate significantly from the
of any AIM fund. this sector. performance of the indexes.
o Class Y shares are available to only ABOUT INDEXES USED IN THIS REPORT o A direct investment cannot be made in
certain investors. Please see the an index. Unless otherwise indicated,
prospectus for more information. o The S&P 500--REGISTERED TRADEMARK-- index results include reinvested
INDEX is a market dividends, and they do not reflect
o All Investor Class shares are closed to capitalization-weighted index covering sales charges. Performance of the peer
new investors. Contact your financial all major areas of the U.S. economy. It group reflects fund expenses;
advisor about purchasing our other is not the 500 largest companies, but performance of a market index does not.
share classes. rather the most widely held 500
companies chosen with respect to market OTHER INFORMATION
PRINCIPAL RISKS OF INVESTING IN THE FUND size, liquidity, and their industry.
o The Chartered Financial Analyst--REGIS-
o Since a large percentage of the Fund's o The S&P NORTH AMERICAN TECHNOLOGY TERED TRADEMARK- (CFA--REGISTERED
assets may be invested in securities of SECTOR INDEX is a modified TRADEMARK--) designation is a globally
a limited number of companies, each capitalization-weighted index composed recognized standard for measuring the
investment has a greater effect on the of companies involved in the technology competence and integrity of investment
Fund's overall performance, and any industry. professionals.
change in the value of those securities
could significantly affect the value of o The LIPPER SCIENCE & TECHNOLOGY FUNDS o The returns shown in the managements
your investment in the Fund. INDEX is an equally weighted discussion of Fund performance are
representation of the largest funds in based on net asset values calculated
o Prices of equity securities change in the Lipper Science & Technology Funds for shareholder transactions. Generally
response to many factors including the category. These funds invest at least accepted accounting principles require
historical and prospective earnings of 65% of their portfolios in science and adjustments to be made to the net
the issuer, the value of its assets, technology stocks. assets of the Fund at period end for
general economic conditions, interest financial reporting purposes, and as
rates, investor perceptions and market o The NASDAQ 100 INDEX includes 100 of such, the net asset values for
liquidity. the largest domestic and international shareholder transactions and the
non-financial securities listed on the returns based on those net asset values
o Foreign securities have additional Nasdaq Stock Market based on market may differ from the net asset values
risks, including exchange rate changes, capitalization. and returns reported in the Financial
political and economic upheaval, the Highlights.
relative lack of information, o The MERRILL LYNCH 100 TECHNOLOGY INDEX
relatively low market liquidity, and (price-only) is an equal-dollar o Industry classifications used in this
the potential lack of strict financial weighted index of 100 stocks designed report are generally according to the
and accounting controls and standards. to measure the performance of a cross Global Industry Classification
section of large, actively traded Standard, which was developed by and is
o There is no guarantee that the technology stocks and American the exclusive property and a service
investment techniques and risk analyses Depositary Receipts. As of May 1, 2009, mark of MSCI Inc. and Standard &
used by the Fund's portfolio managers the Fund has elected to use the Merrill Poor's.
will produce the desired results. Lynch 100 Technology Index as its
style-specific benchmark instead of the
o The prices of securities held by the S&P North American Technology Sector
Fund may decline in response to market Index because the Merrill Lynch 100
risks. Technology Index more appropriately
reflects the Fund's investment style.
o The Fund's investments are concentrated
in a comparatively narrow segment of
the economy. Consequently, the Fund may
tend to be more volatile than other
mutual funds, and the value of the
Fund's investments may tend to rise and
fall more rapidly.
======================================================================================= ==========================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class A Shares ITYAX
======================================================================================= Class B Shares ITYBX
Class C Shares ITHCX
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Class Y Shares ITYYX
Investor Class Shares FTCHX
==========================================
8 AIM TECHNOLOGY FUND
Supplement to Annual Report dated 3/31/09
AIM TECHNOLOGY FUND
==========================================
INSTITUTIONAL CLASS SHARES AVERAGE ANNUAL TOTAL RETURNS Please note that past performance is
For periods ended 3/31/09 not indicative of future results. More
The following information has been recent returns may be more or less than
prepared to provide Institutional Class Inception (12/21/98) -4.56% those shown. All returns assume
shareholders with a performance overview 10 Years -6.32 reinvestment of distributions at NAV.
specific to their holdings. Institutional 5 Years -5.67 Investment return and principal value will
Class shares are offered exclusively to 1 Year -30.07 fluctuate so your shares, when redeemed,
institutional investors, including defined ========================================== may be worth more or less than their
contribution plans that meet certain original cost. See full report for
criteria. Institutional Class shares have no sales information on comparative benchmarks.
charge; therefore, performance is at net Please consult your Fund prospectus for
asset value (NAV). Performance of more information. For the most current
Institutional Class shares will differ month-end performance, please call 800 451
from performance of other share classes 4246 or visit invescoaim.com.
primarily due to differing sales charges
and class expenses. (1) Total annual operating expenses less
any contractual fee waivers and/or
The net annual Fund operating expense expense reimbursements by the advisor
ratio set forth in the most recent Fund in effect through at least June 30,
prospectus as of the date of this 2009. See current prospectus for more
supplement for Institutional Class shares information.
was 0.87%.(1) The total annual Fund
operating expense ratio set forth in the
most recent Fund prospectus as of the date
of this supplement for Institutional Class
shares was 0.88%. The expense ratios
presented above may vary from the expense
ratios presented in other sections of the
actual report that are based on expenses
incurred during the period covered by the
report.
Had the advisor not waived fees and/or
expenses in the past, performance would
have been lower.
==========================================
NASDAQ SYMBOL FTPIX
==========================================
Over for information on your Fund's expenses.
THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND
PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND
EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
FOR INSTITUTIONAL INVESTOR USE ONLY
[INVESCO AIM LOGO]
This material is for institutional investor use only and may not be quoted, reproduced - SERVICE MARK -
or shown to the public, nor used in written form as sales literature for public use.
invescoaim.com I-TEC-INS-1 Invesco Aim Distributors, Inc.
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with ongoing costs of investing in other mutual funds. The example is based on
an investment of $1,000 invested at the beginning of the period and held for the
entire period October 1, 2008, through March 31, 2009.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/01/08) (03/31/09)(1) PERIOD(2) (03/31/09) PERIOD(2) RATIO
- -----------------------------------------------------------------------------------------------------------
Institutional $1,000.00 $773.90 $4.25 $1,020.14 $4.84 0.96%
- -----------------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period October 1, 2008, through March 31, 2009, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
182/365 to reflect the most recent fiscal half year.
AIM TECHNOLOGY FUND
SCHEDULE OF INVESTMENTS(a)
March 31, 2009
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------
COMMON STOCKS & OTHER EQUITY INTERESTS-94.20%
APPLICATION SOFTWARE-7.86%
Adobe Systems Inc.(b)(c) 516,365 $ 11,045,047
- ----------------------------------------------------------------------------------
Amdocs Ltd.(b)(c) 517,784 9,589,360
- ----------------------------------------------------------------------------------
ANSYS, Inc.(b)(c) 93,114 2,337,161
- ----------------------------------------------------------------------------------
Nuance Communications, Inc.(b)(c) 484,787 5,264,787
- ----------------------------------------------------------------------------------
Solera Holdings Inc.(b)(c) 169,411 4,198,005
==================================================================================
32,434,360
==================================================================================
COMMUNICATIONS EQUIPMENT-14.27%
Brocade Communications Systems, Inc.(b)(c) 522,207 1,801,614
- ----------------------------------------------------------------------------------
Cisco Systems, Inc.(b)(c) 749,774 12,573,710
- ----------------------------------------------------------------------------------
Harris Corp.(b) 100,659 2,913,072
- ----------------------------------------------------------------------------------
NICE Systems Ltd.-ADR (Israel)(c) 493,110 12,258,715
- ----------------------------------------------------------------------------------
Nokia-ADR (Finland) 483,533 5,642,830
- ----------------------------------------------------------------------------------
Nortel Networks Corp. (Canada)(b)(c) 12,833 2,887
- ----------------------------------------------------------------------------------
Polycom, Inc.(b)(c) 195,188 3,003,943
- ----------------------------------------------------------------------------------
QUALCOMM Inc.(b) 365,448 14,219,582
- ----------------------------------------------------------------------------------
Research In Motion Ltd. (Canada)(b)(c) 150,358 6,475,919
==================================================================================
58,892,272
==================================================================================
COMPUTER HARDWARE-10.12%
Apple Inc.(b)(c) 117,555 12,357,381
- ----------------------------------------------------------------------------------
Dell Inc.(b)(c) 395,312 3,747,558
- ----------------------------------------------------------------------------------
Hewlett-Packard Co.(b) 478,547 15,342,217
- ----------------------------------------------------------------------------------
International Business Machines Corp.(b) 87,298 8,458,303
- ----------------------------------------------------------------------------------
Teradata Corp.(c) 116,172 1,884,310
==================================================================================
41,789,769
==================================================================================
COMPUTER STORAGE & PERIPHERALS-3.84%
EMC Corp.(b)(c) 975,441 11,120,027
- ----------------------------------------------------------------------------------
NetApp, Inc.(b)(c) 140,377 2,083,195
- ----------------------------------------------------------------------------------
Seagate Technology(b) 441,908 2,655,867
==================================================================================
15,859,089
==================================================================================
DATA PROCESSING & OUTSOURCED SERVICES-2.69%
Alliance Data Systems Corp.(b)(c) 124,493 4,600,016
- ----------------------------------------------------------------------------------
MasterCard, Inc.-Class A(b) 24,378 4,082,828
- ----------------------------------------------------------------------------------
VeriFone Holdings, Inc.(b)(c) 353,005 2,400,434
==================================================================================
11,083,278
==================================================================================
ELECTRONIC COMPONENTS-1.15%
Dolby Laboratories Inc.-Class A(b)(c) 139,629 4,762,745
==================================================================================
ELECTRONIC EQUIPMENT & INSTRUMENTS-0.98%
Cogent Inc.(b)(c) 340,847 4,056,079
==================================================================================
ELECTRONIC MANUFACTURING SERVICES-1.10%
Tyco Electronics Ltd.(b) 412,833 4,557,676
==================================================================================
HOME ENTERTAINMENT SOFTWARE-2.73%
Activision Blizzard, Inc.(b)(c) 708,197 7,407,741
- ----------------------------------------------------------------------------------
Nintendo Co., Ltd. (Japan) 13,100 3,840,951
==================================================================================
11,248,692
==================================================================================
INTEGRATED TELECOMMUNICATION SERVICES-1.98%
AT&T Inc.(b) 323,910 8,162,532
==================================================================================
INTERNET RETAIL-0.70%
Amazon.com, Inc.(b)(c) 39,466 2,898,383
==================================================================================
INTERNET SOFTWARE & SERVICES-8.87%
Ariba Inc.(b)(c) 674,600 5,889,258
- ----------------------------------------------------------------------------------
DivX, Inc.(b)(c) 630,513 3,171,480
- ----------------------------------------------------------------------------------
eBay Inc.(b)(c) 494,070 6,205,519
- ----------------------------------------------------------------------------------
Google Inc.-Class A(b)(c) 36,481 12,697,577
- ----------------------------------------------------------------------------------
Omniture, Inc.(b)(c) 393,999 5,196,847
- ----------------------------------------------------------------------------------
Yahoo! Inc.(b)(c) 268,663 3,441,573
==================================================================================
36,602,254
==================================================================================
IT CONSULTING & OTHER SERVICES-2.73%
Cognizant Technology Solutions Corp.-Class A(b)(c) 542,513 11,278,845
==================================================================================
OTHER DIVERSIFIED FINANCIAL SERVICES-1.79%
BlueStream Ventures L.P. (Acquired 08/03/00-
06/13/08; Cost $25,801,962)(d)(e) -- 7,383,682
==================================================================================
SEMICONDUCTOR EQUIPMENT-3.01%
Applied Materials, Inc.(b) 487,164 5,237,013
- ----------------------------------------------------------------------------------
ASML Holding N.V.-New York Shares (Netherlands)(b) 319,700 5,597,947
- ----------------------------------------------------------------------------------
Varian Semiconductor Equipment Associates,
Inc.(b)(c) 72,913 1,579,296
==================================================================================
12,414,256
==================================================================================
SEMICONDUCTORS-13.23%
Intel Corp.(b) 1,044,081 15,713,419
- ----------------------------------------------------------------------------------
Intersil Corp.-Class A(b) 554,104 6,372,196
- ----------------------------------------------------------------------------------
Marvell Technology Group Ltd.(b)(c) 962,583 8,817,260
- ----------------------------------------------------------------------------------
Microsemi Corp.(b)(c) 491,882 5,705,831
- ----------------------------------------------------------------------------------
ON Semiconductor Corp.(b)(c) 927,802 3,618,428
- ----------------------------------------------------------------------------------
Texas Instruments Inc.(b) 226,757 3,743,758
- ----------------------------------------------------------------------------------
Xilinx, Inc.(b) 555,146 10,636,598
==================================================================================
54,607,490
==================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
9 AIM TECHNOLOGY FUND
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------
SYSTEMS SOFTWARE-14.60%
Check Point Software Technologies Ltd.
(Israel)(b)(c) 595,367 $ 13,223,101
- ----------------------------------------------------------------------------------
McAfee Inc.(b)(c) 411,086 13,771,381
- ----------------------------------------------------------------------------------
Microsoft Corp.(b) 853,941 15,686,896
- ----------------------------------------------------------------------------------
Novell, Inc.(c) 1,366,707 5,822,172
- ----------------------------------------------------------------------------------
Oracle Corp.(b) 533,673 9,643,471
- ----------------------------------------------------------------------------------
Red Hat, Inc.(c) 117,696 2,099,697
==================================================================================
60,246,718
==================================================================================
WIRELESS TELECOMMUNICATION SERVICES-2.55%
American Tower Corp.-Class A(c) 346,285 10,537,453
==================================================================================
Total Common Stocks & Other Equity Interests
(Cost $446,887,707) 388,815,573
==================================================================================
<Caption>
PRINCIPAL
AMOUNT
U.S. TREASURY NOTES-0.28%
3.13%, 11/30/09 (Cost $1,170,096) $ 1,150,000 1,169,855
==================================================================================
MONEY MARKET FUNDS-5.18%
Liquid Assets Portfolio-Institutional Class(f) 10,682,072 $ 10,682,072
- ----------------------------------------------------------------------------------
Premier Portfolio-Institutional Class(f) 10,682,072 10,682,072
==================================================================================
Total Money Market Funds (Cost $21,364,144) 21,364,144
==================================================================================
TOTAL INVESTMENTS (excluding investments purchased
with cash collateral from securities on
loan)-99.66% (Cost $469,421,947) 411,349,572
==================================================================================
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES ON
LOAN
MONEY MARKET FUNDS-29.55%
Liquid Assets Portfolio-Institutional Class (Cost
$121,957,851)(f)(g) 121,957,851 121,957,851
==================================================================================
TOTAL INVESTMENTS-129.21% (Cost $591,379,798) 533,307,423
==================================================================================
OTHER ASSETS LESS LIABILITIES-(29.21)% (120,576,067)
==================================================================================
NET ASSETS-100.00% $ 412,731,356
__________________________________________________________________________________
==================================================================================
</Table>
Investment Abbreviations:
<Table>
ADR - American Depositary Receipt
</Table>
Notes to Schedule of Investments:
(a) Industry and/or sector classifications used in this report are generally
according to the Global Industry Classification Standard, which was
developed by and is the exclusive property and a service mark of MSCI Inc.
and Standard & Poor's.
(b) All or a portion of this security was out on loan at March 31, 2009.
(c) Non-income producing security.
(d) The Fund has a 10.29% ownership of BlueStream Ventures L.P. ("BlueStream")
and has a remaining commitment of $829,416 to purchase additional
interests in BlueStream Ventures L.P., which is subject to the terms of
the limited partnership agreement. BlueStream may be considered an
affiliated company. Security is considered venture capital. The value of
this security as of March 31, 2009 represented 1.79% of the Fund's Net
Assets. See Note 4.
(e) Security purchased or received in a transaction exempt from registration
under the Securities Act of 1933, as amended. The security may be resold
pursuant to an exemption from registration under the 1933 Act, typically
to qualified institutional buyers. The value of this security at March 31,
2009 represented 1.79% of the Fund's Net Assets.
(f) The money market fund and the Fund are affiliated by having the same
investment advisor.
(g) The security has been segregated to satisfy the commitment to return the
cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 1J.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
10 AIM TECHNOLOGY FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2009
<Table>
ASSETS:
Investments, at value (Cost $422,255,841)* $ 382,601,746
- ---------------------------------------------------------------------------------
Investments in affiliates, at value (Cost $169,123,957) 150,705,677
=================================================================================
Total investments, at value (Cost $591,379,798) 533,307,423
=================================================================================
Foreign currencies, at value (Cost $17,718) 16,337
- ---------------------------------------------------------------------------------
Receivables for:
Investments sold 1,979,166
- ---------------------------------------------------------------------------------
Fund shares sold 354,481
- ---------------------------------------------------------------------------------
Dividends and Interest 670,748
- ---------------------------------------------------------------------------------
Investment for trustee deferred compensation and retirement plans 135,266
- ---------------------------------------------------------------------------------
Other assets 44,183
=================================================================================
Total assets 536,507,604
_________________________________________________________________________________
=================================================================================
LIABILITIES:
Payables for:
Investments purchased 426,270
- ---------------------------------------------------------------------------------
Fund shares reacquired 211,107
- ---------------------------------------------------------------------------------
Amount due custodian 131,197
- ---------------------------------------------------------------------------------
Collateral upon return of securities loaned 121,957,851
- ---------------------------------------------------------------------------------
Accrued fees to affiliates 662,160
- ---------------------------------------------------------------------------------
Accrued other operating expenses 145,879
- ---------------------------------------------------------------------------------
Trustee deferred compensation and retirement plans 241,784
=================================================================================
Total liabilities 123,776,248
=================================================================================
Net assets applicable to shares outstanding $ 412,731,356
_________________________________________________________________________________
=================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 915,134,527
- ---------------------------------------------------------------------------------
Undistributed net investment income 14,116,858
- ---------------------------------------------------------------------------------
Undistributed net realized gain (loss) (458,444,827)
- ---------------------------------------------------------------------------------
Unrealized appreciation (depreciation) (58,075,202)
=================================================================================
$ 412,731,356
_________________________________________________________________________________
=================================================================================
NET ASSETS:
Class A $ 122,823,138
_________________________________________________________________________________
=================================================================================
Class B $ 16,951,976
_________________________________________________________________________________
=================================================================================
Class C $ 9,339,520
_________________________________________________________________________________
=================================================================================
Class Y $ 540,748
_________________________________________________________________________________
=================================================================================
Investor Class $ 262,729,738
_________________________________________________________________________________
=================================================================================
Institutional Class $ 346,236
_________________________________________________________________________________
=================================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 6,912,785
_________________________________________________________________________________
=================================================================================
Class B 1,006,393
_________________________________________________________________________________
=================================================================================
Class C 569,595
_________________________________________________________________________________
=================================================================================
Class Y 30,668
_________________________________________________________________________________
=================================================================================
Investor Class 14,915,196
_________________________________________________________________________________
=================================================================================
Institutional Class 18,293.6
_________________________________________________________________________________
=================================================================================
Class A:
Net asset value per share $ 17.77
- ---------------------------------------------------------------------------------
Maximum offering price per share
(Net asset value of $17.77 divided by 94.50%) $ 18.80
_________________________________________________________________________________
=================================================================================
Class B:
Net asset value and offering price per share $ 16.84
_________________________________________________________________________________
=================================================================================
Class C:
Net asset value and offering price per share $ 16.40
_________________________________________________________________________________
=================================================================================
Class Y:
Net asset value and offering price per share $ 17.63
_________________________________________________________________________________
=================================================================================
Investor Class:
Net asset value and offering price per share $ 17.61
_________________________________________________________________________________
=================================================================================
Institutional Class:
Net asset value and offering price per share $ 18.93
_________________________________________________________________________________
=================================================================================
</Table>
* At March 31, 2009, securities with an aggregate value of $121,145,361 were on
loan to brokers.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11 AIM TECHNOLOGY FUND
STATEMENT OF OPERATIONS
For the year ended March 31, 2009
<Table>
INVESTMENT INCOME:
Dividends from affiliates (includes securities lending income of $1,088,112) $ 5,486,722
- ------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $105,230) 3,138,496
- ------------------------------------------------------------------------------------------------
Interest 26,658
================================================================================================
Total investment income 8,651,876
================================================================================================
EXPENSES:
Advisory fees 4,028,787
- ------------------------------------------------------------------------------------------------
Administrative services fees 175,022
- ------------------------------------------------------------------------------------------------
Custodian fees 26,008
- ------------------------------------------------------------------------------------------------
Distribution fees:
Class A 440,805
- ------------------------------------------------------------------------------------------------
Class B 273,416
- ------------------------------------------------------------------------------------------------
Class C 130,708
- ------------------------------------------------------------------------------------------------
Investor Class 808,187
- ------------------------------------------------------------------------------------------------
Transfer agent fees -- A, B, C, Y and Investor 4,266,306
- ------------------------------------------------------------------------------------------------
Transfer agent fees -- Institutional 37
- ------------------------------------------------------------------------------------------------
Trustees' and officers' fees and benefits 36,665
- ------------------------------------------------------------------------------------------------
Other 428,437
================================================================================================
Total expenses 10,614,378
================================================================================================
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (1,665,313)
================================================================================================
Net expenses 8,949,065
================================================================================================
Net investment income (loss) (297,189)
================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates
of $445,951) (55,996,670)
- ------------------------------------------------------------------------------------------------
Foreign currencies (853,428)
- ------------------------------------------------------------------------------------------------
Futures contracts 1,542,629
================================================================================================
(55,307,469)
================================================================================================
Change in net unrealized appreciation (depreciation) of:
Investment securities (141,821,455)
- ------------------------------------------------------------------------------------------------
Foreign currencies (48,527)
- ------------------------------------------------------------------------------------------------
Futures contracts (176,229)
================================================================================================
(142,046,211)
================================================================================================
Net realized and unrealized gain (loss) (197,353,680)
================================================================================================
Net increase (decrease) in net assets resulting from operations $(197,650,869)
________________________________________________________________________________________________
================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12 AIM TECHNOLOGY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2009 and 2008
<Table>
<Caption>
2009 2008
- ---------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $ (297,189) $ (7,189,517)
- ---------------------------------------------------------------------------------------------------------
Net realized gain (loss) (55,307,469) 10,960,682
- ---------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) (142,046,211) (76,832,106)
=========================================================================================================
Net increase (decrease) in net assets resulting from operations (197,650,869) (73,060,941)
=========================================================================================================
Share transactions-net:
Class A (31,669,828) (44,390,972)
- ---------------------------------------------------------------------------------------------------------
Class B (12,273,874) (19,284,449)
- ---------------------------------------------------------------------------------------------------------
Class C (2,108,236) (3,277,546)
- ---------------------------------------------------------------------------------------------------------
Class Y 610,977 --
- ---------------------------------------------------------------------------------------------------------
Investor Class (41,288,165) (127,690,144)
- ---------------------------------------------------------------------------------------------------------
Institutional Class 326,108 (1,933)
=========================================================================================================
Net increase (decrease) in net assets resulting from share
transactions (86,403,018) (194,645,044)
=========================================================================================================
Net increase (decrease) in net assets (284,053,887) (267,705,985)
=========================================================================================================
NET ASSETS:
Beginning of year 696,785,243 964,491,228
=========================================================================================================
End of year (includes undistributed net investment income of
$14,116,858 and $(273,563), respectively) $ 412,731,356 $ 696,785,243
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
13 AIM TECHNOLOGY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Technology Fund (the "Fund") is a series portfolio of AIM Sector Funds (the
"Trust"). The Trust is a Delaware statutory trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of six separate portfolios, each
authorized to issue an unlimited number of shares of beneficial interest. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund. Matters affecting each portfolio or class will be voted on exclusively
by the shareholders of such portfolio or class.
The Fund's investment objective is capital growth.
The Fund currently consists of six different classes of shares: Class A, Class
B, Class C, Class Y, Investor Class and Institutional Class. Investor Class
shares of the Fund are offered only to certain grandfathered investors. Class A
shares are sold with a front-end sales charge unless certain waiver criteria are
met and under certain circumstances load waiver shares may be subject to
contingent deferred sales charges ("CDSC"). Class B shares and Class C shares
are sold with a CDSC. Class Y, Investor Class and Institutional Class shares are
sold at net asset value. Generally, Class B shares will automatically convert to
Class A shares on or the about month-end which is at least eight years after the
date of purchase.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements.
A. SECURITY VALUATIONS -- Securities, including restricted securities, are
valued according to the following policy.
A security listed or traded on an exchange (except convertible bonds) is
valued at its last sales price or official closing price as of the close
of the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on
that day. Securities traded in the over-the-counter market are valued
based on prices furnished by independent pricing services or market
makers. When such securities are valued by an independent pricing service
they may be considered fair valued. Futures contracts are valued at the
final settlement price set by an exchange on which they are principally
traded. Listed options are valued at the mean between the last bid and the
ask prices from the exchange on which they are principally traded. Options
not listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last
sales price or official closing price as of the close of the customary
trading session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as institution-size trading in similar groups of
securities, developments related to specific securities, dividend rate,
yield, quality, type of issue, coupon rate, maturity, individual trading
characteristics and other market data. Short-term obligations, including
commercial paper, having 60 days or less to maturity are recorded at
amortized cost which approximates value. Debt securities are subject to
interest rate and credit risks. In addition, all debt securities involve
some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued
at the market quotations. Because trading hours for certain foreign
securities end before the close of the NYSE, closing market quotations may
become unreliable. If between the time trading ends on a particular
security and the close of the customary trading session on the NYSE,
events occur that are significant and may make the closing price
unreliable, the Fund may fair value the security. If the event is likely
to have affected the closing price of the security, the security will be
valued at fair value in good faith using procedures approved by the Board
of Trustees. Adjustments to closing prices to reflect fair value may also
be based on a screening process of an independent pricing service to
indicate the degree of certainty, based on historical data, that the
closing price in the principal market where a foreign security trades is
not the current value as of the close of the NYSE. Foreign securities
meeting the approved degree of certainty that the price is not reflective
of current value will be priced at the indication of fair value from the
independent pricing service. Multiple factors may be considered by the
independent pricing service in determining adjustments to reflect fair
value and may include information relating to sector indices, American
Depositary Receipts and domestic and foreign index futures. Foreign
securities may have additional risks including exchange rate changes,
potential for sharply devalued currencies and high inflation, political
and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be valued based upon quotes furnished by independent sources.
The last bid price may be used to value equity securities and Corporate
Loans. The mean between the last bid and asked prices may be used to value
debt obligations other than Corporate Loans.
Securities for which market quotations are not readily available or are
unreliable are valued at fair value as determined in good faith by or
under the supervision of the Trust's officers following procedures
approved by the Board of Trustees. Issuer specific events, market trends,
bid/ask quotes of brokers and information providers and other market data
may be reviewed in the course of making a good faith determination of a
security's fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity. Because of the inherent uncertainties of valuation, the
values reflected in the financial statements may materially differ from
the value received upon actual sale of those investments.
14 AIM TECHNOLOGY FUND
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income is recorded on the accrual basis from settlement
date. Dividend income is recorded on the ex-dividend date. Bond premiums
and discounts are amortized and/or accreted for financial reporting
purposes.
The Fund may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
The Fund allocates income and realized and unrealized capital gains and
losses to a class based on the relative net assets of each class.
C. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, the investment
advisor may determine the country in which an issuer is located and/or
credit risk exposure based on various factors. These factors include the
laws of the country under which the issuer is organized, where the issuer
maintains a principal office, the country in which the issuer derives 50%
or more of its total revenues and the country that has the primary market
for the issuer's securities, as well as other criteria. Among the other
criteria that may be evaluated for making this determination are the
country in which the issuer maintains 50% or more of its assets, the type
of security, financial guarantees and enhancements, the nature of the
collateral and the sponsor organization. Country of issuer and/or credit
risk exposure has been determined to be the United States of America,
unless otherwise noted.
D. DISTRIBUTIONS -- Distributions from income and net realized capital gain,
if any, are generally paid annually and recorded on ex-dividend date. The
Fund may elect to treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements
of Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial
statements.
The Fund files tax returns in the U.S. Federal jurisdiction and certain
other jurisdictions. Generally the Fund is subject to examinations by such
taxing authorities for up to three years after the filing of the return
for the tax period.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund are charged to the operations of such class. Transfer
agency fees and expenses and other shareholder recordkeeping fees and
expenses attributable to the Institutional Class are charged to such
class. Transfer agency fees and expenses and other shareholder
recordkeeping fees and expenses relating to all other classes are
allocated among those classes based on relative net assets. All other
expenses are allocated among the classes based on relative net assets.
G. ACCOUNTING ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period including estimates and assumptions related to
taxation. Actual results could differ from those estimates by a
significant amount.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust is indemnified
against certain liabilities that may arise out of performance of their
duties to the Fund. Additionally, in the normal course of business, the
Fund enters into contracts, including the Fund's servicing agreements,
that contain a variety of indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown as this would involve future
claims that may be made against the Fund that have not yet occurred. The
risk of material loss as a result of such indemnification claims is
considered remote.
I. OTHER RISKS -- The Fund's investments are concentrated in a comparatively
narrow segment of the economy. Consequently, the Fund may tend to be more
volatile than other mutual funds, and the value of the Fund's investments
may tend to rise and fall more rapidly.
Many of the products and services offered in technology-related
industries are subject to rapid obsolescence, which may lower the value of
the securities of the companies in this sector.
J. SECURITIES LENDING -- The Fund may lend portfolio securities having a
market value up to one-third of the Fund's total assets. Such loans are
secured by collateral equal to no less than the market value of the loaned
securities determined daily by the securities lending provider. Such
collateral will be cash or debt securities issued or guaranteed by the
U.S. Government or any of its sponsored agencies. Cash collateral received
in connection with these loans is invested in short-term money market
instruments or affiliated money market funds and is shown as such on the
Schedule of Investments. It is the Fund's policy to obtain additional
collateral from or return excess collateral to the borrower by the end of
the next business day, following the valuation date of the securities
loaned. Therefore, the value of the collateral held may be temporarily
less than the value of the securities on loan. Lending securities entails
a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase
the collateral accordingly, and the borrower fails to return the
securities. Upon the failure of the borrower to return the securities,
collateral may be liquidated and the securities may be purchased on the
open market to replace the loaned securities. The Fund could experience
delays and costs in gaining access to the collateral. The Fund bears the
risk of any deficiency in the amount of the collateral available for
return to the borrower due to any loss on the collateral invested.
Dividends received on cash collateral investments for securities lending
transactions, which are net of compensation to counterparties, is included
in Dividends from affiliates on the Statement of Operations. The aggregate
value of securities out on loan is shown as a footnote on the Statement of
Assets and Liabilities, if any.
15 AIM TECHNOLOGY FUND
K. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close
of the NYSE based on quotations posted by banks and major currency
dealers. Portfolio securities and other assets and liabilities denominated
in foreign currencies are translated into U.S. dollar amounts at date of
valuation. Purchases and sales of portfolio securities (net of foreign
taxes withheld on disposition) and income items denominated in foreign
currencies are translated into U.S. dollar amounts on the respective dates
of such transactions. The Fund does not separately account for the portion
of the results of operations resulting from changes in foreign exchange
rates on investments and the fluctuations arising from changes in market
prices of securities held. The combined results of changes in foreign
exchange rates and the fluctuation of market prices on investments (net of
estimated foreign tax withholding) are included with the net realized and
unrealized gain or loss from investments in the Statement of Operations.
Reported net realized foreign currency gains or losses arise from (i)
sales of foreign currencies, (ii) currency gains or losses realized
between the trade and settlement dates on securities transactions, and
(iii) the difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized
foreign currency gains and losses arise from changes in the fair values of
assets and liabilities, other than investments in securities at fiscal
period end, resulting from changes in exchange rates.
The Fund may invest in foreign securities which may be subject to
foreign taxes on income, gains on investments or currency repatriation, a
portion of which may be recoverable.
L. 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. Fluctuations in the value of these contracts are recorded as
unrealized appreciation (depreciation) until the contracts are closed.
When these contracts are closed, realized gains (losses) are recorded.
Realized and unrealized gains and losses on these contracts are included
in the Statement of Operations. The Fund could be exposed to risk, which
may be in excess of the amount reflected in the Statement of Assets and
Liabilities, if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
M. FUTURES CONTRACTS -- The Fund may purchase or sell futures contracts.
Initial margin deposits required upon entering into futures contracts are
satisfied by the segregation of specific securities as collateral for the
account of the broker (the Fund's agent in acquiring the futures
position). During the period the futures contracts are open, changes in
the value of the contracts are recognized as unrealized gains or losses by
recalculating the value of the contracts on a daily basis. Variation
margin payments are received or made depending upon whether unrealized
gains or losses are incurred. When the contracts are closed, the Fund
recognizes a realized gain or loss equal to the difference between the
proceeds from, or cost of, the closing transaction and the Fund's basis in
the contract. If the Fund were unable to liquidate a futures contract
and/or enter into an offsetting closing transaction, the Fund would
continue to be subject to market risk with respect to the value of the
contracts and continue to be required to maintain the margin deposits on
the futures contracts. Risks may exceed amounts recognized in the
Statement of Assets and Liabilities.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with Invesco
Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the
investment advisory agreement, the Fund pays an advisory fee to the Advisor
based on the annual rate of the Fund's average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $350 million 0.75%
- -------------------------------------------------------------------
Next $350 million 0.65%
- -------------------------------------------------------------------
Next $1.3 billion 0.55%
- -------------------------------------------------------------------
Next $2 billion 0.45%
- -------------------------------------------------------------------
Next $2 billion 0.40%
- -------------------------------------------------------------------
Next $2 billion 0.375%
- -------------------------------------------------------------------
Over $8 billion 0.35%
___________________________________________________________________
===================================================================
</Table>
Under the terms of a master sub-advisory agreement the Advisor and each of
Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited,
Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco
Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco
Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco
Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the
Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-
Advisor(s) that provide discretionary investment management services to the Fund
based on the percentage of assets allocated to such Sub-Advisor(s).
The Advisor has contractually agreed to waive advisory fees and/or reimburse
expenses to the extent necessary to limit total annual operating expenses
(excluding certain items discussed below) of Class A, Class B, Class C, Class Y,
Investor Class and Institutional Class shares to 1.55%, 2.30%, 2.30%, 1.30%,
1.55% and 1.30% of average daily net assets, respectively, through at least June
30, 2009. In determining the Advisor's obligation to waive advisory fees and/or
reimburse expenses, the following expenses are not taken into account, and could
cause the net annual operating expenses to exceed the numbers reflected above:
(i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv)
extraordinary items (these are expenses that are not anticipated to arise from
the Fund's day-to-day operations), or items designated as such by the Fund's
Board of Trustees; (v) expenses related to a merger or reorganization, as
approved by the Fund's Board of Trustees; and (vi) expenses that the Fund has
incurred but did not actually pay because of an expense offset arrangement.
Currently, in addition to the expense reimbursement arrangement with Invesco
Ltd. ("Invesco") described more fully below, the expense offset arrangements
from which the Fund may benefit are in the form of credits that the Fund
receives from banks where the Fund or its transfer agent has deposit accounts in
which it holds uninvested cash. These credits are used to pay certain expenses
incurred by the Fund.
16 AIM TECHNOLOGY FUND
The Advisor has contractually agreed, through at least June 30, 2009, to waive
the advisory fee payable by the Fund in an amount equal to 100% of the net
advisory fees the Advisor receives from the affiliated money market funds on
investments by the Fund of uninvested cash (excluding investments of cash
collateral from securities lending) in such affiliated money market funds.
For the year ended March 31, 2009, the Advisor waived advisory fees of $55,201
and reimbursed class level expenses of $1,546,803 for Class A, Class B, Class C,
Class R, Class Y and Investor Class shares in proportion to the relative net
assets of such classes.
At the request of the Trustees of the Trust, Invesco agreed to reimburse
expenses incurred by the Fund in connection with market timing matters in the
AIM Funds, which may include legal, audit, shareholder reporting, communications
and trustee expenses. These expenses along with the related expense
reimbursement are included in the Statement of Operations. For the year ended
March 31, 2009, Invesco reimbursed expenses of the Fund in the amount of $8,786.
The Trust has entered into a master administrative services agreement with
Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain
administrative costs incurred in providing accounting services to the Fund. For
the year ended March 31, 2009, expenses incurred under the agreement are shown
in the Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with
Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has
agreed to pay IAIS a fee for providing transfer agency and shareholder services
to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the
course of providing such services. IAIS may make payments to intermediaries that
provide omnibus account services, sub-accounting services and/or networking
services. All fees payable by IAIS to intermediaries that provide omnibus
account services or sub-accounting are charged back to the Fund, subject to
certain limitations approved by the Trust's Board of Trustees. For the year
ended March 31, 2009, expenses incurred under the agreement are shown in the
Statement of Operations as transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Aim
Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class
B, Class C, Class Y, Investor Class and Institutional Class shares of the Fund.
The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with
respect to the Fund's Class A, Class B, Class C and Investor Class shares
(collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI
compensation at the annual rate of 0.25% of the Fund's average daily net assets
of Class A shares, 1.00% of the average daily net assets of Class B and Class C
shares. The Fund, pursuant to the Investor Class Plan, reimburses IADI for its
allocated share of expenses incurred pursuant to the Investor Class Plan for the
period, up to a maximum annual rate of 0.25% of the average daily net assets of
Investor Class shares. Of the Plan payments, up to 0.25% of the average daily
net assets of each class of shares may be paid to furnish continuing personal
shareholder services to customers who purchase and own shares of such classes.
Any amounts not paid as a service fee under the Plans would constitute an asset-
based sales charge. Rules of the Financial Industry Regulatory Authority
("FINRA") impose a cap on the total sales charges, including asset-based sales
charges that may be paid by any class of shares of the Fund. For the year ended
March 31, 2009, expenses incurred under the Plans are shown in the Statement of
Operations as distribution fees.
Front-end sales commissions and CDSC (collectively the "sales charges") are
not recorded as expenses of the Fund. Front-end sales commissions are deducted
from proceeds from the sales of Fund shares prior to investment in Class A
shares of the Fund. CDSC are deducted from redemption proceeds prior to
remittance to the shareholder. During the year ended March 31, 2009, IADI
advised the Fund that IADI retained $22,800 in front-end sales commissions from
the sale of Class A shares and $56, $36,778 and $1,090 from Class A, Class B and
Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
Invesco Aim, IAIS and/or IADI.
NOTE 3--SUPPLEMENTAL INFORMATION
The Fund adopted the provisions of Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of
the Fund's fiscal year. SFAS 157 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation methods giving
the highest priority to readily available unadjusted quoted prices in an active
market for identical assets (Level 1) and the lowest priority to significant
unobservable inputs (Level 3) generally when market prices are not readily
available or are unreliable. Based on the valuation inputs the securities or
other investments are tiered into one of three levels. Changes in valuation
methods may result in transfers in or out of an investment's assigned level:
Level 1 -- Prices are determined using quoted prices in an active market for
identical assets.
Level 2 -- Prices are determined using other significant observable inputs.
Observable inputs are inputs that other market participants may use in pricing
a security. These may include quoted prices for similar securities, interest
rates, prepayment speeds, credit risk and others.
Level 3 -- Prices are determined using significant unobservable inputs. In
situations where quoted prices or observable inputs are unavailable (for
example, when there is little or no market activity for an investment at the
end of the period), unobservable inputs may be used. Unobservable inputs
reflect the Fund's own assumptions about the factors market participants would
use in determining fair value of the securities or instruments and would be
based on the best available information.
Below is a summary of the tiered valuation input levels, as of the end of the
reporting period, March 31, 2009. The level assigned to the securities
valuations may not be an indication of the risk or liquidity associated with
investing in those securities. Because of the inherent uncertainties of
valuation, the values reflected in the financial statements may materially
differ from the value received upon actual sale of those investments.
<Table>
<Caption>
INVESTMENTS IN
INPUT LEVEL SECURITIES
- --------------------------------------
Level 1 $520,912,935
- --------------------------------------
Level 2 5,010,806
- --------------------------------------
Level 3 7,383,682
======================================
$533,307,423
______________________________________
======================================
</Table>
17 AIM TECHNOLOGY FUND
NOTE 4--INVESTMENTS IN OTHER AFFILIATES
The Investment Company Act of 1940 defines affiliates as those issuances in
which a fund holds 5% or more of the outstanding voting securities. The Fund has
not owned enough of the outstanding voting securities of the issuer to have
control (as defined in the Investment Company Act of 1940) of that issuer. The
following is a summary of the investments in affiliates for the year ended March
31, 2009.
<Table>
<Caption>
CHANGE IN
UNREALIZED
VALUE PURCHASES PROCEEDS APPRECIATION VALUE DIVIDEND REALIZED
03/31/08 AT COST FROM SALES (DEPRECIATION) 03/31/09 INCOME GAIN (LOSS)
- -------------------------------------------------------------------------------------------------------------------------
BlueStream Ventures L.P. $ 11,660,283 $ 829,415 $ -- $ (5,106,016) $ 7,383,682 $3,525,751 $--
_________________________________________________________________________________________________________________________
=========================================================================================================================
</Table>
NOTE 5--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM Funds under specified conditions outlined in procedures adopted by the Board
of Trustees of the Trust. The procedures have been designed to ensure that any
purchase or sale of securities by the Fund from or to another fund or portfolio
that is or could be considered an affiliate by virtue of having a common
investment advisor (or affiliated investment advisors), common Trustees and/or
common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined
under the procedures, each transaction is effected at the current market price.
Pursuant to these procedures, for the year ended March 31, 2009, the Fund
engaged in securities purchases of $4,017,687 and securities sales of $579,075,
which resulted in net realized gains of $445,951.
NOTE 6--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions and (ii) custodian credits which
result from periodic overnight cash balances at the custodian. For the year
ended March 31, 2009, the Fund received credits from these arrangements, which
resulted in the reduction of the Fund's total expenses of $54,523.
NOTE 7--TRUSTEES' AND OFFICERS' FEES AND BENEFITS
"Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officers' Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officers'
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended March 31, 2009, the Fund paid legal fees of $6,347 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 8--CASH BALANCES
The Fund is permitted to temporarily carry a negative or overdrawn balance in
its account with The State Street Bank and Trust Company, the custodian bank. To
compensate the custodian bank for such overdrafts, the overdrawn Fund may either
(i) leave funds as a compensating balance in the account so the custodian bank
can be compensated by earning the additional interest; or (ii) compensate by
paying the custodian bank at a rate agreed upon by the custodian bank and
Invesco Aim, not to exceed the contractually agreed upon rate.
NOTE 9--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
DISTRIBUTIONS TO SHAREHOLDERS:
There were no ordinary income or long term gain distributions paid during the
years ended March 31, 2009 and 2008.
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
<Table>
<Caption>
2009
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) -- investments $ (50,301,386)
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) -- other investments (2,827)
- ------------------------------------------------------------------------------------------------
Temporary book/tax differences (241,158)
- ------------------------------------------------------------------------------------------------
Capital loss carryforward (387,781,326)
- ------------------------------------------------------------------------------------------------
Post-October deferrals (64,076,474)
- ------------------------------------------------------------------------------------------------
Shares of beneficial interest 915,134,527
================================================================================================
Total net assets $ 412,731,356
________________________________________________________________________________________________
================================================================================================
</Table>
18 AIM TECHNOLOGY FUND
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation (depreciation) difference is attributable primarily to wash sales,
the deferral of losses on certain straddles and the treatment of partnerships.
The temporary book/tax differences are a result of timing differences between
book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of the trustee deferral of compensation and
retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions. Under these limitation rules, the Fund is limited to utilizing
$307,274,780 of capital loss carryforward in the fiscal year ending March 31,
2010.
The Fund has a capital loss carryforward as of March 31, 2009 which expires as
follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------------------------
March 31, 2010 $ 16,166,857
- -----------------------------------------------------------------------------------------------
March 31, 2011 367,910,113
- -----------------------------------------------------------------------------------------------
March 31, 2017 3,704,356
===============================================================================================
Total capital loss carryforward $387,781,326
_______________________________________________________________________________________________
===============================================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
NOTE 10--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended March 31, 2009 was $363,274,847 and $380,442,061,
respectively. Cost of investments on a tax basis includes the adjustments for
financial reporting purposes as of the most recently completed Federal income
tax reporting period-end.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $ 41,147,009
- ------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (91,448,395)
================================================================================================
Net unrealized appreciation (depreciation) of investment securities $(50,301,386)
________________________________________________________________________________________________
================================================================================================
Cost of investments for tax purposes is $583,608,809.
</Table>
NOTE 11--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of foreign currency
transactions, partnership transactions and net operating losses, on March 31,
2009, undistributed net investment income was increased by $14,687,610,
undistributed net realized gain (loss) was decreased by $5,867,031 and shares of
beneficial interest decreased by $8,820,579. This reclassification had no effect
on the net assets of the Fund.
19 AIM TECHNOLOGY FUND
NOTE 12--SHARE INFORMATION
<Table>
<Caption>
SUMMARY OF SHARE ACTIVITY
- -------------------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------
2009(a) 2008
--------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 1,122,931 $ 26,184,013 1,032,191 $ 32,029,351
- -------------------------------------------------------------------------------------------------------------------------
Class B 181,822 3,831,127 204,705 5,951,906
- -------------------------------------------------------------------------------------------------------------------------
Class C 104,271 2,209,616 150,130 4,279,397
- -------------------------------------------------------------------------------------------------------------------------
Class Y(b) 32,672 645,381 -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class 1,233,069 26,678,309 1,427,321 43,272,485
- -------------------------------------------------------------------------------------------------------------------------
Institutional Class 18,303 332,049 269 9,664
=========================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 458,008 10,763,061 362,234 10,164,311
- -------------------------------------------------------------------------------------------------------------------------
Class B (480,915) (10,763,061) (378,464) (10,164,311)
=========================================================================================================================
Reacquired:
Class A(b) (3,161,933) (68,616,902) (2,902,938) (86,584,634)
- -------------------------------------------------------------------------------------------------------------------------
Class B (268,192) (5,341,940) (526,753) (15,072,044)
- -------------------------------------------------------------------------------------------------------------------------
Class C (212,421) (4,317,852) (273,622) (7,556,943)
- -------------------------------------------------------------------------------------------------------------------------
Class Y (2,004) (34,404) -- --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class(b) (3,083,015) (67,966,474) (5,766,776) (170,962,629)
- -------------------------------------------------------------------------------------------------------------------------
Institutional Class (330) (5,941) (363) (11,597)
=========================================================================================================================
Net increase (decrease) in share activity (4,057,734) $(86,403,018) (6,672,066) $(194,645,044)
_________________________________________________________________________________________________________________________
=========================================================================================================================
</Table>
(a) There is an entity that is a record owner of more than 5% of the
outstanding shares of the Fund and owns 11% of the outstanding shares of
the Fund. IADI has an agreement with this entity to sell Fund shares. The
Fund, Invesco Aim, and/or Invesco Aim affiliates may make payments to this
entity, which is considered to be related to the Fund, for providing
services to the Fund, Invesco Aim, and/or Invesco Aim affiliates including
but not limited to services such as, securities brokerage, distribution,
third party record keeping and account servicing. The Trust has no
knowledge as to whether all or any portion of the shares owned of record by
this entity is also owned beneficially.
(b) Effective upon the commencement date of Class Y shares, October 3, 2008,
the following shares were converted from Class A and Investor Class shares
into Class Y shares of the Fund:
<Table>
<Caption>
CLASS SHARES AMOUNT
- --------------------------------------------------------------------------------------------------
Class Y 23,344 $ 488,353
- --------------------------------------------------------------------------------------------------
Class A (17,902) (377,921)
- --------------------------------------------------------------------------------------------------
Investor Class ( 5,279) (110,432)
__________________________________________________________________________________________________
==================================================================================================
</Table>
20 AIM TECHNOLOGY FUND
NOTE 13--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
NET GAINS (LOSSES)
NET ASSET NET ON SECURITIES
VALUE, INVESTMENT (BOTH TOTAL FROM NET ASSET NET ASSETS,
BEGINNING INCOME REALIZED AND INVESTMENT VALUE, END TOTAL END OF PERIOD
OF PERIOD (LOSS)(a) UNREALIZED) OPERATIONS OF PERIOD RETURN(b) (000S OMITTED)
- -----------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 $25.58 $(0.00)(d) $(7.81)(e) $(7.81) $17.77 (30.53)%(e) $122,823
Year ended 03/31/08 28.49 (0.23) (2.68) (2.91) 25.58 (10.21) 217,236
Year ended 03/31/07 28.45 (0.30) 0.34 0.04 28.49 0.14 284,962
Year ended 03/31/06 23.59 (0.28) 5.14 4.86 28.45 20.60 329,461
Year ended 03/31/05 24.71 (0.19) (0.93) (1.12) 23.59 (4.53) 314,755
- -----------------------------------------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 24.43 (0.16)(d) (7.43)(e) (7.59) 16.84 (31.07)(e) 16,952
Year ended 03/31/08 27.42 (0.44) (2.55) (2.99) 24.43 (10.90) 38,443
Year ended 03/31/07 27.59 (0.48) 0.31 (0.17) 27.42 (0.62) 62,355
Year ended 03/31/06 23.04 (0.45) 5.00 4.55 27.59 19.75 81,212
Year ended 03/31/05 24.29 (0.34) (0.91) (1.25) 23.04 (5.15) 88,240
- -----------------------------------------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 23.78 (0.16)(d) (7.22)(e) (7.38) 16.40 (31.03)(e) 9,340
Year ended 03/31/08 26.69 (0.42) (2.49) (2.91) 23.78 (10.90) 16,116
Year ended 03/31/07 26.86 (0.47) 0.30 (0.17) 26.69 (0.63) 21,386
Year ended 03/31/06 22.43 (0.44) 4.87 4.43 26.86 19.75 26,507
Year ended 03/31/05 23.64 (0.33) (0.88) (1.21) 22.43 (5.12) 27,016
- -----------------------------------------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(g) 20.92 0.02(d) (3.31)(e) (3.29) 17.63 (15.73)(e) 541
- -----------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 25.35 (0.00)(d) (7.74)(e) (7.74) 17.61 (30.53)(e) 262,730
Year ended 03/31/08 28.23 (0.22) (2.66) (2.88) 25.35 (10.20) 424,981
Year ended 03/31/07 28.19 (0.28) 0.32 0.04 28.23 0.14 595,776
Year ended 03/31/06 23.37 (0.27) 5.09 4.82 28.19 20.63 783,509
Year ended 03/31/05 24.49 (0.20) (0.92) (1.12) 23.37 (4.57) 892,630
- -----------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Year ended 03/31/09 27.07 0.12(d) (8.26)(e) (8.14) 18.93 (30.07)(e) 346
Year ended 03/31/08 29.95 (0.03) (2.85) (2.88) 27.07 (9.62) 9
Year ended 03/31/07 29.70 (0.11) 0.36 0.25 29.95 0.84 12
Year ended 03/31/06 24.44 (0.09) 5.35 5.26 29.70 21.52 12
Year ended 03/31/05 25.35 (0.02) (0.89) (0.91) 24.44 (3.59) 11
_______________________________________________________________________________________________________________________
=======================================================================================================================
<Caption>
RATIO OF RATIO OF
EXPENSES EXPENSES
TO AVERAGE TO AVERAGE NET RATIO OF NET
NET ASSETS ASSETS WITHOUT INVESTMENT
WITH FEE WAIVERS FEE WAIVERS INCOME (LOSS)
AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO
ABSORBED ABSORBED NET ASSETS TURNOVER(c)
- ----------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 1.55%(f) 1.83%(f) (0.02)%(d)(f) 68%
Year ended 03/31/08 1.55 1.56 (0.77) 42
Year ended 03/31/07 1.56 1.57 (1.07) 126
Year ended 03/31/06 1.57 1.63 (1.09) 107
Year ended 03/31/05 1.50 1.68 (0.80) 92
- ----------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 2.30%(f) 2.58(f) (0.77)(d)(f) 68
Year ended 03/31/08 2.30 2.31 (1.52) 42
Year ended 03/31/07 2.31 2.32 (1.82) 126
Year ended 03/31/06 2.30 2.36 (1.82) 107
Year ended 03/31/05 2.15 2.33 (1.45) 92
- ----------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 2.30%(f) 2.58(f) (0.77)(d)(f) 68
Year ended 03/31/08 2.30 2.31 (1.52) 42
Year ended 03/31/07 2.31 2.32 (1.82) 126
Year ended 03/31/06 2.30 2.36 (1.82) 107
Year ended 03/31/05 2.15 2.33 (1.45) 92
- ----------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(g) 1.30%(f)(h) 1.86(f)(h) 0.23(d)(f)(h) 68
- ----------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 1.53%(f) 1.81(f) 0.00(d)(f) 68
Year ended 03/31/08 1.52 1.53 (0.74) 42
Year ended 03/31/07 1.53 1.54 (1.04) 126
Year ended 03/31/06 1.57 1.61 (1.09) 107
Year ended 03/31/05 1.56 1.58 (0.86) 92
- ----------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Year ended 03/31/09 0.90%(f) 0.91(f) 0.63(d)(f) 68
Year ended 03/31/08 0.86 0.87 (0.10) 42
Year ended 03/31/07 0.86 0.86 (0.37) 126
Year ended 03/31/06 0.81 0.81 (0.33) 107
Year ended 03/31/05 0.79 0.81 (0.09) 92
________________________________________________________________________________________
========================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset value
for financial reporting purposes and the returns based upon those net asset
values may differ from the net asset value and returns for shareholder
transactions. Does not include sales charges and is not annualized for
periods less than one year, if applicable.
(c) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year, if applicable.
(d) Net investment income (loss) per share and the ratio of net investment
income (loss) to average net assets includes a distribution from
BlueStreams Ventures L.P. on October 23, 2008. Net investment income (loss)
per share and the ratio of net investment income (loss) to average net
assets excluding the distribution are $(0.13) and (0.57)%, $(0.29) and
(1.32)%, $(0.29) and (1.32)%, $(0.02) and (0.32)%, $(0.13) and (0.55)% and
$(0.01) and 0.08% for Class A, Class B, Class C, Class Y, Investor Class
and Institutional Class shares, respectively.
(e) Includes litigation proceeds received during the period. Had the litigation
proceeds not been received, net gains(losses) on securities (both realized
and unrealized) per share would have been $(8.01), $(7.63), $(7.42),
$(3.33), $(7.94) and $(8.46) for Class A, Class B, Class C, Class Y,
Investor Class and Institutional Class shares, respectively and total
returns would have been lower.
(f) Ratios are based on average daily net assets (000's omitted) of $176,322,
$27,342, $13,071, $415, $348,986 and $46 for Class A, Class B, Class C,
Class Y, Investor Class and Institutional Class shares, respectively.
(g) Commencement date of October 3, 2008 for Class Y shares.
(h) Annualized.
21 AIM TECHNOLOGY FUND
NOTE 14--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On May 23, 2008, the Securities and Exchange Commission ("SEC") publicly posted
its final approval of the Distribution Plans ("Distribution Plans") for the
distribution of monies placed into two separate Fair Funds created pursuant to a
settlement reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"),
Invesco Aim Advisors, Inc. ("Invesco Aim") and Invesco Aim Distributors, Inc.
("IADI") and the SEC (the "Order"). One of the Fair Funds consists of $325
million, plus interest and any contributions by other settling parties, for
distribution to shareholders of certain mutual funds formerly advised by IFG who
may have been harmed by market timing and related activity. The second Fair Fund
consists of $50 million, plus interest and any contributions by other settling
parties, for distribution to shareholders of certain mutual funds advised by
Invesco Aim who may have been harmed by market timing and related activity. The
Distribution Plans provide for the distribution to all eligible investors to
compensate such investors for injury they may have suffered as a result of
market timing in the affected funds. The Distribution Plans include a provision
for any residual amounts in the Fair Funds to be distributed in the future to
the affected funds. Because the distribution of the Fair Funds has not yet
commenced, management of Invesco Aim and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"), the
parent company of IFG and Invesco Aim, has agreed to reimburse expenses incurred
by the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, Invesco Aim, IADI
and/or related entities and individuals alleging that the defendants permitted
improper market timing and related activity in the AIM Funds.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
negligence, breach of fiduciary duty and/or breach of contract. These lawsuits
seek remedies that include, depending on the lawsuit, damages, restitution,
injunctive relief, imposition of a constructive trust, removal of certain
directors and/or employees, various corrective measures under ERISA, rescission
of certain AIM Funds' advisory agreements and/or distribution plans and recovery
of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues were transferred to the United States District Court for the District of
Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court, plaintiffs in
these lawsuits consolidated their claims for pre-trial purposes into three
amended complaints against various Invesco Aim- and IFG-related parties: (i) a
Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of ERISA purportedly
brought on behalf of participants in the Invesco 401(k) plan. Based on orders
issued by the MDL Court, all claims asserted against the AIM Funds that have
been transferred to the MDL Court have been dismissed, although certain Funds
remain nominal defendants in the Consolidated Amended Fund Derivative Complaint.
On January 5, 2008, the parties reached an agreement in principle to settle both
the Consolidated Amended Class Action Complaint and Consolidated Amended Fund
Derivative Complaint, subject to the MDL Court approval. Individual class
members have the right to object. On December 15, 2008, the parties reached an
agreement in principle to settle the Amended Class Action Complaint for
Violations of ERISA, subject to the MDL Court approval. Individual class members
have the right to object. No payments are required under the settlement;
however, the parties agreed that certain limited changes to benefit plans and
participants' accounts would be made.
IFG, Invesco Aim, IADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, Invesco Aim and IADI have advised the Fund that they are providing
full cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, Invesco Aim, IADI and/or related entities and individuals in
the future.
Management of Invesco Aim and the Fund believe that the outcome of the Pending
Litigation and Regulatory Inquiries described above will have no material
adverse affect on the Fund or on the ability of Invesco Aim and IADI to provide
ongoing services to the Fund.
22 AIM TECHNOLOGY FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM Sector Funds
and Shareholders of AIM Technology Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of AIM Technology Fund (one of the
funds constituting AIM Sector Funds, hereafter referred to as the "Fund") at
March 31, 2009, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 2009, by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PRICEWATERHOUSECOOPERS LLP
May 22, 2009
Houston, Texas
23 AIM TECHNOLOGY FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. With
the exception of the actual ending account value and expenses of the Class Y
shares, the example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period October 1, 2008, through
March 31, 2009. The actual ending account and expenses of the Class Y shares in
the below example are based on an investment of $1,000 invested as of close of
business October 3, 2008 (commencement date) and held through March 31, 2009.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period (as of close of business
October 3, 2008 through March 31, 2009 for the Class Y shares). Because the
actual ending account value and expense information in the example is not based
upon a six month period for the Class Y shares, the ending account value and
expense information may not provide a meaningful comparison to mutual funds that
provide such information for a full six month period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/01/08) (03/31/09)(1) PERIOD(2) (03/31/09) PERIOD(2,3) RATIO
- ---------------------------------------------------------------------------------------------------
A $1,000.00 $771.60 $ 6.85 $1,017.20 $ 7.80 1.55%
- ---------------------------------------------------------------------------------------------------
B 1,000.00 768.60 10.14 1,013.46 11.55 2.30
- ---------------------------------------------------------------------------------------------------
C 1,000.00 768.90 10.14 1,013.46 11.55 2.30
- ---------------------------------------------------------------------------------------------------
Y 1,000.00 842.70 5.91 1,018.45 6.54 1.30
- ---------------------------------------------------------------------------------------------------
Investor 1,000.00 771.70 6.63 1,017.45 7.54 1.50
- ---------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period October 1, 2008, through March 31, 2009 (as of close of
business October 3, 2008, through March 31, 2009 for the Class Y shares),
after actual expenses and will differ from the hypothetical ending account
value which is based on the Fund's expense ratio and a hypothetical annual
return of 5% before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
182/365 to reflect the most recent fiscal half year. For the Class Y shares
actual expenses are equal to the annualized expense ratio indicated above
multiplied by the average account value over the period, multiplied by 180
(as of close of business October 3, 2008, through March 31, 2009)/365.
Because the Class Y shares have not been in existence for a full six month
period, the actual ending account value and expense information shown may
not provide a meaningful comparison to fund expense information of classes
that show such data for a full six month period and, because the actual
ending account value and expense information in the expense example covers a
short time period, return and expense data may not be indicative of return
and expense data for longer time periods.
(3) Hypothetical expenses are equal to the annualized expense ratio indicated
above multiplied by the average account value over the period, multiplied by
182/365 to reflect a one-half year period. The hypothetical ending account
value and expenses may be used to compare ongoing costs of investing in
Class Y shares of the Fund and other funds because such data is based on a
full six month period.
24 AIM TECHNOLOGY FUND
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year-end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to be
different, the maximum amount allowable for its fiscal year ended March 31,
2009:
<Table>
<Caption>
FEDERAL AND STATE INCOME TAX
----------------------------
U.S. Treasury Obligations* 0.19%
</Table>
* The above percentage is based on ordinary income dividends paid to
shareholders during the Fund's fiscal year.
NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended June 30, 2008, September 30, 2008, December 31, 2008 and
March 31, 2009 were 22.66%, 14.45%, 13.80%, and 16.84%, respectively.
25 AIM TECHNOLOGY FUND
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM Sector Funds (the "Trust"), is 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 102
portfolios in the AIM Funds complex. The trustees serve for the life of the
Trust, subject to their earlier death, incapacitation, resignation, retirement
or removal as more specifically provided in the Trust's organizational
documents. Each officer serves for a one year term or until their successors are
elected and qualified. Column two below includes length of time served with
predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------------
Martin L. 2007 Executive Director, Chief Executive Officer and President, None
Flanagan(1) -- 1960 Invesco Ltd. (ultimate parent of Invesco Aim and a global
Trustee investment management firm); Chairman, Invesco Aim Advisors,
Inc. (registered investment advisor); Trustee, The AIM
Family of Funds--Registered Trademark--; Vice Chairman,
Investment Company Institute; and Member of Executive Board,
SMU Cox School of Business
Formerly: Director, Chairman, Chief Executive Officer and
President, IVZ Inc. (holding company); INVESCO Group
Services, Inc. (service provider); and Invesco North
American Holdings, Inc. (holding company); Director, Chief
Executive Officer and President, Invesco Holding Company
Limited (parent of Invesco Aim and a global investment
management firm); Chairman, Investment Company Institute;
President, Co-Chief Executive Officer, Co-President, Chief
Operating Officer and Chief Financial Officer, Franklin
Resources, Inc. (global investment management organization)
- --------------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None
Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and
Principal President, Invesco Trimark Dealer Inc. (formerly AIM Mutual
Executive Officer Fund Dealer Inc.) (registered broker dealer), Invesco Aim
Advisors, Inc., and 1371 Preferred Inc. (holding company);
Director, Chairman, Chief Executive Officer and President,
Invesco Aim Management Group, Inc. (financial services
holding company) and Invesco Aim Capital Management, Inc.
(registered investment advisor); Director and President,
INVESCO Funds Group, Inc. (registered investment advisor and
register transfer agent) and AIM GP Canada Inc. (general
partner for a limited partnership); Director, Invesco Aim
Distributors, Inc. (registered broker dealer); Director and
Chairman, Invesco Aim Investment Services, Inc. (registered
transfer agent) and INVESCO Distributors, Inc. (registered
broker dealer); Director, President and Chairman, INVESCO
Inc. (holding company) and Invesco Canada Holdings Inc.
(holding company); Chief Executive Officer, AIM Trimark
Corporate Class Inc. (corporate mutual fund company) and AIM
Trimark Canada Fund Inc. (corporate mutual fund company);
Director and Chief Executive Officer, Invesco Trimark
Ltd./Invesco Trimark Ltee (formerly AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services) (registered
investment advisor and registered transfer agent) and
Invesco Trimark Dealer Inc. (formerly AIM Mutual Fund Dealer
Inc.) (registered broker dealer); Trustee, President and
Principal Executive Officer of The AIM Family of Funds--
Registered Trademark-- (other than AIM Treasurer's Series
Trust and Short-Term Investments Trust); Trustee and
Executive Vice President, The AIM Family of Funds--
Registered Trademark-- (AIM Treasurer's Series Trust and
Short-Term Investments Trust only); and Manager, Invesco
PowerShares Capital Management LLC
Formerly: President, Invesco Trimark Dealer Inc.; Director
and President, AIM Trimark Corporate Class Inc. and AIM
Trimark Canada Fund Inc.; Director and President, Invesco
Trimark Ltd./Invesco Trimark Ltee (formerly AIM Funds
Management Inc. d/b/a INVESCO Enterprise Services); Senior
Managing Director, Invesco Holding Company Limited; Trustee
and Executive Vice President, Tax-Free Investments Trust;
Director and Chairman, Fund Management Company (registered
broker dealer); President and Principal Executive Officer,
The AIM Family of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term Investments Trust and
Tax-Free Investments Trust only); President, AIM Trimark
Global Fund Inc. and AIM Trimark Canada Fund Inc.; and
Director, Trimark Trust (federally regulated Canadian Trust
Company)
- --------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited
Trustee and Chair consulting company) (insurance company);
Captaris, Inc.
(unified messaging
provider); and
Investment Company
Institute
- --------------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 1983 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2003 Retired
Trustee
Formerly: Partner, law firm of Baker & McKenzie; and None
Director, Badgley Funds, Inc. (registered investment
company) (2 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Director, Van Gilder
Trustee firm) Insurance Company,
Board of Governors,
Western Golf
Association/Evans
Scholars Foundation
and Executive
Committee, United
States Golf
Association
- --------------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2003 Director of a number of public and private business None
Trustee corporations, including the Boss Group Ltd. (private
investment and management); Continental Energy Services, LLC
(oil and gas pipeline service); Reich & Tang Funds
(registered investment company); Annuity and Life Re
(Holdings), Ltd. (reinsurance company), and Homeowners of
America Holding Corporation/Homeowners of America Insurance
Company (property casualty company)
Formerly: Director, CompuDyne Corporation (provider of
product and services to the public security market);
Director, President and Chief Executive Officer, Volvo Group
North America, Inc.; Senior Vice President, AB Volvo;
Director of various public and private corporations
- --------------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff
Trustee (government affairs company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate
entertainment)
Formerly: Chief Executive Officer, Texana Timber LP
(sustainable forestry company); and Discovery Global
Education Fund (non-profit)
- --------------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich &
Trustee Tang Funds (16
portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 2003 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 1997 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired
Trustee
Formerly: Partner, Director, Mainstay VP Series Funds, Inc. None
(25 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan is considered an interested person of the Trust because he is
an officer of the advisor to the Trust, and an officer and a director of
Invesco Ltd., ultimate parent of the advisor to the Trust.
(2) Mr. Taylor is considered an interested person of the Trust because he is an
officer and a director of the advisor to, and a director of the principal
underwriter of, the Trust.
26 AIM TECHNOLOGY FUND
TRUSTEES AND OFFICERS--(CONTINUED)
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- --------------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family of N/A
Senior Vice President and Funds--Registered Trademark--
Senior Officer
Formerly: Director of Compliance and Assistant General Counsel,
ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General
Counsel and Director of Compliance, ALPS Mutual Funds, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General Counsel, N/A
Senior Vice President, Chief Invesco Aim Management Group, Inc., Invesco Aim Advisors, Inc.
Legal Officer and Secretary and Invesco Aim Capital Management, Inc.; Director, Senior Vice
President and Secretary, Invesco Aim Distributors, Inc.;
Director, Vice President and Secretary, Invesco Aim Investment
Services, Inc. and INVESCO Distributors, Inc.; Director and Vice
President, INVESCO Funds Group Inc.; Senior Vice President, Chief
Legal Officer and Secretary, The AIM Family of Funds--Registered
Trademark--; and Manager, Invesco PowerShares Capital Management
LLC
Formerly: Director, Vice President and Secretary, Fund Management
Company; Vice President, Invesco Aim Capital Management, Inc.;
Chief Operating Officer, Senior Vice President, General Counsel
and Secretary, Liberty Ridge Capital, Inc. (an investment
adviser); Vice President and Secretary, PBHG Funds (an investment
company); Vice President and Secretary, PBHG Insurance Series
Fund (an investment company); Chief Operating Officer, General
Counsel and Secretary, Old Mutual Investment Partners (a broker-
dealer); General Counsel and Secretary, Old Mutual Fund Services
(an administrator); General Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder servicing center); Executive
Vice President, General Counsel and Secretary, Old Mutual
Capital, Inc. (an investment adviser); and Vice President and
Secretary, Old Mutual Advisors Funds (an investment company)
- --------------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice President, The N/A
Vice President AIM Family of Funds--Registered Trademark--
Formerly: Senior Vice President, Invesco Aim Management Group,
Inc.; Senior Vice President and Chief Compliance Officer, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark--; Vice President and Chief Compliance Officer, Invesco
Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.;
Vice President, Invesco Aim Investment Services, Inc. and Fund
Management Company
- --------------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, Invesco N/A
Vice President Ltd.; Director and Secretary, Invesco Holding Company Limited,
and INVESCO Funds Group, Inc.; Director and Executive Vice
President, IVZ Inc., Invesco Group Services, Inc., Invesco North
American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.;
and Vice President, The AIM Family of Funds--Registered
Trademark--
Formerly: Secretary, IVZ, Inc., Invesco Group Services, Inc., and
Invesco North American Holdings, Inc.; Senior Managing Director
and Secretary, Invesco Holding Company Limited; Director, Senior
Vice President, Secretary and General Counsel, Invesco Aim
Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior
Vice President, Invesco Aim Distributors, Inc.; Director, General
Counsel and Vice President, Fund Management Company; Vice
President, Invesco Aim Capital Management, Inc., Invesco Aim
Investment Services, Inc., Invesco Group Services, Inc. and IVZ
Inc.; Senior Vice President, Chief Legal Officer and Secretary,
The AIM Family of Funds--Registered Trademark--; Director and
Vice President, INVESCO Distributors, Inc. and Chief Executive
Officer and President, INVESCO Funds Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Sheri Morris -- 1964 1999 Vice President, Treasurer and Principal Financial Officer, The N/A
Vice President, Treasurer AIM Family of Funds--Registered Trademark--; and Vice President,
and Principal Financial Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc.
Officer and Invesco Aim Private Asset Management Inc.
Formerly: Assistant Vice President and Assistant Treasurer, The
AIM Family of Funds--Registered Trademark-- and Assistant Vice
President, Invesco Aim Advisors, Inc., Invesco Aim Capital
Management, Inc. and Invesco Aim Private Asset Management, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash Management N/A
Vice President Group; Director of Cash Management and Senior Vice President,
Invesco Aim Advisors, Inc. and Invesco Aim Capital Management,
Inc; Executive Vice President, Invesco Aim Distributors, Inc.;
Senior Vice President, Invesco Aim Management Group, Inc.; Vice
President, The AIM Family of Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust and Short-Term Investments
Trust); and President and Principal Executive Officer, The AIM
Family of Funds--Registered Trademark-- (AIM Treasurer's Series
Trust and Short-Term Investments Trust only)
Formerly President and Principal Executive Officer, Tax-Free
Investments Trust; Director and President, Fund Management
Company; Chief Cash Management Officer and Managing Director,
Invesco Aim Capital Management, Inc.; and Vice President, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark-- (AIM Treasurer's Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust only)
- --------------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim Advisors, N/A
Anti-Money Laundering Inc., Invesco Aim Capital Management, Inc., Invesco Aim
Compliance Officer Distributors, Inc., Invesco Aim Investment Services, Inc.,
Invesco Aim Private Asset Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering Compliance Officer, Fund
Management Company; and Manager of the Fraud Prevention
Department, Invesco Aim Investment Services, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; Senior N/A
Chief Compliance Officer Vice President and Chief Compliance Officer, Invesco Aim
Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief
Compliance Officer, The AIM Family of Funds--Registered
Trademark--, Invesco Global Asset Management (N.A.), Inc.
(registered investment advisor), Invesco Institutional (N.A.),
Inc., (registered investment advisor), INVESCO Private Capital
Investments, Inc. (holding company), Invesco Private Capital,
Inc. (registered investment advisor) and Invesco Senior Secured
Management, Inc. (registered investment advisor); and Vice
President, Invesco Aim Distributors, Inc. and Invesco Aim
Investment Services, Inc.
Formerly: Vice President, Invesco Aim Capital Management, Inc.
and Fund Management Company; and Global Head of Product
Development, AIG-Global Investment Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
The Statement of Additional Information of the Trust includes additional
information about the Fund's Trustees and is available upon request, without
charge, by calling 1.800.959.4246.
Please refer to the Fund's prospectus for information on the Fund's sub-
advisors.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. PricewaterhouseCoopers LLP
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Stradley Ronon Stevens INDEPENDENT TRUSTEES Invesco Aim Investment Services, Inc. State Street Bank and Trust
& Young, LLP Kramer, Levin, Naftalis & P.O. Box 4739 Company
2600 One Commerce Square Frankel LLP Houston, TX 77210-4739 225 Franklin Street
Philadelphia, PA 19103 1177 Avenue of the Americas Boston, MA 02110-2801
New York, NY 10036-2714
27 AIM TECHNOLOGY FUND
====================================================================================================================================
[GO PAPERLESS GRAPHIC]
====================================================================================================================================
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Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all
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This service is provided by Invesco Aim Investment Services, Inc.
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FUND HOLDINGS AND PROXY VOTING INFORMATION
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund
files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is
available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your
Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC
website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C.
You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by
calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file
numbers for the Fund are 811-03826 and 002-85905.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities
is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website,
invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website,
sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2008, is
available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting
Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov.
If used after July 20, 2009, this report must be accompanied by a Fund fact sheet or Invesco Aim
Quarterly Performance Review for the most recent quarter-end. Invesco Aim --SERVICE MARK-- is a service
mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management,
Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are
the investment advisors for the products and services represented by Invesco Aim; they each provide
investment advisory services to individual and institutional clients and do not sell securities.
Please refer to each fund's prospectus for information on the fund's subadvisors. Invesco Aim
Distributors, Inc. is the U.S. distributor for the retail mutual funds, exchange-traded funds and [INVESCO AIM LOGO]
institutional money market funds and the subdistributor for the STIC Global Funds represented by -- SERVICE MARK --
Invesco Aim. All entities are indirect, wholly owned subsidiaries of invesco Ltd.
It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors,
Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global
Asset Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the
consolidated adviser firm will be renamed Invesco Advisers, Inc. Additional information will be posted
at invescoaim.com on or about the end of the fourth quarter of 2009.
invescoaim.com I-TEC-AR-1 Invesco Aim Distributors, Inc.
[INVESCO AIM LOGO] AIM UTILITIES FUND
--SERVICE MARK-- Annual Report to Shareholders o March 31, 2009
[MOUNTAIN GRAPHIC]
2 Letters to Shareholders
4 Performance Summary
4 Management Discussion
6 Long-Term Fund Performance
8 Supplemental Information
9 Schedule of Investments
10 Financial Statements
13 Notes to Financial Statements
20 Financial Highlights
22 Auditor's Report
23 Fund Expenses
24 Tax Information
25 Trustees and Officers
Dear Shareholders:
The past year was difficult to say the least for virtually all investors. Market indexes in the
U.S. and around the globe nosedived in 2008, and the vast majority of us have seen sharp declines in
[TAYLOR the value of our investments. As I write this letter, "market experts" remain divided on the outlook
PHOTO] for the market. While some argue the worst of the decline is over, others say we have farther to fall.
There is widespread agreement, however, that markets are likely to remain volatile for some time to
come.
We've all read about subprime lending, government bailouts and investment scandals -- but we know
that as individuals, we have little control over such matters. Rather, I'd like to discuss with you
Philip Taylor actions you may have already taken, or can take now, that may benefit you going forward.
BOOMS AND BUSTS
Recent history should have reminded all of us that investor sentiment can be fickle. The
technology-driven bull market of the late 1990s gave way to a sharp decline from 2000 to 2002 when the
"tech bubble" burst. More recently, the 2003 to 2007 bull market, driven largely by financial stocks
and a housing boom, among other factors, gave way to the current market decline when the "housing bubble" burst.
These market downturns hurt nearly all investors. But they were particularly painful for investors who, seeking high,
short-term returns, abandoned their long-term, diversified investment plans and decided to chase performance -- i.e., allocate a
large portion of their assets into the "hot" investments du jour. Many of those investors discovered they had unwittingly bought at
the top of the market, and they saw the value of their assets decline significantly as market leadership changed. History has shown
that seeking the highest short-term returns possible has often led to long-term disappointment.
This is why we believe investors should work with their financial advisors to devise a goal-based financial strategy -- a
long-term plan with a reasonable prospect of achieving predetermined financial goals in line with individual risk tolerance. Such a
strategy cannot guarantee a profit or protect against loss in a declining market, but it may help investors avoid emotion-driven,
short-term investment mistakes.
WHAT TO DO NOW
None of us can control the markets, but we can control our own reaction to the unsettling volatility we're currently experiencing.
Here are some steps that may help position you for whatever the market brings next:
o REVISIT YOUR GOALS. Work with your financial advisor to create specific, concrete investment goals consistent with your
risk tolerance. Scared by market volatility, many investors fled to cash in recent months. While that may be entirely
appropriate for investors approaching retirement, other investors may need the growth potential of equities to achieve
their long-term goals. Your financial advisor can suggest investments that match your goals and risk tolerance.
o RESIST LOOKING OVER THE FENCE. Every investor's needs, goals and risk tolerance are different. Your neighbor's,
co-worker's or relative's investments have no relevance to yours because their circumstances, goals and risk tolerances
are as individual as yours.
o LET LOGIC BE YOUR GUIDE. Market volatility is a fact of life for investors. Market declines can be painful, but
historically they haven't proved permanent. Your financial advisor can help you approach your investment plan logically,
not emotionally.
WHAT WE'RE DOING
Invesco Aim has worked on behalf of investors in both bull markets and bear markets. That is why we're committed to good
stewardship, good communication and sound investment management.
To be good stewards, we've established best practice risk-management and investment oversight processes, further enhancing our
compliance oversight and our transparency to our shareholders and our independent fund board.
To be good communicators, we've revamped our website to put Investment Perspectives front and center on the home page of
invescoaim.com and on your account balance page. Our chief investment officers, portfolio managers and I are eager to communicate
with you directly about your investments, market conditions and other topics that may be helpful to you.
To be good investment managers, we've focused on doing one thing well: managing your money. At Invesco Aim, managing your money
is all we do. We believe mutual funds should have well-defined, clearly articulated and repeatable investment strategies. Our funds
have stayed true to their investment strategies even during this current period of market volatility.
CONTACT US
If you have questions about this report or your account, please contact one of our client service representatives at 800 959 4246.
I also invite you to visit invescoaim.com, where you can check on your individual account, obtain long-term performance
information for your fund and read market commentaries from our investment professionals.
As always, I welcome your comments and questions. Please contact me at phil@invescoaim.com and let me know what's on your mind.
Thank you for investing with us. All of us at Invesco Aim look forward to serving you.
Sincerely,
/s/ PHILIP TAYLOR
Philip Taylor
Senior Managing Director, Invesco Ltd.
CEO, Invesco Aim
2 AIM UTILITIES FUND
Dear Fellow Shareholders:
Since my last letter, continuing troubles in the global economy and financial markets have negatively
affected all investors. The new government promises to move quickly with a stimulus package, yet
considerable anxiety remains about how, when and what kind of a recovery will occur. However, mutual
funds generally are more diversified than other investments; as shareholders we invest not in a single
[CROCKETT security but in a portfolio of multiple securities. The benefits of diversification have been
PHOTO] reiterated by the stories of investors who "lost everything" because they had too many of their assets
in one place, whether that place was a single money manager or their employer's stock. Mutual fund
investors also have the opportunity to diversify further among different types of funds that each
Bruce Crockett deploy a different strategy and focus on different kinds of securities. These include conservatively
managed money market funds, which, relative to other securities, continue to offer a more safe,
liquid, and convenient way to invest short-term assets.
In addition to diversification, investing discipline is essential during challenging times such as these. Strategies such as
dollar cost averaging, where individuals invest a consistent amount at regular intervals, can help investors acquire more fund
shares when prices are low. Periodic rebalancing of asset allocation plans achieves the same effect. "Buy low, sell high" has long
been the mantra of investment success, but the advice is not always easy to follow because it requires the discipline to resist
prevailing trends. Of course, investment strategies, such as dollar cost averaging and portfolio rebalancing do not guarantee a
profit or eliminate the risk of loss. Investors should consider their ability to continue investing regardless of fluctuating
security prices.
A long-term view is also important, particularly for assets that are not needed right away. In the past, it has often proven
better to keep long-term assets invested through a downturn than to miss the beginning of the upward trend. To develop a diversified
and disciplined investing plan that is right for your individual goals, I encourage you to consult an experienced and trustworthy
investment professional who has the knowledge and the tools to help you establish and implement the plan, monitor its results and
adapt it to changing goals and circumstances.
Even when working with a personal financial advisor, investors should supplement the relationship with their own knowledge and
awareness of the investments they hold. Visit the Invesco Aim website at invescoaim.com regularly to find out what is happening in
your AIM funds and to read timely market commentary from Invesco Aim management, strategists and portfolio managers. The site's
"Education and Planning" section can also help you clarify basic investment concepts, learn how to choose a financial advisor,
evaluate different investment choices and make more informed investment decisions. Invesco Aim's redesigned public home page
recently received a Gold Award for its user-friendly navigation and graphics from The Mutual Funds Monitor Awards, sponsored by
Corporate Insight.
As always, your Board of Trustees and Invesco Aim are committed to putting your interests first by controlling costs,
monitoring investment performance and streamlining the investment management process during these difficult times. Your Board has
already begun the annual review and management contract renewal process with the continuing goal of making AIM funds one of the best
and most cost-effective ways for you to invest your hard-earned money.
While the investing climate may remain uncertain for a while, economies and markets are dynamic, and no stage is ever
permanent. Please feel free to contact me in writing with your questions or concerns. You can send an email to me at bruce
@brucecrockett.com.
Best regards,
/s/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Trustees
3 AIM UTILITIES FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
======================================================================================= capital appreciation, current income and
PERFORMANCE SUMMARY capital preservation.
Although there were no safe havens from widespread losses during the fiscal year, In selecting investments, the new team
utilities stocks performed better than the broad market due to their defensive nature focuses on dividend-paying companies
and the relative stability of their dividends. All share classes of AIM Utilities Fund within the electric utility, natural gas,
at net asset value fared better than the S&P 500 Index for the fiscal year ended March water and telecommunications industries.
31,2009.(triangle) Companies with solid balance sheets and
operational cash flow that supports
The Fund's large allocation to the electric utilities industry detracted the most sustained or increasing dividends are
from performance during the fiscal year, while holdings in the independent power emphasized. Fundamental research and
producers and energy traders industry detracted the least. Contributors to returns financial statement analysis are the
included proceeds from litigation settlements and select holdings in the backbone of the team's bottom-up
multi-utilities and oil, gas and consumable fuels industries. investment process. Using a variety of
valuation techniques, the team estimates
Your Fund's long-term performance appears later in this report. the potential return over a two-year
investment period.
FUND VS. INDEXES
The portfolio is constructed in an
Total returns, 3/31/08 to 3/31/09, at net asset value (NAV). Performance shown does not effort to provide the best combination of
include applicable contingent deferred sales charges (CDSC) or front-end sales charges, price appreciation potential, dividend
which would have reduced performance. income and risk profile while maintaining
full sector exposure. The team manages
Class A Shares -33.50% risk by maintaining an average of 30-50
Class B Shares -34.06 positions, low turnover and a rigorous
Class C Shares -34.00 sell discipline.
Class Y Shares* -33.46
Investor Class Shares -33.54 MARKET CONDITIONS AND YOUR FUND
S&P 500 Indext (Broad Market Index) -38.06
Lipper Utility Funds Indext(triangle) (Peer Group Index) -32.72 Due to the ongoing financial crisis, stock
markets around the world experienced
tremendous volatility over the fiscal
(triangle) Lipper Inc. year. What began with an alarming increase
in delinquencies on U.S. subprime
* Share class incepted during the fiscal year. See page 7 for a detailed mortgages quickly became a credit crisis
explanation of Fund performance. that spread throughout the global
financial system. As a result, credit
======================================================================================= availability quickly vanished, and
consumers drastically altered their
HOW WE INVEST monitored industry and position weights, spending behavior. Without access to
and made adjustments according to credit, businesses became increasingly
The prior management team invested prevailing economic trends such as gross reluctant to hire and spend, and many
primarily in natural gas, electricity and domestic product (GDP) growth and interest resorted to widespread job cuts. While
telecommunication services companies, rate changes. global economic conditions deteriorated,
selecting stocks based on empirical governments around the world responded
research of individual companies. The On January 23,2009, a new portfolio with expansionary monetary and fiscal
managers used fundamental analysis which management team assumed responsibility for policies. Most major central banks lowered
focused on positive cash flows and AIM Utilities Fund. The new team consists interest rates to below 1%, and government
predictable earnings. The analysis sought of Meggan Walsh, lead portfolio manager, spending initiatives were launched.(1)
to identify strong balance sheets, and Davis Paddock, portfolio manager, and
competent management and sustainable is assisted by the Utilities Team. This
dividends and distributions. Managers also team is committed to providing strategic
looked for attractively valued companies exposure to a traditionally defensive and
that could benefit from industry trends, income-oriented asset class. The team
such as increased demand for certain manages the Fund using a total return
products and deregulation of state approach, emphasizing
markets. The team
========================================== ========================================== ==========================================
PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* Total Net Assets $211.2 million
By sector 1. FPL Group, Inc. 5.6% Total Number of Holdings* 30
2. Sempra Energy 5.2 ==========================================
Utilities 78.6% 3. Verizon Communications Inc. 5.0
Telecommunications Services 10.9 4. ExelonCorp. 4.7
Energy 5.0 5. PG&E Corp. 4.4
Money Market Funds 6. Entergy Corp. 4.4
Plus Other Assets Less 7. AT&T Inc. 4.1
Liabilities 5.5 8. Xcel Energy, Inc. 3.8
========================================== 9. CMS Energy Corp. 3.8
10. Edison International 3.6
==========================================
The Fund's holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
* Excluding money market fund holdings.
4 AIM UTILITIES FUND
The U.S. Congress passed several pieces At the end of the period, the Fund's MEGGAN WALSH
of legislation designed to stimulate largest industry allocations were in the Chartered Financial
economic growth and resuscitate ailing electric and multi-utilities industries. [WALSH Analyst, portfolio manager
banks. Real GDP was revised down to an The Fund also had significant exposure to PHOTO] is lead portfolio manager
annual rate of -6.3% for the fourth quarter the diversified telecommunications and gas of AIM Utilities Fund. Ms.
of 2008,(2) driven primarily by a large utilities industries. Walsh has been in the
decrease in durable goods consumption and investment industry since 1987 and
investments. Manufacturing activity, as At the close of the fiscal year, the joined Invesco Aim in 1991. Ms. Walsh
measured by the Institute for Supply managers saw a number of competing issues earned a B.S. in finance from the
Management's Index (ISM), dropped for the utilities sector. On the positive University of Maryland and an M.B.A. from
precipitously during the period, reaching side, lower commodity prices benefited Loyola College.
a 26-year low in November 2008 as auto regulated utilities as they better managed
sales and demand for other durable goods their input costs. Additionally, the DAVIS PADDOCK
plummeted.(3) country's electric system was outdated and Chartered Financial
will require ongoing infrastructure [PADDOCK Analyst, portfolio manager,
The threat of inflation eased following improvements which may provide PHOTO] is manager of AIM Utilities
declines in energy prices in the second opportunities for increased efficiency. Fund. He joined Invesco Aim
half of 2008. Despite relief from lower However, utilities were not completely in 2001. Mr. Paddock earned a B.A. and an
gas prices, consumers remained cautious as immune to the economic cycle. M.B.A. from The University of Texas at
the economic picture remained uncertain. Austin.
U.S. unemployment trended considerably For the first time in many years, both
higher during the fiscal year and residential and industrial customers were Assisted by the Utilities Team
ultimately reached a seasonally adjusted pulling back on their electric
rate of 8.5% by the end of March 2009, the consumption. This evidence of demand
highest level in more than two decades.(4) reduction combined with tighter credit
markets caused utility companies to
In this environment, all stock market reassess their capital expenditure plans.
sectors delivered double-digit losses for While maintenance and environmental
the fiscal year ended March 31, 2009.(5) improvements were still expected,
The traditionally defensive sectors of discretionary spending was being
health care, consumer staples, constrained.
telecommunication services and utilities
were among the better-performing sectors In closing, we would like to thank you
of the S&P 500 Index. Conversely, for your continued investment in AIM
financial services, industrials and Utilities Fund. We are committed to
materials were the worst performing providing investors strategic exposure to
sectors. a traditionally defensive and
income-oriented asset class through our
Attractive yields supported many total return approach.
utilities stocks as interest rates
declined in 2008, and in contrast to the (1) FXStreet.com
broad results for the sector, a handful of
holdings had positive results. The largest (2) Bureau of Economic Analysis
contributor to the Fund's overall
performance was the California-based (3) Institute for Supply Management
multi-utilities company, PG&E CORP. As a
fully regulated utility, the company (4) Bureau of Labor Statistics
benefited from limited exposure to energy
markets and a more favorable regulatory (5) Lipper Inc.
climate in California.
The views and opinions expressed in
SPECTRA ENERGY also contributed to the management's discussion of Fund
Fund's performance. The company's core performance are those of Invesco Aim
businesses, gas pipelines and storage Advisors, Inc. These views and opinions
facilities, continued to be a consistent are subject to change at any time based on
revenue source. We sold this holding. factors such as market and economic
conditions. These views and opinions may
WILLIAMS COMPANIES and EL PASO CORP. not be relied upon as investment advice or
were the largest detractors from Fund recommendations, or as an offer for a
performance for the year. These companies particular security. The information is
are largely exploration and production not a complete analysis of every aspect of
driven and are considerably affected by any market, country, industry, security or
natural gas prices. Lower production and the Fund. Statements of fact are from
declining natural gas prices pressured sources considered reliable, but Invesco
corporate earnings and stock performance Aim Advisors, Inc. makes no representation
throughout the year. or warranty as to their completeness or
accuracy. Although historical performance
is no guarantee of future results, these
insights may help you understand our
investment management philosophy.
See important Fund and index disclosures
later in this report.
5 AIM UTILITIES FUND
YOUR FUND'S LONG-TERM PERFORMANCE
Past performance cannot guarantee Class C shares. The performance of the taxes a shareholder would pay on Fund
comparable future results. Fund's other share classes will differ distributions or sale of Fund shares.
primarily due to different sales charge
The performance data shown in the first structures and class expenses and may be Both charts above are logarithmic
chart above is that of the Fund's Investor greater than or less than the performance charts, which present the fluctuations in
class shares. The performance of the of the Fund's Class C shares. The data the value of the Fund's share class and
Fund's other share classes will differ shown in the second chart above includes its indexes. We believe that a logarithmic
primarily due to different sales charge reinvested distributions, Fund expenses chart is more effective than other types
structures and class expenses and may be and management fees. Index results include of charts in illustrating changes in value
greater than or less than the performance reinvested dividends, but they do not during the early years shown in the chart.
of the Fund's Investor Class shares. The reflect sales charges. The vertical axis, the one that indicates
data shown in this chart includes the dollar value of an investment, is
reinvested distributions, Fund expenses Performance of an index of funds constructed with each segment representing
and management fees. Index results include reflects fund expenses and management a percent change in the value of the
reinvested dividends. fees; performance of a market index does investment. In both charts, each segment
not. Performance shown in the charts and represents a doubling, or 100% change, in
The performance data shown in the table does not reflect deduction of the value of the investment.
second chart above is that of the Fund's
6 AIM Utilities Fund
AIM UTILITIES FUND - INVESTOR CLASS SHARES
================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITHOUT SALES CHARGES
SINCE INCEPTION
Index data from 5/31/86, Fund data from 6/02/86
AIM
UTILITIES FUND-
INVESTOR CLASS
DATE SHARES S&P 500 INDEX(1)
- ---- ---------------- ----------------
5/31/86 $ 10000
6/86 $10363 10169
7/86 10726 9601
8/86 11338 10312
9/86 10563 9460
10/86 10999 10006
11/86 11100 10249
12/86 10898 9987
1/87 11793 11332
2/87 11553 11779
3/87 11415 12119
4/87 10967 12012
5/87 10904 12116
6/87 11285 12728
7/87 11247 13373
8/87 11634 13871
9/87 11415 13567
10/87 10623 10646
11/87 10200 9768
12/87 10358 10511
1/88 11240 10953
2/88 11079 11461
3/88 10744 11108
4/88 10757 11231
5/88 11164 11326
6/88 11462 11846
7/88 11313 11801
8/88 11258 11401
9/88 11573 11886
10/88 11916 12217
11/88 11916 12042
12/88 11833 12252
1/89 12182 13149
2/89 12055 12822
3/89 12350 13120
4/89 12953 13801
5/89 13663 14357
6/89 13777 14276
7/89 14671 15564
8/89 14828 15868
9/89 15157 15803
10/89 14592 15437
11/89 15073 15750
12/89 15555 16128
1/90 14493 15046
2/90 14367 15239
3/90 14210 15643
4/90 13442 15253
5/90 14408 16737
6/90 14456 16624
7/90 14353 16571
================================================================================
(1) Lipper Inc.
================================================================================
[MOUNTAIN CHART]
8/90 13380 15075
9/90 12997 14343
10/90 13444 14282
11/90 13751 15203
12/90 14001 15626
1/91 13937 16305
2/91 14606 17470
3/91 15145 17892
4/91 15193 17935
5/91 15670 18706
6/91 14913 17850
7/91 15471 18681
8/91 16085 19122
9/91 16367 18802
10/91 16681 19054
11/91 16949 18289
12/91 17910 20377
1/92 17355 19998
2/92 17541 20256
3/92 17220 19863
4/92 17430 20445
5/92 17939 20545
6/92 17889 20240
7/92 18678 21066
8/92 18472 20636
9/92 18437 20878
10/92 18690 20950
11/92 19282 21661
12/92 19845 21927
1/93 20337 22110
2/93 20282 22411
3/93 21325 22884
4/93 21468 22331
5/93 22606 22927
6/93 23202 22994
7/93 23694 22901
8/93 24389 23768
9/93 24425 23586
10/93 24269 24073
11/93 23492 23844
12/93 24049 24132
1/94 24258 24952
2/94 23530 24275
3/94 22530 23219
4/94 22537 23516
5/94 22147 23901
6/94 21804 23316
7/94 22469 24081
8/94 22745 25066
9/94 22468 24453
10/94 22513 25002
11/94 21864 24093
12/94 21655 24449
1/95 21934 25083
2/95 22144 26059
3/95 22355 26827
4/95 22800 27617
5/95 23532 28719
6/95 23673 29385
7/95 23957 30359
8/95 24647 30434
9/95 25527 31718
10/95 25550 31605
11/95 26201 32991
12/95 27126 33626
1/96 27362 34769
2/96 27630 35093
================================================================================
================================================================================
[MOUNTAIN CHART]
3/96 27802 35431
4/96 29030 35952
5/96 28958 36878
6/96 29424 37019
7/96 28215 35384
8/96 28708 36132
9/96 29004 38163
10/96 29944 39215
11/96 30713 42177
12/96 30587 41342
1/97 30863 43923
2/97 30783 44268
3/97 29459 42452
4/97 29677 44984
5/97 31199 47735
6/97 32613 49857
7/97 33050 53823
8/97 31952 50810
9/97 34253 53591
10/97 34239 51803
11/97 36444 54199
12/97 38041 55129
1/98 38158 55739
2/98 39689 59756
3/98 42919 62814
4/98 41735 63457
5/98 41309 62368
6/98 42247 64899
7/98 41934 64213
8/98 37757 54936
9/98 40646 58458
10/98 42264 63206
11/98 43785 67035
12/98 47283 70896
1/99 47964 73859
2/99 47058 71564
3/99 47524 74427
4/99 50299 77309
5/99 51884 75485
6/99 52646 79663
7/99 52557 77186
8/99 49766 76804
9/99 50149 74701
10/99 52075 79426
11/99 53429 81041
12/99 56677 85807
1/00 59863 81497
2/00 62676 79956
3/00 64569 87773
4/00 60114 85133
5/00 57775 83388
6/00 58532 85441
7/00 57326 84107
8/00 60812 89328
9/00 62229 84613
10/00 60132 84254
11/00 54732 77617
12/00 59028 77997
1/01 58019 80763
2/01 56400 73404
3/01 54776 68756
4/01 57953 74095
5/01 54603 74592
6/01 49077 72777
7/01 45995 72060
8/01 43015 67554
9/01 37462 62099
================================================================================
================================================================================
[MOUNTAIN CHART]
10/01 38447 63284
11/01 38785 68137
12/01 38975 68734
1/02 35534 67732
2/02 34240 66425
3/02 36517 68924
4/02 35524 64747
5/02 34050 64272
6/02 32436 59695
7/02 29471 55043
8/02 29919 55403
9/02 27810 49388
10/02 29167 53730
11/02 29654 56890
12/02 30289 53549
1/03 29204 52149
2/03 28363 51366
3/03 28851 51863
4/03 30296 56133
5/03 32975 59088
6/03 33123 59842
7/03 31526 60898
8/03 31845 62083
9/03 32708 61426
10/03 33100 64899
11/03 33511 65469
12/03 35632 68900
1/04 36099 70165
2/04 36889 71140
3/04 36786 70067
4/04 35775 68968
5/04 36136 69913
6/04 36801 71272
7/04 37419 68913
8/04 38399 69189
9/04 39321 69939
10/04 40972 71007
11/04 43615 73879
12/04 44658 76393
1/05 44622 74531
2/05 45992 76098
3/05 46019 74752
4/05 46318 73335
5/05 47027 75666
6/05 49186 75775
7/05 51055 78592
8/05 52740 77875
9/05 54949 78505
10/05 51488 77196
11/05 51451 80113
12/05 52198 80141
1/06 54312 82263
2/06 54616 82486
3/06 53299 83512
4/06 54285 84633
5/06 54817 82200
6/06 56139 82309
7/06 58704 82817
8/06 60348 84784
9/06 59400 86968
10/06 62133 89800
11/06 64438 91505
12/06 65359 92789
1/07 65863 94191
2/07 67911 92354
3/07 70892 93385
4/07 74068 97520
================================================================================
================================================================================
[MOUNTAIN CHART]
5/07 76468 100920
6/07 73516 99244
7/07 70480 96171
8/07 71340 97610
9/07 74786 101257
10/07 79243 102867
11/07 77523 98565
12/07 78446 97883
1/08 72915 92012
2/08 70837 89026
3/08 71050 88641
4/08 74631 92956
5/08 77504 94160
6/08 75845 86230
7/08 70271 85505
8/08 68809 86742
9/08 60449 79022
10/08 53129 65752
11/08 53368 61032
12/08 52871 61676
1/09 51867 56483
2/09 46125 50488
3/09 47199 54903
================================================================================
AIM UTILITIES FUND - CLASS C SHARES
================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT -- OLDEST SHARE CLASS WITH SALES CHARGES SINCE
INCEPTION
Index data from 1/31/00, Fund data from 2/14/00
AIM
UTILITIES FUND- LIPPER
DATE CLASS C SHARES S&P 500 INDEX(1) UTILITY FUNDS INDEX(1)
- ---- ---------------- ---------------- ----------------------
1/31/00 $10000 $10000
2/00 $ 9960 9811 10029
3/00 10258 10770 10516
4/00 9549 10446 10096
5/00 9167 10232 9991
6/00 9283 10484 9980
7/00 9088 10320 9934
8/00 9636 10961 10635
9/00 9853 10382 10977
10/00 9510 10338 10689
11/00 8653 9524 10130
12/00 9327 9571 10661
1/01 9161 9910 10390
2/01 8898 9007 10174
3/01 8635 8437 9957
4/01 9134 9092 10508
5/01 8597 9153 10278
6/01 7719 8930 9636
7/01 7235 8842 9335
8/01 6757 8289 9002
9/01 5881 7620 8452
10/01 6032 7765 8259
11/01 6080 8361 8216
12/01 6107 8434 8385
1/02 5565 8311 7939
2/02 5360 8151 7717
3/02 5709 8457 8203
4/02 5554 7945 7885
5/02 5323 7886 7634
6/02 5063 7325 7143
7/02 4600 6754 6379
8/02 4664 6798 6518
9/02 4333 6060 5925
10/02 4539 6593 6184
11/02 4615 6981 6423
12/02 4696 6571 6481
1/03 4517 6399 6287
2/03 4387 6303 6075
3/03 4462 6364 6210
4/03 4680 6888 6633
5/03 5087 7250 7182
6/03 5105 7343 7279
7/03 4855 7472 7019
8/03 4898 7618 7046
9/03 5032 7537 7187
10/03 5087 7963 7359
11/03 5139 8033 7436
12/03 5465 8454 7880
1/04 5531 8610 8046
2/04 5652 8729 8215
3/04 5631 8597 8214
================================================================================
(1) Lipper Inc.
================================================================================
[MOUNTAIN CHART]
4/04 5477 8463 8020
5/04 5521 8579 8050
6/04 5624 8745 8214
7/04 5712 8456 8287
8/04 5862 8490 8504
9/04 5997 8582 8696
10/04 6248 8713 9049
11/04 6644 9065 9471
12/04 6801 9374 9763
1/05 6784 9145 9765
2/05 6992 9338 10011
3/05 6988 9172 10027
4/05 7033 8999 10109
5/05 7134 9285 10281
6/05 7459 9298 10754
7/05 7736 9644 11085
8/05 7985 9556 11267
9/05 8315 9633 11635
10/05 7787 9472 11044
11/05 7775 9830 11150
12/05 7878 9834 11228
1/06 8197 10094 11684
2/06 8238 10121 11778
3/06 8035 10247 11634
4/06 8178 10385 11839
5/06 8247 10086 11846
6/06 8446 10100 12083
7/06 8825 10162 12596
8/06 9066 10403 12887
9/06 8919 10671 12868
10/06 9322 11019 13506
11/06 9667 11228 14004
12/06 9793 11386 14247
1/07 9863 11558 14364
2/07 10168 11332 14675
3/07 10607 11459 15272
4/07 11074 11966 15883
5/07 11427 12383 16465
6/07 10982 12178 15836
7/07 10519 11801 15266
8/07 10641 11977 15390
9/07 11146 12425 16091
10/07 11808 12622 16974
11/07 11541 12094 16638
12/07 11674 12011 16698
1/08 10842 11290 15510
2/08 10527 10924 15060
3/08 10550 10877 14974
4/08 11075 11406 15868
5/08 11495 11554 16483
6/08 11245 10581 16018
7/08 10408 10492 14996
8/08 10187 10644 14797
9/08 8945 9696 12935
10/08 7854 8068 11248
11/08 7883 7489 11124
12/08 7813 7568 11264
1/09 7653 6931 10987
2/09 6802 6195 9819
3/09 6959 6737 10075
================================================================================
==========================================
AVERAGE ANNUAL TOTAL RETURNS
As of 3/31/09, including maximum THE TOTAL ANNUAL FUND OPERATING EXPENSE
applicable sales charges RATIO SET FORTH IN THE MOST RECENT FUND
PROSPECTUS AS OF THE DATE OF THIS REPORT
CLASS A SHARES FOR CLASS A, CLASS B, CLASS C, CLASS Y AND
Inception (3/28/02) 2.85% INVESTOR CLASS SHARES WAS 1.35%, 2.10%,
5 Years 3.91 2.10%, 1.10% AND 1.35%, RESPECTIVELY.
1 Year -37.16 THE EXPENSE RATIOS PRESENTED ABOVE MAY
VARY FROM THE EXPENSE RATIOS PRESENTED IN
CLASS B SHARES OTHER SECTIONS OF THIS REPORT
Inception (3/28/02) 2.93% THAT ARE BASED ON EXPENSES INCURRED DURING
5 Years 3.98 THE PERIOD COVERED BY THIS REPORT.
1 Year -37.29
CLASS A SHARE PERFORMANCE REFLECTS THE
CLASS C SHARES MAXIMUM 5.50% SALES CHARGE, AND CLASS B
Inception (2/14/00) -3.90% AND CLASS C SHARE PERFORMANCE REFLECTS THE
5 Years 4.33 APPLICABLE CONTINGENT DEFERRED SALES
1 Year -34.65 CHARGE (CDSC) FOR THE PERIOD INVOLVED. THE
CDSC ON CLASS B SHARES DECLINES FROM 5%
CLASS Y SHARES BEGINNING AT THE TIME OF PURCHASE TO 0% AT
10 Years -0.06% THE BEGINNING OF THE SEVENTH YEAR. THE
5 Years 5.13 CDSC ON CLASS C SHARES IS 1 % FOR THE
1 Year -33.46 FIRST YEAR AFTER PURCHASE. CLASS Y SHARES
AND INVESTOR CLASS SHARES DO NOT HAVE A
INVESTOR CLASS SHARES FRONT-END SALES CHARGE OR A CDSC;
Inception (6/2/86) 7.03% THEREFORE, PERFORMANCE IS AT NET ASSET
10 Years -0.07 VALUE.
5 Years 5.11
1 Year -33.54 THE PERFORMANCE OF THE FUND'S SHARE
========================================== CLASSES WILL DIFFER PRIMARILY DUE TO
DIFFERENT SALES CHARGE STRUCTURES AND
CLASS Y SHARES' INCEPTION DATE IS OCTOBER CLASS EXPENSES.
3,2008; RETURNS SINCE THAT DATE ARE ACTUAL
RETURNS. ALL OTHER RETURNS ARE BLENDED HAD THE FUND NOT WAIVED FEES AND/OR
RETURNS OF ACTUAL CLASS Y SHARE REIMBURSED EXPENSES IN THE PAST,
PERFORMANCE AND RESTATED INVESTOR CLASS PERFORMANCE WOULD HAVE BEEN LOWER.
SHARE PERFORMANCE (FOR PERIODS PRIOR TO
THE INCEPTION DATE OF CLASS Y SHARES) AT
NET ASSET VALUE. THE RESTATED INVESTOR
CLASS SHARE PERFORMANCE REFLECTS THE RULE
12B-1 FEES APPLICABLE TO INVESTOR CLASS
SHARES AS WELL AS ANY FEE WAIVERS OR
EXPENSE REIMBURSEMENTS RECEIVED BY
INVESTOR CLASS SHARES. INVESTOR CLASS
SHARES INCEPTION DATE IS JUNE 2,1986.
THE PERFORMANCE DATA QUOTED REPRESENT
PAST PERFORMANCE AND CANNOT GUARANTEE
COMPARABLE FUTURE RESULTS; CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER. PLEASE
VISIT INVESCOAIM.COM FOR THE MOST RECENT
MONTH-END PERFORMANCE. PERFORMANCE FIGURES
REFLECT REINVESTED DISTRIBUTIONS, CHANGES
IN NET ASSET VALUE AND THE EFFECT OF THE
MAXIMUM SALES CHARGE UNLESS OTHERWISE
STATED.
7 AIM UTILITIES FUND
AIM UTILITIES FUND'S INVESTMENT OBJECTIVES ARE CAPITAL GROWTH AND INCOME.
o Unless otherwise stated, information presented in this report is as of March 31,2009, and is based on total net assets.
o Unless otherwise noted, all data provided by Invesco Aim.
ABOUT SHARE CLASSES o The Fund's investments are concentrated o A direct investment cannot be made in
in a comparatively narrow segment of an index. Unless otherwise indicated,
o Effective September 30,2003, only the economy. Consequently, the Fund may index results include reinvested
previously established qualified plans tend to be more volatile than other dividends, and they do not reflect
are eligible to purchase Class B shares mutual funds, and the value of the sales charges or fund expenses.
of any AIM fund. Fund's investments may tend to rise and Performance of an index of funds
fall more rapidly. reflects fund expenses; performance of
o Class Y shares are available to only a market index does not.
certain investors. Please see the o Government regulation, difficulty in
prospectus for more information. obtaining adequate financing and OTHER INFORMATION
investment return, environmental
o All Investor Class shares are closed to issues, fuel prices for generation of o The Chartered Financial Analyst--REGIS
new investors. Contact your financial electricity, natural gas availability, TERED TRADEMARK- (CFA--REGISTERED
advisor about purchasing our other power marketing and trading risks, and TRADEMARK--) designation is a globally
share classes. risks associated with nuclear power recognized standard for measuring the
facilities may adversely affect the competence and integrity of investment
PRINCIPAL RISKS OF INVESTING IN THE FUND market value of the Fund's holdings. professionals.
o Since a large percentage of the Fund's o Although the Fund's return during o The returns shown in management's
assets may be invested in securities of certain periods was positively impacted discussion of Fund performance are
a limited number of companies, each by its investments in initial public based on net asset values calculated
investment has a greater effect on the offerings (IPOs), there can be no for shareholder transactions. Generally
Fund's overall performance, and any assurance that the Fund will have accepted accounting principles require
change in the value of those securities favorable IPO investment opportunities adjustments to be made to the net
could significantly affect the value of in the future. assets of the Fund at period end for
your investment in the Fund. financial reporting purposes, and as
ABOUT INDEXES USED IN THIS REPORT such, the net asset values for
o Prices of equity securities change in shareholder transactions and the
response to many factors including the o The S&P 500--REGISTERED TRADEMARK-- returns based on those net asset values
historical and prospective earnings of INDEX is a market may differ from the net asset values
the issuer, the value of its assets, capitalization-weighted index covering and returns reported in the Financial
general economic conditions, interest all major areas of the U.S. economy. It Highlights.
rates, investor perceptions and market is not the 500 largest companies, but
liquidity. rather the most widely held 500 o Industry classifications used in this
companies chosen with respect to market report are generally according to the
o Foreign securities have additional size, liquidity, and their industry. Global Industry Classification
risks, including exchange rate changes, Standard, which was developed by and is
political and economic upheaval, the o The LIPPER UTILITY FUNDS INDEX is an the exclusive property and a service
relative lack of information, equally weighted representation of the mark of MSCI Inc. and Standard &
relatively low market liquidity, and largest funds in the Lipper Utility Poor's.
the potential lack of strict financial Funds category. These funds invest
and accounting controls and standards. primarily in the equity securities of
domestic and foreign companies
o There is no guarantee that the providing utilities.
investment techniques and risk analyses
used by the Fund's portfolio managers o The Fund is not managed to track the
will produce the desired results. performance of any particular index,
including the indexes defined here, and
o The prices of securities held by the consequently, the performance of the
Fund may decline in response to market Fund may deviate significantly from the
risks. performance of the indexes.
======================================================================================= ==========================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, FUND NASDAQ SYMBOLS
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES. Class A Shares IAUTX
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class B Shares IBUTX
======================================================================================= Class C Shares IUTCX
Class Y Shares IAUYX
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Investor Class Shares FSTUX
==========================================
8 AIM UTILITIES FUND
Supplement to Annual Report dated 3/31/09
AIM UTILITIES FUND
==========================================
INSTITUTIONAL CLASS SHARES AVERAGE ANNUAL TOTAL RETURNS Please note that past performance is
For periods ended 3/31/09 not indicative of future results. More
The following information has been recent returns may be more or less than
prepared to provide Institutional Class Inception (10/25/05) -1.88 those shown. All returns assume
shareholders with a performance overview 1 Year -33.18 reinvestment of distributions at NAV.
specific to their holdings. Institutional ========================================== Investment return and principal value will
Class shares are offered exclusively to fluctuate so your shares, when redeemed,
institutional investors, including defined Institutional Class shares have no sales may be worth more or less than their
contribution plans that meet certain charge; therefore, performance is at net original cost. See full report for
criteria. asset value (NAV). Performance of information on comparative benchmarks.
Institutional Class shares will differ Please consult your Fund prospectus for
from performance of other share classes more information. For the most current
primarily due to differing sales charges month-end performance, please call 800 451
and class expenses. 4246 or visit invescoaim.com.
The total annual Fund operating expense
ratio set forth in the most recent Fund
prospectus as of the date of this
supplement for Institutional Class shares
was 0.90%. The expense ratios presented
above may vary from the expense ratios
presented in other sections of the actual
report that are based on expenses incurred
during the period covered by the report.
Had the advisor not waived fees and/or
expenses in the past, performance would
have been lower.
==========================================
NASDAQ SYMBOL FSIUX
==========================================
Over for information on your Fund's expenses.
THIS SUPPLEMENT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND
PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND
EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
FOR INSTITUTIONAL INVESTOR USE ONLY
[INVESCO AIM LOGO]
This material is for institutional investor use only and may not be quoted, reproduced - SERVICE MARK -
or shown to the public, nor used in written form as sales literature for public use.
invescoaim.com I-UTI-INS-1 Invesco Aim Distributors, Inc.
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with ongoing costs of investing in other mutual funds. The example is based on
an investment of $1,000 invested at the beginning of the period and held for the
entire period October 1, 2008, through March 31, 2009.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/01/08) (03/31/09)(1) PERIOD(2) (03/31/09) PERIOD(2) RATIO
- -----------------------------------------------------------------------------------------------------------
Institutional $1,000.00 $783.80 $5.11 $1,019.20 $5.79 1.15%
- -----------------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period October 1, 2008, through March 31, 2009, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
182/365 to reflect the most recent fiscal half year.
AIM UTILITIES FUND
SCHEDULE OF INVESTMENTS(A)
March 31, 2009
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------------------------
COMMON STOCKS-94.47%
ELECTRIC UTILITIES-37.00%
Duke Energy Corp. 434,000 $ 6,214,880
- ------------------------------------------------------------------------------
E.ON AG (Germany) 187,000 5,193,289
- ------------------------------------------------------------------------------
Edison International 266,000 7,663,460
- ------------------------------------------------------------------------------
Entergy Corp. 135,202 9,205,904
- ------------------------------------------------------------------------------
Exelon Corp. 220,000 9,985,800
- ------------------------------------------------------------------------------
FirstEnergy Corp. 179,967 6,946,726
- ------------------------------------------------------------------------------
FPL Group, Inc. 233,000 11,820,090
- ------------------------------------------------------------------------------
Pepco Holdings, Inc. 346,000 4,318,080
- ------------------------------------------------------------------------------
Portland General Electric Co. 328,834 5,784,190
- ------------------------------------------------------------------------------
PPL Corp. 240,000 6,890,400
- ------------------------------------------------------------------------------
Southern Co. 134,000 4,103,080
==============================================================================
78,125,899
==============================================================================
GAS UTILITIES-10.18%
AGL Resources Inc. 248,000 6,579,440
- ------------------------------------------------------------------------------
EQT Corp. 238,000 7,456,540
- ------------------------------------------------------------------------------
ONEOK, Inc. 200,000 4,526,000
- ------------------------------------------------------------------------------
Questar Corp. 100,000 2,943,000
==============================================================================
21,504,980
==============================================================================
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS-2.56%
NRG Energy, Inc.(b) 307,000 5,403,200
==============================================================================
INTEGRATED TELECOMMUNICATION SERVICES-10.91%
Alaska Communications Systems Group Inc. 562,736 3,770,331
- ------------------------------------------------------------------------------
AT&T Inc. 345,402 8,704,131
- ------------------------------------------------------------------------------
Verizon Communications Inc. 350,000 10,570,000
==============================================================================
23,044,462
==============================================================================
MULTI-UTILITIES-28.80%
Ameren Corp. 74,690 1,732,061
- ------------------------------------------------------------------------------
CMS Energy Corp. 672,000 7,956,480
- ------------------------------------------------------------------------------
Dominion Resources, Inc. 247,147 7,659,086
- ------------------------------------------------------------------------------
National Grid PLC (United Kingdom) 545,000 4,186,987
- ------------------------------------------------------------------------------
PG&E Corp. 245,000 9,363,900
- ------------------------------------------------------------------------------
Public Service Enterprise Group Inc. 221,018 6,513,400
- ------------------------------------------------------------------------------
Sempra Energy 237,000 10,958,880
- ------------------------------------------------------------------------------
Wisconsin Energy Corp. 106,929 4,402,267
- ------------------------------------------------------------------------------
Xcel Energy, Inc. 432,000 8,048,160
==============================================================================
60,821,221
==============================================================================
OIL & GAS STORAGE & TRANSPORTATION-5.02%
El Paso Corp. 784,000 4,900,000
- ------------------------------------------------------------------------------
Williams Cos., Inc. (The) 500,000 5,690,000
==============================================================================
10,590,000
==============================================================================
Total Common Stocks (Cost $241,501,209) 199,489,762
==============================================================================
MONEY MARKET FUNDS-6.14%
Liquid Assets Portfolio-Institutional Class(c) 6,480,220 6,480,220
- ------------------------------------------------------------------------------
Premier Portfolio-Institutional Class(c) 6,480,220 6,480,220
==============================================================================
Total Money Market Funds (Cost $12,960,440) 12,960,440
==============================================================================
TOTAL INVESTMENTS-100.61% (Cost $254,461,649) 212,450,202
==============================================================================
OTHER ASSETS LESS LIABILITIES-(0.61)% (1,295,730)
==============================================================================
NET ASSETS-100.00% $211,154,472
______________________________________________________________________________
==============================================================================
</Table>
Notes to Schedule of Investments:
(a) Industry and/or sector classifications used in this report are generally
according to the Global Industry Classification Standard, which was
developed by and is the exclusive property and a service mark of MSCI Inc.
and Standard & Poor's.
(b) Non-income producing security.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
9 AIM UTILITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2009
<Table>
ASSETS:
Investments, at value (Cost $241,501,209) $199,489,762
- --------------------------------------------------------------------------------
Investments in affiliated money market funds, at value and cost 12,960,440
================================================================================
Total investments (Cost $254,461,649) 212,450,202
================================================================================
Receivables for:
Investments sold 1,777,170
- --------------------------------------------------------------------------------
Fund shares sold 270,622
- --------------------------------------------------------------------------------
Dividends 698,312
- --------------------------------------------------------------------------------
Investment for trustee deferred compensation and retirement plans 34,895
- --------------------------------------------------------------------------------
Other assets 43,929
================================================================================
Total assets 215,275,130
________________________________________________________________________________
================================================================================
LIABILITIES:
Payables for:
Investments purchased 3,409,794
- --------------------------------------------------------------------------------
Fund shares reacquired 263,252
- --------------------------------------------------------------------------------
Accrued fees to affiliates 177,466
- --------------------------------------------------------------------------------
Accrued other operating expenses 198,626
- --------------------------------------------------------------------------------
Trustee deferred compensation and retirement plans 71,520
================================================================================
Total liabilities 4,120,658
================================================================================
Net assets applicable to shares outstanding $211,154,472
________________________________________________________________________________
================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $267,092,659
- --------------------------------------------------------------------------------
Undistributed net investment income (100,127)
- --------------------------------------------------------------------------------
Undistributed net realized gain (loss) (13,826,788)
- --------------------------------------------------------------------------------
Unrealized appreciation (depreciation) (42,011,272)
================================================================================
$211,154,472
________________________________________________________________________________
================================================================================
NET ASSETS:
Class A $118,328,101
________________________________________________________________________________
================================================================================
Class B $ 18,253,855
________________________________________________________________________________
================================================================================
Class C $ 11,817,374
________________________________________________________________________________
================================================================================
Class Y $ 300,226
________________________________________________________________________________
================================================================================
Investor Class $ 53,226,777
________________________________________________________________________________
================================================================================
Institutional Class $ 9,228,139
________________________________________________________________________________
================================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 10,227,890
________________________________________________________________________________
================================================================================
Class B 1,572,954
________________________________________________________________________________
================================================================================
Class C 1,009,946
________________________________________________________________________________
================================================================================
Class Y 25,737
________________________________________________________________________________
================================================================================
Investor Class 4,562,922
________________________________________________________________________________
================================================================================
Institutional Class 797,660
________________________________________________________________________________
================================================================================
Class A:
Net asset value per share $ 11.57
- --------------------------------------------------------------------------------
Maximum offering price per share
(Net asset value of $11.57 divided by 94.50%) $ 12.24
________________________________________________________________________________
================================================================================
Class B:
Net asset value and offering price per share $ 11.60
________________________________________________________________________________
================================================================================
Class C:
Net asset value and offering price per share $ 11.70
________________________________________________________________________________
================================================================================
Class Y:
Net asset value and offering price per share $ 11.67
________________________________________________________________________________
================================================================================
Investor Class:
Net asset value and offering price per share $ 11.67
________________________________________________________________________________
================================================================================
Institutional Class:
Net asset value and offering price per share $ 11.57
________________________________________________________________________________
================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
10 AIM UTILITIES FUND
STATEMENT OF OPERATIONS
For the year ended March 31, 2009
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $127,297) $ 11,420,680
- ------------------------------------------------------------------------------------------------
Dividends from affiliated money market funds (includes securities lending income
of $116,173) 364,656
================================================================================================
Total investment income 11,785,336
================================================================================================
EXPENSES:
Advisory fees 2,364,565
- ------------------------------------------------------------------------------------------------
Administrative services fees 117,363
- ------------------------------------------------------------------------------------------------
Custodian fees 19,734
- ------------------------------------------------------------------------------------------------
Distribution fees:
Class A 430,138
- ------------------------------------------------------------------------------------------------
Class B 333,302
- ------------------------------------------------------------------------------------------------
Class C 187,338
- ------------------------------------------------------------------------------------------------
Investor Class 191,814
- ------------------------------------------------------------------------------------------------
Transfer agent fees -- A, B, C, Y and Investor 951,712
- ------------------------------------------------------------------------------------------------
Transfer agent fees -- Institutional 10,819
- ------------------------------------------------------------------------------------------------
Trustees' and officers' fees and benefits 27,268
- ------------------------------------------------------------------------------------------------
Other 410,578
================================================================================================
Total expenses 5,044,631
================================================================================================
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) (69,541)
================================================================================================
Net expenses 4,975,090
================================================================================================
Net investment income 6,810,246
================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from:
Investment securities (2,676,541)
- ------------------------------------------------------------------------------------------------
Foreign currencies (21,640)
================================================================================================
(2,698,181)
================================================================================================
Change in net unrealized appreciation (depreciation) of:
Investment securities (125,757,024)
- ------------------------------------------------------------------------------------------------
Foreign currencies (1,201)
================================================================================================
(125,758,225)
================================================================================================
Net realized and unrealized gain (loss) (128,456,406)
================================================================================================
Net increase (decrease) in net assets resulting from operations $(121,646,160)
________________________________________________________________________________________________
================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11 AIM UTILITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2009 and 2008
<Table>
<Caption>
2009 2008
- ---------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 6,810,246 $ 6,543,552
- ---------------------------------------------------------------------------------------------------------
Net realized gain (loss) (2,698,181) 31,403,454
- ---------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) (125,758,225) (39,701,642)
=========================================================================================================
Net increase (decrease) in net assets resulting from operations (121,646,160) (1,754,636)
=========================================================================================================
Distributions to shareholders from net investment income:
Class A (4,148,191) (3,637,695)
- ---------------------------------------------------------------------------------------------------------
Class B (524,622) (462,409)
- ---------------------------------------------------------------------------------------------------------
Class C (309,233) (217,456)
- ---------------------------------------------------------------------------------------------------------
Class Y (4,448) --
- ---------------------------------------------------------------------------------------------------------
Investor Class (1,847,527) (1,773,609)
- ---------------------------------------------------------------------------------------------------------
Institutional Class (401,712) (320,758)
=========================================================================================================
Total distributions from net investment income (7,235,733) (6,411,927)
=========================================================================================================
Share transactions-net:
Class A (25,250,837) 3,849,502
- ---------------------------------------------------------------------------------------------------------
Class B (16,773,218) (1,024,495)
- ---------------------------------------------------------------------------------------------------------
Class C (3,516,850) 6,423,525
- ---------------------------------------------------------------------------------------------------------
Class Y 339,880 --
- ---------------------------------------------------------------------------------------------------------
Investor Class (10,946,889) (8,900,355)
- ---------------------------------------------------------------------------------------------------------
Institutional Class (3,538,683) 13,776,456
=========================================================================================================
Net increase (decrease) in net assets resulting from share
transactions (59,686,597) 14,124,633
=========================================================================================================
Net increase (decrease) in net assets (188,568,490) 5,958,070
=========================================================================================================
NET ASSETS:
Beginning of year 399,722,962 393,764,892
=========================================================================================================
End of year (includes undistributed net investment income of $(100,127)
and $215,793, respectively) $ 211,154,472 $399,722,962
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12 AIM UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Utilities Fund (the "Fund") is a series portfolio of AIM Sector Funds (the
"Trust"). The Trust is a Delaware statutory trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of six separate portfolios, each
authorized to issue an unlimited number of shares of beneficial interest. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund. Matters affecting each portfolio or class will be voted on exclusively
by the shareholders of such portfolio or class.
The Fund's investment objectives are capital growth and income.
The Fund currently consists of six different classes of shares: Class A, Class
B, Class C, Class Y, Investor Class and Institutional Class. Investor Class
shares of the Fund are offered only to certain grandfathered investors. Class A
shares are sold with a front-end sales charge unless certain waiver criteria are
met and under certain circumstances load waiver shares may be subject to
contingent deferred sales charges ("CDSC"). Class B shares and Class C shares
are sold with a CDSC. Class Y, Investor Class and Institutional Class shares are
sold at net asset value. Generally, Class B shares will automatically convert to
Class A shares on or the about month-end which is at least eight years after the
date of purchase.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements.
A. SECURITY VALUATIONS -- Securities, including restricted securities, are
valued according to the following policy.
A security listed or traded on an exchange (except convertible bonds) is
valued at its last sales price or official closing price as of the close
of the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on
that day. Securities traded in the over-the-counter market are valued
based on prices furnished by independent pricing services or market
makers. When such securities are valued by an independent pricing service
they may be considered fair valued. Futures contracts are valued at the
final settlement price set by an exchange on which they are principally
traded. Listed options are valued at the mean between the last bid and the
ask prices from the exchange on which they are principally traded. Options
not listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last
sales price or official closing price as of the close of the customary
trading session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as institution-size trading in similar groups of
securities, developments related to specific securities, dividend rate,
yield, quality, type of issue, coupon rate, maturity, individual trading
characteristics and other market data. Short-term obligations, including
commercial paper, having 60 days or less to maturity are recorded at
amortized cost which approximates value. Debt securities are subject to
interest rate and credit risks. In addition, all debt securities involve
some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued
at the market quotations. Because trading hours for certain foreign
securities end before the close of the NYSE, closing market quotations may
become unreliable. If between the time trading ends on a particular
security and the close of the customary trading session on the NYSE,
events occur that are significant and may make the closing price
unreliable, the Fund may fair value the security. If the event is likely
to have affected the closing price of the security, the security will be
valued at fair value in good faith using procedures approved by the Board
of Trustees. Adjustments to closing prices to reflect fair value may also
be based on a screening process of an independent pricing service to
indicate the degree of certainty, based on historical data, that the
closing price in the principal market where a foreign security trades is
not the current value as of the close of the NYSE. Foreign securities
meeting the approved degree of certainty that the price is not reflective
of current value will be priced at the indication of fair value from the
independent pricing service. Multiple factors may be considered by the
independent pricing service in determining adjustments to reflect fair
value and may include information relating to sector indices, American
Depositary Receipts and domestic and foreign index futures. Foreign
securities may have additional risks including exchange rate changes,
potential for sharply devalued currencies and high inflation, political
and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be valued based upon quotes furnished by independent sources.
The last bid price may be used to value equity securities and Corporate
Loans. The mean between the last bid and asked prices may be used to value
debt obligations other than Corporate Loans.
Securities for which market quotations are not readily available or are
unreliable are valued at fair value as determined in good faith by or
under the supervision of the Trust's officers following procedures
approved by the Board of Trustees. Issuer specific events, market trends,
bid/ask quotes of brokers and information providers and other market data
may be reviewed in the course of making a good faith determination of a
security's fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity. Because of the inherent uncertainties of valuation, the
values reflected in the financial statements may materially differ from
the value received upon actual sale of those investments.
13 AIM UTILITIES FUND
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income is recorded on the accrual basis from settlement
date. Dividend income is recorded on the ex-dividend date.
The Fund may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
The Fund allocates income and realized and unrealized capital gains and
losses to a class based on the relative net assets of each class.
C. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, the investment
advisor may determine the country in which an issuer is located and/or
credit risk exposure based on various factors. These factors include the
laws of the country under which the issuer is organized, where the issuer
maintains a principal office, the country in which the issuer derives 50%
or more of its total revenues and the country that has the primary market
for the issuer's securities, as well as other criteria. Among the other
criteria that may be evaluated for making this determination are the
country in which the issuer maintains 50% or more of its assets, the type
of security, financial guarantees and enhancements, the nature of the
collateral and the sponsor organization. Country of issuer and/or credit
risk exposure has been determined to be the United States of America,
unless otherwise noted.
D. DISTRIBUTIONS -- Distributions from income are declared and paid quarterly
and are recorded on ex-dividend date. Distributions from net realized
capital gain, if any, are generally paid annually and recorded on ex-
dividend date. The Fund may elect to treat a portion of the proceeds from
redemptions as distributions for federal income tax purposes.
E. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements
of Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial
statements.
The Fund files tax returns in the U.S. Federal jurisdiction and certain
other jurisdictions. Generally the Fund is subject to examinations by such
taxing authorities for up to three years after the filing of the return
for the tax period.
F. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund are charged to the operations of such class. Transfer
agency fees and expenses and other shareholder recordkeeping fees and
expenses attributable to the Institutional Class are charged to such
class. Transfer agency fees and expenses and other shareholder
recordkeeping fees and expenses relating to all other classes are
allocated among those classes based on relative net assets. All other
expenses are allocated among the classes based on relative net assets.
G. ACCOUNTING ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period including estimates and assumptions related to
taxation. Actual results could differ from those estimates by a
significant amount.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust is indemnified
against certain liabilities that may arise out of performance of their
duties to the Fund. Additionally, in the normal course of business, the
Fund enters into contracts, including the Fund's servicing agreements,
that contain a variety of indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown as this would involve future
claims that may be made against the Fund that have not yet occurred. The
risk of material loss as a result of such indemnification claims is
considered remote.
I. OTHER RISKS -- The Fund's investments are concentrated in a comparatively
narrow segment of the economy. Consequently, the Fund may tend to be more
volatile than other mutual funds, and the value of the Fund's investments
may tend to rise and fall more rapidly.
The Fund may invest a large percentage of assets in securities of a
limited number of companies, such that each investment may have a greater
effect on the Fund's overall performance, and any change in the value of
those securities could significantly affect the value of your investment
in the Fund.
Government regulation, difficulties in obtaining adequate financing and
investment return, environmental issues, prices of fuel for generation of
electricity, availability of natural gas, risks associated with power
marketing and trading, and risks associated with nuclear power facilities
may adversely affect the market value of the Fund's holdings.
J. SECURITIES LENDING -- The Fund may lend portfolio securities having a
market value up to one-third of the Fund's total assets. Such loans are
secured by collateral equal to no less than the market value of the loaned
securities determined daily by the securities lending provider. Such
collateral will be cash or debt securities issued or guaranteed by the
U.S. Government or any of its sponsored agencies. Cash collateral received
in connection with these loans is invested in short-term money market
instruments or affiliated money market funds and is shown as such on the
Schedule of Investments. It is the Fund's policy to obtain additional
collateral from or return excess collateral to the borrower by the end of
the next business day, following the valuation date of the securities
loaned. Therefore, the value of the collateral held may be temporarily
less than the value of the securities on loan. Lending securities entails
a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase
the collateral accordingly, and the borrower fails to return the
securities. Upon the failure of the borrower to return the securities,
collateral may be liquidated and the securities may be purchased on the
open market to replace the loaned securities. The Fund could experience
delays and costs in gaining access to
14 AIM UTILITIES FUND
the collateral. The Fund bears the risk of any deficiency in the amount of
the collateral available for return to the borrower due to any loss on the
collateral invested. Dividends received on cash collateral investments for
securities lending transactions, which are net of compensation to
counterparties, is included in Dividends from affiliates on the Statement
of Operations. The aggregate value of securities out on loan is shown as a
footnote on the Statement of Assets and Liabilities, if any.
K. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close
of the NYSE based on quotations posted by banks and major currency
dealers. Portfolio securities and other assets and liabilities denominated
in foreign currencies are translated into U.S. dollar amounts at date of
valuation. Purchases and sales of portfolio securities (net of foreign
taxes withheld on disposition) and income items denominated in foreign
currencies are translated into U.S. dollar amounts on the respective dates
of such transactions. The Fund does not separately account for the portion
of the results of operations resulting from changes in foreign exchange
rates on investments and the fluctuations arising from changes in market
prices of securities held. The combined results of changes in foreign
exchange rates and the fluctuation of market prices on investments (net of
estimated foreign tax withholding) are included with the net realized and
unrealized gain or loss from investments in the Statement of Operations.
Reported net realized foreign currency gains or losses arise from (i)
sales of foreign currencies, (ii) currency gains or losses realized
between the trade and settlement dates on securities transactions, and
(iii) the difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized
foreign currency gains and losses arise from changes in the fair values of
assets and liabilities, other than investments in securities at fiscal
period end, resulting from changes in exchange rates.
The Fund may invest in foreign securities which may be subject to
foreign taxes on income, gains on investments or currency repatriation, a
portion of which may be recoverable.
L. 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. Fluctuations in the value of these contracts are recorded as
unrealized appreciation (depreciation) until the contracts are closed.
When these contracts are closed, realized gains (losses) are recorded.
Realized and unrealized gains and losses on these contracts are included
in the Statement of Operations. The Fund could be exposed to risk, which
may be in excess of the amount reflected in the Statement of Assets and
Liabilities, if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with Invesco
Aim Advisors, Inc. (the "Advisor" or "Invesco Aim"). Under the terms of the
investment advisory agreement, the Fund pays an advisory fee to the Advisor
based on the annual rate of the Fund's average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $350 million 0.75%
- -------------------------------------------------------------------
Next $350 million 0.65%
- -------------------------------------------------------------------
Next $1.3 billion 0.55%
- -------------------------------------------------------------------
Next $2 billion 0.45%
- -------------------------------------------------------------------
Next $2 billion 0.40%
- -------------------------------------------------------------------
Next $2 billion 0.375%
- -------------------------------------------------------------------
Over $8 billion 0.35%
___________________________________________________________________
===================================================================
</Table>
Under the terms of a master sub-advisory agreement the Advisor and each of
Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited,
Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco
Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco
Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco
Trimark Ltd. (collectively, the "Affiliated Sub-Advisors") the Advisor, not the
Fund, may pay 40% of the fees paid to the Advisor to any such Affiliated Sub-
Advisor(s) that provide discretionary investment management services to the Fund
based on the percentage of assets allocated to such Sub-Advisor(s).
Through June 30, 2008, the Advisor had contractually agreed to waive advisory
fees and/or reimburse expenses to the extent necessary to limit total annual
operating expenses (excluding certain items discussed below) of Class A, Class
B, Class C, Investor Class and Institutional Class shares to 1.30%, 2.05%,
2.05%, 1.30% and 1.05% of average daily net assets, respectively. In determining
the Advisor's obligation to waive advisory fees and/or reimburse expenses, the
following expenses are not taken into account, and could cause the net annual
operating expenses to exceed the numbers reflected above: (i) interest; (ii)
taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v)
expenses related to a merger or reorganization, as approved by the Fund's Board
of Trustees; and (vi) expenses that the Fund has incurred but did not actually
pay because of an expense offset arrangement. Currently, in addition to the
expense reimbursement arrangement with Invesco Ltd. ("Invesco") described more
fully below, the expense offset arrangements from which the Fund may benefit are
in the form of credits that the Fund receives from banks where the Fund or its
transfer agent has deposit accounts in which it holds uninvested cash. These
credits are used to pay certain expenses incurred by the Fund.
Further, the Advisor has contractually agreed, through at least June 30, 2009,
to waive the advisory fee payable by the Fund in an amount equal to 100% of the
net advisory fees the Advisor receives from the affiliated money market funds on
investments by the Fund of uninvested cash (excluding investments of cash
collateral from securities lending) in such affiliated money market funds.
For the year ended March 31, 2009, the Advisor waived advisory fees of $14,654
and reimbursed class level expenses of $41,705 for Class A, Class B, Class C and
Investor Class shares in proportion to the relative net assets of such classes.
15 AIM UTILITIES FUND
At the request of the Trustees of the Trust, Invesco agreed to reimburse
expenses incurred by the Fund in connection with market timing matters in the
AIM Funds, which may include legal, audit, shareholder reporting, communications
and trustee expenses. These expenses along with the related expense
reimbursement are included in the Statement of Operations. For the year ended
March 31, 2009, Invesco reimbursed expenses of the Fund in the amount of $2,009.
The Trust has entered into a master administrative services agreement with
Invesco Aim pursuant to which the Fund has agreed to pay Invesco Aim for certain
administrative costs incurred in providing accounting services to the Fund. For
the year ended March 31, 2009, expenses incurred under the agreement are shown
in the Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with
Invesco Aim Investment Services, Inc. ("IAIS") pursuant to which the Fund has
agreed to pay IAIS a fee for providing transfer agency and shareholder services
to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the
course of providing such services. IAIS may make payments to intermediaries that
provide omnibus account services, sub-accounting services and/or networking
services. All fees payable by IAIS to intermediaries that provide omnibus
account services or sub-accounting are charged back to the Fund, subject to
certain limitations approved by the Trust's Board of Trustees. For the year
ended March 31, 2009, expenses incurred under the agreement are shown in the
Statement of Operations as transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Aim
Distributors, Inc. ("IADI") to serve as the distributor for the Class A, Class
B, Class C, Class Y, Investor Class and Institutional Class shares of the Fund.
The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with
respect to the Fund's Class A, Class B, Class C and Investor Class shares
(collectively the "Plans"). The Fund, pursuant to the Plans, pays IADI
compensation at the annual rate of 0.25% of the Fund's average daily net assets
of Class A shares, 1.00% of the average daily net assets of Class B and Class C
shares and 0.25% of the average daily net assets of Investor Class shares. Of
the Plan payments, up to 0.25% of the average daily net assets of each class of
shares may be paid to furnish continuing personal shareholder services to
customers who purchase and own shares of such classes. Any amounts not paid as a
service fee under the Plans would constitute an asset-based sales charge. Rules
of the Financial Industry Regulatory Authority ("FINRA") impose a cap on the
total sales charges, including asset-based sales charges that may be paid by any
class of shares of the Fund. For the year ended March 31, 2009, expenses
incurred under the Plan are shown in the Statement of Operations as distribution
fees.
Front-end sales commissions and CDSC (collectively the "sales charges") are
not recorded as expenses of the Fund. Front-end sales commissions are deducted
from proceeds from the sales of Fund shares prior to investment in Class A
shares of the Fund. CDSC are deducted from redemption proceeds prior to
remittance to the shareholder. During the year ended March 31, 2009, IADI
advised the Fund that IADI retained $55,636 in front-end sales commissions from
the sale of Class A shares and $9,183, $71,775 and $3,816 from Class A, Class B
and Class C shares, respectively, for CDSC imposed on redemptions by
shareholders.
Certain officers and trustees of the Trust are officers and directors of
Invesco Aim, IAIS and/or IADI.
NOTE 3--SUPPLEMENTAL INFORMATION
The Fund adopted the provisions of Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of
the Fund's fiscal year. SFAS 157 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation methods giving
the highest priority to readily available unadjusted quoted prices in an active
market for identical assets (Level 1) and the lowest priority to significant
unobservable inputs (Level 3) generally when market prices are not readily
available or are unreliable. Based on the valuation inputs the securities or
other investments are tiered into one of three levels. Changes in valuation
methods may result in transfers in or out of an investment's assigned level:
Level 1 -- Prices are determined using quoted prices in an active market for
identical assets.
Level 2 -- Prices are determined using other significant observable inputs.
Observable inputs are inputs that other market participants may use in pricing
a security. These may include quoted prices for similar securities, interest
rates, prepayment speeds, credit risk and others.
Level 3 -- Prices are determined using significant unobservable inputs. In
situations where quoted prices or observable inputs are unavailable (for
example, when there is little or no market activity for an investment at the
end of the period), unobservable inputs may be used. Unobservable inputs
reflect the Fund's own assumptions about the factors market participants would
use in determining fair value of the securities or instruments and would be
based on the best available information.
Below is a summary of the tiered valuation input levels, as of the end of the
reporting period, March 31, 2009. The level assigned to the securities
valuations may not be an indication of the risk or liquidity associated with
investing in those securities. Because of the inherent uncertainties of
valuation, the values reflected in the financial statements may materially
differ from the value received upon actual sale of those investments.
<Table>
<Caption>
INVESTMENTS IN
INPUT LEVEL SECURITIES
- --------------------------------------
Level 1 $212,450,202
- --------------------------------------
Level 2 --
- --------------------------------------
Level 3 --
======================================
$212,450,202
______________________________________
======================================
</Table>
NOTE 4--EXPENSE OFFSET ARRANGEMENT
The expense offset arrangement is comprised of transfer agency credits which
result from balances in Demand Deposit Accounts (DDA) used by the transfer agent
for clearing shareholder transactions. For the year ended March 31, 2009, the
Fund received credits from this arrangement, which resulted in the reduction of
the Fund's total expenses of $11,173.
16 AIM UTILITIES FUND
NOTE 5--TRUSTEES' AND OFFICERS' FEES AND BENEFITS
"Trustees' and Officers' Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officers' Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officers'
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended March 31, 2009, the Fund paid legal fees of $5,206 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 6--CASH BALANCES
The Fund is permitted to temporarily carry a negative or overdrawn balance in
its account with The State Street Bank and Trust Company, the custodian bank. To
compensate the custodian bank for such overdrafts, the overdrawn Fund may either
(i) leave funds as a compensating balance in the account so the custodian bank
can be compensated by earning the additional interest; or (ii) compensate by
paying the custodian bank at a rate agreed upon by the custodian bank and
Invesco Aim, not to exceed the contractually agreed upon rate.
NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS PAID DURING THE YEARS ENDED MARCH
31, 2009 AND 2008:
<Table>
<Caption>
2009 2008
- -------------------------------------------------------------------------------------------------------
Ordinary income $7,235,733 $6,411,927
_______________________________________________________________________________________________________
=======================================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS AT PERIOD-END:
<Table>
<Caption>
2009
- ------------------------------------------------------------------------------------------------
Undistributed ordinary income $ 10,012
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) -- investments (42,441,362)
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation -- other investments 175
- ------------------------------------------------------------------------------------------------
Temporary book/tax differences (87,193)
- ------------------------------------------------------------------------------------------------
Post-October deferrals (7,480,730)
- ------------------------------------------------------------------------------------------------
Capital loss carryforward (5,939,089)
- ------------------------------------------------------------------------------------------------
Shares of beneficial interest 267,092,659
================================================================================================
Total net assets $211,154,472
________________________________________________________________________________________________
================================================================================================
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation (depreciation) difference is attributable primarily to wash sales.
The temporary book/tax differences are a result of timing differences between
book and tax recognition of income and/or expenses. The Fund's temporary
book/tax differences are the result of the trustee deferral of compensation and
retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions. Under these limitation rules, the Fund is limited to utilizing
$4,308,246 of capital loss carryforward in the fiscal year ending March 31,
2010.
The Fund utilized $4,690,558 of capital loss carryforward in the current
period to offset net realized capital gain for federal income tax purposes. The
Fund has a capital loss carryforward as of March 31, 2009 which expires as
follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------------------------
March 31, 2010 $3,469,169
- -----------------------------------------------------------------------------------------------
March 31, 2011 2,166,212
- -----------------------------------------------------------------------------------------------
March 31, 2013 303,708
===============================================================================================
Total capital loss carryforward $5,939,089
_______________________________________________________________________________________________
===============================================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
17 AIM UTILITIES FUND
NOTE 8--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended March 31, 2009 was $14,963,816 and $76,598,462,
respectively. Cost of investments on a tax basis includes the adjustments for
financial reporting purposes as of the most recently completed Federal income
tax reporting period-end.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $ 13,654,064
- ------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (56,095,426)
================================================================================================
Net unrealized appreciation (depreciation) of investment securities $(42,441,362)
________________________________________________________________________________________________
================================================================================================
Cost of investments for tax purposes is $254,891,564.
</Table>
NOTE 9--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of foreign currency
transactions and excise taxes, on March 31, 2009, undistributed net investment
income was increased by $109,567, undistributed net realized gain (loss) was
increased by $21,640 and shares of beneficial interest decreased by $131,207.
This reclassification had no effect on the net assets of the Fund.
18 AIM UTILITIES FUND
NOTE 10--SHARE INFORMATION
<Table>
<Caption>
SUMMARY OF SHARE ACTIVITY
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-----------------------------------------------------------
2009(a) 2008
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 2,353,313 $ 36,625,925 4,629,227 $ 87,647,510
- ------------------------------------------------------------------------------------------------------------------------
Class B 405,105 6,448,164 984,708 18,684,912
- ------------------------------------------------------------------------------------------------------------------------
Class C 429,522 6,945,679 1,121,305 21,657,595
- ------------------------------------------------------------------------------------------------------------------------
Class Y(b) 28,425 370,241 -- --
- ------------------------------------------------------------------------------------------------------------------------
Investor Class 462,072 7,010,287 1,722,790 33,199,501
- ------------------------------------------------------------------------------------------------------------------------
Institutional Class 166,555 2,530,651 1,082,585 19,964,451
========================================================================================================================
Issued as reinvestment of dividends:
Class A 265,477 3,772,825 175,742 3,302,538
- ------------------------------------------------------------------------------------------------------------------------
Class B 33,445 475,210 22,106 416,441
- ------------------------------------------------------------------------------------------------------------------------
Class C 20,031 284,006 10,617 201,639
- ------------------------------------------------------------------------------------------------------------------------
Class Y 368 4,448 -- --
- ------------------------------------------------------------------------------------------------------------------------
Investor Class 122,643 1,752,066 89,242 1,691,405
- ------------------------------------------------------------------------------------------------------------------------
Institutional Class 28,082 401,712 17,003 320,758
========================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 625,195 9,961,386 391,902 7,322,854
- ------------------------------------------------------------------------------------------------------------------------
Class B (623,503) (9,961,386) (390,878) (7,322,854)
========================================================================================================================
Reacquired:
Class A(b) (4,994,906) (75,610,973) (5,024,031) (94,423,400)
- ------------------------------------------------------------------------------------------------------------------------
Class B (915,528) (13,735,206) (679,532) (12,802,994)
- ------------------------------------------------------------------------------------------------------------------------
Class C (720,487) (10,746,535) (816,273) (15,435,709)
- ------------------------------------------------------------------------------------------------------------------------
Class Y (3,056) (34,809) -- --
- ------------------------------------------------------------------------------------------------------------------------
Investor Class(b) (1,325,059) (19,709,242) (2,343,857) (43,791,261)
- ------------------------------------------------------------------------------------------------------------------------
Institutional Class (432,231) (6,471,046) (347,098) (6,508,753)
========================================================================================================================
Net increase (decrease) in share activity (4,074,537) $(59,686,597) 645,558 $ 14,124,633
________________________________________________________________________________________________________________________
========================================================================================================================
</Table>
(a) There are entities that are record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate own 11% of the
outstanding shares of the Fund. IADI has an agreement with these entities
to sell Fund shares. The Fund, Invesco Aim and/or Invesco Aim affiliates
may make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, Invesco Aim and/or Invesco
Aim affiliates including but not limited to services such as securities
brokerage, distribution, third party record keeping and account servicing.
The Trust has no knowledge as to whether all or any portion of the shares
owned of record by these entities are also owned beneficially.
(b) Effective upon the commencement date of Class Y shares, October 3, 2008,
the following shares were converted from Class A and Investor Class into
Class Y shares of the Fund:
<Table>
<Caption>
CLASS SHARES AMOUNT
-------------------------------------------------------------------------------------------------
Class Y 10,878 $ 157,844
-------------------------------------------------------------------------------------------------
Class A (7,141) (102,754)
-------------------------------------------------------------------------------------------------
Investor Class (3,797) (55,090)
_________________________________________________________________________________________________
=================================================================================================
</Table>
19 AIM UTILITIES FUND
NOTE 11--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
NET GAINS
(LOSSES)
NET ASSET ON SECURITIES DIVIDENDS
VALUE, NET (BOTH TOTAL FROM FROM NET NET ASSET NET ASSETS,
BEGINNING INVESTMENT REALIZED AND INVESTMENT INVESTMENT VALUE, END TOTAL END OF PERIOD
OF PERIOD INCOME UNREALIZED) OPERATIONS INCOME OF PERIOD RETURN(a) (000S OMITTED)
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 $17.89 $0.35(c) $(6.29)(d) $(5.94) $(0.38) $11.57 (33.56)%(d) $118,328
Year ended 03/31/08 18.15 0.32(c) (0.27) 0.05 (0.31) 17.89 0.20 214,352
Year ended 03/31/07 13.92 0.31 4.23 4.54 (0.31) 18.15 33.05 214,289
Year ended 03/31/06 12.28 0.28 1.65 1.93 (0.29) 13.92 15.74 135,835
Year ended 03/31/05 10.10 0.30(c) 2.18 2.48 (0.30) 12.28 24.95 113,325
- ------------------------------------------------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 17.95 0.24(c) (6.32)(d) (6.08) (0.27) 11.60 (34.12)(d) 18,254
Year ended 03/31/08 18.21 0.18(c) (0.27) (0.09) (0.17) 17.95 (0.53) 47,990
Year ended 03/31/07 13.97 0.20 4.24 4.44 (0.20) 18.21 32.02 49,840
Year ended 03/31/06 12.32 0.18 1.66 1.84 (0.19) 13.97 14.92 41,888
Year ended 03/31/05 10.13 0.23(c) 2.19 2.42 (0.23) 12.32 24.17 35,303
- ------------------------------------------------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 18.09 0.24(c) (6.36)(d) (6.12) (0.27) 11.70 (34.06)(d) 11,817
Year ended 03/31/08 18.35 0.18(c) (0.27) (0.09) (0.17) 18.09 (0.52) 23,176
Year ended 03/31/07 14.08 0.20 4.27 4.47 (0.20) 18.35 31.99 17,711
Year ended 03/31/06 12.41 0.18 1.68 1.86 (0.19) 14.08 14.98 11,208
Year ended 03/31/05 10.21 0.23(c) 2.20 2.43 (0.23) 12.41 24.08 6,900
- ------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(f) 14.51 0.15(c) (2.77)(d) (2.62) (0.22) 11.67 (18.13)(d) 300
- ------------------------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 18.04 0.35(c) (6.34)(d) (5.99) (0.38) 11.67 (33.54)(d) 53,227
Year ended 03/31/08 18.30 0.32(c) (0.27) 0.05 (0.31) 18.04 0.22 95,682
Year ended 03/31/07 14.04 0.32 4.26 4.58 (0.32) 18.30 33.00 106,793
Year ended 03/31/06 12.38 0.28 1.67 1.95 (0.29) 14.04 15.79 84,701
Year ended 03/31/05 10.18 0.31(c) 2.21 2.52 (0.32) 12.38 25.08 79,536
- ------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Year ended 03/31/09 17.89 0.42(c) (6.29)(d) (5.87) (0.45) 11.57 (33.24)(d) 9,228
Year ended 03/31/08 18.15 0.40(c) (0.27) 0.13 (0.39) 17.89 0.63 18,522
Year ended 03/31/07 13.92 0.36 4.24 4.60 (0.37) 18.15 33.54 5,132
Year ended 03/31/06(f) 13.48 0.13 0.46 0.59 (0.15) 13.92 4.34 719
______________________________________________________________________________________________________________________________
==============================================================================================================================
<Caption>
RATIO OF RATIO OF
EXPENSES EXPENSES
TO AVERAGE TO AVERAGE NET RATIO OF NET
NET ASSETS ASSETS WITHOUT INVESTMENT
WITH FEE WAIVERS FEE WAIVERS INCOME
AND/OR EXPENSES AND/OR EXPENSES TO AVERAGE PORTFOLIO
ABSORBED ABSORBED NET ASSETS TURNOVER(b)
- ---------------------------------------------------------------------------------------
CLASS A
Year ended 03/31/09 1.48%(e) 1.50%(e) 2.26%(e) 5%
Year ended 03/31/08 1.31 1.34 1.69 25
Year ended 03/31/07 1.31 1.41 2.01 33
Year ended 03/31/06 1.30 1.46 2.06 37
Year ended 03/31/05 1.40 1.46 2.76 33
- ---------------------------------------------------------------------------------------
CLASS B
Year ended 03/31/09 2.23(e) 2.25(e) 1.51(e) 5
Year ended 03/31/08 2.06 2.09 0.94 25
Year ended 03/31/07 2.06 2.16 1.26 33
Year ended 03/31/06 2.05 2.21 1.31 37
Year ended 03/31/05 2.05 2.21 2.11 33
- ---------------------------------------------------------------------------------------
CLASS C
Year ended 03/31/09 2.23(e) 2.25(e) 1.51(e) 5
Year ended 03/31/08 2.06 2.09 0.94 25
Year ended 03/31/07 2.06 2.16 1.26 33
Year ended 03/31/06 2.05 2.21 1.31 37
Year ended 03/31/05 2.05 2.21 2.11 33
- ---------------------------------------------------------------------------------------
CLASS Y
Year ended 03/31/09(f) 1.46(e)(g) 1.47(e)(g) 2.28(e)(g) 5
- ---------------------------------------------------------------------------------------
INVESTOR CLASS
Year ended 03/31/09 1.48(e) 1.50(e) 2.26(e) 5
Year ended 03/31/08 1.31 1.34 1.69 25
Year ended 03/31/07 1.31 1.41 2.01 33
Year ended 03/31/06 1.30 1.46 2.06 37
Year ended 03/31/05 1.30 1.46 2.86 33
- ---------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Year ended 03/31/09 1.00(e) 1.01(e) 2.74(e) 5
Year ended 03/31/08 0.89 0.89 2.11 25
Year ended 03/31/07 0.91 0.91 2.41 33
Year ended 03/31/06(f) 0.92(g) 1.05(g) 2.44(g) 37
_______________________________________________________________________________________
=======================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset value
for financial reporting purposes and the returns based upon those net asset
values may differ from the net asset value and returns for shareholder
transactions. Does not include sales charges and is not annualized for
periods less than one year, if applicable.
(b) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year, if applicable.
(c) Calculated using average shares outstanding.
(d) Includes litigation proceeds received during the period. Had the litigation
proceeds not been received, net gains(losses) on securities (both realized
and unrealized) per share would have been $(6.39), $(6.42), $(6.46),
$(2.83), $(6.44) and $(6.39) for Class A, Class B, Class C, Class Y,
Investor Class and Institutional Class shares, respectively and total
return would have been lower.
(e) Ratios are based on average daily net assets (000's omitted) of $172,055,
$33,330, $18,734, $212, $76,726 and $14,328 for Class A, Class B, Class C,
Class Y, Investor Class and Institutional Class shares, respectively.
(f) Commencement date of October 3, 2008 and October 25, 2005 for Class Y and
Institutional Class shares, respectively.
(g) Annualized.
20 AIM UTILITIES FUND
NOTE 12--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On May 23, 2008, the Securities and Exchange Commission ("SEC") publicly posted
its final approval of the Distribution Plans ("Distribution Plans") for the
distribution of monies placed into two separate Fair Funds created pursuant to a
settlement reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"),
Invesco Aim Advisors, Inc. ("Invesco Aim") and Invesco Aim Distributors, Inc.
("IADI") and the SEC (the "Order"). One of the Fair Funds consists of $325
million, plus interest and any contributions by other settling parties, for
distribution to shareholders of certain mutual funds formerly advised by IFG who
may have been harmed by market timing and related activity. The second Fair Fund
consists of $50 million, plus interest and any contributions by other settling
parties, for distribution to shareholders of certain mutual funds advised by
Invesco Aim who may have been harmed by market timing and related activity. The
Distribution Plans provide for the distribution to all eligible investors to
compensate such investors for injury they may have suffered as a result of
market timing in the affected funds. The Distribution Plans include a provision
for any residual amounts in the Fair Funds to be distributed in the future to
the affected funds. Because the distribution of the Fair Funds has not yet
commenced, management of Invesco Aim and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"), the
parent company of IFG and Invesco Aim, has agreed to reimburse expenses incurred
by the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, Invesco Aim, IADI
and/or related entities and individuals alleging that the defendants permitted
improper market timing and related activity in the AIM Funds.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
negligence, breach of fiduciary duty and/or breach of contract. These lawsuits
seek remedies that include, depending on the lawsuit, damages, restitution,
injunctive relief, imposition of a constructive trust, removal of certain
directors and/or employees, various corrective measures under ERISA, rescission
of certain AIM Funds' advisory agreements and/or distribution plans and recovery
of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues were transferred to the United States District Court for the District of
Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court, plaintiffs in
these lawsuits consolidated their claims for pre-trial purposes into three
amended complaints against various Invesco Aim- and IFG-related parties: (i) a
Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of ERISA purportedly
brought on behalf of participants in the Invesco 401(k) plan. Based on orders
issued by the MDL Court, all claims asserted against the AIM Funds that have
been transferred to the MDL Court have been dismissed, although certain Funds
remain nominal defendants in the Consolidated Amended Fund Derivative Complaint.
On January 5, 2008, the parties reached an agreement in principle to settle both
the Consolidated Amended Class Action Complaint and Consolidated Amended Fund
Derivative Complaint, subject to the MDL Court approval. Individual class
members have the right to object. On December 15, 2008, the parties reached an
agreement in principle to settle the Amended Class Action Complaint for
Violations of ERISA, subject to the MDL Court approval. Individual class members
have the right to object. No payments are required under the settlement;
however, the parties agreed that certain limited changes to benefit plans and
participants' accounts would be made.
IFG, Invesco Aim, IADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, Invesco Aim and IADI have advised the Fund that they are providing
full cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, Invesco Aim, IADI and/or related entities and individuals in
the future.
Management of Invesco Aim and the Fund believe that the outcome of the Pending
Litigation and Regulatory Inquiries described above will have no material
adverse affect on the Fund or on the ability of Invesco Aim and IADI to provide
ongoing services to the Fund.
21 AIM UTILITIES FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM Sector Funds
and Shareholders of AIM Utilities Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of AIM Utilities Fund (one of the
funds constituting AIM Sector Funds, hereafter referred to as the "Fund") at
March 31, 2009, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 2009, by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PRICEWATERHOUSECOOPERS LLP
May 15, 2009
Houston, Texas
22 AIM UTILITIES FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. With
the exception of the actual ending account value and expenses of the Class Y
shares, the example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period October 1, 2008, through
March 31, 2009. The actual ending account and expenses of the Class Y shares in
the below example are based on an investment of $1,000 invested as of close of
business October 3, 2008 (commencement date) and held through March 31, 2009.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period (as of close of business
October 3, 2008 through March 31, 2009 for the Class Y shares). Because the
actual ending account value and expense information in the example is not based
upon a six month period for the Class Y shares, the ending account value and
expense information may not provide a meaningful comparison to mutual funds that
provide such information for a full six month period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
------------------------------------------------------
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (10/01/08) (03/31/09)(1) PERIOD(2) (03/31/09) PERIOD(2,3) RATIO
- ---------------------------------------------------------------------------------------------------
A $1,000.00 $781.20 $ 7.59 $1,016.40 $ 8.60 1.71%
- ---------------------------------------------------------------------------------------------------
B 1,000.00 777.80 10.90 1,012.67 12.34 2.46
- ---------------------------------------------------------------------------------------------------
C 1,000.00 778.30 10.91 1,012.67 12.34 2.46
- ---------------------------------------------------------------------------------------------------
Y 1,000.00 818.70 6.55 1,017.65 7.34 1.46
- ---------------------------------------------------------------------------------------------------
Investor 1,000.00 781.10 7.59 1,016.40 8.60 1.71
- ---------------------------------------------------------------------------------------------------
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period October 1, 2008, through March 31, 2009 (as of close of
business October 3, 2008, through March 31, 2009 for the Class Y shares),
after actual expenses and will differ from the hypothetical ending account
value which is based on the Fund's expense ratio and a hypothetical annual
return of 5% before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
182/365 to reflect the most recent fiscal half year. For the Class Y shares
actual expenses are equal to the annualized expense ratio indicated above
multiplied by the average account value over the period, multiplied by 180
(as of close of business October 3, 2008, through March 31, 2009)/365.
Because the Class Y shares have not been in existence for a full six month
period, the actual ending account value and expense information shown may
not provide a meaningful comparison to fund expense information of classes
that show such data for a full six month period and, because the actual
ending account value and expense information in the expense example covers a
short time period, return and expense data may not be indicative of return
and expense data for longer time periods.
(3) Hypothetical expenses are equal to the annualized expense ratio indicated
above multiplied by the average account value over the period, multiplied by
182/365 to reflect a one-half year period. The hypothetical ending account
value and expenses may be used to compare ongoing costs of investing in
Class Y shares of the Fund and other funds because such data is based on a
full six month period.
23 AIM UTILITIES FUND
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year-end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to be
different, the maximum amount allowable for its fiscal year ended March 31,
2009:
<Table>
<Caption>
FEDERAL AND STATE INCOME TAX
----------------------------
Qualified Dividend Income* 100%
Corporate Dividends Received Deduction* 100%
</Table>
* The above percentages are based on ordinary income dividends paid to
shareholders during the Fund's fiscal year.
NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended June 30, 2008, September 30, 2008, December 31, 2008 and
March 31, 2009 were 10.88%, 11.30%, 10.85%, and 10.39%, respectively.
24 AIM UTILITIES FUND
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM Sector Funds (the "Trust"), is 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 102
portfolios in the AIM Funds complex. The trustees serve for the life of the
Trust, subject to their earlier death, incapacitation, resignation, retirement
or removal as more specifically provided in the Trust's organizational
documents. Each officer serves for a one year term or until their successors are
elected and qualified. Column two below includes length of time served with
predecessor entities, if any.
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
INTERESTED PERSONS
- --------------------------------------------------------------------------------------------------------------------------------
Martin L. 2007 Executive Director, Chief Executive Officer and President, None
Flanagan(1) -- 1960 Invesco Ltd. (ultimate parent of Invesco Aim and a global
Trustee investment management firm); Chairman, Invesco Aim Advisors,
Inc. (registered investment advisor); Trustee, The AIM
Family of Funds--Registered Trademark--; Vice Chairman,
Investment Company Institute; and Member of Executive Board,
SMU Cox School of Business
Formerly: Director, Chairman, Chief Executive Officer and
President, IVZ Inc. (holding company); INVESCO Group
Services, Inc. (service provider); and Invesco North
American Holdings, Inc. (holding company); Director, Chief
Executive Officer and President, Invesco Holding Company
Limited (parent of Invesco Aim and a global investment
management firm); Chairman, Investment Company Institute;
President, Co-Chief Executive Officer, Co-President, Chief
Operating Officer and Chief Financial Officer, Franklin
Resources, Inc. (global investment management organization)
- --------------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Head of North American Retail and Senior Managing Director, None
Trustee, President and Invesco Ltd.; Director, Chief Executive Officer and
Principal President, Invesco Trimark Dealer Inc. (formerly AIM Mutual
Executive Officer Fund Dealer Inc.) (registered broker dealer), Invesco Aim
Advisors, Inc., and 1371 Preferred Inc. (holding company);
Director, Chairman, Chief Executive Officer and President,
Invesco Aim Management Group, Inc. (financial services
holding company) and Invesco Aim Capital Management, Inc.
(registered investment advisor); Director and President,
INVESCO Funds Group, Inc. (registered investment advisor and
register transfer agent) and AIM GP Canada Inc. (general
partner for a limited partnership); Director, Invesco Aim
Distributors, Inc. (registered broker dealer); Director and
Chairman, Invesco Aim Investment Services, Inc. (registered
transfer agent) and INVESCO Distributors, Inc. (registered
broker dealer); Director, President and Chairman, INVESCO
Inc. (holding company) and Invesco Canada Holdings Inc.
(holding company); Chief Executive Officer, AIM Trimark
Corporate Class Inc. (corporate mutual fund company) and AIM
Trimark Canada Fund Inc. (corporate mutual fund company);
Director and Chief Executive Officer, Invesco Trimark
Ltd./Invesco Trimark Ltee (formerly AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services) (registered
investment advisor and registered transfer agent) and
Invesco Trimark Dealer Inc. (formerly AIM Mutual Fund Dealer
Inc.) (registered broker dealer); Trustee, President and
Principal Executive Officer of The AIM Family of Funds--
Registered Trademark-- (other than AIM Treasurer's Series
Trust and Short-Term Investments Trust); Trustee and
Executive Vice President, The AIM Family of Funds--
Registered Trademark-- (AIM Treasurer's Series Trust and
Short-Term Investments Trust only); and Manager, Invesco
PowerShares Capital Management LLC
Formerly: President, Invesco Trimark Dealer Inc.; Director
and President, AIM Trimark Corporate Class Inc. and AIM
Trimark Canada Fund Inc.; Director and President, Invesco
Trimark Ltd./Invesco Trimark Ltee (formerly AIM Funds
Management Inc. d/b/a INVESCO Enterprise Services); Senior
Managing Director, Invesco Holding Company Limited; Trustee
and Executive Vice President, Tax-Free Investments Trust;
Director and Chairman, Fund Management Company (registered
broker dealer); President and Principal Executive Officer,
The AIM Family of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term Investments Trust and
Tax-Free Investments Trust only); President, AIM Trimark
Global Fund Inc. and AIM Trimark Canada Fund Inc.; and
Director, Trimark Trust (federally regulated Canadian Trust
Company)
- --------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited
Trustee and Chair consulting company) (insurance company);
Captaris, Inc.
(unified messaging
provider); and
Investment Company
Institute
- --------------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 1983 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2003 Retired
Trustee
Formerly: Partner, law firm of Baker & McKenzie; and None
Director, Badgley Funds, Inc. (registered investment
company) (2 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2000 Founder, Green, Manning & Bunch Ltd., (investment banking Director, Van Gilder
Trustee firm) Insurance Company,
Board of Governors,
Western Golf
Association/Evans
Scholars Foundation
and Executive
Committee, United
States Golf
Association
- --------------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2003 Director of a number of public and private business None
Trustee corporations, including the Boss Group Ltd. (private
investment and management); Continental Energy Services, LLC
(oil and gas pipeline service); Reich & Tang Funds
(registered investment company); Annuity and Life Re
(Holdings), Ltd. (reinsurance company), and Homeowners of
America Holding Corporation/Homeowners of America Insurance
Company (property casualty company)
Formerly: Director, CompuDyne Corporation (provider of
product and services to the public security market);
Director, President and Chief Executive Officer, Volvo Group
North America, Inc.; Senior Vice President, AB Volvo;
Director of various public and private corporations
- --------------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 2003 Chief Executive Officer, Twenty First Century Group, Inc. Administaff
Trustee (government affairs company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate
entertainment)
Formerly: Chief Executive Officer, Texana Timber LP
(sustainable forestry company); and Discovery Global
Education Fund (non-profit)
- --------------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 2003 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Director, Reich &
Trustee Tang Funds (16
portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis -- 1950 2003 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Lewis F. Pennock -- 1942 2003 Partner, law firm of Pennock & Cooper None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 1997 Retired None
Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired
Trustee
Formerly: Partner, Director, Mainstay VP Series Funds, Inc. None
(25 portfolios)
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan is considered an interested person of the Trust because he is
an officer of the advisor to the Trust, and an officer and a director of
Invesco Ltd., ultimate parent of the advisor to the Trust.
(2) Mr. Taylor is considered an interested person of the Trust because he is an
officer and a director of the advisor to, and a director of the principal
underwriter of, the Trust.
25 AIM UTILITIES FUND
TRUSTEES AND OFFICERS--(CONTINUED)
<Table>
<Caption>
NAME, YEAR OF BIRTH AND TRUSTEE AND/ OTHER
POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) DIRECTORSHIP(S)
TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE
- --------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- --------------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer of The AIM Family of N/A
Senior Vice President and Funds--Registered Trademark--
Senior Officer
Formerly: Director of Compliance and Assistant General Counsel,
ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; General
Counsel and Director of Compliance, ALPS Mutual Funds, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, Secretary and General Counsel, N/A
Senior Vice President, Chief Invesco Aim Management Group, Inc., Invesco Aim Advisors, Inc.
Legal Officer and Secretary and Invesco Aim Capital Management, Inc.; Director, Senior Vice
President and Secretary, Invesco Aim Distributors, Inc.;
Director, Vice President and Secretary, Invesco Aim Investment
Services, Inc. and INVESCO Distributors, Inc.; Director and Vice
President, INVESCO Funds Group Inc.; Senior Vice President, Chief
Legal Officer and Secretary, The AIM Family of Funds--Registered
Trademark--; and Manager, Invesco PowerShares Capital Management
LLC
Formerly: Director, Vice President and Secretary, Fund Management
Company; Vice President, Invesco Aim Capital Management, Inc.;
Chief Operating Officer, Senior Vice President, General Counsel
and Secretary, Liberty Ridge Capital, Inc. (an investment
adviser); Vice President and Secretary, PBHG Funds (an investment
company); Vice President and Secretary, PBHG Insurance Series
Fund (an investment company); Chief Operating Officer, General
Counsel and Secretary, Old Mutual Investment Partners (a broker-
dealer); General Counsel and Secretary, Old Mutual Fund Services
(an administrator); General Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder servicing center); Executive
Vice President, General Counsel and Secretary, Old Mutual
Capital, Inc. (an investment adviser); and Vice President and
Secretary, Old Mutual Advisors Funds (an investment company)
- --------------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice President, The N/A
Vice President AIM Family of Funds--Registered Trademark--
Formerly: Senior Vice President, Invesco Aim Management Group,
Inc.; Senior Vice President and Chief Compliance Officer, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark--; Vice President and Chief Compliance Officer, Invesco
Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.;
Vice President, Invesco Aim Investment Services, Inc. and Fund
Management Company
- --------------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 General Counsel, Secretary and Senior Managing Director, Invesco N/A
Vice President Ltd.; Director and Secretary, Invesco Holding Company Limited,
and INVESCO Funds Group, Inc.; Director and Executive Vice
President, IVZ Inc., Invesco Group Services, Inc., Invesco North
American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.;
and Vice President, The AIM Family of Funds--Registered
Trademark--
Formerly: Secretary, IVZ, Inc., Invesco Group Services, Inc., and
Invesco North American Holdings, Inc.; Senior Managing Director
and Secretary, Invesco Holding Company Limited; Director, Senior
Vice President, Secretary and General Counsel, Invesco Aim
Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior
Vice President, Invesco Aim Distributors, Inc.; Director, General
Counsel and Vice President, Fund Management Company; Vice
President, Invesco Aim Capital Management, Inc., Invesco Aim
Investment Services, Inc., Invesco Group Services, Inc. and IVZ
Inc.; Senior Vice President, Chief Legal Officer and Secretary,
The AIM Family of Funds--Registered Trademark--; Director and
Vice President, INVESCO Distributors, Inc. and Chief Executive
Officer and President, INVESCO Funds Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Sheri Morris -- 1964 1999 Vice President, Treasurer and Principal Financial Officer, The N/A
Vice President, Treasurer AIM Family of Funds--Registered Trademark--; and Vice President,
and Principal Financial Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc.
Officer and Invesco Aim Private Asset Management Inc.
Formerly: Assistant Vice President and Assistant Treasurer, The
AIM Family of Funds--Registered Trademark-- and Assistant Vice
President, Invesco Aim Advisors, Inc., Invesco Aim Capital
Management, Inc. and Invesco Aim Private Asset Management, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2003 Head of Invesco's World Wide Fixed Income and Cash Management N/A
Vice President Group; Director of Cash Management and Senior Vice President,
Invesco Aim Advisors, Inc. and Invesco Aim Capital Management,
Inc; Executive Vice President, Invesco Aim Distributors, Inc.;
Senior Vice President, Invesco Aim Management Group, Inc.; Vice
President, The AIM Family of Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust and Short-Term Investments
Trust); and President and Principal Executive Officer, The AIM
Family of Funds--Registered Trademark-- (AIM Treasurer's Series
Trust and Short-Term Investments Trust only)
Formerly President and Principal Executive Officer, Tax-Free
Investments Trust; Director and President, Fund Management
Company; Chief Cash Management Officer and Managing Director,
Invesco Aim Capital Management, Inc.; and Vice President, Invesco
Aim Advisors, Inc. and The AIM Family of Funds--Registered
Trademark-- (AIM Treasurer's Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust only)
- --------------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim Advisors, N/A
Anti-Money Laundering Inc., Invesco Aim Capital Management, Inc., Invesco Aim
Compliance Officer Distributors, Inc., Invesco Aim Investment Services, Inc.,
Invesco Aim Private Asset Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering Compliance Officer, Fund
Management Company; and Manager of the Fraud Prevention
Department, Invesco Aim Investment Services, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, Invesco Aim Management Group, Inc.; Senior N/A
Chief Compliance Officer Vice President and Chief Compliance Officer, Invesco Aim
Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief
Compliance Officer, The AIM Family of Funds--Registered
Trademark--, Invesco Global Asset Management (N.A.), Inc.
(registered investment advisor), Invesco Institutional (N.A.),
Inc., (registered investment advisor), INVESCO Private Capital
Investments, Inc. (holding company), Invesco Private Capital,
Inc. (registered investment advisor) and Invesco Senior Secured
Management, Inc. (registered investment advisor); and Vice
President, Invesco Aim Distributors, Inc. and Invesco Aim
Investment Services, Inc.
Formerly: Vice President, Invesco Aim Capital Management, Inc.
and Fund Management Company; and Global Head of Product
Development, AIG-Global Investment Group, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
The Statement of Additional Information of the Trust includes additional
information about the Fund's Trustees and is available upon request, without
charge, by calling 1.800.959.4246.
Please refer to the Fund's prospectus for information on the Fund's sub-
advisors.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza Invesco Aim Advisors, Inc. Invesco Aim Distributors, Inc. PricewaterhouseCoopers LLP
Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Stradley Ronon Stevens INDEPENDENT TRUSTEES Invesco Aim Investment State Street Bank and
& Young, LLP Kramer, Levin, Naftalis & Services, Inc. Trust Company
2600 One Commerce Square Frankel LLP P.O. Box 4739 225 Franklin Street
Philadelphia, PA 19103 1177 Avenue of the Americas Houston, TX 77210-4739 Boston, MA 02110-2801
New York, NY 10036-2714
26 AIM UTILITIES FUND
[GO PAPERLESS GRAPHIC]
====================================================================================================================================
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Visit invescoaim.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that's all
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This service is provided by Invesco Aim Investment Services, Inc.
====================================================================================================================================
FUND HOLDINGS AND PROXY VOTING INFORMATION
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual reports to shareholders. For the first and third quarters, the Fund
files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is
available at invescoaim.com. From our home page, click on Products & Performance, then Mutual Funds, then Fund Overview. Select your
Fund from the drop-down menu and click on Complete Quarterly Holdings. Shareholders can also look up the Fund's Forms N-Q on the SEC
website at sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C.
You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by
calling 202 942 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file
numbers for the Fund are 811-03826 and 002-85905.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities
is available without charge, upon request, from our Client Services department at 800 959 4246 or on the Invesco Aim website,
invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website,
sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2008, is
available at our website. Go to invescoaim.com, access the About Us tab, click on Required Notices and then click on Proxy Voting
Activity. Next, select the Fund from the drop-down menu. The information is also available on the SEC website, sec.gov.
If used after July 20, 2009, this report must be accompanied by a Fund fact sheet or Invesco Aim Quarterly Performance Review for
the most recent quarter-end. Invesco Aim--SERVICE MARK-- is a service mark of Invesco Aim Management Group, Inc. Invesco Aim
Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset
Management, Inc. and Invesco PowerShares Capital Management LLC are the investment
advisors for the products and services represented by Invesco Aim; they each provide
investment advisory services to individual and institutional clients and do not sell [INVESCO AIM LOGO]
securities. Please refer to each fund's prospectus for information on the fund's -- SERVICE MARK --
subadvisors. Invesco Aim Distributors, Inc. is the U.S. distributor for the retail
mutual funds, exchange-traded funds and institutional money market funds and the
subdistributor for the STIC Global Funds represented by Invesco Aim. All entities are
indirect, wholly owned subsidiaries of invesco Ltd.
It is anticipated that on or about the end of the fourth quarter of 2009, Invesco Aim Advisors, Inc.,
Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset
Management (N.A.), Inc. will be merged into Invesco Institutional (N.A.), Inc., and the consolidated
adviser firm will be renamed Invesco Advisers, Inc. Additional information will be posted at
invescoaim.com on or about the end of the fourth quarter of 2009.
invescoaim.com I-UTI-AR-1 Invesco Aim Distributors, Inc.
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the Registrant had
adopted a code of ethics (the "Code") that applies to the Registrant's
principal executive officer ("PEO") and principal financial officer
("PFO"). There were no amendments to the Code during the period covered
by the report. The Registrant did not grant any waivers, including
implicit waivers, from any provisions of the Code to the PEO or PFO
during the period covered by this report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees has determined that the Registrant has at least
one audit committee financial expert serving on its Audit Committee. The
Audit Committee financial expert is Raymond Stickel, Jr. Mr. Stickel is
"independent" within the meaning of that term as used in Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
FEES BILLED BY PWC RELATED TO THE REGISTRANT
PWC billed the Registrant aggregate fees for services rendered to the
Registrant for the last two fiscal years as follows:
Percentage of Fees Percentage of Fees
Billed Applicable to Billed Applicable to
Non-Audit Services Non-Audit Services
Provided for fiscal Provided for fiscal
Fees Billed for year end 2009 Fees Billed for year end 2008
Services Rendered to Pursuant to Waiver of Services Rendered to Pursuant to Waiver of
the Registrant for Pre-Approval the Registrant for Pre-Approval
fiscal year end 2009 Requirement(1) fiscal year end 2008 Requirement(1)
-------------------- --------------------- -------------------- ---------------------
Audit Fees $228,607 N/A $221,828 N/A
Audit-Related Fees $ 0 0% $ 0 0%
Tax Fees(2) $ 49,199 0% $ 48,844 0%
All Other Fees $ 0 0% $ 0 0%
-------- --------
Total Fees $277,806 0% $270,672 0%
PWC billed the Registrant aggregate non-audit fees of $49,199 for the fiscal
year ended 2009, and $48,844 for the fiscal year ended 2008, for non-audit
services rendered to the Registrant.
- ----------
(1) With respect to the provision of non-audit services, the pre-approval
requirement is waived pursuant to a de minimis exception if (i) such
services were not recognized as non-audit services by the Registrant at the
time of engagement, (ii) the aggregate amount of all such services provided
is no more than 5% of the aggregate audit and non-audit fees paid by the
Registrant to PWC during a fiscal year; and (iii) such services are
promptly brought to the attention of the Registrant's Audit Committee and
approved by the Registrant's Audit Committee prior to the completion of the
audit.
(2) Tax fees for the fiscal year end March 31, 2009 includes fees billed for
reviewing tax returns and consultation services. Tax fees for the fiscal
year end March 31, 2008 includes fees billed for reviewing tax returns and
consultation services.
FEES BILLED BY PWC RELATED TO INVESCO AIM AND INVESCO AIM AFFILIATES
PWC billed Invesco Aim Advisors, Inc. ("Invesco Aim"), the Registrant's
adviser, and any entity controlling, controlled by or under common control with
Invesco Aim that provides ongoing services to the Registrant ("Invesco Aim
Affiliates") aggregate fees for pre-approved non-audit services rendered to
Invesco Aim and Invesco Aim Affiliates for the last two fiscal years as follows:
Fees Billed for Non- Fees Billed for Non-
Audit Services Audit Services
Rendered to Invesco Percentage of Fees Rendered to Invesco Percentage of Fees
Aim and Invesco Aim Billed Applicable to Aim and Invesco Aim Billed Applicable to
Affiliates for fiscal Non-Audit Services Affiliates for fiscal Non-Audit Services
year end 2009 That Provided for fiscal year year end 2008 That Provided for fiscal year
Were Required end 2009 Pursuant to Were Required end 2008 Pursuant to
to be Pre-Approved Waiver of Pre- to be Pre-Approved Waiver of Pre-
by the Registrant's Approval by the Registrant's Approval
Audit Committee Requirement(1) Audit Committee Requirement(1)
--------------------- ------------------------ --------------------- ------------------------
Audit-Related Fees $0 0% $0 0%
Tax Fees $0 0% $0 0%
All Other Fees $0 0% $0 0%
--- ---
Total Fees(2) $0 0% $0 0%
- ----------
(1) With respect to the provision of non-audit services, the pre-approval
requirement is waived pursuant to a de minimis exception if (i) such
services were not recognized as non-audit services by the Registrant at the
time of engagement, (ii) the aggregate amount of all such services provided
is no more than 5% of the aggregate audit and non-audit fees paid by the
Registrant, Invesco Aim and Invesco Aim Affiliates to PWC during a fiscal
year; and (iii) such services are promptly brought to the attention of the
Registrant's Audit Committee and approved by the Registrant's Audit
Committee prior to the completion of the audit.
(2) Including the fees for services not required to be pre-approved by the
registrant's audit committee, PWC billed Invesco Aim and Invesco Aim
Affiliates aggregate non-audit fees of $0 for the fiscal year ended 2009,
and $0 for the fiscal year ended 2008, for non-audit services rendered to
Invesco Aim and Invesco Aim Affiliates.
The Audit Committee also has considered whether the provision of non-audit
services that were rendered to Invesco Aim and Invesco Aim Affiliates that
were not required to be pre-approved pursuant to SEC regulations, if any,
is compatible with maintaining PWC's independence. To the extent that such
services were provided, the Audit Committee determined that the provision
of such services is compatible with PWC maintaining independence with
respect to the Registrant.
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
POLICIES AND PROCEDURES
As adopted by the Audit Committees of
the AIM Funds (the "Funds")
Last Amended September 18, 2006
STATEMENT OF PRINCIPLES
Under the Sarbanes-Oxley Act of 2002 and rules adopted by the Securities and
Exchange Commission ("SEC") ("Rules"), the Audit Committees of the Funds' (the
"Audit Committee") Board of Trustees (the "Board") are responsible for the
appointment, compensation and oversight of the work of independent accountants
(an "Auditor"). As part of this responsibility and to assure that the Auditor's
independence is not impaired, the Audit Committees pre-approve the audit and
non-audit services provided to the Funds by each Auditor, as well as all
non-audit services provided by the Auditor to the Funds' investment adviser and
to affiliates of the adviser that provide ongoing services to the Funds
("Service Affiliates") if the services directly impact the Funds' operations or
financial reporting. The SEC Rules also specify the types of services that an
Auditor may not provide to its audit client. The following policies and
procedures comply with the requirements for pre-approval and provide a mechanism
by which management of the Funds may request and secure pre-approval of audit
and non-audit services in an orderly manner with minimal disruption to normal
business operations.
Proposed services either may be pre-approved without consideration of specific
case-by-case services by the Audit Committees ("general pre-approval") or
require the specific pre-approval of the Audit Committees ("specific
pre-approval"). As set forth in these policies and procedures, unless a type of
service has received general pre-approval, it will require specific pre-approval
by the Audit Committees. Additionally, any fees exceeding 110% of estimated
pre-approved fee levels provided at the time the service was pre-approved will
also require specific approval by the Audit Committees before payment is made.
The Audit Committees will also consider the impact of additional fees on the
Auditor's independence when determining whether to approve any additional fees
for previously pre-approved services.
The Audit Committees will annually review and generally pre-approve the services
that may be provided by each Auditor without obtaining specific pre-approval
from the Audit Committee. The term of any general pre-approval runs from the
date of such pre-approval through September 30th of the following year, unless
the Audit Committees consider a different period and state otherwise. The Audit
Committees will add to or subtract from the list of general pre-approved
services from time to time, based on subsequent determinations.
The purpose of these policies and procedures is to set forth the guidelines to
assist the Audit Committees in fulfilling their responsibilities.
DELEGATION
The Audit Committees may from time to time delegate pre-approval authority to
one or more of its members who are Independent Trustees. All decisions to
pre-approve a service by a delegated member shall be reported to the Audit
Committee at its next quarterly meeting.
AUDIT SERVICES
The annual audit services engagement terms will be subject to specific
pre-approval of the Audit Committees. Audit services include the annual
financial statement audit and other procedures such as tax provision work that
is required to be performed by the independent auditor to be able to form an
opinion on the Funds' financial statements. The Audit Committee will obtain,
review and consider sufficient information concerning the proposed Auditor to
make a reasonable evaluation of the Auditor's qualifications and independence.
In addition to the annual Audit services engagement, the Audit Committees may
grant either general or specific pre-approval of other audit services, which are
those services that only the independent auditor reasonably can provide. Other
Audit services may include services such as issuing consents for the
inclusion of audited financial statements with SEC registration statements,
periodic reports and other documents filed with the SEC or other documents
issued in connection with securities offerings.
NON-AUDIT SERVICES
The Audit Committees may provide either general or specific pre-approval of any
non-audit services to the Funds and its Service Affiliates if the Audit
Committees believe that the provision of the service will not impair the
independence of the Auditor, is consistent with the SEC's Rules on auditor
independence, and otherwise conforms to the Audit Committee's general principles
and policies as set forth herein.
AUDIT-RELATED SERVICES
"Audit-related services" are assurance and related services that are reasonably
related to the performance of the audit or review of the Fund's financial
statements or that are traditionally performed by the independent auditor.
Audit-related services include, among others, accounting consultations related
to accounting, financial reporting or disclosure matters not classified as
"Audit services"; assistance with understanding and implementing new accounting
and financial reporting guidance from rulemaking authorities; and agreed-upon
procedures related to mergers, compliance with ratings agency requirements and
interfund lending activities.
TAX SERVICES
"Tax services" include, but are not limited to, the review and signing of the
Funds' federal tax returns, the review of required distributions by the Funds
and consultations regarding tax matters such as the tax treatment of new
investments or the impact of new regulations. The Audit Committee will
scrutinize carefully the retention of the Auditor in connection with a
transaction initially recommended by the Auditor, the major business purpose of
which may be tax avoidance or the tax treatment of which may not be supported in
the Internal Revenue Code and related regulations. The Audit Committee will
consult with the Funds' Treasurer (or his or her designee) and may consult with
outside counsel or advisors as necessary to ensure the consistency of Tax
services rendered by the Auditor with the foregoing policy.
No Auditor shall represent any Fund or any Service Affiliate before a tax court,
district court or federal court of claims.
Under rules adopted by the Public Company Accounting Oversight Board and
approved by the SEC, in connection with seeking Audit Committee pre-approval of
permissible Tax services, the Auditor shall:
1. Describe in writing to the Audit Committees, which writing may be in
the form of the proposed engagement letter:
a. The scope of the service, the fee structure for the
engagement, and any side letter or amendment to the
engagement letter, or any other agreement between the
Auditor and the Fund, relating to the service; and
b. Any compensation arrangement or other agreement, such as a
referral agreement, a referral fee or fee-sharing
arrangement, between the Auditor and any person (other than
the Fund) with respect to the promoting, marketing, or
recommending of a transaction covered by the service;
2. Discuss with the Audit Committees the potential effects of the
services on the independence of the Auditor; and
3. Document the substance of its discussion with the Audit Committees.
ALL OTHER AUDITOR SERVICES
The Audit Committees may pre-approve non-audit services classified as "All other
services" that are not categorically prohibited by the SEC, as listed in Exhibit
1 to this policy.
PRE-APPROVAL FEE LEVELS OR ESTABLISHED AMOUNTS
Pre-approval of estimated fees or established amounts for services to be
provided by the Auditor under general or specific pre-approval policies will be
set periodically by the Audit Committees. Any proposed fees exceeding 110% of
the maximum estimated pre-approved fees or established amounts for pre-approved
audit and non-audit services will be reported to the Audit Committees at the
quarterly Audit Committees meeting and will require specific approval by the
Audit Committees before payment is made. The Audit Committee will always factor
in the overall relationship of fees for audit and non-audit services in
determining whether to pre-approve any such services and in determining whether
to approve any additional fees exceeding 110% of the maximum pre-approved fees
or established amounts for previously pre-approved services.
PROCEDURES
On an annual basis, A I M Advisors, Inc. ("AIM") will submit to the Audit
Committees for general pre-approval, a list of non-audit services that the Funds
or Service Affiliates of the Funds may request from the Auditor. The list will
describe the non-audit services in reasonable detail and will include an
estimated range of fees and such other information as the Audit Committee may
request.
Each request for services to be provided by the Auditor under the general
pre-approval of the Audit Committees will be submitted to the Funds' Treasurer
(or his or her designee) and must include a detailed description of the services
to be rendered. The Treasurer or his or her designee will ensure that such
services are included within the list of services that have received the general
pre-approval of the Audit Committees. The Audit Committees will be informed at
the next quarterly scheduled Audit Committees meeting of any such services for
which the Auditor rendered an invoice and whether such services and fees had
been pre-approved and if so, by what means.
Each request to provide services that require specific approval by the Audit
Committees shall be submitted to the Audit Committees jointly by the Fund's
Treasurer or his or her designee and the Auditor, and must include a joint
statement that, in their view, such request is consistent with the policies and
procedures and the SEC Rules.
Each request to provide tax services under either the general or specific
pre-approval of the Audit Committees will describe in writing: (i) the scope of
the service, the fee structure for the engagement, and any side letter or
amendment to the engagement letter, or any other agreement between the Auditor
and the audit client, relating to the service; and (ii) any compensation
arrangement or other agreement between the Auditor and any person (other than
the audit client) with respect to the promoting, marketing, or recommending of a
transaction covered by the service. The Auditor will discuss with the Audit
Committees the potential effects of the services on the Auditor's independence
and will document the substance of the discussion.
Non-audit services pursuant to the de minimis exception provided by the SEC
Rules will be promptly brought to the attention of the Audit Committees for
approval, including documentation that each of the conditions for this
exception, as set forth in the SEC Rules, has been satisfied.
On at least an annual basis, the Auditor will prepare a summary of all the
services provided to any entity in the investment company complex as defined in
section 2-01(f)(14) of Regulation S-X in sufficient detail as to the nature of
the engagement and the fees associated with those services.
The Audit Committees have designated the Funds' Treasurer to monitor the
performance of all services provided by the Auditor and to ensure such services
are in compliance with these policies and procedures. The Funds' Treasurer will
report to the Audit Committee on a periodic basis as to the results of such
monitoring. Both the Funds' Treasurer and management of AIM will immediately
report to the chairman of the Audit Committee any breach of these policies and
procedures that comes to the attention of the Funds' Treasurer or senior
management of AIM.
EXHIBIT 1 TO PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES POLICIES AND
PROCEDURES
CONDITIONALLY PROHIBITED NON-AUDIT SERVICES (NOT PROHIBITED IF THE FUND CAN
REASONABLY CONCLUDE THAT THE RESULTS OF THE SERVICE WOULD NOT BE SUBJECT TO
AUDIT PROCEDURES IN CONNECTION WITH THE AUDIT OF THE FUND'S FINANCIAL
STATEMENTS)
- Bookkeeping or other services related to the accounting records or
financial statements of the audit client
- Financial information systems design and implementation
- Appraisal or valuation services, fairness opinions, or
contribution-in-kind reports
- Actuarial services
- Internal audit outsourcing services
CATEGORICALLY PROHIBITED NON-AUDIT SERVICES
- Management functions
- Human resources
- Broker-dealer, investment adviser, or investment banking services
- Legal services
- Expert services unrelated to the audit
- Any service or product provided for a contingent fee or a commission
- Services related to marketing, planning, or opining in favor of the
tax treatment of confidential transactions or aggressive tax position
transactions, a significant purpose of which is tax avoidance
- Tax services for persons in financial reporting oversight roles at the
Fund
- Any other service that the Public Company Oversight Board determines
by regulation is impermissible.
PwC advised the Funds' Audit Committee that PwC had identified three matters for
consideration under the SEC's auditor independence rules.
First, PwC was engaged to perform services to an affiliate of Invesco Ltd.
("Invesco"), including (a) consulting with respect to the acquisition by the
affiliate of certain assets from a third party; and (b) providing expert
testimony in connection with any arbitration proceeding or litigation arising
from or relating to the transaction. Rules of the Securities and Exchange
Commission ("SEC") provide that an accountant is not independent if, at any
point during the audit and professional engagement period, the accountant
provides expert services unrelated to the audit to an audit client.
Specifically, PwC would not be permitted to provide expert testimony nor perform
other services in support of the client or its counsel in connection with a
proceeding. Within days of being engaged to provide the services it was
determined that some of the services contemplated in the engagement terms would
be inconsistent with the SEC's auditor independence rules. A review of the
services performed pursuant to the original agreement was conducted. After a
review, PwC concluded that the actual services provided were not inconsistent
with the SEC's independence rules. Following the review, the initial engagement
terms were modified to limit PwC's services to those permitted under the rules.
Second, an employee of PwC served as a nominee shareholder (effectively
equivalent to a Trustee) of various companies or trusts since 2001. Some of
these companies held shares of Invesco Nippon Warrants Fund (the "Investment."),
an affiliate of Invesco, formerly known as AMVESCAP PLC (the "Company"). The
investment, which consisted of 2,070 shares, was initially entered into during
July 1, 2001 - December 31, 2005. PwC informed the Audit Committee that this
matter could have constituted an investment in an affiliate of an audit client
in violation of Rule 2-01(c)(1) of Regulation S-X.
Third, PwC became aware that certain aspects of investment advisory services
provided by a PwC network member Firm's Wealth Advisory Practice to its clients
(generally high net worth individuals not associated with Invesco) were
inconsistent with the SEC's auditor independence requirements of the SEC. The
technical violations occurred as a result of professionals of the Wealth
Advisory Practice making a single
recommendation of an audit client's product to its clients rather than also
identifying one or more suitable alternatives for the Wealth Advisory Practice's
client to consider. The Wealth Advisory Practice also received commissions from
the fund manager. With respect to Invesco and its affiliates, there were 33
cases of single product recommendation and 20 cases of commissions received
totaling approximately (pound)7,000. These violations occurred over a two year
period and ended in November 2007.
It should be noted that at no time did The Wealth Advisory Practice recommend
products on behalf Invesco and its affiliates. Additionally, members of the
audit engagement team were not aware of these violations or services; the advice
provided was based on an understanding of the investment objectives of the
clients of the Wealth Advisory Practice and not to promote the Company and its
affiliates, and the volume and nature of the violations were insignificant.
Although PwC received commissions, PwC derived no economic benefit from the
commission as any commissions received were deducted from the time based fees
charged to the investor client and created no incentive for PwC to recommend the
investment.
PwC advised the Audit Committee that it believes its independence had not been
adversely affected as it related to the audits of the Funds by any of these
matters. In reaching this conclusion, PwC noted that during the time of its
audits, the engagement team was not aware of the services provided or the
investments and noted the insignificance of the services provided. Based on the
foregoing, PwC did not believe any of these matters affected PwC's ability to
act objectively and impartially and to issue a report on financial statements as
the Funds' independent auditor, and, believes that a reasonable investor with
knowledge of all the facts would agree with this conclusion.
Based upon PwC's review, discussion and representations above, the audit
committee, in its business judgment, concurred with PwC's conclusions in
relation to its independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Investments in securities of unaffiliated issuers is included as part
of the reports to stockholders filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 11. CONTROLS AND PROCEDURES.
(a) As of March 13, 2009, an evaluation was performed under the supervision
and with the participation of the officers of the Registrant, including
the PEO and PFO, to assess the effectiveness of the Registrant's
disclosure controls and procedures, as that term is defined in Rule
30a-3(c) under the Investment Company Act of 1940 (the "Act"), as
amended. Based on that evaluation, the Registrant's officers, including
the PEO and PFO, concluded that, as of March 13, 2009, the Registrant's
disclosure controls and procedures were reasonably designed to ensure:
(1) that information required to be disclosed by the Registrant on Form
N-CSR is recorded, processed, summarized and reported within the time
periods specified by the rules and forms of the Securities and Exchange
Commission; and (2) that material information relating to the
Registrant is made known to the PEO and PFO as appropriate to allow
timely decisions regarding required disclosure.
(b) There have been no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act) that
occurred during the second fiscal quarter of the period covered by this
report that have materially affected, or are reasonably likely to
materially affect, the Registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
12(a)(1) Code of Ethics.
12(a)(2) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(a) under the Investment Company Act
of 1940.
12(a)(3) Not applicable.
12(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(b) under the Investment Company Act
of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: AIM Sector Funds
By: /s/ PHILIP A. TAYLOR
----------------------------------
Philip A. Taylor
Principal Executive Officer
Date: June 5, 2009
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: /s/ PHILIP A. TAYLOR
----------------------------------
Philip A. Taylor
Principal Executive Officer
Date: June 5, 2009
By: /s/ Sheri Morris
----------------------------------
Sheri Morris
Principal Financial Officer
Date: June 5, 2009
EXHIBIT INDEX
12(a)(1) Code of Ethics.
12(a)(2) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(a) under the Investment Company Act
of 1940.
12(a)(3) Not applicable.
12(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(b) under the Investment Company Act
of 1940.