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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 811-1474
----------------------------------------------
AIM Stock Funds
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
11 Greenway Plaza, Suite 100 Houston, Texas 77046
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Robert H. Graham 11 Greenway Plaza, Suite 100 Houston, Texas 77046
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (713) 626-1919
-----------------------------
Date of fiscal year end: 7/31
--------------------
Date of reporting period: 1/31/05
-------------------
Item 1. Reports to Stockholders.
AIM MID CAP STOCK FUND
Semiannual Report to Shareholders . January 31, 2005
[COVER IMAGE]
FORMERLY INVESCO MID CAP GROWTH FUND
[Your goals. Our solutions.]
- REGISTERED TRADEMARK -
[AIM Investments Logo]
- REGISTERED TRADEMARK -
AIM MID CAP STOCK FUND seeks to achieve long-term growth of capital.
.. Unless otherwise stated, information presented in this report is as of 1/31/05
and is based on total net assets.
.. Effective October 15, 2004, INVESCO Mid Cap Growth Fund was renamed AIM Mid
Cap Stock Fund
ABOUT SHARE CLASSES
.. Effective 9/30/03, Class B shares are not available as an investment for
retirement plans maintained pursuant to Section 401 of the Internal Revenue
Code, including 401(k) plans, money purchase pension plans and profit sharing
plans. Plans that have existing accounts invested in Class B shares will
continue to be allowed to make additional purchases.
.. Investor Class shares are closed to most investors. For more information on
who may continue to invest in the Investor Class shares, please see the
prospectus.
PRINCIPAL RISKS OF INVESTING IN THE FUND
.. Investing in small and mid-size companies involves risks not associated with
investing in more established companies, including business risk, significant
stock price fluctuations and illiquidity.
.. At any given time, the Fund may be subject to sector risk, which means a
certain sector may underperform other sectors or the market as a whole. The Fund
is not limited with respect to the sectors in which it can invest.
.. By concentrating on a small number of holdings, the Fund carries greater risk
because each investment has a greater effect on the fund's overall performance.
.. International investing presents certain risks not associated with investing
solely in the United States. These include risks relating to fluctuations in the
value of the U.S. dollar relative to the values of other currencies, the custody
arrangements made for the Fund's foreign holdings, differences in accounting,
political risks and the lesser degree of public information required to be
provided by non-U.S. companies. The Fund may invest 100% of its assets in the
securities of non-U.S. issuers.
ABOUT INDEXES USED IN THIS REPORT
.. The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500
- --registered trademark-- Index) is an index of common stocks frequently used as
a general measure of U.S. stock market performance.
.. The unmanaged Russell Midcap --registered trademark-- Growth Index is a subset
of the Russell Midcap --registered trademark-- Index, which represents the
performance of the stocks of domestic mid-capitalization companies; the Growth
subset measures the performance of Russell Midcap companies with higher price/
book ratios and higher forecasted growth values.
.. The unmanaged Lipper Mid-Cap Growth Fund Index represents an average of the
performance of the 30 largest mid-capitalization growth funds tracked by Lipper,
Inc., an independent mutual fund performance monitor.
.. The Fund is not managed to track the performance of any particular index,
including the indexes defined here, and consequently, the performance of the
Fund may deviate significantly from the performance of the indexes.
.. A direct investment cannot be made in an index. Unless otherwise indicated,
index results include reinvested dividends, and they do not reflect sales
charges. Performance of an index of funds reflects fund expenses; performance of
a market index does not.
OTHER INFORMATION
.. The returns shown in the Management's Discussion of Fund Performance are based
on net asset values calculated for shareholder transactions. Generally accepted
accounting principles require adjustments to be made to the net assets of the
Fund at period end for financial reporting purposes, and as such, the net asset
values for shareholder transactions and the returns based on those net asset
values may differ from the net asset values and returns reported in the
Financial Highlights.
.. Industry classifications used in this report are generally according to the
Global Industry Classification Standard, which was developed by and is the
exclusive property and a service mark of Morgan Stanley Capital International
Inc. and Standard & Poor's.
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the 1st and 3rd quarters of each fiscal year
on Form N-Q. The Fund's Form N-Q filings are available on the SEC's Web site,
sec.gov. Copies of the Fund's Forms N-Q may be reviewed and copied at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549-0102.
You can obtain information on the operation of the Public Reference Room,
including information about duplicating fee charges, by calling 1-202-942-8090
or by electronic request at the following E-mail address: publicinfo@sec.gov.
The SEC file numbers for the Fund are 811-1540 and 2-27334. The Fund's most
recent portfolio holdings, as filed on Form N-Q, are also available at
AIMinvestments.com.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, by calling 800-959-4246, or on the AIM Web site,
AIMinvestments.com. Scroll down on the home page and click on AIM Funds Proxy
Voting Policies.
Information regarding how the Fund voted proxies related to its portfolio
securities during the 12 months ended 6/30/04 is available at our Web site. Go
to AIMinvestments.com, access the About Us tab, click on Required Notices and
then click on Proxy Voting Activity. Next, select the Fund from the drop-down
menu.
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND
PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES
AND EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
AIMINVESTMENTS.COM
AIM MID CAP STOCK FUND
[GRAHAM PHOTO]
ROBERT H. GRAHAM
[WILLIAMSON PHOTO]
MARK H. WILLIAMSON
[CROCKETT PHOTO]
BRUCE L. CROCKETT
Dear Fellow Shareholder of The AIM Family of Funds --registered trademark-- :
NEW BOARD CHAIR
It is our pleasure to introduce you to Bruce Crockett, the new Chair of the
Board of Trustees of the AIM Funds. Bob Graham has served as Chairman of the
Board of Trustees of the AIM Funds ever since Ted Bauer retired from that
position in 2000. However, as you may be aware, the U.S. Securities and Exchange
Commission recently adopted a rule requiring that an independent Fund trustee,
meaning a trustee who is not an officer of the Fund's investment advisor, serve
as Chair of the Funds' Board. In addition, a similar provision was included in
the terms of AIM Advisors' recent settlements with certain regulators.
Accordingly, the AIM Funds' Board elected Mr. Crockett, one of the 13
independent trustees on the AIM Funds' Board, as Chair. His appointment became
effective on October 4, 2004. Mr. Graham remains on the Funds' Board as Vice
Chair and President, as does Mark Williamson, President and Chief Executive
Officer of AIM Investments --registered trademark--. Mr. Graham also remains
Chair of AIM Investments.
Mr. Crockett has been a member of the AIM Funds' Board since 1992, when AIM
acquired certain funds that had been advised by CIGNA. He had been a member of
the board of those funds since 1978. Mr. Crockett has more than 30 years of
experience in finance and general management and has been Chairman of Crockett
Technologies Associates since 1996. He is the first independent Chair of the
Funds' Board in AIM's history, as he is not affiliated with AIM or AMVESCAP in
any way. He is committed to ensuring that the AIM Funds adhere to the highest
standards of corporate governance for the benefit of Fund shareholders, and we
at AIM share that commitment.
MARKET CONDITIONS DURING THE FISCAL YEAR
After rising 9.23% in the fourth quarter of 2004, the S&P 500 Index declined by
2.44% in January 2005. The market's January performance disappointed some
investors who were looking for the so-called "January effect," in which positive
returns in January supposedly portend a strong stock market for the full year.
Nonetheless, many equity investors took comfort in the fact that the S&P 500
Index rose 8.15% for the six months covered by this report.
Bond returns were solid despite the fact that the U.S. Federal Reserve
began raising short-term interest rates during 2004. For the six-month reporting
period, the Lehman U.S. Aggregate Bond Index, which represents the performance
of investment-grade bonds, returned 3.81%; the Lehman High Yield Index, which
represents the performance of high yield securities, rose 8.03%; and the Lehman
Municipal Bond Index, which represents the performance of investment-grade
municipal securities, rose 4.80%. (All three Lehman indexes are compiled by
Lehman Brothers, the global investment bank.)
All in all, 2004 was a good year for most American investors. Profit growth
of U.S. corporations was generally positive, and the decline in the value of the
dollar boosted returns from foreign holdings. U.S. gross domestic product (GDP)
grew 4.4% for all of 2004. Business economists responding to a December 2004
BusinessWeek survey foresaw GDP growth of 3.5% in 2005, a level higher than the
post-World War II average of 3.4%. Also, the Institute for Supply Management's
manufacturing and nonmanufacturing indexes--based on surveys of purchasing
managers in industries that together cover more than 70% of the U.S.
economy--both continued to rise during February and remained in very strong
territory.
Of course, none of this can guarantee that 2005 will be another year of
positive returns for equity or fixed-income investors. Over the short term, the
only sure thing about the markets is their unpredictability. Hence, we have
always urged shareholders to maintain a long-term investment perspective, to
make sure their portfolio of investments is suitably diversified, and to contact
their financial advisors any time they have questions or concerns about their
investments or the markets.
YOUR FUND
The following pages present a discussion of how your Fund invests, how it
performed compared to pertinent benchmarks during the reporting period and how
it has performed over the long term. We hope you find this information helpful.
We also encourage you to visit AIMinvestments.com often. Updated information on
your Fund is always available there, as well as general information on a variety
of investing topics.
As always, AIM remains committed to building solutions for your investment
goals, and we thank you for your continued participation in AIM Investments. If
you have any questions, please contact our Client Service representatives at
800-959-4246.
Sincerely,
/S/ ROBERT H. GRAHAM /S/ MARK H. WILLIAMSON
Robert H. Graham Mark H. Williamson
Chair, AIM Investments CEO & President, AIM Investments
President & Vice Chair, AIM Funds Trustee, AIM Funds
March 1, 2005
AIM Investments is a registered service mark of A I M Management Group Inc. A I
M Advisors, Inc. and A I M Capital Management, Inc. are the investment advisors
and A I M Distributors, Inc. is the distributor for the retail funds represented
by AIM Investments.
AIM MID CAP STOCK FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
Stocks, as measured by most domestic market indexes, rallied in the fourth
quarter of 2004. The market upswing, combined with strong stock selection,
enabled the fund to post double-digit returns for the six months ended January
31, 2005.
FUND VS. INDEXES
Total returns, 7/31/04-1/31/05, excluding applicable sales charges. If sales
charges were included, returns would be lower.
Class A Shares 14.19%
Class B Shares 13.83
Class C Shares 13.84
Investor Class Shares 14.29
S&P 500 Index (Broad-Market Index) 8.15
Russell Midcap Growth Index
(Style-specific Index) 13.61
Lipper Mid-Cap Growth Fund Index
(Peer Group Index) 12.83
Source: Lipper, Inc.
Investor preference for mid-cap stocks over large-cap stocks helped the
Fund outperform the large-cap oriented S&P 500 Index. Strong stock selection
helped the Fund outperform the Russell Midcap Growth Fund Index and the Lipper
Mid-Cap Growth Fund Index. In addition, our focus on attractively valued growth
stocks helped the Fund outperform the Lipper Mid-Cap Growth Fund Index because
of the generally attractive risk/reward characteristics of the holdings in the
portfolio.
HOW WE INVEST
The Fund's current management team assumed its duties effective July 16, 2004.
We use a bottom-up approach to investing, selecting stocks based on an
evaluation of individual companies. We have worked to position the fund solidly
within the mid-cap category by reducing or eliminating our holdings in several
large-cap companies. We also are conscious of selecting growth stocks that we
consider attractively valued.
We strive to produce consistent returns over the long-term by adhering to
our investment process in all market environments. Our investment process
involves:
.. Identifying mid-cap companies that we believe have sustainable revenue and
earnings growth and attractive financial returns;
.. Applying fundamental research to identify stocks with sustainable growth as
demonstrated by sales unit growth, strong pricing power, stable to increasing
operating margins and production of free cash flow;
.. Using a variety of valuation techniques to determine target buy prices and a
company's valuation upside and downside potential.
MARKET CONDITIONS AND YOUR FUND
Stocks, as measured by the S&P 500 Index, rose over the six-month reporting
period, as major economic indicators were generally positive. Gross domestic
product, the broadest measure of overall economic activity, rose at annualized
rates of 4.0% and 3.8% in the third and fourth quarters of 2004, respectively.
In its January 2005 Beige Book report, the U.S. Federal Reserve Board noted that
"economic activity continued to expand from late November to early January."
Most of the S&P 500 Index's gains were recorded in the fourth quarter of
2004. The index rose after the price of oil peaked in October and the U.S.
presidential campaign drew to a close. The Fund was in a favorable position to
take advantage of this rally.
During the reporting period, mid-cap value stocks outperformed mid-cap
growth stocks. Our focus on stocks with attractive valuations enhanced Fund
performance. We observed that with the exception of the fourth quarter of 2004,
investors were concerned about the potential effect of rising oil prices, a
weakening U.S. dollar and economic uncertainty on stock prices; consequently,
investors tended to favor the perceived safety of stocks that were considered
undervalued relative to the rest of the market. The Fund also benefited from its
higher quality core holdings which tended to be less volatile. Sectors that
contributed the most to Fund performance were consumer discretionary,
information technology, health care and financials.
The Fund benefited from its overweight position relative to the index and
strong stock selection in financials, health care, telecommunication services
and information technology. Health care rallied following the conclusion of the
U.S. presidential campaign in November 2004. Information technology also
PORTFOLIO COMPOSITION
By sector
[PIE CHART]
Information Technology 21.4%
Financials 10.7%
Health Care 16.3%
Utilities 0.7%
Money Market Funds and
Other Assets Less Liabilities 3.8%
Materials 3.1%
Industrials 11.9%
Telecommunication Services 3.5%
Consumer Discretionary 19.5%
Consumer Staples 3.1%
Energy 6.0%
TOP 10 EQUITY HOLDINGS*
1. Royal Caribbean Cruises Ltd.
(Liberia) 1.3%
2. Williams Cos., Inc. (The) 1.3
3. Robinson (C.H.) Worldwide, Inc. 1.2
4. Scientific Games Corp.-Class A 1.2
5. Hilton Hotels Corp. 1.2
6. Jarden Corp. 1.2
7. Harris Corp. 1.1
8. Corrections Corp. of America 1.1
9. CB Richard Ellis Group, Inc.-
Class A 1.1
10. Career Education Corp. 1.1
TOP 10 INDUSTRIES*
1. Health Care Services 4.6%
2. Communications Equipment 4.5
3. Diversified Commercial Services 4.3
4. Health Care Equipment 3.9
5. Biotechnology 3.5
6. Wireless Telecommunication
Services 3.5
7. Real Estate 3.3
8. Semiconductors 2.8
9. Application Software 2.7
10. Oil & Gas Equipment & Services 2.6
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.
2
rallied in the fourth quarter after struggling for much of the year. Although
telecommunication services represented a relatively small weighting in both the
portfolio and the index, it was among the best-performing market sectors for the
reporting period.
Consumer discretionary, industrials and materials were the only sectors
where the Fund underperformed the Russell Midcap Growth Index. The Fund was
underweight relative to the index in consumer discretionary, and this detracted
from portfolio performance relative to the benchmark. We did not own many of the
media stocks that rebounded during the fourth quarter after lagging for much of
2004. Within industrials, our underweight positions in the commercial services
and supplies and electrical equipment industries adversely affected Fund
performance relative to the Russell Midcap Growth Index.
CB Richard Ellis Group, a company reflective of our investment discipline,
was a strong contributor to Fund performance. An industry leader, CB Richard
Ellis Group is the world's largest commercial real estate services company with
operations in more than 48 countries. Because of its size and global presence,
the company is often able to provide a broader range of expertise and services
than many of its smaller competitors.
Autodesk, a maker of computer-aided design software used by architects and
engineers, also enhanced Fund performance. The company benefited from increased
demand for its software. One of the key factors that we look for in selecting
holdings for the fund is a potential catalyst for future growth. We believe the
management team of this company is committed to improving the profitability of
its business, as illustrated by the successful implementation of a business
model that places greater emphasis on selling upgrades of the firm's software
and collecting ongoing maintenance fees from its customers.
Detracting from performance were Internet service provider United Online
and Iron Mountain, a records and information management company. In August,
United Online's stock declined after the company's third-quarter revenue
forecast was lower than analysts had estimated, and management reported
weaker-than-expected subscriber numbers. We sold this holding in the third
quarter of 2004.
Iron Mountain declined following the company's announcement of
lower-than-anticipated profit margins in the company's U.S. paper-based records
management business. While this is a relevant issue in the short term, we
continued to hold the stock as we believe the company could benefit from
increased demand for its services because of expanding record retention
requirements stemming from heightened regulations in certain industries.
TOTAL NET ASSETS $33.4 million
TOTAL NUMBER OF HOLDINGS* 119
IN CLOSING
We are pleased to have provided positive returns for our investors for the
reporting period. We are always striving to improve performance while adhering
to the Fund's investment discipline, which focuses on the attractively priced
stocks of mid-cap companies with the potential to deliver sustainable earnings
growth. We appreciate your continued participation in AIM Mid Cap Stock Fund.
The views and opinions expressed in Management's Discussion of Fund Performance
are those of A I M Advisors, Inc. These views and opinions are subject to change
at any time based on factors such as market and economic conditions. These views
and opinions may not be relied upon as investment advice or recommendations, or
as an offer for a particular security. The information is not a complete
analysis of every aspect of any market, country, industry, security or the Fund.
Statements of fact are from sources considered reliable, but A I M Advisors,
Inc. makes no representation or warranty as to their completeness or accuracy.
Although historical performance is no guarantee of future results, these
insights may help you understand our investment management philosophy.
See important Fund and index disclosures inside front cover.
[RASPLICKA PHOTO]
PAUL J. RASPLICKA, Chartered Financial Analyst and Senior Portfolio Manager, is
lead manager of AIM Mid Cap Stock Fund. Mr. Rasplicka began his investment
career in 1982. A native of Denver, Mr. Rasplicka is a magna cum laude graduate
of the University of Colorado at Boulder with a B.S. in business administration.
He received an M.B.A. from the University of Chicago. He is also a Chartered
Investment Counselor.
[CHAPMAN PHOTO]
MICHAEL CHAPMAN, Chartered Financial Analyst and Portfolio Manager, began his
investment career in 1995. He joined AIM in 2001 and is a manager of AIM Mid Cap
Stock Fund. Mr. Chapman has a B.S. in petroleum engineering and an M.A. in
energy and mineral resources from the University of Texas.
Assisted by the Mid-Cap Growth/GARP Team
[RIGHT ARROW GRAPHIC]
For a presentation of your Fund's long-term performance record, please turn to
page 5.
3
AIM MID CAP STOCK FUND
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments; contingent
deferred sales charges on redemptions; and redemption fees, if any; and (2)
ongoing costs, including management fees; distribution and/or service fees
(12b-1); and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period, August 1, 2004, to January 31, 2005.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The Fund's actual cumulative total returns at net asset value after
expenses for the six months ended January 31, 2005, appear in the table "Fund
vs. Indexes" on page 2. The hypothetical account values and expenses may not be
used to estimate your actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example with
the 5% hypothetical examples that appear in the shareholder reports of the other
funds.
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
ACTUAL HYPOTHETICAL
(5% annual return before expenses)
----------------------------- ----------------------------------
Beginning Account Ending Account Expenses Ending Account Expenses
Share Value Value Paid During Value Paid During
Class (08/01/04) (01/31/05)/1/ Period/2/ (01/31/05) Period/2/
- -------- ----------------- -------------- ----------- ------------------ -------------
A $ 1,000.00 $ 1,141.90 $ 8.91 $ 1,016.89 $ 8.39
B 1,000.00 1,138.30 12.40 1,013.61 11.67
C 1,000.00 1,138.40 12.40 1,013.61 11.67
Investor 1,000.00 1,142.90 8.37 1,017.39 7.88
/1/The actual ending account value is based on the actual total return of the
Fund for the period August 1, 2004, to January 31, 2005, after actual expenses
and will differ from the hypothetical ending account value which is based on the
Fund's expense ratio and a hypothetical annual return of 5% before expenses. The
Fund's actual cumulative total returns at net asset value after expenses for the
six months ended January 31, 2005, appear in the table "Fund vs. Indexes" on
page 2.
/2/Expenses are equal to the Fund's annualized expense ratio (1.65%, 2.30%,
2.30%, and 1.55% for Class A, Class B, Class C, and Investor Class shares,
respectively) multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
[ARROW
BUTTON For More Information Visit
IMAGE] AIMINVESTMENTS.COM
4
AIM MID CAP STOCK FUND
YOUR FUND'S LONG-TERM PERFORMANCE
Below you will find a presentation of your Fund's performance record for periods
ended 1/31/05, the close of the six-month period covered by this report.
Please read the important disclosure accompanying these tables, which explains
how Fund performance is calculated and the sales charges, if any, that apply to
the share class in which you are invested.
AVERAGE ANNUAL TOTAL RETURNS
As of 1/31/05, including applicable sales charges
Class A Shares
Inception (10/1/01) 10.98%
1 Year 2.06
Class B Shares
Inception (10/1/01) 11.38%
1 Year 2.25
Class C Shares
Inception (10/1/01) 11.88%
1 Year 6.29
Investor Class Shares
Inception (9/3/02) 18.97%
1 Year 8.15
In addition to returns as of the close of the reporting period, industry
regulations require us to provide average annual total returns as of 12/31/04,
the most recent calendar quarter-end.
AVERAGE ANNUAL TOTAL RETURNS
As of 12/31/04, including applicable sales charges
Class A Shares
Inception (10/1/01) 11.74%
1 Year 6.27
Class B Shares
Inception (10/1/01) 12.20%
1 Year 6.72
Class C Shares
Inception (10/1/01) 12.71%
1 Year 10.87
Investor Class Shares
Inception (9/3/02) 20.43%
1 Year 12.65
The performance data quoted represent past performance and cannot guarantee
comparable future results; current performance may be lower or higher. Please
visit AIMinvestments.com for the most recent month-end performance. Performance
figures reflect reinvested distributions, changes in net asset value and the
effect of the maximum sales charge unless otherwise stated. Investment return
and principal value will fluctuate so that you may have a gain or loss when you
sell shares.
Class A share performance reflects the maximum 5.50% sales charge, and
Class B and Class C share performance reflects the applicable contingent
deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares
declines from 5% beginning at the time of purchase to 0% at the beginning of the
seventh year. The CDSC on Class C shares is 1% for the first year after
purchase. Investor Class shares do not have a front-end sales charge or a CDSC;
therefore, performance is at net asset value.
The performance of the fund's share classes will differ due to different
sales charge structures and class expenses.
Had the advisor not waived fees and/or reimbursed expenses, performance
would have been lower.
5
SUPPLEMENT TO SEMIANNUAL REPORT DATED 1/31/05
AIM MID CAP STOCK FUND
INSTITUTIONAL CLASS SHARES
The following information has been prepared to provide Institutional Class
shareholders with a performance overview specific to their holdings.
Institutional Class shares are offered exclusively to institutional investors,
including defined contribution plans that meet certain criteria.
=====================================================
AVERAGE ANNUAL TOTAL RETURNS
For periods ended 1/31/05
Inception (9/9/98) 11.33%
5 Years 3.43
1 Year 8.30
6 Months* 14.42
=====================================================
AVERAGE ANNUAL TOTAL RETURNS
For periods ended 12/31/04, most recent
calendar quarter-end
Inception (9/9/98) 11.73%
5 Years 3.60
1 Year 12.85
6 Months* 8.71
* Cumulative total return that has not been annualized
=====================================================
Institutional Class shares have no sales charge; therefore, performance is at
NAV. Performance of Institutional Class shares will differ from performance of
other share classes due to differing sales charges and class expenses.
Had the advisor not waived fees and/or reimbursed expenses, performance
would have been lower.
Please note that past performance is not indicative of future results. More
recent returns may be more or less than those shown. All returns assume
reinvestment of distributions at net asset value. Investment return and
principal value will fluctuate so your shares, when redeemed, may be worth more
or less than their original cost. See full report for information on comparative
benchmarks. Please consult your fund prospectus for more information. For the
most current month-end performance, please call 800-525-8085 or visit
AIMinvestments.com.
Over for information on your fund's expenses.
FOR INSTITUTIONAL INVESTOR USE ONLY
This material is for institutional investor use only and may not be quoted,
reproduced or shown to the public, nor used in written form as sales literature
for public use.
[YOUR GOALS. OUR SOLUTIONS.] [AIM INVESTMENTS LOGO]
- REGISTERED TRADEMARK - - REGISTERED TRADEMARK -
AIMINVESTMENTS.COM I-MCS-INS-2
INFORMATION ABOUT YOUR FUND'S EXPENSES
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 August 1, 2004, to January 31, 2005.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The Fund's actual cumulative total return after expenses for the six
months ended January 31, 2005, appears in the table on the front of this
supplement. The hypothetical account values and expenses may not be used to
estimate your 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.
==========================================================================================================
ACTUAL HYPOTHETICAL
(5% ANNUAL RETURN
BEFORE EXPENSES)
BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES ENDING ACCOUNT EXPENSES
VALUE VALUE PAID DURING VALUE PAID DURING
(8/1/04) (1/31/05)/1/ PERIOD/2/ (1/31/05) PERIOD/2/
Institutional Class $ 1,000.00 $ 1,144.30 $ 7.03 $ 1,018.65 $ 6.61
/1/The actual ending account value is based on the actual total return of the
Fund for the period August 1, 2004, to January 31, 2005, after actual expenses
and will differ from the hypothetical ending account value which is based on the
Fund's expense ratio and a hypothetical annual return of 5% before expenses. The
Fund's actual cumulative total return after expenses for the six months ended
January 31, 2005, appears in the table on the front of this supplement.
/2/Expenses are equal to the Fund's annualized expense ratio, 1.30% for
Institutional Class shares, multiplied by the average account value over the
period, multiplied by 184/365 (to reflect the one-half year period).
==========================================================================================================
AIMINVESTMENTS.COM I-MCS-INS-2
FINANCIALS
SCHEDULE OF INVESTMENTS
January 31, 2005
(Unaudited)
MARKET
SHARES VALUE
------------------------------------------------------------------------
COMMON STOCKS & OTHER EQUITY
INTERESTS-96.17%
ADVERTISING-1.64%
Omnicom Group Inc. 2,900 $ 246,181
------------------------------------------------------------------------
R.H. Donnelley Corp./(a)/ 5,100 301,920
------------------------------------------------------------------------
548,101
------------------------------------------------------------------------
AEROSPACE & Defense-0.68%
L-3 Communications Holdings, Inc. 3,200 228,512
------------------------------------------------------------------------
AIR FREIGHT & Logistics-1.23%
Robinson (C.H.) Worldwide, Inc. 8,001 412,051
------------------------------------------------------------------------
APPAREL RETAIL-1.99%
Abercrombie & Fitch Co.-Class A 7,200 360,864
------------------------------------------------------------------------
Ross Stores, Inc. 10,600 303,372
------------------------------------------------------------------------
664,236
------------------------------------------------------------------------
APPAREL, ACCESSORIES & Luxury
Goods-1.05%
Polo Ralph Lauren Corp. 9,000 350,550
------------------------------------------------------------------------
APPLICATION SOFTWARE-2.69%
Amdocs Ltd. (United Kingdom)/(a)/ 11,800 351,050
------------------------------------------------------------------------
Autodesk, Inc. 11,100 326,007
------------------------------------------------------------------------
Macromedia, Inc./(a)/ 2,500 85,600
------------------------------------------------------------------------
Mercury Interactive Corp./(a)/ 3,100 135,687
------------------------------------------------------------------------
898,344
------------------------------------------------------------------------
ASSET MANAGEMENT & Custody
Banks-1.65%
Legg Mason, Inc. 3,975 306,989
------------------------------------------------------------------------
T. Rowe Price Group Inc. 4,100 245,385
------------------------------------------------------------------------
552,374
------------------------------------------------------------------------
BIOTECHNOLOGY-3.53%
Affymetrix, Inc./(a)/ 4,600 189,336
------------------------------------------------------------------------
Charles River Laboratories International, Inc./(a)/ 6,100 289,018
------------------------------------------------------------------------
Chiron Corp./(a)/ 4,700 154,395
------------------------------------------------------------------------
Genzyme Corp./(a)/ 4,100 238,661
------------------------------------------------------------------------
Martek Biosciences Corp./(a)/ 5,800 306,356
------------------------------------------------------------------------
1,177,766
------------------------------------------------------------------------
BROADCASTING & Cable TV-0.75%
Scripps Co. (E.W.) (The)-Class A 5,400 250,344
------------------------------------------------------------------------
BUILDING PRODUCTS-0.85%
American Standard Cos. Inc./(a)/ 7,100 284,284
------------------------------------------------------------------------
MARKET
SHARES VALUE
------------------------------------------------------------
CASINOS & Gaming-2.54%
Harrah's Entertainment, Inc. 2,500 $ 158,100
------------------------------------------------------------
Scientific Games Corp.-Class A/(a)/ 15,600 401,232
------------------------------------------------------------
Station Casinos, Inc. 4,700 289,050
------------------------------------------------------------
848,382
------------------------------------------------------------
COMMERCIAL PRINTING-1.06%
Donnelley (R.R.) & Sons Co. 10,600 354,570
------------------------------------------------------------
COMMODITY CHEMICALS-0.91%
Celanese Corp.-Series A/(a)/ 18,900 304,857
------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-4.50%
Avaya Inc./(a)/ 19,100 274,085
------------------------------------------------------------
Avocent Corp./(a)/ 4,500 164,295
------------------------------------------------------------
Corning Inc./(a)/ 13,400 146,596
------------------------------------------------------------
Harris Corp. 5,900 382,143
------------------------------------------------------------
Plantronics, Inc. 8,100 301,401
------------------------------------------------------------
Scientific-Atlanta, Inc. 7,800 236,418
------------------------------------------------------------
1,504,938
------------------------------------------------------------
COMPUTER STORAGE & Peripherals-1.36%
Emulex Corp./(a)/ 10,800 176,796
------------------------------------------------------------
Storage Technology Corp./(a)/ 8,800 277,112
------------------------------------------------------------
453,908
------------------------------------------------------------
CONSTRUCTION & Farm Machinery & Heavy
Trucks-0.18%
PACCAR Inc. 850 60,061
------------------------------------------------------------
CONSUMER FINANCE-0.95%
AmeriCredit Corp./(a)/ 6,700 164,485
------------------------------------------------------------
First Marblehead Corp. (The)/(a)/ 2,400 154,392
------------------------------------------------------------
318,877
------------------------------------------------------------
DATA PROCESSING & Outsourced
Services-2.52%
Alliance Data Systems Corp./(a)/ 7,400 321,308
------------------------------------------------------------
CSG Systems International, Inc./(a)/ 15,900 288,108
------------------------------------------------------------
Iron Mountain Inc./(a)/ 8,250 232,650
------------------------------------------------------------
842,066
------------------------------------------------------------
DEPARTMENT STORES-0.66%
Kohl's Corp./(a)/ 4,700 220,947
------------------------------------------------------------
DISTILLERS & Vintners-1.01%
Constellation Brands, Inc.-Class A/(a)/ 6,500 337,480
------------------------------------------------------------
F-1
MARKET
SHARES VALUE
-----------------------------------------------------------------------
DIVERSIFIED BANKS-0.67%
Centennial Bank Holdings, Inc. (Acquired 12/27/04;
Cost $219,450)/(b)/ 20,900 $ 224,675
-----------------------------------------------------------------------
DIVERSIFIED CHEMICALS-0.96%
Eastman Chemical Co. 5,900 319,485
-----------------------------------------------------------------------
DIVERSIFIED COMMERCIAL SERVICES-4.33%
Apollo Group, Inc.-Class A/(a)/ 3,015 235,743
-----------------------------------------------------------------------
Career Education Corp./(a)/ 9,000 362,610
-----------------------------------------------------------------------
Cintas Corp. 7,200 313,200
-----------------------------------------------------------------------
Corrections Corp. of America/(a)/ 9,200 378,028
-----------------------------------------------------------------------
Jackson Hewitt Tax Service Inc. 7,000 155,960
-----------------------------------------------------------------------
1,445,541
-----------------------------------------------------------------------
DRUG RETAIL-0.96%
Shoppers Drug Mart Corp. (Canada)/(a)/ 10,200 322,205
-----------------------------------------------------------------------
ELECTRONIC EQUIPMENT
MANUFACTURERS-1.49%
Aeroflex Inc./(a)/ 17,300 166,426
-----------------------------------------------------------------------
Amphenol Corp.-Class A/(a)/ 8,400 330,372
-----------------------------------------------------------------------
496,798
-----------------------------------------------------------------------
ELECTRONIC MANUFACTURING
SERVICES-0.93%
Benchmark Electronics, Inc./(a)/ 9,700 310,109
-----------------------------------------------------------------------
EMPLOYMENT SERVICES-0.92%
Manpower Inc. 6,300 306,495
-----------------------------------------------------------------------
ENVIRONMENTAL SERVICES-1.07%
Republic Services, Inc. 3,200 105,504
-----------------------------------------------------------------------
Stericycle, Inc./(a)/ 4,900 252,007
-----------------------------------------------------------------------
357,511
-----------------------------------------------------------------------
GENERAL MERCHANDISE STORES-1.68%
Dollar General Corp. 13,000 262,730
-----------------------------------------------------------------------
Dollar Tree Stores, Inc./(a)/ 11,000 299,530
-----------------------------------------------------------------------
562,260
-----------------------------------------------------------------------
HEALTH CARE DISTRIBUTORS-1.21%
Henry Schein, Inc./(a)/ 4,700 319,882
-----------------------------------------------------------------------
Omnicare, Inc. 2,700 83,025
-----------------------------------------------------------------------
402,907
-----------------------------------------------------------------------
HEALTH CARE EQUIPMENT-3.94%
Bio-Rad Laboratories-Class A/(a)/ 2,700 158,733
-----------------------------------------------------------------------
Fisher Scientific International Inc./(a)/ 4,200 265,230
-----------------------------------------------------------------------
Kinetic Concepts, Inc./(a)/ 4,400 286,000
-----------------------------------------------------------------------
PerkinElmer, Inc. 13,000 298,870
-----------------------------------------------------------------------
Waters Corp./(a)/ 6,300 309,204
-----------------------------------------------------------------------
1,318,037
-----------------------------------------------------------------------
MARKET
SHARES VALUE
-----------------------------------------------------------
HEALTH CARE FACILITIES-1.26%
Community Health Systems Inc./(a)/ 11,500 $ 333,270
-----------------------------------------------------------
VCA Antech, Inc./(a)/ 4,700 87,185
-----------------------------------------------------------
420,455
-----------------------------------------------------------
HEALTH CARE SERVICES-4.58%
Caremark Rx, Inc./(a)/ 8,000 312,800
-----------------------------------------------------------
Covance Inc./(a)/ 5,400 229,500
-----------------------------------------------------------
DaVita, Inc./(a)/ 7,900 331,484
-----------------------------------------------------------
Express Scripts, Inc./(a)/ 4,300 319,017
-----------------------------------------------------------
Renal Care Group, Inc./(a)/ 8,800 335,808
-----------------------------------------------------------
1,528,609
-----------------------------------------------------------
HEALTH CARE SUPPLIES-0.85%
Cooper Cos., Inc. (The) 3,700 283,790
-----------------------------------------------------------
HOME FURNISHINGS-0.90%
Tempur-Pedic International Inc./(a)/ 14,100 301,599
-----------------------------------------------------------
HOMEBUILDING-0.79%
Pulte Homes, Inc. 4,000 264,320
-----------------------------------------------------------
HOTELS, RESORTS & Cruise Lines-2.50%
Hilton Hotels Corp. 17,600 391,600
-----------------------------------------------------------
Royal Caribbean Cruises Ltd. (Liberia) 8,400 445,200
-----------------------------------------------------------
836,800
-----------------------------------------------------------
HOUSEWARES & Specialties-2.15%
Jarden Corp./(a)/ 8,500 391,000
-----------------------------------------------------------
Yankee Candle Co., Inc. (The)/(a)/ 10,000 327,600
-----------------------------------------------------------
718,600
-----------------------------------------------------------
HYPERMARKETS & Super Centers-0.74%
BJ's Wholesale Club, Inc./(a)/ 8,600 246,046
-----------------------------------------------------------
INDUSTRIAL GASES-0.69%
Praxair, Inc. 5,350 230,853
-----------------------------------------------------------
INDUSTRIAL MACHINERY-1.55%
Eaton Corp. 3,700 251,563
-----------------------------------------------------------
Ingersoll-Rand Co.-Class A (Bermuda) 3,600 267,768
-----------------------------------------------------------
519,331
-----------------------------------------------------------
INSURANCE BROKERS-0.98%
Willis Group Holdings Ltd. (Bermuda) 8,500 328,780
-----------------------------------------------------------
INTEGRATED OIL & Gas-0.94%
Murphy Oil Corp. 3,500 312,480
-----------------------------------------------------------
INTERNET SOFTWARE & Services-2.10%
Ask Jeeves, Inc./(a)/ 5,200 147,472
-----------------------------------------------------------
Digital River, Inc./(a)/ 7,100 277,681
-----------------------------------------------------------
VeriSign, Inc./(a)/ 10,700 276,488
-----------------------------------------------------------
701,641
-----------------------------------------------------------
F-2
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
INVESTMENT COMPANIES--EXCHANGE TRADED
FUNDS-0.47%
iShares Nasdaq Biotechnology Index Fund-Institutional
Shares/(a)/ 2,200 $ 156,728
- --------------------------------------------------------------------------------
LEISURE PRODUCTS-1.01%
Brunswick Corp. 7,300 336,676
- --------------------------------------------------------------------------------
METAL & Glass Containers-0.50%
Pactiv Corp./(a)/ 7,500 166,575
- --------------------------------------------------------------------------------
MULTI-LINE INSURANCE-0.52%
Quanta Capital Holdings Ltd. (Bermuda)/(a)/ 17,800 174,440
- --------------------------------------------------------------------------------
MULTI-UTILITIES & Unregulated Power-0.73%
Questar Corp. 4,800 243,840
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS-0.47%
Zebra Technologies Corp.-Class A/(a)/ 3,100 157,883
- --------------------------------------------------------------------------------
OIL & GAS DRILLING-0.73%
Noble Corp. (Cayman Islanda)/(a)/ 4,600 245,410
- --------------------------------------------------------------------------------
OIL & GAS EQUIPMENT & SERVICES-2.63%
Halliburton Co. 7,300 300,249
- --------------------------------------------------------------------------------
National-Oilwell, Inc./(a)/ 8,800 324,544
- --------------------------------------------------------------------------------
Weatherford International Ltd. (Bermuda)/(a)/ 4,700 255,069
- --------------------------------------------------------------------------------
879,862
- --------------------------------------------------------------------------------
OIL & GAS EXPLORATION & PRODUCTION-0.42%
W&T Offshore, Inc./(a)/ 7,700 140,140
- --------------------------------------------------------------------------------
OIL & GAS REFINING, MARKETING &
TRANSPORTATION-1.27%
Williams Cos., Inc. (The) 25,200 423,612
- --------------------------------------------------------------------------------
OTHER DIVERSIFIED FINANCIAL SERVICES-1.07%
CapitalSource Inc./(a)/ 15,200 358,872
- --------------------------------------------------------------------------------
PHARMACEUTICALS-0.95%
Shire Pharmaceuticals Group PLC-ADR (United Kingdom) 9,100 318,500
- --------------------------------------------------------------------------------
REAL ESTATE-3.27%
Aames Investment Corp. 27,900 292,671
- --------------------------------------------------------------------------------
KKR Financial Corp. (Acquired 08/05/04; Cost $201,000)/(b)/ 20,100 216,075
- --------------------------------------------------------------------------------
New Century Financial Corp. 5,400 323,406
- --------------------------------------------------------------------------------
People's Choice Financial Corp. (Acquired 12/21/04; Cost
$254,000)/(a)(b)/ 25,400 260,350
- --------------------------------------------------------------------------------
1,092,502
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
--------------------------------------------------------------------------
REAL ESTATE MANAGEMENT &
DEVELOPMENT-1.12%
CB Richard Ellis Group, Inc.-Class A/(a)/ 10,700 $ 374,393
--------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT-2.07%
KLA-Tencor Corp./(a)/ 7,400 342,250
--------------------------------------------------------------------------
Novellus Systems, Inc./(a)/ 13,400 350,410
--------------------------------------------------------------------------
692,660
--------------------------------------------------------------------------
SEMICONDUCTORS-2.77%
ATI Technologies Inc. (Canada)/(a)/ 18,600 322,338
--------------------------------------------------------------------------
Microchip Technology Inc. 10,725 279,386
--------------------------------------------------------------------------
National Semiconductor Corp. 19,200 325,056
--------------------------------------------------------------------------
926,780
--------------------------------------------------------------------------
SOFT DRINKS-0.41%
Cott Corp. (Canada)/(a)/ 5,600 135,800
--------------------------------------------------------------------------
SPECIALTY STORES-1.81%
Advance Auto Parts, Inc./(a)/ 6,700 288,770
--------------------------------------------------------------------------
Williams-Sonoma, Inc./(a)/ 9,100 314,860
--------------------------------------------------------------------------
603,630
--------------------------------------------------------------------------
TECHNOLOGY DISTRIBUTORS-0.49%
CDW Corp. 2,800 163,800
--------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION
SERVICES-3.52%
American Tower Corp.-Class A/(a)/ 16,500 298,980
--------------------------------------------------------------------------
Nextel Partners, Inc.-Class A/(a)/ 16,400 326,196
--------------------------------------------------------------------------
NII Holdings Inc./(a)/ 5,200 279,760
--------------------------------------------------------------------------
SpectraSite, Inc./(a)/ 4,600 269,560
--------------------------------------------------------------------------
1,174,496
--------------------------------------------------------------------------
Total Common Stocks & Other Equity Interests
(Cost $28,800,972) 32,138,574
--------------------------------------------------------------------------
MONEY MARKET FUNDS-3.32%
Premier Portfolio (Cost $1,108,596)/(c)(d)/ 1,108,596 1,108,596
--------------------------------------------------------------------------
TOTAL INVESTMENTS-99.49% (Cost $29,909,568) 33,247,170
--------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-0.51% 168,754
--------------------------------------------------------------------------
NET ASSETS-100.00% $ 33,415,924
--------------------------------------------------------------------------
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at January 31, 2005 was
$701,000, which represented 2.10% of the Fund's Net Assets. These
securities are considered to be illiquid.
(c) Effective October 15, 2004, INVESCO Treasurer's Money Market Reserve Fund
was renamed Premier Portfolio.
(d) The money market fund and the Fund are affiliated by having the same
investment advisor. See Note 3.
See accompanying notes which are an integral part of the financial statements.
F-3
STATEMENT OF ASSETS AND LIABILITIES
January 31, 2005
(Unaudited)
ASSETS:
Investments, at market value (cost $28,800,972) $32,138,574
- -----------------------------------------------------------------------------------
Investments in affiliated money market funds (cost $1,108,596) 1,108,596
- -----------------------------------------------------------------------------------
Total investments (cost $29,909,568) 33,247,170
- -----------------------------------------------------------------------------------
Receivables for:
Investments sold 449,811
- -----------------------------------------------------------------------------------
Fund shares sold 410,412
- -----------------------------------------------------------------------------------
Dividends 3,139
- -----------------------------------------------------------------------------------
Investment for trustee deferred compensation and retirement plans 5,546
- -----------------------------------------------------------------------------------
Other assets 36,955
- -----------------------------------------------------------------------------------
Total assets 34,153,033
- -----------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 631,144
- -----------------------------------------------------------------------------------
Fund shares reacquired 40,373
- -----------------------------------------------------------------------------------
Trustee deferred compensation and retirement plans 5,714
- -----------------------------------------------------------------------------------
Accrued distribution fees 10,595
- -----------------------------------------------------------------------------------
Accrued trustees' fees 877
- -----------------------------------------------------------------------------------
Accrued transfer agent fees 6,974
- -----------------------------------------------------------------------------------
Accrued operating expenses 41,432
- -----------------------------------------------------------------------------------
Total liabilities 737,109
- -----------------------------------------------------------------------------------
Net assets applicable to shares outstanding $33,415,924
- -----------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Shares of beneficial interest $28,977,704
- -----------------------------------------------------------------------------------
Undistributed net investment income (loss) (141,787)
- -----------------------------------------------------------------------------------
Undistributed net realized gain from investment securities and foreign
currencies 1,242,405
- -----------------------------------------------------------------------------------
Unrealized appreciation of investment securities 3,337,602
- -----------------------------------------------------------------------------------
$33,415,924
- -----------------------------------------------------------------------------------
NET ASSETS:
Class A $9,142,944
----------------------------------------------------------
Class B $5,282,686
----------------------------------------------------------
Class C $3,277,417
----------------------------------------------------------
Investor Class $6,043,534
----------------------------------------------------------
Institutional Class $9,669,343
----------------------------------------------------------
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES AUTHORIZED:
Class A 518,952
----------------------------------------------------------
Class B 307,081
----------------------------------------------------------
Class C 191,670
----------------------------------------------------------
Investor Class 342,039
----------------------------------------------------------
Institutional Class 544,107
----------------------------------------------------------
Class A :
Net asset value per share $ 17.62
----------------------------------------------------------
Offering price per share:
(Net asset value of $17.62 / 94.50%) $ 18.65
----------------------------------------------------------
Class B :
Net asset value and offering price per share $ 17.20
----------------------------------------------------------
Class C :
Net asset value and offering price per share $ 17.10
----------------------------------------------------------
Investor Class:
Net asset value and offering price per share $ 17.67
----------------------------------------------------------
Institutional Class:
Net asset value and offering price per share $ 17.77
----------------------------------------------------------
See accompanying notes which are an integral part of the financial statements.
F-4
STATEMENT OF OPERATIONS
For the six months ended January 31, 2005
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $58) $ 67,829
- --------------------------------------------------------------------------------------------------
Dividends from affiliated money market funds 11,202
- --------------------------------------------------------------------------------------------------
Total investment income 79,031
- --------------------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 127,550
- --------------------------------------------------------------------------------------------------
Administrative services fees 25,205
- --------------------------------------------------------------------------------------------------
Custodian fees 5,700
- --------------------------------------------------------------------------------------------------
Distribution fees:
Class A 12,880
- --------------------------------------------------------------------------------------------------
Class B 18,703
- --------------------------------------------------------------------------------------------------
Class C 14,792
- --------------------------------------------------------------------------------------------------
Investor Class 6,778
- --------------------------------------------------------------------------------------------------
Transfer agent fees -- Class A, B, C and Investor 30,259
- --------------------------------------------------------------------------------------------------
Transfer agent fees -- Institutional Class 543
- --------------------------------------------------------------------------------------------------
Trustees' fees and retirement benefits 6,905
- --------------------------------------------------------------------------------------------------
Registration and filing fees 51,494
- --------------------------------------------------------------------------------------------------
Professional fees 30,113
- --------------------------------------------------------------------------------------------------
Other 30,167
- --------------------------------------------------------------------------------------------------
Total expenses 361,089
- --------------------------------------------------------------------------------------------------
Less:Fees waived, expenses reimbursed and expense offset arrangements (141,953)
- --------------------------------------------------------------------------------------------------
Net expenses 219,136
- --------------------------------------------------------------------------------------------------
Net investment income (loss) (140,105)
- --------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES AND FOREIGN CURRENCIES:
Net realized gain (loss) from:
Investment securities 1,461,148
- --------------------------------------------------------------------------------------------------
Foreign currencies (3,041)
- --------------------------------------------------------------------------------------------------
1,458,107
- --------------------------------------------------------------------------------------------------
Change in net unrealized appreciation of:
Investment securities 1,971,169
- --------------------------------------------------------------------------------------------------
Foreign currencies 2,843
- --------------------------------------------------------------------------------------------------
1,974,012
- --------------------------------------------------------------------------------------------------
Net gain from investment securities and foreign currencies 3,432,119
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $3,292,014
- --------------------------------------------------------------------------------------------------
See accompanying notes which are an integral part of the financial statements.
F-5
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended January 31, 2005 and the year ended July 31, 2004
(Unaudited)
JANUARY 31, JULY 31,
2005 2004
- -------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $ (140,105) $ (266,290)
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain from investment securities and foreign currencies 1,458,107 2,272,478
- -------------------------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investment securities
and foreign currencies 1,974,012 (380,720)
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 3,292,014 1,625,468
- -------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (25,943) --
- -------------------------------------------------------------------------------------------------------------------------
Class B (13,836) --
- -------------------------------------------------------------------------------------------------------------------------
Class C (10,505) --
- -------------------------------------------------------------------------------------------------------------------------
Investor Class (18,370) --
- -------------------------------------------------------------------------------------------------------------------------
Institutional Class (25,244) --
- -------------------------------------------------------------------------------------------------------------------------
Decrease in net assets resulting from distributions (93,898) --
- -------------------------------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,682,368 (596,196)
- -------------------------------------------------------------------------------------------------------------------------
Class B 1,940,212 181,496
- -------------------------------------------------------------------------------------------------------------------------
Class C 257,394 183,883
- -------------------------------------------------------------------------------------------------------------------------
Investor Class 272,932 889,516
- -------------------------------------------------------------------------------------------------------------------------
Institutional Class 5,942,348 1,550,245
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from share transactions 10,095,254 2,208,944
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 13,293,370 3,834,412
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 20,122,554 16,288,142
- -------------------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment income (loss) of $(141,787)
and $(1,682), respectively) $33,415,924 $20,122,554
- -------------------------------------------------------------------------------------------------------------------------
See accompanying notes which are an integral part of the financial statements.
F-6
NOTES TO FINANCIAL STATEMENTS
January 31, 2005
(Unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Mid Cap Stock Fund, formerly INVESCO Mid-Cap Growth Fund, (the "Fund") is a
series portfolio of AIM Stock 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 four separate portfolios, each authorized to issue an unlimited
number of shares of beneficial interest. The Fund currently consists of
multiple classes of shares. Matters affecting each portfolio or class will be
voted on exclusively by the shareholders of such portfolio or class. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to the Fund.
The Fund's investment objective is to seek long-term capital growth. Each
company listed in the Schedule of Investments is organized in the United States
of America unless otherwise noted.
Under the Trust's organizational documents, each Trustee, officer, employee
or other agent of the Trust (including the Trust's investment manager) is
indemnified against certain liabilities that may arise out of performance of
their duties to the Fund. Additionally, in the normal course of business, the
Fund enters into contracts that contain a variety of indemnification clauses.
The Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred. However, the Fund has not had prior claims or losses pursuant to
these contracts.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of the
significant accounting policies followed by the Fund in the preparation of its
financial statements.
A. SECURITY VALUATIONS -- Securities, including restricted securities, are
valued according to the following policy.
A security listed or traded on an exchange (except convertible bonds) is
valued at its last sales price as of the close of the customary trading
session on the exchange where the security is principally traded, or lacking
any sales on a particular day, the security is valued at the closing bid
price on that day. Each security traded in the over-the-counter market (but
not securities reported on the NASDAQ National Market System) is valued on
the basis of prices furnished by independent pricing services, which may be
considered fair valued, or market makers. Each security reported on the
NASDAQ National Market System is valued at the NASDAQ Official Closing Price
("NOCP") as of the close of the customary trading session on the valuation
date or absent a NOCP, at the closing bid price.
Futures contracts are valued at the final settlement price set by an
exchange on which they are principally traded. Listed options are valued at
the mean between the last bid and the ask prices from the exchange on which
they are principally traded. Options not listed on an exchange are valued by
an independent source at the mean between the last bid and ask prices. For
purposes of determining net asset value per share, futures and option
contracts generally will be valued 15 minutes after the close of the
customary trading session of the New York Stock Exchange ("NYSE").
Investments in open-end registered investment companies and closed-end
registered investment companies that do not trade on an exchange are valued
at the end of day net asset value per share. Investments in closed-end
registered investment companies that trade on an exchange are valued at the
last sales price as of the close of the customary trading session on the
exchange where the security is principally traded.
Debt obligations (including convertible bonds) are fair valued using an
evaluated quote provided by an independent pricing service. Evaluated quotes
provided by the pricing service may be determined without exclusive reliance
on quoted prices, and may reflect appropriate factors such as
institution-size trading in similar groups of securities, developments
related to specific securities, dividend rate, yield, quality, type of
issue, coupon rate, maturity, individual trading characteristics and other
market data. Short-term obligations having 60 days or less to maturity and
commercial paper are valued at amortized cost which approximates market
value.
Securities for which market prices are not provided by any of the above
methods are valued based upon quotes furnished by independent sources and
are valued at the last bid price in the case of equity securities and in the
case of debt obligations, the mean between the last bid and asked prices.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the close
of the NYSE. Generally, trading in foreign securities is substantially
completed each day at various times prior to the close of the NYSE. The
values of such securities used in computing the net asset value of the
Fund's shares are determined as of the close of the respective markets.
Events affecting the values of such foreign securities may occur between the
times at which the particular foreign market closes and the close of the
customary trading session of the NYSE which would not ordinarily be
reflected in the computation of the Fund's net asset value. If the event is
likely to have affected the closing price of the security, the security will
be valued at fair value in good faith using procedures approved by the Board
of Trustees. Adjustments to closing prices to reflect fair value may also be
based on a screening process of an independent pricing service to indicate
the degree of certainty, based on historical data, that the closing price in
the principal market where a foreign security trades is not the current
market value as of the close of the NYSE. Foreign securities meeting the
approved degree of certainty that the price is not reflective of current
market value will be priced at the indication of fair value from the
independent pricing service. Multiple factors may be considered by the
independent pricing service in determining adjustments to reflect fair value
and may include information relating to sector indices, ADRs, domestic and
foreign index futures and exchange-traded funds.
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.
F-7
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income is recorded on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased and/or
a reduction of proceeds on a sale of securities. Such transaction costs are
included in the determination of realized and unrealized gain (loss) from
investment securities reported in the Statement of Operations and the
Statement of Changes in Net Assets and the realized and unrealized net gains
(losses) on securities per share in the Financial Highlights. Transaction
costs are included in the calculation of the Fund's net asset value and,
accordingly, they reduce the Fund's total returns. These transaction costs
are not considered operating expenses and are not reflected in net
investment income reported in the Statement of Operations and Statement of
Changes in Net Assets, or the net investment income per share and ratios of
expenses and net investment income reported in the Financial Highlights, nor
are they limited by any expense limitation arrangements between the Fund and
the advisor.
The Fund allocates income and realized and unrealized capital gains and
losses to a class based on the relative net assets of each class.
C. DISTRIBUTIONS -- Distributions from income and net realized capital gain, if
any, are generally paid annually and recorded on ex-dividend date. The Fund
may elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and, as such, will not be subject to federal
income taxes on otherwise taxable income (including net realized capital
gain) which is distributed to shareholders. Therefore, no provision for
federal income taxes is recorded in the financial statements.
E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund are charged to the operations of such class. Transfer
agency fees and expenses and other shareholder recordkeeping fees and
expenses attributable to the Institutional Class are charged to such class.
Transfer agency fees and expenses and other shareholder recordkeeping fees
and expenses relating to all other classes are allocated among those classes
based on relative net assets. All other expenses are allocated among the
classes based on relative net assets.
F. 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.
G. FOREIGN CURRENCY CONTRACTS -- A foreign currency contract is an obligation
to purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
H. PUT OPTIONS -- The Fund may purchase put options. By purchasing a put
option, the Fund obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for this
right, the Fund pays an option premium. The option's underlying instrument
may be a security or a futures contract. Put options may be used by the Fund
to hedge securities it owns by locking in a minimum price at which the Fund
can sell. If security prices fall, the put option could be exercised to
offset all or a portion of the Fund's resulting losses. At the same time,
because the maximum the Fund has at risk is the cost of the option,
purchasing put options does not eliminate the potential for the Fund to
profit from an increase in the value of the securities hedged. A risk in
buying an option is that the Fund pays a premium whether or not the option
is exercised. In addition, there can be no assurance that a liquid secondary
market will exist for any option purchased or sold.
F-8
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 1.00% of the Fund's
average daily net assets. Effective January 1, 2005 through June 30, 2006, AIM
has contractually agreed to waive advisory fees to the extent necessary so that
the advisory fees payable by the Fund (based on the Fund's average daily net
assets) do not exceed the annual rate of:
NET ASSETS RATE
-------------------------
First $250 million 0.745%
-------------------------
Next $250 million 0.73 %
-------------------------
Next $500 million 0.715%
-------------------------
Next $1.5 billion 0.70 %
-------------------------
Next $2.5 billion 0.685%
-------------------------
Next $2.5 billion 0.67 %
-------------------------
Next $2.5 billion 0.655%
-------------------------
Over $10 billion 0.64 %
-------------------------
AIM has voluntarily agreed to waive advisory fees and/or reimburse expenses
to the extent necessary to limit total annual operating expenses (excluding
certain items discussed below) of Class A, Class B, Class C, Investor Class and
Institutional Class shares to 1.65%, 2.30%, 2.30%, 1.55% and 1.30% of average
daily net assets, respectively. AIM has contractually agreed to waive advisory
fees and/or reimburse expenses to the extent necessary to limit total annual
operating expenses (excluding certain items discussed below) of Class A, Class
B, Class C, Investor Class and Institutional Class shares to 2.00%, 2.65%,
2.65%, 1.90% and 1.65% of average daily net assets, respectively, through July
31, 2005. In determining the advisor's obligation to waive advisory fees and/or
reimburse expenses, the following expenses are not taken into account, and
could cause the total annual fund operating expenses to exceed the limits
stated above: (i) interest; (ii) taxes; (iii) dividend expense on short sales;
(iv) extraordinary items (these are expenses that are not anticipated to arise
from the Fund's day-to-day operations), or items designated as such by the
Fund's Board of Trustees; (v) expenses related to a merger or reorganization,
as approved by the Fund's Board of Trustees; and (vi) expenses that the Fund
has incurred but did not actually pay because of an expense offset arrangement.
Currently, the only expense offset arrangements from which the Fund benefits
are in the form of credits that the Fund receives from banks where the Fund or
its transfer agent has deposit accounts in which it holds uninvested cash.
Those credits are used to pay certain expenses incurred by the Fund. Further,
AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of
25% of the advisory fee AIM receives from the affiliated money market funds on
investments by the Fund in such affiliated money market funds. Voluntary fee
waivers or reimbursements may be modified or discontinued at any time upon
consultation with the Board of Trustees without further notice to investors. To
the extent that the annualized expense ratio does not exceed the expense
limitation, AIM will retain its ability to be reimbursed for such fee waivers
or reimbursements prior to the end of each fiscal year. For the six months
ended January 31, 2005, AIM waived fees of $108,179.
For the six months ended January 31, 2005, at the request of the Trustees of
the Trust, AMVESCAP PLC ("AMVESCAP") agreed to reimburse $5,059 of expenses
incurred by the Fund in connection with market timing matters in the AIM Funds,
including legal, audit, shareholder reporting, communications and trustee
expenses. These expenses along with the related expense reimbursement are
included in the Statement of Operations.
The Fund, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. Pursuant to such agreement, for the six months
ended January 31, 2005, AIM was paid $25,205.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer agency
and shareholder services to the Fund and reimburse AISI for certain expenses
incurred by AISI in the course of providing such services. AISI may make
payments to intermediaries that provide omnibus account services,
sub-accounting services and/or networking services. For the Institutional
Class, the transfer agent has contractually agreed to reimburse class specific
transfer agent fees and expenses to the extent necessary to limit transfer
agent fees to 0.10% of the average net assets. For the six months ended January
31, 2005, the Fund paid AISI $30,259 for Class A, Class B, Class C and Investor
Class share classes and $543 for Institutional Class shares and AIM reimbursed
fees of $28,360 for Class A, Class B, Class C and Investor Class share classes
and $116 for the Institutional Class shares.
The Trust has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B, Class C, 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 AIM
Distributors compensation at the annual rate of 0.35% of the Fund's average
daily net assets of Class A shares, 1.00% of the average daily net assets of
Class B and Class C shares and 0.25% of the average daily net assets of
Investor Class shares. Of these amounts, up to 0.25% of the average daily net
assets of the Class A, Class B, Class C or Investor Class shares may be paid to
furnish continuing personal shareholder services to customers who purchase and
own shares of such classes. Any amounts not paid as a service fee under the
Plans would constitute an asset-based sales charge. NASD Rules also impose a
cap on the total sales charges, including asset-based sales charges that may be
paid by any class of shares of the Fund. Pursuant to the Plans, for the six
months ended January 31, 2005, the Class A, Class B, Class C and Investor Class
shares paid $12,880, $18,703, $14,792 and $6,778, respectively.
Front-end sales commissions and contingent deferred sales charges ("CDSC")
(collectively the "sales charges") are not recorded as expenses of the Fund.
Front-end sales commissions are deducted from proceeds from the sales of Fund
shares prior to investment in Class A shares of the Fund. CDSC are deducted
from redemption proceeds prior to remittance to the shareholder. For the six
months ended January 31, 2005 AIM Distributors advised the Fund that it
retained $4,074 in
F-9
front-end sales commissions from the sale of Class A shares and $77, $47 and
$113 from Class A, Class B and Class C shares, respectively, for CDSC imposed
upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of AIM,
AISI and/or AIM Distributors.
NOTE 3--INVESTMENTS IN AFFILIATES
The Fund is permitted, pursuant to an exemptive order from the Securities and
Exchange Commission ("SEC") and approved procedures by the Board of Trustees,
to invest daily available cash balances in affiliated money market funds. The
Fund and the money market funds below have the same investment advisor and
therefore, are considered to be affiliated. The table below shows the
transactions in and earnings from investments in affiliated money market funds
for the six months ended January 31, 2005.
INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
PROCEEDS UNREALIZED MARKET REALIZED
MARKET VALUE PURCHASES FROM APPRECIATION VALUE DIVIDEND GAIN
FUND 07/31/04 AT COST SALES (DEPRECIATION) 01/31/05 INCOME (LOSS)
- ---------------------------------------------------------------------------------------------------
Premier Portfolio $674,355 $10,370,490 $(9,936,249) $-- $1,108,596 $11,202 $--
- ---------------------------------------------------------------------------------------------------
NOTE 4--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM Funds under specified conditions outlined in procedures adopted by the
Board of Trustees of the Trust. The procedures have been designed to ensure
that any purchase or sale of securities by the Fund from or to another fund or
portfolio that is or could be considered an affiliate by virtue of having a
common investment advisor (or affiliated investment advisors), common Trustees
and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as
defined under the procedures, each transaction is effected at the current
market price. Pursuant to these procedures, during the six months ended January
31, 2005, the Fund engaged in purchases and sales of securities of $210,000 and
$72,528, respectively.
NOTE 5--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the
transfer agent for clearing shareholder transactions and (ii) custodian credits
which result from periodic overnight cash balances at the custodian. For the
six months ended January 31, 2005, the Fund received credits from these
arrangements which resulted in the reduction of the Fund's total expenses of
$239.
NOTE 6--TRUSTEES' FEES
Trustees' fees represent remuneration paid to each Trustee of the Trust who is
not an "interested person" of AIM. Trustees have the option to defer
compensation payable by the Trust. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall
be deemed to be invested.
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 that also participate in a retirement plan and receive benefits under
such plan.
Obligations under the deferred compensation and retirement plans represent
unsecured claims against the general assets of the Fund.
During the six months ended January 31, 2005, the Fund paid legal fees of
$2,210 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as
counsel to the Independent Trustees. A member of that firm is a Trustee of the
Trust.
NOTE 7--BORROWINGS
Pursuant to an exemptive order from the SEC, the Fund may participate in an
interfund lending facility that AIM has established for temporary borrowings by
the AIM Funds. An interfund loan will be made under this facility only if the
loan rate (an average of the rate available on bank loans and the rate
available on investments in overnight repurchase agreements) is favorable to
both the lending fund and the borrowing fund. A loan will be secured by
collateral if the Fund's aggregate borrowings from all sources exceeds 10% of
the Fund's total assets. To the extent that the loan is required to be secured
by collateral, the collateral is marked to market daily to ensure that the
market value is at least 102% of the outstanding principal value of the loan.
The Fund is a participant in an uncommitted unsecured revolving credit
facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow
up to the lesser of (i) $125,000,000, or (ii) the limits set by its prospectus
for borrowings. The Fund and other funds advised by AIM which are parties to
the credit facility can borrow on a first come, first served basis. Principal
on each loan outstanding shall bear interest at the bid rate quoted by SSB at
the time of the request for the loan.
During the six months ended January 31, 2005, the Fund did not borrow or lend
under the interfund lending facility or borrow under the uncommitted unsecured
revolving credit facility.
F-10
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with SSB, the custodian bank. To compensate
the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave
funds in the account so the custodian can be compensated by earning the
additional interest; or (ii) compensate by paying the custodian bank. In either
case, the custodian bank will be compensated at an amount equal to the Federal
Funds rate plus 100 basis points.
NOTE 8--TAX INFORMATION
The amount and character of income and gains to be distributed are determined
in accordance with income tax regulations, which may differ from generally
accepted accounting principles. Reclassifications are made to the Fund's
capital accounts to reflect income and gains available for distribution (or
available capital loss carryforward) under income tax regulations. The tax
character of distributions paid during the year and the tax components of net
assets will be reported at the Fund's fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the
amount of capital loss carryforward actually available for the Fund to utilize.
The ability to utilize capital loss carryforward in the future may be limited
under the Internal Revenue Code and related regulations based on the results of
future transactions.
The Fund utilized $2,026,994 of capital loss carryforward during the year
ended July 31, 2004 to offset net realized capital gain for federal income tax
purposes. The Fund has a capital loss carryforward as of July 31, 2004 which
expires as follows:
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
---------------------------
July 31, 2010 $16,984
---------------------------
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
NOTE 9--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities
and money market funds) purchased and sold by the Fund during the six months
ended January 31, 2005 was $21,080,965 and $11,345,965, respectively. For
interim reporting periods, the cost of investments for tax purposes includes
reversals of certain tax items, such as, wash sales that have occurred since
the prior fiscal year-end.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $3,684,674
------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (388,384)
------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $3,296,290
------------------------------------------------------------------------------
Cost of investments for tax purposes is $29,950,880.
F-11
NOTE 10--SHARE INFORMATION
The Fund currently offers of five different classes of shares: Class A shares,
Class B shares, Class C shares, Investor Class shares and Institutional Class
shares. Class A shares are sold with a front-end sales charge. Class B shares
and Class C shares are sold with CDSC. Investor Class shares and Institutional
Class shares are sold at net asset value. Under certain circumstances, Class A
shares and are subject to CDSC. Generally, Class B shares will automatically
convert to Class A shares eight years after the end of the calendar month of
purchase.
CHANGES IN SHARES OUTSTANDING/(a)/
- --------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 2005 JULY 31, 2004
--------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------
Sold:
Class A 163,922 $ 2,787,724 126,364 $ 1,993,888
- --------------------------------------------------------------------------------------------------------
Class B 131,853 2,200,363 39,727 622,652
- --------------------------------------------------------------------------------------------------------
Class C 24,079 387,663 170,972 2,642,938
- --------------------------------------------------------------------------------------------------------
Investor Class 125,565 2,140,573 881,162 13,650,693
- --------------------------------------------------------------------------------------------------------
Institutional Class 361,223 6,016,070 134,650 2,154,609
- --------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 1,370 24,088 -- --
- --------------------------------------------------------------------------------------------------------
Class B 735 12,635 -- --
- --------------------------------------------------------------------------------------------------------
Class C 555 9,487 -- --
- --------------------------------------------------------------------------------------------------------
Investor Class 1,019 17,969 -- --
- --------------------------------------------------------------------------------------------------------
Institutional Class 1,422 25,208 -- --
- --------------------------------------------------------------------------------------------------------
Automatic conversion of Class B shares to Class A shares:
Class A 48 846 6,217 103,132
- --------------------------------------------------------------------------------------------------------
Class B (50) (846) (6,338) (103,132)
- --------------------------------------------------------------------------------------------------------
Reacquired:
Class A (69,141) (1,130,290) (170,717) (2,693,216)
- --------------------------------------------------------------------------------------------------------
Class B (16,407) (271,940) (21,581) (338,024)
- --------------------------------------------------------------------------------------------------------
Class C (8,826) (139,756) (163,602) (2,459,055)
- --------------------------------------------------------------------------------------------------------
Investor Class (114,127) (1,885,610) (882,819) (12,761,177)
- --------------------------------------------------------------------------------------------------------
Institutional Class (6,044) (98,930) (37,562) (604,364)
- --------------------------------------------------------------------------------------------------------
597,196 $10,095,254 76,473 $ 2,208,944
- --------------------------------------------------------------------------------------------------------
/(a)/There is one entity that is a record owner of more than 5% of the
outstanding shares of the Fund and owns 9% of the outstanding shares of the
Fund. AIM Distributors may have an agreement with this entity to sell Fund
shares. The Fund, AIM and/or AIM affiliates may make payments to this
entity, which is considered to be related to the Fund, for providing
services to the Fund, AIM and/or AIM affiliates including but not limited
to services such as, securities brokerage, distribution, third party record
keeping and account servicing. The Trust has no knowledge as to whether all
or any portion of the shares owned of record by this entity is also owned
beneficially.
In addition, 25% of the outstanding shares of the Fund are owned by
affiliated mutual funds. Affiliated mutual funds are mutual funds that
are also advised by AIM.
F-12
NOTE 11--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
CLASS A
----------------------------------------------------------------------------
OCTOBER 1, 2001
SIX MONTHS THREE MONTHS (DATE SALES
ENDED YEAR ENDED ENDED YEAR ENDED COMMENCED) TO
JANUARY 31, JULY 31, JULY 31, APRIL 30, APRIL 30,
2005 2004 2003 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $15.48 $13.98 $12.65 $ 14.95 $11.80
- ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.09)/(a)/ (0.21) (0.00)/(b)/ (0.12)/(b)/ (0.10)/(a)/
- ---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) 2.29 1.71 1.33 (2.18) 3.25
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.20 1.50 1.33 (2.30) 3.15
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions from net realized gain (0.06) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.62 $15.48 $13.98 $ 12.65 $14.95
- ---------------------------------------------------------------------------------------------------------------------------------
Total return/(c)/ 14.19% 10.73% 10.51% (15.38)% 26.69%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $9,143 $6,542 $6,444 $ 5,587 $2,627
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets:
- ---------------------------------------------------------------------------------------------------------------------------------
With fee waivers and/or expense reimbursements 1.65%/(d)/ 1.65% 1.65%/(e)/ 1.65% 1.65%/(e)/
- ---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.83%/(d)/ 2.78% 2.85%/(e)/ 2.77% 3.09%/(e)/
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average
net assets (1.03)%/(d)/ (1.24)% (1.28)%/(e)/ (1.16)% (1.44)%/(e)/
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate/(f)/ 46% 117% 23% 50% 23%
- ---------------------------------------------------------------------------------------------------------------------------------
/(a)/Calculated using average shares outstanding.
/(b)/The net investment income (loss) per share was calculated after permanent
book tax differences, such as net operating losses, were reclassified from
accumulated net investment income (loss) to paid in capital. Had net
investment income (loss) per share been calculated using the current
method, which is before reclassification of net operating losses, net
investment income (loss) per share would have been $(0.05) and $(0.25) for
the three months ended July 31, 2003 and the year ended April 30, 2003,
respectively.
/(c)/Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset value
for financial reporting purposes and the returns based upon those net asset
values may differ from the net asset value and returns for shareholder
transactions. Does not include sales charges and is not annualized for
periods less than one year.
/(d)/Ratios are annualized and based on average daily net assets of $7,299,620.
/(e)/Annualized.
/(f)/Not annualized for periods less than one year.
F-13
NOTE 11--FINANCIAL HIGHLIGHTS (continued)
CLASS B
-------------------------------------------------------------------------
OCTOBER 1,
THREE 2001
SIX MONTHS MONTHS YEAR (DATE SALES
ENDED YEAR ENDED ENDED ENDED COMMENCED) TO
JANUARY 31, JULY 31, JULY 31, APRIL 30, APRIL 30,
2005 2004 2003 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $15.16 $13.79 $12.49 $ 14.86 $11.80
- ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.14)/(a)/ (0.29) (0.02)/(b)/ (0.17)/(b)/ (0.15)/(a)/
- ---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) 2.24 1.66 1.32 (2.20) 3.21
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.10 1.37 1.30 (2.37) 3.06
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions from net realized gain (0.06) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.20 $15.16 $13.79 $ 12.49 $14.86
- ---------------------------------------------------------------------------------------------------------------------------------
Total return/(c)/ 13.83% 9.93% 10.41% (15.95)% 25.93%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $5,283 $2,895 $2,470 $ 2,139 $1,106
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.30%/(d)/ 2.30% 2.30%/(e)/ 2.30% 2.30%/(e)/
- ---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 3.48%/(d)/ 3.59% 3.68%/(e)/ 3.71% 4.06%/(e)/
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average
net assets (1.68)%/(d)/ (1.89)% (1.92)%/(e)/ (1.81)% (2.14)%/(e)/
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate/(f)/ 46% 117% 23% 50% 23%
- ---------------------------------------------------------------------------------------------------------------------------------
/(a)/Calculated using average shares outstanding.
/(b)/The net investment income (loss) per share was calculated after permanent
book tax differences, such as net operating losses, were reclassified from
accumulated net investment income (loss) to be paid in capital. Had net
investment income (loss) per share been calculated using the current
method, which is before reclassification of net operating losses, net
investment income (loss) per share would have been $(0.07) and $(0.30) for
the three months ended July 31, 2003 and the year ended April 30, 2003,
respectively.
/(c)/Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset value
for financial reporting purposes and the returns based upon those net
asset values may differ from the net asset value and returns for the
shareholder transactions. Does not include sales charges and is not
annualized for periods less than one year.
/(d)/Ratios are annualized and based on average daily net assets of $3,710,073.
/(e)/Annualized.
/(f)/Not annualized for periods less than one year.
CLASS C
----------------------------------------------------------------------------
OCTOBER 1,
2001
SIX MONTHS THREE MONTHS (DATE SALES
ENDED YEAR ENDED ENDED YEAR ENDED COMMENCED) TO
JANUARY 31, JULY 31, JULY 31, APRIL 30, APRIL 30,
2005 2004 2003 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $15.07 $13.70 $12.42 $ 14.84 $11.80
- ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.14)/(a)/ (0.29) (0.02)/(b)/ (0.25)/(b)/ (0.14)/(a)/
- ---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) 2.23 1.66 1.30 (2.17) 3.18
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.09 1.37 1.28 (2.42) 3.04
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions from net realized gain (0.06) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.10 $15.07 $13.70 $ 12.42 $14.84
- ---------------------------------------------------------------------------------------------------------------------------------
Total return/(c)/ 13.84% 10.00% 10.31% (16.31)% 25.76%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $3,277 $2,650 $2,308 $ 2,063 $ 515
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.30%/(d)/ 2.30% 2.30%/(e)/ 2.30% 2.30%/(e)/
- ---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 3.48%/(d)/ 3.68% 3.86%/(e)/ 3.88% 4.45%/(e)/
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average
net assets (1.68)%/(d)/ (1.89)% (1.92)%/(e)/ (1.80)% (2.13)%/(e)/
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate/(f)/ 46% 117% 23% 50% 23%
- ---------------------------------------------------------------------------------------------------------------------------------
/(a)/Calculated using average shares outstanding.
/(b)/The net investment income (loss) per share was calculated after permanent
book tax differences, such as net operating losses, were reclassified from
accumulated net investment income (loss) to paid in capital. Had net
investment income (loss) per share been calculated using the current
method, which is before reclassification of net operating losses, net
investment income (loss) per share would have been $(0.07) and $(0.37) for
the three months ended July 31, 2003 and the year ended April 30, 2003,
respectively.
/(c)/Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset value
for financial reporting purposes and the returns based upon those net asset
values may differ from the net asset value and returns for shareholder
transactions. Does not include sales charges and is not annualized for
periods less than one year.
/(d)/Ratios are annualized and based on average daily net assets of $2,934,343.
/(e)/Annualized.
/(f)/Not annualized for periods less than one year.
F-14
NOTE 11--FINANCIAL HIGHLIGHTS (continued)
INVESTOR CLASS
---------------------------------------------------------
SEPTEMBER 3,
THREE 2002
SIX MONTHS YEAR MONTHS (DATE SALES
ENDED ENDED ENDED COMMENCED) TO
JANUARY 31, JULY 31, JULY 31, APRIL 30,
2005 2004 2003 2003
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $15.51 $14.00 $12.66 $11.66
- ---------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.08)/(a)/ (0.19) (0.01)/(b)/ (0.07)/(a)/
- ---------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.30 1.70 1.35 1.07
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.22 1.51 1.34 1.00
- ---------------------------------------------------------------------------------------------------------------------
Less distributions from net realized gain (0.06) -- -- --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.67 $15.51 $14.00 $12.66
- ---------------------------------------------------------------------------------------------------------------------
Total return/(c)/ 14.29% 10.79% 10.58% 8.58%
- ---------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $6,044 $5,113 $3,798 $2,536
- ---------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.55%/(d)/ 1.55% 1.55%/(e)/ 1.55%/(e)/
- ---------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.73%/(d)/ 3.19% 3.55%/(e)/ 3.57%/(e)/
- ---------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (0.93)%/(d)/ (1.14)% (1.18)%/(e)/ (1.01)%/(e)/
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate/(f)/ 46% 117% 23% 50%
- ---------------------------------------------------------------------------------------------------------------------
/(a)/Calculated using average shares outstanding.
/(b)/The net investment income (loss) per share was calculated after permanent
book tax differences, such as net operating losses, were reclassified from
accumulated net investment income (loss) to paid in capital. Had net
investment income (loss) per share been calculated using the current
method, which is before reclassification of net operating losses, net
investment income (loss) per share would have been $(0.06) for the three
months ended July 31, 2003.
/(c)/Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net assets value
for financial reporting purposes and the returns based upon those net
asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges and is not
annualized for periods less than one year.
/(d)/Ratios are annualized and based on average daily net assets of $5,378,242.
/(e)/Annualized.
/(f)/Not annualized for periods less than one year.
F-15
NOTE 11--FINANCIAL HIGHLIGHTS (continued)
INSTITUTIONAL CLASS
-----------------------------------------------------------------------------------------
SIX MONTHS THREE MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED APRIL 30,
JANUARY 31, JULY 31, JULY 31, ----------------------------------------------
2005 2004 2003 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $15.58 $14.04 $12.69 $ 14.94 $14.78 $ 19.03 $ 12.76
- -----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.06)/(a)/ (0.07) (0.03)/(a)/ (0.11)/(a)/ (0.15)/(a)/ (0.13) (0.12)
- -----------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both
realized and unrealized) 2.31 1.61 1.38 (2.14) 0.31 2.38 6.41
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.25 1.54 1.35 (2.25) 0.16 (2.51) 6.29
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized gains (0.06) -- -- -- -- (1.64) (0.02)
- -----------------------------------------------------------------------------------------------------------------------------------
Return of capital -- -- -- -- -- (0.10) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.06) -- -- -- -- (1.74) (0.02)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.77 $15.58 $14.04 $ 12.69 $14.94 $ 14.78 $ 19.03
- -----------------------------------------------------------------------------------------------------------------------------------
Total return/(b)/ 14.42% 10.97% 10.64% (15.06)% 1.08% (13.60)% 49.49%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $9,669 $2,922 $1,269 $ 1,111 $2,538 $19,742 $17,703
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets:
With fee waivers and/or expense
reimbursements 1.30%/(c)/ 1.30% 1.30%/(d)/ 1.30% 1.30% 1.30% 1.31%
- -----------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense
reimbursements 2.19%/(c)/ 2.91% 3.15%/(d)/ 3.35% 2.29% 1.88% 2.48%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets (0.68)%/(c)/ (0.89)% (0.93)%/(d)/ (0.83)% (1.06)% (0.90)% (0.95)%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate/(e)/ 46% 117% 23% 50% 23% 41% 42%
- -----------------------------------------------------------------------------------------------------------------------------------
/(a)/Calculated using average shares outstanding.
/(b)/Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset value
for financial reporting purposes and the returns based upon those net asset
values may differ from the net asset value and returns for shareholder
transactions. Not annualized for periods less than one year.
/(c)/Ratios are annualized and based on average daily net assets of $5,979,777.
/(d)/Annualized.
/(e)/Not annualized for periods less than one year.
NOTE 12--SUBSEQUENT EVENT
The Board of Trustees of the Trust ("Seller") unanimously approved, on March
22, 2005, an Agreement and Plan of Reorganization (the "Agreement") pursuant to
which the Fund ("Selling Fund") a series of Seller, would transfer all of its
assets to AIM Capital Development Fund ("Buying Fund"), a series of AIM Equity
Funds (the "Reorganization"). As a result of the Reorganization, shareholders
of Selling Fund would receive shares of Buying Fund in exchange for their
shares of Selling Fund, and Selling Fund would cease operations.
The Agreement requires approval of Selling Fund shareholders and will be
submitted to the shareholders for their consideration at a meeting to be held
on or around June 28, 2005. If the Agreement is approved by shareholders of
Selling Fund and certain conditions required by the Agreement are satisfied,
the transaction is expected to become effective shortly thereafter.
F-16
NOTE 13--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment
advisor to certain AIM Funds) and A I M Advisors, Inc. ("AIM") (the Fund's
investment advisor) reached final settlements with certain regulators,
including without limitation the Securities and Exchange Commission ("SEC"),
the New York Attorney General ("NYAG") and the Colorado Attorney General
("COAG"), to resolve civil enforcement actions and investigations related to
market timing activity and related issues in the AIM Funds, including those
formerly advised by IFG. These regulators alleged, in substance, that IFG and
AIM failed to disclose in the prospectuses for the AIM Funds that they advised
and to the independent directors/trustees of such Funds that they had entered
into certain arrangements permitting market timing of such Funds, thereby
breaching their fiduciary duties to such Funds. As a result of the foregoing,
the regulators alleged that IFG and AIM breached various Federal and state
securities, business and consumer protection laws. On the same date, A I M
Distributors, Inc. ("ADI") (the distributor of the retail AIM Funds) reached a
final settlement with the SEC to resolve an investigation relating to market
timing activity and related issues in the AIM Funds. The SEC also alleged that
ADI violated various Federal securities laws. The SEC also has settled related
market timing enforcement actions brought against certain former officers and
employees of IFG.
Under the terms of the settlements, IFG agreed to pay a total of $325
million, of which $110 million is civil penalties. Of this $325 million total
payment, half has been paid and the remaining half will be paid on or before
December 31, 2005. AIM and ADI agreed to pay a total of $50 million, of which
$30 million is civil penalties, all of which has been paid. The entire $325
million IFG settlement payment will be made available for distribution to the
shareholders of those AIM Funds that IFG formerly advised that were harmed by
market timing activity, and the entire $50 million settlement payment by AIM
and ADI will be made available for distribution to the shareholders of those
AIM Funds advised by AIM that were harmed by market timing activity, all as to
be determined by an independent distribution consultant. The settlement
payments will be distributed in accordance with a methodology to be determined
by the independent distribution consultant, in consultation with AIM and the
independent trustees of the AIM Funds and acceptable to the staff of the SEC.
Under the settlements with the NYAG and COAG, AIM has agreed to reduce
management fees on certain equity and balanced AIM Funds by $15 million per
year for the next five years, based upon effective fee rates and assets under
management as of July 1, 2004, and not to increase certain management fees.
Under the terms of the settlements, AIM is undertaking certain governance and
compliance reforms, including maintaining an internal controls committee and
retaining an independent compliance consultant and a corporate ombudsman. Also,
commencing in 2007 and at least once every other year thereafter, AIM will
undergo a compliance review by an independent third party. In addition, under
the terms of the settlements, AIM has undertaken to cause the AIM Funds to
operate in accordance with certain governance policies and practices, including
retaining a full-time independent senior officer whose duties include
monitoring compliance and managing the process by which proposed management
fees to be charged the AIM Funds are negotiated. Also, commencing in 2008 and
not less than every fifth calendar year thereafter, the AIM Funds will hold
shareholder meetings at which their Boards of Trustees will be elected.
At the request of the trustees of the AIM Funds, AMVESCAP PLC ("AMVESCAP"),
the parent company of IFG and AIM, has agreed to reimburse expenses incurred by
such Funds related to market timing matters.
The SEC has also settled market timing enforcement actions against Raymond R.
Cunningham (the former president and chief executive officer of IFG and a
former member of the board of directors of the AIM Funds formerly advised by
IFG), Timothy J. Miller (the former chief investment officer and a former
portfolio manager for IFG), Thomas A. Kolbe (the former national sales manager
of IFG) and Michael D. Legoski (a former assistant vice president in IFG's
sales department). As part of these settlements, the SEC ordered these
individuals to pay restitution and civil penalties in various amounts and
prohibited them from associating with, or serving as an officer or director of,
an investment advisor, broker, dealer and/or investment company, as applicable,
for certain periods of time.
The payments made in connection with the above-referenced settlements by IFG,
AIM and ADI will total approximately $375 million (not including AIM's
agreement to reduce management fees on certain equity and balanced AIM Funds by
$15 million per year for the next five years, based upon effective fee rates
and assets under management as of July 1, 2004). The manner in which the
settlement payments will be distributed is unknown at the present time and will
be determined by an independent distribution consultant appointed under the
settlement agreements. Therefore, management of AIM and the Fund are unable at
the present time to estimate the impact, if any, that the distribution of the
settlement payments may have on the Fund or whether such distribution will have
an impact on the Fund's financial statements in the future.
At the present time, management of AIM and the Fund are unable to estimate
the impact, if any, that the outcome of the Regulatory Inquiries and Pending
Litigation described below may have on AIM, ADI or the Fund.
Regulatory Inquiries and Pending Litigation
The mutual fund industry as a whole is currently subject to regulatory
inquiries and litigation related to a wide range of issues. These issues
include, among others, market timing activity, late trading, fair value
pricing, excessive or improper advisory and/or distribution fees, mutual fund
sales practices, including but not limited to revenue sharing and
directed-brokerage arrangements, investments in securities of other registered
investment companies, contractual plans, issues related to Section 529 college
savings plans, procedures for locating lost security holders and participation
in class action settlements.
As described more fully below, IFG and AIM are the subject of a number of
ongoing regulatory inquiries and civil lawsuits related to one or more of the
issues currently being scrutinized by various Federal and state regulators,
including but not limited to those issues described above. Additional
regulatory actions and/or civil lawsuits related to the above or other issues
may be filed against the AIM Funds, IFG, AIM and/or related entities and
individuals in the future. Additional regulatory inquiries related to the above
or other issues also may be received by the AIM Funds, IFG, AIM and/or related
entities and individuals in the future.
F-17
NOTE 13--LEGAL PROCEEDINGS (continued)
Ongoing Regulatory Inquiries Concerning IFG and AIM
IFG, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds formerly advised by IFG have received
regulatory inquiries in the form of subpoenas or other oral or written requests
for information and/or documents related to one or more of the following
issues, some of which concern one or more such 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, and investments in securities of other
registered investment companies. These regulators include the SEC, the NASD,
Inc. ("NASD"), the Florida Department of Financial Services, the Attorney
General of the State of West Virginia, the West Virginia Securities Commission
and the Bureau of Securities of the State of New Jersey. IFG and certain of
these other parties also have received more limited inquiries from the United
States Department of Labor ("DOL") and the United States Attorney's Office for
the Southern District of New York, some of which concern one or more of the AIM
Funds formerly advised by IFG. IFG is providing full cooperation with respect
to these inquiries.
AIM, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds have received regulatory inquiries in the form
of subpoenas or other oral or written requests for information and/or documents
related to one or more of the following issues, some of which concern one or
more AIM Funds: market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders. These regulators include the SEC, the NASD, the
Department of Banking for the State of Connecticut, the Attorney General of the
State of West Virginia, the West Virginia Securities Commission and the Bureau
of Securities of the State of New Jersey. AIM and certain of these other
parties also have received more limited inquiries from the SEC, the NASD, the
DOL, the Internal Revenue Service, the United States Attorney's Office for the
Southern District of New York, the United States Attorney's Office for the
Central District of California, the United States Attorney's Office for the
District of Massachusetts, the Massachusetts Securities Division, the U.S.
Postal Inspection Service and the Commodity Futures Trading Commission, some of
which concern one or more AIM Funds. AIM is providing full cooperation with
respect to these inquiries.
Private Civil Actions Alleging Market Timing
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, certain AIM Funds, IFG, AIM, AIM Management, AMVESCAP, certain
related entities, certain of their current and former officers and/or certain
unrelated third parties) making allegations that are similar in many respects
to those in the settled regulatory actions brought by the SEC, the NYAG and the
COAG concerning market timing activity in the AIM Funds. These lawsuits allege
a variety of theories of recovery, including but not limited to: (i) violation
of various provisions of the Federal and state securities laws; (ii) violation
of various provisions of ERISA; (iii) breach of fiduciary duty; and/or (iv)
breach of contract. These lawsuits were initiated in both Federal and state
courts and seek such remedies as compensatory damages; restitution; injunctive
relief; disgorgement of management fees; imposition of a constructive trust;
removal of certain directors and/or employees; various corrective measures
under ERISA; rescission of certain Funds' advisory agreements; interest; and
attorneys' and experts' fees.
All lawsuits based on allegations of market timing, late trading, and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court") for consolidated or coordinated
pre-trial proceedings. Pursuant to an Order of the MDL Court, plaintiffs
consolidated their claims for pre-trial purposes into three amended complaints
against various 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 the Employee Retirement Income
Securities Act ("ERISA") purportedly brought on behalf of participants in
AMVESCAP's 401(k) plan. The plaintiffs in one of the underlying lawsuits
continue to seek remand of their lawsuit to state court.
Private Civil Actions Alleging Improper Use of Fair Value Pricing
Multiple civil class action lawsuits have been filed against various parties
(including, depending on the lawsuit, certain AIM Funds, IFG and/or AIM)
alleging that certain AIM Funds inadequately employed fair value pricing. These
lawsuits allege a variety of theories of recovery, including but not limited
to: (i) violations of various provisions of the Federal securities laws; (ii)
common law breach of duty; and (iii) common law negligence and gross
negligence. These lawsuits have been filed in both Federal and state courts and
seek such remedies as compensatory and punitive damages; interest; and
attorneys' fees and costs.
Private Civil Actions Alleging Excessive Advisory and/or Distribution Fees
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, INVESCO Institutional (N.A.), Inc. ("IINA"), ADI
and/or INVESCO Distributors, Inc. ("INVESCO Distributors")) alleging that the
defendants charged excessive advisory and/or distribution fees and failed to
pass on to shareholders the perceived savings generated by economies of scale.
Certain of these lawsuits also allege that the defendants adopted unlawful
distribution plans. These lawsuits allege a variety of theories of recovery,
including but not limited to: (i) violation of various provisions of the
Federal securities laws; (ii) breach of fiduciary duty; and/or (iii) breach of
contract. These lawsuits have been filed in Federal courts and seek such
remedies as damages; injunctive relief; rescission of certain Funds' advisory
agreements and distribution plans; interest; prospective relief in the form of
reduced fees; and attorneys' and experts' fees. All of these lawsuits have been
transferred to the United States District Court for the Southern District of
Texas, Houston Division by order of the applicable United States District Court
in which they were initially filed. The plaintiff in one of these lawsuits has
challenged this order.
F-18
NOTE 13--LEGAL PROCEEDINGS (continued)
Private Civil Actions Alleging Improper Charging of Distribution Fees on
Limited Offering Funds or Share Classes
Multiple civil lawsuits, including shareholder derivative suits, have been
filed against various parties (including, depending on the lawsuit, IFG, AIM,
ADI and/or certain of the trustees of the AIM Funds) alleging that the
defendants breached their fiduciary duties by charging distribution fees while
funds and/or specific share classes were closed generally to new investors
and/or while other share classes of the same fund were not charged the same
distribution fees. These lawsuits allege a variety of theories of recovery,
including but not limited to: (i) violation of various provisions of the
Federal securities laws; and (ii) breach of fiduciary duty. These lawsuits have
been filed in Federal courts and seek such remedies as damages; injunctive
relief; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Mutual Fund Sales Practices and
Directed-Brokerage Arrangements
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, AIM Management, IFG, AIM, AIM Investment Services, Inc. ("AIS")
and/or certain of the trustees of the AIM Funds) alleging that the defendants
improperly used the assets of the AIM Funds to pay brokers to aggressively
promote the sale of the AIM Funds over other mutual funds and that the
defendants concealed such payments from investors by disguising them as
brokerage commissions. These lawsuits allege a variety of theories of recovery,
including but not limited to: (i) violation of various provisions of the
Federal securities laws; (ii) breach of fiduciary duty; and (iii) aiding and
abetting a breach of fiduciary duty. These lawsuits have been filed in Federal
courts and seek such remedies as compensatory and punitive damages; rescission
of certain Funds' advisory agreements and distribution plans and recovery of
all fees paid; an accounting of all fund-related fees, commissions and soft
dollar payments; restitution of all unlawfully or discriminatorily obtained
fees and charges; and attorneys' and experts' fees.
Private Civil Action Alleging Failure to Ensure Participation in Class Action
Settlements
A civil lawsuit, purporting to be a class action lawsuit, has been filed
against AIM, IINA, A I M Capital Management, Inc. and the trustees of the AIM
Funds alleging that the defendants breached their fiduciary duties by failing
to ensure that the AIM Funds participated in class action settlements in which
the AIM Funds were eligible to participate. This lawsuit alleges as theories of
recovery: (i) violation of various provisions of the Federal securities laws;
(ii) common law breach of fiduciary duty; and (iii) common law negligence. This
lawsuit has been filed in Federal court and seeks such remedies as compensatory
and punitive damages; forfeiture of all commissions and fees paid by the class
of plaintiffs; and costs and attorneys' fees.
* * * * * * * * * * * * * *
As a result of the matters discussed above, investors in the AIM Funds might
react by redeeming their investments. This might require the Funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the Funds.
F-19
OTHER INFORMATION
TRUSTEES AND OFFICERS
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
Bob R. Baker Bruce L. Crockett 11 Greenway Plaza
Chair Suite 100
Frank S. Bayley Houston, TX 77046-1173
Robert H. Graham
James T. Bunch Vice Chair and President INVESTMENT ADVISOR
Bruce L. Crockett Mark H. Williamson A I M Advisors, Inc.
Executive Vice President 11 Greenway Plaza
Albert R. Dowden Suite 100
Lisa O. Brinkley Houston, TX 77046-1173
Edward K. Dunn, Jr. Senior Vice President and Chief Compliance Officer
TRANSFER AGENT
Jack M. Fields Russell C. Burk
Senior Vice President AIM Investment Services, Inc.
Carl Frischling P.O. Box 4739
Kevin M. Carome Houston, TX 77210-4739
Robert H. Graham Senior Vice President, Secretary and Chief Legal Officer
CUSTODIAN
Gerald J. Lewis Sidney M. Dilgren
Vice President and Treasurer State Street Bank and Trust Company
Prema Mathai-Davis 225 Franklin Street
Robert G. Alley Boston, MA 02110-2801
Lewis F. Pennock Vice President
COUNSEL TO THE FUND
Ruth H. Quigley Stuart W. Coco
Vice President Ballard Spahr
Larry Soll Andrews & Ingersoll, LLP
J. Philip Ferguson 1735 Market Street
Mark H. Williamson Vice President Philadelphia, PA 19103-7599
Karen Dunn Kelley COUNSEL TO THE INDEPENDENT TRUSTEES
Vice President
Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022-3852
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046-1173
DOMESTIC EQUITY
AIM Aggressive Growth Fund
AIM Balanced Fund*
AIM Basic Balanced Fund*
AIM Basic Value Fund
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund
AIM Constellation Fund
AIM Core Stock Fund/1/
AIM Dent Demographic Trends Fund
AIM Diversified Dividend Fund
AIM Dynamics Fund/1/
AIM Emerging Growth Fund
AIM Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Libra Fund
AIM Mid Cap Basic Value Fund
AIM Mid Cap Core Equity Fund/2/
AIM Mid Cap Growth Fund
AIM Mid Cap Stock Fund/1/
AIM Opportunities I Fund
AIM Opportunities II Fund
AIM Opportunities III Fund
AIM Premier Equity Fund
AIM S&P 500 Index Fund/1/
AIM Select Equity Fund
AIM Small Cap Equity Fund/3/
AIM Small Cap Growth Fund/4/
AIM Small Company Growth Fund/1/
AIM Total Return Fund*/1/
AIM Trimark Endeavor Fund
AIM Trimark Small Companies Fund
AIM Weingarten Fund
* Domestic equity and income fund
INTERNATIONAL/GLOBAL EQUITY
AIM Asia Pacific Growth Fund
AIM Developing Markets Fund
AIM European Growth Fund
AIM European Small Company Fund/5/
AIM Global Aggressive Growth Fund
AIM Global Equity Fund/6/
AIM Global Growth Fund
AIM Global Value Fund
AIM International Core Equity Fund/1/
AIM International Growth Fund
AIM International Small Company Fund/7/
AIM Trimark Fund
SECTOR EQUITY
AIM Advantage Health Sciences Fund/1/
AIM Energy Fund/1/
AIM Financial Services Fund/1/
AIM Global Health Care Fund
AIM Gold & Precious Metals Fund/1/
AIM Health Sciences Fund/1/
AIM Leisure Fund/1/
AIM Multi-Sector Fund/1/
AIM Real Estate Fund
AIM Technology Fund/1/
AIM Utilities Fund/1/
FIXED INCOME
TAXABLE
AIM Floating Rate Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Fund
AIM Money Market Fund
AIM Short Term Bond Fund
AIM Total Return Bond Fund
Premier Portfolio
Premier U.S. Government Money Portfolio/1/
TAX-FREE
AIM High Income Municipal Fund
AIM Municipal Bond Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Free Intermediate Fund
Premier Tax-Exempt Portfolio
AIM ALLOCATION SOLUTIONS
AIM Aggressive Allocation Fund
AIM Conservative Allocation Fund
AIM Moderate Allocation Fund
/1/The following name changes became effective October 15, 2004: INVESCO
Advantage Health Sciences Fund to AIM Advantage Health Sciences Fund, INVESCO
Core Equity Fund to AIM Core Stock Fund, INVESCO Dynamics Fund to AIM Dynamics
Fund, INVESCO Energy Fund to AIM Energy Fund, INVESCO Financial Services Fund to
AIM Financial Services Fund, INVESCO Gold & Precious Metals Fund to AIM Gold &
Precious Metals Fund, INVESCO Health Sciences Fund to AIM Health Sciences Fund,
INVESCO International Core Equity Fund to AIM International Core Equity Fund,
INVESCO Leisure Fund to AIM Leisure Fund, INVESCO Mid-Cap Growth Fund to AIM Mid
Cap Stock Fund, INVESCO Multi-Sector Fund to AIM Multi-Sector Fund, INVESCO S&P
500 Index Fund to AIM S&P 500 Index Fund, INVESCO Small Company Growth Fund to
AIM Small Company Growth Fund, INVESCO Technology Fund to AIM Technology Fund,
INVESCO Total Return Fund to AIM Total Return Fund, INVESCO U.S. Government
Money Fund to Premier U.S. Government Money Portfolio, INVESCO Utilities Fund to
AIM Utilities Fund. /2/As of end of business on February 27, 2004, AIM Mid Cap
Core Equity Fund has limited public sales of its shares to certain investors.
For more information on who may continue to invest in the Fund, please contact
your financial advisor. /3/Effective December 13, 2004, AIM Small Cap Equity
Fund is open to all investors. /4/As of end of business on March 18, 2002, AIM
Small Cap Growth Fund has limited public sales of its shares to certain
investors. For more information on who may continue to invest in the Fund,
please contact your financial advisor. /5/As of end of business on March 28,
2005, AIM European Small Company Fund has limited public sales of its shares to
certain investors. For more information on who may continue to invest in the
Fund, please contact your financial advisor. /6/Effective March 31, 2004, AIM
Global Trends Fund was renamed AIM Global Equity Fund. /7/Effective December 30,
2004, AIM International Emerging Growth Fund was renamed AIM International Small
Company Fund. As of end of business on March 14, 2005, the Fund has limited
public sales of its shares to certain investors. For more information on who may
continue to invest in the Fund, please contact your financial advisor.
If used after April 20, 2005, this report must be accompanied by a Fund
Performance & Commentary or by an AIM Quarterly Performance Review for the most
recent quarter-end. Mutual funds distributed by A I M Distributors, Inc.
A I M Management Group Inc. has provided leadership in the investment management
industry since 1976 and manages $138 billion in assets. AIM is a subsidiary of
AMVESCAP PLC, one of the world's largest independent financial services
companies with $382 billion in assets under management. Data as of December 31,
2004.
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY.
FOR THIS AND OTHER INFORMATION ABOUT AIM FUNDS, OBTAIN A PROSPECTUS FROM YOUR
FINANCIAL ADVISOR AND READ IT THOROUGHLY BEFORE INVESTING.
AIMinvestments.com I-MCS-SAR-1 A I M Distributors, Inc.
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ITEM 2. CODE OF ETHICS.
There were no amendments to the Code of Ethics (the "Code")
that applies to the Registrant's Principal Executive Officer
("PEO") and Principal Financial Officer ("PFO") during the
period covered by the report. The Registrant did not grant any
waivers, including implicit waivers, from any provisions of
the Code to the PEO or PFO during the period covered by this
report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Investments in securities of unaffiliated issuers is included
as part of the reports to stockholders filed under Item 1 of
this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 11. CONTROLS AND PROCEDURES.
(a) As of March 16, 2005, an evaluation was performed under the
supervision and with the participation of the officers of the
Registrant, including the Principal Executive Officer ("PEO")
and Principal Financial Officer ("PFO"), to assess the
effectiveness of the Registrant's disclosure controls and
procedures, as that term is defined in Rule 30a-3(c) under the
Investment Company Act of 1940 (the "Act"), as amended. Based
on that evaluation, the Registrant's officers, including
the PEO and PFO, concluded that, as of March 16, 2005, the
Registrant's disclosure controls and procedures were
reasonably designed to ensure: (1) that information required
to be disclosed by the Registrant on Form N-CSR is recorded,
processed, summarized and reported within the time periods
specified by the rules and forms of the Securities and
Exchange Commission; and (2) that material information
relating to the Registrant is made known to the PEO and PFO as
appropriate to allow timely decisions regarding required
disclosure.
(b) There have been no changes in the Registrant's internal
control over financial reporting (as defined in Rule 30a-3(d)
under the Act) that occurred during the second fiscal quarter
of the period covered by the report that has materially
affected, or is reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
12(a)(1) Not applicable.
12(a)(2) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(a) under the
Investment Company Act of 1940.
12(a)(3) Not applicable.
12(b) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(b) under the
Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: AIM Stock Funds
By: /s/ ROBERT H. GRAHAM
-----------------------------------------------------------
Robert H. Graham
Principal Executive Officer
Date: March 30, 2005
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: /s/ ROBERT H. GRAHAM
-----------------------------------------------------------
Robert H. Graham
Principal Executive Officer
Date: March 30, 2005
By: /s/ SIDNEY M. DILGREN
-----------------------------------------------------------
Sidney M. Dilgren
Principal Financial Officer
Date: March 30, 2005
EXHIBIT INDEX
12(a)(1) Not applicable.
12(a)(2) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(a) under the
Investment Company Act of 1940.
12(a)(3) Not applicable.
12(b) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(b) under the
Investment Company Act of 1940.