Style Cluster

AIM Funds Management
James Gauthier, Analyst
Marianne Rapicano
July 2000

Contents
A. Overview
B. Performance Measurement
i. Ultimate Tables
ii. Style Cluster Results
C. Fund Correlation
D. Management Expense Ratio Analysis
E. Model Portfolios

A. AIM Funds Management – An overview

Call it a rag to riches story – then back to rags, almost. If any fund family went from relative obscurity to becoming a major player in the Canadian mutual fund industry in 1999, AIM would fit the bill. The performance of many of the firm’s funds was spectacular for the year. According to IFIC, the company had assets under management of $9.28-billion in April of 2000, more than doubling the previous year’s tally. That makes it the 15^th largest money manager in Canada, up from number twenty in April 1999. AIM is the Canadian arm of British financial Conglomerate AMVESCAP. Other firms owned by AMVESCAP include the AIM Management Group (US), Invesco, and the firm’s most recent acquisition, Trimark. More on that later.

There’s one word that can explain the tremendous success AIM had in 1999 – technology. The sector had an incredible year, easily outpacing Old Economy names. Fortunately for AIM, the overwhelming theme of their style was perfectly suited for this tech run-up that saw the Nasdaq gain over 80% for the year. The dominating stock selection approach is growth/momentum. Of the company’s 17 equity funds (this excludes all RSP eligible global funds), five are pure momentum plays and can ten can be described as growth oriented. Now, just because the word "momentum" is used to describe the style of several of AIM’s funds, don’t get yourself in a tizzy. This is not strictly a price momentum model, like the one used by day traders. The differences are significant.

Momentum Style

AIM Portfolio manager Derek Webb says that there are several momentum characteristics he looks for before an investment is made. First, the firms that are growing their earnings the fastest are taken note of. Next, it is important for a company to be in the habit of consistently beating analysts’ earnings expectations. He also likes firms that are regularly having their earnings estimates upped by analysts. Generally these predictions are correct in direction, but not magnitude. Finally, Derek looks for companies that have high relative strength in their prices. Computers tabulate a list of firms that fit the above criteria and Derek selects the best names available. The approach is very disciplined is not committed strictly to technology. Wherever there is momentum in the market is where this fund will be, whether that means industrials, cyclicals, or consumer products. It just so happens that 1999 was an incredible year for momentum tech investors. Incidentally, Webb’s Canada Growth fund and Global Theme Class fund were up 48.1% and 37.2%, respectively, in 1999. Other hot momentum funds were the American Aggressive Growth fund and the American Growth Class fund with respective performances of 32% and 40.8%.

So why does Mr. Webb and AIM have such faith in momentum? It is believed that this approach is a superior method to selecting stocks. Back testing done by Webb has shown that this method provides the greatest value added most consistently. This has been shown to be the case for markets all over the world.

The slightly less aggressive (relative to momentum investing) growth approach taken by many of AIM’s other funds was very tech biased in 1999 and still is today. It is undeniable that the growth in the economy is coming from the New Economy and investors in AIM’s growth offerings were rewarded tremendously in 1999, especially in the sector offerings. For instance the Global Technology fund tripled in value over the year and Global Telecommunications Class fund more than doubled. The most significant driver in the investment decision of AIM’s growth managers obviously is earnings growth. They look for companies that are increasing their earnings the fastest, and although valuation is considered, it plays second fiddle to growth.

Tech Meltdown

Technology stocks have been absolutely decimated since the Nasdaq hit its high on March 10. As of May 31, 2000, the index was off 32.7% from the peak. Just as tech brought AIM glory on the way up, the sector has brought AIM investors a great deal of grief on its way down. From the market peak, the Global Technology fund is down over 34%, the Global Telecom fund; down 29.4%, and the American Aggressive Growth fund is down 23.3%. Between March and April, Derek Webb dramatically reduced the tech exposure in the Canada Growth Class fund, bringing it down to 28% of assets from 53%. The money was reallocated to financial services and energy. Aside from the changes made in this momentum-driven fund, AIM managers have given the tech sector an overwhelming show of confidence by barely budging in their tech allocations. Sure, there’s been some reshuffling, but there have been only marginal reductions in the tech weightings and in some cases, such as the American Premier fund, the tech allocation has actually been increased.

All AIM funds are managed from outside of Canada by a combination of AIM Management Group (US) and Invesco. Offices are located in Houston, Denver, San Francisco, Atlanta, and London.

The Trimark acquisition

On May 9 it was announced that Trimark had accepted a takeover bid from AMVESCAP PLC. We feel the combination of the two companies will present unitholders with options never available before to the Canadian mutual fund investor. The scope of the combined firm will increase dramatically in terms of geography and style. Again, as it stands, AIM has no money managers working in Canada. Sure, the company has a significant presence in Canada with the funds managed by Derek Webb and Clas Olsson but AIM’s forte lies outside of our borders. They offer European and Asian funds along with some highly focused specialty funds and it is these specialty funds that have been garnering much of the attention for the firm.

Trimark’s global funds are nothing to sneeze at (the Select Growth fund has over $5-billion in assets) but it is predominantly a Canadian money manager, and a value manager at that. That’s the reason the company had so much success up until just recently when growth became the hot thing.

AIM president Rob Hain expects investors to be able to move between funds from AIM and Trimark without triggering a DSC well before next year’s RRSP season. When this is so, investors will have a vast array of growth and value and domestic and international funds at their fingertips.

The combination of the two firms will make AIM/Trimark the second largest fund manager in the country and hopefully it will bring another benefit to unitholders – a reduction in fees. AIM’s MERs are some of the highest in the business and it would be nice if any synergies created via the merger could be passed on to unitholders in the form of fee reductions.

Overall we are very happy to see AIM and Trimark get together. Investors will soon have options available to them that rank among the best in the business.

As a stand-alone firm, however, AIM is an aggressive investor’s dream. The family does have a couple of quality value funds in the Canada Value Class fund and the International Value fund, but growth is the name of the game here and AIM doesn’t hold back any punches.

AIM is the Canadian arm of British financial conglomerate AMVESCAP, which also owns AIM Management Group (US), Invesco, and the firm’s most recent acquisition, Trimark. AIM funds are managed from outside of Canada by a combination of AIM Management Group (US) and Invesco. Offices are located in Houston, Denver, San Francisco, Atlanta, and London.

QuickFacts about AIM Funds Management

AIM Funds Management oversees $9.3-billion for Canadian investors, making it the fifteenth largest mutual company in terms of assets under management.
The largest funds in the AIM family are Canada Growth fund at just over $1.5-billion in assets, and the Global Theme Class fund at just under $1.5-billion In assets.
AMVESCAP, parent firm of AIM, manages C$565-billion worldwide.
The dominant investment styles are AIM is growth and momentum.
Most of the funds in the family are tech-heavy and were severely hurt as the Nasdaq tumbled.

B. Performance Measurement

i. Ultimate Tables

Stars	Fund	91	92	93	94	95	96	97	98	99	Apr-00	Up Mkt Grade	Down Mkt Grade	% of Time Losing $	Biggest Drop	Date of Biggest Drop	Months to Recover	Worst 12 Mos	MER

	AIM Amer Aggr Growth											-	-	25.00%	-22.11%	31-May-98	7	-17.92%	2.95%
	This is a young fund that benefited greatly from the recent tech surge. Lead manager Robert Kippes uses a bottom-up approach with a focus on earnings momentum. He likes to see companies that are receiving upward revisions in their estimates. Microchip Technology, one of the fund's top holdings, has been doing well. Buying based on earnings momentum has been a great approach over the past year but the portfolio hasn't been immune to the tech tumble.


	AIM American Premier											D	C	6.67%	-14.22%	31-Aug-95	15	-10.70%	2.85%
	This is AIM's flagship US fund. Managers Trent May and Doug McEldowney focus on high-quality, large-cap firms. The technology sector has contributed heavily to performance. In the recent market turmoil, it has been the established names that have done well, and this fund has many of them. It's interesting to look at a performance graph of this fund. AIM/Invesco began managing it in mid-1996 and since that point performance has been excellent. This is a good fund but be aware of the tech allocation.


	AIM Canadian Balanced											D	C	4.88%	-13.94%	30-Jun-98	7	-5.75%	2.55%
	This is the Lamborghini of balanced funds. It's fast and flashy but you want to be aware of what's under the hood and you don't want to be burned by too many tickets. The portfolio is a mix of corporate and government bonds and high flying, high priced tech stocks. The equity portion of the fund is managed based on earnings momentum. Growth is good and lead manager Clas Olsson is willing to pay for it. Typical balanced fund investors will probably not enjoy the ride with this fund but it certainly is a unique approach.


	AIM Canadian Premier Fund											B	C	14.29%	-25.19%	30-Jun-98	11	-16.49%	2.63%
	Like many of AIM's funds, hot tech stocks have brought this one to the forefront. Clas Olsson manages this one from the US and he focuses on earnings momentum in his stock selection process. Companies demonstrating stable and improving earnings growth with prices not reflective of this growth are targeted. The momentum style allows Olsson to pick stocks from any sector and he certainly has the performance to back up his approach, despite the fund's high fees.


	AIM Cash Performance											D	-	0.00%	0.00%	NA	NA	2.49%	1.24%


	AIM European Growth Fund											C	B	12.20%	-20.03%	31-Aug-98	5	-4.92%	2.96%
	The tech bug has been spreading in Europe, a fact manager Steve Chamberlain is well aware of. 90% of the time devoted to this fund is spent on bottom-up research. This tells us that country allocations aren't nearly as important as company allocations. With the volatility and valuation of US markets, Europe may be the place investors go for bargains. However, this fund is VERY expensive so do some comparison shopping.


	AIM Gbl Health Sciences											B	-	8.86%	-24.05%	31-Mar-00	NA	-2.48%	2.66%
	This 'global' fund would more appropriately be called a US fund. Total global exposure is only about 4%. Performance has dragged a bit because manager John Schroer was heavy into pharmas in 1999. He shifted heavily into biotechs in late 1999 and did well initially but got burned in March. Schroer liquidated assets big-time this spring. He's waiting for better opportunities and he learned a lot from the recent biotech ups and downs. However, we question his rapid sector shifts. We like his research methodology but be aware of the high MER.


	AIM Canadian Bond Fund											C	A	10.23%	-5.27%	28-Feb-99	NA	1.21%	2.16%
	Performance hasn't been so hot lately because the bond market has lagged.. Higher yielding corporates have not been an exception. This would be a fabulous fund if fees were chopped 50 bps because in a bond market like the one we're currently experiencing, every basis point counts.


	AIM Global Technology											-	-	6.67%	-20.12%	31-Jul-98	5	-8.12%	2.85%
	Bill Keithler has provided jaw dropping performance to unitholders with this fund thanks to his investments in profitable tech firms. The portfolio is well diversified through the tech industry. There are over 150 names in the fund and its largest holding, Cisco, only makes up 2% of assets. If you can stand the volatility and high expenses then this sector fund is one to consider. Keithler has more than proven himself.


	AIM International Value											D	B	24.82%	-23.19%	31-Aug-90	32	-18.85%	2.90%
	Value's been out and unit holders of this fund have been disappointed. However, the names in the portfolio are mainly blue chip and they should prosper as money starts coming back to these types of securities. Technology is the biggest sector holding, but the names aren't the glorified high fliers. They include IBM, Canon and SAP. The US makes up a third of the portfolio and the rest is nicely diversified geographically.


	AIM Canada Growth Class											-	-	15.09%	-24.19%	30-Jun-98	13		2.38%
	Manager Derek Webb is famous for his momentum approach. It is important to remember that momentum is not found exclusively in tech stocks. The focus is on the earnings records of individual companies. He first uses computer models to search for firms displaying good momentum then he selects the cream of the crop from the list. We really like Webb as a manager. He feels information availability is the key to successful management today. He is trying to sell a disciple and has made a strong case for momentum thanks to his performance.


	AIM Canada Income Class											-	-	38.89%	-20.35%	30-Jun-98	NA		2.08%
	Income is not really the focus of this Derek Webb run fund. The portfolio contains a well-diversified mix of growth and income stocks. Technology accounts for about 35% of the portfolio. $.0375 is distributed monthly. Webb's a momentum investor but he switches gears a bit for this one. He looks from the bottom-up for high yielding stocks, growth companies and REITs. However, performance has lagged and management just doesn't fit properly. We'd look elsewhere for an income fund.


	AIM America Growth Class											-	-	9.09%	-22.16%	31-Jul-98	5		2.74%
	This was an average fund until Manager Charles Scavone began to put a focus on earnings momentum. Time will tell if this style will continue to add value. Technology is the dominant force in the portfolio. It makes up 50% of the fund while the remaining 50% is diversified throughout numerous industries. Mid-cap stocks are favoured by management and the aim is to buffer against downward fluctuations in any individual holding or industry by providing exposure to a broad range of stocks.


	AIM Gbl Infrastructure											-	-	3.64%	-13.26%	31-Aug-98	5		2.95%
	This fund invests in companies that design, develop or support infrastructures. Telecom companies are the biggest part of the fund, and on that note, executives at IM have decided to merge this offering with the Global Telecom fund.


	AIM Global Nat Resources											-	-	34.55%	-43.19%	30-Nov-97	NA		2.95%
	Momentum managers Derek Webb and Roger Mortimer have left their bread and butter styles on the sideline for this offering in exchange for a more traditional bottom-up approach. We feel they've done an excellent job with this one. Country allocations have gone well but be aware that expenses are more than 40 bps above the the average of its peers'.


	AIM Global Telecom											-	-	12.73%	-22.90%	30-Jun-96	13		2.70%
	Telecom is hot and portfolio manager Brian Hayward sees three trends for the industry: deregulation, proliferation of wireless and the explosion of data traffic. Hayward focuses on industry leaders and picks stocks using a bottom-up approach. He meets regularly with management and his relationship with Invesco's high-yield bond guys give him insights that many competitors don't have. This is an incredible sector and having this fund as a small portion of a diversified portfolio would be a good move. Networking, fiber optics and wireless will change the way we live and this fund is positioned to capitalize.


	AIM Global Theme Class											-	-	0.00%	-14.73%	31-Aug-98	4		2.75%
	Lead manager Derek Webb feels that we are in the new world of investing where it is the manager's job to manage information. Webb divides the world by industrial group rather than geographic region. Momentum is combined with bottom-up analysis in the stock selection process. He is trying to sell a discipline and has made a strong case for momentum thanks to his performance. This fund appears to be a bit more conservative than his other funds due to its geographical and industrial diversification.


	AIM Latin Amer Growth											-	-	30.91%	-51.44%	31-Aug-97	NA		2.93%
	Latin America had a fabulous 1999. Investments from US and European companies have given many Latin American firms credibility. This fund has consistently been a great performer and for an AIM fund, its MER isn't too bad. If you can handle the volatility of a Latin American investment, strongly consider this one.


	AIM Pacific Growth Class											-	-	27.27%	-50.82%	31-Jul-97	29		2.95%
	It truly was a continent wide recovery for Asia in 1999. Manager Henry Chan uses a bottom-up approach to select leading growth companies across all sectors in the region. The performance of this fund has been somewhat choppy but overall, it has been quite good. Asia still has lots of room for improvement and the road to recovery will be volatile but this is a solid fund.


	AIM Sht-Term Income A											-	-	0.00%	-0.51%	31-Dec-96	5		1.76%


	AIM Short-Term Income B											-	-	0.00%	-0.65%	31-Dec-96	8		2.34%


	AIM Global Grwth & Inc											-	-	21.82%	-12.18%	31-Jan-99	NA		2.77%
	Don't let long run return numbers fool you on this one. This fund is in the dog house almost entirely because of a disastrous 1999. The portfolio is very well diversified with plenty of cheap names with a slight contrarian spin to it. We expect it to do well as the tech sector consolidates.


	AIM Global Bond Fund											-	-	21.82%	-12.09%	31-Jan-99	NA		2.35%
	Bond funds aren't exciting but if you decide to get involved you should look for a one that's cheap and consistent. This one is neither. This 'global' fund is heavily concentrated in North America with 83% of assets invested in the continent. The top positions are in US treasuries and they make up just under 45% of the fund. There's a 60/40 split between government and corporate bonds. This is an expensive fund that has had middle of the road performance. The high corporate allocation hasn't boosted performance significantly.


	AIM Canada Value Class											-	-	35.00%	-24.53%	31-May-98	13		2.82%
	There's probably as little exposure to tech as you can find in an AIM fund with this offering. We have no problem with the name 'value' being attached to it. This fund has done amazingly well without having a great deal of exposure to tech and telecom. Solid picks in the energy and manufacturing sectors have paid off. We remain optimistic on the outlook for this one.


	AIM Gbl Health Science Cl											-	-	33.33%	-25.09%	31-Mar-00	NA		2.82%
	This is the same as the other Health Sciences fund with the only difference being the legal status. This one can be classified as a corporation. Performance has dragged a bit because manager John Schroer was heavy into pharmas in 1999. He shifted heavily into biotechs in late 1999 and did well initially but got burned in March. Schroer liquidated assets big-time this spring. He's waiting for better opportunities and he learned a lot from the recent biotech ups and downs. However, we question his rapid sector shifts. We like his research methodology but be aware of the high MER.


	AIM Canada Money Market											-	-	0.00%	0.00%	NA	NA		1.08%


	AIM RSP American Premier											-	-	NA	-6.03%	30-Apr-00	NA		2.92%


	AIM RSP European Growth											-	-	NA	-9.10%	31-Mar-00	NA		2.93%


	AIM RSP Gbl Grth & Income											-	-	NA	-3.30%	31-Jan-00	2		2.96%


	AIM RSP Global Theme Fund											-	-	NA	-5.33%	31-Mar-00	NA		2.88%


	AIM RSP Glo Hlth Sci Fd											-	-	NA	-23.23%	31-Mar-00	NA		3.16%


	AIM RSP Glo Telecomm Fd											-	-	NA	-14.37%	30-Apr-00	NA		3.07%


	AIM RSP Glo Technology Fd											-	-	NA	-18.20%	31-Mar-00	NA		3.05%

ii. Style Cluster

By comparing a fund’s performance to the performance of its peers we can determine how good of a job the portfolio manager has done in adding value.

Fund Name	Fund Return	Cluster Return	Manager Added Value
AIM European Growth	40.9%	30%	10.9%
AIM Canadian Premier Fund	29%	26.6%	2.4%
AIM Canada Growth	26.8%	22.7%	4.1%
AIM Canada Income Cl	5.5%	9.6%	-4.1%
AIM Global Nat. Resources	-2.8%	-3.3%	.5%
AIM American Premier Fund	32.3%	25.1%	7.2%
AIM Global Telecom Cl	50%	45.6%	4.4%
AIM Global Health Sciences	16.3%	21.9%	-5.7%
AIM Global Theme Class	30.1%	15%	15.2%
AIM Global Technology	75.9%	64.8%	11.1%
AIM International Value	10.8%	12.9%	-2.1%

Note: Funds must have at least 36 months of data to be included in analysis.

Now, when we say peers, we mean funds that historically have had extremely similar patterns of performance because, intuitively, funds appearing to have had comparable numbers employ the same style (although this analysis does not explicitly test for that). This approach acts as a far more detailed comparison than looking at funds using blanket style labels such as "small-cap growth".

The method analyzes the correlation of a fund’s monthly returns with those of other funds and identifies the most closely related fund clusters. In this table the three year-compounded returns to April 31, 2000 are used. The cluster return is based on the return of the 12 closest peers. The cluster analysis has been limited to nine of the largest AIM funds based on total assets.

AIM’s two largest funds, the Canada Growth Class fund and the Global Theme Class fund each outpaced their peers by respective numbers of 4.1% and 15.2%. In both cases, a higher weighting in high-flying technology shares than the cluster contributed to the value added.

Several other funds from the family achieved extremely impressive value-added numbers. The European Growth fund achieved a manager value added of 10.9%. This can be attributed to the manager’s willingness to invest in fast growing, but expensive European companies especially in the technology and telecommunications sectors. The Global Technology fund also outperformed its cluster by a stellar 11.1%

The Global Health Sciences fund was the biggest laggard, trailing its peers by 5.7% Why? Over three quarters of the fund has been invested in the US. This has meant that exposure of this "global" fund to quality European drug makers has been limited, thereby keeping performance down. Management has also rotated in and out of sectors with less than tremendous precision.

C. Fund Correlation

Correlation, in this context, is a measure of similarity between funds. It is a useful tool that can help identify diversification in the portfolio. The formula for correlation is covariance divided by the product of the standard deviations of the two subjects. The measure runs from –1.00 to +1.00 and we consider any correlation of .85 or greater to be high (these are highlighted). It is useful because suppose you have a portfolio of three funds, all having correlations of greater than .85. There is essentially little diversification in the portfolio. You could sell off two of the funds and invest the proceeds in the remaining fund without worrying about diversification being lost because there wasn’t any to begin with. On the other hand, if you had a correlation of .42 between a pair of funds, redundancy would not be an issue. The following table details the correlations among AIM funds.

	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19	20	21	22	23	24	25	26
1 - AIM Amer Aggr Growth	1.00	0.54	0.86	0.84	0.11	0.65	0.65	0.23	0.93	0.40	0.81	0.56	0.08	0.89	0.74	0.82	0.23	0.78	0.68	0.43	0.35	0.00	-0.08	0.21	-0.01	0.73
2 - AIM American Premier Fund	-	1.00	0.55	0.55	0.13	0.59	0.46	0.25	0.99	0.77	0.53	0.60	0.03	0.69	0.65	0.75	0.18	0.72	0.73	0.50	0.45	0.01	0.02	0.63	0.33	0.47
3 - AIM Canadian Balanced	-	-	1.00	0.99	0.16	0.80	0.56	0.26	0.96	0.47	0.94	0.59	0.18	0.83	0.63	0.86	0.31	0.90	0.78	0.50	0.46	0.12	0.05	0.33	-0.09	0.80
4 - AIM Canadian Premier Fund	-	-	-	1.00	0.14	0.79	0.53	0.20	0.96	0.50	0.95	0.60	0.15	0.83	0.63	0.86	0.35	0.91	0.79	0.53	0.51	0.10	0.03	0.34	-0.13	0.81
5 - AIM Cash Performance	-	-	-	-	1.00	0.01	-0.01	-0.20	0.24	0.02	0.03	0.00	0.90	0.09	-0.15	0.13	-0.12	0.15	0.05	0.11	0.42	0.27	0.30	-0.16	-0.08	0.07
6 - AIM European Gowth Fund	-	-	-	-	-	1.00	0.58	0.23	0.65	0.55	0.76	0.38	-0.23	0.70	0.52	0.73	0.00	0.81	0.59	0.34	0.38	-0.21	-0.27	0.55	0.15	0.53
7 - AIM Global Health Sciences	-	-	-	-	-	-	1.00	0.39	0.82	0.20	0.48	0.24	-0.08	0.50	0.73	0.50	-0.17	0.49	0.44	0.14	0.12	0.02	-0.11	0.16	0.21	0.23
8 - AIM Canadian Bond Fund	-	-	-	-	-	-	-	1.00	-0.22	0.15	0.23	0.19	-0.09	0.15	0.12	0.21	0.09	0.17	0.35	0.00	-0.19	0.10	0.05	0.29	0.53	0.08
9 - AIM Global RSP Index Fund	-	-	-	-	-	-	-	-	1.00	0.97	0.94	0.94	0.48	0.92	0.95	0.98	0.81	0.95	0.95	0.91	0.78	0.51	0.53	0.67	-0.26	0.96
10 - AIM International Value	-	-	-	-	-	-	-	-	-	1.00	0.48	0.74	-0.08	0.59	0.55	0.71	0.39	0.58	0.68	0.68	0.54	0.02	0.06	0.77	0.25	0.63
11 - AIM Canada Growth Class	-	-	-	-	-	-	-	-	-	-	1.00	0.58	0.06	0.84	0.68	0.81	0.50	0.88	0.79	0.52	0.44	0.03	-0.05	0.42	-0.12	0.82
12 - AIM Canada Income Class	-	-	-	-	-	-	-	-	-	-	-	1.00	-0.02	0.64	0.65	0.69	0.51	0.59	0.70	0.63	0.30	0.23	0.23	0.51	0.05	0.79
13 - AIM Cda Money Market Class	-	-	-	-	-	-	-	-	-	-	-	-	1.00	-0.02	-0.13	0.08	0.06	0.12	0.16	0.10	0.38	0.49	0.50	-0.36	-0.16	0.10
14 - AIM America Growth Class	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	0.72	0.87	0.33	0.88	0.80	0.51	0.40	-0.04	-0.07	0.46	-0.01	0.76
15 - AIM Global Health Sciences Cl	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	0.69	0.34	0.67	0.76	0.38	0.18	0.33	0.32	0.51	0.22	0.44
16 - AIM Global Infrastructure Cl	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	0.38	0.90	0.84	0.59	0.52	0.10	0.10	0.51	0.08	0.79
17 - AIM Glo Nat Resources Class	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	0.32	0.49	0.50	0.29	0.28	0.28	0.24	-0.23	0.67
18 - AIM Global Telecom Class	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	0.84	0.51	0.55	0.06	0.02	0.41	.-.06	0.77
19 - AIM Global Theme Class	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	0.59	0.53	0.24	0.19	0.49	0.06	0.76
20 - AIM Latin Amer Growth Class	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	0.56	0.15	0.15	0.31	-0.10	0.61
21 - AIM Pacific Growth Class	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	0.09	0.06	0.17	-0.24	0.56
22 - AIM Sht-Term Income Cl A	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	0.98	-0.26	-0.06	0.11
23 - AIM Sht-Term Income Cl B	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	-0.21	-0.02	0.07
24 - AIM Global Grwth & Inc Cl	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	0.52	0.39
25 - AIM Global Bond Fund	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00	-0.19
26 - AIM Canada Value Class	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	1.00

Note: Funds must have at least 36 months of data to be included in analysis.

D. Management Expense Ratio Analysis

AIM funds are expensive. In fact, the overwhelming majority of the family’s funds have MERs greater that at least half of their respective peers. It is interesting to note that AIM’s specialty funds can be found down the price scale a bit further than many of the firm’s diversified offerings.

MER and percent rank for selected AIM funds

Fund	MER	% Rank	Fund	MER	% Rank
AIM Canadian Bond Fund	2.40%	0.966	AIM European Growth Fund	2.93%	0.755
AIM Global Grwth & Inc	2.78%	0.96	AIM Cash Performance	1.25%	0.736
AIM Global Bond Fund	2.60%	0.906	AIM Canadian Balanced	2.59%	0.701
AIM Canada Value Class	2.89%	0.898	AIM Global Theme Class	2.77%	0.664
AIM Amer Aggressive Gro	2.95%	0.878	AIM Global Technology	2.93%	0.661
AIM American Premier Fund	2.93%	0.868	AIM Glo Infrastructure	2.78%	0.548
AIM America Growth	2.92%	0.859	AIM Global Telecom	2.78%	0.548
AIM Pacific Growth	3.02%	0.822	AIM Canada Income Cl	2.10%	0.534
AIM Canadian Premier Fund	2.69%	0.787	AIM Global Hlth Sci Cl	2.75%	0.532
AIM Glo Nat Resources	2.96%	0.775	AIM Canada Growth	2.42%	0.523
AIM International Value	2.95%	0.76	AIM Glo Health Sciences	2.64%	0.467
AIM Latin Amer Growth	2.94%	0.757	AIM Cda Money Market	0.77%	0.355

E. Model Portfolios

Portfolio

Results

Nester
AIM American Premier	7%	Average MER	2.00%
AIM Canada Money Market	25%	Average Annual Return	10.63%
AIM Canadian Bond	42%	Best Year	21.04%
AIM Canada Growth Class	26%	Worst Year	0.02%
		% of Losing Years	0.00%
		% of Years less than +5%	20.00%
		Biggest Drop	-5.29%
		Months to Recover	4

Nester
This type of person doesn’t care much about managing money. Nesters equate money with comfort not security. They aren’t interested in leaving money for their kids, but rather in living for today. These individuals really don’t have much in the way of investments and just want to get by. Nesters do not believe that a person's wealth is equated with his or her worth.

Idealist
AIM American Premier	7%	Average MER	2.10%
AIM Canada Money Market	15%	Average Annual Return	11.03%
AIM Canadian Bond	52%	Best Year	20.70%
AIM Canada Growth	26%	Worst Year	0.35%
		% of Losing Years	0.00%
		% of Years less than +5%	17.78%
		Biggest Drop	-5.17%
		Months to Recover	4

Idealists are generous thrifty people who don’t much care for money. They wouldn’t be devastated by a losing investment; but then again, they’re not that likely to be involved much in vesting. For them money means security, not happiness.

Splurger
AIM Canadian Bond	23%	Average MER	2.50%
AIM Canada Growth Class	26%	Average Annual Return	14.75%
AIM European Growth	11%	Best Year	43.25%
AIM America Growth Class	20%	Worst Year	-2.37%
AIM Global Bond	20%	% of Losing Years	3.41%
		% of Years less than +5%	20.45%
		Biggest Drop	-10.18%
		Months to Recover	3

BULLRIDE.jpg (7248 bytes) Splurgers buy luxuries. They are also quite risk-averse. These individuals are hunters but without the financial acumen. They appreciate those who appreciate the best, and aren’t very particle.

Protector
AIM Canada Growth Class	31%	Average MER	2.54%
AIM Global Bond	32%	Average Annual Return	15.77%
AIM Pacific Growth Class	16%	Best Year	47.20%
AIM America Growth Class	21%	Worst Year	-11.77%
		% of Losing Years	9.09%
		% of Years less than +5%	20.00%
		Biggest Drop	-11.77%
		Months to Recover	13

Protectors put others first. They are financially savvy and have adequate insurance, or more. They are competent, stable and think of others first in financial affairs.

Hunter
AIM Pacific Growth Class	18%	Average MER	2.67%
AIM Canada Growth Class	30%	Average Annual Return	16.85%
AIM Global Bond	12%	Best Year	84.43%
AIM Global Technology	13%	Worst Year	-10.36%
AIM America Growth Class	11%	% of Losing Years	15.85%
AIM European Growth	16%	% of Years less than +5%	34.15%
		Biggest Drop	-13.66%
		Months to Recover	3

Hunters are high income individuals who are aggressive about making, spending and investing their money. Sometimes hunters are extravagant and they generally equate money with happiness, achievement or power. Hunters feel comfortable choosing investments and believe that it takes intelligence and guts to

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