AIM International Mutual Funds. AIM Counselor Series Trust

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1 AIM Counselor Series Trust AIM Advantage Health Sciences Fund Class A, B and C Prospectus dated December 20, 2005 as supplemented January 17, 2006 and April 21, 2006 AIM Floating Rate Fund-Class A, B1, C and R Prospectus dated April 14, 2006 AIM Multi-Sector Fund Class A, B and C Prospectus dated December 20, 2005 as supplemented January 17, 2006, April 13, 2006 and April 21, 2006 AIM Structured Core Fund Class A, B, C and R AIM Structured Growth Fund Class A, B, C and R AIM Structured Value Fund Class A, B, C and R Prospectuses dated March 31, 2006 as supplemented April 21, 2006 AIM Equity Funds AIM Capital Development Fund Class A, B, C, R and Investor AIM Charter Fund Class A, B, C and R AIM Constellation Fund Class A, B, C and R AIM Diversified Dividend Fund Class A, B, C, R and Investor AIM Large Cap Basic Value Fund Class A, B, C, R and Investor AIM Large Cap Growth Fund Class A, B, C, R and Investor Prospectuses dated February 28, 2006 as supplemented April 21, 2006 AIM Funds Group AIM European Small Company Fund Class A, B and C AIM Global Value Fund Class A, B and C AIM International Small Company Fund Class A, B and C AIM Mid Cap Basic Value Fund Class A, B, C and R AIM Select Equity Fund Class A, B and C AIM Small Cap Equity Fund Class A, B, C and R Prospectuses dated April 24, 2006 AIM Basic Balanced Fund Class A, B, C, R and Investor Prospectus dated April 24, 2006 as supplemented May 1, 2006 AIM Growth Series AIM Basic Value Fund Class A, B, C and R AIM Conservative Allocation Fund Class A, B, C and R AIM Global Equity Fund Class A, B, C and R AIM Growth Allocation Fund Class A, B, C and R AIM Income Allocation Fund Class A, B, C and R AIM International Allocation Fund Class A, B, C and R AIM Mid Cap Core Equity Fund Class A, B, C and R AIM Moderate Allocation Fund Class A, B, C and R AIM Moderate Growth Allocation Fund Class A, B, C and R AIM Moderately Conservative Allocation Fund Class A, B, C and R AIM Small Cap Growth Fund Class A, B, C, R and Investor Prospectuses dated April 24, 2006 AIM International Mutual Funds AIM Asia Pacific Growth Fund Class A, B and C AIM European Growth Fund Class A, B, C, R and Investor AIM Global Aggressive Growth Fund Class A, B and C AIM Global Growth Fund Class A, B and C Prospectuses dated February 28, 2006 as supplemented April 21, 2006 AIM International Core Equity Fund Class A, B, C, R and Investor AIM International Growth Fund Class A, B, C and R Prospectuses dated February 28, 2006 as supplemented April 21, 2006 and May 1, 2006 AIM Investment Funds AIM China Fund Class A, B and C AIM Enhanced Short Bond Fund Class A, C and R AIM International Bond Fund Class A, B and C AIM Japan Fund Class A, B and C Prospectuses dated March 31, 2006 as supplemented April 21, 2006 AIM Developing Markets Fund Class A, B and C AIM Global Health Care Fund Class A, B, C and Investor AIM Trimark Endeavor Fund Class A, B, C and R AIM Trimark Fund Class A, B, C and R Prospectuses dated February 28, 2006 as supplemented April 21, 2006 AIM Trimark Small Companies Fund Class A, B, C and R Prospectus dated February 28, 2006 as supplemented March 24, 2006 and April 21, 2006 AIM Investment Securities Funds AIM Global Real Estate Fund Class A, B, C and R AIM Money Market Fund AIM Cash Reserve Shares, Class B, C, R and Investor AIM Real Estate Fund Class A, B, C, R and Investor Prospectuses dated October 25, 2005 as supplemented December 8, 2005 and April 21, 2006 AIM High Yield Fund Class A, B, C and Investor AIM Intermediate Government Fund Class A, B, C, R and Investor AIM Limited Maturity Treasury Fund Class A and A3 AIM Municipal Bond Fund Class A, B, C and Investor Prospectuses dated October 25, 2005 as supplemented December 8, 2005, March 31, 2006 and April 21, 2006 AIM Income Fund Class A, B, C, R and Investor AIM Total Return Bond Fund Class A, B, C and R Prospectuses dated October 25, 2005 as supplemented December 8, 2005, March 31, 2006, April 21, 2006 and May 1, 2006 S:\SUPP\ \All Retail Funds (AFRF).doc (4) skb

2 AIM Short Term Bond Fund Class A, C and R Prospectus dated October 25, 2005 as supplemented December 8, 2005, February 3, 2006, March 31, 2006 and April 21, 2006 AIM Sector Funds AIM Energy Fund Class A, B, C and Investor AIM Financial Services Fund Class A, B, C and Investor AIM Gold & Precious Metals Fund Class A, B, C and Investor AIM Leisure Fund Class A, B, C, R and Investor AIM Technology Fund Class A, B, C and Investor AIM Utilities Fund Class A, B, C and Investor Prospectus dated October 25, 2005 as supplemented December 8, 2005, March 31, 2006 April 13, 2006 and April 21, 2006 AIM Special Opportunities Funds AIM Opportunities I Fund Class A, B and C AIM Opportunities II Fund Class A, B and C AIM Opportunities III Fund Class A, B and C Prospectuses dated February 28, 2006 as supplemented April 21, 2006 AIM Stock Funds AIM Dynamics Fund Class A, B, C, R and Investor Prospectus dated October 25, 2005 as supplemented December 8, 2005 and April 21, 2006 AIM Summit Fund Class A, B and C Prospectus dated February 28, 2006 as supplemented April 21, 2006 AIM Tax-Exempt Funds AIM High Income Municipal Fund Class A, B and C Prospectus dated July 29, 2005 as revised April 13, 2006 and as supplemented April 21, 2006 AIM Tax-Exempt Cash Fund Class A and Investor Prospectus dated July 29, 2005 as supplemented December 8, 2005, December 23, 2005 and April 21, 2006 AIM Tax-Free Intermediate Fund Class A and A3 Prospectus dated July 29, 2005 as supplemented December 8, 2005, December 23, 2005, March 31, 2006 and April 21, 2006 AIM Treasurer's Series Trust Premier Portfolio Investor Class Premier Tax-Exempt Portfolio Investor Class Premier U.S. Government Money Portfolio Investor Class Prospectus dated December 20, 2005 as supplemented April 21, 2006 AIM S&P 500 Index Fund Investor Class Prospectus dated October 25, 2005 as supplemented December 8, 2005, January 31, 2006 and April 21, 2006 Reference is made to the SHAREHOLDER INFORMATION REDEEMING SHARES Permitted Exchanges section of the above referenced prospectuses. Class B1 Shares of AIM Floating Rate Fund may be exchanged for Class A, Class A3, Investor Class or AIM Cash Reserve Shares. Exceptions are: (1) Class A Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund are currently closed to new investors and (2) Investor Class Shares are currently offered to new investors only on a limited basis (see SHAREHOLDER INFORMATION PURCHASING SHARES Grandfathered Investors section of the above referenced prospectuses). You will not pay a sales charge, contingent deferred sales charge or other sales charge when exchanging such Class B1 shares. Class B1 Shares of AIM Floating Rate Fund may not be exchanged for Class B, Class C, Class P, Class R or Institutional Class Shares. S:\SUPP\ \All Retail Funds (AFRF).doc (4) skb

3 AIM Basic Value Fund PROSPECTUS April 24, 2006 Prospectus Enclosed AIM Growth Series

4 AIM Privacy Policy We are always aware that when you invest in a fund advised by AIM, you entrust us with more than your money. You also share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private. AIM collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you, or our former customers, to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms. Even within AIM, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, AIM maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our Web site More detail is available to you at that site. THIS PAGE IS NOT PART OF THE PROSPECTUS The AIM Family of Funds ) The AIM Institutional Funds ) A I M Advisors, Inc. ) A I M Capital Management, Inc. ) A I M Distributors, Inc. ) Fund Management Company

5 AIM Basic Value Fund PROSPECTUS April 24, 2006 AIM Basic Value Fund seeks to provide long-term growth of capital. This prospectus contains important information about the Class A, B, C and R shares of the fund. Please read it before investing and keep it for future reference. As with all other mutual fund securities, the Securities and Exchange Commission has not approved or disapproved these securities or determined whether the information in this prospectus is adequate or accurate. Anyone who tells you otherwise is committing a crime. An investment in the fund: m is not FDIC insured; m may lose value; and m is not guaranteed by a bank.

6 AIM BASIC VALUE FUND Table of Contents Risk/Return Summary 1 Performance Information 2 Annual Total Returns 2 Performance Table 3 Fee Table and Expense Example 4 Fee Table 4 Expense Example 4 Hypothetical Investment and Expense Information 5 Investment Objectives, Strategies and Risks 6 Objectives and Strategies 6 Risks 6 Disclosure of Portfolio Holdings 7 Fund Management 8 The Advisor 8 Advisor Compensation 8 Portfolio Manager(s) 8 Other Information 9 Sales Charges 9 Dividends and Distributions 9 Financial Highlights 10 Shareholder Information A-1 Choosing a Share Class A-1 Excessive Short-Term Trading Activity Disclosures A-5 Purchasing Shares A-8 Redeeming Shares A-10 Exchanging Shares A-13 Pricing of Shares A-16 Taxes A-17 Obtaining Additional Information Back Cover The AIM Family of Funds, AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investments, AIM Investor, AIM Lifetime America, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE, The AIM College Savings Plan, AIM Solo 401(k), AIM Investments and Design and Your goals. Our solutions. are registered service marks and AIM Bank Connection, AIM Internet Connect, AIM Private Asset Management, AIM Private Asset Management and Design, AIM Stylized and/or Design, AIM Alternative Assets and Design and myaim.com are service marks of A I M Management Group Inc. AIM Trimark is a registered service mark of A I M Management Group Inc. and AIM Funds Management Inc. No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.

7 AIM BASIC VALUE FUND Risk/Return Summary The fund s investment objective is long-term growth of capital. Please see Investment Objective, Strategies and Risks following The fund seeks to meet this objective by investing, normally, at least the expense information for a description of these risks and other 65% of its total assets in equity securities of U.S. issuers that have risks of investing in the fund. market capitalizations in excess of $5 billion. In selecting securities There is a risk that you could lose all or a portion of your for the fund s portfolio, the portfolio managers seek to invest in investment in the fund and that the income you may receive from your companies with market prices that the portfolio managers believe are investment may vary. The value of your investment in the fund will significantly below the portfolio managers estimates of intrinsic rise and fall with the prices of the securities in which the fund invests. value. The fund may also invest up to 25% of its total assets in foreign An investment in the fund is not a deposit in a bank and is not securities. insured or guaranteed by the Federal Deposit Insurance Corporation Among the principal risks of investing in the fund, which could or any other government agency. adversely affect its net asset value, yield and total return are: Market Risk Foreign Securities Risk Equity Securities Risk U.S. Government Interest Rate and Credit Risk Obligations Risk Derivatives Risk Counterparty Risk Leveraging Risk Management Risk Value Investing Risk 1

8 AIM BASIC VALUE FUND Performance Information The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund s past performance (before and after taxes) is not necessarily an indication of its future performance. ANNUAL TOTAL RETURNS 1 The following bar chart shows changes in the performance of the fund s Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower. 40% 27.23% 32.04% 33.76% % 7.02% 20.25% 10.88% 5.55% % % /31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 1 The fund s return during certain periods was positively impacted by its investments in initial public offerings (IPOs). There can be no assurance that the fund will have favorable IPO investment opportunities in the future. For additional information regarding the funds performance, please see the Financial Highlights section of this prospectus. The Class A shares year-to-date total return as of March 31, 2006 is 4.97%. During the periods shown in the bar chart, the highest quarterly return was 21.10% (quarter ended June 30, 1999) and the lowest quarterly return was 20.82% (quarter ended September 30, 2002). 2

9 AIM BASIC VALUE FUND Performance Information (continued) PERFORMANCE TABLE The following performance table compares the fund s performance to that of a broad-based securities market index, a style specific index and a peer group index. The fund s performance reflects payment of sales loads, if applicable. The indices may not reflect payment of fees, expenses or taxes. The fund is not managed to track the performance of any particular index, including the indices shown below, and consequently, the performance of the fund may deviate significantly from the performance of the indices shown below. Average Annual Total Returns 1 (for the periods ended Since Inception December 31, 2005) 1 Year 5 Years 10 Years Inception 2 Date Class A 10/18/95 Return Before Taxes (0.26)% 2.63% 10.98% Return After Taxes on Distributions (0.26) Return After Taxes on Distributions and Sale of Fund Shares (0.17) Class B 10/18/95 Return Before Taxes (0.20) Class C 05/03/99 Return Before Taxes % Class R 3 10/18/95 3 Return Before Taxes S&P 500 Index Russell 1000 Value Index 4, Lipper Large-Cap Value Fund Index 4, After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and after-tax returns for Class B, C and R shares will vary. 1 The funds return during certain periods was positively impacted by its investments in IPOs. There can be no assurance that the fund will have favorable IPO investment opportunities in the future. For additional information regarding the funds performance, please see the Financial Highlights section of this prospectus. 2 Since Inception performance is only provided for a class with less than ten calendar years of performance. 3 The returns shown for the one year period are the historical returns of the fund s Class R shares. The returns shown for other periods are the blended returns of the historical performance of the fund s Class R shares since their inception and the restated historical performance of the fund s Class A shares (for periods prior to inception of the Class R shares) at net asset value, adjusted to reflect the higher Rule 12b-1 fees applicable to the Class R shares. The inception date shown in the table is that of the fund s Class A shares. The inception date of the fund s Class R shares is June 3, The Standard & Poor s 500 Index measures the performance of the 500 most widely held common stocks and is considered one of the best indicators of U.S. stock market performance. The fund has also included the Russell 1000 Value Index, which the fund believes more closely reflects the performance of the securities in which the fund invests. In addition, the Lipper Large-Cap Value Fund Index (which may or may not include the fund) is included for comparison to a peer group. 5 The Russell 1000 Value Index measures the performance of those Russell 1000 Index companies with the lower price-to-book ratios and lower forecasted growth values. 6 The Lipper Large-Cap Value Fund Index is an equally weighted representation of the 30 largest funds in the Lipper Large-Cap Value category. These funds, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. The SuperComposite 1500 Index is a market cap weighted index made up of 1500 liquid securities of companies with market capitalizations of $300 million and above, and represents the small-, mid-, and large-cap markets. Large-Cap Value funds typically have a below-average price-to-earnings ratio, price-to-book ratio, and a three year sales-per-share growth value, compared to the S&P 500 Index. 3

10 AIM BASIC VALUE FUND Fee Table and Expense Example FEE TABLE by the fund do not exceed a specified maximum annual advisory fee rate, which fee This table describes the fees and expenses that you may pay if you buy rate includes breakpoints and is based upon net asset levels. The fund s maximum and hold shares of the fund. annual advisory fee rate ranges from 0.695% (for average net assets up to $250 million) to 0.52% (for average net assets over $10 billion). Shareholder Fees If a financial institution is managing your account, you may also be charged a transaction or other fee by such financial institution. (fees paid directly from As a result of 12b-1 fees, long-term shareholders in the fund may your investment) Class A Class B Class C Class R pay more than the maximum permitted initial sales charge. Maximum Sales Charge (Load) Imposed on Purchases EXPENSE EXAMPLE (as a percentage of This example is intended to help you compare the costs of investing in offering price) 5.50% None None None different classes of the fund with the cost of investing in other mutual Maximum Deferred funds. Sales Charge (Load) The example assumes that you invest $10,000 in the fund for the (as a percentage of time periods indicated and then redeem all of your shares at the end original purchase price of those periods. The example also assumes that your investment has or redemption proceeds, a 5% return each year, that the fund s operating expenses remain the whichever is less) None % 1.00% None 1 same and includes the effect of any contractual fee waivers and/or expense reimbursements, if any. To the extent fees are waived or Annual Fund Operating Expenses 2 expenses are reimbursed voluntarily, your expenses will be lower. Although your actual returns and costs may be higher or lower, based (expenses that are deducted on these assumptions your costs would be: from fund assets) Class A Class B Class C Class R Management Fees 0.66% 0.66% 0.66% 0.66% 1 Year 3 Years 5 Years 10 Years Distribution and/or Class A $660 $892 $1,150 $1,903 Service (12b-1) Fees Class B ,228 2,059 Other Expenses Class C ,028 2,254 Total Annual Fund Operating Expenses Class R ,713 Fee Waiver Net Annual Fund You would pay the following expenses if you did not redeem your Operating Expenses shares: 1 1 Year 3 Years 5 Years 10 Years A contingent deferred sales charge may apply in some cases. See Shareholder Information Choosing a Share Class Sales Charges. 2 There is no guarantee that actual expenses will be the same as those shown in the Class A $660 $892 $1,150 $1,903 table. Class B ,028 2,059 3 The Board of Trustees has approved a permanent reduction of the Rule 12b-1 fees Class C ,028 2,254 applicable to Class A shares to 0.25% effective July 1, Distribution and/or Service (12b-1) Fees reflect this agreement. Class R ,713 4 Effective January 1, 2005 through December 31, 2009, the advisor has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable 4

11 AIM BASIC VALUE FUND Hypothetical Investment and Expense Information The settlement agreement between A I M Advisors, Inc. and certain of its affiliates and the New York Attorney General requires A I M Advisors, Inc. and certain of its affiliates to provide certain hypothetical information regarding investment and expense information. The chart below is intended to reflect the annual and cumulative impact of the fund s expenses, including investment advisory fees and other fund costs, on the fund s return over a 10-year period. The example reflects the following: ) You invest $10,000 in the fund and hold it for the entire 10 year period; ) Your investment has a 5% return before expenses each year; ) The fund s current annual expense ratio includes any applicable contractual fee waiver or expense reimbursement for the period committed; ) Hypotheticals both with and without any applicable initial sales charge applied (see Shareholder Information Choosing a Share Class section of this prospectus for applicability of initial sales charge); and ) There is no sales charge on reinvested dividends. There is no assurance that the annual expense ratio will be the expense ratio for the fund classes for any of the years shown. To the extent that A I M Advisors, Inc. and certain of its affiliates make any fee waivers and/or expense reimbursements pursuant to a voluntary arrangement, your actual expenses may be less. This is only a hypothetical presentation made to illustrate what expenses and returns would be under the above scenarios, your actual returns and expenses are likely to differ (higher or lower) from those shown below. Class A (Includes Maximum Sales Charge) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual Expense Ratio % 1.14% 1.14% 1.14% 1.20% 1.20% 1.20% 1.20% 1.20% 1.20% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses (1.64)% 2.16% 6.10% 10.20% 14.38% 18.73% 23.24% 27.92% 32.79% 37.83% End of Year Balance $ 9, $10, $10, $10, $11, $11, $12, $12, $13, $13, Estimated Annual Expenses $ $ $ $ $ $ $ $ $ $ Class A (Without Maximum Sales Charge) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual Expense Ratio % 1.14% 1.14% 1.14% 1.20% 1.20% 1.20% 1.20% 1.20% 1.20% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 3.86% 7.87% 12.03% 16.36% 20.78% 25.37% 30.13% 35.08% 40.21% 45.54% End of Year Balance $10, $10, $11, $11, $12, $12, $13, $13, $14, $14, Estimated Annual Expenses $ $ $ $ $ $ $ $ $ $ Class B 2 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual Expense Ratio % 1.89% 1.89% 1.89% 1.95% 1.95% 1.95% 1.95% 1.20% 1.20% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 3.11% 6.32% 9.62% 13.03% 16.48% 20.03% 23.69% 27.47% 32.31% 37.34% End of Year Balance $10, $10, $10, $11, $11, $12, $12, $12, $13, $13, Estimated Annual Expenses $ $ $ $ $ $ $ $ $ $ Class C 2 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual Expense Ratio % 1.89% 1.89% 1.89% 1.95% 1.95% 1.95% 1.95% 1.95% 1.95% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 3.11% 6.32% 9.62% 13.03% 16.48% 20.03% 23.69% 27.47% 31.35% 35.36% End of Year Balance $10, $10, $10, $11, $11, $12, $12, $12, $13, $13, Estimated Annual Expenses $ $ $ $ $ $ $ $ $ $ Class R Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual Expense Ratio % 1.39% 1.39% 1.39% 1.45% 1.45% 1.45% 1.45% 1.45% 1.45% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 3.61% 7.35% 11.23% 15.24% 19.33% 23.57% 27.95% 32.50% 37.20% 42.07% End of Year Balance $10, $10, $11, $11, $11, $12, $12, $13, $13, $14, Estimated Annual Expenses $ $ $ $ $ $ $ $ $ $ Your actual expenses may be higher or lower than those shown. 2 The hypothetical assumes you hold your investment for a full 10 years. Therefore, any applicable deferred sales charge that might apply in years one through five for Class B and year one for Class C, have not been deducted. 5

12 AIM BASIC VALUE FUND Investment Objectives, Strategies and Risks OBJECTIVES AND STRATEGIES The fund s investment objective is long-term growth of capital. The fund s investment objective may be changed by the Board of Trustees without shareholder approval. The fund seeks to meet this objective by investing, normally, at least 65% of its total assets in equity securities of U.S. issuers that have market capitalizations in excess of $5 billion. In complying with the fund s 65% investment requirement, the fund will invest primarily in marketable equity securities the managers believe have the potential for capital growth, and its investments may include synthetic and derivative instruments. Synthetic and derivative instruments are invest- ments that have economic characteristics similar to the fund s direct investments. Synthetic and derivative instruments that the fund may invest in include futures contracts, option contracts, and equity linked derivatives. Synthetic and derivative instruments may have the effect of leveraging the fund s portfolio. In selecting securities, the portfolio managers emphasize the following characteristics, although not all investments will have these attributes: m Buy businesses trading at a significant discount to portfolio managers estimate of intrinsic value. A company s market price must generally offer 50% appreciation potential to estimated intrinsic value over a 2 to 3 year time period. m Emphasize quality businesses with potential to grow intrinsic value over time. We seek established companies which we believe have solid growth prospects, the ability to earn an attractive return on invested capital and a management team that exhibits intelligent capital allocation skills. We estimate a company s intrinsic value primarily by taking the present value of projected future free cash flows (i.e. the excess cash generated by the business after considering all cash inflows and outflows to operate the business). We believe this intrinsic value represents the fair economic worth of the business and a value that an informed buyer would pay to acquire the entire company for cash. We check this valuation method with long-run absolute valuation characteristics (including price-to-earnings ratio and price-to-book value ratio) adjusted for the prevailing inflation and interest rate environment. The portfolio managers will consider selling a security to capitalize on a more attractive investment opportunity, if a security is trading significantly above the portfolio managers estimate of intrinsic value or if there is a permanent, fundamental deterioration in business prospects that results in inadequate upside potential to estimated intrinsic value. The fund managers seek to achieve strong long-term performance by constructing a diversified portfolio of typically stocks that offers value content greater than the broad market, as measured by the portfolio s aggregate discount to the portfolio managers estimated intrinsic value of the portfolio. The investment process is fundamental in nature and focused on individual companies as opposed to macro economic forecasts or specific industry exposure. The portfolio construction process is intended to preserve and grow the estimated intrinsic value of the fund s portfolio rather than mirror the composition or sector weights of any benchmark. The fund may also invest up to 25% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase. For cash management purposes, the fund may hold a portion of its assets in cash or cash equivalents, including shares of affiliated money market funds. In anticipation of or in response to adverse market or other conditions, or atypical circumstances such as unusually large cash inflows or redemptions, the fund may temporarily hold all or a portion of its assets in cash, cash equivalents (including shares of affiliated money market funds) or high-quality debt instruments. As a result, the fund may not achieve its investment objective. RISKS The principal risks of investing in the fund are: m Market Risk The prices of and the income generated by securities held by the fund may decline in response to certain events, including those directly involving the companies whose securities are owned by the fund; general economic and market conditions; regional or global economic instability; and currency and interest rate fluctuations. m Value Investing Risk Value stocks can react differently to issuer, political, market and economic developments than the market as a whole and other types of stocks. Value stocks tend to be currently out-of-favor with many investors and can continue to be underval- ued for long periods of time and may not ever realize their full value. m Equity Securities Risk The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions, and market liquidity. m Foreign Securities Risk Foreign securities have additional risks, including fluctuations in the value of the U.S. dollar relative to the values of other currencies, relatively low market liquidity, decreased publicly available information about issuers, inconsistent and potentially less stringent accounting, auditing and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers, expropriation, nationalization or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in foreign securities may also be subject to dividend withholding or confisca- tory taxes, currency blockage and/or transfer restrictions. m Interest Rate and Credit Risk The fund may invest in debt securities such as notes and bonds. The values of debt securities and the income generated by debt securities may be affected by 6

13 AIM BASIC VALUE FUND changing interest rates and by changes in effective maturities and credit ratings of these securities. There is a possibility that the issuers of these instruments will be unable to meet interest payments or repay principal. Changes in the financial strength of an issuer may reduce the credit rating of its securities and may decrease their value. Interest rate increases may cause the price of a debt security to decrease, and the longer a debt security s duration, the more sensitive it is to this risk. Falling interest rates may also prompt some issuers to refinance existing debt, causing your investment in the fund to lose value. m U.S. Government Obligations Risk The fund may invest in obligations issued by agencies and instrumentalities of the U.S. Government. These obligations vary in the level of support they receive from the U.S. Government. They may be: (i) supported by the full faith and credit of the U.S. Treasury, such as those of the Government National Mortgage Association; (ii) supported by the right of the issuer to borrow from the U.S. Treasury, such as those of the Federal National Mortgage Association; (iii) supported by the discretionary authority of the U.S. Government to purchase the issuer s obligations, such as those of the former Student Loan Marketing Association; or (iv) supported only by the credit of the issuer, such as those of the Federal Farm Credit Bureau. The U.S. Government may choose not to provide financial support to U.S. Government sponsored agencies or instrumentalities if it is not legally obligated to do so, in which case, if the issuer defaulted, the underlying fund holding securities of such issuer might not be able to recover its investment from the U.S. Government. Disclosure of Portfolio Holdings m Derivatives Risk The value of derivatives so-called because their value derives from the value of an underlying asset (including an underlying security), reference rate or index may rise or fall more rapidly than other investments. For some derivatives, it is possible to lose more than the amount invested in the derivative. If the fund uses derivatives to hedge the overall risk of its portfolio, it is possible that the hedge may not succeed. This may happen for various reasons, including unexpected changes in the value of the rest of the fund s portfolio. m Counterparty Risk Individually negotiated, or over-the-counter, derivatives are also subject to counterparty risk, which is the risk that the other party to the contract will not fulfill its contractual obligation to complete the transaction with the fund. m Leveraging Risk The fund may engage in transactions, including the use of synthetic instruments and derivatives, which may give rise to a form of leverage. Leverage may cause the fund s portfolio to be more volatile than if the portfolio had not been leveraged because leverage can exaggerate the effect of any increase or decrease in the value of securities held by the fund. m Management Risk There is no guarantee that the investment techniques and risk analyses used by the fund s portfolio managers will produce the desired results. The fund s portfolio holdings are disclosed on a regular basis in its semi-annual and annual reports to shareholders, and on Form N-Q, which is filed with the Securities and Exchange Commission (SEC) within 60 days of the fund s first and third fiscal quarter-ends. In addition, portfolio holdings information for the fund is available at To reach this information, access the fund s overview page on the website. Links to the following fund information are located in the upper right side of this website page: Approximate Date of Information Remains Information Website Posting Posted on Website Top ten holdings as of month-end 15 days after month-end Until posting of the following month s top ten holdings Complete portfolio holdings as of calendar quarter-end 30 days after calendar quarter-end For one year A description of the fund s policies and procedures with respect to the disclosure of the fund s portfolio holdings is available in the fund s Statement of Additional Information, which is available at 7

14 AIM BASIC VALUE FUND Fund Management THE ADVISOR AIM, ADI and/or related entities and individuals in the future. You A I M Advisors, Inc. (the advisor or AIM) serves as the fund s can find more detailed information concerning all of the above investment advisor and is responsible for its day-to-day management. matters, including the parties to the civil lawsuits and summaries of The advisor is located at 11 Greenway Plaza, Suite 100, Houston, the various allegations and remedies sought in such lawsuits, in the Texas The advisor supervises all aspects of the fund s fund s Statement of Additional Information. operations and provides investment advisory services to the fund, As a result of the matters discussed above, investors in the AIM including obtaining and evaluating economic, statistical and financial funds might react by redeeming their investments. This might require information to formulate and implement investment programs for the the funds to sell investments to provide for sufficient liquidity and fund. could also have an adverse effect on the investment performance of The advisor has acted as an investment advisor since its organization the funds. in Today, the advisor, together with its subsidiaries, advises or manages over 200 investment portfolios, including the ADVISOR COMPENSATION fund, encompassing a broad range of investment objectives. During the fiscal year ended December 31, 2005, the advisor received On October 8, 2004, INVESCO Funds Group, Inc. (IFG) (the former compensation of 0.60% of average daily net assets. investment advisor to certain AIM funds), AIM and A I M Distributors, A discussion regarding the basis for the Board of Trustees approval Inc. (ADI) (the distributor of the retail AIM funds) reached final of the investment advisory agreement of the fund is available in the settlements with certain regulators, including the SEC, the New York fund s annual report to shareholders for the twelve-month period Attorney General and the Colorado Attorney General, to resolve civil ended December 31, enforcement actions and/or investigations related to market timing and related activity in the AIM funds, including those formerly advised PORTFOLIO MANAGER(S) by IFG. As part of the settlements, a $325 million fair fund ($110 million of which is civil penalties) has been created to The following individuals are jointly and primarily responsible for the compensate shareholders harmed by market timing and related day-to-day management of the fund s portfolio: activity in funds formerly advised by IFG. Additionally, AIM and ADI m Bret W. Stanley (lead manager), Senior Portfolio Manager, who has created a $50 million fair fund ($30 million of which is civil been responsible for the fund since 1998 and has been associated penalties) to compensate shareholders harmed by market timing and with the advisor and/or its affiliates since As the lead related activity in funds advised by AIM, which was done pursuant to manager, Mr. Stanley generally has final authority over all aspects of the terms of the settlement. These two fair funds may increase as a the fund s investment portfolio, including but not limited to, result of contributions from third parties who reach final settlements purchases and sales of individual securities, portfolio construction with the SEC or other regulators to resolve allegations of market techniques, portfolio risk assessment, and the management of daily timing and/or late trading that also may have harmed applicable AIM cash flows in accordance with portfolio holdings. The degree to funds. These two fair funds will be distributed in accordance with a which Mr. Stanley may perform these functions, and the nature of methodology to be determined by AIM s independent distribution these functions, may change from time to time. consultant, in consultation with AIM and the independent trustees of m the AIM funds and acceptable to the staff of the SEC. R. Canon Coleman II, Portfolio Manager, who has been responsible Civil lawsuits, including a regulatory proceeding and purported for the fund since 2003 and has been associated with the advisor class action and shareholder derivative suits, have been filed against and/or its affiliates since certain of the AIM funds, IFG, AIM, ADI and/or related entities and m Matthew W. Seinsheimer, Senior Portfolio Manager, who has been individuals, depending on the lawsuit, alleging among other things: responsible for the fund since 2000 and has been associated with (i) that the defendants permitted improper market timing and related the advisor and/or its affiliates since activity in the funds; (ii) that certain funds inadequately employed m fair value pricing; (iii) that the defendants charged excessive Michael J. Simon, Senior Portfolio Manager, who has been responsi- advisory and/or distribution fees and failed to pass on to shareholders ble for the fund since 2002 and has been associated with the the perceived savings generated by economies of scale and that the advisor and/or its affiliates since From 1996 to 2001, he was defendants adopted unlawful distribution plans; and (iv) that the equity analyst and portfolio manager with Luther King Capital defendants improperly used the assets of the funds to pay brokers to Management. aggressively promote the sale of the funds over other mutual funds They are assisted by the advisor s Basic Value Team, which is and that the defendants concealed such payments from investors by comprised of portfolio managers and research analysts. Team memdisguising them as brokerage commissions. bers provide research support and make securities recommenda- Additional civil lawsuits related to the above or other matters may tions with respect to the fund s portfolio, but do not have day-to-day be filed by regulators or private litigants against the AIM funds, IFG, management responsibilities with respect to the fund s portfolio. 8

15 AIM BASIC VALUE FUND The fund s Statement of Additional Information provides additional information about the portfolio managers investments in the fund, a description of their compensation structure, and information regard- ing other accounts they manage. Members of the team may change from time to time. More information on the portfolio manager(s) and the team, including biographies of other members of the team, may be found on the advisor s website ( The website is not part of this prospectus. Other Information SALES CHARGES Purchases of Class A shares of AIM Basic Value Fund are subject to the maximum 5.50% initial sales charge as listed under the heading Category I Initial Sales Charges in the Shareholder Information Choosing a Share Class section of this prospectus. Certain purchases of Class A shares at net asset value may be subject to the contingent deferred sales charge listed in that section. Purchases of Class B and Class C shares are subject to the contingent deferred sales charges listed in that section. Certain purchases of Class R shares may be subject to the contingent deferred sales charge listed in that section. DIVIDENDS AND DISTRIBUTIONS The fund expects that its distributions, if any, will consist primarily of capital gains. Dividends The fund generally declares and pays dividends, if any, annually. Capital Gains Distributions The fund generally distributes long-term and short-term capital gains, if any, annually. 9

16 AIM BASIC VALUE FUND Financial Highlights The financial highlights table is intended to help you understand the fund s financial performance. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions). This information has been audited by PricewaterhouseCoopers LLP, whose report, along with the fund s financial statements, is included in the fund s annual report, which is available upon request. For a discussion of how investments in IPOs affected the fund s performance, see the Performance Information section of this prospectus. Class A Year ended December 31, Net asset value, beginning of period $ $ $ $ $ Income from investment operations: Net investment income (loss) 0.06 (0.03) (0.06) (0.04) (a) (0.02) (a) Net gains (losses) on securities (both realized and unrealized) (6.54) 0.06 Total from investment operations (6.58) 0.04 Less distributions: Dividends from net investment income (0.00) (0.00) Distributions from net realized gains (0.00) (0.01) Total distributions (0.00) (0.01) Net asset value, end of period $ $ $ $ $ Total return (b) 5.55% 10.88% 33.76% (23.14)% 0.16% Ratios/supplemental data: Net assets, end of period (000s omitted) $3,682,420 $4,480,701 $3,812,300 $2,534,964 $2,066,536 Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.19% (c) 1.29% 1.34% 1.33% 1.30% Without fee waivers and/or expense reimbursements 1.25% (c) 1.31% 1.34% 1.33% 1.30% Ratio of net investment income (loss) to average net assets 0.15% (c) (0.11)% (0.28)% (0.17)% (0.05)% Portfolio turnover rate 12% 15% 20% 30% 20% (a) (b) Calculated using average shares outstanding. 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. (c) Ratios are based on average daily net assets of $4,067,937,

17 AIM BASIC VALUE FUND Financial Highlights (continued) Class B Year ended December 31, Net asset value, beginning of period $ $ $ $ $ Income from investment operations: Net investment income (loss) (0.19) (0.23) (0.21) (0.20) (a) (0.19) (a) Net gains (losses) on securities (both realized and unrealized) (6.27) 0.04 Total from investment operations (6.47) (0.15) Less distributions from net realized gains (0.00) (0.01) Net asset value, end of period $ $ $ $ $ Total return (b) 4.80% 10.14% 32.95% (23.63)% (0.53)% Ratios/supplemental data: Net assets, end of period (000s omitted) $1,682,608 $1,985,690 $1,946,590 $1,498,499 $1,538,292 Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.89% (c) 1.94% 1.99% 1.98% 1.95% Without fee waivers and/or expense reimbursements 1.95% (c) 1.96% 1.99% 1.98% 1.95% Ratio of net investment income (loss) to average net assets (0.55)% (c) (0.76)% (0.93)% (0.82)% (0.70)% Portfolio turnover rate 12% 15% 20% 30% 20% (a) (b) Calculated using average shares outstanding. 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. (c) Ratios are based on average daily net assets of $1,795,208,

18 AIM BASIC VALUE FUND Financial Highlights (continued) Class C Year ended December 31, Net asset value, beginning of period $ $ $ $ $ Income from investment operations: Net investment income (loss) (0.19) (0.23) (0.21) (0.20) (a) (0.19) (a) Net gains (losses) on securities (both realized and unrealized) (6.27) 0.04 Total from investment operations (6.47) (0.15) Less distributions from net realized gains (0.00) (0.01) Net asset value, end of period $ $ $ $ $ Total return (b) 4.80% 10.15% 32.90% (23.63)% (0.53)% Ratios/supplemental data: Net assets, end of period (000s omitted) $566,685 $681,234 $667,412 $518,575 $566,627 Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.89% (c) 1.94% 1.99% 1.98% 1.95% Without fee waivers and/or expense reimbursements 1.95% (c) 1.96% 1.99% 1.98% 1.95% Ratio of net investment income (loss) to average net assets (0.55)% (c) (0.76)% (0.93)% (0.82)% (0.70)% Portfolio turnover rate 12% 15% 20% 30% 20% (a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $607,477,

19 AIM BASIC VALUE FUND Financial Highlights (continued) Class R June 3, 2002 (Date sales Year ended December 31, commenced) to December 31, Net asset value, beginning of period $ $ $ $ Income from investment operations: Net investment income (loss) (0.02) (0.06) (0.06) (0.05) (a) Net gains (losses) on securities (both realized and unrealized) (5.65) Total from investment operations (5.70) Net asset value, end of period $ $ $ $ Total return (b) 5.33% 10.70% 33.52% (20.70)% Ratios/supplemental data: Net assets, end of period (000s omitted) $33,049 $29,245 $12,097 $ 1,421 Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.39% (c) 1.44% 1.49% 1.54% (d) Without fee waivers and/or expense reimbursements 1.45% (c) 1.46% 1.49% 1.54% (d) Ratio of net investment income (loss) to average net assets (0.05)% (c) (0.26)% (0.43)% (0.37)% (d) Portfolio turnover rate 12% 15% 20% 30% (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 based on average daily net assets of $31,750,231. (d) Annualized. 13