<PAGE>
SHORT-TERM INVESTMENTS TRUST
TREASURY PORTFOLIO
INSTITUTIONAL CLASS
Supplement dated June 28, 1995
to the Prospectus
dated December 21, 1994 and
to the Statement of Additional Information
dated December 21, 1994
Effective July 1, 1995, A I M Institutional Fund Services, Inc. ("AIFS"), a
wholly-owned subsidiary of A I M Advisors, Inc. and a registered transfer agent,
will become the exclusive transfer agent and dividend disbursing agent for the
Institutional Class (the "Class") of the Treasury Portfolio (the "Portfolio") of
Short-Term Investments Trust (the "Fund"). Since September 16, 1994, AIFS has
been acting as a transfer agent for the Class providing certain limited transfer
agency services for shares of the Class. The phone number of AIFS is
(800) 659-1005.
AIFS will provide such transfer agency services pursuant to a Transfer
Agency and Service Agreement, dated September 16, 1994, as amended July 1, 1995,
and the Administrative Services Agreement, dated September 16, 1994, between
A I M Advisors, Inc. and AIFS will terminate.
Effective July 17, 1995, purchase orders and redemption requests received
by the Fund after 4:00 p.m. Eastern Time on a business day of the Portfolio will
be effected at the net asset value determined on the next business day.
Also effective July 17, 1995: (1) the net asset value per share of the
Portfolio will be determined daily as of 4:00 p.m. Eastern Time, (2) dividends
from the net income of the Portfolio will be declared daily to shareholders of
record of the Class of the Portfolio immediately after 4:00 p.m. Eastern Time,
and (3) information concerning the amount of the dividends declared on any
particular day will normally be available by 5:00 p.m. Eastern Time on that day.
<PAGE>
Short-Term
Investments Trust
Prospectus
- --------------------------------------------------------------------------------
Treasury
Portfolio The Treasury Portfolio is a money market fund whose
investment objective is the maximization of current
Institutional income to the extent consistent with the preservation
Class of capital and the maintenance of liquidity. The
Treasury Portfolio seeks to achieve its objective by
December 21, 1994 investing in direct obligations of the U.S. Treasury
and repurchase agreements secured by such obligations.
The instruments purchased by the Treasury Portfolio
will have maturities of 397 days or less.
The Treasury Portfolio is a series portfolio of
Short-Term Investments Trust (the "Fund"), an open-end
diversified series management investment company. This
Prospectus relates solely to the Institutional Class
of the Treasury Portfolio, a class of shares designed
to be a convenient vehicle in which institutions,
particularly banks, acting for themselves or in a
fiduciary, advisory, agency, custodial or other
similar capacity can invest in a diversified money
market fund.
The Fund also offers shares of other classes of the
Treasury Portfolio pursuant to separate prospectuses:
the Personal Investment Class, Private Investment
Class and Cash Management Class, as well as shares of
classes of another portfolio of the Fund, the Treasury
TaxAdvantage Portfolio.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A
PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN
SHARES OF THE INSTITUTIONAL CLASS OF THE TREASURY
PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION,
DATED DECEMBER 21, 1994, HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS HEREBY
INCORPORATED BY REFERENCE. A COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION IS ATTACHED HERETO AS AN
APPENDIX TO THIS PROSPECTUS.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE
FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED
BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY. THERE CAN BE NO ASSURANCE THAT THE TREASURY
PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE. SHARES OF THE FUND INVOLVE
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
[AIM LOGO APPEARS HERE]
Fund Management Company
11 Greenway Plaza
Suite 1919
Houston, Texas 77046-1173
(800) 659-1005
<PAGE>
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Fund is an open-end diversified series management investment company. This
Prospectus relates to the Institutional Class (the "Class") of the Treasury
Portfolio (the "Portfolio"). The Portfolio is a money market fund which invests
in direct obligations of the U.S. Treasury and repurchase agreements secured by
such obligations. The instruments purchased by the Portfolio will have
maturities of 397 days or less. The investment objective of the Portfolio is the
maximization of current income to the extent consistent with the preservations
of capital and the maintenance of liquidity.
Pursuant to separate prospectuses, the Fund also offers shares of other
classes of the Fund representing an interest in the Portfolio. Such classes have
different distribution arrangements and are designed for institutional and other
categories of investors. The Fund also offers shares of two classes of another
portfolio, the Treasury TaxAdvantage Portfolio, each pursuant to a separate
prospectus. The portfolios of the Fund are referred to collectively as the
"Portfolios."
Because the Fund declares dividends on a daily basis, shares of each class of
the Portfolio have the same net asset value (proportionate interest in the net
assets of the Portfolio) and bear equally those expenses, such as the advisory
fee, that are allocated to the Portfolio as a whole. All classes of the
Portfolio share a common investment objective and portfolio of investments.
However, different classes of the Portfolio have different shareholder
qualifications and are separately allocated certain class expenses, such as
those associated with the distribution of their shares. Therefore, each class
will have a different dividend payment and a different yield.
INVESTORS IN THE CLASS
The Class is designed to be a convenient and economical vehicle in which
institutions, particularly banks, acting for themselves or in a fiduciary,
advisory, agency, custodial or other similar capacity can invest short-term cash
reserves. Although shares of the Class may not be purchased by individuals
directly, institutions may purchase shares for accounts maintained by
individuals. See "Suitability for Investors." For the fiscal year ended August
31, 1994, the expenses of operation for the Class represented 0.08% of the
average daily net assets of the Class.
PURCHASE OF SHARES
Shares of the Class are sold at net asset value without a sales charge. The
minimum initial investment in the Class is $1,000,000. There is no minimum
amount for subsequent investments. Payment for shares of the Class purchased
must be in federal funds or other funds immediately available to the Portfolio.
See "Purchase of Shares."
REDEMPTION OF SHARES
Redemptions may be made without charge at net asset value. Payment for
redeemed shares of the Class for which redemption orders are received prior to
3:00 p.m. Eastern Time will normally be made in federal funds on the same day.
See "Redemption of Shares."
DIVIDENDS
The net income of each Portfolio is declared as a dividend daily to
shareholders of record immediately after 3:00 p.m. Eastern Time. Dividends are
paid monthly by check or wire transfer unless the shareholder has previously
elected to have such dividends automatically reinvested in additional shares of
the Class. Information concerning the amount of the dividends declared on any
particular day will normally be available by 4:00 p.m. Eastern Time on that day.
See "Dividends."
CONSTANT NET ASSET VALUE
The Fund uses the amortized cost method of valuing the securities held by the
Portfolio and rounds the per share net asset value to the nearest whole cent.
Accordingly, the net asset value per share of the Portfolio will normally remain
constant at $1.00. AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED
BY THE U.S. GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL
BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE. See "Net Asset Value."
INVESTMENT ADVISOR
A I M Advisors, Inc. ("AIM") serves as the Portfolio's investment advisor and
receives a fee based on the Portfolio's average daily net assets. During the
fiscal year ended August 31, 1994, the Fund paid AIM fees with respect to the
Portfolio which represented 0.06% of the average daily net assets of the
Portfolio. AIM is primarily engaged in the business of acting as manager or
advisor to investment companies. Under an Administrative Services Agreement, AIM
may be reimbursed by the Fund for its
2
<PAGE>
costs of performing certain accounting and other administrative services for the
Fund. See "Management of the Fund - Investment Advisor" and "- Administrative
Services."
DISTRIBUTOR
Fund Management Company ("FMC") acts as the exclusive distributor of the
Fund's shares. FMC does not receive any fee from the Fund. See "Purchase of
Shares."
SPECIAL RISK CONSIDERATIONS
The Portfolio may borrow money and enter into reverse repurchase agreements.
The Portfolio may invest in repurchase agreements and purchase securities for
delayed delivery. Accordingly, an investment in the Portfolio may entail
somewhat different risks from an investment in an investment company that does
not engage in such practices. See "Investment Program."
3
<PAGE>
TABLE OF FEES AND EXPENSES
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases
(as a percentage of offering price)...................... None
Maximum sales load on reinvested dividends
(as a percentage of offering price)...................... None
Deferred sales load (as a percentage of original
purchase price or redemption proceeds,
as applicable)........................................... None
Redemption fees (as a percentage of amount redeemed,
if applicable)........................................... None
Exchange fee.............................................. None
ANNUAL PORTFOLIO OPERATING EXPENSES - INSTITUTIONAL CLASS
(as a percentage of average net assets)
Management fees........................................... 0.06%
12b-1 fees................................................ none
Other expenses:
Custodian fees............................................ 0.01%
Other..................................................... 0.01%
----
Total other expenses..................................... 0.02%
----
Total portfolio operating expenses - Institutional Class... 0.08%
====
</TABLE>
EXAMPLE
An investor would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period.
<TABLE>
<S> <C>
1 year........................................................ $ 1
3 years....................................................... $ 3
5 years....................................................... $ 5
10 years....................................................... $10
</TABLE>
The Table of Fees and Expenses is designed to assist an investor in
understanding the various costs and expenses that an investor in the Class will
bear directly or indirectly. (For more complete descriptions of the various
costs and expenses, see "Management of the Fund" below.) The expense figures are
based upon actual costs and fees charged to the Class. To the extent any service
providers assume expenses of the Class, such assumption of expenses will have
the effect of lowering the Class's overall expense ratio and increasing its
yield to investors. Beneficial owners of shares of the Class should also
consider the effect of any charges imposed by the institution maintaining their
accounts.
The example in the Table of Fees and Expenses assumes that all dividends and
distributions are reinvested and that the amounts listed under "Annual Portfolio
Operating Expenses - Institutional Class" remain the same in the years shown.
THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE AN ACCURATE REPRESENTATION OF PAST OR
FUTURE PERFORMANCE AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
4
<PAGE>
FINANCIAL HIGHLIGHTS
Shown below are the per share data, ratios and supplemental data
(collectively, "data") for each of the years in the ten-year period ended August
31, 1994. The data has been audited by KPMG Peat Marwick LLP, independent
auditors, whose report on the financial statements and the related notes appears
in the Statement of Additional Information.
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income.............. 0.04 0.03 0.05 0.07 0.08
---------- ---------- ---------- ---------- ----------
Total from investment
operations....................... 0.04 0.03 0.05 0.07 0.08
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment
income............................ (0.04) (0.03) (0.05) (0.07) (0.08)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return........................ 3.53% 3.22% 4.56% 7.04% 8.52%
========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period
(000s omitted).................... $2,452,389 $3,652,672 $3,835,387 $2,437,902 $1,703,460
========== ========== ========== ========== ==========
Ratio of expenses to
average net assets................ 0.08%(a) 0.08% 0.09% 0.10% 0.12
========== ========== ========== ========== ==========
Ratio of net investment income to
average net assets................ 3.39%(a) 3.17% 4.38% 6.73% 8.19%
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
1989 1988 1987 1986 1985
---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income.............. 0.09 0.07 0.06 0.07 0.09
---------- ---------- -------- -------- --------
Total from investment
operations....................... 0.09 0.07 0.06 0.07 0.09
---------- ---------- -------- -------- --------
Less distributions:
Dividends from net investment
income............................ (0.09) (0.07) (0.06) (0.07) (0.09)
---------- ---------- -------- -------- --------
Net asset value, end of period...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ======== ======== ========
Total return........................ 9.03% 6.98% 6.17% 7.28% 8.92%
========== ========== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted).................... $1,189,822 $1,121,144 $650,547 $488,239 $117,805
========== ========== ======== ======== ========
Ratio of expenses to
average net assets................ 0.11% 0.13% 0.14% 0.19% 0.19%(b)
========== ========== ======== ======== ========
Ratio of net investment income to
average net assets................ 8.69% 6.76% 6.01% 6.89% 8.18%(b)
========== ========== ======== ======== ========
</TABLE>
- ------------------------
(a) Ratios are based on average net assets of $3,396,841,362.
(b) After waiver of advisory fees.
5
<PAGE>
SUITABILITY FOR INVESTORS
The Class is intended for use primarily by institutions, particularly banks,
acting for themselves or in a fiduciary, advisory, agency, custodial or other
similar capacity. They are designed to be a convenient and economical vehicle in
which such institutions can invest short-term cash reserves. Shares of the Class
may not be purchased directly by individuals, although institutions may purchase
shares for accounts maintained by individuals. Prospective investors should
determine if an investment in the Class is consistent with the objectives of an
account and with applicable state and federal laws and regulations.
An investment in the Class may relieve the institution of many of the
investment and administrative burdens encountered when investing in money market
instruments directly. These include: selection of portfolio investments;
surveying the market for the best price at which to buy and sell; valuation of
portfolio securities; selection and scheduling of maturities; receipt, delivery
and safekeeping of securities; and portfolio recordkeeping. It is anticipated
that most investors will perform their own sub-accounting. To assist these
institutions, information concerning the dividends declared by the Portfolios on
any particular day will normally be available by 4:00 p.m. Eastern Time on that
day.
Investors in the Class have the opportunity to receive a somewhat higher yield
than might be obtainable through direct investment in money market instruments
and enjoy the benefits of same-day liquidity. Generally, higher interest rates
can be obtained on the purchase of very large blocks of money market
instruments. Of course, any such relative increase in interest rates may be
offset to some extent by the operating expenses of the Class. However, these
expenses are expected to be relatively small due primarily to the following
factors: the Class will have a small number of shareholders who do not need many
of the services provided by other money market investment companies, thereby
resulting in lower transfer agent fees and costs for printing reports and proxy
statements; sales of the shares of the Class to institutions acting for
themselves or in a fiduciary capacity are exempt from the registration
requirements of most state securities laws, thereby resulting in reduced state
registration fees; and the relatively low investment advisory fee paid to AIM.
INVESTMENT PROGRAM
INVESTMENT OBJECTIVE
The investment objective of the Portfolio is the maximization of current
income to the extent consistent with the preservation of capital and the
maintenance of liquidity. The Portfolio seeks to achieve its objective by
investing in direct obligations of the U.S. Treasury and repurchase agreements
secured by such obligations. The money market instruments in which the Portfolio
invests are considered to carry very little risk and accordingly may not have as
high a yield as that available on money market instruments of lesser quality.
The Portfolio consists exclusively of money market instruments which have
maturities of 397 days or less from the date of purchase (except that securities
subject to repurchase agreements may have longer maturities).
INVESTMENT POLICIES
The Portfolio invests exclusively in direct obligations of the U.S. Treasury,
which include Treasury bills, notes and bonds, and repurchase agreements
relating to such securities. The Portfolio may also engage in certain investment
practices described below. The market values of the money market instruments
held by the Portfolio will be affected by changes in the yields available on
similar securities. If yields have increased since a security was purchased, the
market value of such security will generally have decreased. Conversely, if
yields have decreased, the market value of such security will generally have
increased.
REPURCHASE AGREEMENTS. The Portfolio intends to invest in repurchase
agreements with banks and broker-dealers pertaining to the securities described
above and which at the date of purchase are "First Tier" securities as defined
in Rule 2a-7 under the Investment Company Act of 1940, as amended (the "1940
Act"), as such Rule may be amended from time to time. Generally, "First Tier"
securities are securities that are rated in the highest rating category by two
nationally recognized statistical rating organizations ("NRSROs") or, if only
rated by one NRSRO, are rated in the highest rating category by that NRSRO or,
if unrated, are determined by AIM (under the supervision of and pursuant to
guidelines established by the Fund's Board of Trustees) to be of comparable
quality to a rated security that meets the foregoing quality standards. A
repurchase agreement is an instrument under which the Portfolio acquires
ownership of a debt security and the seller agrees, at the time of the sale, to
repurchase the obligation at a mutually agreed-upon time and price, thereby
determining the yield during the Portfolio's holding period. The Portfolio may
enter into repurchase agreements only with institutions believed by the Fund's
Board of Trustees to present minimal credit risk. With regard to repurchase
transactions, in the event of a bankruptcy or other default of a seller of a
repurchase agreement (such as the seller's failure to repurchase the obligation
in accordance with the terms of the agreement), the Portfolio could experience
both delays in liquidating the underlying securities and losses, including: (a)
a possible decline in the value of the underlying security during the period
while the Portfolio seeks to enforce its rights thereto, (b) possible subnormal
levels of income and lack of access to income during this period, and (c)
expenses of enforcing its rights. Repurchase agreements are considered to be
loans under the 1940 Act.
6
<PAGE>
BORROWING MONEY/REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow money
and enter into reverse repurchase agreements with respect to its portfolio
securities in amounts up to 10% of the value of its total assets at the time of
borrowing or entering into a reverse repurchase agreement. Reverse repurchase
agreements involve the sale by the Portfolio of a portfolio security at an
agreed-upon price, date and interest payment. The Portfolio will borrow money or
enter into reverse repurchase agreements solely for temporary or defensive
purposes, such as to facilitate the orderly sale of portfolio securities or to
accommodate abnormally heavy redemption requests should they occur. The
Portfolio will use reverse repurchase agreements when the interest income to be
earned from the securities that would otherwise have to be liquidated to meet
redemption requests is greater than the interest expense of the reverse
repurchase transaction. Reverse repurchase agreements involve the risk that the
market value of securities retained by the Portfolio in lieu of liquidation may
decline below the repurchase price of the securities sold by the Portfolio which
it is obligated to repurchase. The risk, if encountered, could cause a reduction
in the net asset value of the Portfolio's shares. Reverse repurchase agreements
are considered to be borrowings by the Portfolio under the 1940 Act.
LENDING OF PORTFOLIO SECURITIES. The Portfolio may also lend its portfolio
securities in amounts up to 331/3% of its total assets to financial institutions
in accordance with the investment restrictions of the Portfolio. Such loans
would involve risks of delay in receiving additional collateral in the event the
value of the collateral decreased below the value of the securities loaned or of
delay in recovering the securities loaned or even loss of rights in the
collateral should the borrower of the securities fail financially. However,
loans will be made only to borrowers deemed by AIM to be of good standing and
only when, in AIM's judgment, the income to be earned from the loans justifies
the attendant risks.
PURCHASING DELAYED DELIVERY SECURITIES. In managing the Portfolio's
investments, AIM may indicate to dealers or issuers its interest in acquiring
certain securities for the Portfolio for settlement beyond a customary
settlement date. In some cases, the Portfolio may agree to purchase such
securities at stated prices and yields. In such cases, such securities are
considered "delayed delivery" securities when traded in the secondary market.
Since this is done to facilitate the acquisition of portfolio securities and is
not for the purpose of investment leverage, the amount of delayed delivery
securities involved may not exceed the estimated amount of funds available for
investment on the settlement date. Until the settlement date, assets of the
Portfolio with a dollar value sufficient at all times to make payment for the
delayed delivery securities will be set segregated. The total amount of
segregated assets may not exceed 25% of the Portfolio's total assets. The
delayed delivery securities, which will not begin to accrue interest until the
settlement date, will be recorded as an asset of the Portfolio and will be
subject to the risks of market value fluctuations. The purchase price of the
delayed delivery securities will be recorded as a liability of the Portfolio
until settlement. Absent extraordinary circumstances, the Portfolio's right to
acquire delayed delivery securities will not be divested prior to the settlement
date.
ILLIQUID SECURITIES. The Portfolio will invest no more than 10% of its net
assets in illiquid securities.
PORTFOLIO TRANSACTIONS. The Portfolio does not seek profits through short-term
trading and will generally hold portfolio securities to maturity, but AIM may
seek to enhance the yield of the Portfolio by taking advantage of yield
disparities or other factors that occur in the money markets. For example,
market conditions frequently result in similar securities trading at different
prices. AIM may dispose of any portfolio security prior to its maturity if
such disposition and reinvestment of proceeds are expected to enhance yield
consistent with AIM's judgment as to desirable portfolio maturity structure or
if such disposition is believed to be advisable due to other circumstances or
conditions. Securities held by the Portfolio will be disposed of prior to
maturity if an earlier disposition is deemed desirable by AIM to meet redemption
requests. In addition, AIM will continually monitor the creditworthiness of
issuers whose securities are held by the Portfolio, and securities held by the
Portfolio may be disposed of prior to maturity as a result of a revised credit
evaluation of the issuer or other circumstances or considerations. The
Portfolio's policy of investing in securities with maturities of 397 days or
less will result in high portfolio turnover. Since brokerage commissions are not
normally paid on investments of the type made by the Portfolio, the high
turnover rate should not adversely affect the Portfolio's net income.
The investment policies described above may be changed by the Board of
Trustees without the affirmative vote of a majority of the outstanding shares of
the Portfolio.
INVESTMENT RESTRICTIONS
The Portfolio's investment program is subject to a number of investment
restrictions which reflect self-imposed standards as well as federal and state
regulatory limitations. These restrictions are designed to minimize certain
risks associated with investing in specified types of securities or
engaging in certain transactions and to limit the amount of the Portfolio's
assets which may be concentrated in any specific industry or issuer. The most
significant of these restrictions provide that the Portfolio will not:
(1) purchase securities of any one issuer (other than obligations of the
U.S. Government, its agencies or instrumentalities) if, immediately after
such purchase, more than 5% of the value of the Portfolio's total assets
would be in-
7
<PAGE>
vested in such issuer, except as permitted by Rule 2a-7 under the 1940 Act,
as such Rule may be amended from time to time; or
(2) borrow money or issue senior securities except (a) for temporary or
emergency purposes (e.g., in order to facilitate the orderly sale of
portfolio securities, or to accommodate abnormally heavy redemption
requests), the Portfolio may borrow money from banks or obtain funds by
entering into reverse repurchase agreements, and (b) to the extent that
entering into commitments to purchase securities in accordance with the
Portfolio's investment program may be considered the issuance of senior
securities. The Portfolio will not purchase securities while borrowings in
excess of 5% of its total assets are outstanding.
The foregoing investment restrictions of the Portfolio (as well as certain
others set forth in the Statement of Additional Information) are matters of
fundamental policy which may not be changed without the affirmative vote of a
majority of the outstanding shares of the Portfolio.
In addition to the restrictions described above, the Portfolio must also
comply with the requirements of Rule 2a-7 under the 1940 Act, as such Rule may
be amended from time to time, which govern the operations of money market funds,
and may be more restrictive than the policies described herein. The Securities
and Exchange Commission (the "SEC") has proposed certain changes to Rule 2a-7.
While such proposed changes may have a prospective impact on the investments of
the Portfolio, the Portfolio anticipating no difficulty in complying with any
proposed change if adopted by the SEC. A description of further investment
restrictions applicable to the Portfolio is contained in the Statement of
Additional Information.
PURCHASE OF SHARES
Shares of the Class are sold on a continuing basis at their net asset value
next determined after an order has been accepted by the Portfolio. Although
there is no sales charge imposed on the purchase of shares of the Class, banks
or other institutions may charge a record keeping, account maintenance or other
fee to their customers, and beneficial holders of the shares of the Class should
consult with the institutions maintaining their accounts to obtain a schedule of
applicable fees. To facilitate the investment of proceeds of purchase orders,
the investors are urged to place their orders as early in the day as possible.
Purchase orders will be accepted for execution on the day the order is placed,
provided that the order is properly submitted and received by the Portfolio
prior to 3:00 p.m. Eastern Time on a business day of the Portfolio. Purchase
orders recieved after such time will be processed at the next day's net asset
value. Shares of the Class will earn the dividend declared on the effective date
of purchase.
A "business day of the Portfolio" is any day on which both the Federal Reserve
Bank of New York and The Bank of New York, the Fund's custodian, are open for
business. It is expected that The Bank of New York and the Federal Reserve Bank
of New York will be closed during the next twelve months on Saturdays and
Sundays, and on the observed holidays of New Year's Day, Martin Luther King,
Jr.'s Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day,
Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day.
Subject to the conditions stated above and the Portfolio's right to reject any
purchase order, orders will be accepted (i) when payment for the shares of the
Class purchased is received by The Bank of New York, the Portfolio's custodian
bank, in the form described below, or (ii) at the time the order is placed, if
the Portfolio is assured of payment. Shares of the Class purchased by orders
which are accepted prior to 3:00 p.m. Eastern Time will earn the dividend
declared on the date of purchase.
Payments for shares of the Class purchased must be in the form of federal
funds or other funds immediately available to the Portfolio. Federal Reserve
wires should be sent as early as possible in order to facilitate crediting to
the shareholder's account. Any funds received with respect to an order which is
not accepted by the Portfolio and any funds received for which an order has not
been received will be returned to the sending institution. An order to purchase
shares must specify that it is for the purchase of "Shares of the Institutional
Class of the Treasury Portfolio," otherwise any funds received will be returned
to the sending institution.
The minimum initial investment in the Class is $1,000,000. Institutions may be
requested to maintain separate Master Accounts in the shares of the Class
held by the institution (i) for its own account, for the account of other
institutions and for accounts for which the institution acts as a fiduciary, and
(ii) for accounts for which the institution acts in some other capacity. An
institution's Master Account(s) and sub-accounts in the shares of the Class may
be aggregated for the purpose of the minimum investment requirement. No
minimum amount is required for subsequent investments in the Portfolio nor are
minimum balances required. Prior to the initial purchase of shares of the Class,
an Account Information and Authorization Form must be completed and sent to Fund
Management Company ("FMC"), at 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173. Account Information and Authorization Forms may be obtained from
FMC. Any changes made to the information provided in the Account Information and
Authorization Form must be made in writing or by completing a new form and
providing it to FMC.
8
<PAGE>
Banks will be required to certify to the Fund that they comply with applicable
state law regarding registration as broker-dealers, or that they are exempt
from such registration.
In the interest of economy and convenience, certificates representing shares
of the Class will not be issued except upon written request to the Fund.
Certificates (in full shares only) will be issued without charge and may be
redeposited at any time.
The Fund reserves the right in its sole discretion to withdraw all or any part
of the offering made by this Prospectus or to reject any purchase order.
REDEMPTION OF SHARES
A shareholder may redeem any or all of its shares of the Class at the net
asset value next determined after receipt of the redemption request in proper
form by the Portfolio. Redemption requests with respect to the Class may also be
made via AIM LINK(TM), a personal computer application software product.
Normally, the net asset value per share of the Portfolio will remain constant at
$1.00. See "Net Asset Value." Redemption requests with respect to shares of the
Class for which certificates have not been issued are normally made by calling
the Fund.
Payment for redeemed shares of the Class is normally made by Federal Reserve
wire to the commercial bank account designated in the institution's Account
Information and Authorization Form, but may be remitted by check upon request by
a shareholder. If a redemption request is received by the Portfolio prior to
3:00 p.m. Eastern Time on a business day of the Portfolio, the redemption will
be effected at the net asset value next determined on such day and the shares of
the Class to be redeemed will not receive the dividend declared on the effective
date of the redemption. If a redemption request is received by the Portfolio
after 3:00 p.m. Eastern Time or on other than a business day of the Portfolio,
the redemption will be effected at the net asset value of the Portfolio
determined as of 3:00 p.m. Eastern Time on the next business day of the
Portfolio, and the proceeds of such redemption will normally be wired on the
effective day of the redemption.
A shareholder may change the bank account designated to receive redemption
proceeds by written notice to the Fund. The authorized signature on the notice
must be guaranteed by a commercial bank or a trust company. Additional
documentation may be required when deemed appropriate by the Fund, State Street
Bank and Trust Company, one of the Fund's transfer agents, or A I M
Institutional Fund Services, Inc., the other transfer agent of the Fund.
Payment for shares of the Class redeemed by mail and payment for telephone
redemptions in amounts of less than $1,000 will be made by check mailed within
seven days after receipt of the redemption request in proper form. The Fund may
make payment for telephone redemptions in excess of $1,000 by check when it is
considered to be in the Portfolio's best interest to do so.
The shares of the Class are not redeemable at the option of the Fund unless
the Board of Trustees of the Fund determines in its sole discretion that failure
to so redeem may have materially adverse consequences to the shareholders of the
Fund.
DIVIDENDS
Dividends from the net income of the Portfolio are declared daily to
shareholders of record of each class of the Portfolio as of immediately after
3:00 p.m. Eastern Time on the day of declaration. Net income for dividend
purposes is determined daily as of 3:00 p.m. Eastern Time. The dividend accrued
and paid for each class will consist of (a) income of the Portfolio, the
allocation of which is based upon such class's pro rata share of the total
outstanding shares representing an interest in the Portfolio, less (b) Fund
expenses accrued for the applicable dividend period attributable to the
Portfolio, such as custodian fees, trustees' fees, accounting and legal
expenses, based upon such class's pro rata share of the net assets of the
Portfolio, less (c) expenses directly attributable to such class that are
accrued for the applicable dividend period, such as distribution expenses, if
any, transfer agent fees or registration fees that may be unique to such class.
Although realized gains and losses on the assets of the Portfolio are reflected
in its net asset value, they are not expected to be of an amount which would
affect its $1.00 per share net asset value for purposes of purchases and
redemptions. See "Net Asset Value." Distributions from net realized short-term
gains may be declared and paid yearly or more frequently. See "Taxes." The
Portfolio does not expect to realize any long-term capital gains or losses.
All dividends declared during a month will be paid by check or wire transfer.
(Wire transfers may only be made in amounts of $1,000 or more.) Payment will
normally be made on the first business day of the following month. A shareholder
may elect to have all dividends automatically reinvested in additional full and
fractional shares of the Class at the net asset value as of 3:00 p.m. Eastern
Time on the last business day of the month. Such election, or any revocation
thereof, must be made either in writing by the institution to FMC at 11 Greenway
Plaza, Suite 1919, Houston, TX 77046-1173 or transmitted via the version of AIM
LINK(TM) containing the subaccounting feature, and will become effective with
dividends paid after its receipt by FMC or, if
9
<PAGE>
such election is transmitted via AIM LINK(TM), FMC's affiliates. If a
shareholder redeems all the shares of the Class in its account at any time
during the month, all dividends declared through the date of redemption are paid
to the shareholder along with the proceeds of the redemption.
The Fund uses its best efforts to maintain its net asset value per share of
the Portfolio at $1.00 for purposes of sales and redemptions. See "Net Asset
Value." Should the Fund incur or anticipate any unusual expense, loss or
depreciation which could adversely affect the income or net asset value of the
Portfolio, the Fund's Board of Trustees would at that time consider whether to
adhere to the present dividend policy described above or to revise it in light
of the then prevailing circumstances. For example, under such unusual
circumstances, the Board of Trustees might reduce or suspend the daily dividend
in order to prevent to the extent possible the net asset value per share of the
Portfolio from being reduced below $1.00. Thus, such expenses, losses or
depreciation may result in a shareholder receiving no dividends for the period
during which it held its shares of the Class and cause such a shareholder to
receive upon redemption a price per share lower than the shareholder's original
cost.
TAXES
The policy of the Portfolio is to distribute to its shareholders at least 90%
of its investment company taxable income for each year and consistent therewith
to meet the distribution requirements of Part I of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). The Portfolio also intends to
meet the distribution requirements imposed by the Code in order to avoid the
imposition of a 4% excise tax. The Portfolio intends to distribute at least 98%
of its net investment income for the calendar year and at least 98% of its net
realized capital gains, if any, for the period ending on October 31. The
Portfolio also intends to meet the other requirements of Subchapter M, including
the requirements with respect to diversification of assets and sources of
income, so that the Portfolio will pay no taxes on net investment income and net
realized capital gains paid to shareholders.
Dividends paid by the Portfolio are subject to taxation as of the date of
payment, whether received by shareholders in cash or shares of the Class. The
Code provides an exception to this general rule: if the Portfolio declares a
dividend in October, November or December to shareholders of record in such
months and pays the dividend during January of the next year, a shareholder will
be treated for tax purposes as having received the dividend on December 31 of
the year in which it is declared rather than in January when it is paid. It is
anticipated that no portion of distributions will be eligible for the dividends
received deduction for corporations. Dividends paid by the Portfolio from its
net investment income and short-term capital gains are taxable to shareholders
at ordinary income tax rates.
The Portfolio will be treated as a separate corporation for purposes of
determining taxable income, distribution requirements and other requirements of
Subchapter M. Therefore, the Portfolio may not offset its gains against the
losses of the other portfolio of the Fund and each portfolio of the Fund must
specifically comply with all the provisions of the Code.
Distributions and transactions referred to in the preceding paragraphs may be
subject to state, local or foreign taxes, and the treatment thereof may differ
from the federal income tax consequences discussed herein. Shareholders are
advised to consult with their own tax advisers concerning the application of
state, local or foreign taxes.
The foregoing discussion of federal income tax consequences is based on tax
laws and regulations in effect on the date of this Prospectus which are subject
to change by legislation or administrative action.
NET ASSET VALUE
The net asset value per share of the Portfolio is determined daily as of 3:00
p.m. Eastern Time on each business day of the Fund. Net asset value per share is
determined by dividing the value of the Portfolio's securities, cash and other
assets (including interest accrued but not collected) less all of its
liabilities (including accrued expenses and dividends payable), by the number of
shares outstanding of the Portfolio and rounding the resulting per share net
asset value to the nearest one cent.
The securities of the Portfolio are valued on the basis of amortized cost
pursuant to rules promulgated by the Securities and Exchange Commission
applicable to money market funds. This method values a security at its cost on
the date of purchase and thereafter assumes a constant amortization to maturity
of any discount or premium, regardless of the impact of fluctuating interest
rates on the market value of the security. While this method provides certainty
in valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Portfolio would receive if
the security were sold. During such periods, the daily yield on shares of the
Portfolio, computed as described in "Purchases and Redemptions -- Performance
Information" in the Statement of Additional Information, may differ somewhat
from an identical computation made by an investment company with identical
investments utilizing available indications as to market value to value its
portfolio securities.
10
<PAGE>
YIELD INFORMATION
Yield information for the Class can be obtained by calling the Fund at (800)
659-1005. Yields will fluctuate from time to time and are not necessarily
indicative of future results. Accordingly, the yield information may not provide
a basis for comparison with investments which pay a fixed rate of interest for a
stated period of time. Yield is a function of the type and quality of the
Portfolio's investments, the Portfolio's maturity and the operating expense
ratio of the Class. A shareholder's investment in the Portfolio is not insured
or guaranteed by the U.S. Government or by any institution. These factors should
be carefully considered by the investor before making an investment in the
Portfolio.
For the seven-day period ended August 31, 1994, the current yield and the
effective yield of the Class (which assumes the reinvestment of dividends for a
365-day year and a return for the entire year equal to the annualized current
yield for the period) were 4.49% and 4.59%, respectively. These yields are
quoted for illustration purposes only. The yields for any other seven-day period
may be substantially different from the yields quoted above.
To assist banks and other institutions performing their own subaccounting, same
day information as to the daily dividend per share for the Portfolio to eight
decimal places and current yield normally will be available by 4:00 p.m. Eastern
time.
REPORTS TO SHAREHOLDERS
The Fund furnishes shareholders with semi-annual reports containing
information about the Portfolio and its operations, including a list of the
investments held by the Portfolio and financial statements. The annual financial
statements are audited by the Fund's independent auditors.
Unless otherwise requested by the shareholder, each shareholder will be
provided with a written confirmation for each transaction. Institutions
establishing sub-accounts will receive a written confirmation for each
transaction in a sub-account. Duplicate confirmations may be transmitted to the
beneficial owner of the sub-account if requested by the institution. The
institution will receive a periodic statement setting forth, for each sub-
account, the share balance, income earned for the month, income earned for the
year to date and the total current value of the account.
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES
The overall management of the business and affairs of the Fund is vested with
its Board of Trustees. The Board of Trustees approves all significant agreements
between the Fund and persons or companies furnishing services to the Fund,
including agreements with the Fund's investment advisor, distributor, custodian
and transfer agent. The day-to-day operations of the Fund are delegated to the
Fund's officers and to AIM, subject always to the objectives and policies of the
Fund and to the general supervision of the Fund's Board of Trustees.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-
1173, acts as the investment advisor for the Portfolio pursuant to a Master
Investment Advisory Agreement dated as of October 18, 1993 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its affiliates,
manages or advises 37 investment company portfolios. As of November 3, 1994, the
total assets of the investment company managed, advised or administered by AIM
and its affiliates were approximately $28.3 billion. All of the directors and
certain of the officers of AIM are also trustees or executive officers of the
Fund. AIM is a wholly-owned subsidiary of A I M Management Group Inc. ("AIM
Management").
Pursuant to the terms of the Advisory Agreement, AIM manages the investment of
the Portfolio's assets and obtains and evaluates economic, statistical and
financial information to formulate and implement investment policies for the
Portfolio. The Advisory Agreement requires AIM to reduce its fee to the extent
required to satisfy any expense limitations imposed by the securities laws or
regulations thereunder of any state in which the Portfolio's shares are
qualified for sale.
For the fiscal year ended August 31, 1994, AIM received fees from the Fund
under an advisory agreement previously in effect, which provided for the same
level of compensation to AIM as the Advisory Agreement, with respect to the
Portfolio which represented 0.06% of the Portfolio's average daily net assets.
During such fiscal year, the expenses of the Class, including AIM's fees,
amounted to 0.08% of the Class's average daily net assets.
11
<PAGE>
ADMINISTRATIVE SERVICES
The Fund has entered into a Master Administrative Services Agreement dated as
of October 18, 1993 with AIM (the "Administrative Services Agreement"), pursuant
to which AIM has agreed to provide or arrange for the provision of certain
accounting and other administrative services to the Portfolio, including the
services of a principal financial officer of the Fund and related staff. As
compensation to AIM for its services under the Administrative Services
Agreement, the Portfolio may reimburse AIM for expenses incurred by AIM in
connection with such services.
In addition, AIM and A I M Institutional Fund Services, Inc. ("AIFS") have
entered into an Administrative Services Agreement pursuant to which AIFS is
reimbursed by AIM for its costs in providing shareholder services for the Fund.
AIFS or its affiliates received reimbursement of shareholder services costs of
$13,752 with respect to the Portfolio for the period June 1,1994 through August
31, 1994 which represented 0.0004% of the Portfolio's average daily net assets.
FEE WAIVERS
AIM may in its discretion from time to time agree to waive voluntarily all or
any portion of its advisory fee and/or assume certain expenses of the Portfolio
but will retain its ability to be reimbursed prior to the end of the fiscal
year.
DISTRIBUTOR
The Fund has entered into a Master Distribution Agreement dated as of October
18, 1993 (the "Distribution Agreement") with FMC, a registered broker-dealer and
a wholly-owned subsidiary of AIM, to act as the exclusive distributor of the
shares of the Class. The address of FMC is 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. Certain trustees and officers of the Fund are
affiliated with FMC and AIM. The Distribution Agreement provides that FMC has
the exclusive right to distribute shares of the Fund either directly or through
other broker-dealers. FMC is the distributor of several of the mutual funds
managed or advised by AIM.
PORTFOLIO TRANSACTIONS AND BROKERAGE
AIM is responsible for decisions to buy and sell securities for the
Portfolios, broker-dealer selection and negotiation of commission rates. Since
purchases and sales of portfolio securities by the Portfolio are usually
principal transactions, the Portfolio incurs little or no brokerage commissions.
Portfolio securities are normally purchased directly from the issuer or from a
market maker for the securities. The purchase price paid to dealers serving as
market makers may include a spread between the bid and asked prices. The
Portfolio may also purchase securities from underwriters at prices which include
a concession paid by the issuer to the underwriter.
AIM's primary consideration in effecting a security transaction is to obtain
the best net price and the most favorable execution of the order. To the extent
that the executions and prices offered by more than one dealer are comparable,
AIM may, in its discretion, effect transactions with dealers that furnish
statistical, research or other information or services which are deemed by AIM
to be beneficial to the Portfolio's investment programs. Certain research
services furnished by dealers may be useful to clients of AIM other than the
Portfolio. Similarly, any research services received by AIM through placement of
portfolio transactions of other clients may be of value to AIM in fulfilling its
obligations to the Portfolio.
GENERAL INFORMATION
ORGANIZATION AND DESCRIPTION OF SHARES
The Fund is a Delaware business trust. The Fund was originally incorporated in
Maryland on January 24, 1977, but had no operations prior to November 10, 1980.
Effective December 31, 1986, the Fund was reorganized as a Massachusetts
business trust; and effective October 15, 1993, the Fund was reorganized as a
Delaware business trust. On October 15, 1993, the Portfolio succeeded to
the assets and assumed the liabilities of the Treasury Portfolio (the
"Predecessor Portfolio") of Short-Term Investments Co., a Massachusetts business
trust ("STIC"), pursuant to an Agreement and Plan of Reorganization between the
Fund and STIC. All historical financial and other information contained in this
Prospectus for periods prior to October 15, 1993 relating to the Portfolio (or a
class thereof) is that of the Predecessor Portfolio (or the corresponding class
thereof). The Fund has filed an amendment to the Registration Statement on Form
N-1A, as amended, of Short-Term Investments Co. (File No. 2-58287), pursuant to
which the Fund has expressly adopted such Registration Statement as its own
Registration Statement for all purposes of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, and the 1940 Act.
Shares of beneficial interest of the Fund are divided into six classes of which
four, including the Class, represent interests in the Portfolio and two classes
represent interests in the Treasury TaxAdvantage Portfolio. Each class of shares
has a par value of $.01 per share. All shares of the Fund have equal rights with
respect to voting, except that the holders of shares of a particular
12
<PAGE>
portfolio or class will have the exclusive right to vote on matters pertaining
solely to that portfolio or class. For example, holders of shares of a
particular portfolio will have the exclusive right to vote on any investment
advisory agreement or investment restriction that relates only to such
portfolio. In addition, if a portfolio is divided into various classes, holders
of shares of a particular class will have the exclusive right to vote on any
matter, such as distribution arrangements, which relates solely to such class.
The holders of shares of the Portfolio have distinctive rights with respect to
dividends and redemption which are more fully described in this Prospectus. In
the event of liquidation or termination of the Fund, holders of shares of each
portfolio will receive pro rata, subject to the rights of creditors, (a) the
proceeds of the sale of the assets held in the respective portfolio to which
such shares relate, less (b) the liabilities of the Fund attributable or
allocated to the respective portfolio based on the liquidation value of the
portfolio. Fractional shares of each portfolio have the same rights as full
shares to the extent of their proportionate interest.
There will not normally be annual shareholders' meetings. Shareholders may
remove trustees from office by votes cast at a meeting of shareholders called
solely for such purpose or by written consent. A meeting of shareholders for the
sole purpose of considering removal of a trustee be called at the request of the
holders of 10% or more of the Fund's outstanding shares.
There are no preemptive or conversion rights applicable to any of the Fund's
shares. The Fund's shares, when issued, will be fully paid and non-assessable.
The Board of Trustees may create additional portfolios of the Fund without
shareholder approval.
TRANSFER AGENTS AND CUSTODIAN
The Bank of New York, 110 Washington Street, 8th Floor, New York, New York
10286, acts as custodian for the portfolio securities and cash of the Portfolio.
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, acts as a transfer agent for the shares of the Class. A I M Institutional
Fund Services Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-
1173, also acts as a transfer agent for the shares of the Class.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania,
serves as counsel to the Fund and has passed upon the legality of the shares of
the Portfolio.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be directed
to the Fund at 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173, or may
be made by calling (800) 659-1005.
OTHER INFORMATION
This Prospectus sets forth basic information that investors should know about
the Fund and the Portfolio prior to investing. A Statement of Additional
Information has been filed with the Securities and Exchange Commission and is
attached as an Appendix to this Prospectus. Additional copies of the
Statement of Additional Information are available upon request and without
charge by writing or calling the Fund or FMC. This Prospectus omits certain
information contained in the registration statement filed with the Securities
and Exchange Commission. Copies of the registration statement, including items
omitted herein, may be obtained from the Securities and Exchange Commission by
paying the charges prescribed under its rules and regulations.
13
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[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
APPENDIX
STATEMENT OF
ADDITIONAL INFORMATION
SHORT-TERM INVESTMENTS TRUST
TREASURY PORTFOLIO
(INSTITUTIONAL CLASS)
11 GREENWAY PLAZA
SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 659-1005
-----------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.
IT SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS,
THAT PRECEDES THIS APPENDIX, ADDITIONAL
COPIES OF WHICH MAY BE OBTAINED BY WRITING
FUND MANAGEMENT COMPANY, 11 GREENWAY PLAZA,
SUITE 1919, HOUSTON, TEXAS 77046-1173
OR CALLING (800) 659-1005
-----------------
STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 21, 1994
RELATING TO THE PROSPECTUS DATED DECEMBER 21, 1994
A-1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Appendix............................................................. A-1
Introduction......................................................... A-3
General Information about the Fund.................................. A-3
The Fund and Its Shares............................................ A-3
Trustees and Officers.............................................. A-4
Investment Advisor................................................. A-7
Administrative Services............................................ A-8
Expenses........................................................... A-8
Banking Regulations................................................ A-9
Transfer Agents and Custodian...................................... A-9
Reports............................................................ A-9
Principal Holders of Securities.................................... A-10
Purchases and Redemptions........................................... A-13
Net Asset Value Determination...................................... A-13
Distribution Agreement............................................. A-13
Performance Information............................................ A-13
Suspension of Redemption Rights.................................... A-14
Investment Program and Restrictions................................. A-14
Investment Program................................................. A-14
Eligible Securities................................................ A-14
Investment Restrictions............................................ A-15
Other Investment Policies.......................................... A-16
Portfolio Transactions.............................................. A-16
Tax Matters......................................................... A-17
Qualification as a Regulated Investment Company.................... A-17
Excise Tax on Regulated Investment Companies....................... A-18
Portfolio Distributions............................................ A-18
Effect of Future Legislation; Local Tax Considerations............. A-18
Financial Statements................................................ FS-1
</TABLE>
A-2
<PAGE>
INTRODUCTION
The Treasury Portfolio (the "Portfolio") is an investment portfolio of Short-
Term Investments Trust (the "Fund"), a mutual fund. The rules and regulations of
the United States Securities and Exchange Commission (the "SEC") require all
mutual funds to furnish prospective investors certain information concerning the
activities of the fund being considered for investment. This information is
included in the Prospectus dated December 21, 1994 (the "Prospectus") that
precedes this Statement of Additional Information. Additional copies of the
Prospectus and Statement of Additional Information may be obtained without
charge by writing the principal distributor of the Fund's shares, Fund
Management Company ("FMC"), 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-
1173, or by calling (800) 659-1005. Investors must receive a Prospectus before
they invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Institutional Class of the
Portfolio. Some of the information required to be in this Statement of
Additional Information is also included in the Prospectus; and, in order to
avoid repetition, reference will be made to sections of the Prospectus.
Additionally, the Prospectus and this Statement of Additional Information omit
certain information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from the
Prospectus and this Statement of Additional Information, may be obtained from
the SEC by paying the charges prescribed under its rules and regulations.
GENERAL INFORMATION ABOUT THE FUND
THE FUND AND ITS SHARES
The Fund is an open-end diversified management series investment company which
was originally organized as a corporation under the laws of the State of
Maryland on January 24, 1977, but which had no operations prior to November 10,
1980. The Fund was reorganized as a business trust under the laws of the
Commonwealth of Massachusetts on December 31, 1986. The Fund was again
reorganized as a business trust under the laws of the State of Delaware on
October 15, 1993. A copy of the Agreement and Declaration of Trust (the
"Declaration of Trust") establishing the Fund is on file with the SEC. The Fund
has filed an amendment to the Registration Statement on Form N-1A, as amended,
of Short-Term Investments Co. (File No. 2-58287), pursuant to which the Fund has
expressly adopted such Registration Statement as its own Registration Statement
for all purposes of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as
amended ("the 1940 Act"). On October 15, 1993, the Portfolio succeeded to the
assets and assumed the liabilities of the Treasury Portfolio (the "Predecessor
Portfolio") of Short-Term Investments Co., a Massachusetts business trust
("STIC"), pursuant to an Agreement and Plan of Reorganization between the Fund
and STIC. All historical financial and other information contained in this
Statement of Additional Information for periods prior to October 15, 1993
relating to the Portfolio (or a class thereof) is that of the Predecessor
Portfolio (or the corresponding class thereof). Similarly, the information set
forth under "Principal Holders of Securities" relates to the Predecessor
Portfolios (or the corresponding classes thereof). Shares of beneficial interest
of the Fund are redeemable at the net asset value thereof at the option of the
shareholder or at the option of the Fund in certain circumstances. For
information concerning the methods of redemption and the rights of share
ownership, investors should consult the Prospectus under the captions "General
Information" and "Redemption of Shares."
The Fund offers on a continuous basis shares representing an interest in one
of two portfolios: the Portfolio and the Treasury TaxAdvantage Portfolio
(together, the "Portfolios"). The Portfolio consists of the following four
classes of shares: Private Investment Class, Personal Investment Class,
Institutional Class and Cash Management Class. Each such class has different
shareholder qualifications and bears expenses differently. This Statement of
Additional Information and the Prospectus relate solely to the Institutional
Class (the "Class") of the Portfolio. Shares of the other classes of the
Portfolio and the classes of the Treasury TaxAdvantage Portfolio are offered
pursuant to separate prospectuses and statements of additional information.
Shares of beneficial interest of the Fund will be redeemable at the net asset
value thereof at the option of the shareholder or at the option of the Fund in
certain circumstances. For information concerning the methods of redemption and
the rights of share ownership, investors should consult the Prospectus under the
captions "Redemption of Shares."
As used in the Prospectus, the term "majority of the outstanding shares" of
the Fund, a particular portfolio or a particular class means, respectively, the
vote of the lesser of (i) 67% or more of the shares of the Fund, such portfolio
or such class present at a meeting of the Fund's shareholders, if the holders of
more than 50% of the outstanding shares of the Fund, such portfolio or such
class are present or represented by proxy, or (ii) more than 50% of the
outstanding shares of the Fund, such portfolio or such class.
Shareholders of the Fund do not have cumulative voting rights. Therefore the
holders of more than 50% of the outstanding shares of all series or classes
voting together for election of trustees may elect all of the members of the
Board of Trustees and in such event, the remaining holders cannot elect any
members of the Board of Trustees.
A-3
<PAGE>
The Declaration of Trust provides for the perpetual existence of the Fund. The
Fund, either Portfolio and any class thereof, however, may be terminated at any
time, upon the recommendation of the Board of Trustees, by vote of a majority of
the outstanding shares of the Fund, such Portfolio and such class, respectively;
provided, however, that the Board of Trustees may terminate, without such
shareholder approval, the Fund, either Portfolio and any class thereof with
respect to which there are fewer than 100 shares outstanding.
The Declaration of Trust permits the trustees to issue an unlimited number of
full and fractional shares, of $.01 par value, of each class of shares of
beneficial interest of the Fund. The Board of Trustees may establish additional
series or classes of shares from time to time without shareholder approval.
Additional information concerning the rights of share ownership is set forth in
the prospectus applicable to each such class or series of shares of the Fund.
The assets received by the Fund for the issue or sale of shares of each class
relating to a portfolio and all income, earnings, profits, losses and proceeds
therefrom, subject only to the rights of creditors, will be allocated to that
portfolio, and constitute the underlying assets of that portfolio. The
underlying assets of each portfolio will be segregated and will be charged with
the expenses with respect to that portfolio and with a share of the general
expenses of the Fund. While certain expenses of the Fund will be allocated to
the separate books of account of each portfolio, certain other expenses may be
legally chargeable against the assets of the entire Fund.
Under Delaware law, shareholders of a Delaware business trust shall be
entitled to the same limitations of liability extended to shareholders of
private for-profit corporations, however, there is a remote possibility that
shareholders could, under certain circumstances, be held liable for the
obligations of the Fund to the extent the courts of another state which does not
recognize such limited liability were to apply the laws of such state to a
controversy involving such obligations. However, the Declaration of Trust
disclaims shareholder liability for acts or obligations of the Fund and requires
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by the Fund or the trustees to all parties,
and each party thereto must expressly waive all rights of action directly
against shareholders of the Fund. The Declaration of Trust provides for
indemnification out of the Fund's property for all losses and expenses of any
shareholder of the Fund held liable on account of being or having been a
shareholder. Thus, the risk of a shareholder incurring financial loss due to
shareholder liability is limited to circumstances in which the Fund would be
unable to meet its obligations and wherein the complaining party was held not to
be bound by the disclaimer.
The Declaration of Trust further provides that the trustees will not be liable
for errors of judgment or mistakes of fact or law. However, nothing in the
Declaration of Trust protects a trustee against any liability to which a trustee
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office. The Declaration of Trust provides for indemnification by the Fund of the
trustees and the officers of the Fund except with respect to any matter as to
which any such person did not act in good faith in the reasonable belief that
his action was in or not opposed to the best interests of the Fund. Such person
may not be indemnified against any liability to the Fund or to the Fund's
shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. The Declaration of Trust also authorizes
the purchase of liability insurance on behalf of trustees and officers.
As described in the Prospectus, the Fund will not normally hold annual
shareholders' meetings. At such time as less than a majority of the trustees
have been elected by the shareholders, the trustees then in office will call a
shareholders' meeting for the election of trustees. In addition, trustees may be
removed from office by a written consent signed by the holders of two-thirds of
the outstanding shares of the Fund and filed with the Fund's custodian or by a
vote of the holders of two-thirds of the outstanding shares at a meeting duly
called for that purpose, which meeting shall be held upon written request of the
holders of not less than 10% of the outstanding shares of the Fund.
TRUSTEES AND OFFICERS
The trustees and officers of the Fund and their principal occupations during
the last five years are set forth below. Unless otherwise indicated, the address
of each trustee and officer is 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173.
*CHARLES T. BAUER, Trustee and Chairman
Director and Chairman and Chief Executive Officer, A I M Management Group
Inc.; Chairman of the Board of Directors, A I M Advisors, Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M
Institutional Fund Services, Inc. and Fund Management Company.
- ---------------
* A trustee who is an "interested person" of the Fund and A I M Advisors, Inc.,
as defined in the 1940 Act.
A-4
<PAGE>
BRUCE L. CROCKETT, Trustee
COMSAT Corporation
6560 Rock Spring Drive
Bethesda, MD 20817
Director, President and Chief Executive Officer, COMSAT Corporation (Includes
COMSAT World Systems, COMSAT Mobile Communications, COMSAT Video Enterprises,
COMSAT RSI and COMSAT International Ventures). Previously, President and Chief
Operating Officer, COMSAT Corporation; President, World Systems Division, COMSAT
Corporation; and Chairman, Board of Governors of INTELSAT (each of the COMSAT
companies listed above is an international communication, information and
entertainment distribution services company).
OWEN DALY II, Trustee
Six Blythewood Road
Baltimore, MD 21210
Director, Cortland Trust Inc. (investment company). Formerly, Director, CF & I
Steel Corp., Monumental Life Insurance Company and Monumental General Insurance
Company; and Chairman of the Board of Equitable Bancorporation.
*CARL FRISCHLING, Trustee
919 Third Avenue
New York, NY 10022
Partner, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel (law firm).
Formerly, Partner, Reid & Priest (law firm); and, prior thereto, Partner,
Spengler Carlson Gubar Brodsky & Frischling (law firm).
**ROBERT H. GRAHAM, Trustee and President
Director, President and Chief Operating Officer, A I M Management Group Inc.;
Director and President, A I M Advisors, Inc.; Director and Executive Vice
President, A I M Distributors, Inc.; Director and Senior Vice President, A I M
Institutional Fund Services, Inc. and Fund Management Company; and Director
and Vice President, A I M Capital Management, Inc., and A I M Fund Services,
Inc.
JOHN F. KROEGER, Trustee
Box 464
24875 Swan Road-Martingham
St. Michaels, MD 21663
Trustee, Flag Investors International Trust; and Director, Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc., Flag
Investors Quality Growth Fund, Inc., Flag Investors Total Return U.S. Treasury
Fund, Inc., Flag Investors Intermediate Term Income Fund, Inc., Managed
Municipal Fund, Inc., Flag Investors Value Builder Fund, Inc., Flag Investors
Maryland Intermediate Tax-Free Income Fund, Inc., Alex. Brown Cash Reserve Fund,
Inc. and North American Government Bond Fund, Inc. (investment companies).
Formerly, Consultant, Wendell & Stockel Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee
8955 Katy Freeway, Suite 204
Houston, TX 77024
Attorney in private practice in Houston, Texas.
IAN W. ROBINSON, Trustee
183 River Drive
Tequesta, FL 33469
Formerly, Executive Vice President and Chief Financial Officer, Bell Atlantic
Management Services, Inc. (provider of centralized management services to
telephone companies); Executive Vice President, Bell Atlantic Corporation
(parent of seven telephone companies); and Vice President and Chief Financial
Officer, Bell Telephone Company of Pennsylvania and Diamond State Telephone
Company.
- --------------
*A trustee who is an "interested person" of the Fund, as defined in the 1940
Act.
**A trustee who is an "interested person" of the Fund and AIM, as defined in the
1940 Act.
A-5
<PAGE>
LOUIS S. SKLAR, Trustee
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests Limited
Partnership (real estate development).
WILLIAM H. KLEH, Senior Vice President
Director and Senior Vice President, A I M Advisors, Inc.; Director and Vice
President, Fund Management Company; Senior Vice President, A I M Management
Group Inc.; and Vice President, A I M Capital Management, Inc., A I M
Distributors, Inc. and A I M Fund Services, Inc.
JOHN J. ARTHUR, Senior Vice President and Treasurer
Senior Vice President and Treasurer, A I M Advisors, Inc.; and Vice President
and Treasurer, A I M Management Group Inc., A I M Capital Management, Inc.,
A I M Distributors, Inc., A I M Fund Services, Inc., A I M Institutional Fund
Services Inc. and Fund Management Company.
GARY T. CRUM, Senior Vice President
Director and President, A I M Capital Management, Inc.; Director and Senior
Vice President, A I M Management Group Inc. and A I M Advisors, Inc.; and
Director, A I M Distributors, Inc.
CAROL F. RELIHAN, Vice President and Secretary
Vice President, General Counsel and Secretary, A I M Advisors, Inc., A I M
Distributors, Inc., A I M Institutional Fund Services, Inc., A I M Fund
Services, Inc., A I M Management Group Inc. and Fund Management Company; and
General Counsel and Secretary, A I M Capital Management, Inc.
DANA R. SUTTON, Vice President and Assistant Treasurer
Vice President and Fund Controller, A I M Advisors, Inc.; and Assistant Vice
President and Assistant Treasurer, Fund Management Company.
POLLY A. AHRENDTS, Vice President
Vice President, A I M Capital Management, Inc.
GARY V. BEAUCHAMP, Vice President
Vice President, A I M Capital Management, Inc.
MELVILLE B. COX, Vice President
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc., A I M
Institutional Fund Services, Inc. and A I M Fund Services, Inc.; and Assistant
Vice President, A I M Distributors, Inc. and Fund Management Company. Formerly,
Vice President, Charles Schwab & Co., Inc.; Assistant Secretary, Charles Schwab
Family of Funds and Schwab Investments; Chief Compliance Officer, Charles Schwab
Investment Management, Inc.; and Vice President, Integrated Resources Life
Insurance Co. and Capitol Life Insurance Co.
KAREN DUNN KELLEY, Vice President
Senior Vice President, A I M Capital Management, Inc.; and Vice President,
A I M Advisors, Inc.
J. ABBOTT SPRAGUE, Vice President
Director and President, A I M Institutional Fund Services, Inc. and Fund
Management Company; Director and Senior Vice President, A I M Advisors, Inc.;
and Senior Vice President, A I M Fund Services, Inc. and A I M Management Group
Inc.
The standing committees of the Board of Trustees are the Audit Committee, the
Investments Committee and the Nominating and Compensation Committee.
The members of the Audit Committee are Messrs. Daly, Kroeger (Chairman),
Pennock and Robinson. The Audit Committee is responsible for meeting with the
Fund's auditors to review audit procedures and results and to consider any
matters arising from an audit to be brought to the attention of the trustees as
a whole with respect to the Fund's fund accounting or its internal
A-6
<PAGE>
accounting controls, or for considering such matters as may from time to time be
set forth in a charter adopted by the Board of Trustees and such committee.
The members of the Investments Committee are Messrs. Bauer, Crockett, Daly
(Chairman), Kroeger and Pennock. The Investments Committee is responsible for
reviewing portfolio compliance, brokerage allocation, portfolio investment
pricing issues, interim dividend and distribution issues, or considering such
matters as may from time to time be set forth in a charter adopted by the Board
of Trustees and such committee.
The members of the Nominating and Compensation Committee are Messrs. Crockett,
Daly, Kroeger, Pennock (Chairman) and Sklar. The Nominating and Compensation
Committee is responsible for considering and nominating individuals to stand for
election as trustees who are not interested persons as long as the Fund
maintains a distribution plan pursuant to Rule 12b-1 under the 1940 Act,
reviewing from time to time the compensation payable to the disinterested
trustees, or considering such matters as may from time to time be set forth in a
charter adopted by the Board of Trustees and such committee.
All of the Fund's trustees also serve as directors or trustees of some or all
of the other investment companies managed or advised by A I M Advisors, Inc.
("AIM") or distributed and administered by FMC. All of the Fund's executive
officers hold similar offices with some or all of such investment
companies.
Each trustee is reimbursed for expenses incurred in connection with each
meeting of the Board of Trustees or any Committee attended. The trustees of the
Fund who do not serve as officers of the Fund are compensated for their services
according to a fee schedule which recognizes the fact that they also serve as
directors or trustees of certain other investment companies advised or managed
by AIM. Each such trustee receives a fee, allocated among the investment
companies for which he serves as a director or trustee, which consists of
two components: (i) an annual retainer, based on the number of series portfolios
of the investment companies for which such trustee serves as director/trustee
("Series"), which annual retainer shall equal the sum of $7,500 for the first
Series, $5,000 for the second Series, $2,500 for the third Series, $1,000 for
each of the fourth through tenth Series, and $750 for each additional Series,
with 50% of such annual retainer being allocated equally among the Series for
which the trustee serves as director/trustee, and 50% of such annual retainer
being allocated among the Series based upon their relative net assets; and (ii)
a meeting fee of $250 per Series, up to a maximum of $1,000 per meeting, for
each board meeting attended in person by such trustee, with 50% of such meeting
fee being allocated equally among the Series for which the trustee serves as
director/trustee, and 50% allocated among the Series based upon their relative
net assets.
During the fiscal year ended August 31, 1994, the Fund paid $32,987 and $8,407
in trustees' fees and expenses allocated to the Portfolio and the Treasury Tax
Advantage Portfolio, respectively.
The Fund paid Reid & Priest $27,379 in legal fees for services provided to the
Portfolio during the fiscal year ended August 31, 1994. Carl Frischling,
Esquire, trustee to the Fund was a partner in such firm.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-
1173, acts as the investment advisor of the Portfolio pursuant to a Master
Investment Advisory Agreement dated as of October 18, 1993 (the "Advisory
Agreement"). AIM was organized in 1976, and together with its affiliates advises
or manages 37 investment company portfolios. As of November 3, 1994, the total
assets of the investment company portfolios managed or advised by AIM and its
affiliates were approximately $28.3 billion.
Pursuant to the terms of the Advisory Agreement, AIM manages the investment of
the assets of the Portfolio. AIM obtains and evaluates economic, statistical and
financial information to formulate and implement investment policies for the
Portfolio. Any investment program undertaken by AIM will at all times be subject
to the policies and control of the Fund's Board of Trustees. AIM shall not be
liable to the Fund or to its shareholders for any act or omission by AIM or for
any loss sustained by the Fund or its shareholders except in the case of willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
As compensation for its services with respect to the Portfolio, AIM receives a
monthly fee which is calculated by applying the following annual rates to the
average daily net assets of the Portfolio:
<TABLE>
<CAPTION>
NET ASSETS RATE
---------- ----
<S> <C>
First $300 million........................... .15%
Over $300 million to $1.5 billion............ .06%
Over $1.5 billion............................ .05%
</TABLE>
The Advisory Agreement requires AIM to reduce its fee to the extent required
to satisfy any expense limitations imposed by the securities laws or regulations
thereunder of any state in which the Fund's shares are qualified for sale.
A-7
<PAGE>
The Advisory Agreement provides that, upon the request of the Board of
Trustees, AIM may perform or arrange for the performance of certain additional
services on behalf of the Portfolio which are not required by the Advisory
Agreement. AIM may receive reimbursement or reasonable compensation for such
additional services, as may be agreed upon by AIM and the Board of Trustees,
based upon a finding by the Board of Trustees that the provision of such
services would be in the best interest of the Portfolio and its shareholders.
The Board of Trustees has made such a finding and, accordingly, has entered into
a master administrative services agreement under which AIM will provide the
additional services described below under the caption "Administrative Services."
Pursuant to an investment advisory agreement between the Fund and AIM
previously in effect (the "Prior Advisory Agreement"), which provided for the
same level of compensation to AIM as the Advisory Agreement, AIM received fees
from the Fund for the fiscal years ended August 31, 1994, 1993 and 1992 with
respect to the Portfolio in the amounts of $2,337,627, $2,211,262 and
$1,986,652, respectively.
The Advisory Agreement was approved for its initial term by the Board of
Trustees on July 19, 1993. The Advisory Agreement will continue in effect until
June 30, 1995, and from year to year thereafter, provided that it is
specifically approved at least annually by the Fund's Board of Trustees and the
affirmative vote of a majority of the trustees who are not parties to the
Advisory Agreement or "interested persons" of any such party by votes cast in
person at a meeting called for such purpose. The Fund or AIM may terminate the
Advisory Agreement on 60 days' notice without penalty. The Advisory Agreement
terminates automatically in the event of its assignment, as defined in the 1940
Act.
AIM is a wholly-owned subsidiary of A I M Management Group Inc. ("AIM
Management"), 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173. All of
the directors and certain of the officers of AIM are also executive officers of
the Fund and their affiliations are shown under "Trustees and Officers." The
address of each director and officer of AIM is 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173.
FMC is a registered broker-dealer and wholly-owned subsidiary of AIM. FMC acts
as distributor of the Shares.
ADMINISTRATIVE SERVICES
AIM also acts as the Portfolio's administrator pursuant to a Master
Administrative Services Agreement dated as of October 18, 1993 between AIM and
the Fund (the "Administrative Services Agreement"). In addition, AIM and A I M
Institutional Fund Services, Inc. ("AIFS") have entered into an Administrative
Services Agreement, dated as of September 16, 1994 (the "AIFS Administrative
Services Agreement").
The Administrative Services Agreement was initially approved by the Board of
Trustees on July 19, 1993. Under the Administrative Services Agreement, AIM
performs accounting and other administrative services for the Portfolio. As full
compensation for the performance of such services, AIM is reimbursed for any
personnel and other costs (including applicable office space, facilities and
equipment) of furnishing the services of a principal financial officer of the
Fund and of persons working under his supervision for maintaining the financial
accounts and books and records of the Fund, including calculation of the
Portfolio's daily net asset value, and preparing tax returns and financial
statements for the Portfolio. The method of calculating such reimbursements must
be annually approved, and the amounts paid will be periodically reviewed, by the
Fund's Board of Trustees.
Under the terms of the Prior Advisory Agreement, AIM was reimbursed for the
fiscal years ended August 31, 1993 and 1992, in the amounts of $82,419 and
$70,144, respectively, for fund accounting services for the Portfolio.
Under the Administrative Services Agreement, AIM was reimbursed for the fiscal
year ended August 31, 1994, $97,055 for fund accounting services and $13,752 for
shareholder services, for the Portfolio.
The AIFS Administrative Services Agreement between AIM and AIFS, a registered
transfer agent and wholly-owned subsidiary of AIM, provides that AIFS may
perform certain shareholder services for the Fund. For such services, AIFS is
entitled to receive from AIM such reimbursement of its costs associated with
each such Fund as may be approved by the Fund's Board of Trustees. For the
period from June 1, 1994 through August 31, 1994, AIFS or its affiliates
received shareholder services fees with respect to the Portfolio in the amount
of $13,752.
EXPENSES
In addition to fees paid to AIM pursuant to the Agreement and the expenses
reimbursed to AIM under the Administrative Services Agreement, the Fund also
pays or causes to be paid all other expenses of the Fund, including, without
limitation: the charges and expenses of any registrar, any custodian or
depository appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, and any transfer, dividend or accounting agent or
agents appointed by the Fund; brokers' commissions chargeable to the Fund in
connection with portfolio securities transactions to which the Fund is a party;
all taxes, including securities issuance and transfer taxes, and fees payable by
the Fund to federal, state or other governmental agencies;
A-8
<PAGE>
the costs and expenses of engraving or printing of certificates representing
shares of the Fund; all costs and expenses in connection with the registration
and maintenance of registration of the Fund and its shares with the SEC and
various states and other jurisdictions (including filing and legal fees and
disbursements of counsel); the costs and expenses of printing, including
typesetting, and distributing prospectuses and statements of additional
information of the Fund and supplements thereto to the Fund's shareholders; all
expenses of shareholders' and trustees' meetings and of preparing, printing and
mailing of prospectuses, proxy statements and reports to shareholders; fees and
travel expenses of trustees and trustee members of any advisory board or
committee; all expenses incident to the payment of any dividend, distribution,
withdrawal or redemption, whether in shares or in cash; charges and expenses of
any outside service used for pricing of the Fund's shares; charges and expenses
of legal counsel, including counsel to the trustees of the Fund who are not
"interested persons" (as defined in the 1940 Act) of the Fund or AIM, and of
independent accountants in connection with any matter relating to the Fund;
membership dues of industry associations; interest payable on Fund borrowings;
postage; insurance premiums on property or personnel (including officers and
trustees) of the Fund which inure to its benefit; and extraordinary expenses
(including, but not limited to, legal claims and liabilities and litigation
costs and any indemnification related thereto). FMC bears the expenses of
printing and distributing prospectuses and statements of additional information
(other than those prospectuses and statements of additional information
distributed to existing shareholders of the Fund) and any other promotional or
sales literature used by FMC or furnished by FMC to purchasers or dealers in
connection with the public offering of the Fund's shares.
Expenses of the Fund which are not directly attributable to the operations of
any class of shares or portfolio of the Fund are prorated among all classes of
the Fund based upon the relative net assets of each class. Expenses of the Fund
which are not directly attributable to a specific class of shares but are
directly attributable to a specific portfolio are prorated among all classes of
such Portfolio based upon the relative net assets of each such class. Expenses
of the Fund which are directly attributable to a specific class of shares are
charged against the income available for distribution as dividends to the
holders of such shares.
BANKING REGULATIONS
The Glass-Steagall Act and other applicable laws, among other things,
generally prohibit federally chartered or supervised banks from engaging in the
business of underwriting, selling or distributing securities, but permit banks
to make shares of mutual funds available to their customers and to perform
administrative and shareholder servicing functions. However, judicial or
administrative decisions or interpretations of such laws, as well as changes in
either federal or state statutes or regulations relating to the permissible
activities of banks or their subsidiaries or affiliates, could prevent a bank
from continuing to perform all or a part of its servicing activities. If a bank
were prohibited from so acting, shareholder clients of such bank would be
permitted to remain shareholders of the Fund and alternate means for continuing
the servicing of such shareholders would be sought. In such event, changes in
the operation of the Fund might occur and shareholders serviced by such bank
might no longer be able to avail themselves of any automatic investment or other
services then being provided by such bank. It is not expected that shareholders
wold suffer any adverse financial consequences as a result of any of these
occurrences. In addition, state securities laws on this issue may differ from
the interpretations of federal law expressed herein and certain banks and
financial institutions may be required to register as dealers pursuant to state
law.
TRANSFER AGENTS AND CUSTODIAN
The Bank of New York acts as custodian for the portfolio securities and cash
of the Portfolio. The Bank of New York receives such compensation from the Fund
for its services in such capacity as is agreed to from time to time by The Bank
of New York and the Fund. The address of The Bank of New York is 110 Washington
Street, 8th Floor, New York, New York 10286.
State Street Bank and Trust Company serves as a transfer agent for the shares
of the Class and receives such compensation from the Fund for its services in
such capacity as is agreed to from time to time by State Street Bank and Trust
Company and the Fund. The address of State Street Bank and Trust Company is 225
Franklin Street, Boston, Massachusetts 02110. A I M Institutional Fund Services,
Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173, also acts as a
transfer agent for the shares of the Class and currently receives no
compensation from the Fund for its services.
REPORTS
The Fund furnishes shareholders with semi-annual reports containing
information about the Fund and its operations, including a schedule of
investments held in the Portfolio and its financial statements. The annual
financial statements are audited by the Fund's independent auditors. The Board
of Trustees has selected KPMG Peat Marwick LLP, NationsBank Building, 700
Louisiana, Houston, Texas 77002, as the independent auditors to audit the
financial statements and review the tax returns of the Portfolio.
A-9
<PAGE>
PRINCIPAL HOLDERS OF SECURITIES
TREASURY PORTFOLIO
To the best of the knowledge of the Fund, the names and addresses of the
holders of 5% or more of the outstanding shares of any class of the Treasury
Portfolio as of October 31, 1994, and the percentage of such shares owned by
such shareholders as of such date are as follows:
INSTITUTIONAL CLASS
<TABLE>
<CAPTION> PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
NationsBank of Texas, N.A................................. 20.71%
1401 Elm Street, 11th Floor
Dallas, TX 75202-2911
Wachovia Bank of North Carolina........................... 11.77%
Trust Operations
P.O. Box 3075 MC
Winston-Salem, NC 31051
Trust Company of Georgia.................................. 11.70%
P.O. Box 105213
Atlanta, GA 30348
Texas Commerce Bank....................................... 7.39%
601 Travis
Houston, TX 77702
Victoria & Co............................................. 6.27%
Trust Operations
P.O. Box 1698
Victoria, TX 77902
U.S. Bank of Washington.................................. 6.26%
Trust Securities
1414 Fourth Avenue
Seattle, WA 98111
</TABLE>
PERSONAL INVESTMENT CLASS
<TABLE>
<CAPTION> PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY
---------------- ------------
<S> <C>
Republic National Bank of New York........................ 48.59%(a,b)
1 Hanson Place, Lower
Brooklyn, NY 11243
Frost National Bank....................................... 47.41%(b,c)
P.O. Box 1600
San Antonio, TX 78296
</TABLE>
- -------------
(a) The Fund has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
(b) A shareholder who holds 25% or more of the outstanding shares of a class may
be presumed to be in "control" of such class of shares, as defined in the
1940 Act.
(c) The Fund has knowledge as to certain shares beneficially owned, however to
the best knowledge of the Fund, no one beneficially owns 5% or more of the
outstanding shares of the class.
A-10
<PAGE>
PRIVATE INVESTMENT CLASS
<TABLE>
<CAPTION> PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY
---------------- -----------
<S> <C>
VAR & Co.................................................. 32.17%(a,b)
180 East 5th Street
St. Paul, MN 55101
Liberty Bank and Trust Company of Tulsa, N.A.............. 31.70%(a,b)
P.O. Box 25848
Tulsa, OK 74101
Huntington Capital........................................ 19.35%(c)
41 South High Street
Columbus, Ohio 43287
CoreStates Bank, N.A...................................... 11.22%(a)
Penn Mutual Insurance Building
530 Walnut Street
Philadelphia, PA 19106
</TABLE>
CASH MANAGEMENT CLASS
<TABLE>
<CAPTION> PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
---------------- ----------------- ------------
<S> <C> <C>
United Counties Trust Company........ -0- 25.16%(a,b)
30 Maple Street
Summit, NJ 07901
City of Burbank...................... 9.44% -0-
333 South Beaudry Avenue, 25th Floor
Los Angeles, CA 95691
Montgomery County.................... 7.80% -0-
101 Monrose Street, 15th Floor
Rockville, MD 20850
City of Ontario...................... 6.07% -0-
303 East "B" Street
Ontario, CA 91764
City of Beaumont-Meridian Trust
Company of California............... 5.86% -0-
35 North 6th Street
Reading, PA 19603
City of West Sacramento.............. 5.80% -0-
2101 Stone Boulevard
West Sacramento, CA 95691
</TABLE>
- -------------
(a) The Fund has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
(b) A shareholder who holds 25% or more of the outstanding shares of a class
may be presumed to be in "control" of such class of shares, as defined in
the 1940 Act.
(c) The Fund has knowledge as to certain shares beneficially owned, however to
the best knowledge of the Fund, no one beneficially owns 5% or more of
the outstanding shares of the class.
A-11
<PAGE>
TREASURY TAXADVANTAGE PORTFOLIO
To the best of the knowledge of the Fund, the names and addresses of the
holders of 5% or more of the outstanding shares of any class of the Treasury
TaxAdvantage Portfolio as of October 31, 1994, and the percentage of such shares
owned by such shareholders as of such date are as follows:
INSTITUTIONAL CLASS
<TABLE>
<CAPTION> PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
FirsTier Bank Omaha...................................... 26.87%(b)
1700 Farnam Street
Omaha, NE 68102
Muchmore & Co............................................ 19.03%
P.O. Box 1205
Cranford, NJ 07016
First National Bank of Maryland.......................... 8.69%
P.O. Box 1596
Baltimore, MD 21203
Sanwa Bank............................................... 5.75%
P.O. Box 60078
Los Angeles, CA 90060
Wachovia Bank of North Carolina.......................... 5.21%
P.O. Box 3075
Winston-Salem, NC 27150
Liberty Bank and Trust Company, N.A...................... 5.09%
P.O. Box 25848
Oklahoma City, OK 73125
Boatmen's Trust Co....................................... 5.03%
100 North Broadway
St. Louis, MO 63101
</TABLE>
PRIVATE INVESTMENT CLASS
- ------------------------
AIM provided the initial capitalization of the Private Investment Class of the
Treasury TaxAdvantage Portfolio and, accordingly, as of the date of this
Statement of Additional Information, owned all the outstanding shares of
beneficial interest of the Private Investment Class of the Treasury TaxAdvantage
Portfolio. Although the Private Investment Class of the Treasury TaxAdvantage
Portfolio expects that the sale of its shares to the public pursuant to the
Prospectus will promptly reduce the percentage of such shares owned by AIM to
less than 1% of the total shares outstanding, as long as AIM owns over 25% of
the shares of the Private Investment Class of the Treasury TaxAdvantage
Portfolio that are outstanding, it may be presumed to be in "control" of the
Private Investment Class of the Treasury TaxAdvantage Portfolio, as defined in
the 1940 Act.
Shares shown as beneficially owned by the above institutions are those shares
for which the institutions possessed or shared voting or investment power with
respect to such shares on behalf of their underlying accounts.
To the best of the knowledge of the Fund, as of October 31, 1994, the trustees
and officers of the Fund beneficially owned less than 1% of each class of the
Fund's outstanding shares.
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(a) The Fund has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
(b) A shareholder who holds 25% or more of the outstanding shares of a class
may be presumed to be in "control" of such class of shares, as defined in
the 1940 Act.
A-12
<PAGE>
PURCHASES AND REDEMPTIONS
NET ASSET VALUE DETERMINATION
Shares of the Portfolio are sold at net asset value. Shareholders may at any
time redeem all or a portion of their shares at net asset value. The investor's
price for purchases and redemptions will be the net asset value next determined
following the receipt of an order to purchase or a request to redeem shares.
The valuation of the portfolio instruments based upon their amortized cost and
the concomitant maintenance of the net asset value per share of $1.00 for the
Portfolio is permitted in accordance with applicable rules and regulations of
the SEC, including Rule 2a-7, which require the Fund to adhere to certain
conditions. These rules require that the Fund maintain a dollar-weighted average
portfolio maturity of 90 days or less for the Portfolio, purchase only
instruments having remaining maturities of 397 days or less and invest only in
securities determined by the Fund's Board of Trustees to be of high quality with
minimal credit risk.
The Board of Trustees is required to establish procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share at
$1.00 for the Portfolio as computed for the purpose of sales and redemptions.
Such procedures include review of the Portfolio's portfolio holdings by the
Board of Trustees, at such intervals as they may deem appropriate, to determine
whether the net asset value calculated by using available market quotations or
other reputable sources for the Portfolio deviates from $1.00 per share and, if
so, whether such deviation may result in material dilution or is otherwise
unfair to existing holders of the Portfolio's shares. In the event the Board of
Trustees determines that such a deviation exists for the Portfolio, it will take
such corrective action as the Board of Trustees deems necessary and appropriate
with respect to the Portfolio, including the sales of portfolio instruments
prior to maturity to realize capital gains or losses or to shorten the average
portfolio maturity; the withholding of dividends; redemption of shares in kind;
or the establishment of a net asset value per share by using available market
quotations.
DISTRIBUTION AGREEMENT
The Fund has entered into a Master Distribution Agreement dated as of October
18, 1993 (the "Distribution Agreement") with FMC, a registered broker-dealer and
a wholly-owned subsidiary of AIM, to act as the exclusive distributor of the
shares of the Class. The address of FMC is 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. See "General Information About the Fund - Trustees
and Officers" and "- Investment Advisor" for information as to the affiliation
of certain trustees and officers of the Fund with FMC, AIM and AIM Management.
The Distribution Agreement provides that FMC has the exclusive right to
distribute shares of the Class either directly or through other broker-dealers.
The Distribution Agreement also provides that FMC will pay promotional expenses,
including the incremental costs of printing prospectuses and statements of
additional information, annual reports and other periodic reports for
distribution to persons who are not shareholders of the Fund and the costs of
preparing and distributing any other supplemental sales literature. FMC has not
undertaken to sell any specified number of shares of the Class. FMC does not
receive any fees with respect to the shares of the Class pursuant to the
Distribution Agreement.
On July 19, 1993, the Board of Trustees (including the affirmative vote of all
the trustees who are not parties to the Distribution Agreement or "interested
persons" of any such party) initially approved the Distribution Agreement for
its initial term. The Distribution Agreement will remain in effect until June
30, 1995, and it will continue in effect from year to year thereafter only if
such continuation is specifically approved at least annually by the Fund's Board
of Trustees and the affirmative vote of the trustees who are not parties to the
Distribution Agreement or "interested persons" of any such party by votes cast
in person at a meeting called for such purpose. A prior distribution agreement
between the Fund and FMC, with terms substantially the same as those of the
Distribution Agreement was in effect through October 15, 1993. The Fund or FMC
may terminate the Distribution Agreement on 60 days' written notice without
penalty. The Distribution Agreement will terminate automatically in the event of
its "assignment," as defined in the 1940 Act.
PERFORMANCE INFORMATION
As stated under the caption "Yield Information" in the Prospectus, yield
information for the shares of the Class may be obtained by calling the Fund
at (800) 659-1005. The current yield quoted will be the net average annualized
yield for an identified period. Current yield will be computed by assuming that
an account was established with a single share (the "Single Share Account") on
the first day of the period. To arrive at the quoted yield, the net change in
the value of that Single Share Account for the period (which would include
dividends accrued with respect to the share, and dividends declared on shares
purchased with dividends accrued and paid, if any, but would not include
realized gains and losses or unrealized appreciation or depreciation) will be
multiplied by 365 and then divided by the number of days in the period, with the
resulting figure carried to the nearest hundredth of one percent. The Fund may
also furnish a quotation of effective yield that assumes the reinvestment of
dividends for a 365-day year and a return for the entire year equal to the
average annualized yield for the period, which will be computed by compounding
the unannualized current yield for the period by adding 1 to the unannualized
current yield, raising the sum to a power equal to 365 divided by the number of
days in the period, and then subtracting 1 from the result.
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<PAGE>
For the seven-day period ended August 31, 1994, the current yield and the
effective yield (which assumes the reinvestment of dividends for a 365-day year
and a return for the entire year equal to the annualized current yield for the
period) for the Class were 4.49% and 4.59%, respectively. These yields are
quoted for illustration purposes only. The yields for any other seven-day period
may be substantially different from the yields quoted above.
The Fund may compare the performance of the Class or the performance of
securities in which it may invest to:
. IBC/Donoghue's Money Fund Averages, which are average yields of various
types of money market funds that include the effect of compounding
distributions;
. other mutual funds, especially those with similar investment objectives.
These comparisons may be based on data published by IBC/Donoghue's Money Fund
Report of Holliston, MA 01746 or by Lipper Analytical Services, Inc., a widely
recognized independent service located in Summit, New Jersey, which monitors
the performance of mutual funds;
. yields on other money market securities or averages of other money market
securities as reported by the Federal Reserve Bulletin, by TeleRate, a
financial information network, or by Bloomberg, a financial information firm;
and
. other fixed-income investments such as Certificates of Deposit ("CDs").
The principal value and interest rate of CDs and money market securities are
fixed at the time of purchase whereas the Class's yield will fluctuate. Unlike
some CDs and certain other money market securities, money market mutual funds
are not insured by the FDIC. Investors should give consideration to the quality
and maturity of the portfolio securities of the respective investment companies
when comparing investment alternatives.
The Fund may reference the growth and variety of money market mutual funds and
AIM's innovation and participation in the industry.
SUSPENSION OF REDEMPTION RIGHTS
The right of redemption may be suspended or the date of payment upon
redemption may be postponed when (a) trading on the New York Stock Exchange is
restricted, as determined by applicable rules and regulations of the SEC, (b)
the New York Stock Exchange is closed for other than customary weekend or
holiday closings, (c) the SEC has by order permitted such suspension, or (d) an
emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of the Portfolio not reasonably
practicable.
INVESTMENT PROGRAM AND RESTRICTIONS
INVESTMENT PROGRAM
The Portfolio seeks to achieve its objective by investing in high grade money
market instruments. The money market instruments in which the Portfolio invests
are considered to carry very little risk and accordingly may not have as high a
yield as that available on money market instruments of lesser quality. The
Portfolio invests exclusively in direct obligations of the U.S. Treasury,
which include Treasury bills, notes and bonds and repurchase agreements relating
to such securities. The Portfolio may enter into repurchase agreements with
respect to U.S. Treasury securities. The Portfolio may also borrow money and
enter into reverse repurchase agreements with respect to its portfolio
securities in amounts up to 10% of the value of its total assets at the time of
borrowing or entering into a repurchase agreement. The Portfolio will only
borrow money or enter into reverse repurchase agreements for temporary or
emergency purposes to facilitate the orderly sale of portfolio securities to
accommodate abnormally heavy redemption requests should they occur.
ELIGIBLE SECURITIES
Rule 2a-7 under the 1940 Act, which governs the operations of money market
funds, defines an "Eligible Security" as follows:
(i) a security with a remaining maturity of 397 days or less that is rated
(or that has been issued by an issuer that is rated with respect to a class
of short-term debt obligations, or any security within that class, that is
comparable in priority and security with the security) by the Requisite
NRSROs(1) in one of the two highest rating categories for short-term debt
obligations (within which there may be sub-categories or gradations
indicating relative standing); or
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(1) "Requisite NRSRO" shall mean (a) any two nationally recognized statistical
rating organizations that have issued a rating with respect to a security or
class of debt obligations of an issuer, or (b) if only one NRSRO has issued
a rating with respect to such security or issuer of such security, that
NRSRO. At present the NRSROs are: Standard & Poor's Corp., Moody's Investors
Service, Inc., Duff and Phelps, Inc., Fitch Investors Services, Inc. and,
with respect to certain types of securities, IBCA Limited and its affiliate,
IBCA Inc. Subcategories or gradations in ratings (such as a "+" or "-") do
not count as rating categories.
A-14
<PAGE>
(ii) a security:
(A) that at the time of issuance was a long-term security but that has a
remaining maturity of 397 calendar days or less, and
(B) whose issuer has received from the Requisite NRSROs a rating, with
respect to a class of short-term debt obligations (or any security within that
class) that is now comparable in priority and security with the security, in
one of the two highest rating categories for short-term debt obligations
(within which there may be sub-categories or gradations indicating relative
standing); or
(iii) an unrated security(2) that is of comparable quality to a security
meeting the requirements of paragraphs (a)(5)(i) or (ii) of this section, as
determined by the money market fund's board of directors; provided, however,
that:
(A) the board of directors may base its determination that a Standby
Commitment is an Eligible Security upon a finding that the issuer of the
commitment presents a minimal risk of default; and
(B) a security that at the time of issuance was a long-term security but that
has a remaining maturity of 397 calendar days or less and that is an unrated
security is not an Eligible Security if the security has a long-term rating
from any NRSRO that is not within the NRSRO's two highest categories (within
which there may be sub-categories or gradations indicating relative standing).
INVESTMENT RESTRICTIONS
As a matter of fundamental policy which may not be changed without a majority
vote of shareholders of the Portfolio (as that term is defined under "General
Information about the Fund - The Fund and its Shares"), the Portfolio may not:
(1) purchase securities of any one issuer (other than obligations of the U.S.
Government, its agencies and instrumentalities) if, immediately after such
purchase, more than 5% of the value of the Portfolio's total assets would be
invested in such issuer, except as permitted by Rule 2a-7 under the 1940 Act,
as amended from time to time;
(2) borrow money or issue senior securities except (a) for temporary or
emergency purposes (e.g., in order to facilitate the orderly sale of portfolio
securities to accommodate abnormally heavy redemption requests), the Portfolio
may borrow money from banks or obtain funds by entering into reverse repurchase
agreements, and (b) to the extent that entering into commitments to purchase
securities in accordance with the Portfolio's investment program may be
considered the issuance of senior securities, provided that the Portfolio will
not purchase portfolio securities while borrowings in excess of 5% of its total
assets are outstanding;
(3) mortgage, pledge or hypothecate any assets except to secure permitted
borrowings and except for reverse repurchase agreements and then only in an
amount up to 33 1/3% of the value of its total assets at the time of borrowing
or entering into a reverse repurchase agreement;
(4) make loans of money or securities other than (a) through the purchase of
debt securities in accordance with the Portfolio's investment program, (b) by
entering into repurchase agreements and (c) by lending portfolio securities to
the extent permitted by law or regulation;
(5) underwrite securities issued by any other person, except to the extent
that the purchase of securities and the later disposition of such securities in
accordance with the Portfolio's investment program may be deemed an
underwriting;
(6) invest in real estate, except that the Portfolio may purchase and sell
securities secured by real estate or interests therein or issued by issuers
which invest in real estate or interests therein;
(7) purchase or sell commodities or commodity futures contracts, purchase
securities on margin, make short sales or invest in puts or calls;
(8) invest in any obligation not payable as to principal and interest in
United States currency; or
(9) acquire for value the securities of any other investment company, except
in connection with a merger, consolidation, reorganization or acquisition of
assets.
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(2) An "unrated security" is a security (i) issued by an issuer that does not
have a current short-term rating from any NRSRO, either as to the particular
security or as to any other short-term obligations of comparable priority
and security; (ii) that was a long-term security at the time of issuance and
whose issuer has not received from any NRSRO a rating with respect to a
class of short-term debt obligations now comparable in priority and
security; or (iii) a security that is rated but which is the subject of an
external credit support agreement not in effect when the security was
assigned its rating, provided that a security is not an unrated security if
any short-term debt obligation issued by the issuer and comparable in
priority and security is rated by any NRSRO.
A-15
<PAGE>
OTHER INVESTMENT POLICIES
The Portfolio does not intend to invest in companies for the purpose of
exercising control or management. The Portfolio may also lend its portfolio
securities in amounts up to 33 1/3% of its total assets to financial
institutions in accordance with the investment restrictions of the Portfolio.
Such loans would involve risks of delay in receiving additional collateral in
the event the value of the collateral decreased below the value of the
securities loaned or of delay in recovering the securities loaned or even loss
of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by AIM to be
of good standing and only when, in AIM's judgment, the income to be earned from
the loans justifies the attendant risks. None of the foregoing policies is
fundamental.
The Fund may, from time to time in order to qualify shares of the Portfolio
for sale in a particular state, agree to certain investment restrictions in
addition to or more stringent than those set forth above. Such restrictions are
not fundamental and may be changed without the approval of shareholders. For
example, the Portfolio will not invest in oil, gas or other mineral leases,
rights, royalty contracts or exploration or development programs (Texas). This
restriction, however, does not prevent the Portfolio from purchasing and selling
securities of companies engaged in the exploration, development, production,
refining, transporting and marketing of oil, gas or minerals. In addition, the
Portfolio will not purchase or retain securities of any issuer if the officers
or trustees of the Fund or the officers or directors of AIM owning beneficially
more than one-half of one percent of the securities of an issuer together own
beneficially more than five percent of the securities of that issuer. The
Portfolio also will not invest in illiquid securities or enter into reverse
repurchase agreements. The Fund will notify the appropriate shareholder(s) if,
upon the advice of AIM, the Portfolio intends to begin investing in illiquid
securities or entering into reverse repurchase agreements.
PORTFOLIO TRANSACTIONS
AIM is responsible for decisions to buy and sell securities for the Portfolio,
broker-dealer selection and negotiation of commission rates. Since purchases and
sales of portfolio securities by the Portfolio are usually principal
transactions, the Portfolio incurs little or no brokerage commissions. Portfolio
securities are normally purchased directly from the issuer or from a market
maker for the securities. The purchase price paid to dealers serving as market
makers may include a spread between the bid and asked prices. The Portfolio may
also purchase securities from underwriters at prices which include a commission
paid by the issuer to the underwriter.
The Portfolio does not seek to profit from short-term trading, and will
generally (but not always) hold portfolio securities to maturity, but AIM may
seek to enhance the yield of the Portfolio by taking advantage of yield
disparities or other factors that occur in the money markets. For example,
market conditions frequently result in similar securities trading at different
prices. AIM may dispose of any portfolio security prior to its maturity if such
disposition and reinvestment of proceeds are expected to enhance yield
consistent with AIM's judgment as to desirable portfolio maturity structure or
if such disposition is believed to be advisable due to other circumstances or
conditions. The amortized cost method of valuing portfolio securities requires
that the Portfolio maintain an average weighted portfolio maturity of ninety
days or less. Thus, there is likely to be relatively high portfolio turnover,
but since brokerage commissions are not normally paid on money market
instruments, the high rate of portfolio turnover is not expected to have a
material effect on the net income or expenses of the Portfolio.
AIM's primary consideration in effecting a security transaction is to obtain
the best net price and the most favorable execution of the order. To the
extent that the execution and prices offered by more than one dealer are
comparable, AIM may, in its discretion, effect transactions with dealers that
furnish statistical, research or other information or services which are deemed
by AIM to be beneficial to the Portfolio's investment program. Certain research
services furnished by dealers may be useful to AIM with respect to clients other
than the Portfolio. Similarly, any research services received by AIM through
placement of portfolio transactions of other clients may be of value to AIM in
fulfilling its obligations to the Portfolio. AIM is of the opinion that the
material received is beneficial in supplementing AIM's research and analysis;
and, therefore, it may benefit the Portfolio by improving the quality of AIM's
investment advice. The advisory fees paid by the Portfolio are not reduced
because AIM receives such services.
Provisions of the 1940 Act and rules and regulations thereunder have been
construed to prohibit the Fund from purchasing securities or instruments from,
or selling securities or instruments to, any holder of 5% or more of the voting
securities of any investment company managed or advised by AIM. The Fund has
obtained an order of exemption from the SEC which permits the Fund to engage in
certain transactions with such 5% holder, if the Fund complies with conditions
and procedures designed to ensure that such transactions are executed at fair
market value and present no conflicts of interest.
AIM and its affiliates manage several other investment accounts, some of which
may have objectives similar to the Portfolio's. It is possible that at times
identical securities will be acceptable for one or more of such investment
accounts. However, the position of each account in the securities of the same
issue may vary and the length of time that each account may choose to hold its
investment in the securities of the same issue may likewise vary. The timing and
amount of purchase by each account will also be determined by its cash position.
If the purchase or sale of securities is consistent with the investment policies
of the
A-16
<PAGE>
Portfolio and one or more of these accounts and is considered at or about the
same time, transactions in such securities will be allocated in good faith among
such accounts, in accordance with applicable laws and regulations, in order to
obtain the best net price and most favorable execution. The allocation and
combination of simultaneous securities purchases on behalf of the Portfolio
will be made in the same way that such purchases are allocated among or combined
with those of other AIM accounts. Simultaneous transactions could adversely
affect the ability of the Portfolio to obtain or dispose of the full amount of a
security which it seeks to purchase or sell.
Under the 1940 Act, persons affiliated with the Fund are prohibited from
dealing with the Portfolios as principal in any purchase or sale of securities
unless an exemptive order allowing such transactions is obtained from the SEC.
The Board of Trustees has adopted procedures pursuant to Rule 17a-7 under the
1940 Act relating to portfolio transactions among the Portfolios and the AIM
Funds and each of the Portfolios may from time to time enter into transactions
in accordance with such Rule and procedures.
TAX MATTERS
The following is only a summary of certain additional tax considerations
generally affecting the Fund and its shareholders that are not described in the
Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of the Fund or its shareholders, and the discussion here and in the
Prospectus is not intended as a substitute for careful planning.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
The Fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As a
regulated investment company, the Fund is not subject to federal income tax on
the portion of its net investment income (i.e., taxable interest, dividends
and other taxable ordinary income, net of expenses) and capital gain net income
(i.e., the excess of capital gains over capital losses) that it distributes to
shareholders, provided that it distributes at least 90% of its investment
company taxable income (i.e., net investment income and the excess of net short-
term capital gain over net long-term capital loss) for the taxable year (the
"Distribution Requirement"), and satisfies certain other requirements of the
Code that are described below. Distributions by the Fund made during the taxable
year or, under specified circumstances, within twelve months after the close of
the taxable year, will be considered distributions of income and gains for the
taxable year and can therefore satisfy the Distribution Requirement.
In addition to satisfying the Distribution Requirement, a regulated investment
company must (1) derive at least 90% of its gross income from dividends,
interest, certain payments with respect to securities loans, gains from the sale
or other disposition of stock or securities or foreign currencies (to the extent
such currency gains are directly related to the regulated investment company's
principal business of investing in stock or securities) and other income
(including but not limited to gains from options, futures or forward contracts)
derived with respect to its business of investing in such stock, securities or
currencies (the "Income Requirement"); and (2) derive less than 30% of its gross
income (exclusive of certain gains on designated hedging transactions that are
offset by realized or unrealized losses on offsetting positions) from the sale
or other disposition of stock, securities or foreign currencies (or of options,
futures or forward contracts thereon) held for less than three months (the
"Short-Short Gain Test"). However, foreign currency gains, including those
derived from options, futures and forwards contracts, will not be characterized
as Short-Short Gain if they are directly related to the regulated investment
company's principal business of investing in stock or securities (or in options
or futures thereon). Because of the Short-Short Gain Test, a fund may have to
limit the sale of appreciated securities that it has held for less than three
months. However, the Short-Short Gain Test will not prevent a fund from
disposing of investments at a loss, since the recognition of a loss before the
expiration of the three-month holding period is disregarded. Interest (including
original issue discount) received by a fund at maturity or upon the disposition
of a security held for less than three months will not be treated as gross
income derived from the sale or other disposition of a security within the
meaning of the Short-Short Gain Test. However, income that is attributable to
realized market appreciation will be treated as gross income from the sale or
other disposition of securities for this purpose.
In addition to satisfying the requirements described above, a regulated
investment company must satisfy an asset diversification test in order to
qualify for tax purposes as a regulated investment company. Under this test, at
the close of each quarter of a fund's taxable year, at least 50% of the value of
a fund's assets must consist of cash and cash items, U.S. Government securities,
securities of other regulated investment companies, and securities of other
issuers (as to which a fund has not invested more than 5% of the value of a
fund's total assets in securities of such issuer and as to which a fund does not
hold more than 10% of the outstanding voting securities of such issuer), and no
more than 25% of the value of its total assets may be invested in the securities
of any other issuer (other than U.S. Government securities and securities of
other regulated investment companies), or in two or more issuers which a fund
controls and which are engaged in the same or similar trades or businesses.
If, for any taxable year the Portfolio does not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
will be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable as
ordinary dividends to the extent of the Portfolio's current and accumulated
earnings and profits. Such distributions generally will be eligible for the
dividends received deduction in the case of corporate shareholders.
A-17
<PAGE>
EXCISE TAX ON REGULATED INVESTMENT COMPANIES
A 4% non-deductible excise tax is imposed on a regulated investment company
that fails to distribute in each calendar year an amount equal to 98% of
ordinary taxable income for the calendar year and 98% of capital gain net income
for the one-year period ended on October 31 of such calendar year (or, at the
election of a regulated investment company having a taxable year ending November
30 or December 31, for its taxable year). The balance of such income must be
distributed during the next calendar year. For the foregoing purposes, a
regulated investment company is treated as having distributed any amount on
which it is subject to income tax for any taxable year ending in such calendar
year.
The Portfolio intends to make sufficient distributions or deemed distributions
of its ordinary taxable income and capital gain net income prior to the end of
each calendar year to avoid liability for the excise tax. However, investors
should note that the Portfolio may in certain circumstances be required to
liquidate portfolio investments to make sufficient distributions to avoid excise
tax liability.
PORTFOLIO DISTRIBUTIONS
The Portfolio anticipates distributing substantially all of its investment
company taxable income for each taxable year. Such distributions will be taxable
to shareholders as ordinary income and treated as dividends for federal income
tax purposes, but they will not qualify for the 70% dividends received deduction
for corporations.
Distributions by the Portfolio will be treated in the manner described above
regardless of whether such distributions are paid in cash or reinvested in
additional shares of the Portfolio. Shareholders receiving a distribution in the
form of additional shares will be treated as receiving a distribution in an
amount equal to the fair market value of the shares received, determined as of
the reinvestment date.
Ordinarily, shareholders are required to take distributions by the Portfolio
into account in the year in which the distributions are made. However, dividends
declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by the Portfolio) on December
31 of such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised annually as to the U.S. federal
income tax consequences of distributions made (or deemed made) during the year.
The Portfolio will be required in certain cases to withhold and remit to the
U.S. Treasury 31% of the ordinary income dividends and capital gain dividends,
and in certain cases, of the proceeds of redemption of shares, paid to any
shareholder (1) who has provided either an incorrect tax identification number
or no number at all, (2) who is subject to backup withholding by the Internal
Revenue Service for failure to report the receipt of interest or dividend income
properly, or (3) who has failed to certify to the Fund that it is not subject to
backup withholding or that it is a corporation or other "exempt recipient."
EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS
The foregoing general discussion of U.S. federal income tax consequences is
based on the Code and the regulations issued thereunder as in effect on the date
of its Statement of Additional Information. Future legislative or administrative
changes or court decisions may significantly change the conclusions expressed
herein, and any such changes or decisions may have a retroactive effect
with respect to the transactions contemplated herein.
Rules of state and local taxation of ordinary income dividends and capital
gain dividends from regulated investment companies often differ from the rules
for U.S. federal income taxation described above. Shareholders are urged to
consult their tax advisers as to the consequences of these and other state and
local tax rules affecting investment in the Fund.
A-18
<PAGE>
INDEPENDENT To the Board of Trustees and Shareholders
AUDITORS' REPORT Short-Term Investments Trust:
We have audited the accompanying statement
of assets and liabilities of the Treasury
Portfolio (a series portfolio of Short-Term
Investments Trust), including the schedule of
investments, as of August 31, 1994, and the
related statement of operations for the year
then ended, the statement of changes in net
assets for each of the years in the two-year
period then ended, and the financial
highlights for each of the years in the ten-
year period then ended. These financial
statements and financial highlights are the
responsibility of the Fund's management. Our
responsibility is to express an opinion on
these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the financial statements and financial
highlights are free of material misstatement.
An audit includes examining, on a test basis,
evidence supporting the amounts and
disclosures in the financial statements. Our
procedures included confirmation of securities
owned as of August 31, 1994 by correspondence
with the custodian and brokers. An audit also
includes assessing the accounting principles
used and significant estimates made by
management, as well as evaluating the overall
financial statement presentation. We believe
that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and
financial highlights referred to above present
fairly, in all material respects, the
financial position of the Treasury Portfolio
as of August 31, 1994, the results of its
operations for the year then ended, the
changes in its net assets for each of the
years in the two-year period then ended, and
the financial highlights for each of the years
in the ten-year period then ended, in
conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Houston, Texas
October 7, 1994
FS-1
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
---------------------------------------
<S> <C> <C> <C> <C>
SCHEDULE OF U.S. TREASURY SECURITIES - 18.52%
INVESTMENTS
August 31, 1994 U.S. TREASURY BILLS(a)
3.26%................................. 10/20/94 $ 50,000 $ 49,778,140
U.S. TREASURY NOTES
9.50%................................. 10/15/94 166,000 167,203,065
6.00%................................. 11/15/94 20,000 20,095,730
8.25%................................. 11/15/94 115,000 116,105,009
4.625%................................ 12/31/94 69,900 69,841,401
7.625%................................ 12/31/94 18,200 18,360,544
3.875%................................ 02/28/95 60,000 59,653,126
U.S. TREASURY STRIPS(a)
3.37%................................. 11/15/94 60,000 59,584,968
------------
Total U.S. Treasury Securities......... 560,621,983
------------
Total Investments (excluding repurchase
agreements) - 18.52%(b)............. $560,621,983(c)
============
</TABLE>
(a) U.S. Treasury Bills and STRIPS are traded on a
discount basis. In such cases the interest
rate shown represents the rate of discount
paid or received at the time of purchase by
the Portfolio.
(b) Percentage of Net Assets.
(c) Also represents cost for federal income tax
purposes.
FS-2
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
---------------------------------------
<S> <C> <C> <C> <C>
SCHEDULE OF REPURCHASE AGREEMENTS(a) - 83.45%
INVESTMENTS
August 31, 1994 BT Securities Corp.
4.78%(b).............................. $140,000 $140,000,000
Bear, Stearns & Co. Inc.
4.85%(c).............................. 140,000 140,000,000
Daiwa Securities America Inc.
4.90%(d).............................. 09/01/94 145,000 145,000,000
Deutsche Bank Government Securities, Inc.
4.82%(e).............................. 560,000 560,000,000
First Boston Corp. (The)
4.83%(f).............................. 09/01/94 140,000 140,000,000
Fuji Securities Inc.
4.85%(g).............................. 150,000 150,000,000
Goldman, Sachs & Co.
4.83%(h).............................. 09/01/94 290,308 290,308,138
Morgan (J.P.) Securities, Inc.
4.85%(i).............................. 140,000 140,000,000
Kidder, Peabody & Co. Inc.
4.87%(j).............................. 400,000 400,000,000
Nikko Securities Co., Ltd.
4.85%(k).............................. 81,000 81,000,000
Sanwa-BGK Securities Co., L.P.
4.90%(l).............................. 09/01/94 100,000 100,000,000
Smith Barney Inc.
4.85%(m).............................. 09/01/94 140,000 140,000,000
UBS Securities Inc.
4.83%(n).............................. 09/01/94 100,000 100,000,000
--------------
Total Repurchase
Agreements-83.45%(o),,................ $2,526,308,138(p)
==============
</TABLE>
(a) Collateral on repurchase agreements is taken
into possession by the Fund upon entering
into the repurchase agreement. The collateral
is marked to market daily to ensure its
market value as being 102 percent of the
sales price of the repurchase agreement.
(b) Open repurchase agreement entered into
07/05/94; however, either party may terminate
the agreement as of any business day not less
than one business day after receipt of
written notice from the terminating party.
Interest rates are redetermined daily.
Collateralized by $114,150,000 U.S. Treasury
Bonds, 10.75% due 08/15/05.
(c) Open repurchase agreement entered into
07/05/94; however, either party may terminate
the agreement as of any business day not less
than one business day after receipt of
written notice from the terminating party.
Interest rates are redetermined daily.
Collateralized by $291,220,000 U.S. Treasury
STRIPS, due 11/15/00 to 08/15/05.
(d) Entered into 08/31/94 with a maturing value
of $145,019,736. Collateralized by
$128,850,000 U.S. Treasury Bonds, 8.125% to
10.375% due 11/15/12 to 08/15/15.
(e) Open repurchase agreement entered into
04/13/94; however, either party may terminate
the agreement as of any business day not less
than one business day after receipt of
written notice from the terminating party.
Interest rates are redetermined daily.
Collateralized by $568,442,000 U.S. Treasury
Obligations, 0% to 8.50% due 12/01/94 to
08/15/19.
(f) Entered into 08/31/94 with a maturing value
of $140,018,783. Collateralized by
$145,826,000 U.S. Treasury Bills, due
10/13/94 to 05/04/95.
FS-3
<PAGE>
(g) Open repurchase agreement entered into 07/25/94; however, either party
may terminate the agreement as of any business day not less than one
business day after receipt of written notice from the terminating party.
Interest rates are redetermined daily. Collateralized by $348,710,000
U.S. Treasury STRIPS, due 05/15/95 to 05/15/16.
(h) Joint repurchase agreement entered into 08/31/94 with a maturing value of
$554,131,782 with the Fund's pro-rata interest being $290,347,088.
Collateralized by $562,755,000 U.S. Treasury Notes, 4.375% to 8.875% due
05/15/95 to 01/15/00.
(i) Open repurchase agreement entered into 07/19/94; however, either party
may terminate the agreement as of any business day not less than one
business day after receipt of written notice from the terminating party.
Interest rates are redetermined daily. Collateralized by $318,314,000
U.S. Treasury STRIPS, due 11/15/04 to 05/15/06.
(j) Open repurchase agreement entered into 06/15/94; however, either party
may terminate the agreement as of any business day not less than one
business day after receipt of written notice from the terminating party.
Interest rates are redetermined daily. Collateralized by $846,176,000
U.S. Treasury Obligations, 0% to 8.25% due 11/10/94 to 08/15/20.
(k) Open repurchase agreement entered into 04/14/94; however, either party
may terminate the agreement as of any business day not less than one
business day after receipt of written notice from the terminating party.
Interest rates are redetermined daily. Collateralized by $143,760,000
U.S. Treasury Obligations, 0% to 6.50% due 03/09/95 to 04/30/99.
(l) Entered into 08/31/94 with a maturing value of $100,013,611.
Collateralized by $129,346,000 U.S. Treasury STRIPS, due 02/15/98 to
05/15/06.
(m) Entered into 08/31/94 with a maturing value of $140,018,861.
Collateralized by $141,693,000 U.S. Treasury Obligations, 0% to 13.875%
due 09/29/94 to 05/15/11.
(n) Entered into 08/31/94 with a maturing value of $100,013,417.
Collateralized by $145,455,000 U.S. Treasury STRIPS, due 11/15/99.
(o) Percentage of Net Assets.
(p) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
FS-4
<PAGE>
<TABLE>
<S> <C> <C>
STATEMENT OF ASSETS:
ASSETS AND
LIABILITIES Investments, excluding repurchase agreements,
August 31, 1994 at value (amortized cost).......................... $ 560,621,983
Repurchase agreements................................ 2,526,308,138
Interest receivable.................................. 10,350,449
Investment for deferred compensation plan............ 14,334
Other assets......................................... 213,998
--------------
Total assets........................................ 3,097,508,902
--------------
LIABILITIES:
Payable for investments purchased.................... 59,659,548
Deferred compensation payable........................ 14,334
Dividends payable.................................... 10,223,671
Accrued advisory fees................................ 153,502
Accrued distribution fees............................ 138,135
Accrued trustees' fees............................... 258
Accrued administrative fees.......................... 1,279
Accrued custodian fees............................... 6,496
Accrued operating expenses........................... 5,439
--------------
Total liabilities................................... 70,202,662
--------------
NET ASSETS........................................... $3,027,306,240
==============
NET ASSET VALUE PER SHARE:
Shares of beneficial interest, $.01 par value
per share........................................... 3,027,151,729
==============
Net asset value, offering and redemption price
per share.......................................... $1.00
=====
</TABLE>
See Notes to Financial Statements.
FS-5
<PAGE>
<TABLE>
<S> <C> <C>
STATEMENT OF INVESTMENT INCOME:
OPERATIONS
August 31, 1994 Interest income..................................... $133,977,139
------------
EXPENSES:
Advisory fees....................................... 2,337,627
Custodian fees...................................... 311,038
Administrative service fees......................... 110,807
Trustees' fees and expenses......................... 32,987
Transfer agent fees................................. 34,793
Filing fees......................................... 153,443
Professional fees................................... 130,166
Printing expenses................................... 46,966
Distribution fees (Note 2).......................... 1,320,280
Other............................................... 145,678
------------
Total expenses..................................... 4,623,785
Less expenses assumed by advisor.................... (97,500)
------------
Net expenses....................................... 4,526,285
------------
Net investment income............................... 129,450,854
Net realized gain on sale of investments............ 63,526
------------
Net increase in net assets resulting
from operations.................................... $129,514,380
============
</TABLE>
See Notes to Financial Statements.
FS-6
<PAGE>
<TABLE>
<CAPTION>
1994 1993
------------- --------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS:
CHANGES IN
NET ASSETS Net investment income........................ $ 129,450,854 $ 113,178,558
For the years ended Net realized gain on sales of investments.... 63,526 36,003
August 31, 1994 -------------- --------------
and 1993 Net increase in net assets resulting from
operations................................. 129,514,380 113,214,561
Distributions to shareholders from net
investment income............................ (129,450,854) (113,178,558)
Share transactions - net...................... (908,258,039) 75,699,799
-------------- --------------
Net increase (decrease) in net assets........ (908,194,513) 75,735,802
NET ASSETS:
Beginning of period.......................... 3,935,500,753 3,859,764,951
-------------- --------------
End of period................................ $3,027,306,240 $3,935,500,753
============== ==============
NET ASSETS CONSIST OF:
Shares of beneficial interest................ $3,027,151,729 $3,935,409,768
Undistributed net realized gain on sales
of investments.............................. 154,511 90,985
-------------- --------------
$3,027,306,240 $3,935,500,753
============== ==============
</TABLE>
See Notes to Financial Statements.
FS-7
<PAGE>
NOTES TO NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
FINANCIAL
STATEMENTS Short-Term Investments Trust (the "Fund") is
August 31, 1994 registered under the Investment Company Act of
1940, as amended, as an open-end series
diversified management investment company. The
Fund is organized as a Delaware business trust
consisting of two different portfolios, each of
which offers separate series of shares: the
Treasury Portfolio and the Treasury Tax Advantage
Portfolio. Information presented in these
financial statements pertains only to the
Treasury Portfolio (the "Portfolio"), with
assets, liabilities and operations of each
portfolio being accounted for separately. The
Portfolio consists of four different classes of
shares: the Institutional Class, the Private
Investment Class, the Personal Investment Class,
and the Cash Management Class.
The following is a summary of the significant
accounting policies followed by the Portfolio in
the preparation of its financial statements.
A. Security Valuations -- The Portfolio invests
only in securities which have maturities of
397 days or less. The securities are valued on
the basis of amortized cost which approximates
market value. This method values a security at
its cost on the date of purchase and
thereafter assumes a constant amortization to
maturity of any discount or premium.
B. Securities Transactions, Investment Income and
Distributions -- Securities transactions are
accounted for on a trade date basis. Realized
gains or losses are computed on the basis of
specific identification of the securities
sold. Interest income, adjusted for
amortization of premiums and discounts on
investments, is accrued daily. Dividends to
shareholders are declared daily and are paid
on the first business day of the following
month.
C. Federal Income Taxes -- The Portfolio intends
to comply with the requirements 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 gains) which is distributed
to shareholders. Therefore, no provision for
federal income taxes is recorded in the
financial statements.
D. Expenses -- Operating expenses directly
attributable to a specific class of shares are
charged to that class' operations. Expenses
which are applicable to all classes, e.g.
advisory fees, are allocated among them.
Expenses of the Fund which are not directly
attributable to a specific class are prorated
among the classes to which the expense relates
based on the relative net assets of each
class.
FS-8
<PAGE>
NOTE 2 -- ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master advisory agreement, AIM
receives a monthly fee with respect to the Portfolio calculated by applying a
monthly rate, based upon the following annual rates, to the average daily net
assets of the Portfolio:
<TABLE>
<CAPTION>
NET ASSETS RATE
---------- ----
<S> <C>
First $300 million................................ .15%
Over $300 million to $1.5 billion................. .06%
Over $1.5 billion................................. .05%
</TABLE>
AIM will, if necessary, reduce its fee for any fiscal year to the extent
required so that the amount of ordinary expenses of the Portfolio (excluding
interest, taxes, brokerage commissions and extraordinary expenses) paid or
incurred by the Portfolio for such fiscal year does not exceed the applicable
expense limitations imposed by the state securities regulations in any state in
which the Portfolio's shares are qualified for sale. AIM voluntarily reimbursed
expenses of $20,000 on the Treasury Portfolio Private Investment Class, $56,500
on the Treasury Portfolio Personal Investment Class and $21,000 on the Treasury
Portfolio Cash Management Class during the year ended August 31, 1994.
The Portfolio, pursuant to a master administrative services agreement with
AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting and shareholder services to the Portfolio. During the year ended
August 31, 1994, the Portfolio reimbursed AIM $110,807 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Fund, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act with respect to the Private Investment
Class, Personal Investment Class and the Cash Management Class of the Portfolio.
The Plan provides that the Treasury Portfolio's Private Investment Class,
Personal Investment Class and Cash Management Class may pay up to a 0.50%, 0.75%
and 0.10%, respectively, maximum annual rate of the average daily net assets
attributable to such class. Of this amount, the Fund may pay an asset-based
sales charge to FMC and the Fund may pay a service fee of (a) 0.25% of the
average daily net assets of each of the Private Investment Class and the
Personal Investment Class and (b) 0.10% of the average daily net assets of the
Cash Management Class, to selected banks, broker-dealers and other financial
institutions who offer continuing personal shareholder services to their
customers who purchase and own shares of the Private Investment Class, the
Personal Investment Class or the Cash Management Class. Any amounts not paid as
a service fee under such Plan would constitute an asset-based sales charge.
During the year ended August 31, 1994, the Treasury Portfolio Private Investment
Class, the Treasury Portfolio Personal Investment Class and the Treasury
Portfolio Cash Management Class accrued for compensation to FMC amounts of
$871,283, $393,582 and $55,415, respectively, under the Plan. Certain officers
and trustees of the Trust are officers of AIM and FMC.
The Fund paid legal fees of $27,379 for the year ended August 31, 1994 for
services rendered by Reid & Priest as counsel to the Board of Trustees. In
September 1994, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel was appointed
as counsel to the Board of Trustees. A member of that firm is a trustee of the
Trust.
NOTE 3 -- TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is
not an "interested person" of the Fund. The Fund invests trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
FS-9
<PAGE>
NOTE 4 -- SHARE INFORMATION
As of August 31, 1994, shares outstanding of the Treasury Portfolio are:
Institutional Class -- 2,452,263,604, Private Investment Class -- 412,695,183,
Personal Investment Class -- 88,577,788 and Cash Management Class -- 73,615,154.
Changes in shares outstanding during the years ended August 31, 1994 and 1993
were as follows:
<TABLE>
<CAPTION>
August 31, 1994 August 31, 1993
--------------------------------- ----------------------------------
Shares Amount Shares Amount
--------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
TREASURY PORTFOLIO:
Sold:
Institutional Class....................... 26,026,026,543 $ 26,026,026,543 26,079,743,649 $ 26,079,743,609
Private Investment Class.................. 827,921,059 827,921,059 310,527,892 310,527,892
Personal Investment Class................. 343,375,963 343,375,963 178,186,012 178,186,012
Cash Management Class*.................... 142,326,763 142,326,763 8,755,500 8,755,500
Issued as reinvestment of dividends:
Institutional Class....................... 11,688,081 11,688,081 2,055,129 2,055,129
Private Investment Class.................. 361,516 361,516 299,756 299,756
Personal Investment Class................. 1,153,701 1,153,701 656,310 656,310
Cash Management Class*.................... 1,883,744 1,883,744 - -
Reacquired:
Institutional Class....................... (27,238,038,910) (27,238,038,910) (26,264,542,910) (26,264,542,910)
Private Investment Class.................. (619,863,560) (619,863,560) (107,076,872) (107,076,872)
Personal Investment Class................. (325,817,071) (325,817,071) (132,829,643) (132,829,643)
Cash Management Class*.................... (79,275,868) (79,275,868) (74,984) (74,984)
--------------- ---------------- --------------- ----------------
Net increase (decrease).................... (908,258,039) $ (908,258,039) 75,699,799 $ 75,699,799
=============== ================ =============== ================
</TABLE>
* The Treasury Portfolio Cash Management Class commenced operations on August
17, 1993.
NOTE 5 -- FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Treasury Portfolio Institutional Class during each of the years in the ten-
year period ended August 31, 1994.
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987
---------- ---------- ---------- ---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income.... 0.035 0.032 0.045 0.068 0.082 0.087 0.068 0.060
---------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Total from investment
operations............. 0.035 0.032 0.045 0.068 0.082 0.087 0.068 0.060
---------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Less distributions:
Dividends from net
investment income....... (0.035) (0.032) (0.045) (0.068) (0.082) (0.087) (0.068) (0.060)
---------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Net asset value, end of
period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ========== ========== ========
Total return.............. 3.53% 3.22% 4.56% 7.04% 8.52% 9.03% 6.98% 6.17%
========== ========== ========== ========== ========== ========== ========== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)........... $2,452,389 $3,652,672 $3,835,387 $2,437,902 $1,703,460 $1,189,822 $1,121,144 $650,547
========== ========== ========== ========== ========== ========== ========== ========
Ratio of expenses to
average net assets....... 0.08%(a) 0.08% 0.09% 0.10% 0.12% 0.11% 0.13% 0.14%
========== ========== ========== ========== ========== ========== ========== ========
Ratio of net investment
income to average net
assets................... 3.39%(a) 3.17% 4.38% 6.73% 8.19% 8.69% 6.76% 6.01%
========== ========== ========== ========== ========== ========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
1986 1985
---------- --------
<S> <C> <C>
Net asset value, beginning
of period................ $ 1.00 $ 1.00
Income from investment
operations:
Net investment income.... 0.070 0.086
-------- --------
Total from investment
operations............. 0.070 0.086
-------- --------
Less distributions:
Dividends from net
investment income....... (0.070) (0.086)
-------- --------
Net asset value, end of
period.................. $ 1.00 $ 1.00
======== ========
Total return.............. 7.28% 8.92%
======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)........... $488,239 $117,805
======== ========
Ratio of expenses to
average net assets....... 0.19% 0.19%(b)
======== ========
Ratio of net investment
income to average net
assets................... 6.89% 8.18%(b)
======== ========
</TABLE>
(a) Ratios are based on average net assets of $3,396,841,362.
(b) After waiver of advisory fees.
FS-10
<PAGE>
====================================== =====================================
SHORT-TERM INVESTMENTS TRUST PROSPECTUS
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173 DECEMBER 21, 1994
(713) 626-1919
SHORT-TERM
INVESTMENT ADVISOR INVESTMENTS TRUST
A I M ADVISORS, INC.
11 Greenway Plaza, Suite 1919 ----------
Houston, Texas 77046-1173 TREASURY PORTFOLIO
(713) 626-1919 ----------
DISTRIBUTOR INSTITUTIONAL CLASS
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 1919 TABLE OF CONTENTS
Houston, Texas 77046-1173
(800) 659-1005 <TABLE>
<CAPTION>
AUDITORS PAGE
KPMG PEAT MARWICK LLP ----
NationsBank Building <S> <C>
Houston, Texas 77002 Summary...................... 2
CUSTODIAN Table of Fees and Expenses... 4
THE BANK OF NEW YORK
110 Washington Street Financial Highlights......... 5
8th Floor
New York, New York 10286 Suitability For Investors.... 6
TRANSFER AGENTS Investment Program........... 6
STATE STREET BANK AND TRUST COMPANY
225 Franklin Street Purchase of Shares........... 8
Boston, Massachusetts 02110
Redemption of Shares......... 9
A I M INSTITUTIONAL FUND SERVICES, INC.
11 Greenway Plaza, Suite 1919 Dividends.................... 9
Houston, Texas 77046-1173
Taxes........................ 10
NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY Net Asset Value.............. 10
REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE Yield Information............ 11
OFFERING MADE BY THE PROSPECTUS, AND
IF GIVEN OR MADE, SUCH INFORMATION OR Reports to Shareholders...... 11
REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE Management of the Fund....... 11
FUND OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN General Information.......... 12
OFFER IN ANY JURISDICTION TO ANY
PERSON TO WHOM SUCH OFFERING MAY Appendix..................... A-1
NOT LAWFULLY BE MADE. </TABLE>
====================================== =====================================
