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PROSPECTUS
PRIVATE INVESTMENT CLASS
OF THE
TREASURY TAXADVANTAGE PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA, SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 877-7748
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The Treasury TaxAdvantage Portfolio is a money market fund whose investment
objective is the maximization of current income to the extent consistent with
the preservation of capital and the maintenance of liquidity. The Treasury
TaxAdvantage Portfolio seeks to achieve its objective by investing in direct
obligations of the U.S. Treasury. The Treasury TaxAdvantage Portfolio's
investment strategy is intended to enable the Portfolio to provide its
shareholders with dividends that are exempt from state and local income taxation
in certain jurisdictions. The instruments purchased by the Treasury TaxAdvantage
Portfolio will have maturities of 397 days or less.
The Treasury TaxAdvantage Portfolio is a series portfolio of Short-Term
Investments Trust (the "Trust"), an open-end diversified, series, management
investment company. This Prospectus relates solely to the Private Investment
Class of the Treasury TaxAdvantage Portfolio, a class of shares designed to be a
convenient vehicle in which customers of banks, certain broker-dealers and other
financial institutions can invest short-term cash reserves.
The Trust also offers shares of another class of the Treasury TaxAdvantage
Portfolio pursuant to a separate prospectus: the Institutional Class, as well as
shares of other classes of another portfolio of the Trust, the Treasury
Portfolio: the Cash Management Class, the Institutional Class, the Personal
Investment Class, the Private Investment Class and the Resource Class.
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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.
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THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A PROSPECTIVE INVESTOR
SHOULD KNOW BEFORE INVESTING IN SHARES OF THE PRIVATE INVESTMENT CLASS OF THE
TREASURY TAXADVANTAGE PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 30, 1996, HAS
BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC")
AND IS HEREBY INCORPORATED BY REFERENCE. FOR A COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION WITHOUT CHARGE, WRITE TO THE ADDRESS ABOVE OR CALL (800)
877-7748. THE SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE
STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND
OTHER INFORMATION REGARDING THE TRUST.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE TRUST'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 TAXADVANTAGE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE. SHARES OF THE TRUST INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
PROSPECTUS DATED: DECEMBER 30, 1996
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TABLE OF CONTENTS
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SUMMARY.......................................... 2
TABLE OF FEES AND EXPENSES....................... 5
FINANCIAL HIGHLIGHTS............................. 6
SUITABILITY FOR INVESTORS........................ 7
INVESTMENT PROGRAM............................... 7
PURCHASE OF SHARES............................... 9
REDEMPTION OF SHARES............................. 11
DIVIDENDS........................................ 11
TAXES............................................ 12
NET ASSET VALUE.................................. 13
YIELD INFORMATION................................ 13
REPORTS TO SHAREHOLDERS.......................... 14
MANAGEMENT OF THE TRUST.......................... 14
GENERAL INFORMATION.............................. 17
</TABLE>
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Trust is an open-end diversified series management investment company.
This Prospectus relates to the Private Investment Class (the "Class") of the
Treasury TaxAdvantage Portfolio (the "Portfolio"). The Portfolio is a money
market fund which invests in direct obligations of the U.S. Treasury. 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 preservation of capital and the maintenance of
liquidity. The Portfolio's investment strategy is intended to enable the
Portfolio to provide its shareholders with dividends that are exempt from state
and local income taxation in certain jurisdictions.
Pursuant to a separate prospectus, the Trust also offers other shares of
another class of shares of beneficial interest of the Portfolio representing an
interest in the Portfolio. Such class has different distribution arrangements
and is designed for institutional investors. The Trust also offers shares of
several classes representing an interest in another portfolio, the Treasury
Portfolio, pursuant to separate prospectuses. The portfolios of the Fund are
referred to collectively as "Portfolios."
Because the Trust 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 vehicle in which customers of
banks, certain broker-dealers and other financial institutions can invest in a
diversified open-end money market fund.
PURCHASE OF SHARES
Shares of the Class that are offered hereby are sold at net asset value.
The minimum initial investment in the Class is $10,000. There is no minimum
amount for subsequent investments. Payment for shares of the Class purchased
must be in funds immediately available to the Trust. See "Purchase of Shares."
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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
1:00 p.m. Eastern Time will normally be made on the same day. See "Redemption of
Shares."
DIVIDENDS
The net income of the Portfolio is declared as a dividend daily to
shareholders of record immediately after 1:00 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 3:30 p.m. Eastern Time on that day.
See "Dividends."
CONSTANT NET ASSET VALUE
The Trust 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 Trust's investment advisor and
receives a fee based on the Trust's average daily net assets. During the fiscal
year ended August 31, 1996, the Trust paid AIM advisory fees with respect to the
Portfolio which represented 0.15% 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 Trust for its costs of performing certain accounting
and other administrative services for the Trust. See "Management of the
Trust -- Investment Advisor" "-- Administrative Services."
On November 4, 1996, A I M Management Group Inc. ("AIM Management"),
announced that it had entered into an Agreement and Plan of Merger among INVESCO
plc, INVESCO Group Services, Inc. and AIM Management, pursuant to which AIM
Management will be merged with INVESCO Group Services, Inc. INVESCO plc and its
subsidiaries are an independent investment management group engaged in
institutional investment management and retail mutual fund businesses in the
United States, Europe and the Pacific region. It is contemplated that the merger
will occur on February 28, 1997. The Trust's investment advisor, AIM, is a
wholly-owned subsidiary of AIM Management.
The proposed transaction may be deemed to cause an "assignment" (as that
term is defined under the Investment Company Act of 1940, as amended (the "1940
Act")) of the Master Investment Advisory Agreement between the Trust and AIM.
Under the 1940 Act and the Master Investment Advisory Agreement, an assignment
results in the automatic termination of the Master Investment Advisory
Agreement.
On December 11, 1996, the Board of Trustees of the Trust approved a new
investment advisory agreement, subject to shareholder approval, between AIM and
the Trust with respect to the Portfolio. Shareholders will be asked to approve
the proposed advisory agreement at an annual meeting of shareholders
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to be held on February 7, 1997 (the "Annual Meeting"). The Board of Trustees has
also approved a new administrative services agreement with AIM and a new
distribution agreement with Fund Management Company. There are no material
changes to the terms of the new agreements, including the fees payable by the
Portfolio. No change is anticipated in the investment advisory or other
personnel responsible for the Portfolio as a result of these new agreements.
The Board of Trustees has approved these new agreements because the
Portfolio's corresponding existing agreements will terminate upon the
consummation of the proposed merger of AIM Management into a subsidiary of
INVESCO plc. Provided that the Portfolio's shareholders approve the new
investment advisory agreement at the Annual Meeting and the merger is
consummated, the new investment advisory agreement with respect to the
Portfolio, as well as the new administrative services and distribution
agreements, will automatically become effective as of the closing date of the
merger.
DISTRIBUTOR AND DISTRIBUTION PLAN
Fund Management Company ("FMC") acts as the exclusive distributor of the
shares of the Class. Pursuant to a plan of distribution adopted by the Trust's
Board of Trustees, the Trust may pay up to 0.50% of the average daily net asset
value of the Portfolio attributable to the Class to FMC as well as to certain
broker-dealers or other financial institutions. Of this amount, up to 0.25% may
be for continuing personal services to shareholders provided by broker-dealers
or institutions and the balance would be deemed an asset-based sales charge. See
"Purchase of Shares" and "Distribution Plan."
SPECIAL RISK CONSIDERATIONS
The Portfolio may borrow money and enter into reverse repurchase agreements
for temporary or emergency purposes, and may 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. There can be no assurance that the Portfolio will be able to
maintain a stable net asset value of $1.00 per share. See "Investment Program."
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
Logo), AIM and Design, AIM, AIM LINK and AIM Institutional Funds are registered
service marks and La Familia AIM de Fondos and La Familia AIM de Fondos and
Design are service marks of A I M Management Group Inc.
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TABLE OF FEES AND EXPENSES
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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 -- PRIVATE INVESTMENT CLASS
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management fees (after fee waivers)**................................... 0.15%
12b-1 fees (after fee waivers)**........................................ 0.25%***
Other expenses:
Custodian fees....................................................... 0.01%
Other................................................................ 0.04%
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Total other expenses............................................ 0.05%
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Total portfolio operating expenses --
Private Investment Class............................................. 0.45%
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* Beneficial owners of shares of the Class should consider the effect of any
charges imposed by their bank, broker-dealer or financial institution for
various services.
** Had there been no fee waivers, Management fees, 12b-1 fees and Total
portfolio operating expenses would have been 0.18%, 0.50% and 0.73%,
respectively.
*** It is possible that as a result of Rule 12b-1 fees, long-term shareholders
may pay more than the economic equivalent of the maximum front-end sales
charges permitted under rules of the National Association of Securities
Dealers, Inc. Given the Rule 12b-1 fee of the Class, however, it is
estimated that it would take a substantial number of years for a shareholder
to exceed such maximum front-end sales charges.
EXAMPLE
An investor in the Class would pay the following expenses on a $1,000
investment, assuming (1) a 5% annual return and (2) redemption at the end of
each time period.
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1 year............................................................... $ 5
3 years.............................................................. $14
5 years.............................................................. $25
10 years.............................................................. $57
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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 Trust" below.) The expense figures
are based upon actual
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costs and fees charged to the Class for the fiscal year ended August 31, 1996.
The Table of Fees and Expenses reflects voluntary waivers for the Class. Future
waivers of fees (if any) may vary from the figures reflected in the Table of
Fees and Expenses. To the extent any service providers assume additional
expenses of the Class, such assumption of additional 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 -- Private Investment Class" remain the same in the
years shown.
The example shown in the above table is based on the amounts listed under
"Annual Portfolio Operating Expenses." THE EXAMPLE SHOULD NOT BE CONSIDERED TO
BE AN ACCURATE REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESSER THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
Shown below are the per share data, ratios and supplemental data
(collectively, "data") for the fiscal year ended August 31, 1996 and for the
period December 21, 1994 (date operations commenced) through August 31, 1995.
The data has been audited by KPMG Peat Marwick LLP, independent auditors, whose
unqualified report thereon appears in the Statement of Additional Information.
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1996 1995
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Net asset value, beginning of period.................................. $ 1.00 $ 1.00
Income from investment operations:
Net investment income............................................... 0.05 0.04
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Total from investment operations............................ 0.05 0.04
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Less distributions:
Dividends from net investment income................................ (0.05) (0.04)
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Net asset value, end of period........................................ $ 1.00 $ 1.00
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Total return.......................................................... 4.93% 5.32%(a)
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Ratios/supplemental data:
Net assets, end of period (000s omitted)............................ $49,978 $5,423
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Ratio of expenses to average net assets(b).......................... 0.45%(c) 0.45%(a)
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Ratio of net investment income to average net assets(b)............. 4.72%(c) 5.21%(a)
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(a) Annualized.
(b) After waiver of advisory fees, distribution fees and expense reimbursements.
Ratios of expenses and net investment income to average net assets prior to
waivers and expense reimbursements were 0.85% and 4.32% for 1996 and 1.02%
and 4.64% for 1995.
(c) Ratios are based on average net assets of $21,111,080.
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SUITABILITY FOR INVESTORS
The Class is intended for use primarily by customers of banks, certain
broker-dealers and other financial institutions who seek a convenient vehicle in
which to invest in an open-end diversified money market fund. The Portfolio's
investment strategy is intended to provide its shareholders with dividends that
are exempt from state and local income taxation in certain jurisdictions. The
minimum initial investment is $10,000.
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 diversification, economies of scale and
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.
Because the Portfolio invests in direct obligations of the U.S. Treasury it
may be considered to have somewhat less risk than many other money market funds
and yields on the Portfolio may be expected to be somewhat lower than many other
money market funds. However, the possible exemption from state and local income
taxation with respect to dividends paid by the Portfolio may enable shareholders
to achieve an after-tax return comparable to or higher than that obtained from
other money market funds, which may provide an advantage to some shareholders.
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 intends to provide its shareholders with
dividends that are exempt from state and local income taxation in certain
jurisdictions. The Portfolio seeks to achieve its objective by investing in
direct obligations of the U.S. Treasury. 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.
INVESTMENT POLICIES
The Portfolio invests exclusively in direct obligations of the U.S.
Treasury, which include Treasury bills, notes and bonds. 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.
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. The Portfolio will
only borrow money or enter into reverse repurchase agreements for temporary or
emergency purposes, such as to facilitate the orderly sale of portfolio
securities to accommodate abnormally heavy redemption requests should they
occur. Borrowing will not be made for leverage purposes. Reverse repurchase
transactions are limited to a term not to exceed 92 days. 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
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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 under the 1940 Act.
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 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 market. 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. 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, however, 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 provides that the Portfolio will not:
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
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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 restriction of the Portfolio (as well as certain
others set forth in the Statement of Additional Information) is a matter 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 governs the operations of money market
funds, and may be more restrictive than the policies described herein. 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
anticipates 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 received by the Portfolio. As discussed
below, the Trust reserves the right to reject any purchase order. Although there
is no sales charge imposed on the purchase of shares of the Class, banks or
other institutions may charge a recordkeeping, 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,
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 1:00 p.m. Eastern Time on a business day of the Portfolio. Purchase
orders received after such time will be processed at the next day's net asset
value. Following the initial investment, subsequent purchases of shares of the
Class may also be made via AIM LINK--Registered Trademark--, a personal computer
application software product. 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 Trust's custodian bank,
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.
Shares of the Class are sold to customers of banks, certain broker-dealers
and other financial institutions (each, an Institution, and collectively,
"Institutions"). Individuals, corporations, partnerships and other businesses
that maintain qualified accounts at an Institution may invest in the shares of
the Class. Each Institution will render administrative support services to its
customers who are the beneficial owners of the shares of the Class. Such
services may include, among other things, establishment and maintenance of
shareholder accounts and records; assistance in processing purchase and
redemption transactions in shares of the Class; providing periodic statements
showing a customer's account balance in shares of the Class; distribution of
Trust proxy statements, annual reports and other communications to shareholders
whose accounts are serviced by the Institution; and such other services as the
Trust may reasonably request. Institutions will be required to certify to the
Trust that they comply with applicable state law regarding registration as
broker-dealers, or that they are exempt from such registration.
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Prior to the initial purchase of shares of the Class, an Account
Application, which can be obtained from A I M Institutional Fund Services, Inc.
("AIFS"), must be completed and sent to AIFS at 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. Any changes made to the information provided in the
Account Application must be made in writing or by completing a new form and
providing it to AIFS. An investor must open an account in the shares of the
Class through an Institution in accordance with procedures established by such
Institution. Each Institution separately determines the rules applicable to
accounts in the shares of the Class opened with it, including minimum initial
and subsequent investment requirements and the procedures to be followed by
investors to effect purchases of shares of the Class. The minimum initial
investment is $10,000, and there is no minimum amount of subsequent purchases of
shares of the Class by an Institution on behalf of its customers. An investor
who proposes to open a Portfolio account with an Institution should consult with
a representative of such Institution to obtain a description of the rules
governing such an account. The Institution holds shares of the Class registered
in its name, as agent for the customer, on the books of the Institution. A
statement with regard to the customer's shares of the Class is supplied to the
customer periodically, and confirmations of all transactions for the account of
the customer are provided by the Institution to the customer promptly upon
request. In addition, the Institution sends to each customer proxies, periodic
reports and other information with regard to the customer's shares of the Class.
The customer's shares of the Class are fully assignable and subject to
encumbrance by the customer.
All agreements which relate to a customer's account with an Institution are
with the Institution. An investor may terminate his relationship with an
Institution at any time, in which case an account in the investor's name will be
established directly with the Portfolio and the investor will become a
shareholder of record. In such case, however, the investor will not be able to
purchase additional shares of the Class directly, except through reinvestment of
dividends and distributions.
Orders for the purchase of shares of the Class are placed by the investor
with the Institution. The Institution is responsible for the prompt transmission
of the order to the Trust. The Portfolio will normally be required to make
immediate settlement in federal funds (member bank deposits with a Federal
Reserve Bank) for portfolio securities purchased. Accordingly, payment for
shares of the Class purchased by Institutions on behalf of their customers must
be in federal funds. If an investor's order to purchase shares of the Class is
paid for other than in federal funds, the Institution, acting on behalf of the
investor, completes the conversion into federal funds (which may take two
business days), or itself advances federal funds prior to conversion, and
promptly transmits the order and payment in the form of federal funds to AIFS.
Subject to the conditions stated above and to the Trust'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 Trust's custodian
bank, in the form described above and notice of such order is provided to AIFS
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 12:00 p.m.
Eastern Time will earn the dividend declared on the date of purchase.
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 Trust and any funds received
for which an order has not been received will be returned to the sending
Institution. An order must specify that it is for the purchase of Shares of the
"Private Investment Class of the Treasury TaxAdvantage Portfolio," otherwise any
funds received will be returned to the sending Institution.
The Trust 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.
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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 Trust. Redemption requests with respect to the Class may also be
made via AIM LINK--Registered Trademark--. 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 are normally made
through a customer's Institution.
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 Application, but may be remitted by check upon request by a shareholder.
If a redemption request is received by the Portfolio prior to 1:00 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 1:00 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 1:00
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 Trust. 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 Trust or AIFS, the
Trust's transfer agent.
Shareholders may request a redemption by telephone. AIFS and FMC will not
be liable for any loss, expense or cost arising out of any telephone redemption
request effected in accordance with the authorization set forth in the Account
Application if they reasonably believe such request to be genuine but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions if they do not follow reasonable procedures for verification of
telephone transactions. Such reasonable procedures for verification of telephone
transactions may include recordings of telephone transactions (maintained for
six months), and mailings of confirmations promptly after the transaction.
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 Trust 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.
In certain cases, the Trust may call for the redemption of, or refuse to
transfer or issue, shares of the Class in order to comply with the law or to
further the purposes for which the Trust is formed. If a transfer or redemption
of shares of the Class causes the value of shares of the Class in an account to
be less than $500, the Trust may cause the remaining shares to be redeemed.
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
1:00 p.m. Eastern Time on the day of declaration. Net income for dividend
purposes is determined daily as of 1:00 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) Portfolio
expenses, such as custodian fees, trustees' fees, accounting and legal expenses,
based upon such class' pro rata share of the net
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assets of the Portfolio, less (c) expenses directly attributable to such class,
such as distribution expenses, if any, and transfer agency fees. 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 normally be paid by wire
transfer. 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 1:00 p.m. Eastern Time on the last business day of the month.
Such election, or any revocation thereof, must be made in writing by the
Institution to AIFS at 11 Greenway Plaza, Suite 1919, Houston, TX 77046-1173,
and will become effective with dividends paid after its receipt by AIFS. 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 Portfolio uses its best efforts to maintain the net asset value per
share at $1.00 for purposes of sales and redemptions. See "Net Asset Value."
Should the Trust incur or anticipate any unusual expense, loss or depreciation
which could adversely affect the income or net asset value of the Portfolio, the
Trust'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
FEDERAL TAXATION
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 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 one-year period
ending on October 31 and therefore to meet the distribution requirements imposed
by the Code in order to avoid the imposition of a 4% excise tax. 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 federal income taxes on net investment income and
net realized capital gains paid to shareholders.
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 losses
of the other portfolio of the Trust and each portfolio of the Trust must
specifically comply with all the provisions of the Code.
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 Portfolio.
The Code provides an exception to this general rule: if the
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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 of the
following year 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.
Foreign persons who file a United States tax return after December 31, 1996
for a U.S. tax refund and who are not eligible to obtain a social security
number must apply to the Internal Revenue Service ("IRS") for an individual
taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form
W-7 and accompanying instructions, please contact your tax advisor or AIFS.
STATE AND LOCAL TAXATION
Distributions and other Trust 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.
The Portfolio's investment strategy is intended to provide shareholders with
dividends that are exempt from state and local personal and, in some cases,
corporate income taxation in as many jurisdictions as possible. The possible
exemption from such taxation may enable shareholders to achieve an after-tax
return comparable to or higher than that obtained from other money market funds.
Shareholders should consult their own tax advisors concerning the tax impact of
their investment in the Portfolio and the application of state, local or foreign
taxes.
NET ASSET VALUE
The net asset value per share of the Portfolio is determined daily as of
1:00 p.m. Eastern Time on each business day of the Portfolio. 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 SEC 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.
YIELD INFORMATION
Yield information for the Class can be obtained by calling the Trust at
(800) 877-7748. 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
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stated period of time. Yield is a function of the type and quality of a
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, 1996, 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 average annualized
current yield for the period) were 4.79% and 4.90%, respectively. These
performance numbers are quoted for illustration purposes only. The performance
numbers for any other seven-day period may be substantially different from those
quoted above.
To assist banks and other institutions performing their own sub-accounting,
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.
From time to time and in its discretion, AIM or its affiliates may waive
all or a portion of its advisory fees and/or assume certain expenses of the
Portfolio. Such a practice will have the effect of increasing the Portfolio's
yield and total return.
REPORTS TO SHAREHOLDERS
The Trust furnishes shareholders with semi-annual reports containing
information about the Portfolio and its operations, including a list of the
investments held in the Portfolio and financial statements. The annual financial
statements are audited by the Trust's independent auditors.
Unless otherwise requested by the shareholder, each shareholder will be
provided with a written confirmation for each transaction by its Institution.
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 TRUST
BOARD OF TRUSTEES
The overall management of the business and affairs of the Trust is vested
with its Board of Trustees. The Board of Trustees approves all significant
agreements between the Trust and persons or companies furnishing services to the
Trust, including agreements with the Trust's investment advisor, distributor,
custodian and transfer agent. The day-to-day operations of the Trust are
delegated to the Trust's officers and to AIM, subject always to the objectives
and policies of the Trust and to the general supervision of the Trust'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,
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manages or advises 41 investment company portfolios. As of November 14, 1996,
total assets of the investment company portfolios managed or advised by AIM and
its affiliates were approximately $61.1 billion. All of the directors and
certain of the officers of AIM are also trustees or executive officers of the
Trust. AIM is a wholly-owned subsidiary of AIM Management. AIM Management is a
holding company in the financial services business.
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, 1996, AIM received fees from the Trust
under an advisory agreement previously in effect, which provided for the same
level of compensation to AIM as the Advisory Agreement, as well as received fees
from the Trust under the Advisory Agreement, with respect to the Portfolio which
represented 0.15% of the Portfolio's average daily net assets. During such
fiscal year, the expenses of the Class, including AIM's fees, amounted to 0.45%
of the Class' daily net assets.
ADMINISTRATIVE SERVICES
The Trust 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 Trust 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.
FEE WAIVERS
AIM or its affiliates 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 for such
fee or expenses prior to the end of each fiscal year. FMC may in its discretion
from time to time voluntarily agree to waive its 12b-1 fee, but will retain its
ability to be reimbursed for such fee or expenses prior to the end of each
fiscal year. AIM voluntarily waived advisory fees of $116,126 on the Portfolio
and assumed expenses of $25,600.
DISTRIBUTOR
The Trust 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
Trust are affiliated with FMC and AIM. The Distribution Agreement provides that
FMC has the exclusive right to distribute shares of the Class either directly or
through other broker-dealers. FMC is the distributor of several of the mutual
funds managed or advised by AIM.
FMC may, from time to time, at its expense, pay a bonus or other
consideration or incentive to dealers or banks who sell a minimum dollar amount
of the shares of the Class during a specific period of time. In some instances,
these incentives may be offered only to certain dealers or institutions who have
sold or may sell
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significant amounts of shares. The total amount of such additional bonus
payments or other consideration shall not exceed 0.05% of the net asset value of
the shares of the Class sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of shares of the Class or
the amount received as proceeds from such sales. Dealers or institutions may not
use sales of the shares of the Class to qualify for any incentives to the extent
that such incentives may be prohibited by the laws of any jurisdiction.
DISTRIBUTION PLAN
The Trust has adopted a Master Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act. The Plan provides that the Trust may compensate
FMC in connection with the distribution of shares of the Class in an amount
equal to 0.50% on an annualized basis of the average daily net assets of the
Portfolio attributable to the Class. Such amounts may be expended when and if
authorized by the Board of Trustees and may be used to finance such
distribution-related services as expenses of organizing and conducting sales
seminars, printing of prospectuses and statements of additional information (and
supplements thereto) and reports for other than existing shareholders,
preparation and distribution of advertising material and sales literature and
costs of administering the Plan.
Of the compensation paid to FMC under the Plan, a service fee may be paid
to dealers and other financial institutions that provide continuing personal
shareholder services to their customers who purchase and own shares of the
Class, in amounts of up to 0.25% of the average net assets of the Portfolio
attributable to the Class which are attributable to the customers of such
dealers or financial institutions. Payments to dealers and other financial
institutions in excess of such amount and payments retained by FMC would be
characterized as an asset-based sales charge pursuant to the Plan. The Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Portfolio with respect to the Class. The Plan
does not obligate the Trust to reimburse FMC for the actual expenses FMC may
incur in fulfilling its obligations under the Plan on behalf of the Class. Thus,
under the Plan, even if FMC's actual expenses exceed the fee payable to FMC
thereunder at any given time, the Trust will not be obligated to pay more than
that fee. If FMC's expenses are less than the fee it receives, FMC will retain
the full amount of the fee.
The Plan requires the officers of the Trust to provide the Board of
Trustees at least quarterly with a written report of the amounts expended
pursuant to each Plan and the purposes for which such expenditures were made.
The Board of Trustees shall review these reports in connection with their
decisions with respect to the Plan.
As required by Rule 12b-1 under the 1940 Act, the Plan was approved by the
Board of Trustees, including a majority of the trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan ("Qualified Trustees") on December 6, 1994. In approving the
Plan in accordance with the requirements of Rule 12b-1, the trustees considered
various factors and determined that there is a reasonable likelihood that the
Plan will benefit the Trust and the shareholders of the Class.
The Plan may be terminated by a vote of a majority of the Qualified
Trustees, or by a vote of a majority of the holders of the outstanding voting
securities of the shares of the Class. Any change in the Plan that would
increase materially the distribution expenses paid by the Class requires
shareholder approval; otherwise the Plan may be amended by the trustees,
including a majority of the Qualified Trustees, by vote cast in person at a
meeting called for the purpose of voting upon such amendment. As long as the
Plan is in effect, the selection or nomination of the Qualified Trustees is
committed to the discretion of the Qualified Trustees.
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PORTFOLIO TRANSACTIONS AND BROKERAGE
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.
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 Trust is a Delaware business trust. The Trust was originally
incorporated in Maryland on January 24, 1977, but had no operations prior to
November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a
Massachusetts business trust; and effective October 15, 1993, the Trust was
reorganized as a Delaware business trust. On October 15, 1993, the Portfolio
succeeded to the assets and assumed the liabilities of the Treasury TaxAdvantage
Portfolio (the "Predecessor Portfolio") of Short-Term Investments Co., a
Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of
Reorganization between the Trust 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). Shares of beneficial interest of
the Trust are divided into seven classes. Two classes, including the Class,
represent interests in the Portfolio, and five classes represent interests in
the Treasury Portfolio. Each class of shares has a par value of $.01 per share.
The other classes of the Trust may have different sales charges and other
expenses which may affect performance. An investor may obtain information
concerning the Trust's other classes by contacting FMC.
All shares of the Trust have equal rights with respect to voting, except
that the holders of shares of a particular 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 shareholders of the Class 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 Trust, 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 Trust
attributable to the respective portfolio or allocated to the respective
portfolio based on the liquidation value of such portfolio. Fractional shares of
each portfolio have the same rights as full shares to the extent of their
proportionate interest.
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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 shall be called at the request
of the holders of 10% or more of the Trust's outstanding shares. As of December
1, 1996, First National Bank of Chicago was the owner of record of 61.27% of the
outstanding shares of the Class. As long as First National Bank of Chicago owns
over 25% of such shares, it may be presumed to be in "control" of the Private
Investment Class of the Treasury TaxAdvantage Portfolio, as defined in the 1940
Act.
There are no preemptive or conversion rights applicable to any of the
Trust's shares. The Trust's shares, when issued, will be fully paid and
non-assessable. The Board of Trustees may create additional portfolios and
classes of the Trust without shareholder approval.
TRANSFER AGENT AND CUSTODIAN
The Bank of New York, 90 Washington Street, 11th Floor, New York, New York
10286, acts as custodian for the portfolio securities and cash of the Portfolio.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173, acts as transfer agent for the shares of the Portfolio.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia,
Pennsylvania, serves as counsel to the Trust 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 an investor's Institution, or to the Trust at 11 Greenway Plaza,
Suite 1919, Houston, Texas 77046-1173, or may be made by calling (800) 877-7748.
OTHER INFORMATION
This Prospectus sets forth basic information that investors should know
about the Trust and the Portfolio prior to investing. A Statement of Additional
Information has been filed with the SEC. Copies of the Statement of Additional
Information are available upon request and without charge by writing or calling
the Trust or FMC. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted herein, may be obtained from the SEC by paying the
charges prescribed under its rules and regulations.
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<TABLE>
<S> <C>
SHORT-TERM INVESTMENTS TRUST SHORT-TERM
11 Greenway Plaza, Suite 1919 INVESTMENTS TRUST
Houston, Texas 77046-1173
(800) 877-7748 PRIVATE
INVESTMENT CLASS
INVESTMENT ADVISOR OF THE
A I M ADVISORS, INC. -----------------------
11 Greenway Plaza, Suite 1919 TREASURY
Houston, Texas 77046-1173 TAXADVANTAGE
(713) 626-1919 PORTFOLIO PROSPECTUS
DISTRIBUTOR
FUND MANAGEMENT COMPANY DECEMBER 30, 1996
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(800) 877-7748 [LOGO APPEARS HERE]
Fund Management Company
AUDITORS
KPMG PEAT MARWICK LLP
NationsBank Building
700 Louisiana
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK
90 Washington Street
11th Floor
New York, New York 10286
TRANSFER AGENT
A I M INSTITUTIONAL FUND
SERVICES, INC.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST
OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY
JURISDICTION TO ANY PERSON TO WHOM SUCH OFFERING MAY NOT LAWFULLY BE MADE.
</TABLE>
