<PAGE>
[AIM LOGO APPEARS HERE] Dear Shareholder:
[PHOTO of As the six-month period covered by this report
Charles T. Bauer, was closing, the U.S. economy continued to move
Chairman of the ahead at a brisk pace. During the final quarter
LETTER Board of The Fund of 1998, the economy grew at its fastest rate
TO OUR APPEARS HERE] in two and a half years. Total gross domestic
SHAREHOLDERS product (GDP) growth for 1998 was 3.9%.
There was a different story overseas. Throughout the second half
of 1998, the global economy continued to experience economic
turmoil, financial instability and increased credit concerns.
Certain regions, particularly Asia, Russia and Latin America,
remained in a severe downturn.
As a result of this global meltdown, the U.S. Federal Open
Market Committee of the Federal Reserve Board (the Fed) reduced
the federal funds rate from 5.5% to 4.75% in three steps between
September and November. The discount rate was also reduced from 5%
to 4.5%. Interest rates were lowered, not to stimulate an already
strong U.S. economy, but to minimize the impact of the
international economic crises upon the U.S. economy and to
decrease volatility and calm the financial markets. In the United
States and Europe, financial markets were very volatile, but the
underlying economies continued surprisingly strong growth.
The yield on the one-year Treasury bill, which was as high as
5.32% in early July, dropped to 4.37% in early December as an
increase in the one-year Treasury bill's price caused its yield to
decline. The price increase was a result of investors' demand for
Treasuries in a "flight to quality" environment resulting from the
international crises and credit concerns.
YOUR INVESTMENT PORTFOLIO
As Treasury bill yields continued to drop significantly below the
federal funds target, the managers of the Portfolio increased
their exposure to the repurchase-agreement market and looked more
selectively out the yield curve. With little reason to extend
weighted average maturity (WAM) to pick up yield, the managers
kept the WAM in the 20- to 40-day range. Employing the barbell
structure, the portfolio managers were able to take advantage of
the higher-yielding overnight market while looking for strategic
opportunities out the curve. At the close of the reporting period,
the WAM of the Portfolio was 39 days. The Portfolio will continue
to maintain a relatively short maturity structure, remaining
flexible to take advantage of any sudden market moves.
Using this strategy, the Private Investment Class of the
Portfolio offered competitive yield as of February 28, 1999, as
shown in the table.
The Portfolio holds the highest credit quality ratings given by
three widely known credit-rating agencies. It continues to be
rated AAAm by Standard & Poor's Corporation and Aaa by Moody's
Investors Service, Inc. In addition, shortly after the reporting
period closed, the Portfolio received the highest rating, AAA,
granted by Fitch IBCA. These ratings are historical and are based
on an analysis of the
Yields as of 2/28/99
<TABLE>
<CAPTION>
Average Seven-Day
Monthly Yield Yield
<S> <C> <C>
Treasury Portfolio
Private Investment Class 4.38% 4.42%
IBC Money Fund Averages(TM) -
U.S. Treasury & Repurchase Agreements 4.10% 4.17%
IBC Money Fund Averages(TM) -
Government Only/Institutions Only 4.43% 4.45%
</TABLE>
(continued)
<PAGE>
Portfolio's credit quality, composition, management and weekly
portfolio reviews. With the addition of the AAA Fitch rating, AIM
became the only multi-fund complex to have all of its
institutional money market portfolios given the highest rating by
three different rating agencies.
Net assets of the Private Investment Class stood at $367.39
million at the close of the reporting period.
The Treasury Portfolio seeks to maximize current income to the
extent consistent with preservation of capital and maintenance of
liquidity. It invests exclusively in direct obligations of the
U.S. Treasury and repurchase agreements secured by such
obligations. Government securities, such as U.S. Treasury bills
and bonds, offer a high degree of safety and are guaranteed as to
the timely payment of principal and interest if held to maturity.
An investment in a money market fund is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other
government agency. Although a money market fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to
lose money investing in the fund.
OUTLOOK FOR THE FUTURE
Statistics released shortly after the close of the reporting
period showed that employment gains have exceeded expectations and
wage inflation has been virtually non-existent. This caused
interest rates to drop, another indication the U.S. economy
continues to benefit from the unusual combination of strong growth
and low inflation.
As 1998 ended, there was speculation the Fed might decrease
interest rates even more. However, this view changed abruptly with
the release of stronger-than-expected adjusted December and
January economic numbers during the first quarter of 1999. These
numbers and other factors led many to speculate about the Fed
changing course and raising short-term rates again. We believe it
is unlikely such a move would be made soon because inflation
remains negligible despite robust economic growth. For the 12
months ended February 1999, producer prices were up just 0.5%, and
prices for intermediate goods actually fell during February 1999.
Retail sales growth and other economic indicators led to estimated
annualized GDP growth of 4.6% for the first quarter of 1999.
We are pleased to send you this report on your investment. AIM
is committed to the primary goals of safety, liquidity and yield
in institutional fund management. We are also committed to
customer service and are ready to respond to your comments about
this report. If you have any questions, please contact one of our
representatives at 800-659-1005. We are happy to be of service.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
2
<PAGE>
SCHEDULE OF INVESTMENTS
February 28, 1999
(Unaudited)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
U.S. TREASURY SECURITIES - 25.97%
U.S. TREASURY BILLS(a) - 7.48%
3.87% 04/15/99 $ 50,000 $ 49,758,125
- ----------------------------------------------------------------------------
4.71% 04/22/99 50,000 49,659,833
- ----------------------------------------------------------------------------
4.725% 04/22/99 25,000 24,829,375
- ----------------------------------------------------------------------------
4.73% 04/22/99 25,000 24,829,195
- ----------------------------------------------------------------------------
4.74% 04/22/99 19,000 18,869,913
- ----------------------------------------------------------------------------
5.135% 04/29/99 50,000 49,579,215
- ----------------------------------------------------------------------------
5.173% 04/29/99 50,000 49,576,142
- ----------------------------------------------------------------------------
4.44% 05/06/99 25,000 24,796,500
- ----------------------------------------------------------------------------
5.15% 05/27/99 25,000 24,688,854
- ----------------------------------------------------------------------------
4.658% 08/19/99 50,000 48,893,844
- ----------------------------------------------------------------------------
4.485% 12/09/99 50,000 48,237,146
- ----------------------------------------------------------------------------
413,718,142
- ----------------------------------------------------------------------------
U.S. TREASURY NOTES - 18.49%
6.25% 03/31/99 25,000 25,014,182
- ----------------------------------------------------------------------------
6.375% 04/30/99 50,000 50,163,934
- ----------------------------------------------------------------------------
6.25% 05/31/99 50,000 50,185,938
- ----------------------------------------------------------------------------
6.75% 05/31/99 75,000 75,380,143
- ----------------------------------------------------------------------------
6.75% 06/30/99 150,000 150,615,641
- ----------------------------------------------------------------------------
6.375% 07/15/99 130,000 130,646,729
- ----------------------------------------------------------------------------
5.875% 07/31/99 50,000 50,226,705
- ----------------------------------------------------------------------------
6.875% 07/31/99 50,000 50,419,111
- ----------------------------------------------------------------------------
6.00% 08/15/99 25,000 25,149,495
- ----------------------------------------------------------------------------
5.875% 08/31/99 25,000 25,194,647
- ----------------------------------------------------------------------------
6.875% 08/31/99 25,000 25,324,516
- ----------------------------------------------------------------------------
5.75% 09/30/99 75,000 75,453,696
- ----------------------------------------------------------------------------
7.125% 09/30/99 50,000 50,704,565
- ----------------------------------------------------------------------------
5.625% 10/31/99 80,000 80,462,841
- ----------------------------------------------------------------------------
7.50% 10/31/99 50,000 50,934,336
- ----------------------------------------------------------------------------
7.75% 11/30/99 55,612 56,800,359
- ----------------------------------------------------------------------------
6.375% 01/15/00 50,000 50,553,406
- ----------------------------------------------------------------------------
1,023,230,244
- ----------------------------------------------------------------------------
Total U.S. Treasury Securities (Cost
$1,436,948,386) 1,436,948,386
- ----------------------------------------------------------------------------
Total Investments (excluding Repurchase
Agreements) 1,436,948,386
- ----------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENTS(b) - 76.18%
BancAmerica Robertson Stephens(c)
4.75% 03/01/99 $250,000 $ 250,000,000
- -----------------------------------------------------------------------------
Barclays Capital, Inc.(d)
4.75% 03/01/99 250,000 250,000,000
- -----------------------------------------------------------------------------
Bear, Stearns & Co., Inc.(e)
4.77% -- 150,000 150,000,000
- -----------------------------------------------------------------------------
BT - Alex-Brown, Inc.(f)
4.78% 03/01/99 160,000 160,000,000
- -----------------------------------------------------------------------------
CIBC Oppenheimer Corp.(g)
4.75% 03/01/99 250,000 250,000,000
- -----------------------------------------------------------------------------
Credit Suisse First Boston Corp.(h)
4.78% 03/01/99 100,000 100,000,000
- -----------------------------------------------------------------------------
Deutsche Bank Securities Inc.(i)
4.75% -- 800,000 800,000,000
- -----------------------------------------------------------------------------
First Chicago Capital Markets, Inc.(j)
4.75% 03/01/99 250,000 250,000,000
- -----------------------------------------------------------------------------
Greenwich Capital Markets, Inc.(k)
4.74% 03/01/99 250,000 250,000,000
- -----------------------------------------------------------------------------
Greenwich Capital Markets, Inc.(l)
4.75% 03/01/99 150,000 150,000,000
- -----------------------------------------------------------------------------
Merrill Lynch Government Securities,
Inc.(m)
4.75% 03/01/99 250,000 250,000,000
- -----------------------------------------------------------------------------
Warburg Dillon Read, LLC(n)
4.72% 03/01/99 250,000 250,000,000
- -----------------------------------------------------------------------------
Warburg Dillon Read, LLC(o)
4.75% 03/01/99 250,000 250,000,000
- -----------------------------------------------------------------------------
SG Cowen Securities Corp.(p)
4.75% 03/01/99 355,318 355,318,343
- -----------------------------------------------------------------------------
State Street Bank and Trust Co.(q)
4.75% 03/01/99 250,000 250,000,000
- -----------------------------------------------------------------------------
Westdeutsche Landesbank Girozentrale(r)
4.75% 03/01/99 250,000 250,000,000
- -----------------------------------------------------------------------------
Total Repurchase Agreements (Cost
$4,215,318,343) 4,215,318,343
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS - 102.15% 5,652,266,729(s)
- -----------------------------------------------------------------------------
LIABILITIES LESS OTHER ASSETS - (2.15%) (119,123,984)
- -----------------------------------------------------------------------------
NET ASSETS - 100.00% $5,533,142,745
=============================================================================
</TABLE>
4
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) U.S. Treasury bills 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) Collateral on repurchase agreements, including the Portfolio's pro-rata
interest in joint repurchase agreements, is taken into possession by the
Portfolio upon entering into the repurchase agreement. The collateral is
marked to market daily to ensure its market value is at least 102% of the
sales price of the repurchase agreement. The investments in some repurchase
agreements are through participation in joint accounts with other mutual
funds, private accounts, and certain non-registered investment companies
managed by the investment advisor or its affiliates.
(c) Entered into 02/26/99 with a maturing value of $250,098,958. Collateralized
by $250,000,000 U.S. Government obligations, 4.75% to 7.50% due 02/15/04 to
02/15/05 with an aggregate market value at 02/28/99 of $255,212,474.
(d) Entered into 02/26/99 with a maturing value of $250,098,958. Collateralized
by $251,415,000 U.S. Government obligations, 5.625% to 6.875% due 07/31/99
to 10/31/99 with an aggregate market value at 02/28/99 of $255,000,856.
(e) Open joint repurchase agreement. Either party may terminate the agreement
upon demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $433,517,000 U.S. Government obligations, 0% to 10.625%
due 05/15/99 to 11/15/27 with an aggregate market value at 02/28/99 of
$153,209,953.
(f) Joint repurchase agreement entered into 02/26/99 with a maturing value of
$250,099,583. Collateralized by $263,100,000 U.S. Government obligations,
0% due 08/15/99 to 02/15/00 with an aggregate market value at 02/28/99 of
$254,885,090.
(g) Entered into 02/26/99 with a maturing value of $250,098,958. Collateralized
by $237,304,000 U.S. Government obligations, 0% to 14.08% due 04/22/99 to
08/15/27 with an aggregate market value at 02/28/99 of $255,002,657.
(h) Entered into 02/26/99 with a maturing value of $100,039,833. Collateralized
by $310,967,026 U.S. Government obligations, 0% to 8.75% due 08/15/09 to
05/15/20 with an aggregate market value at 02/28/99 of $103,707,282.
(i) Open repurchase agreement. Either party may terminate the agreement upon
demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $781,060,000 U.S. Government obligations, 0% to 8.125%
due 07/22/99 to 07/15/02 with an aggregate market value at 02/28/99 of
$816,000,400.
(j) Entered into 02/26/99 with a maturing value of $250,098,958. Collateralized
by $236,060,000 U.S. Government obligations, 3.625% to 8.125% due 02/28/99
to 04/15/28 with an aggregate market value at 02/28/99 of $255,000,576.
(k) Entered into 02/26/99 with a maturing value of $250,888,750. Collateralized
by $498,737,000 U.S. Government obligations, 0% to 11.75% due 05/15/99 to
11/25/27 with an aggregate market value at 02/28/99 of $255,000,698.
(l) Entered into 02/26/99 with a maturing value of $150,059,375. Collateralized
by $120,550,000 U.S. Government obligations, 4.75% to 9.25% due 02/15/04 to
02/15/16 with an aggregate market value at 02/28/99 of $153,001,515.
(m) Entered into 02/26/99 with a maturing value of $250,098,958. Collateralized
by $234,297,000 U.S. Government obligations, 4.25% to 8.50% due 08/31/99 to
02/15/23 with an aggregate market value at 02/28/99 of $255,000,487.
(n) Term repurchase agreement entered into 01/28/99 with a maturity date of
03/01/99 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. Collateralized by $821,757,000 U.S. Government
obligations, 0% to 5.875% due 08/31/99 to 05/15/20 with an aggregate market
value at 02/28/99 of $255,026,530.
(o) Joint repurchase agreement entered into 02/26/99 with a maturing value of
$500,197,917. Collateralized by $1,391,757,000 U.S. Government obligations,
0% to 6.875% due 02/15/00 to 08/15/27 with an aggregate market value at
02/28/99 of $510,248,025.
(p) Joint repurchase agreement entered into 02/26/99 with a maturing value of
$600,237,500. Collateralized by $547,514,000 U.S. Government obligations,
5.25% to 15.75% due 03/31/99 to 11/15/27 with an aggregate market value at
02/28/99 of $612,193,164.
(q) Entered into 02/26/99 with a maturing value of $250,098,958. Collateralized
by $220,410,000 U.S. Government obligations, 6.50% to 8.75% due 05/15/17 to
11/15/26 with an aggregate market value at 02/28/99 of $255,001,963.
(r) Entered into 02/26/99 with a maturing value of $250,098,958. Collateralized
by $188,908,000 U.S. Government obligations, 5.375% to 14.00% due 06/30/03
to 08/15/21 with an aggregate market value at 02/28/99 of $255,000,875.
(s) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
5
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $1,436,948,386
- ------------------------------------------------------------------------
Repurchase agreements 4,215,318,343
- ------------------------------------------------------------------------
Interest receivable 18,816,180
- ------------------------------------------------------------------------
Investment for deferred compensation plan 95,252
- ------------------------------------------------------------------------
Other assets 174,743
- ------------------------------------------------------------------------
Total assets 5,671,352,904
- ------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 118,188,316
- ------------------------------------------------------------------------
Dividends 18,908,690
- ------------------------------------------------------------------------
Deferred compensation 95,252
- ------------------------------------------------------------------------
Accrued administrative services fees 12,615
- ------------------------------------------------------------------------
Accrued advisory fees 238,673
- ------------------------------------------------------------------------
Accrued distribution fees 394,778
- ------------------------------------------------------------------------
Accrued transfer agent fees 72,494
- ------------------------------------------------------------------------
Accrued trustees' fees 5,000
- ------------------------------------------------------------------------
Accrued operating expenses 294,341
- ------------------------------------------------------------------------
Total liabilities 138,210,159
- ------------------------------------------------------------------------
NET ASSETS $5,533,142,745
========================================================================
NET ASSETS:
Institutional Class $3,455,203,107
========================================================================
Private Investment Class $ 367,386,016
========================================================================
Personal Investment Class $ 447,735,309
========================================================================
Cash Management Class $ 880,161,716
========================================================================
Reserve Class $ 204,913
========================================================================
Resource Class $ 382,451,684
========================================================================
SHARES OF BENEFICIAL INTEREST, $.01 PAR VALUE PER SHARE:
Institutional Class 3,455,066,613
========================================================================
Private Investment Class 367,376,130
========================================================================
Personal Investment Class 447,717,413
========================================================================
Cash Management Class 880,118,604
========================================================================
Reserve Class 204,913
========================================================================
Resource Class 382,431,844
========================================================================
NET ASSET VALUE PER SHARE:
Net asset value, offering and redemption price per share $ 1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
STATEMENT OF OPERATIONS
For the six months ended February 28, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $137,672,982
- -------------------------------------------------------------------
EXPENSES:
Advisory fees 1,585,584
- -------------------------------------------------------------------
Custodian fees 108,877
- -------------------------------------------------------------------
Administrative services fees 84,325
- -------------------------------------------------------------------
Trustees' fees and expenses 25,132
- -------------------------------------------------------------------
Transfer agent fees 364,728
- -------------------------------------------------------------------
Distribution fees (Note 2) 3,356,856
- -------------------------------------------------------------------
Other 205,052
- -------------------------------------------------------------------
Total expenses 5,730,554
- -------------------------------------------------------------------
Less: Fee waivers (1,055,502)
- -------------------------------------------------------------------
Net expenses 4,675,052
- -------------------------------------------------------------------
Net investment income 132,997,930
- -------------------------------------------------------------------
Net realized gain on sales of investments 104,590
- -------------------------------------------------------------------
Net increase in net assets resulting from operations $133,102,520
===================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended February 28, 1999
and for the year ended August 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
February 28, August 31,
1999 1998
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 132,997,930 $ 282,365,404
- ------------------------------------------------------------------------------
Net realized gain on sales of investments 104,590 17,887
- ------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 133,102,520 282,383,291
- ------------------------------------------------------------------------------
Distributions to shareholders from net
investment income:
- ------------------------------------------------------------------------------
Institutional Class (80,398,902) (171,162,611)
- ------------------------------------------------------------------------------
Private Investment Class (8,278,198) (20,105,302)
- ------------------------------------------------------------------------------
Personal Investment Class (9,027,064) (18,031,165)
- ------------------------------------------------------------------------------
Cash Management Class (26,120,890) (55,954,060)
- ------------------------------------------------------------------------------
Reserve Class (587) --
- ------------------------------------------------------------------------------
Resource Class (9,172,289) (17,112,266)
- ------------------------------------------------------------------------------
Distributions to shareholders from net
realized gains:
- ------------------------------------------------------------------------------
Institutional Class (432,019) --
- ------------------------------------------------------------------------------
Private Investment Class (43,762) --
- ------------------------------------------------------------------------------
Personal Investment Class (47,810) --
- ------------------------------------------------------------------------------
Cash Management Class (126,800) --
- ------------------------------------------------------------------------------
Resource Class (49,582) --
- ------------------------------------------------------------------------------
Share transactions-net (See Note 4) 389,503,964 (116,572,228)
- ------------------------------------------------------------------------------
Net increase (decrease) in net assets 388,908,581 (116,554,341)
- ------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 5,144,234,164 5,260,788,505
- ------------------------------------------------------------------------------
End of period $5,533,142,745 $5,144,234,164
==============================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $5,532,915,517 $5,143,411,553
- ------------------------------------------------------------------------------
Undistributed net realized gain on sales of
investments 227,228 822,611
- ------------------------------------------------------------------------------
$5,533,142,745 $5,144,234,164
==============================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
February 28, 1999
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Short-Term Investments Trust (the "Fund") is 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 three different portfolios, each of which offers separate series
of shares: the Treasury Portfolio, the Government & Agency Portfolio and the
Treasury TaxAdvantage Portfolio. The Government & Agency Portfolio commenced
operations on September 1, 1998. Information presented in these financial
statements pertains only to the Treasury Portfolio (the "Portfolio"), with the
assets, liabilities and operations of each portfolio being accounted for
separately. The Portfolio currently offers six different classes of shares: the
Institutional Class, the Private Investment Class, the Personal Investment
Class, the Cash Management Class, the Reserve Class and the Resource Class.
Matters affecting each class are voted on exclusively by the shareholders of
each class. The 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 preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the
Portfolio in the preparation of its financial statements.
A. Security Valuations - The Portfolio's 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 - Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses are allocated
among the classes.
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 investment 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 0.15%
- ----------------------------------------
Over $300 million to $1.5 billion 0.06%
- ----------------------------------------
Over $1.5 billion 0.05%
- ----------------------------------------
</TABLE>
8
<PAGE>
The Portfolio, pursuant to a master administrative services agreement with
AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting services to the Portfolio. During the six months ended February 28,
1999, the Fund reimbursed AIM $84,325 for such services.
The Portfolio, pursuant to a transfer agency and service agreement, has agreed
to pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agent and
shareholder services to the Portfolio. During the six months ended February 28,
1999, the Portfolio paid AFS $247,916 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, the Personal Investment Class, the Cash Management Class, the
Reserve Class and the Resource Class of the Portfolio. The Plan provides that
the Private Investment Class, the Personal Investment Class, the Cash
Management Class, the Reserve Class and the Resource Class pay up to a 0.50%,
0.75%, 0.10%, 1.00%, and 0.20%, 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, Personal Investment Class, and the Reserve Class, (b) 0.10% of the
average daily net assets of the Cash Management Class and (c) 0.20% of the
average daily net assets of the Resource 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, the Cash Management
Class, the Reserve Class or the Resource Class. Any amounts not paid as a
service fee under such Plan would constitute an asset-based sales charge. 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 each
class. During the six months ended February 28, 1999, the Private Investment
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class paid $539,008, $1,022,315, $431,237, $126 and
$308,668, respectively, as compensation under the Plan. FMC waived fees of
$1,055,502 for the same period. Certain officers and trustees of the Trust are
officers of AIM, FMC and AFS.
During the six months ended February 28, 1999, the Portfolio paid legal fees
of $4,491 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as
counsel to the Board of Trustees. A member of that firm is a trustee of the
Fund.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is
not an "interested person" of AIM. The Fund may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
9
<PAGE>
NOTE 4-SHARE INFORMATION
Changes in shares outstanding during the six months ended February 28, 1999 and
the year ended August 31, 1998 were as follows:
<TABLE>
<CAPTION>
FEBRUARY 28, 1999 AUGUST 31, 1998
-------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 10,788,400,876 $10,788,400,876 18,385,087,568 $18,385,087,568
- -------------------------------------------------------------------------------------------
Private Investment
Class 762,911,985 762,911,985 1,991,337,616 1,991,337,616
- -------------------------------------------------------------------------------------------
Personal Investment
Class 2,035,980,105 2,035,980,105 3,949,434,631 3,949,434,631
- -------------------------------------------------------------------------------------------
Cash Management Class 4,345,361,793 4,345,361,793 6,742,292,291 6,742,292,291
- -------------------------------------------------------------------------------------------
Reserve Class* 204,913 204,913 -- --
- -------------------------------------------------------------------------------------------
Resource Class 1,180,258,417 1,180,258,417 2,712,585,402 2,712,585,402
- -------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 19,680,199 19,680,199 34,740,376 34,740,376
- -------------------------------------------------------------------------------------------
Private Investment
Class 3,202,359 3,202,359 5,517,795 5,517,795
- -------------------------------------------------------------------------------------------
Personal Investment
Class 8,304,749 8,304,749 16,025,048 16,025,048
- -------------------------------------------------------------------------------------------
Cash Management Class 11,094,426 11,094,426 20,427,201 20,427,201
- -------------------------------------------------------------------------------------------
Resource Class 9,240,659 9,240,659 15,915,270 15,915,270
- -------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (10,340,881,880) (10,340,881,880) (18,839,453,624) (18,839,453,624)
- -------------------------------------------------------------------------------------------
Private Investment
Class (758,999,033) (758,999,033) (2,099,963,668) (2,099,963,668)
- -------------------------------------------------------------------------------------------
Personal Investment
Class (2,002,310,361) (2,002,310,361) (3,882,639,209) (3,882,639,209)
- -------------------------------------------------------------------------------------------
Cash Management Class (4,409,979,110) (4,409,979,110) (6,658,189,744) (6,658,189,744)
- -------------------------------------------------------------------------------------------
Resource Class (1,262,966,133) (1,262,966,133) (2,509,689,181) (2,509,689,181)
- -------------------------------------------------------------------------------------------
Net increase (decrease) 389,503,964 $ 389,503,964 (116,572,228) $ (116,572,228)
===========================================================================================
</TABLE>
* The Reserve Class commenced sales on January 1, 1999.
10
<PAGE>
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of the Private Investment
Class outstanding during the six months ended February 28, 1999 and each of the
years in the five-year period ended August 31, 1998.
<TABLE>
<CAPTION>
AUGUST 31,
FEBRUARY 28, ------------------------------------------------
1999 1998 1997 1996 1995 1994
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.02 0.05 0.05 0.05 0.05 0.03
- --------------------------------------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.02) (0.05) (0.05) (0.05) (0.05) (0.03)
- --------------------------------------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======================================= ======== ======== ======== ======== ======== ========
Total return 2.32% 5.33% 5.16% 5.25% 5.34% 3.22%
======================================= ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $367,386 $360,307 $463,441 $352,537 $394,585 $412,716
======================================= ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets(a) 0.39%(b) 0.38% 0.39% 0.39% 0.40% 0.38%
======================================= ======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets(c) 4.61%(b) 5.20% 5.05% 5.14% 5.23% 3.26%
======================================= ======== ======== ======== ======== ======== ========
</TABLE>
(a) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
0.59% (annualized), 0.58%, 0.59%, 0.59%, 0.60% and 0.60% for the periods
1999-1994, respectively.
(b) Ratios are annualized and based on average net assets of $362,316,347.
(c) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 4.41%(annualized), 5.00%, 4.85%, 4.94%, 5.03% and 3.05%
for the periods 1999-1994, respectively.
11
<PAGE>
<TABLE>
<CAPTION>
TRUSTEES
<S> <C>
Charles T. Bauer Carl Frischling
Bruce L. Crockett Robert H. Graham Short-Term
Owen Daly II Prema Mathai-Davis Investments Trust
Edward K. Dunn, Jr. Lewis F. Pennock (STIT)
Jack M. Fields Louis S. Sklar
OFFICERS
Charles T. Bauer Chairman
Robert H. Graham President
John J. Arthur Sr. Vice President & Treasurer
Gary T. Crum Sr. Vice President
Carol F. Relihan Sr. Vice President & Secretary
Dana R. Sutton Vice President & Assistant Treasurer Treasury
Melville B. Cox Vice President Portfolio
Karen Dunn Kelley Vice President ----------------------------------------
J. Abbott Sprague Vice President Private SEMI-
Mary J. Benson Assistant Vice President & Assistant Treasurer Investment ANNUAL
Sheri Morris Assistant Vice President & Assistant Treasurer Class REPORT
Renee A. Friedli Assistant Secretary
P. Michelle Grace Assistant Secretary
Jeffrey H. Kupor Assistant Secretary
Nancy L. Martin Assistant Secretary
Ofelia M. Mayo Assistant Secretary FEBRUARY 28, 1999
Lisa A. Moss Assistant Secretary
Kathleen J. Pflueger Assistant Secretary
Samuel D. Sirko Assistant Secretary
Stephen I. Winer Assistant Secretary
INVESTMENT ADVISOR
A I M Advisors, Inc. [LOGO APPEARS HERE]
11 Greenway Plaza, Suite 100 Fund Management Company
Houston, TX 77046-1173
(800) 347-1919
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
(800) 659-1005
CUSTODIAN
The Bank of New York
90 Washington Street, 11th Floor
New York, NY 10286
LEGAL COUNSEL TO FUND
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
LEGAL COUNSEL TO TRUSTEES
Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022
TRANSFER AGENT
A I M Fund Services, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
TRE-SAR-3
</TABLE>
