<PAGE>
[AIM LOGO APPEARS HERE] Dear Shareholder:
--Registered Trademark
[PHOTO of As the end of the fiscal year arrived, the U.S.
Charles T. Bauer, economy continued to move ahead at a lively
Chairman of the pace. The robust domestic economy (coupled with
LETTER Board of The Fund inflationary tendencies in certain commodity
TO OUR APPEARS HERE] prices) compelled the Federal Reserve Board (the
SHAREHOLDERS Fed) to increase the federal funds rate four
times during the fiscal year, resulting in a current federal
funds rate of 6.50%. On August 22, at its last meeting before
the end of the reporting period, the Fed remained on hold,
leaving the rate unchanged. However, concern about inflation
remains due to trepidation about crude-oil prices. The energy
sector poses the highest risk of inflation; the price of crude
oil has escalated from $25 per barrel to more than $33 during
the fiscal year. Recent monthly economic data releases reflect
a moderate growth trend for the economy, a bit slower than when
2000 began. Gross domestic product for the second quarter of
2000 was 5.6%, and the estimate for the third quarter is
between 3.5% and 4.0%.
YOUR INVESTMENT PORTFOLIO
As of August 31, 2000, the performance of the portfolio's
Private Investment Class topped that of its comparative
indexes, as shown in the table. (Had the advisor not waived
fees and expenses during the reporting period, returns would
have been lower.) Although the Treasury-bill yield curve
remained somewhat expensive for the portfolio's rate target for
most of the fiscal year, the portfolio held to its consistent
investment discipline, maintaining a relatively short, laddered
portfolio structure. This structure is used to help ensure that
the portfolio's yield is not unduly influenced by reinvestment
rates on any particular maturity date. As Treasury-bill rates
plunged, portfolio managers looked to take advantage of the
relatively cheaper coupon securities to help add value. The
portfolio's weighted average maturity (WAM) was between 17 and
43 days during the fiscal year. At the close of the period, the
weighted average maturity was 22 days. Net assets of the
Private Investment Class stood at $109.50 million at the end of
the fiscal year.
<TABLE>
<CAPTION>
YIELDS AS OF 8/31/00
Average Seven-Day
Monthly Yield Yield
<S> <C> <C>
Government & Agency Portfolio
Private Investment Class 6.20% 6.25%
IBC Money Fund Averages(TM)
U.S. Treasury/Repurchase Agreements 5.72% 5.74%
IBC Money Fund Averages(TM)
Government Only/Institutions Only 6.04% 6.06%
</TABLE>
The portfolio continues to hold the highest credit-quality
ratings given by three widely known credit-rating agencies:
AAAm from Standard & Poor's, Aaa from Moody's and AAA from
Fitch IBCA. These historical ratings are based on an analysis
of the portfolio's credit quality, composition, management and
weekly portfolio reviews. AIM is the largest multi-fund complex
to have all its institutional money market portfolios given the
highest rating by three nationally recognized ratings agencies,
according to IBC Financial Data, Inc.
The Government & Agency Portfolio seeks to maximize current
income to the extent consistent with preservation of capital
and maintenance of liquidity. It invests in direct obligations
of the U.S. Treasury and other securities issued or guaranteed
as to principal and interest by the U.S. government or by its
agencies or instrumentalities, as well as repurchase
(continued)
<PAGE>
agreements secured by such obligations. Government
securities, such as U.S. Treasury bills and notes, 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
August saw a decline in the Consumer Price Index and the
Producer Price Index and flat retail sales, which led to
a widespread consensus among financial markets that the
Fed will not increase short-term rates for the rest of
the year. Jobless claims are the highest they have been
since mid-1998. With a presidential election in the near
future, the Fed is expected to remain on hold, and the
economy will experience the gradual effect of the fiscal
year's aggregate 125-basis-point short-term rate
increase. Considering the short weighted average
maturity the portfolio maintains, the inversion of the
Treasury yield curve has allowed it to maintain
outstanding performance, along with the flexibility to
adjust its maturity schedule in the event of sudden rate
changes or curve corrections.
We are pleased to send you this annual report on your
investment. AIM is committed to the primary goals of
safety, liquidity and yield in institutional fund
management. We are also dedicated to customer service,
and we 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 if we may help.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
2
<PAGE>
SCHEDULE OF INVESTMENTS
August 31, 2000
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY DISCOUNT NOTES(a) - 25.05%
FEDERAL HOME LOAN MORTGAGE CORP.(b) - 7.75%
6.06% 09/08/00 $10,000 $ 9,988,217
-------------------------------------------------------------------------------
6.12% 09/20/00 7,515 7,490,726
-------------------------------------------------------------------------------
6.41% 12/15/00 20,000 19,626,083
-------------------------------------------------------------------------------
6.45% 01/04/01 10,000 9,776,042
-------------------------------------------------------------------------------
6.45% 01/05/01 10,000 9,774,250
-------------------------------------------------------------------------------
6.40% 01/10/01 10,000 9,767,111
-------------------------------------------------------------------------------
6.45% 01/31/01 10,000 9,727,667
===============================================================================
76,150,096
===============================================================================
MEDIUM TERM NOTES - 1.02%
6.88% 08/28/01 10,000 10,000,000
===============================================================================
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 16.28%
6.06% 09/14/00 15,000 14,967,175
-------------------------------------------------------------------------------
6.07% 09/21/00 20,000 19,932,555
-------------------------------------------------------------------------------
6.17% 09/28/00 10,000 9,953,725
-------------------------------------------------------------------------------
6.14% 10/05/00 10,000 9,942,011
-------------------------------------------------------------------------------
6.17% 10/05/00 10,000 9,941,775
-------------------------------------------------------------------------------
6.16% 10/12/00 10,000 9,929,844
-------------------------------------------------------------------------------
6.17% 10/19/00 10,000 9,917,733
-------------------------------------------------------------------------------
6.22% 10/19/00 10,000 9,917,067
-------------------------------------------------------------------------------
6.65% 11/22/00 10,000 9,848,528
-------------------------------------------------------------------------------
6.55% 12/07/00 25,000 24,558,785
-------------------------------------------------------------------------------
6.50% 12/21/00 11,914 11,675,224
-------------------------------------------------------------------------------
6.47% 01/11/01 10,000 9,762,767
-------------------------------------------------------------------------------
6.45% 01/25/01 10,000 9,738,619
===============================================================================
160,085,808
===============================================================================
Total U.S. Government Agency Discount Notes (Cost
$246,235,904) 246,235,904
_______________________________________________________________________________
===============================================================================
Total Investments (excluding Repurchase
Agreements) 246,235,904
_______________________________________________________________________________
===============================================================================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENTS(b) - 75.48%
Banc One Capital Markets, Inc.
6.67%(c) 09/01/00 $ 47,000 $ 47,000,000
------------------------------------------------------------------------
Barclays Capital Inc.
6.68%(d) 09/01/00 47,000 47,000,000
------------------------------------------------------------------------
BNP Capital Markets, LLC
6.68%(e) 09/01/00 242,000 242,000,000
------------------------------------------------------------------------
Dean Witter Reynolds, Inc.
6.67%(f) 09/01/00 47,000 47,000,000
------------------------------------------------------------------------
First Union Capital Markets Corp.
6.67%(g) 09/01/00 47,000 47,000,000
------------------------------------------------------------------------
Salomon Smith Barney Inc.
6.67%(h) -- 41,000 41,000,000
------------------------------------------------------------------------
SG Cowen Securities Corp.
6.68%(i) 09/01/00 242,000 242,000,000
------------------------------------------------------------------------
Westdeutsche Landesbank Girozentrale
6.67%(j) 09/01/00 29,066 29,066,462
========================================================================
Total Repurchase Agreements (Cost
$742,066,462) 742,066,462
========================================================================
TOTAL INVESTMENTS - 100.53% (COST
$988,302,366)(k) 988,302,366
========================================================================
LIABILITIES LESS OTHER ASSETS - (0.53)% (5,213,950)
________________________________________________________________________
========================================================================
NET ASSETS - 100.00% $983,088,416
________________________________________________________________________
========================================================================
</TABLE>
4
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) U.S. Agency Discount Notes 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) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$250,046,319. Collateralized by $261,934,000 U.S. Government obligations,
0% due 10/06/00 to 03/01/01 with an aggregate market value at 08/31/00 of
$255,003,949.
(d) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$337,904,727. Collateralized by $344,076,000 U.S. Government obligations,
5.47% to 7.63% due 02/15/02 to 09/15/09 with an aggregate market value at
08/31/00 of $344,599,443.
(e) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$500,092,778. Collateralized by $649,836,000 U.S. Government obligations,
0% to 7.13% due 09/01/00 to 11/15/21 with a market value at 08/31/00 of
$510,000,646.
(f) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$150,027,792. Collateralized by $154,491,000 U.S. Government obligations,
0% to 7.75% due 09/01/00 to 05/23/11 with an aggregate market value at
08/31/00 of $153,000,708.
(g) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$200,037,056. Collateralized by $204,839,000 U.S. Government obligations,
0% to 8.25% due 10/02/00 to 04/01/36 with an aggregate market value at
08/31/00 of $204,000,606.
(h) Open joint repurchase agreement. Either party may terminate the agreement
upon demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $1,014,955,000 U.S Government obligations, 0% to 9.375%
due 09/01/00 to 05/15/30 with an aggregate market value at 08/31/00 of
$935,151,358.
(i) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$500,092,778. Collateralized by $520,898,000 U.S. Government obligations,
0% to 8.88% due 06/21/01 to 08/15/17 with an aggregate market value at
08/31/00 of $510,240,768.
(j) Joint repurchase agreement entered into 08/31/00 with a maturing value of
$75,013,896. Collateralized by $77,459,000 U.S. Government obligations,
5.13% to 7.63% due 03/15/02 to 10/15/08 with a market value at 08/31/00 of
$76,500,286.
(k) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
5
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements at value (amortized
cost) $246,235,904
------------------------------------------------------------------------------
Repurchase agreements (amortized cost) 742,066,462
------------------------------------------------------------------------------
Interest receivable 145,170
------------------------------------------------------------------------------
Investment for deferred compensation plan 11,826
------------------------------------------------------------------------------
Other assets 46
==============================================================================
Total assets 988,459,408
==============================================================================
LIABILITIES:
Payables for:
Dividends 5,246,338
------------------------------------------------------------------------------
Deferred compensation plan 11,826
------------------------------------------------------------------------------
Accrued advisory fees 1,806
------------------------------------------------------------------------------
Accrued administrative services fees 13,975
------------------------------------------------------------------------------
Accrued distribution fees 80,538
------------------------------------------------------------------------------
Accrued trustees' fees 1,454
------------------------------------------------------------------------------
Accrued transfer agent fees 11,100
------------------------------------------------------------------------------
Accrued operating expenses 3,955
==============================================================================
Total liabilities 5,370,992
==============================================================================
Net assets applicable to shares outstanding $983,088,416
______________________________________________________________________________
==============================================================================
NET ASSETS:
Institutional Class $399,390,022
______________________________________________________________________________
==============================================================================
Private Investment Class $109,496,204
______________________________________________________________________________
==============================================================================
Personal Investment Class $ 14,425,600
______________________________________________________________________________
==============================================================================
Cash Management Class $223,494,784
______________________________________________________________________________
==============================================================================
Reserve Class $ 2,661,843
______________________________________________________________________________
==============================================================================
Resource Class $233,619,963
______________________________________________________________________________
==============================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Institutional Class 399,389,878
______________________________________________________________________________
==============================================================================
Private Investment Class 109,496,235
______________________________________________________________________________
==============================================================================
Personal Investment Class 14,425,600
______________________________________________________________________________
==============================================================================
Cash Management Class 223,494,913
______________________________________________________________________________
==============================================================================
Reserve Class 2,661,839
______________________________________________________________________________
==============================================================================
Resource Class 233,619,951
______________________________________________________________________________
==============================================================================
Net asset value, offering and redemption price per share for all
classes $1.00
______________________________________________________________________________
==============================================================================
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
STATEMENT OF OPERATIONS
For the year ended August 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $37,950,109
==================================================================
EXPENSES:
Advisory fees 623,378
------------------------------------------------------------------
Administrative services fee 150,815
------------------------------------------------------------------
Custodian fees 29,754
------------------------------------------------------------------
Distribution fees:
Private Investment Class 321,807
------------------------------------------------------------------
Personal Investment Class 30,106
------------------------------------------------------------------
Cash Management Class 147,900
------------------------------------------------------------------
Resource Class 209,243
------------------------------------------------------------------
Reserve Class 9,540
------------------------------------------------------------------
Transfer agent fees 102,586
------------------------------------------------------------------
Trustees' fees 8,934
------------------------------------------------------------------
Other 137,547
==================================================================
Total expenses 1,771,610
==================================================================
Less: Fee waiver and expense reimbursement (843,100)
==================================================================
Net expenses 928,510
==================================================================
Net investment income 37,021,599
==================================================================
Net increase in net assets resulting from operations $37,021,599
__________________________________________________________________
==================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 2000 and 1999
<TABLE>
<CAPTION>
AUGUST 31, AUGUST 31,
2000 1999
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 37,021,599 $ 11,215,411
------------------------------------------------------------------------------
Net increase in net assets resulting from opera-
tions 37,021,599 11,215,411
==============================================================================
Distributions to shareholders from net investment
income:
Institutional Class (17,899,952) (5,533,351)
------------------------------------------------------------------------------
Private Investment Class (3,672,868) (1,913,875)
------------------------------------------------------------------------------
Personal Investment Class (240,085) --
------------------------------------------------------------------------------
Cash Management Class (8,847,397) (3,191,932)
------------------------------------------------------------------------------
Reserve Class (52,966) --
------------------------------------------------------------------------------
Resource Class (6,308,331) (576,253)
------------------------------------------------------------------------------
Share transactions - net:
Institutional Class 259,529,935 139,859,943
------------------------------------------------------------------------------
Private Investment Class 66,968,191 42,528,044
------------------------------------------------------------------------------
Personal Investment Class 14,425,600 --
------------------------------------------------------------------------------
Cash Management Class 138,381,530 85,113,383
------------------------------------------------------------------------------
Reserve Class 2,661,839 --
------------------------------------------------------------------------------
Resource Class 221,936,209 11,683,742
==============================================================================
Net increase in net assets 703,903,304 279,185,112
==============================================================================
NET ASSETS:
Beginning of year 279,185,112 --
==============================================================================
End of year $983,088,416 $279,185,112
______________________________________________________________________________
==============================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $983,088,416 $279,185,112
==============================================================================
$983,088,416 $279,185,112
______________________________________________________________________________
==============================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 31, 2000
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 portfolios, each of which offers separate series of shares:
the Treasury Portfolio, the Government & Agency Portfolio and the Government
TaxAdvantage Portfolio (formerly the Treasury TaxAdvantage Portfolio). The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only
to the Government & Agency Portfolio (the "Portfolio"). The Portfolio consists
of six separate 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 to maximize current income consistent with
the preservation of capital and the maintenance of liquidity.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 as permitted under Rule 2a-7
of the 1940 Act. 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 and Investment Income - 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 recorded on the accrual basis from settlement date.
C. Distributions - It is the policy of the Portfolio to declare dividends from
net investment income daily and pay on the first business day of the
following month.
D. 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.
E. Expenses - Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
NOTE 2 - INVESTMENT 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 at the
annual rate of 0.10% of the average daily net assets of the Portfolio. During
the year ended August 31, 2000, AIM waived fees of $623,378 and reimbursed
expenses of $7,628.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended August 31, 2000, AIM was
paid $150,815 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the year ended, August 31, 2000, AFS was
paid $77,911 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
9
<PAGE>
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class and the Resource Class pay up to the maximum annual rate of 0.50%, 0.75%,
0.10%, 1.00% and 0.20%, respectively, of the average daily net assets
attributable to such class. Of this amount, the Fund may pay a service fee of
(a) 0.25% of the average daily net assets of each of the Private Investment
Class, the 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. Currently, FMC has elected to waive a portion of its compensation
payable by the Fund such that compensation paid pursuant to the Plan with
respect to the Private Investment Class, the Personal Investment Class, the
Cash Management Class, the Reserve Class and the Resource Class equals the
maximum annual rate of 0.30%, 0.50%, 0.08%, 0.80% and 0.16%, respectively, of
the average daily net assets attributable to such class. During the year ended
August 31, 2000, the Private Investment Class, the Personal Investment Class,
the Cash management Class, the Reserve Class and the Resource Class paid
$193,084, $20,071, $118,320, $7,632 and $167,395, respectively, as compensation
under the Plan and FMC waived fees of $212,094.
Certain officers and trustees of the Fund are officers of AIM, FMC, and AFS.
During the year ended August 31, 2000, the Portfolio paid legal fees of $4,153
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 to trustees who are 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.
NOTE 4 - SHARE INFORMATION
Changes in shares outstanding during the years ended August 31, 2000 and 1999
were as follows:
<TABLE>
<CAPTION>
2000 1999
------------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- ------------ -------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 5,049,011,141 $ 5,049,011,141 596,607,970 $ 596,607,970
-------------------------------------------------------------------------------------
Private Investment
Class 223,917,108 223,917,108 101,447,592 101,447,592
-------------------------------------------------------------------------------------
Personal Investment
Class* 30,148,500 30,148,500 -- --
-------------------------------------------------------------------------------------
Cash Management Class 606,494,133 606,494,133 281,678,849 281,678,849
-------------------------------------------------------------------------------------
Reserve Class* 14,985,036 14,985,036 -- --
-------------------------------------------------------------------------------------
Resource Class 743,203,426 743,203,426 167,590,664 167,590,664
-------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 9,186,364 9,186,364 3,376,023 3,376,023
-------------------------------------------------------------------------------------
Private Investment
Class 3,099,686 3,099,686 1,572,109 1,572,109
-------------------------------------------------------------------------------------
Personal Investment
Class* 2,529 2,529 -- --
-------------------------------------------------------------------------------------
Cash Management Class 7,900,071 7,900,071 2,457,651 2,457,651
-------------------------------------------------------------------------------------
Reserve Class* 40,333 40,333 -- --
-------------------------------------------------------------------------------------
Resource Class 1,269,456 1,269,456 383,792 383,792
-------------------------------------------------------------------------------------
Reacquired:
Institutional Class (4,798,667,570) (4,798,667,570) (460,124,050) (460,124,050)
-------------------------------------------------------------------------------------
Private Investment
Class (160,048,603) (160,048,603) (60,491,657) (60,491,657)
-------------------------------------------------------------------------------------
Personal Investment
Class* (15,725,429) (15,725,429) -- --
-------------------------------------------------------------------------------------
Cash Management Class (476,012,674) (476,012,674) (199,023,117) (199,023,117)
-------------------------------------------------------------------------------------
Reserve Class* (12,363,530) (12,363,530) -- --
-------------------------------------------------------------------------------------
Resource Class (522,536,673) (522,536,673) (156,290,714) (156,290,714)
=====================================================================================
703,903,304 $ 703,903,304 279,185,112 $ 279,185,112
_____________________________________________________________________________________
=====================================================================================
</TABLE>
* The Personal Investment Class and Reserve Class commenced sales on January
31, 2000 and January 26, 2000, respectively.
10
<PAGE>
NOTE 5 - FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Private
Investment Class outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
PRIVATE
INVESTMENT CLASS
--------------------
YEAR ENDED
AUGUST 31,
--------------------
2000 1999
-------- -------
<S> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00
---------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.06 0.05
===========================================================================
Less distributions from net investment income (0.06) (0.05)
===========================================================================
Net asset value, end of period $ 1.00 $ 1.00
___________________________________________________________________________
===========================================================================
Total return 5.71% 4.75%
___________________________________________________________________________
===========================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $109,496 $45,528
___________________________________________________________________________
===========================================================================
Ratio of expenses to average net assets:
With fee waivers and reimbursements 0.37%(a) 0.36%
---------------------------------------------------------------------------
Without fee waivers and reimbursements 0.67%(a) 0.70%
___________________________________________________________________________
===========================================================================
Ratio of net investment income to average net assets 5.72%(a) 4.62%
___________________________________________________________________________
===========================================================================
</TABLE>
(a) Ratios are based on average net assets of $64,361,329.
11
<PAGE>
NOTE 6 - CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP was previously the independent public accountants for the Portfolio.
Due to an investment in the Portfolio, which KPMG LLP represented to the Fund
was inadvertent, and new SEC rules regarding auditor independence, KPMG LLP
resigned as of December 28, 2000. The Board of Trustees of the Fund, upon
recommendation of its Audit Committee, accepted the resignation of KPMG LLP and
appointed Tait, Weller & Baker as independent public accountants to audit the
financial statements of the Portfolio. KPMG LLP had served as independent
public accountants for the year ended August 31, 1999. The audit report of KPMG
LLP on the financial statements of the Portfolio for the year ended August 31,
1999 did not contain any adverse opinion or disclaimer of opinion, nor was it
qualified or modified as to uncertainty, audit scope, or accounting principles.
In connection with the audit for the year ended August 31, 1999, and the
subsequent period through December 28, 2000, there were no disagreements with
KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures, which disagreements if
not resolved to their satisfaction would have caused them to make reference in
connection with their opinion to the subject matter of the disagreement.
Neither the Portfolio nor anyone on its behalf consulted with Tait, Weller &
Baker at any time prior to their engagement with respect to the application of
accounting principles to a specified transaction, either completed or proposed
or the type of audit opinion that might be rendered on the Portfolio's
financial statements.
12
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders
Short-Term Investments Trust:
We have audited the accompanying statement of assets and liabilities of
Government & Agency Portfolio (a series portfolio of Short-Term Investments
Trust), including the schedule of investments, as of August 31, 2000, and the
related statement of operations, the statement of changes in net assets, and
the financial highlights for the year then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit. The financial statements and financial
highlights for the period ended August 31, 1999 were audited by other auditors
whose report dated October 6, 1999 expressed an unqualified opinion on such
financial statements and financial highlights.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 2000, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Government & Agency Portfolio as of August 31, 2000, the results of its
operations, the changes in its net assets, and the financial highlights for the
year then ended, in conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
December 29, 2000
Philadelphia, Pennsylvania
13
<PAGE>
PROXY RESULTS (UNAUDITED)
A Special Meeting of Shareholders of Government & Agency Portfolio (the
"Fund"), a portfolio of Short-Term Investments Trust, a Delaware business trust
(the "Trust"), was held on May 3, 2000. The meeting was held for the following
purposes:
(1)* To elect ten Trustees as follows: Charles T. Bauer, Bruce L. Crockett,
Owen Daly II, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert
H. Graham, Prema Mathai-Davis, Lewis F. Pennock and Louis S. Sklar.
(2) To approve a new Master Investment Advisory Agreement with A I M Advisors,
Inc.
(3) To approve changing the fundamental investment restrictions of the Fund.
(4) To approve changing the investment objective of the Fund so that it is non-
fundamental.
(5) To ratify the selection of KPMG LLP as independent accountants of the Fund
for the fiscal year ending in 2000.
The results of the voting on the above matters were as follows:
<TABLE>
<CAPTION>
WITHHELD/
DIRECTORS/MATTER VOTES FOR ABSTENTIONS
---------------- ------------- -----------
<C> <S> <C> <C> <C>
(1)* Charles T. Bauer............. 2,273,936,836 196,328,854
Bruce L. Crockett............ 2,428,834,336 41,431,354
Owen Daly II................. 2,428,834,336 41,431,354
Edward K. Dunn, Jr........... 2,428,834,336 41,431,354
Jack M. Fields............... 2,428,834,336 41,431,354
Carl Frischling.............. 2,411,783,586 58,482,104
Robert H. Graham............. 2,428,834,336 41,431,354
Prema Mathai-Davis........... 2,428,834,336 41,431,354
Lewis F. Pennock............. 2,273,936,836 196,328,854
Louis S. Sklar............... 2,428,834,336 41,431,354
<CAPTION>
VOTES WITHHELD/
DIRECTORS/MATTER VOTES FOR AGAINST ABSTENTIONS
---------------- ------------- ---------- -----------
<C> <S> <C> <C> <C>
(2) Approval of a new Master
Investment Advisory
Agreement.................... 258,397,526 0 87,412,546**
(3) (a) Approval of changing or
adding Fundamental
Restriction on Issuer
Diversification.............. 258,397,526 0 87,412,546**
(3) (b) Approval of changing the
Fundamental Restriction on
Borrowing Money and Issuing
Senior Securities............ 258,397,526 0 87,412,546**
(3) (c) Adjournment of approval of
changing the Fundamental
Restriction on Underwriting
Securities................... 202,741,026 0 143,069,046**
(3) (d) Approval of changing the
Fundamental Restriction on
Industry Concentration....... 258,397,526 0 87,412,546**
(3) (e) Approval of changing the
Fundamental Restriction on
Purchasing or Selling Real
Estate....................... 258,397,526 0 87,412,546**
(3) (f) Approval of changing the
Fundamental Restriction on
Purchasing or Selling
Commodities, Margin
Transactions, Short Sales of
Securities and Investing in
Puts or Calls................ 258,397,526 0 87,412,546**
(3) (g) Approval of changing the
Fundamental Restriction on
Making Loans................. 258,397,526 0 87,412,546**
(3) (h) Approval of a new Fundamental
Investment Restriction on
Investing all of the Fund's
Assets in an Open-End Fund... 258,397,526 0 87,412,546**
(3) (i) Elimination of Fundamental
Restriction on Mortgaging or
Pledging Assets.............. 258,397,526 0 87,412,546**
(3) (j) Elimination of Fundamental
Restriction on Investing in
Obligations not Payable in
United States Currency....... 258,397,526 0 87,412,546**
(4) Changing the Investment
Objective of the Fund so that
it is Non-Fundamental........ 258,397,526 0 87,412,546**
(5) Ratification of the selection
of KPMG LLP as Independent
Accountants of the Fund...... 211,082,067 49,226,175 85,501,830
The Special Meeting of Shareholders of the Trust was reconvened on May 31,
2000. The following matter was then considered:
<CAPTION>
VOTES WITHHELD/
DIRECTORS/MATTER VOTES FOR AGAINST ABSTENTIONS
---------------- ------------- ---------- -----------
<C> <S> <C> <C> <C>
(3) (c) Approval of changing the
Fundamental Restriction on
Underwriting Securities...... 257,749,655 N/A 143,069,046**
</TABLE>
------
* Proposal 1 required approval by a combined vote of all of the portfolios of
Short-Term Investments Trust
** Includes Broker Non-Votes
14
<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
Gary T. Crum Sr. Vice President
Carol F. Relihan Sr. Vice President & Secretary
Dana R. Sutton Vice President & Treasurer Government
Melville B. Cox Vice President & Agency
Karen Dunn Kelley Vice President Portfolio
J. Abbott Sprague Vice President -------------------------------------------------
Mary J. Benson Assistant Vice President & Assistant Treasurer Private ANNUAL
Sheri Morris Assistant Vice President & Assistant Treasurer Investment REPORT
Renee A. Friedli Assistant Secretary Class
P. Michelle Grace Assistant Secretary
Nancy L. Martin Assistant Secretary
Ofelia M. Mayo Assistant Secretary AUGUST 31, 2000
Lisa A. Moss Assistant Secretary
Kathleen J. Pflueger Assistant Secretary
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
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
AUDITORS
Tait, Weller & Baker
8 Penn Center Plaza, Suite 800
Philadelphia, PA 19103
This report may be distributed only to current shareholders or [LOGO APPEARS HERE]
to persons who have received a current prospectus. Fund Management Company
</TABLE>
IGAP-AR-2
