[AIM LOGO APPEARS HERE]
[PHOTO Charles T. Bauer, Chairman of the Board of The Fund APPEARS HERE]
Letter
to Our
Shareholders
Dear Shareholder:
Uncertainty concerning the future course of interest rates was the chief
influence on money markets during the period covered by this report. The Cash
Reserve Portfolio of Tax-Free Investments Co. maintained its competitive
position, producing attractive tax-free money market yields for the six months
ended September 30, 1996.
The federal funds target rate, which serves as a benchmark for other
short-term rates, remained at 5.25% throughout the reporting period. However,
fixed-income markets were volatile amid ongoing speculation about possible
policy changes by the Federal Reserve Board. Economic growth was vigorous
during the entire six-month period, attaining a 4.7% annualized rate during
the second quarter of 1996. This, coupled with reports of labor shortages for
skilled workers, triggered concern about potential wage inflation. Many market
participants anticipated a tightening by the Fed, and this expectation
contributed to rising interest rates.
At the start of the reporting period, high-quality, one-year tax-free
notes were priced to yield 3.10% to 3.25%. By June, that had increased to
3.90% to 4.00% levels. As the six-month reporting period closed, one-year
tax-free yields had settled in the 3.70% to 3.75% range.
YOUR INVESTMENT PORTFOLIO
The Cash Reserve Portfolio continued to practice its strict investment
discipline. The Portfolio seeks to generate as high a level of federally
tax-exempt income as is consistent with preservation of capital and
maintenance of liquidity through investments in high-quality short-term
municipal securities. The Portfolio invests solely in securities rated "First
Tier" as deemed in Rule 2a-7 under the Investment Company Act of 1940.
Because the weighted average maturity of the Portfolio is relatively
short, the Cash Reserve Portfolio can respond quickly to changes in the
interest rate environment. As of the close of the six-month reporting period,
the Portfolio's weighted average maturity was 37 days.
The Portfolio continues to hold an AAAm credit quality rating, the
highest given by Standard & Poor's Corporation, a widely known credit rating
agency. The AAAm rating is historical and is based on an annual analysis of
the Portfolio's credit quality, composition, management, and weekly portfolio
reviews. As with any money market fund, your investment in the Cash Reserve
Portfolio is neither insured nor guaranteed by the U.S. government, the FDIC,
the Federal Reserve Board, or any other agency, and there can be no assurance
that the Portfolio will be able to maintain a stable net asset value of $1.00
per share.
<TABLE>
<CAPTION>
Yields as of 9/30/96
Average Seven-Day
Monthly Yield Yield
<S> <C> <C>
Cash Reserve Portfolio
Institutional Cash
Reserve Shares 3.37% 3.56%
IBC Tax-Free Money Fund
Averages Institutions Only (TM) 3.21% 3.39%
IBC All Tax-Free Money
Fund Averages (TM) 3.00% 3.18%
</TABLE>
As shown in the table, performance of the Portfolio's Institutional Cash
Reserve Shares as of September 30, 1996, compared favorably with performance
reported for comparative indexes.
At the close of the six-month reporting period, net assets of the
Institutional Cash Reserve Shares stood at $920.46 million.
(continued)
<PAGE>
OUTLOOK FOR THE FUTURE
At its September 24, 1996, meeting, the Federal Reserve Board left the federal
funds rate at 5.25%. Some data indicated a slowing in the U.S. economy. For
example, the job market began displaying signs of weakness; the average
monthly gain in employment during the third quarter of 1996 was approximately
half the average monthly gain during the second quarter of the year. Inflation
still seemed well in check; consumer prices rose a barely visible 0.1% during
August. Thus, as the reporting period approached its close, interest rates
remained steady and chances were good that monetary policy would stay
unchanged.
The prospect of a stable interest rate environment means the Cash Reserve
Portfolio can continue to manage its weighted average maturity and portfolio
structure to maximize available yield without sacrificing liquidity or taking
on additional net asset value risk.
We are pleased to send you this report concerning your investment. AIM is
committed to customer service and to the primary goals of safety, liquidity
and yield in institutional fund management. We are ready to respond to your
comments about this report and to any questions you may have. Please contact
one of our representatives at 800-659-1005 if we may be of service.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
Average Monthly Yield Comparison
6 months ended 9/30/96 (Yields are average monthly yields for the month-ends
shown)
<TABLE>
<CAPTION>
Tax-Free Investments Co. IBC Tax-Free
Cash Reserve Portfolio Money Fund Average IBC All Tax-Free
Institutional Cash Reserve Shares(1) Institutions Only(TM)(2) Money Funds Averages(TM)(3)
<S> <C> <C> <C>
4/96 3.32% 3.18% 2.97%
5/96 3.53 3.37 3.16
6/96 3.21 3.08 2.88
7/96 2.94 2.87 2.67
8/96 3.34 3.17 2.98
9/96 3.37 3.21 3.00
<FN>
(1) Yields shown above are net of expenses.
(2) Average yield for all Tax-Free Money Funds Institutions Only category compiled by
IBC Money Market Insight --Registered Trademark--
(3) Average yield for all Tax-Free Money Funds category compiled by IBC Money Market
Insight --Registered Trademark--
</TABLE>
Source: IBC Financial Data, Inc. The monthly yields shown represent past
performance. Future yields will fluctuate.
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ALABAMA - 4.70%
Birmingham (City of); General Obligation Refunding Bond
Series 1995
3.80% 06/01/23(b)(c) A-1+ VMIG-1 $ 5,000 $ 5,000,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
BMC Special Care Facilities Financing Authority; Variable Rate Hospital
Series 1985 RB
3.90% Series D 12/01/30(b)(d) A-1 Aaa 4,000 4,000,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
3.90% Series E 12/01/30(b)(d) A-1 Aaa 4,400 4,400,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Homewood (City of) Educational Building Authority (Samford
University); Adjustable/Fixed Rate Educational Facilities Series 1988
C RB
3.95% 12/01/13(b)(c) - VMIG-1 7,115 7,115,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Hunstville (City of); Health Care Facilities Series A RB
4.00% 06/01/24(b)(d) A-1 VMIG-1 6,400 6,400,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Jefferson (County of); Sewer Series 1995-A Revenue Warrants
3.90% 09/01/25(b)(c) A-1+ VMIG-1 15,000 15,000,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Marshall (County of); Special Obligation School Refunding Series 1994
Warrants
3.90% 02/01/12(b)(c) A-1+ - 2,850 2,850,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
44,765,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
ARIZONA - 2.63%
Arizona (State of) Agricultural Improvement and Power District (Salt
River Project); Promissory Notes
3.45% 10/01/96 A-1+ P-1 1,940 1,940,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
3.70% 01/30/97 A-1+ P-1 4,260 4,260,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
3.65% 01/31/97 A-1+ P-1 9,570 9,570,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Maricopa County High School District No. 210; Series 1995 A GO
5.75% 07/01/97 AA Aa 1,000 1,014,511
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Phoenix (City of); Series 1995 A-2 RB
3.95% 06/01/20(b) A-1+ Aa1 6,800 6,800,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Scottsdale (City of) Municipal Property Corp.; Series 1986 COP
7.875% 11/01/96(d)(e) AAA Aaa 1,400 1,432,642
- ------------------------------------------------------------------------ ----- ------- -------- -----------
25,017,153
- ------------------------------------------------------------------------ ----- ------- -------- -----------
COLORADO-4.27%
Adams (County of) Industrial Development (Clear Creek Business);
Series 1984 RB
3.85% 11/01/08(b)(c) - VMIG-1 8,300 8,300,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Colorado (State of) General Fund; Series 1996 A TRAN
4.50% 06/27/97 SP-1+ - 5,000 5,022,690
- ------------------------------------------------------------------------ ----- ------- -------- -----------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Colorado - (continued)
Colorado Housing Finance Authority (Coventry Village Project);
Multifamily Housing Revenue Series 1996 B RB
3.90% 10/15/16(b)(c) A-1+ - $ 5,370 $ 5,370,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
Colorado Housing Finance Authority (Winridge Project); Adjustable
Reference Multifamily Housing Series 1993 RB
3.90% 02/01/23(b)(c) A-1+ - 12,715 12,715,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
Pitkin (County of) (Centennial-Aspen Project); Multifamily Housing Series
1984 RB
3.80% 04/01/07(b)(c) - VMIG-1 9,250 9,250,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
40,657,690
- -------------------------------------------------------------------------- ---- ------- -------- -----------
CONNECTICUT - 0.62%
Connecticut (State of) Power and Light Development Authority;
Series 1993 A RB
3.90% 09/01/28(b)(c) A-1+ VMIG-1 2,903 2,902,837
- -------------------------------------------------------------------------- ---- ------- -------- -----------
Connecticut (State of)(Transportation Infrastructure Purpose S-1);
Special Tax Obligation RB
3.80% 12/01/10(b)(c) A-1+ VMIG-1 3,000 3,000,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
5,902,837
- -------------------------------------------------------------------------- ---- ------- -------- -----------
DISTRICT OF COLUMBIA - 1.30%
District of Columbia (American Association for the Advancement of
Science); Series 1995 RB
4.00% 10/01/22(b)(c) A-1 VMIG-1 8,600 8,600,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
District of Columbia (The American University Issue); Variable Rate
Weekly Demand Series 1985 RB
3.95% 10/01/15(b)(c) - VMIG-1 3,800 3,800,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
12,400,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
FLORIDA - 7.60%
Brevard (County of) Housing Finance Authority (Palm Place Project);
Multifamily Housing Series 1985 RB
3.85% 12/01/07(b)(c) - VMIG-1 5,360 5,360,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
Dade (County of); Water and Sewer Systems Series 1994 RB
3.80% 10/05/22(b)(d) A-1+ VMIG-1 7,800 7,800,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
Florida Housing Finance Agency (Woodlands Project); Adjustable Rate
Multifamily Housing Series 1985 SS RB
3.80% 12/01/07(b)(c) A-1+ VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
Gulf Breeze (City of)(Florida Municipal Bond Fund); Variable Rate
Demand Series 1995 A RB
3.90% 03/31/21(b)(c) A-1 - 10,000 10,000,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
Indian Trace Community Development District (Basin I Water
Management Special Benefit Bonds); Series 1989 RB
3.80% 11/01/99(b)(d) A-1+ VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------- ---- ------- -------- -----------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Florida - (continued)
Jacksonville (City of) Health Facilities Authority (Baptist Health
Properties Project); Series 1990 RB
4.10% 06/01/20(b)(c) A-1 - $ 3,200 $ 3,200,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Pinellas (County of) Health Facilities Authority (Pooled Hospital Loan
Program); Series 1985
4.00% 12/01/15(b)(c) A-1 VMIG-1 3,300 3,300,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Putnam County Development Authority (Seminole Electric Cooperative,
Inc. Project); National Rural Utilities Cooperative Finance Corp.
Guaranteed Floating/Fixed Rate Pooled Series 1984 H-1 PCR
3.95% 03/15/14(b)(c) A-1+ P-1 4,015 4,015,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Sunshine State Governmental Financing Commission; Series 1986 RB
3.70% 01/31/97(c)(e) - VMIG-1 7,000 7,000,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Sunshine State Governmental Financing Commission (Florida State
Board of Administration); Government Financing Program Tax
Exempt Commercial Notes
3.65% 10/22/96(d) A-1+ - 10,000 10,000,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
3.70% 01/29/97(d) A-1+ - 8,000 8,000,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
University Athletic Association Inc. (University of Florida Stadium
Project); Capital Improvement Adjustable RB
3.95% Series 1990 02/01/20(b)(c) - VMIG-1 7,500 7,500,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
3.95% Series 1994 02/01/20(b)(c) - VMIG-1 2,200 2,200,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
72,375,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
GEORGIA - 4.17%
Burke (County of) Development Authority (Oglethorpe Power Corp.);
Adjustable Tender Series 1994 A PCR
3.80% 01/01/19(b)(d) A-1+ VMIG-1 5,000 5,000,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Cobb (County of); General Obligation Series 1996 TAN
4.00% 12/31/96 SP-1+ MIG-1 10,000 10,008,643
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Decatur County Bainbridge Industrial Development Authority (Kaiser
Agriculture Chemical Inc. Project); Series 1985 IDR
3.85% 12/01/02(b)(c) A-1+ - 2,100 2,100,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Dekalb (County of) Housing Authority (Clairmont Crest Project);
Multifamily Housing Series 1995 RB
3.85% 06/15/25(b)(c) A-1+ - 7,600 7,600,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Dekalb (County of) Housing Authority (Post Ashford Project);
Multifamily Housing Series 1995 RB
3.85% 06/01/25(b)(c) A-1+ - 6,895 6,895,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Dekalb (County of) Private Hospital Authority (Egleston Children's
Health Care System Project); Variable Rate Demand Series
1995 A RAN
3.80% 12/01/17(b)(c) A-1+ VMIG-1 3,500 3,500,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Georgia - (continued)
Development Authority of Dekalb County (Radiation Sterilizers, Inc.
Project); Variable Rate Demand Series 1985 IDR
3.65% 03/01/05(b)(c) A-1 - $ 4,600 $ 4,600,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
39,703,643
- ------------------------------------------------------------------------ ----- ------- -------- -----------
ILLINOIS - 13.39%
Burbank (City of) (Service Merchandise Co. Inc. Project); Floating Rate
Monthly Demand Industrial Building Series 1984 RB
3.60% 09/15/24(b)(c) A-1+ - 3,600 3,600,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Chicago (City of); Tender Notes Series 1996 GO
3.10% 02/04/97(c)(e) SP-1+ MIG-1 28,300 28,284,758
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Chicago School Reform Board of Trustees (Chicago School Reform
Board of Trustees Equipment Acquisition Project); Series
1995 COP
3.70% 12/01/96(c) AA- - 4,000 4,000,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Cook (County of)(Catholic Charities Housing Development Corp.
Project); Adjustable Demand Series 1988 A-1 RB
3.85% 01/01/28(b)(c) - VMIG-1 1,700 1,700,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Cook (County of) Township High School District No. 211 (Palatine and
Schaumburg, Illinois); Limited School Tax Series 1995 GO
4.25% 12/01/96 AA Aa1 6,140 6,149,554
- ------------------------------------------------------------------------ ----- ------- -------- -----------
East Peoria (City of) (Radnor/East Peoria Partnership Project);
Multifamily Housing Series 1983 RB
4.05% 06/01/08(b)(c) - Aa3 6,070 6,070,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Illinois (State of); Series 1981 GO
11.00% 11/01/96(e)(g) AAA Aaa 2,000 2,032,751
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Illinois (State of); Sales Tax Series E RB
8.10% 06/15/97(e)(g) AAA Aaa 1,435 1,504,413
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Illinois Development Finance Authority; Variable Rate Demand Notes
Series 1996-1997A
3.85% 06/30/97(b)(c) A-1+ - 6,600 6,600,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Illinois Development Finance Authority (American College of Surgeons
Project); Tax Exempt Series 1996 RB
3.90% 08/01/26(b)(c) A-1+ - 6,000 6,000,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Illinois Development Finance Authority (Chicago Symphony Orchestra
Project); Variable/Fixed Rate Demand Series 1996 RB
3.90% 06/01/31(b)(c) A-1+ VMIG-1 2,040 2,039,626
- ------------------------------------------------------------------------ ----- ------- -------- -----------
Illinois Development Finance Authority (Commonwealth Edison Co.); PCR
3.95% Series A 12/01/06(b)(d) A-1 VMIG-1 5,000 5,000,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
3.95% Series 1996 B 12/01/06(b)(d) A-1 P-1 15,000 15,000,000
- ------------------------------------------------------------------------ ----- ------- -------- -----------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Illinois - (continued)
Illinois Development Finance Authority (Institutional Gas Technology
Project); Variable Rate Series 1993 RB
3.85% 09/01/18(b)(c) A-1+ - $ 2,600 $ 2,600,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Illinois Educational Facilities Authority (DePaul University);
Series 1992 RB
3.85% 04/01/26(b)(c) A-1+ VMIG-1 11,000 11,000,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Illinois Educational Facilities Authority (Pooled Financing Program);
Adjustable Rate Series 1985 RB
3.90% 12/01/05(b)(d) A-1+ VMIG-1 4,120 4,120,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Illinois Health Facilities Authority (Streetville Corp.); Variable Rate
Series 1994 RB
3.85% 08/15/24(b)(c) A-1+ P-1 3,000 3,000,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Marseilles (City of) (Kaiser Agricultural Chemicals Inc. Project);
Variable Rate Demand Series 1985 IDR
3.85% 01/01/98(b)(c) A-1+ - 3,750 3,750,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Oak Forest (City of) (Homewood Pool); Series 1989 RB
3.90% 07/01/24(b)(c) - VMIG-1 3,000 3,000,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Village of Lisle (Four Lakes Project); Multi-Family Housing
Series 1985 A RB
3.90% 04/01/19(b)(c) A-1 - 1,390 1,390,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Village of Northbrook (Euromarket Designs, Inc. Project); Variable Rate
Demand Refunding Series 1993 IDR
3.85% 07/01/02(b)(c) A-1+ - 3,200 3,200,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Winnebage and Boone (Counties of) School District No. 206; Tax
Anticipation Warrants Series 1996 GO
4.35% 10/30/96(d) SP-1 MIG-1 7,500 7,507,006
- ------------------------------------------------------------------------ ----- ------- -------- ------------
127,548,108
- ------------------------------------------------------------------------ ----- ------- -------- ------------
INDIANA - 2.58%
Auburn (City of) (Sealed Power Corp. Project); Variable Rate Demand
Economic Development Series 1985 RB
3.70% 07/01/10(b)(c) - VMIG-1 1,200 1,200,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Indiana (State of) (Advance Funding Project); Series 1996 A-2 RAN
4.25% 01/09/97 SP-1+ MIG-1 14,000 14,027,796
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Indianapolis (City of) (Childrens Museum Project); Economic
Development Floating Rate Series 1995 RB
3.80% 10/01/25(b)(c) A-1+ - 5,000 5,000,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
Indianapolis (City of) (Jewish Community Campus Project); Variable
Rate Economic Development RB
3.85% 04/01/05(b)(c) - VMIG-1 2,395 2,395,000
- ------------------------------------------------------------------------ ----- ------- -------- ------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Indiana - (continued)
Petersburg (City of) (Indianapolis Power and Light Co. Project);
Adjustable Rate Tender Securities Series 1995 B PCR
3.80% 01/01/23(b)(d) A-1+ VMIG-1 $ 2,000 $ 2,000,000
- -------------------------------------------------------------------------- ----- ------- ------- -----------
24,622,796
- -------------------------------------------------------------------------- ----- ------- ------- -----------
IOWA - 0.29%
Iowa (State of) School Corporations (Corporations of Iowa School Cash
Anticipation Program); Warrant Certificates
Series 1995-1996 B TRAN
4.25% 01/30/97(d) SP-1+ MIG-1 2,800 2,805,801
- -------------------------------------------------------------------------- ----- ------- ------- -----------
KANSAS - 0.13%
Kansas State Development Finance Authority (Water Pollution Control -
SRF); Series 1993 I RB
4.30% 11/01/96 - Aa1 1,250 1,250,614
- -------------------------------------------------------------------------- ----- ------- ------- -----------
KENTUCKY - 1.39%
Mason County (East Kentucky Power Cooperative, Inc. Project); National
Rural Utilities Cooperative Finance Corp. Guaranteed Floating/Fixed
Rate Pooled Series 1984 B-2 PCR
3.95% 10/15/14(b)(c) A-1+ Aa3 9,150 9,150,000
- -------------------------------------------------------------------------- ----- ------- ------- -----------
Mayfield (City of) (Kentucky League of Cities Funding Trust Pooled
Lease Financing Program); Variable Rate Multi-City Lease
Series 1996 RB
4.10% 07/01/26(b)(c) A-1 VMIG-1 4,100 4,100,000
- -------------------------------------------------------------------------- ----- ------- ------- -----------
13,250,000
- -------------------------------------------------------------------------- ----- ------- ------- -----------
LOUISIANA - 2.94%
East Baton Rouge Mortgage Finance Authority (GNMA and FNMA
Mortgage-Backed Securities Program); Single Family Mortgage
Refunding Series 1996 C-1 RB
3.85% 04/03/97(e)(g) - VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------- ----- ------- ------- -----------
Louisiana Offshore Terminal Authority (LOOP Inc. Project); Deepwater
Port Refunding Series 1992 A RB
3.70% 09/01/08(b)(c) A-1+ VMIG-1 19,000 19,000,000
- -------------------------------------------------------------------------- ----- ------- ------- -----------
Louisiana Public Facilities Authority (Greenbriar Hospital Inc. Project);
Variable Rate Demand Series 1984 RB
3.85% 11/01/14(b)(c) - Aa2 2,000 2,000,000
- -------------------------------------------------------------------------- ----- ------- ------- -----------
Louisiana Public Facilities Authority (Willis-Knighton Medical Center
Project); Hospital Series 1995 RB
3.80% 09/01/25(b)(d) A-1 VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------- ----- ------- ------- -----------
28,000,000
- -------------------------------------------------------------------------- ----- ------- ------- -----------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MARYLAND - 0.58%
Prince George (County of) Housing Authority (Laurel-Oxford Associates
Apartment Project); Mortgage Series 1985 RB
3.925% 10/01/07(b)(c) - VMIG-1 $3,500 $ 3,500,000
- ------------------------------------------------------------------------ ----- ------- ------- -----------
Washington Suburban Sanitation District; General Construction Bonds
Unlimited Series 1986 GO
7.25% 01/01/97(e)(g) AAA Aaa 2,000 2,056,393
- ------------------------------------------------------------------------ ----- ------- ------- -----------
5,556,393
- ------------------------------------------------------------------------ ----- ------- ------- -----------
MICHIGAN - 5.58%
Jackson County Economic Development Corp. (Sealed Power Corp.);
Economic Development Variable Refunding RB
3.70% 10/01/19(b)(c) - VMIG-1 1,000 1,000,000
- ------------------------------------------------------------------------ ----- ------- ------- -----------
Michigan (State of); Series 1995 GO
6.50% 12/01/96 AA Aa 5,555 5,580,653
- ------------------------------------------------------------------------ ----- ------- ------- -----------
Michigan State Hospital Finance Authority
(Hospital Equipment Loan Program); Hospital RB
3.90% Pooled Series 1994 A 12/01/23(b)(c) - VMIG-1 6,600 6,600,000
- ------------------------------------------------------------------------ ----- ------- ------- -----------
3.90% Pooled Series 1995 A 12/01/23(b)(c) - VMIG-1 3,400 3,400,000
- ------------------------------------------------------------------------ ----- ------- ------- -----------
3.90% Pooled Series 1996 A 12/01/23(b)(c) - VMIG-1 5,000 5,000,000
- ------------------------------------------------------------------------ ----- ------- ------- -----------
Michigan State Strategic Fund (Detroit Edison Co.);
Limited Obligation RB
3.80% 09/01/30(b)(c) A-1+ P-1 8,500 8,500,000
- ------------------------------------------------------------------------ ----- ------- ------- -----------
Michigan State Strategic (Peachwood Center Association Project);
Limited Obligation Series 1995 RB
3.80% 06/01/16(b)(c) A-1+ - 2,350 2,350,000
- ------------------------------------------------------------------------ ----- ------- ------- -----------
Michigan State Underground Storage Tank Financial Assurance
Authority; Series I RB
5.00% 05/01/97(d) AAA Aaa 6,500 6,542,039
- ------------------------------------------------------------------------ ----- ------- ------- -----------
Michigan Strategic Fund (Consumer's Power Corp.); Variable Rate
Demand Series 1988 A PCR
3.95% 04/15/18(b)(c) - P-1 1,090 1,089,740
- ------------------------------------------------------------------------ ----- ------- ------- -----------
Michigan Strategic Fund (260 Brown St. Associates Project); Convertible
Variable Rate Demand Limited Obligation
Series 1985 RB
3.50% 10/01/15(b)(c) - VMIG-1 3,650 3,650,000
- ------------------------------------------------------------------------ ----- ------- ------- -----------
Michigan Strategic Fund (The Norcor Corp. Project); IDR
3.80% 12/01/00(b)(c) - P-1 4,400 4,400,000
- ------------------------------------------------------------------------ ----- ------- ------- -----------
Wayne County School District; State School Aid
1995 Limited Tax Series 1996 GO
4.50% 05/01/97 SP-1+ - 5,000 5,015,472
- ------------------------------------------------------------------------ ----- ------- ------- -----------
53,127,904
- ------------------------------------------------------------------------ ----- ------- ------- -----------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MINNESOTA - 1.27%
Bloomington (City of) Port Authority (Mall of America Project); Special
Tax Revenue Series 1996 B RB
3.90% 02/01/13(b)(d) A-1+ VMIG-1 $2,000 $ 2,000,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
Mankato (City of) (Northern States Power Co. Project); Floating
Collateralized Series 1985 PCR
3.95% 03/01/11(b)(d) AA- A1 2,900 2,900,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
Minneapolis (City of) Community Development Agency (Walker Methodist
Health Systems); Adjustable Refunding Series 1995 RB
3.85% 04/01/10(b)(c) A-1 - 6,000 6,000,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
Red Wing (City of) Industrial Development Authority (Northern States
Power Co.); Floating Rate Collateralized Series 1985 PCR
3.95% 03/01/11(b)(d) AA- A1 1,200 1,200,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
12,100,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
MISSOURI - 1.68%
Missouri Health & Educational Facilities Authority (Christian Health
Services Development Corp. Equipment and Capital Loan Program);
Floating Rate Weekly Demand Series 1989 RB
3.70% Series A 11/01/19(b)(c) A-1+ - 2,600 2,600,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
3.70% Series B 11/01/19(b)(c) A-1+ - 3,750 3,750,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
Missouri State Environmental Improvement & Energy Resource Authority
(Associated Electric Cooperative, Inc. Project); Pooled
Series 1993-M RB
3.95% 12/15/03(b)(c) AA- VMIG-1 2,770 2,770,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
Saint Louis County Industrial Development Authority (Bonhomme Village
Apartments Association Project); Variable Rate Demand Housing
Series 1985 RB
3.80% 10/01/07(b)(c) - VMIG-1 6,900 6,900,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
16,020,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
NEBRASKA - 0.11%
Omaha Public Power District; Nebraska Electric Series 1993 D RB
3.90% 02/01/97 AA Aa 1,000 1,002,319
- ------------------------------------------------------------------------ ---- ------- ------- -----------
NEVADA - 0.21%
Clark (County of) (Nevada Power Co. Project);
Series 1995 D-1 PCR
3.90% 10/01/11(b)(c) A-1+ - 2,000 2,000,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
NEW HAMPSHIRE - 2.13%
Business Finance Authority for the State of New Hampshire (Connecticut
Power & Light); Series 1993 A PCR
3.90% 12/01/22(b)(c) - VMIG-1 $ 1,600 $ 1,600,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
New Hampshire Higher Educational and Health Facilities Authority (VHA
of New England Capital Asset Financial Program); Variable Rate
Hospital Series 1985 RB
3.85% Series B 12/01/25(b)(d) A-1 Aaa 4,200 4,200,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
3.85% Series G 12/01/25(b)(d) A-1 Aaa 14,125 14,125,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
New Hampshire Industrial Development Authority (Bangor Hydro-
Electric Co. Project); Variable Rate Demand Series 1983 PCR
3.60% 01/01/09(b)(c) A-1+ - 400 400,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
20,325,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
NEW MEXICO - 0.37%
Albuquerque (City of); Gross Receipts Lodgers Tax Series 1991 A RB
3.90% 07/01/22(b)(c) - VMIG-1 3,500 3,500,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
NEW YORK - 15.13%
Eagle Tax Exempt Trust; Class A COP(f)
4.00% Series 1993 E 08/01/06(b)(d) A-1+c - 15,000 15,000,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
4.00% Series 1993 F 08/01/06(b)(d) A-1+c - 20,500 20,500,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
4.00% Series 943802 05/01/07(b)(d) A-1+c - 17,800 17,800,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
4.00% Series 943901 06/15/07(b)(d) A-1+c - 14,500 14,500,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
4.00% Series 94C2102 06/01/14(b)(d) A-1+c - 11,300 11,300,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
3.95% Series 1994 C-1 06/15/18(b)(g) A-1+c - 18,000 18,000,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
4.00% Series 950901 06/01/21(b)(d) A-1+ - 12,700 12,700,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
3.95% Series 943207 07/01/29(b)(d) A-1+c - 14,200 14,200,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
Merrill Lynch Group Float Program, New York State Medical Facilities
Finance Agency (St. Lukes-Roosevelt Hospital Center); Floating
Option Tax-Exempt Receipts Series PA-113 1993 A Mortgage RB
3.85% 02/15/29(b)(d) A-1+c - 9,700 9,700,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
New York (City of); General Obligation Fiscal Series 1997 A TAN
4.50% 02/12/97 SP-1+ MIG-1 5,000 5,015,162
- ----------------------------------------------------------------------- ----- ------- -------- ------------
New York State Energy Research and Development Authority (Niagara
Mohawk Power Corp.); Series 1985 C RB
3.95% 12/01/25(b)(c) - P-1 5,500 5,500,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
144,215,162
- ----------------------------------------------------------------------- ----- ------- -------- ------------
NORTH CAROLINA - 3.75%
Alamance Industrial Facilities & Pollution Control Financing Authority
(Science Manufacturing Inc. Project); Series 1985 IDR
4.00% 04/01/15(b)(c) - P-1 4,400 4,400,000
- ----------------------------------------------------------------------- ----- ------- -------- ------------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
North Carolina - (continued)
Charlotte (City of); Airport Refunding Variable Rate Series 1993 A RB
3.80% 07/01/16(b)(d) A-1+ VMIG-1 7,550 7,550,000
- ----------------------------------------------------------------------- ---- ------- -------- -----------
New Hanover (County of) Industrial Facilities and Pollution Control
Financing Authority (Gang-Nail Systems, Inc. Project);
Series 1984 RB
3.85% 12/01/99(b)(c) - P-1 $ 5,600 $ 5,600,000
- ----------------------------------------------------------------------- ---- ------- -------- -----------
North Carolina Eastern Municipal Power Systems; Series A RB
7.50% 01/01/97(e)(g) - AAA 5,000 5,151,666
- ----------------------------------------------------------------------- ---- ------- -------- -----------
North Carolina Municipal Power Agency Number 1 (Catawba Project)
3.65% 10/31/96(c) A-1+ P-1 3,000 3,000,000
- ----------------------------------------------------------------------- ---- ------- -------- -----------
3.65% 11/27/96(c) A-1+ P-1 10,000 10,000,000
- ----------------------------------------------------------------------- ---- ------- -------- -----------
35,701,666
- ----------------------------------------------------------------------- ---- ------- -------- -----------
OHIO - 1.85%
Cleveland (City of) Ohio School District; Series 1991 GO
7.70% 12/01/96(g) - AAA 1,500 1,509,896
- ----------------------------------------------------------------------- ---- ------- -------- -----------
Cuyahoga (County of) (S&R Playhouse Realty Co.); Adjustable Rate
Demand Series 1984 IDR
3.65% 12/01/09(b)(c) - MIG-1 655 655,000
- ----------------------------------------------------------------------- ---- ------- -------- -----------
Franklin (County of) (Bricker & Eckler Building Co. Project); Variable
Rate Demand Series 1984 IDR
4.05% 11/01/14(b)(c) - P-1 8,900 8,900,000
- ----------------------------------------------------------------------- ---- ------- -------- -----------
Marion (County of) (Pooled Lease Program); Hospital RB
3.95% 10/01/22(b)(c) A-1+ - 2,560 2,560,000
- ----------------------------------------------------------------------- ---- ------- -------- -----------
Ohio Housing Finance Agency (Kenwood Congregate Retirement
Community Project); Variable Rate Demand Multifamily Housing
Series 1985 RB
3.50% 12/01/15(b)(c) - VMIG-1 980 980,000
- ----------------------------------------------------------------------- ---- ------- -------- -----------
Summit (County of) Various Purpose Notes; Series 1996 B General
Obligation BAN
4.00% 06/05/97 - MIG-1 3,000 3,006,841
- ----------------------------------------------------------------------- ---- ------- -------- -----------
17,611,737
- ----------------------------------------------------------------------- ---- ------- -------- -----------
OKLAHOMA - 1.05%
Oklahoma Water Resource Board State Loan Program;
Series 1994 A RB
3.75% 03/03/97(e) A-1+ - 10,000 10,000,000
- ----------------------------------------------------------------------- ---- ------- -------- -----------
OREGON - 1.05%
Oregon (State of); Veteran Welfare Variable Rate Demand
Series 73 F GO
3.80% 12/01/17(b)(c) A-1+ VMIG-1 4,100 4,100,000
- ----------------------------------------------------------------------- ---- ------- -------- -----------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Oregon - (continued)
Portland (City of) (South Park Block Project); Multifamily Housing
Refunding Series 1988 A RB
3.85% 12/01/11(b)(c) A-1+ - $ 5,900 $ 5,900,000
10,000,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
PENNSYLVANIA - 2.66%
Delaware County Industrial Development Authority (Henderson-Radnor
Joint Venture Project); Limited Obligation Series 1985 RB
3.875% 04/01/15(b)(c) - Aa3 900 900,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
Lehigh (County of) General Purpose Authority (Hospital Cent Services
Capital Asset Finance Program); Variable Rate Demand Series A RB
3.80% 01/13/97(d)(e) A-1 Aaa 5,000 5,000,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
Northeastern Pennsylvania Hospital Authority (Hospital Central Services
Capital Asset Program); Variable Rate Demand
Series B RB
3.60% 10/23/96(d)(e) A-1 Aaa 3,000 3,000,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
Quakertown Hospital Authority (HPF Group); Variable Rate Series
1985 A RB
3.80% 07/01/05(b)(c) - VMIG-1 1,800 1,800,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
Schuykill County Industrial Development Authority (Gilberton Power
Project); Variable Rate Resources Recovery Series 1985 RB
3.95% 12/01/02(b)(c) A-1 - 2,300 2,300,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
Wilkes-Barre (City of) Industrial Development Authority (Toys "R"
Us/Penn Inc. Project); Economic Development Series 1984 RB
3.75% 07/01/14(b)(c) - A1 2,300 2,300,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
York (City of) General Authority; Adjustable Rate Pooled Financing
Series 1996 RB
3.85% 09/01/26(b)(c) A-1 - 10,000 10,000,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
25,300,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
SOUTH CAROLINA - 0.26%
Horry (County of) (Carolina Treatment Center); Variable Rate Demand
Series 1984 RB
3.85% 12/01/14(b)(c) - Aa2 2,500 2,500,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
TENNESSEE - 5.86%
Health, Educational and Housing Facility Board of Shelby County (Rhodes
College); Variable Rate Demand Educational Facilities Series 1985 RB
3.60% 08/01/10(b)(c) A-1+ - 2,075 2,075,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
Industrial Development Board of the City of Knoxville (Toys "R" Us Inc.,
Project); Series 1984 IDR
4.05% 05/01/14(b)(c) - A1 1,150 1,150,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
Knox (County of) Industrial Development Authority (Centre Square II,
Ltd. Project); Floating Rate Monthly Demand Series 1984 IDR
3.50% 12/01/14(b)(c) A-1+ - 5,400 5,400,000
- --------------------------------------------------------------------------- ---- ------- -------- -----------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Tennessee - (continued)
Knox (County of) Industrial Development Authority (Old Kingston
Properties); Floating Rate Industrial Series 1984 RB
3.50% 12/01/14(b)(c) A-1+ - $ 3,500 $ 3,500,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
Knox (County of) Industrial Development Authority (Professional Plaza,
Ltd. Project); Floating Rate Monthly Demand Series 1984 IDR
3.50% 12/01/14(b)(c) A-1+ - 2,900 2,900,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
Knox County Industrial Development Board (Weisgarber Partners);
Floating Rate Series 1984 IDR
3.50% 12/01/14(b)(c) A-1+ - 700 700,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
Nashville and Davidson (County of) Industrial Development Board of
Metro Government (Amberwood Ltd Project);
Multifamily Housing RB
4.15% Series 1993 A 07/01/13(b)(c) - VMIG-1 2,345 2,345,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
4.15% Series 1993 B 07/01/13(b)(c) A-1 VMIG-1 1,990 1,990,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
Nashville Metro Airport Authority; Adjustable Rate Series 1993 RB
3.85% 07/01/19(b)(d) A-1+ VMIG-1 4,700 4,700,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
Tennessee State School Bond Authority; Higher Educational Facilities BAN
3.85% Series 1994 C 03/01/98(b)(d) A-1+ VMIG-1 5,535 5,535,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
3.85% Series 1995 C 03/01/98(b)(d) A-1+ VMIG-1 11,000 11,000,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
3.85% Series 1996 A 03/01/98(b) A-1+ VMIG-1 14,500 14,500,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
55,795,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
TEXAS - 9.58%
Angelina & Neches River Authority Industrial Development Corp. (Temple
Inland Marine); Series 1984 B RB
3.90% 05/01/14(b)(c) - P-1 4,200 4,200,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
Austin (City of) Texas Utility System; Refunding Combination
Series 1992 A RB
5.00% 11/15/96(d) AAA Aaa 1,975 1,978,541
- ------------------------------------------------------------------------- ---- ------- -------- -----------
Brazos River Harbor Navigation District of Brazoria County (Hoffman-La
Roche Inc. Project); Series 1985 RB
3.75% 04/01/02(b)(c) - A1 2,750 2,750,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
Brownsville (City of) Utility System; Series A Commercial Paper Notes
3.75% 02/10/97(c) A-1+ P-1 1,000 1,000,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
Harris County Health Facilities Development Corp. (Greater Houston
Pooled Health); Series 1985 A RB
3.85% 11/01/25(b)(c) A-1 - 3,000 3,000,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
Harris County Health Facilities Development Corp. (Gulf Coast Regional
Blood Center Project); Series 1992 RB
3.85% 04/01/17(b)(c) A-1 - 3,550 3,550,000
- ------------------------------------------------------------------------- ---- ------- -------- -----------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Texas - (continued)
Houston (City of) Texas Water and Sewer System; Series A Commercial
Paper Notes
3.65% 10/10/96 A-1 P-1 $ 5,000 $ 5,000,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Houston (City of) Texas Water and Sewer System Revenue Exchange
Prior Lien; Series A RB
7.00% 12/01/96(d)(e) AAA Aaa 1,265 1,297,898
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Lower Colorado River Authority; Third Supplemental Junior Lien
Refunding Series 1996 RB
3.80% 01/01/13(b)(d) A-1+ VMIG-1 5,000 5,000,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Nueces County Health Facilities Development Corp. (Driscoll Childrens
Hospital); Floating Rate Demand Hospital Series 1985 RB
3.95% 07/01/15(b)(c) - VMIG-1 2,570 2,570,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Plano (City of) Independent School District; GO
5.50% 02/15/97(c) AAA Aaa 1,450 1,459,521
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Red River Authority of Texas (Southwestern Public Service Co. Project)
Adjustable Rate Tender Securities; Refunding PCR
3.85% Series 1991 07/01/11(b)(d) A-1+ VMIG-1 13,300 13,300,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
3.80% Series 1996 07/01/16(b)(d) A-1+ VMIG-1 5,000 5,000,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
San Antonio (City of) Electric & Gas; Refunding Series 1991 A RB
6.00% 02/01/97(d) AAA Aaa 1,000 1,007,597
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Tarrant (County of) Texas Housing Finance Corp. (Windcastle Project);
Multifamily Housing RB
3.95% 08/01/26(b)(c) A-1+ - 2,100 2,100,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Texas (State of); Series 1996 TRAN
4.75% 08/29/97 SP-1+ MIG-1 24,000 24,167,077
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Texas (University of) Board of Regents Revenue Financing System;
Series A Commercial Paper
3.60% 10/29/96 A-1+ P-1 7,516 7,516,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Texas Department of Housing and Community Affairs; SFM Tax Exempt
Refunding Series B Commercial Paper Notes
3.75% 10/01/96(d) A-1+ - 4,315 4,315,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
Trinity River Industrial Development Authority (Radiation Sterilizers,
Inc. Project); Variable Rate Demand IDR
3.65% Series 1985 A 11/01/05(b)(c) A-1 - 500 500,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
3.65% Series 1985 B 11/01/05(b)(c) A-1 - 1,650 1,650,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
91,361,634
- ----------------------------------------------------------------------- ----- ------- -------- -----------
UTAH - 1.42%
Bountiful (City of) (Bountiful Gateway Park Project); Adjustable Rate
Refunding Series 1987 IDR
3.85% 12/01/97(b)(c) A-1+ - 3,835 3,835,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
State Board of Regents of the State of Utah (University Inn Project);
Variable Rate Demand Series 1985 IDR
4.10% 12/01/15(b)(c) - P-1 8,800 8,800,000
- ----------------------------------------------------------------------- ----- ------- -------- -----------
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
- ------------------------------------------------------------------------ ---- ------- ------- -----------
<S> <C> <C> <C> <C>
Utah - (continued)
Utah State Housing Finance Agency; Single Family Mortgage Variable
Rate Issue 1993 D RB
4.00% 07/01/16(b) - VMIG-1 $ 900 $ 900,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
13,535,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
VERMONT - 0.22%
Vermont (State of); Series 1993 B GO
6.60% 10/15/96 AA- Aa 2,100 2,102,322
- ------------------------------------------------------------------------ ---- ------- ------- -----------
VIRGINIA - 2.07%
Fairfax County Redevelopment and Housing Authority (Chase
Commons Project); Variable Rate Demand Series 1984 A RB
3.925% 12/01/06(b)(c) - VMIG-1 3,330 3,330,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
Henrico (County of) Virginia Industrial Development Authority
(Hermitage Project); Variable Rate Health Facilities Bonds
Series 1994
4.10% 05/01/24(b)(c) - VMIG-1 11,369 11,369,109
- ------------------------------------------------------------------------ ---- ------- ------- -----------
Richmond Redevelopment & Housing Authority (1995 Old Manchester
Project); Variable Rate Demand Series 1995 A RB
3.85% 12/01/25(b)(c) A-1+ - 5,000 5,000,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
19,699,109
- ------------------------------------------------------------------------ ---- ------- ------- -----------
WASHINGTON - 0.32%
Snohomish (County of) Washington Public Utilities (District No. 001);
Electric Revenue Generation System Series 1986 A
7.875% 01/01/97(e)(g) - AAA 1,000 1,029,893
- ------------------------------------------------------------------------ ---- ------- ------- -----------
Washington Suburban Sanitation District; General Construction RB
7.375% 01/01/97(e)(g) AAA AAA 1,000 1,030,103
- ------------------------------------------------------------------------ ---- ------- ------- -----------
Washington Suburban Sanitation District; Water Supply Refunding
Series 1986 GO
5.90% 11/01/96 AA Aa1 1,000 1,001,807
- ------------------------------------------------------------------------ ---- ------- ------- -----------
3,061,803
- ------------------------------------------------------------------------ ---- ------- ------- -----------
WEST VIRGINIA - 0.29%
West Virginia Hospital Finance Authority (VHA Mid-Atlantic States, Inc.
Capital Asset Financing Program); Series 1985 C RB
3.90% 12/01/25(b)(d) A-1 Aaa 2,800 2,800,000
- ------------------------------------------------------------------------ ---- ------- ------- -----------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
- -------------------------------------- ----- ------- ------- ---------------
<S> <C> <C> <C> <C>
WISCONSIN - 0.74%
Wisconsin (State of); GO
4.50% 06/16/97 SP-1+ MIG-1 $6,000 $ 6,026,367
- -------------------------------------- ----- ------- ------- ---------------
Wisconsin (State of); Series C GO
7.00% 05/01/97(e)(g) AAA AAA 1,000 1,027,839
- -------------------------------------- ----- ------- ------- ---------------
7,054,206
- -------------------------------------- ----- ------- ------- ---------------
TOTAL INVESTMENTS - 104.19% 992,667,897(h)
- -------------------------------------- ----- ------- ------- ---------------
OTHER ASSETS AND LIABILITIES - (4.19%) (39,900,043)
- -------------------------------------- ----- ------- ------- ---------------
NET ASSETS - 100.00% $ 952,767,854
- -------------------------------------- ----- ------- ------- ---------------
</TABLE>
INVESTMENT ABBREVIATIONS:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
BAN Bond Anticipation Notes RAN Revenue Anticipation Notes
COP Certificates of Participation RB Revenue Bonds
GO General Obligation Bonds TAN Tax Anticipation Notes
IDR Industrial Development Revenue Bonds TRAN Tax and Revenue Anticipation Notes
PCR Pollution Control Revenue Bonds
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Ratings assigned by Moody's Investors Service, Inc. ("Moody's") and
Standard & Poor's Corporation ("S&P").
(b) Demand security; payable upon demand by the Fund at specified
intervals no greater than thirteen months. Interest rates are
redetermined periodically. Rates shown are the rates in effect
on September 30, 1996.
(c) Security is secured by a letter of credit.
(d) Security is secured by bond insurance.
(e) Security has an outstanding call or mandatory put by the issuer. Par
value and maturity date reflect such call or put.
(f) The Fund may invest in synthetic municipal instruments the value of
and return on which are derived from underlying securities. The
types of synthetic municipal instruments in which the Fund may
invest include variable rate instruments. These instruments involve
the deposit into a trust of one or more long-term tax-exempt bonds
or notes ("Underlying Bonds"), and the sale of certificates
evidencing interests in the trust to investors such as the Fund.
The trustee receives the long-term fixed rate interest payments on
the Underlying Bonds, and pays certificate holders short-term
floating or variable interest rates which are reset periodically.
A "variable rate trust certificate" evidences an interest in
a trust entitling the certificate holder to receive variable rate
interest based on prevailing short-term interest rates and also
typically providing the certificate holder with the conditional right
to put its certificate at par value plus accrued interest. Because
synthetic municipal instruments involve a trust and a third party
conditional put feature, they involve complexities and potential
risks that may not be present where a municipal security is
owned directly.
(g) Security is secured by an escrow fund.
(h) Cost for federal income tax purposes is $992,642,239.
See Notes to Financial Statements.
17
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996
(Unaudited)
<S> <C>
ASSETS:
Investments, at value (amortized cost) $ 992,667,897
- --------------------------------------------------------- --------------
Cash 490,350
- --------------------------------------------------------- --------------
Receivables for:
- --------------------------------------------------------- --------------
Investments sold 8,315,194
- --------------------------------------------------------- --------------
Interest 6,592,138
- --------------------------------------------------------- --------------
Investment for deferred compensation plan 20,746
- --------------------------------------------------------- --------------
Other assets 94,371
Total assets 1,008,180,696
- --------------------------------------------------------- --------------
LIABILITIES:
Payables for:
Investments purchased 52,487,610
- --------------------------------------------------------- --------------
Dividends 2,737,607
- --------------------------------------------------------- --------------
Deferred compensation 20,746
- --------------------------------------------------------- --------------
Accrued advisory fees 139,996
- --------------------------------------------------------- --------------
Accrued directors' fees 2,786
- --------------------------------------------------------- --------------
Accrued accounting service fees 5,895
- --------------------------------------------------------- --------------
Accrued transfer agent fees 8,079
- --------------------------------------------------------- --------------
Accrued distribution fees 6,838
- --------------------------------------------------------- --------------
Accrued operating expenses 3,285
- --------------------------------------------------------- --------------
Total liabilities 55,412,842
- --------------------------------------------------------- --------------
NET ASSETS $ 952,767,854
- --------------------------------------------------------- --------------
NET ASSETS:
Institutional Shares $ 920,456,305
- --------------------------------------------------------- --------------
Private Investment Class $ 32,311,549
- --------------------------------------------------------- --------------
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Shares:
Authorized 3,000,000,000
- --------------------------------------------------------- --------------
Outstanding 920,504,974
- --------------------------------------------------------- --------------
Private Investment Class:
- --------------------------------------------------------- --------------
Authorized 1,000,000,000
- --------------------------------------------------------- --------------
Outstanding 32,313,257
- --------------------------------------------------------- --------------
NET ASSET VALUE PER SHARE:
- --------------------------------------------------------- --------------
Net asset value, offering and redemption price per share $ 1.00
- --------------------------------------------------------- --------------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended September 30, 1996
(Unaudited)
<S> <C>
INVESTMENT INCOME:
Interest income $18,252,572
- ----------------------------------------------------- ------------
EXPENSES:
Advisory fees 1,176,053
- ----------------------------------------------------- ------------
Transfer agent fees 40,068
- ----------------------------------------------------- ------------
Accounting service fees 35,370
- ----------------------------------------------------- ------------
Directors' fees 5,826
- ----------------------------------------------------- ------------
Distribution fees (Note 2) 85,655
- ----------------------------------------------------- ------------
Other expenses 65,821
- ----------------------------------------------------- ------------
Total expenses 1,408,793
- ----------------------------------------------------- ------------
Less fees waived and expenses assumed by advisor (315,023)
- ----------------------------------------------------- ------------
Net expenses 1,093,770
- ----------------------------------------------------- ------------
Net investment income 17,158,802
- ----------------------------------------------------- ------------
Net realized gain on sales of investments 15,792
- ----------------------------------------------------- ------------
Net unrealized appreciation of investments 19,881
- ----------------------------------------------------- ------------
Net increase in net assets resulting from operations $17,194,475
- ----------------------------------------------------- ------------
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 1996 and the year ended March 31, 1996
(Unaudited)
SEPTEMBER 30, MARCH 31,
1996 1996
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 17,158,802 $ 40,503,678
- --------------------------------------------------------------- --------------- ---------------
Net realized gain on sales of investments 15,792 292,222
- --------------------------------------------------------------- --------------- ---------------
Net unrealized appreciation (depreciation) of investments 19,881 (30,577)
- --------------------------------------------------------------- --------------- ---------------
Net increase in net assets resulting from operations 17,194,475 40,765,323
- --------------------------------------------------------------- --------------- ---------------
Distributions to shareholders from net investment income:
Institutional Shares (16,639,408) (39,402,142)
- --------------------------------------------------------------- --------------- ---------------
Private Investment Class (519,394) (1,101,536)
- --------------------------------------------------------------- --------------- ---------------
Capital stock transactions - net:
Institutional Shares (88,617,375) (1,106,286)
- --------------------------------------------------------------- --------------- ---------------
Private Investment Class (2,828,872) 5,845,831
- --------------------------------------------------------------- --------------- ---------------
Net increase (decrease) in net assets (91,410,574) 5,001,190
- --------------------------------------------------------------- --------------- ---------------
NET ASSETS:
Beginning of period 1,044,178,428 1,039,177,238
- --------------------------------------------------------------- --------------- ---------------
End of period $ 952,767,854 $1,044,178,428
- --------------------------------------------------------------- --------------- ---------------
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in):
Institutional Shares $ 920,504,974 $1,009,122,349
- --------------------------------------------------------------- --------------- ---------------
Private Investment Class 32,313,257 35,142,129
- --------------------------------------------------------------- --------------- ---------------
Undistributed net realized gain (loss) on sales of investments (76,035) (91,827)
- --------------------------------------------------------------- --------------- ---------------
Unrealized appreciation of investments 25,658 5,777
- --------------------------------------------------------------- --------------- ---------------
$ 952,767,854 $1,044,178,428
- --------------------------------------------------------------- --------------- ---------------
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Tax-Free Investments Co. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Company is organized as a Maryland
corporation consisting of one portfolio, the Cash Reserve Portfolio (the
"Fund"). The Fund consists of two different classes of shares, the
Institutional Cash Reserve Shares ("Institutional Shares") and the Private
Investment Class. Matters affecting each class are voted on exclusively by the
shareholders of each class. The investment objective of the Fund is to
generate as high a level of tax-exempt income as is consistent with
preservation of capital and maintenance of liquidity.
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. 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.
A. Securities Valuations - The Fund uses the amortized cost method of
valuing investment portfolio securities which has been determined by the Board
of Directors of the Company to represent the fair value of the Fund's
investments.
B. Securities Transactions and Investment Income - Securities transactions
are recorded on a trade date basis. Realized gains and losses from securities
transactions are computed on the basis of specific identification of the
securities sold. Interest income, adjusted for amortization of premiums and,
when appropriate, discounts on investments, is earned from settlement date and
is recorded on the accrual basis. Interest income is allocated to each class
daily, based upon each class' pro rata share of the total shares of the Fund
outstanding. Discounts, other than original issue, on short-term obligations
are amortized to unrealized appreciation for financial reporting purposes.
C. Dividends and Distributions to Shareholders - It is the policy of the
Fund to declare daily dividends from net investment income. Such dividends are
paid monthly. Distributions from net realized capital gains, if any, are
declared and paid annually. Net capital gains cannot be distributed to the
extent they can be offset by any capital loss carryovers of the Fund.
D. Federal Income Taxes - The Fund 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. The Fund has a capital loss carryforward of $175,320
(which may be carried forward to offset future taxable gains, if any) which
expires, if not previously utilized, through the year 2004. The Fund cannot
distribute capital gains to shareholders until the tax loss carryforwards have
been utilized. In addition, the Fund intends to invest in sufficient municipal
securities to allow it to qualify to pay "exempt interest dividends," as
defined in the Internal Revenue Code, to shareholders.
E. Expenses - Operating expenses directly attributable to a class are
charged to that class' operations. Expenses which are applicable to both
classes, e.g., advisory fees, are allocated between them.
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.25% of
the first $500 million of the Fund's average daily net assets plus 0.20% of
the Fund's average daily net assets in excess of $500 million.
AIM will, if necessary, reduce its fees for any fiscal year to the extent
required so that the amount of ordinary expenses of each class (excluding
interest, taxes, brokerage commissions and extraordinary expenses) paid or
incurred by each class for such fiscal year does not exceed the applicable
expense limitations imposed by securities regulations in any state or
jurisdiction in which the Company's shares are qualified for sale. AIM has
voluntarily agreed to reduce its fee from the Fund to the extent necessary so
that the amount of ordinary expenses of the Institutional Shares (excluding
interest, taxes, brokerage commissions, directors' fees, extraordinary
expenses and federal registration fees) paid or incurred by the Institutional
Shares does not exceed 0.20% of the Institutional Shares' average daily net
assets. As a result, AIM's advisory fee on the Private Investment Class is
reduced in the same proportion as the Institutional Shares. For the six months
ended September 30, 1996, AIM reduced its advisory fee from the Fund by
$249,383 and assumed expenses of $23,000.
21
<PAGE>
Under the terms of a master distribution agreement between Fund
Management Company ("FMC") and the Company, FMC acts as the exclusive
distributor of capital stock of the Institutional Shares and the Private
Investment Class. The Company 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 Plan provides that the Private Investment Class
may pay up to a 0.50% maximum annual rate of the Private Investment Class'
average daily net assets. Of this amount, the Fund may pay an asset-based
sales charge to FMC and the Fund may pay a service fee of 0.25% of the average
daily net assets of the Private Investment Class to selected 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. 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 Fund with respect to the Private Investment Class. During the
six months ended September 30, 1996, the Private Investment Class paid
$43,015 as compensation under the Plan.
The Fund, pursuant to the Company's master investment advisory agreement
with AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting services to the Fund. During the six months ended September 30,
1996, the Fund reimbursed AIM $35,370 for such services.
The Fund, pursuant to a transfer agent and service agreement, has agreed
to pay A I M Institutional Fund Services, Inc. ("AIFS") a fee for providing
transfer agent and shareholder services to the Fund. During the six months
ended September 30, 1996, the Fund paid AIFS $40,068 for such services.
Certain officers and directors of the Company are directors or officers of
AIM, AIFS and FMC.
During the six months ended September 30, 1996, the Fund paid legal fees
of $2,696 for services rendered by Kramer, Levin, Naftalis & Frankel as
counsel to the Board of Directors. A member of that firm is a director of the
Company.
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees,
if so elected by a director, in mutual fund shares in accordance with a
deferred compensation plan.
NOTE 4 - CAPITAL STOCK
Changes in capital stock outstanding during the six months ended September 30,
1996 and the year ended March 31, 1996 were as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
------------- ---------
1996 1996
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Sold:
Institutional Shares 2,353,212,767 $ 2,353,212,767 5,051,588,995 $ 5,051,588,995
- ------------------------------------- --------------- ---------------- --------------- ----------------
Private Investment Class 101,163,912 101,163,912 218,503,050 218,503,050
- ------------------------------------- --------------- ---------------- --------------- ----------------
Issued as reinvestment of dividends:
Institutional Shares 53,567 53,567 99,312 99,312
- ------------------------------------- --------------- ---------------- --------------- ----------------
Private Investment Class 398,321 398,321 1,064,127 1,064,127
- ------------------------------------- --------------- ---------------- --------------- ----------------
Redeemed:
Institutional Shares (2,441,883,709) (2,441,883,709) (5,052,794,593) (5,052,794,593)
- ------------------------------------- --------------- ---------------- --------------- ----------------
Private Investment Class (104,391,105) (104,391,105) (213,721,346) (213,721,346)
- ------------------------------------- --------------- ---------------- --------------- ----------------
Net increase (decrease) (91,446,247) $ (91,446,247) 4,739,545 $ 4,739,545
- ------------------------------------- --------------- ---------------- --------------- ----------------
</TABLE>
22
<PAGE>
NOTE 5 - FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Institutional Shares
capital stock outstanding during the six months ended September 30, 1996, each
of the years in the seven-year period ended March 31, 1996, the eleven months
ended March 31, 1989 and the year ended April 30, 1988.
<TABLE>
<CAPTION>
MARCH 31,
-------------------------------------------------------------
SEPTEMBER 30,
---------------
1996 1996 1995 1994 1993 1992
--------------- ----------- ----------- ----------- --------- -----------
<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 0.04 0.03 0.02 0.03 0.04
- ---------------------------------------------- --------------- ----------- ----------- ----------- --------- -----------
Less distributions:
Dividends from net investment income (0.02) (0.04) (0.03) (0.02) (0.03) (0.04)
- ---------------------------------------------- --------------- ----------- ----------- ----------- --------- -----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------- --------------- ----------- ----------- ----------- --------- -----------
Total return 3.31%(a) 3.67% 3.06% 2.33% 2.66% 4.09%
- ---------------------------------------------- --------------- ----------- ----------- --------- -----------
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $ 920,456 $1,009,039 $1,009,891 $1,040,595 $994,828 $1,191,209
- ---------------------------------------------- --------------- ----------- ----------- ----------- --------- -----------
Ratio of expenses to average
net assets 0.20%(b) 0.20%(c) 0.20%(c) 0.20%(c) 0.20%(c) 0.20%(c)
- ---------------------------------------------- --------------- ----------- ----------- ----------- --------- -----------
Ratio of net investment income to average net
assets 3.27%(b) 3.59%(d) 3.01%(d) 2.30%(d) 2.66%(d) 4.00%(d)
- ---------------------------------------------- --------------- ----------- ----------- ----------- --------- -----------
MARCH 31, APRIL 30,
------------------------------------- -----------
1991 1990 1989 1988
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income 0.06 0.06 0.05 0.04
- ---------------------------------------------- ----------- ----------- ----------- -----------
Less distributions:
Dividends from net investment income (0.06) (0.06) (0.05) (0.04)
- ---------------------------------------------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------- ----------- ----------- ----------- -----------
Total return 5.68% 6.22% 5.67%(a) 4.56%
- ---------------------------------------------- ----------- ----------- ----------- -----------
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $1,156,557 $1,114,813 $1,062,479 $1,192,604
- ---------------------------------------------- ----------- ----------- ----------- -----------
Ratio of expenses to average
net assets 0.20%(c) 0.20%(c) 0.20%(c) 0.21%(c)
- ---------------------------------------------- ----------- ----------- ----------- -----------
Ratio of net investment income to average net
assets 5.52%(d) 6.03%(d) 5.52%(d) 4.47%(d)
- ---------------------------------------------- ----------- ----------- ----------- -----------
<FN>
(a) Annualized.
(b) Ratios are annualized and based on average net assets of $1,013,671,329. Annualized ratios of expenses and net
investment income to average net assets prior to waiver of advisory fees are 0.25% and 3.23%, respectively.
(c) Ratios of expenses to average net assets prior to waiver of advisory fees were 0.26%, 0.26%, 0.28%, 0.26%, 0.26%,
0.27%, 0.28%, 0.28%(annualized) and 0.29% for the periods 1996-1988, respectively.
(d) Ratios of net investment income to average net assets prior to waiver of advisory fees were 3.53%, 2.95%, 2.22%,
2.60%, 3.94%, 5.46%, 5.95%, 5.44%(annualized) and 4.40%, for the periods 1996-1988, respectively.
</TABLE>
NOTE 6 - SUBSEQUENT EVENT
On November 4, 1996, A I M Management Group Inc. ("AIM Management") and
INVESCO PLC announced the execution of an Agreement and Plan of Merger
pursuant to which AIM Management will be merged with and into a direct
wholly-owned subsidiary of INVESCO PLC. AIM Management is the parent company
of the Fund's advisor. The merger is conditional on, among other things,
approval by the shareholders of INVESCO PLC and AIM Management and the
shareholders of the AIM Funds and the mutual funds managed by INVESCO PLC, and
is expected to take place during the first quarter of 1997.
23
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
DIRECTORS
Charles T. Bauer John F. Kroeger Tax-Free
Bruce L. Crockett Lewis F. Pennock Investments Co.
Owen Daly II Ian W. Robinson (TFIC)
Carl Frischling Louis S. Sklar
Robert H. Graham
OFFICERS
Charles T. Bauer Chairman
Robert H. Graham President
John J. Arthur Sr. Vice President & Treasurer Cash Reserve
Gary T. Crum Sr. Vice President Portfolio
Carol F. Relihan Sr. Vice President & Secretary -------------------------------------
Dana R. Sutton Vice President & Assistant Treasurer Institutional Cash Semi-
Stuart W. Coco Vice President Reserve Shares Annual
Melville B. Cox Vice President Report
Karen Dunn Kelley Vice President
J. Abbott Sprague Vice President
P. Michelle Grace Assistant Secretary September 30, 1996
David L. Kite Assistant Secretary
Nancy L. Martin Assistant Secretary
Ofelia M. Mayo Assistant Secretary
Kathleen J. Pflueger Assistant Secretary
Samuel D. Sirko Assistant Secretary
Stephen I. Winer Assistant Secretary
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 1919
Houston, TX 77046
(800) 347-1919
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 1919
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
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
LEGAL COUNSEL TO DIRECTORS
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, NY 10022
TRANSFER AGENT
A I M Institutional Fund Services, Inc.
11 Greenway Plaza, Suite 1919
Houston, TX 77046-1173
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>
24
