<PAGE>
[AIM LOGO APPEARS HERE] Dear Shareholder:
[PHOTO of One year ago, financial markets were still
Charles T. Bauer, in the grip of the near-meltdown occasioned by
Chairman of the 1998's Asian crises. The situation led the
LETTER Board of the Fund Federal Reserve Board (the Fed) to reduce the
TO OUR APPEARS HERE short-term federal funds target rate three
SHAREHOLDERS times late in 1998. These Fed moves were not
motivated by a slowdown in the U.S. economy;
rather, they represented strenuous effort to reestablish
liquidity in markets worldwide. The U.S. economy continued to move
ahead at a brisk pace, exhibiting the unusual combination of
strong growth coupled with low inflation.
However, this scenario changed slightly as some monthly economic
indicators showed inflationary tendencies in certain commodity
prices. This and the unwinding of the 1998 global crisis (evident
in the stabilization of the foreign markets) compelled the Fed to
increase short-term interest rates twice during the six-month
period covered by this report. The Fed increased the federal funds
rate 25 basis points at both the June 30 and August 24 Federal
Open Market Committee meetings. On August 24, the Fed also
increased the discount rate by 25 basis points to 4.75%. Many
investors felt that part of the Fed's motivation was to raise
rates before the fourth quarter to stabilize the markets pre-
emptively. The Fed has committed to provide as much as $50 billion
in cash to banks at year-end, along with special liquidity
facilities so brokers can finance their inventories.
YOUR INVESTMENT PORTFOLIO
For the six-month period ended September 30, 1999, the Cash
Reserve Portfolio maintained its competitive position versus its
benchmarks, as shown in the table. The portfolio also maintained
the quality of its holdings, consistent with the highest credit
ratings given by three widely known credit-rating agencies: AAAm
from Standard & Poor's, Aaa from Moody's and AAA from Fitch IBCA.
AIM is the largest multi-family complex to have all its
institutional money market portfolio given the highest rating by
three nationally recognized ratings agencies.
The Cash Reserve Portfolio seeks to generate as high a level of
federally tax-exempt income as is consistent with the preservation
of capital and the maintenance of liquidity by investing in high-
quality short-term municipal obligations. It invests solely in
securities rated "First Tier" as defined in Rule 2a-7 under the
Investment Company Act of 1940. The net assets of the portfolio's
Cash Management Class stood at approximately $5.5 million at the
close of the period.
An investment in a money market fund such as TFIC Cash Reserve
Portfolio is not insured or guaranteed by the Federal Deposit
<TABLE>
<CAPTION>
YIELDS AS OF 9/30/99
<S> <C> <C> <C>
AVERAGE SEVEN-DAY
MONTHLY YIELD YIELD
Cash Reserve Portfolio
Cash Management Class 2.73% 3.41%
IBC Tax-Free Money Fund--
Average Institutions Only(TM) 3.03% 3.25%
IBC All Tax-Free Money--
Fund Averages(TM) 2.80% 3.02%
</TABLE>
(continued)
<PAGE>
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 by investing in
the fund.
OUTLOOK FOR THE FUTURE
Although the U.S. gross domestic product growth rate fell from
2.3% to 1.9% at the end of the second quarter, the annualized
growth rate for the third quarter was a robust 4.8%. The last two
Fed rate increases have so far had little effect on the U.S.
economy, which continues full steam ahead. At its November 16
meeting, after the close of the reporting period, the Fed again
increased short-term interest rates, and speculation continued
about another Fed tightening. Liquidity is the primary concern
around the Y2K issue. Because no one knows where the cash will be
flowing by year-end, money managers are dutifully estimating the
anticipated high withdrawal volume from financial institutions.
Despite these concerns, another tightening is still quite
possible. Another increase would position the federal funds target
rate exactly where it was before 1998's international crisis.
We are pleased to send you this report about your investment.
AIM is committed to customer service and to the primary goals of
safety, liquidity and yield in institutional fund management. We
would be pleased to respond to any questions or comments you might
have about this report or your investment. Please contact one of
our representatives at 800-659-1005 if we may help.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1999
(Unaudited)
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
SHORT-TERM MUNICIPAL OBLIGATIONS -
100.93%
ALABAMA - 1.00%
Birmingham (City of)(YMCA-Birmingham);
Public Park and Recreation Board
Variable Rate Demand Series 1996 RB
(LOC-Amsouth Bank of Alabama)
3.85%, 06/01/16(b) -- VMIG-1 $ 3,065 $ 3,065,000
- -----------------------------------------------------------------------------
Marshall (County of); Special Obligation
School Refunding Series 1994 Wts. (LOC-
First Alabama Bank)
3.85%, 02/01/12(b) A-1 -- 2,695 2,695,000
- -----------------------------------------------------------------------------
Morgan Stanley Float Program, Jefferson
(County of) Sewer Imp.; Floating Rate
Trust Certificates Series 124 1999 Wts.
RB
3.85%, 02/01/36(b)(c)(d) A-1c -- 5,100 5,100,000
- -----------------------------------------------------------------------------
10,860,000
- -----------------------------------------------------------------------------
ALASKA - 0.48%
Valdez Marine (BP Pipelines Inc.
Project); Floating Rate Treasury Series
1999 A28 Reg D Term RB
3.95%, 12/01/25(b)(d) -- VMIG-1 5,275 5,275,000
- -----------------------------------------------------------------------------
ARIZONA - 1.90%
Maricopa (County of) Pollution Control
Corp. (Arizona Public Service Co.);
Refunding Variable Rate Demand Series
1994 A PCR
3.75%, 05/01/29(b) A-1+ P-1 5,300 5,300,000
- -----------------------------------------------------------------------------
Mesa Industrial Development Authority
(Discovery Health Systems); Variable
Rate Demand Series 1999 B RB
3.80%, 01/01/29(b)(c) A-1+ VMIG-1 2,700 2,700,000
- -----------------------------------------------------------------------------
Pinal (County of) Industrial Development
Authority (Magma Copper Company
Project); Series 1984 PCR (LOC-National
Westminster)
2.95%, 12/01/09(b) A-1+ P-1 4,700 4,700,000
- -----------------------------------------------------------------------------
Salt River Project Agricultural
Improvement and Power District;
Promissory Notes
3.40%, 11/10/99 A-1+ P-1 7,970 7,970,000
- -----------------------------------------------------------------------------
20,670,000
- -----------------------------------------------------------------------------
ARKANSAS - 0.59%
Arkansas Hospital Equipment Financing
Authority (Baptist Health Project);
Hospital Equipment Series 1995 RB
3.85%, 11/01/10(b)(c) A-1+ VMIG-1 6,400 6,400,000
- -----------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
CALIFORNIA - 0.50%
Huntington Beach (City of) (Seabridge
Villas Project); Floating Rate
Multifamily Housing Series 1985 A RB
4.00%, 02/01/10(b) -- VMIG-1 $ 3,000 $ 3,000,000
- -------------------------------------------------------------------------------
Student Loan Marketing Corporation;
Student Loan Revenue Refunding Series
1993 A RB (LOC-Dresdner Bank AG)
3.20%, 11/01/02(b)(e) -- VMIG-1 2,500 2,500,000
- -------------------------------------------------------------------------------
5,500,000
- -------------------------------------------------------------------------------
COLORADO - 1.20%
Eagle Ranch Metro District Golf Course;
Variable Rate Series 1999 B RB (LOC-
Societe Generale)
3.80%, 10/15/18(b) A-1+ -- 3,900 3,900,000
- -------------------------------------------------------------------------------
Pitkin (County of) Industrial Development
(Aspen Skiing Company Project); Refunding
Series 1994 A IDR (LOC-First National
Bank)
2.95%, 04/01/16(b) A-1+ -- 3,000 3,000,000
- -------------------------------------------------------------------------------
Platte River Power Authority; Adjustable
Tender (Subordinate Lien) Electric Series
S-1 RB
3.50%, 12/01/99(b) A-1+ VMIG-1 6,200 6,200,000
- -------------------------------------------------------------------------------
13,100,000
- -------------------------------------------------------------------------------
CONNECTICUT - 1.63%
Connecticut (State of) (Transportation
Infrastructure Purpose S-1); Special Tax
Obligation RB
3.75%, 12/01/10(b) A-1+ VMIG-1 2,178 2,178,000
- -------------------------------------------------------------------------------
Connecticut (State of) Development
Authority (Corporation for Independent
Living Project); Health Care Variable
Rate Demand Series 1990 RB (LOC-Chase
Manhattan Bank)
3.65%, 07/01/15(b) -- VMIG-1 1,669 1,669,000
- -------------------------------------------------------------------------------
Connecticut (State of) Health &
Educational Facilities Authority (Yale
University); Variable Rate Demand Series
1997 T-2 RB
3.70%, 07/01/29(b) A-1+ VMIG-1 1,914 1,914,000
- -------------------------------------------------------------------------------
JP Morgan Putter TE Receipt; Connecticut
(State of) Special Tax Obligation Series
114 1999 A RB
3.88%, 10/01/09(b)(d) -- VMIG-1 11,980 11,980,000
- -------------------------------------------------------------------------------
17,741,000
- -------------------------------------------------------------------------------
DELAWARE - 0.47%
University of Delaware; Variable Rate
Demand Series 1998 RB
3.75%, 11/01/23(b) A-1+ -- 3,173 3,173,000
- -------------------------------------------------------------------------------
Wilmington (City of); Unlimited Tax Series
1990 GO
6.75%, 05/15/00(c) AAA Aaa 1,815 1,889,372
- -------------------------------------------------------------------------------
5,062,372
- -------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
FLORIDA - 9.18%
Broward (County of) Housing Finance
Authority (Landings Inverrary
Apartments); Multifamily Variable Rate
Demand Housing Series 1985 RB
4.00%, 06/01/13(b) -- VMIG-1 $10,000 $ 10,000,000
- -----------------------------------------------------------------------------
Collier (County of) Health Facilities
Authority (Cleveland Clinic Health
System); Hospital Series 1999 RB
3.80%, 01/01/33(b) A-1+ VMIG-1 18,200 18,200,000
- -----------------------------------------------------------------------------
Florida (State of) (Gas Project No. 1);
Series 1998 RB
4.25%, 12/01/99(c) AAA Aaa 4,515 4,520,791
- -----------------------------------------------------------------------------
Gulf Breeze (City of) (Florida Municipal
Bond Fund); Variable Rate Demand Series
1996 A RB (LOC-Bank of America N.A.)
3.85%, 03/31/21(b) A-1+ -- 3,585 3,585,000
- -----------------------------------------------------------------------------
Gulf Breeze (City of) Healthcare
Facilities (Heritage Health Care
Project); Variable Rate Demand Series
1999 RB
3.92%, 01/01/24(b)(c) -- VMIG-1 7,000 7,000,000
- -----------------------------------------------------------------------------
Gulf Breeze (City of) (Local Government
Loan Program); Floating Rate Series
1985 B RB
3.75%, 12/01/15(b)(c) A-1+ VMIG-1 2,060 2,060,000
- -----------------------------------------------------------------------------
Jacksonville (City of) (The River City
Renaissance Program); Commercial Paper
Notes Series 1993
3.25%, 10/15/99 A-1 P-1 6,000 6,000,000
- -----------------------------------------------------------------------------
Lee (County of) Housing Finance
Authority (Forestwood Apartments
Project); Refunding Housing Series 1995
A RB
3.75%, 06/15/25(b) A-1+ -- 624 624,000
- -----------------------------------------------------------------------------
Lee (County of) Industrial Development
Authority (Shell Point Village
Project); Variable Rate Demand Series
1999 B IDR (LOC-Bank of America N.A.)
3.80%, 11/01/29(b) A-1+ -- 10,000 10,000,000
- -----------------------------------------------------------------------------
Morgan Stanley Float Program, (Board of
Education Lottery); Floating Rate Trust
Certificate Series 57 1998 RB
3.85%, 07/01/15(b)(c)(d) A-1c -- 15,000 15,000,000
- -----------------------------------------------------------------------------
Morgan Stanley Float Program, Orange
(County of) School Board; Floating Rate
Trust Certificates Series 85 1999 COP
3.85%, 08/01/22(b)(c)(d) -- VMIG-1 8,135 8,135,000
- -----------------------------------------------------------------------------
Morgan Stanley Float Program, Tampa Bay
(City of) Water Utility System;
Floating Rate Trust Certificates Series
112 1999 RB
3.08%, 10/01/27(b)(c)(d) A-1c A1 4,995 4,995,000
- -----------------------------------------------------------------------------
Nassau (County of) (Solid Waste System);
Refunding Series 1999 RB (LOC-First
Union National Bank)
3.80%, 07/01/13(b) A-1 -- 4,000 4,000,000
- -----------------------------------------------------------------------------
Putnam (County of) Development Authority
(Seminole Electric Cooperative, Inc.
Project); National Rural Utilities
Guaranteed Semiannual Variable Pooled
Series 1984 H-4 PCR
3.00%, 03/15/00(b)(e) A-1+ P-1 3,600 3,600,000
- -----------------------------------------------------------------------------
Tampa (City of); Refunding Gtd.
Entitlement Series 1991 RB
6.50%, 10/01/99(c) AAA Aaa 2,205 2,205,000
- -----------------------------------------------------------------------------
99,924,791
- -----------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
GEORGIA - 4.07%
Clarke (County of) Georgia School
District (School Sales Tax); Unlimited
Tax Series 1997 GO
4.55%, 03/01/00(c) AAA Aaa $ 2,150 $ 2,163,584
- -------------------------------------------------------------------------------
Cobb (County of) Development Authority
(Institute of Nuclear Power Operations);
Variable Rate Demand Series 1998 IDR
(LOC-Suntrust Bank)
3.80%, 02/01/13(b) -- Aa3 5,265 5,265,000
- -------------------------------------------------------------------------------
Cobb (County of) Kennestone Hospital
Authority (Equipment Pool Project);
Variable Rate Anticipation Certificates
Series 1999 RB
3.90%, 04/01/26(b) A-1+ VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------
Decatur County Bainbridge Industrial
Development Authority (Kaiser
Agriculture Chemical Inc. Project);
Series 1985 IDR (LOC-Harris Trust &
Savings Bank)
3.80%, 12/01/02(b) -- -- 2,100 2,100,000
- -------------------------------------------------------------------------------
Dekalb (County of) Private Hospital
Authority (Egleston Childrens Hospital
at Emory University); Variable Rate
Demand Series 1994 A RAN (LOC-Suntrust
Bank)
3.65%, 03/01/24(b) A-1+ VMIG-1 1,665 1,665,000
- -------------------------------------------------------------------------------
Fayette (County of) Development Authority
Educational Facilities (Catholic School
Properties Inc. Project); Variable Rate
Demand Series 1999 RB (LOC-Wachovia
Bank)
3.80%, 04/01/24(b) -- Aa2 5,000 5,000,000
- -------------------------------------------------------------------------------
Floyd (County of) Development Authority
(Shorter College Project); Variable Rate
Demand Series 1998 RB (LOC-Suntrust
Bank)
3.85%, 06/01/17(b) A-1+ -- 4,000 4,000,000
- -------------------------------------------------------------------------------
Georgia (State of); Refunding Unlimited
Tax Series 1998 E GO
4.00%, 02/01/00 AAA Aaa 5,600 5,615,687
- -------------------------------------------------------------------------------
Gwinnett (County of) Housing Authority
(Post Chase Project); Variable Rate
Demand Multifamily Housing Series 1997
RB
3.80%, 06/01/25(b) A-1+ -- 3,500 3,500,000
- -------------------------------------------------------------------------------
44,309,271
- -------------------------------------------------------------------------------
IDAHO - 0.28%
Idaho (State of); Unlimited Tax Series
1999 TAN
4.25%, 06/30/00 SP-1+ MIG-1 3,000 3,018,377
- -------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ILLINOIS - 8.62%
Bear Stearns Municipal Securities Trust
Certificates (Illinois Sales Tax); Series
1998-25 Class A RB (LOC-Bear Stearns
Capital Markets)
3.82%, 03/15/07(b)(d) A-1 Aa3 $10,000 $ 10,000,000
- -------------------------------------------------------------------------------
Chicago (City of); Limited Tax Series 1998
GO (LOC-Morgan Guaranty Trust)
2.85%, 01/31/00(b) A-1+ VMIG-1 4,000 4,000,000
- -------------------------------------------------------------------------------
Chicago (City of) Metro Water District
(Greater Chicago Reclamation); Refunding
Unlimited Tax Series 1992 GO
5.15%, 12/01/99 AA Aa2 5,000 5,013,766
- -------------------------------------------------------------------------------
Chicago (City of) O'Hare International
Airport (American Airlines); Variable
Rate Demand Series 1983 B RB (LOC-Royal
Bank of Canada)
3.00%, 12/01/17(b) -- P-1 5,600 5,600,000
- -------------------------------------------------------------------------------
East Peoria (City of) (Radnor/East Peoria
Partnership Project); Multifamily Housing
Series 1983 RB (LOC-Bank of Nova Scotia)
4.00%, 06/01/08(b) -- Aa3 5,085 5,085,000
- -------------------------------------------------------------------------------
Illinois Development Finance Authority
(American College of Surgeons Project);
Tax Exempt Series 1996 RB (LOC-Northern
Trust Company)
3.90%, 08/01/26(b) A-1+ -- 4,821 4,821,000
- -------------------------------------------------------------------------------
Illinois Development Finance Authority
(Chicago Commons Project); Variable Rate
Demand Series 1999 RB (LOC-Bank of
America)
3.80%, 01/01/29(b) A-1+ -- 5,500 5,500,000
- -------------------------------------------------------------------------------
Illinois Development Finance Authority
(Jewish Charities Program) Variable Rate
Demand Series 1999 A RAN (LOC-Harris
Trust & Savings Bank)
3.85%, 06/30/00(b) A-1+ -- 5,390 5,390,000
- -------------------------------------------------------------------------------
Illinois Development Finance Authority
(Local Government Financing Project);
Variable Rate Demand Series 1999 A RB
3.80%, 09/01/29(b)(c) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------
Illinois Health Facilities Authority
(Northwestern Memorial Hospital);
Variable Rate Demand Series 1995 RB
2.95%, 08/15/25(b) A-1+ VMIG-1 9,000 9,000,000
- -------------------------------------------------------------------------------
Illinois Health Facilities Authority
(Resurrection Health Care); Variable Rate
Demand Series 1999 A RB
3.00%, 05/15/29(b) AAA VMIG-1 3,600 3,600,000
- -------------------------------------------------------------------------------
Illinois Health Facilities Authority;
Revolving Fund Pooled Series 1985 D RB
(LOC-First National Bank)
3.80%, 08/01/15(b) A-1+ VMIG-1 4,829 4,829,000
- -------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Illinois - (continued)
Illinois Health Facilities Authority
(The Methodist Medical Center);
Refunding Series 1998 RB
4.50%, 11/15/99(c) AAA Aaa $ 2,090 $ 2,093,520
- -----------------------------------------------------------------------------
Illinois Health Facilities Authority
(Swedish Covenant Hospital); Refunding
Variable Rate Demand Series 1998 A RB
3.85%, 08/15/27(b) A-1+ VMIG-1 2,100 2,100,000
- -----------------------------------------------------------------------------
Illinois (State of) Regional
Transportation Authority (Cook Dupage
Lake Co.); Refunding Unlimited Tax
Series 1999 GO
5.00%, 06/01/00(c) AAA Aaa 4,990 5,033,564
- -----------------------------------------------------------------------------
Illinois (State of) Toll Highway
Authority;
Series 1998 A Municipal Securities
Trust Certificates
3.82%, 02/15/12(b)(c)(d) A-1 Aaa 11,700 11,700,000
- -----------------------------------------------------------------------------
93,765,850
- -----------------------------------------------------------------------------
INDIANA - 1.16%
Auburn (City of) (Sealed Power Corp.
Project); Variable Rate Demand
Economic Development Series 1985 RB
(LOC-NBD Bank)
3.50%, 07/01/10(b) -- VMIG-1 1,200 1,200,000
- -----------------------------------------------------------------------------
Indianapolis (City of); Local Public
Improvement Bond Bank RB Series 1995 B
5.00%, 02/01/00 AAA Aaa 1,500 1,509,097
- -----------------------------------------------------------------------------
Indianapolis (City of); Local Public
Improvement Bond Bank RB Notes Series
1999 B
4.00%, 01/10/00 SP-1+ -- 7,900 7,916,074
- -----------------------------------------------------------------------------
Indianapolis (City of) Economic
Development Authority (Jewish
Community Campus Project); Variable
Rate Series 1995 RB
3.75%, 04/01/05(b) -- VMIG-1 1,995 1,995,000
- -----------------------------------------------------------------------------
12,620,171
- -----------------------------------------------------------------------------
IOWA - 1.29%
Iowa Higher Education Loan Authority;
Private College Facility RB
3.85%, 12/01/15(b)(c) A-1+ VMIG-1 12,000 12,000,000
- -----------------------------------------------------------------------------
Iowa School Corporations (Iowa School
Cash Anticipation Program); Warrant
Certificates Series 1999 A
4.00%, 06/23/00(c) SP-1+ MIG-1 2,000 2,010,829
- -----------------------------------------------------------------------------
14,010,829
- -----------------------------------------------------------------------------
KANSAS - 0.15%
Olathe (City of); Unlimited Tax Series
194 1999 GO
3.75%, 04/01/00(c) AAA Aaa 1,660 1,664,440
- -----------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
KENTUCKY - 2.60%
Kentucky Asset/Liability Commission;
Project Notes General Fund Series 1998 A
RB (LOC-Landesbank Hessen-Thuringen
Girozentrale)
3.40%, 06/30/01(b) -- VMIG-1 $10,000 $ 10,000,000
- -------------------------------------------------------------------------------
Kentucky Interlocal School Transport
Association; Series 1999 TRAN
4.00%, 06/30/00 SP-1+ MIG-1 14,000 14,046,963
- -------------------------------------------------------------------------------
Trimble (County of) (Louisville Gas and
Electric Company Project); Series 1992 A
PCR
3.45%, 09/01/17(b) A-1 VMIG-1 4,300 4,300,000
- -------------------------------------------------------------------------------
28,346,963
- -------------------------------------------------------------------------------
LOUISIANA - 2.54%
Louisiana Public Facilities Authority
(Christus Health); Series 1999 B RB
3.40%, 07/01/29(b)(c) A-1+ VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------
Louisana Public Facilities Authority
(Tiger Athletic Foundation Project);
Variable Rate Demand Series 1999 RB
(LOC-Hibernia National Bank)
3.80%, 09/01/28(b) A-1+ -- 13,000 13,000,000
- -------------------------------------------------------------------------------
New Orleans (City of); Aviation Board
Variable Refunding Series B RB
3.75%, 08/01/16(b)(c) A-1+ VMIG-1 4,635 4,635,000
- -------------------------------------------------------------------------------
27,635,000
- -------------------------------------------------------------------------------
MASSACHUSETTS - 0.27%
Massachusetts (State of); Limited Tax
Series 1993 B GO
4.60%, 11/01/99 AA- Aa3 2,890 2,893,957
- -------------------------------------------------------------------------------
MICHIGAN - 2.25%
Detroit (City of) Sewer District; Bear
Stearns Municipal Trust Certificates
Variable Rate Demand Series 1999-81
Class A RB
(LOC-Bear Stearns Capital Markets)
3.83%, 10/01/02(d) A-1+c Aaa 15,000 15,000,000
- -------------------------------------------------------------------------------
Grand Rapids (City of); Water Supply
Series 1990 RB
7.25%, 01/01/00(e)(f) AAA AAA 3,000 3,089,714
- -------------------------------------------------------------------------------
Jackson County Economic Development Corp.
(Sealed Power Corp.); Economic
Development Refunding Variable Rate
Demand Series 1984 RB (LOC-NBD Bank)
3.50%, 10/01/19(b) -- VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------
Michigan (State of); Municipal Bond
Authority RB Series 1999 B-1
4.25%, 08/25/00 SP-1+ -- 2,000 2,011,267
- -------------------------------------------------------------------------------
Michigan Strategic Fund (260 Brown St.
Associates Project); Convertible
Variable Rate Demand Limited Obligation
Series 1985 RB (LOC-Comerica Bank)
3.30%, 10/01/15(b) -- VMIG-1 3,400 3,400,000
- -------------------------------------------------------------------------------
24,500,981
- -------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MINNESOTA - 0.04%
Mankato (City of) (Northern States
Power Co. Project); Floating
Collateralized Series 1985 PCR
3.85%, 03/01/11(b) AA Aa3 $ 500 $ 500,000
- -----------------------------------------------------------------------------
MISSISSIPPI - 0.92%
Morgan Stanley Float Program,
Mississippi (State of) Development
Bank Special Obligation; Floating Rate
Trust Certificates Series 160 1999 RB
3.85%, 07/01/24(b)(c)(d) A-1c -- 10,000 10,000,000
- -----------------------------------------------------------------------------
MISSOURI - 3.86%
Missouri (State of) (Health Care
System); Bear Stearns Municipal Trust
Certificates; Variable Rate Demand
Series 1998 Class A RB
3.87%, 08/01/05(b)(c)(d) A-1+c -- 13,835 13,835,000
- -----------------------------------------------------------------------------
Missouri Health & Educational
Facilities Authority (Deaconess Long
Term Care-A); Variable Rate Demand
Health Facilities Series 1996 RB
3.80%, 12/01/16(b) A-1+ VMIG-1 10,785 10,785,000
- -----------------------------------------------------------------------------
Missouri Health & Educational
Facilities Authority (Missouri Pooled
Hospital Loan Program); Variable Rate
Demand Series 1999 A RB
3.80%, 08/01/29(b) A-1+ -- 14,000 14,000,000
- -----------------------------------------------------------------------------
Missouri Rural Water Financing Corp.
(Public Project); Construction Series
1998 Notes
4.50%, 11/15/99 -- MIG-1 3,370 3,375,052
- -----------------------------------------------------------------------------
41,995,052
- -----------------------------------------------------------------------------
NEW MEXICO - 0.92%
New Mexico (State of); Series 1999 TRAN
4.00%, 06/30/00 SP-1+ MIG-1 10,000 10,055,572
- -----------------------------------------------------------------------------
NEW YORK - 18.38%
Eagle Tax Exempt Trust; Class A COP(d)
3.84%, Series 1993 E 08/01/06(b) A-1+c -- 15,000 15,000,000
- -----------------------------------------------------------------------------
3.84%, Series 1993 F 08/01/06(b) A-1+c -- 20,850 20,850,000
- -----------------------------------------------------------------------------
3.84%, Series 943802 05/01/07(b)(c) A-1+c -- 17,800 17,800,000
- -----------------------------------------------------------------------------
3.84%, Series 943901 06/15/07(b)(c) A-1+c -- 15,175 15,175,000
- -----------------------------------------------------------------------------
3.84%, Series 950901 06/01/21(b)(f) A-1+c -- 13,315 13,315,000
- -----------------------------------------------------------------------------
3.84%, Series 97C4702 01/01/20(b) A-1+c -- 9,900 9,900,000
- -----------------------------------------------------------------------------
3.87%, Series 964703 07/01/11(b)(c) A-1+c -- 5,870 5,870,000
- -----------------------------------------------------------------------------
3.87%, Series 97C4703 01/01/01(b)(f) A-1+c -- 11,295 11,295,000
- -----------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
New York - (continued)
Eagle Tax Exempt Trust (Colorado
Housing and Finance Authority); Series
94C0601 Class A COP
3.84%, 10/01/23(b)(d) A-1+c AAA $10,000 $ 10,000,000
- -----------------------------------------------------------------------------
Eagle Tax Exempt Trust (Houston Water
and Sewer); Series 974305 Class A COP
3.84%, 12/01/27(b)(c)(d) A-1+c AAA 14,005 14,005,000
- -----------------------------------------------------------------------------
Eagle Tax Exempt Trust (Washington
State); Series 984701 Class A COP
3.84%, 05/01/18(b)(d) A-1+c -- 14,400 14,400,000
- -----------------------------------------------------------------------------
Long Island Power Authority;
Subordinated RB (LOC-Bayerische
Landesbank Girozentrale)
2.85%, Series 1999 4 11/17/99(b) A-1+ VMIG-1 11,000 11,000,000
- -----------------------------------------------------------------------------
3.20%, Series 1998 2 04/01/25(b) A-1+ VMIG-1 11,750 11,750,000
- -----------------------------------------------------------------------------
New York (State of) Medical Facilities
Finance Agency (St.Lukes-Roosevelt
Hospital Center); Merrill Lynch Group
Float Program Floating Option Tax-
Exempt Receipts Series PA-113 1996 A
Mortgage RB
3.05%, 02/15/29(b)(d) A-1+c -- 9,700 9,700,000
- -----------------------------------------------------------------------------
New York (State of); Variable Rate
Demand Series 1998 A GO (LOC-Morgan
Guaranty Trust Co. of New York)
3.45%, 12/02/99(b) A-1+ P-1 20,000 20,000,000
- -----------------------------------------------------------------------------
200,060,000
- -----------------------------------------------------------------------------
NORTH CAROLINA - 1.29%
North Carolina Medical Care Commission
Retirement Community (Adult
Communities Total Services Inc.);
Variable Rate Demand Series 1996 RB
(LOC-Lasalle National Bank)
3.75%, 11/15/09(b) A-1+ -- 5,655 5,655,000
- -----------------------------------------------------------------------------
North Carolina Medical Care Commission
(The Givens Estates Inc. Project);
Health Care Facilities Variable Rate
Demand Series 1997 RB (LOC-First Union
National Bank)
3.00%, 12/01/26(b) -- VMIG-1 3,000 3,000,000
- -----------------------------------------------------------------------------
North Carolina Medical Care Commission
(The Moses H. Cone Memorial Hospital
Project); Hospital Series 1995 RB
3.85%, 09/01/02(b) A-1+ -- 5,400 5,400,000
- -----------------------------------------------------------------------------
14,055,000
- -----------------------------------------------------------------------------
</TABLE>
11
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
OHIO - 3.34%
Clermont County Hospital (Catholic Health
Care-Mercy Health System); Variable Rate
Demand Series 1994 B RB
3.90%, 09/01/21(b) A-1+ VMIG-1 $ 9,100 $ 9,100,000
- -------------------------------------------------------------------------------
Clinton (County of) Hospital (Ohio
Hospital Capital Inc.); Variable Rate
Demand Series 1999 RB (LOC-Fifth Third
Bank)
3.80%, 07/01/29(b) A-1+ -- 10,000 10,000,000
- -------------------------------------------------------------------------------
Franklin (County of) (Bricker & Eckler
Building Co. Project); Floating Rate
Series 1984 IDR (LOC-Bank One Cleveland
N.A.)
3.85%, 11/01/14(b) -- P-1 8,100 8,100,000
- -------------------------------------------------------------------------------
Loraine (County of) (Catholic Healthcare
Partners); Variable Rate Demand Series
1998 A RB
3.15%, 12/01/27(e) A-1+ P-1 7,000 7,000,000
- -------------------------------------------------------------------------------
Marion (County of) (Pooled Lease
Program); Variable Rate Demand Hospital
Improvement Series 1992 RB (LOC-Bank One
Akron N.A.)
3.83%, 10/01/22(b) A-1+ -- 1,165 1,165,000
- -------------------------------------------------------------------------------
Ohio Housing Financing Agency (Kenwood
Congregate Retirement Community
Project); Variable Rate Demand
Multifamily Housing Series 1985 RB (LOC-
Morgan Guaranty Trust)
3.65%, 12/01/15(b) -- VMIG-1 956 956,000
- -------------------------------------------------------------------------------
36,321,000
- -------------------------------------------------------------------------------
OKLAHOMA - 2.76%
Oklahoma Development Financing Authority
(Oklahoma Hospital Association);
Variable Rate Demand Series 1999 A RB
3.80%, 06/01/29(b) A-1+ -- 20,000 20,000,000
- -------------------------------------------------------------------------------
Oklahoma Water Resources Board (State
Loan Program); Series 1999 RB
3.60%, 03/01/00(b)(e) A-1+c -- 3,000 3,000,000
- -------------------------------------------------------------------------------
Oklahoma Water Resources Board (State
Loan Program); Variable Rate Demand
Series 1995 RB
3.60%, 03/01/00(b)(e) A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------
30,000,000
- -------------------------------------------------------------------------------
OREGON - 0.46%
Oregon State Housing & Community Services
Department; Single Family Mortgage
Series 1999 C RB
3.15%, 04/13/00 -- MIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
PENNSYLVANIA - 1.51%
Delaware County Industrial Development
Authority (Henderson-Radnor Joint Venture
Project); Limited Obligation Series 1985
IDR (LOC-Corestates Bank)
4.00%, 04/01/15(b) -- Aa3 $ 765 $ 765,000
- -------------------------------------------------------------------------------
Luzerne County Convention Center
Authority; Hotel Room Rent Series 1998 A
RB (LOC-First Union National Bank)
3.80%, 09/01/28(b) A-1 -- 7,790 7,790,000
- -------------------------------------------------------------------------------
Philadelphia (City of) Parking Authority;
Parking Series 1999 RB
4.00%, 02/01/00(c) AAA Aaa 1,290 1,294,065
- -------------------------------------------------------------------------------
York (City of) General Authority; Variable
Rate Pooled Financing Series 1996 RB
(LOC-First Union National Bank)
3.85%, 09/01/26(b) A-1 -- 6,609 6,609,000
- -------------------------------------------------------------------------------
16,458,065
- -------------------------------------------------------------------------------
TENNESSEE - 6.28%
Industrial Development Board of the
Metropolitan Government of Nashville and
Davidson County (Amberwood, Ltd.
Project); Multifamily Housing Refunding
IDR (LOC-Commerzbank A.G.)
4.07%, Series 1993 A, 07/01/13(b) A-1+ VMIG-1 2,095 2,095,000
- -------------------------------------------------------------------------------
4.00%, Series 1993 B, 07/01/13(b) A-1 VMIG-1 1,790 1,790,000
- -------------------------------------------------------------------------------
Industrial Development Board of the
Metropolitan Government of Nashville &
Davidson County (Chimney Top II);
Multifamily Variable Rate Demand Series
1984 RB (LOC-Bank of America N.A.)
3.85%, 09/01/06(b) -- VMIG-1 2,100 2,100,000
- -------------------------------------------------------------------------------
Knox (County of) Health Education and
Housing Facilities Board (Solutions
Group, Inc. Project); Variable Rate
Demand Series 1999 RB
3.80%, 05/01/29(b) A-1+ -- 40,000 40,000,000
- -------------------------------------------------------------------------------
Montgomery (County of) Public Building
Authority (Tennessee County Loan Pool);
Pooled Financing Variable Rate Demand
(LOC-Bank of America N.A.)
3.80%, Series 1997 RB 11/01/27(b) -- VMIG-1 5,200 5,200,000
- -------------------------------------------------------------------------------
3.80%, Series 1999 RB 09/01/29(b) -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------
Shelby (County of); Refunding Unlimited
Tax Series 1993 A GO
4.65%, 03/01/00 AA+ Aa3 2,160 2,172,684
- -------------------------------------------------------------------------------
68,357,684
- -------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
TEXAS - 13.56%
Austin (City of) (Travis & Williamson
Counties); Combined Utility Systems
Series 1998 A Commercial Paper Notes
3.45%, 11/02/99 A-1+ P-1 $ 7,551 $ 7,551,000
- -------------------------------------------------------------------------------
Bexar (County of) Texas Housing Finance
Authority (Fountainhead Apartments);
Refunding Variable Rate Demand
Multifamily Series 1996 RB
3.75%, 09/15/26(b) A-1+ -- 8,361 8,361,000
- -------------------------------------------------------------------------------
Dallas Area Rapid Transit (DART); Sales
Tax Revenue Commercial Paper Notes Series
C (LOC-Westdeutsche Landesbank
Girozentrale)
3.30%, 10/20/99 A-1+ P-1 5,200 5,200,000
- -------------------------------------------------------------------------------
Dallas (City of) (Equipment Acquisition
Contractual Obligation); Limited Tax
Series 1998 GO
4.00%, 02/15/00 AAA Aaa 2,765 2,773,216
- -------------------------------------------------------------------------------
Fort Worth (City of); Series B General
Purpose Commercial Paper Notes
3.35%, 11/17/99 A-1+ P-1 6,000 6,000,000
- -------------------------------------------------------------------------------
Grand Prairie (City of) Texas Housing
Finance Corporation (Windridge Grand
Prairie Associates); Multifamily Housing
Refunding Series 1993 RB
3.85%, 06/01/10(b) A-1+ -- 4,500 4,500,000
- -------------------------------------------------------------------------------
Gulf Coast Waste Disposal Authority (Amoco
Oil Company Project); Texas Environmental
Improvement Series 1986 RB
3.10%, 03/01/09(b) A-1+ P-1 7,000 7,000,000
- -------------------------------------------------------------------------------
Harris County Health Facilities
Development Corp.; ACES Greater Houston
Pooled Health Series 1985 A RB (LOC-Chase
Bank of Texas N.A.)
3.85%, 11/01/25(b) A-1 -- 2,300 2,300,000
- -------------------------------------------------------------------------------
Harris County Health Facilities
Development Corp. (Gulf Coast Regional
Blood Center Project); Blood Center
Series 1992 RB (LOC-Texas Commerce Bank
N.A.)
3.90%, 04/01/17(b) A-1 -- 3,250 3,250,000
- -------------------------------------------------------------------------------
Harris (County of) Toll Road; Refunding
Sub Lien Unlimited Tax Series 1995 A GO
6.00%, 08/15/00 AA VMIG-1 2,470 2,518,788
- -------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corporation (Amoco Project); Variable
Rate Demand Series 1983 PCR
3.60%, 03/01/14(b) A-1+ Aa1 3,500 3,500,000
- -------------------------------------------------------------------------------
Houston (City of) Water and Sewer Systems;
Series A
Commercial Paper Notes
3.35%, 09/01/13(b) A-1 P-1 20,000 20,000,000
- -------------------------------------------------------------------------------
Houston (City of) Water and Sewer Systems;
Floating Rate Treasury Series A29 1999
Reg D RB
3.90%, 12/01/15(b)(d) -- VMIG-1 4,300 4,300,000
- -------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Texas - (continued)
Katy (City of) Independent School
District; Refunding Limited Tax Series
1998 A GO
4.25%, 02/15/00 AAA Aaa $ 1,935 $ 1,942,373
- -------------------------------------------------------------------------------
North Central Texas Health Facilities
Development Corp. (Methodist Hospitals
of Dallas); Flexible Rate Hospital
Series 1998 RB
3.30%, 10/12/99(b)(c) A-1+ VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------
3.35%, 10/19/99(b)(c) A-1+ VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------
Plano Texas Health Facilities Development
Corporation (Childrens-Presbyterian
Health Center); Hospital Series 1989 RB
3.55%, 01/01/19(c) A-1+ VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------
San Antonio (City of); Limited Tax Series
1998 A COP
4.00%, 02/01/00 AA+ Aa2 1,450 1,453,915
- -------------------------------------------------------------------------------
San Antonio (City of); Refunding Series
1992 RB
5.90%, 05/15/00(c) AAA Aaa 2,050 2,079,160
- -------------------------------------------------------------------------------
Tarrant (County of) Texas Health
Facilities Authority (Adventist Health
System); Variable Rate Demand Series
1997 A RB (LOC-Suntrust Bank Central
Florida)
3.80%, 11/15/27(b) A-1+ -- 8,775 8,775,000
- -------------------------------------------------------------------------------
Texas (State of); Series 1999 TRAN
4.50%, 08/31/00 SP-1+ MIG-1 24,000 24,169,463
- -------------------------------------------------------------------------------
Texas (State of) (Texas Water Financing
Assistance); JP Morgan Putter 118 Series
1999 GO
3.90%, 08/01/23(b)(d) Aar -- 4,755 4,755,000
- -------------------------------------------------------------------------------
Trinity River Industrial Development
Authority (Radiation Sterilizers, Inc.
Project); Variable Rate Demand IDR (LOC-
Comerica Bank)
3.60%, Series 1985 A 11/01/05(b) A-1 -- 500 500,000
- -------------------------------------------------------------------------------
3.60%, Series 1985 B 11/01/05(b) A-1 -- 1,650 1,650,000
- -------------------------------------------------------------------------------
147,578,915
- -------------------------------------------------------------------------------
UTAH - 0.46%
Central Utah Water Conservation District;
Refunding Variable Rate Demand Limited
Tax Series 1998 E GO
3.75%, 04/01/27(b)(c) A-1+ VMIG-1 4,000 4,000,000
- -------------------------------------------------------------------------------
Utah Associated Municipal Power System
(The Hunter Project); Refunding Series
1994 RB
4.35%, 07/01/00(c) AAA Aaa 1,000 1,005,440
- -------------------------------------------------------------------------------
5,005,440
- -------------------------------------------------------------------------------
VERMONT - 0.88%
Vermont Educational and Health Building
Finance Authority (Middlebury College
Project); Variable Rate Demand Series
1988 A RB
3.10%, 11/01/27(b)(c) A-1+ Aa 1,500 1,500,000
- -------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
Vermont - (continued)
Vermont Educational and Health Building
Finance Authority (VHA New England);
Variable Rate Hospital RB
3.85%, Series 1985 B 12/01/25(b)(c) A-1+ -- $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------
3.85%, Series 1985 E 12/01/25(b)(c) A-1+ -- 2,500 2,500,000
- -------------------------------------------------------------------------------
3.85%, Series 1985 F 12/01/25(b)(c) A-1+ -- 2,100 2,100,000
- -------------------------------------------------------------------------------
3.85%, Series 1985 G 12/01/25(b)(c) A-1+ -- 2,500 2,500,000
- -------------------------------------------------------------------------------
9,600,000
- -------------------------------------------------------------------------------
VIRGINIA - 1.43%
Manassa Park Virginia; Variable Rate
Demand Series 1999 BAN (LOC-Wachovia
Bank N.A.)
3.80%, 01/01/03(b) -- Aa2 10,000 10,000,000
- -------------------------------------------------------------------------------
Norfolk (City of) (Pooled Financing
Program-Sentara Health System Group);
Commercial Paper Revenue Notes
3.40%, 11/01/99 A-1+ P-1 5,600 5,600,000
- -------------------------------------------------------------------------------
15,600,000
- -------------------------------------------------------------------------------
WASHINGTON - 1.82%
Port of Seattle; Subordination Lien
Series 1999 A RB (LOC-Commerzbank AG)
3.35%, 10/05/99 A-1+ VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------
Washington State Public Power Supply
(Nuclear Project No. 3); Series B Pre
Refunded RB
7.40%, 01/01/00(e) AAA AAA 9,500 9,775,473
- -------------------------------------------------------------------------------
19,775,473
- -------------------------------------------------------------------------------
WEST VIRGINIA - 0.60%
West Virginia Hospital Finance Authority
(VHA Mid-Atlantic States, Inc. Capital
Asset Financing Program); RB
3.85%, Series 1985 B 12/01/25(b)(c) A-1+ -- 3,000 3,000,000
- -------------------------------------------------------------------------------
3.85%, Series 1985 C 12/01/25(b)(c) A-1+ -- 3,500 3,500,000
- -------------------------------------------------------------------------------
6,500,000
- -------------------------------------------------------------------------------
WISCONSIN - 1.70%
Milwaukee (County of); Unlimited Tax
Series 1995 A GO
5.125%, 12/01/99 AA- Aa3 2,275 2,283,194
- -------------------------------------------------------------------------------
Racine (City of); Promissory Notes
Unlimited Tax Series 1998 B GO
3.70%, 12/01/99 SP-1+ MIG-1 2,290 2,291,854
- -------------------------------------------------------------------------------
Wasau (City of) School District; Series
1999 BAN
3.45%, 06/01/00 -- MIG-1 5,000 5,003,704
- -------------------------------------------------------------------------------
Wisconsin (State of) Transportation;
Commercial Paper Notes Series 1997 (LOC-
Bayerische Landesbank Girozentrale)
3.25%, 10/12/99 A-1+ P1 8,893 8,893,000
- -------------------------------------------------------------------------------
18,471,752
- -------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
WYOMING - 0.54%
Uinta (County of) (Amoco Project);
Refunding Variable Rate Demand Series
1998 PCR
2.85%, 07/01/26(b) A-1+ Aa1 $ 5,900 $ 5,900,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.93% 1,098,532,955(g)
- -------------------------------------------------------------------------------
LIABILITIES LESS OTHER ASSETS - (0.93%) (10,146,711)
- -------------------------------------------------------------------------------
NET ASSETS - 100.00% $1,088,386,244
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT ABBREVIATIONS:
<TABLE>
<C> <S>
BAN Bond Anticipation Note
COP Certificates of Participation
GO General Obligation Bonds
Gtd Guaranteed
IDR Industrial Development Revenue Bonds
LOC Letter of Credit
Ltd. Limited
</TABLE>
<TABLE>
<S> <C>
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
RB Revenue Bonds
TAN Tax Anticipation Notes
TRAN Tax and Revenue Anticipation Notes
WTS Warrants
</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 09/30/99.
(c) Secured by bond insurance provided by one of the following companies:
AMBAC, FGIC, FSA or MBIA.
(d) 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.
(e) Subject to an irrevocable call or mandatory put by the issuer. Par value
and maturity date reflect such call or put.
(f) Secured by an escrow fund of U.S. Treasury obligations.
(g) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
17
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (amortized cost) $1,098,532,955
- ------------------------------------------------------------------------
Cash 7,406,769
- ------------------------------------------------------------------------
Receivables for:
Investments sold 3,030,000
- ------------------------------------------------------------------------
Interest 6,481,011
- ------------------------------------------------------------------------
Investment for deferred compensation plan 43,928
- ------------------------------------------------------------------------
Other assets 162,194
- ------------------------------------------------------------------------
Total assets 1,115,656,857
- ------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 24,022,762
- ------------------------------------------------------------------------
Dividends 2,969,695
- ------------------------------------------------------------------------
Deferred compensation 43,928
- ------------------------------------------------------------------------
Accrued administrative services fees 14,000
- ------------------------------------------------------------------------
Accrued advisory fees 120,275
- ------------------------------------------------------------------------
Accrued directors' fees 2,525
- ------------------------------------------------------------------------
Accrued transfer agent fees 29,115
- ------------------------------------------------------------------------
Accrued distribution fees 33,376
- ------------------------------------------------------------------------
Accrued operating expenses 34,937
- ------------------------------------------------------------------------
Total liabilities 27,270,613
- ------------------------------------------------------------------------
Net assets applicable to shares outstanding $1,088,386,244
========================================================================
NET ASSETS:
Institutional Class $ 968,609,455
========================================================================
Private Investment Class $ 88,678,984
========================================================================
Cash Management Class $ 5,524,759
========================================================================
Reserve Class $ 25,358,267
========================================================================
Resource Class $ 214,779
========================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class:
Authorized 3,000,000,000
========================================================================
Outstanding 968,605,347
========================================================================
Private Investment Class:
Authorized 1,000,000,000
========================================================================
Outstanding 88,677,372
========================================================================
Cash Management Class:
Authorized 1,000,000,000
========================================================================
Outstanding 5,524,625
========================================================================
Reserve Class:
Authorized 1,000,000,000
========================================================================
Outstanding 25,357,583
========================================================================
Resource Class:
Authorized 1,000,000,000
========================================================================
Outstanding 215,053
========================================================================
Net asset value, offering and redemption price per share $1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
STATEMENT OF OPERATIONS
For the six months ended September 30, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $18,462,258
- ------------------------------------------------------------------
EXPENSES:
Advisory fees 1,254,939
- ------------------------------------------------------------------
Administrative services fees 64,785
- ------------------------------------------------------------------
Transfer agent fees 93,476
- ------------------------------------------------------------------
Custody fees 28,262
- ------------------------------------------------------------------
Directors' fees 7,499
- ------------------------------------------------------------------
Distribution fees (Note 2) 300,870
- ------------------------------------------------------------------
Other expenses 97,206
- ------------------------------------------------------------------
Total expenses 1,847,037
- ------------------------------------------------------------------
Less: Fees waived and expenses assumed (513,563)
- ------------------------------------------------------------------
Net expenses 1,333,474
- ------------------------------------------------------------------
Net investment income 17,128,784
- ------------------------------------------------------------------
Net increase in net assets resulting from operations $17,128,784
- ------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 1999 and the year ended March 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30,
1999 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 17,128,784 $ 34,628,129
- -----------------------------------------------------------------------------
Net realized gain on sales of investments -- 8,745
- -----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 17,128,784 34,636,874
- -----------------------------------------------------------------------------
Distributions to shareholders from net
investment income:
Institutional Class (15,657,100) (32,079,516)
- -----------------------------------------------------------------------------
Private Investment Class (1,188,991) (2,486,438)
- -----------------------------------------------------------------------------
Cash Management Class (77,611) (62,175)
- -----------------------------------------------------------------------------
Reserve Class (198,244) --
- -----------------------------------------------------------------------------
Resource Class (6,838) --
- -----------------------------------------------------------------------------
Capital stock transactions - net:
Institutional Class (103,986,706) 175,685,921
- -----------------------------------------------------------------------------
Private Investment Class (1,927,463) 10,142,224
- -----------------------------------------------------------------------------
Cash Management Class (1,614,107) 7,138,732
- -----------------------------------------------------------------------------
Reserve Class 25,357,583 --
- -----------------------------------------------------------------------------
Resource Class 215,053 --
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets (81,955,640) 192,975,622
- -----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,170,341,884 977,366,262
- -----------------------------------------------------------------------------
End of period $1,088,386,244 $1,170,341,884
=============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in):
Institutional Class $ 968,681,636 $1,072,668,342
- -----------------------------------------------------------------------------
Private Investment Class 88,683,814 90,611,277
- -----------------------------------------------------------------------------
Cash Management Class 5,525,387 7,139,494
- -----------------------------------------------------------------------------
Reserve Class 25,357,583 --
- -----------------------------------------------------------------------------
Resource Class 215,053 --
- -----------------------------------------------------------------------------
Undistributed realized gain (loss) on sales
of investments (77,229) (77,229)
- -----------------------------------------------------------------------------
$1,088,386,244 $1,170,341,884
=============================================================================
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
(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 currently offers six different classes of shares, the
Institutional Class ("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 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. Security Valuations - The Fund's securities are valued on the basis of
amortized cost which approximates market value. This method values a
security at its cost on the date of purchase and thereafter, assumes a
constant amortization to maturity of any discount or premiums.
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. Net realized capital gains (including net short-term capital
gains and market discounts), if any, are distributed annually.
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 $77,230 (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 - 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 between the classes.
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 has contractually agreed to limit the Fund's expenses (exclusive of 12b-1
fees, interest, taxes, brokerage commissions, extraordinary expenses and
federal registration fees) to the maximum annual rate of 0.20% of the average
daily net assets of the Fund's Private Investment Class, Personal Investment
Class, Cash Management Class, Reserve Class and Resource Class. During the six
months ended September 30, 1999, AIM waived its advisory fees of $390,329.
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. During the six months ended September 30,
1999, AIM was paid $64,785 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
21
<PAGE>
Class, the Personal Investment Class, the Cash Management Class, the Reserve
Class, and the Resource Class pay up to a 0.50%, 0.75%, 0.10%, 1.00%, and
0.20%, respectively, maximum annual rate of the average daily net assets
attributable to such class. Of this amount, the Fund may pay an asset-based
sales charge to FMC and the Fund may pay a service fee of (a) 0.25% of the
average daily net assets of each of the Private Investment Class, Personal
Investment Class, and the Reserve Class, (b) 0.10% of the average daily net
assets of the Cash Management Class and (c) 0.20% of the average daily net
assets of the Resource Class, to selected banks, broker-dealers and other
financial institutions who offer continuing personal shareholder services to
their customers who purchase and own shares of the Private Investment Class,
the Personal Investment Class, the Cash Management Class, the Reserve Class, or
the Resource Class. Any amounts not paid as a service fee under such Plan would
constitute an asset-based sales charge. The Plan also imposes a cap on the
total amount of sales charges, including asset-based sales charges, that may be
paid by the Fund with respect to each class. During the six months ended
September 30, 1999, the Private Investment Class, the Cash Management Class,
the Reserve Class and the Resource Class paid $105,100, $2,083, $70,084 and
$369, respectively, as compensation to FMC under the Plan. FMC waived fees of
$123,234 during the same period.
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 agent and
shareholder services to the Fund. During the six months ended September 30,
1999, the Fund paid AFS $68,240 for such services.
During the six months ended September 30, 1999, the Fund paid legal fees of
$3,129 for services rendered by Kramer, Levin, Naftalis & Frankel LLP 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 directors who are 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,
1999 and the year ended March 31, 1999 were as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 MARCH 31, 1999
------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 3,455,035,959 $3,455,035,959 7,257,933,597 $ 7,257,933,597
- -------------------------------------------------------------------------------------------
Private Investment
Class 182,810,242 182,810,242 580,913,749 580,913,749
- -------------------------------------------------------------------------------------------
Cash Management Class* 8,463,343 8,463,343 13,152,591 13,152,591
- -------------------------------------------------------------------------------------------
Reserve Class** 94,830,488 94,830,488 -- --
- -------------------------------------------------------------------------------------------
Resource Class*** 14,857,101 14,857,101 -- --
- -------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 973,207 973,207 1,929,870 1,929,870
- -------------------------------------------------------------------------------------------
Private Investment
Class 1,002,097 1,002,097 2,254,362 2,254,362
- -------------------------------------------------------------------------------------------
Cash Management Class* 78,890 78,890 41,812 41,812
- -------------------------------------------------------------------------------------------
Reserve Class** 148,035 148,035 -- --
- -------------------------------------------------------------------------------------------
Resource Class*** 5,187 5,187 -- --
- -------------------------------------------------------------------------------------------
Redeemed:
Institutional Class (3,559,995,872) (3,559,995,872) (7,084,177,546) (7,084,177,546)
- -------------------------------------------------------------------------------------------
Private Investment
Class (185,739,802) (185,739,802) (573,025,887) (573,025,887)
- -------------------------------------------------------------------------------------------
Cash Management Class* (10,156,340) (10,156,340) (6,055,671) (6,055,671)
- -------------------------------------------------------------------------------------------
Reserve Class** (69,620,940) (69,620,940) -- --
- -------------------------------------------------------------------------------------------
Resource Class*** (14,647,235) (14,647,235) -- --
- -------------------------------------------------------------------------------------------
Net increase (decrease) (81,955,640) $ (81,955,640) 192,966,877 $ 192,966,877
===========================================================================================
</TABLE>
* The Cash Management Class commenced sales on January 4, 1999.
** The Reserve Class commenced sales on June 1, 1999.
*** The Resource Class commenced sales on April 6, 1999.
22
<PAGE>
NOTE 5 - FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Cash Management Class
capital stock outstanding during the six months ended September 30, 1999, and
the period January 4, 1999 (date sales commenced) through March 31, 1999.
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1999 1999
------------- ---------
<S> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00
- --------------------------------------------- ------ ------
Income from investment operations:
Net investment income 0.02 0.01
- --------------------------------------------- ------ ------
Less distributions:
Dividends from net investment income (0.02) (0.01)
- --------------------------------------------- ------ ------
Net asset value, end of period $ 1.00 $ 1.00
- --------------------------------------------- ------ ------
Total return 1.51% 0.64%
- --------------------------------------------- ------ ------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $5,525 $7,139
- --------------------------------------------- ------ ------
Ratio of expenses to average net assets(a) 0.28%(b) 0.28%(c)
- --------------------------------------------- ------ ------
Ratio of net investment income to average net
assets(d) 2.99%(b) 3.08%(c)
- --------------------------------------------- ------ ------
</TABLE>
(a) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements are
0.37% (annualized) and 0.38% (annualized).
(b) Ratios are annualized and based on average net assets of $5,208,488.
(c) Annualized.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements are 2.90% (annualized) and 2.98% (annualized).
23
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
DIRECTORS
Charles T. Bauer Carl Frischling Tax-Free
Bruce L. Crockett Robert H. Graham Investments Co.
Owen Daly II Prema Mathai-Davis (TFIC)
Edward K. Dunn, Jr. Lewis F. Pennock
Jack M. Fields Louis S. Sklar
OFFICERS
Charles T. Bauer Chairman
Robert H. Graham President
Gary T. Crum Sr. Vice President Cash Reserve
Carol F. Relihan Sr. Vice President & Secretary Portfolio
Dana R. Sutton Vice President & Treasurer ------------------------------------------
Melville B. Cox Vice President Cash SEMIANNUAL
Karen Dunn Kelley Vice President Management REPORT
J. Abbott Sprague Vice President Class
Mary J. Benson Assistant Vice President & Assistant Treasurer
Sheri Morris Assistant Vice President & Assistant Treasurer
Renee A. Friedli Assistant Secretary
P. Michelle Grace Assistant Secretary
Jeffrey H. Kupor Assistant Secretary September 30, 1999
Nancy L. Martin Assistant Secretary
Ofelia M. Mayo Assistant Secretary
Lisa A. Moss Assistant Secretary
Kathleen J. Pflueger Assistant Secretary
Samuel D. Sirko Assistant Secretary
Stephen I. Winer Assistant Secretary
[LOGO APPEARS HERE]
Fund Management Company
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 DIRECTORS
Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022
TRANSFER AGENT
A I M Fund Services, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
This report may be distributed only to current shareholders or
to persons who have received a current prospectus.
</TABLE>
