<PAGE>
[AIM LOGO APPEARS HERE] Dear Shareholder:
[PHOTO of During the six months covered by this report,
Charles T. Bauer, the U.S. economy continued to exhibit solid
Chairman of the growth with little or no inflation. Gross
LETTER Board of The Fund domestic product grew at a 3.1% annual rate in
TO OUR APPEARS HERE] the third quarter of 1997 and a 3.7% annual rate
SHAREHOLDERS in the final quarter of the year. Sturdy growth
is expected in the first half of 1998 as well. Inflation was well
controlled, remaining in the 1% to 2% range. As a result, the
Federal Reserve Board (the Fed) kept its key short-term target,
the federal funds rate, at 5.50% throughout the reporting period.
During the last half of 1997, markets focused on the collapse
in several Asian countries' currencies and the potential effects
on the U.S. economy. As Asian economic turmoil continued, fixed-
income markets rallied in anticipation that the Fed would lower
rates to counteract the dampening effects of the Far East
situation. At the close of the reporting period, the markets were
still waiting for the much-anticipated slowdown, and interest
rates had moved up some as the chance of the Fed's lowering rates
was pushed further into the future.
YOUR INVESTMENT PORTFOLIO
As of February 28, 1998, the Personal Investment Class of the
Short-Term Investments Co. Prime Portfolio produced competitive
monthly yield of 5.02%; the Portfolio's seven-day yield was also
5.02%.
Portfolio management continued its disciplined approach of
maintaining a laddered 60-day maximum maturity schedule. This
structure allows the Portfolio to respond to higher interest-rate
levels more quickly than funds with longer maturity structures
and thus to take advantage of higher yields that were prevalent
at the end of 1997. The Portfolio's weighted average maturity
(WAM) was maintained in the 15- to 25-day range during the six-
month period. At the end of February the WAM stood at 18 days.
The Prime Portfolio seeks to maximize current income to the
extent consistent with preservation of capital and maintenance of
liquidity. It invests in high-grade taxable money market
instruments with maturities of 60 days or less; including U.S.
government obligations, bank obligations, commercial paper, and
selected repurchase agreement securities. As with any money
market fund, an investment in Prime Portfolio is neither insured
nor guaranteed by the U.S. government, the FDIC or a bank, and
there can be no assurance that the Portfolio will be able to
maintain a stable net asset value of $1.00 per share.
The Portfolio holds the credit quality ratings given by two
widely known credit-rating agencies: AAAm from Standard & Poor's
Corporation and Aaa from Moody's Investors Service, Inc. The
ratings are historical and are based on an analysis of the
Portfolio's credit quality, composition, management, and weekly
portfolio reviews.
Net assets of the Personal Investment Class stood at $108.46
million as of February 28, 1998, up from $97.22 million six
months earlier.
(continued)
<PAGE>
OUTLOOK FOR THE FUTURE
As the reporting period closed, the general expectation was that
the economy would continue to grow at a solid pace of around 3%
and then slow somewhat in the second half of 1998 as the effects
of Asia's difficulties take hold. Inflation was expected to
remain tame and the Fed was expected to hold rates steady for the
foreseeable future. In his late-February testimony to Congress,
Fed Chairman Alan Greenspan noted that the deflationary effects
of turmoil in Asia could offset the inflationary pressures from
strong domestic spending and tight U.S. labor markets.
For the foreseeable future, the Portfolio will continue to
maintain a weighted average maturity in the 15- to 25-day range
to remain flexible and to react quickly to any sudden interest
rate changes. AIM remains committed to the primary goals of
safety, liquidity and yield in institutional fund management.
We are pleased to send you this report concerning your
investment. We also are committed to customer service and 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
2
<PAGE>
SCHEDULE OF INVESTMENTS
February 28, 1998
(Unaudited)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
COMMERCIAL PAPER - 85.39%(a)
BASIC INDUSTRIES - 2.26%
CHEMICALS - 1.69%
Bayer Corp.
5.48% 03/31/98 $ 50,000 $ 49,771,667
- -------------------------------------------------------------------------
Du Pont (E.I.) de Nemours and Co.
5.42% 03/20/98 25,000 24,984,944
- -------------------------------------------------------------------------
5.48% 03/30/98 25,000 24,889,639
- -------------------------------------------------------------------------
Henkel Corp.
5.43% 03/20/98 15,000 14,957,013
- -------------------------------------------------------------------------
114,603,263
- -------------------------------------------------------------------------
METAL MINING - 0.57%
Rio Tinto America, Inc.
5.465% 03/06/98 38,700 38,670,625
- -------------------------------------------------------------------------
Total Basic Industries 153,273,888
- -------------------------------------------------------------------------
CAPITAL GOODS - 3.90%
COMPUTERS & OFFICE EQUIPMENT - 0.74%
Xerox Credit Corp.
5.47% 04/01/98 50,000 49,764,486
- -------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.74%
Sony Capital Corp.
5.50% 03/17/98 20,000 19,951,111
- -------------------------------------------------------------------------
5.51% 03/17/98 30,000 29,926,534
- -------------------------------------------------------------------------
49,877,645
- -------------------------------------------------------------------------
MACHINE TOOLS & RELATED PRODUCTS - 0.22%
Vermont American Corp.
5.48% 03/30/98 15,081 15,014,426
- -------------------------------------------------------------------------
MACHINERY - 2.20%
Dover Corp.
5.50% 03/09/98 24,000 23,970,667
- -------------------------------------------------------------------------
5.50% 03/12/98 20,000 19,966,389
- -------------------------------------------------------------------------
5.47% 03/18/98 30,000 29,922,508
- -------------------------------------------------------------------------
5.50% 03/19/98 34,500 34,405,125
- -------------------------------------------------------------------------
5.49% 03/30/98 20,000 19,911,550
- -------------------------------------------------------------------------
5.56% 04/02/98 21,000 20,896,213
- -------------------------------------------------------------------------
149,072,452
- -------------------------------------------------------------------------
Total Capital Goods 263,729,009
- -------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
CONSUMER DURABLES - 13.04%
AUTOMOBILE - 11.67%
Daimler-Benz North America Corp.
5.455% 03/02/98 $ 25,000 $ 24,996,212
- -----------------------------------------------------------------
5.45% 03/11/98 15,096 15,073,146
- -----------------------------------------------------------------
5.46% 03/11/98 50,000 49,924,166
- -----------------------------------------------------------------
5.43% 03/16/98 50,000 49,886,875
- -----------------------------------------------------------------
5.44% 03/20/98 50,000 49,856,445
- -----------------------------------------------------------------
5.47% 04/08/98 25,000 24,855,653
- -----------------------------------------------------------------
5.53% 04/13/98 50,000 49,669,736
- -----------------------------------------------------------------
5.52% 04/16/98 32,000 31,774,293
- -----------------------------------------------------------------
Ford Motor Credit Co.
5.45% 03/06/98 50,000 49,962,153
- -----------------------------------------------------------------
5.46% 03/20/98 30,000 29,913,550
- -----------------------------------------------------------------
5.49% 04/02/98 50,000 49,756,000
- -----------------------------------------------------------------
5.49% 04/03/98 50,000 49,748,375
- -----------------------------------------------------------------
5.48% 04/06/98 50,000 49,726,000
- -----------------------------------------------------------------
5.48% 04/17/98 30,000 29,785,367
- -----------------------------------------------------------------
Toyota Motor Credit Corp.
5.48% 03/02/98 30,000 29,995,433
- -----------------------------------------------------------------
5.51% 03/06/98 15,000 14,988,521
- -----------------------------------------------------------------
5.48% 03/09/98 25,000 24,969,556
- -----------------------------------------------------------------
5.46% 03/10/98 30,000 29,959,050
- -----------------------------------------------------------------
5.49% 03/16/98 25,000 24,942,812
- -----------------------------------------------------------------
5.48% 03/17/98 25,000 24,939,111
- -----------------------------------------------------------------
5.50% 03/24/98 25,000 24,912,153
- -----------------------------------------------------------------
5.48% 03/27/98 30,000 29,881,267
- -----------------------------------------------------------------
5.50% 03/27/98 30,000 29,880,833
- -----------------------------------------------------------------
789,396,707
- -----------------------------------------------------------------
RESIDENTIAL CONSTRUCTION - 1.37%
Weyerhaeuser Real Estate Co.
5.45% 03/05/98 25,000 24,984,861
- -----------------------------------------------------------------
5.50% 03/19/98 15,000 14,958,750
- -----------------------------------------------------------------
5.48% 04/02/98 35,000 34,829,511
- -----------------------------------------------------------------
5.49% 04/03/98 18,000 17,909,415
- -----------------------------------------------------------------
92,682,537
- -----------------------------------------------------------------
Total Consumer Durables 882,079,244
- -----------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
CONSUMER NONDURABLES - 7.24%
BEVERAGES - 0.74%
Coca-Cola Co. (The)
5.45% 03/23/98 $ 25,000 $ 24,916,736
- --------------------------------------------------------------------------
5.45% 04/07/98 25,000 24,859,965
- --------------------------------------------------------------------------
49,776,701
- --------------------------------------------------------------------------
DRUGS - 0.77%
Novartis Finance Corp.
5.46% 03/10/98 27,000 26,963,145
- --------------------------------------------------------------------------
Pfizer Inc.
5.50% 03/30/98 25,000 24,889,236
- --------------------------------------------------------------------------
51,852,381
- --------------------------------------------------------------------------
FOOD PROCESSING - 3.56%
Campbell Soup Co.
5.43% 03/17/98 18,000 17,956,560
- --------------------------------------------------------------------------
5.45% 03/18/98 25,000 24,935,660
- --------------------------------------------------------------------------
5.45% 03/27/98 25,000 24,901,597
- --------------------------------------------------------------------------
Cargill Financial Services Corp.
5.46% 03/30/98 25,000 24,890,042
- --------------------------------------------------------------------------
Heinz (H.J.) Co.
5.43% 03/03/98 25,000 24,992,458
- --------------------------------------------------------------------------
5.50% 03/04/98 27,610 27,597,345
- --------------------------------------------------------------------------
5.45% 03/11/98 30,100 30,054,432
- --------------------------------------------------------------------------
5.48% 04/03/98 39,000 38,804,090
- --------------------------------------------------------------------------
5.45% 04/09/98 27,000 26,840,588
- --------------------------------------------------------------------------
240,972,772
- --------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 0.33%
Colgate-Palmolive Co.
5.46% 03/26/98 22,400 22,315,067
- --------------------------------------------------------------------------
PUBLISHING (NEWSPAPERS) - 1.55%
Gannett Co., Inc.
5.49% 03/19/98 25,000 24,931,375
- --------------------------------------------------------------------------
5.50% 04/07/98 30,000 29,830,417
- --------------------------------------------------------------------------
5.50% 04/09/98 50,000 49,702,083
- --------------------------------------------------------------------------
104,463,875
- --------------------------------------------------------------------------
PUBLISHING (EXCLUDING NEWSPAPERS) - 0.29%
Donnelley (R.R.) & Sons Co.
5.48% 03/24/98 20,000 19,929,978
- --------------------------------------------------------------------------
Total Consumer Nondurables 489,310,774
- --------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
CONSUMER SERVICES - 1.34%
BROADCAST MEDIA - 1.34%
Scripps (E.W.) Co.
5.43% 03/11/98 $32,635 $ 32,585,776
- ----------------------------------------------------------------------
5.455% 03/11/98 25,000 24,962,118
- ----------------------------------------------------------------------
5.43% 03/12/98 33,050 32,995,164
- ----------------------------------------------------------------------
Total Consumer Services 90,543,058
- ----------------------------------------------------------------------
ENERGY - 0.67%
OIL & GAS (INTEGRATED) - 0.67%
Exxon Imperial U.S., Inc.
5.52% 04/13/98 30,606 30,404,204
- ----------------------------------------------------------------------
Petrofina Delaware, Inc.
5.45% 03/20/98 15,000 14,956,854
- ----------------------------------------------------------------------
Total Energy 45,361,058
- ----------------------------------------------------------------------
FINANCIAL - 53.37%
ASSET-BACKED SECURITIES - 24.87%
Asset Securitization Cooperative Corp.
5.49% 03/04/98 35,000 34,983,988
- ----------------------------------------------------------------------
5.49% 03/06/98 50,000 49,961,875
- ----------------------------------------------------------------------
5.45% 03/13/98 30,000 29,945,500
- ----------------------------------------------------------------------
5.50% 04/03/98 50,000 49,747,917
- ----------------------------------------------------------------------
Ciesco, L.P.
5.47% 03/23/98 25,000 24,916,431
- ----------------------------------------------------------------------
Clipper Receivables Corp.
5.48% 03/02/98 46,662 46,654,897
- ----------------------------------------------------------------------
5.49% 03/23/98 25,473 25,387,538
- ----------------------------------------------------------------------
5.51% 03/25/98 43,000 42,842,047
- ----------------------------------------------------------------------
Corporate Asset Funding Co., Inc.
5.46% 03/06/98 50,000 49,962,083
- ----------------------------------------------------------------------
5.50% 04/01/98 50,000 49,763,194
- ----------------------------------------------------------------------
5.48% 04/03/98 50,000 49,748,833
- ----------------------------------------------------------------------
Delaware Funding Corp.
5.46% 03/12/98 35,993 35,932,952
- ----------------------------------------------------------------------
Eiger Capital Corp.
5.51% 03/23/98 50,000 49,831,639
- ----------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
FINANCIAL - (continued)
ASSET-BACKED SECURITIES - (CONTINUED)
Falcon Asset Securitization Corp.
5.48% 03/02/98 $ 20,000 $ 19,996,955
- -----------------------------------------------------------------------
5.50% 03/09/98 32,700 32,660,033
- -----------------------------------------------------------------------
5.47% 03/13/98 44,325 44,244,181
- -----------------------------------------------------------------------
5.46% 03/17/98 50,000 49,878,667
- -----------------------------------------------------------------------
Fleet Funding Corp.
5.47% 03/02/98 50,000 49,992,403
- -----------------------------------------------------------------------
5.49% 03/04/98 38,590 38,572,345
- -----------------------------------------------------------------------
5.51% 03/12/98 25,000 24,957,910
- -----------------------------------------------------------------------
5.50% 03/18/98 47,285 47,162,190
- -----------------------------------------------------------------------
Monte Rosa Capital Corp.
5.48% 03/02/98 40,000 39,993,911
- -----------------------------------------------------------------------
5.49% 03/10/98 45,000 44,938,238
- -----------------------------------------------------------------------
5.49% 03/17/98 40,000 39,902,400
- -----------------------------------------------------------------------
5.50% 03/24/98 40,000 39,859,444
- -----------------------------------------------------------------------
5.53% 03/24/98 19,168 19,100,278
- -----------------------------------------------------------------------
5.48% 04/02/98 30,000 29,853,867
- -----------------------------------------------------------------------
5.48% 04/14/98 25,000 24,832,556
- -----------------------------------------------------------------------
5.48% 04/20/98 25,000 24,809,722
- -----------------------------------------------------------------------
5.53% 04/24/98 17,112 16,970,056
- -----------------------------------------------------------------------
Preferred Receivables Funding Corp.
5.51% 03/19/98 24,175 24,108,398
- -----------------------------------------------------------------------
5.51% 03/24/98 23,525 23,442,185
- -----------------------------------------------------------------------
5.46% 03/25/98 25,175 25,083,363
- -----------------------------------------------------------------------
5.49% 04/13/98 78,750 78,233,597
- -----------------------------------------------------------------------
5.50% 04/20/98 58,000 57,556,944
- -----------------------------------------------------------------------
Receivables Capital Corp.
5.47% 03/03/98 31,140 31,130,537
- -----------------------------------------------------------------------
5.51% 03/19/98 30,000 29,917,350
- -----------------------------------------------------------------------
5.50% 04/09/98 50,000 49,702,083
- -----------------------------------------------------------------------
5.49% 04/16/98 40,000 39,719,400
- -----------------------------------------------------------------------
Sheffield Receivables Corp.
5.51% 03/17/98 50,000 49,877,556
- -----------------------------------------------------------------------
5.52% 03/18/98 50,000 49,869,667
- -----------------------------------------------------------------------
5.49% 03/26/98 42,400 42,238,350
- -----------------------------------------------------------------------
5.50% 03/31/98 30,000 29,862,500
- -----------------------------------------------------------------------
5.57% 04/17/98 23,750 23,577,291
- -----------------------------------------------------------------------
1,681,723,271
- -----------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
FINANCIAL - (continued)
BANKING - 2.36%
Bank of America
5.45% 03/25/98 $30,000 $ 29,891,000
- ---------------------------------------------------------------------------
Canadian Imperial Holdings Inc.
5.48% 03/10/98 30,000 29,958,900
- ---------------------------------------------------------------------------
5.46% 03/18/98 30,000 29,922,650
- ---------------------------------------------------------------------------
Commerze Bank U.S. Finance, Inc.
5.46% 04/24/98 30,000 29,754,300
- ---------------------------------------------------------------------------
Dresdner U.S. Finance, Inc.
5.54% 04/02/98 40,000 39,809,178
- ---------------------------------------------------------------------------
159,336,028
- ---------------------------------------------------------------------------
BROKERAGE/INVESTMENTS - 13.43%
Bear, Stearns & Co. Inc.
5.56% 03/06/98 50,000 49,961,389
- ---------------------------------------------------------------------------
5.46% 03/13/98 50,000 49,909,000
- ---------------------------------------------------------------------------
5.49% 03/26/98 50,000 49,809,375
- ---------------------------------------------------------------------------
5.52% 04/22/98 50,000 49,601,333
- ---------------------------------------------------------------------------
5.49% 04/23/98 20,000 19,838,350
- ---------------------------------------------------------------------------
Credit Suisse First Boston Corp.
5.52% 03/03/98 50,000 49,984,667
- ---------------------------------------------------------------------------
5.47% 03/11/98 25,000 24,962,014
- ---------------------------------------------------------------------------
Merrill Lynch & Co. Inc.
5.44% 03/13/98 35,000 34,936,534
- ---------------------------------------------------------------------------
5.48% 03/16/98 50,000 49,885,833
- ---------------------------------------------------------------------------
5.49% 04/08/98 50,000 49,710,250
- ---------------------------------------------------------------------------
5.47% 04/20/98 40,000 39,696,111
- ---------------------------------------------------------------------------
Morgan Stanley, Dean Witter, Discover & Co.
5.47% 03/09/98 40,000 39,951,378
- ---------------------------------------------------------------------------
5.47% 03/27/98 50,000 49,802,472
- ---------------------------------------------------------------------------
5.48% 04/06/98 26,000 25,857,520
- ---------------------------------------------------------------------------
5.49% 04/07/98 40,000 39,774,300
- ---------------------------------------------------------------------------
5.49% 04/08/98 30,000 29,826,150
- ---------------------------------------------------------------------------
Smith Barney, Inc.
5.50% 03/03/98 50,000 49,984,722
- ---------------------------------------------------------------------------
5.49% 03/09/98 50,000 49,939,000
- ---------------------------------------------------------------------------
5.47% 03/10/98 40,000 39,945,300
- ---------------------------------------------------------------------------
5.44% 03/11/98 25,000 24,962,222
- ---------------------------------------------------------------------------
5.47% 03/11/98 50,000 49,924,028
- ---------------------------------------------------------------------------
5.46% 03/12/98 40,000 39,933,267
- ---------------------------------------------------------------------------
908,195,215
- ---------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
FINANCIAL - (continued)
BUSINESS CREDIT - 0.29%
National Rural Utilities Cooperative Finance
Corp.
5.49% 04/14/98 $ 20,000 $ 19,865,800
- ------------------------------------------------------------------------------
INSURANCE (LIFE) - 3.63%
Metlife Funding, Inc.
5.48% 03/26/98 30,972 30,854,134
- ------------------------------------------------------------------------------
Prudential Funding Corp.
5.47% 03/03/98 25,000 24,992,403
- ------------------------------------------------------------------------------
5.57% 03/05/98 50,000 49,969,056
- ------------------------------------------------------------------------------
5.48% 03/10/98 30,000 29,958,900
- ------------------------------------------------------------------------------
5.43% 03/13/98 50,000 49,909,500
- ------------------------------------------------------------------------------
5.47% 03/18/98 30,000 29,922,508
- ------------------------------------------------------------------------------
5.49% 04/06/98 30,000 29,835,300
- ------------------------------------------------------------------------------
245,441,801
- ------------------------------------------------------------------------------
INSURANCE (PROPERTY & CASUALTY) - 0.59%
A.I. Credit Corp.
5.50% 03/05/98 40,000 39,975,555
- ------------------------------------------------------------------------------
PERSONAL CREDIT - 3.68%
Associates Corp. of North America
5.47% 03/04/98 40,000 39,981,767
- ------------------------------------------------------------------------------
5.48% 03/09/98 50,000 49,939,111
- ------------------------------------------------------------------------------
5.51% 03/19/98 30,000 29,917,350
- ------------------------------------------------------------------------------
5.48% 03/30/98 30,000 29,867,567
- ------------------------------------------------------------------------------
5.47% 03/31/98 50,000 49,772,083
- ------------------------------------------------------------------------------
5.49% 04/24/98 50,000 49,588,250
- ------------------------------------------------------------------------------
249,066,128
- ------------------------------------------------------------------------------
MULTIPLE INDUSTRY - 4.52%
General Electric Capital Corp.
5.55% 03/04/98 50,000 49,976,875
- ------------------------------------------------------------------------------
5.50% 03/05/98 29,000 28,982,278
- ------------------------------------------------------------------------------
5.55% 03/06/98 22,475 22,457,675
- ------------------------------------------------------------------------------
5.45% 03/12/98 50,000 49,916,736
- ------------------------------------------------------------------------------
5.46% 03/16/98 50,000 49,886,250
- ------------------------------------------------------------------------------
5.46% 03/19/98 50,000 49,863,500
- ------------------------------------------------------------------------------
5.49% 03/31/98 30,000 29,862,750
- ------------------------------------------------------------------------------
5.48% 04/10/98 25,000 24,847,778
- ------------------------------------------------------------------------------
305,793,842
- ------------------------------------------------------------------------------
Total Financial 3,609,397,640
- ------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
RETAIL - 0.40%
SPECIALTY STORES - 0.40%
Toys "R" Us Inc.
5.50% 03/30/98 $27,000 $ 26,880,375
- --------------------------------------------------------------------------
Total Retail 26,880,375
- --------------------------------------------------------------------------
UTILITIES - 3.17%
TELEPHONE - 3.17%
Ameritech Capital Funding Corp.
5.52% 03/06/98 25,000 24,980,833
- --------------------------------------------------------------------------
5.45% 03/10/98 31,000 30,957,763
- --------------------------------------------------------------------------
5.45% 04/06/98 30,000 29,836,500
- --------------------------------------------------------------------------
BellAtlantic Financial Services, Inc.
5.50% 03/10/98 25,000 24,965,625
- --------------------------------------------------------------------------
BellSouth Capital Funding Corp.
5.44% 03/02/98 23,900 23,896,388
- --------------------------------------------------------------------------
5.47% 03/16/98 30,000 29,931,625
- --------------------------------------------------------------------------
5.45% 03/30/98 25,000 24,890,243
- --------------------------------------------------------------------------
SBC Communications Capital Corp.
5.48% 03/25/98 25,000 24,908,667
- --------------------------------------------------------------------------
Total Utilities 214,367,644
- --------------------------------------------------------------------------
Total Commercial Paper 5,774,942,690
- --------------------------------------------------------------------------
MASTER NOTE AGREEMENTS - 0.54%
Goldman Sachs Group (The), L.P.
5.625%(b) 04/20/98 3,000 3,000,000
- --------------------------------------------------------------------------
Merrill Lynch Mortgage Capital Inc.
5.9875%(c) 08/17/98 30,600 30,600,000
- --------------------------------------------------------------------------
Morgan (J.P.) Securities Inc.
5.7575%(d) 04/06/98 3,000 3,000,000
- --------------------------------------------------------------------------
Total Master Note Agreements 36,600,000
- --------------------------------------------------------------------------
Total Investments (excluding Repurchase
Agreements) 5,811,542,690
- --------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENTS -
15.10%(e)
BZW Securities Inc.
5.68%(f) 03/02/98 $108,313 $ 108,313,044
- -------------------------------------------------------------
Bear, Stearns & Co. Inc.
5.67%(g) - 100,000 100,000,000
- -------------------------------------------------------------
5.65%(h) - 100,000 100,000,000
- -------------------------------------------------------------
CIBC Oppenheimer Corp.
5.68%(i) 03/02/98 400,000 400,000,000
- -------------------------------------------------------------
Dresdner Kleinwort
Benson North America
LLC
5.70%(j) 03/02/98 45,000 45,000,000
- -------------------------------------------------------------
Nesbitt Burns Securities
Inc.
5.68%(k) - 5,000 5,000,000
- -------------------------------------------------------------
5.65%(l) - 10,000 10,000,000
- -------------------------------------------------------------
Smith Barney, Inc.
5.68%(m) - 252,671 252,671,430
- -------------------------------------------------------------
Total Repurchase
Agreements 1,020,984,474
- -------------------------------------------------------------
TOTAL INVESTMENTS -
101.03% 6,832,527,164(n)
- -------------------------------------------------------------
OTHER LIABILITIES LESS
ASSETS - (1.03%) (69,558,014)
- -------------------------------------------------------------
NET ASSETS - 100.00% $6,762,969,150
=============================================================
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Some commercial paper is traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Portfolio.
(b) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase Agreement upon seven business days' prior written notice to
the issuer. Interest rates on master notes are redetermined periodically.
Rate shown is the rate in effect on 02/28/98.
(c) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase Agreement upon two business days' notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in
effect on 02/28/98.
(d) The Portfolio may demand prepayment of notes purchased under the Master
Note Purchase Agreement upon seven business days' notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in
effect on 02/28/98.
(e) Collateral on repurchase agreements, including the Portfolio's pro-rata
interest in joint repurchase agreements, is taken into possession by the
Fund upon entering into the repurchase agreement. The collateral is marked
to market daily to ensure its market value as being 102% of the sales price
of the repurchase agreement. The investments in some repurchase agreements
are through participation in joint accounts with other mutual funds,
private accounts and certain non-registered investment companies managed by
the investment advisor or its affiliates.
(f) Joint repurchase agreement entered into 02/27/98 with a maturing value of
$400,189,333. Collateralized by $409,970,000 U.S. Government obligations,
0% to 6.789% due 03/11/98 to 02/15/08 with an aggregate market value at
02/28/98 of $408,000,678.
(g) Open joint repurchase agreement. Either party may terminate the agreement
upon demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $351,545,000 U.S. Government obligations, 0% to 8.45% due
03/01/98 to 12/15/17 with an aggregate market value at 02/28/98 of
$306,043,482.
11
<PAGE>
(h) Open joint repurchase agreement. Either party may terminate the agreement
upon demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $991,047,000 U.S. Government obligations, 0% to 11.25%
due 08/15/99 to 02/15/27 with an aggregate market value at 02/28/98 of
$306,026,754.
(i) Entered into 02/27/98 with a maturing value of $400,189,333. Collateralized
by $406,519,000 U.S. Government obligations, 0% to 7.17% due 03/09/98 to
02/15/08 with an aggregate market value at 02/28/98 of $408,000,534.
(j) Joint repurchase agreement entered into 02/27/98 with a maturing value of
$300,142,500. Collateralized by $623,931,078 U.S. Government obligations,
0% to 7.00% due 10/01/00 to 04/01/37 with an aggregate market value at
02/28/98 of $306,001,633.
(k) Open joint repurchase agreement. Either party may terminate the agreement
upon demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $79,053,000 U.S. Government obligations, 0% to 8.335% due
03/04/98 to 04/01/36 with an aggregate market value at 02/28/98 of
$76,500,233.
(l) Open joint repurchase agreement. Either party may terminate the agreement
upon demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $503,831,000 U.S. Government obligations, 0% to 7.00% due
05/15/98 to 08/15/27 with an aggregate market value at 02/28/98 of
$214,200,526.
(m) Open joint repurchase agreement. Either party may terminate the agreement
upon demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $480,588,000 U.S. Government obligations, 0% to 10.70%
due 03/12/98 to 02/04/28 with an aggregate market value at 02/28/98 of
$490,153,664.
(n) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1998
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $5,811,542,690
- ------------------------------------------------------------------------
Repurchase agreements 1,020,984,474
- ------------------------------------------------------------------------
Interest receivable 457,261
- ------------------------------------------------------------------------
Investment for deferred compensation plan 95,280
- ------------------------------------------------------------------------
Other assets 815,449
- ------------------------------------------------------------------------
Total assets 6,833,895,154
- ------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 39,809,178
- ------------------------------------------------------------------------
Dividends 30,075,743
- ------------------------------------------------------------------------
Deferred compensation 95,280
- ------------------------------------------------------------------------
Accrued administrative services fees 10,457
- ------------------------------------------------------------------------
Accrued advisory fees 308,533
- ------------------------------------------------------------------------
Accrued distribution fees 217,338
- ------------------------------------------------------------------------
Accrued transfer agent fees 68,384
- ------------------------------------------------------------------------
Accrued operating expenses 341,091
- ------------------------------------------------------------------------
Total liabilities 70,926,004
- ------------------------------------------------------------------------
NET ASSETS $6,762,969,150
========================================================================
NET ASSETS:
Institutional Class $5,130,746,265
========================================================================
Private Investment Class $ 308,965,249
========================================================================
Personal Investment Class $ 108,457,506
========================================================================
Cash Management Class $1,000,836,744
========================================================================
Resource Class $ 213,963,386
========================================================================
CAPITAL STOCK, $.001 PAR VALUE PER SHARE:
Institutional Class 5,130,751,126
========================================================================
Private Investment Class 308,965,529
========================================================================
Personal Investment Class 108,457,604
========================================================================
Cash Management Class 1,000,837,650
========================================================================
Resource Class 213,963,579
========================================================================
NET ASSET VALUE PER SHARE:
Net asset value, offering and redemption price per share $1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
STATEMENT OF OPERATIONS
For the six months ended February 28, 1998
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $214,733,746
- -------------------------------------------------------------------
EXPENSES:
Advisory fees 2,100,407
- -------------------------------------------------------------------
Custodian fees 383,730
- -------------------------------------------------------------------
Administrative services fees 55,785
- -------------------------------------------------------------------
Directors' fees and expenses 22,516
- -------------------------------------------------------------------
Transfer agent fees 422,027
- -------------------------------------------------------------------
Distribution fees (Note 2) 1,666,120
- -------------------------------------------------------------------
Other 411,516
- -------------------------------------------------------------------
Total expenses 5,062,101
- -------------------------------------------------------------------
Less: Fee waivers (516,732)
- -------------------------------------------------------------------
Net expenses 4,545,369
- -------------------------------------------------------------------
Net investment income 210,188,377
- -------------------------------------------------------------------
Net increase in net assets resulting from operations $210,188,377
===================================================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended February 28, 1998 and the year ended August 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
FEBRUARY 28, AUGUST 31,
1998 1997
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 210,188,377 $ 385,469,863
- ----------------------------------------------------------------------------
Net realized gain on sales of investments -- 2,155
- ----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 210,188,377 385,472,018
- ----------------------------------------------------------------------------
Distributions to shareholders from net
investment income:
Institutional Class (173,164,288) (334,619,312)
- ----------------------------------------------------------------------------
Private Investment Class (6,920,257) (11,638,406)
- ----------------------------------------------------------------------------
Personal Investment Class (2,787,938) (4,703,034)
- ----------------------------------------------------------------------------
Cash Management Class (21,804,048) (28,088,448)
- ----------------------------------------------------------------------------
Resource Class (5,511,846) (6,420,663)
- ----------------------------------------------------------------------------
Capital stock transactions-net (91,741,484) 702,760,124
- ----------------------------------------------------------------------------
Net increase (decrease) in net assets (91,741,484) 702,762,279
- ----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 6,854,710,634 6,151,948,355
- ----------------------------------------------------------------------------
End of period $6,762,969,150 $6,854,710,634
============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $6,762,975,488 $6,854,716,972
- ----------------------------------------------------------------------------
Undistributed net realized gain (loss) on
sales of investments (6,338) (6,338)
- ----------------------------------------------------------------------------
$6,762,969,150 $6,854,710,634
============================================================================
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Short-Term Investments Co. (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end series diversified management
investment company. The Fund is organized as a Maryland corporation consisting
of two different portfolios, each of which offers separate series of shares:
the Prime Portfolio and the Liquid Assets Portfolio. Information presented in
these financial statements pertains only to the Prime Portfolio (the
"Portfolio"), with the assets, liabilities and operations of each portfolio
accounted for separately. The Portfolio consists of five different classes of
shares: the Institutional Class, the Private Investment Class, the Personal
Investment Class, the Cash Management Class and the Resource Class. Matters
affecting each class are voted on exclusively by the shareholders of each
class. The Portfolio is a money market fund whose objective is the maximization
of current income to the extent consistent with the preservation of capital and
the maintenance of liquidity.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of the significant accounting policies followed by the
Portfolio in the preparation of its financial statements.
A. Security Valuations - The Portfolio's securities are valued on the basis of
amortized cost which approximates market value. This method values a
security at its cost on the date of purchase and thereafter assumes a
constant amortization to maturity of any discount or premium.
B. Securities Transactions, Investment Income and Distributions - Securities
transactions are accounted for on a trade date basis. Realized gains or
losses are computed on the basis of specific identification of the
securities sold. Interest income, adjusted for amortization of premiums and
discounts on investments, is accrued daily. Dividends to shareholders are
declared daily and are paid on the first business day of the following
month.
C. Federal Income Taxes - The Portfolio intends to comply with the requirements
of the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
D. Expenses - Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, AIM receives a monthly fee with respect to the Portfolio calculated
by applying a monthly rate, based upon the following annual rates, to the
average daily net assets of the Portfolio:
<TABLE>
<CAPTION>
Net Assets RATE
- ----------------------------------------
<S> <C>
First $100 million 0.20%
- ----------------------------------------
Over $100 million to $200 million 0.15%
- ----------------------------------------
Over $200 million to $300 million 0.10%
- ----------------------------------------
Over $300 million to $1.5 billion 0.06%
- ----------------------------------------
Over $1.5 billion 0.05%
- ----------------------------------------
</TABLE>
The Portfolio, pursuant to a master administrative services agreement with
AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting services to the Portfolio. During the six months ended February 28,
1998, the Portfolio reimbursed AIM $55,785 for such services.
The Portfolio, pursuant to a transfer agency and service agreement, has agreed
to pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agent and
shareholder services to the Portfolio. On September 20, 1997, the Board of
Directors of the Fund approved the appointment of AFS as transfer agent of the
Fund effective December 29, 1997. During the six months ended February 28,
1998, the Portfolio paid AFS $131,310 for such services. Prior to the effective
date of the agreement with AFS, the Portfolio paid A I M Institutional Fund
Services, Inc. $227,922 pursuant to a transfer agency and shareholder services
agreement for the period September 1, 1997 through December 28, 1997.
16
<PAGE>
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 and
the Resource Class of the Portfolio. The Plan provides that the Private
Investment Class, the Personal Investment Class, the Cash Management Class and
the Resource Class may pay FMC up to a maximum annual rate of 0.50%, 0.75%,
0.10% and 0.20%, respectively, 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 and the Personal Investment 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 or the Resource Class. Any amounts not paid as a service fee under such
Plan would constitute an asset-based sales charge. The Plan also imposes a cap
on the total amount of sales charges, including asset-based sales charges, that
may be paid by the Portfolio with respect to each class. During the six months
ended February 28, 1998, the Private Investment Class, the Personal Investment
Class, the Cash Management Class and the Resource Class paid $655,174,
$411,402, $396,067 and $203,477, respectively, as compensation under the Plan.
FMC waived fees of $516,732 for the same period. Certain officers and directors
of the Fund are officers of AIM, FMC and AFS.
During the six months ended February 28, 1998, the Portfolio paid legal fees
of $9,435 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 Fund.
NOTE 3-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Fund 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 during the six months ended February 28, 1998 and the
year ended August 31, 1997 were as follows.
<TABLE>
<CAPTION>
FEBRUARY 28, 1998 AUGUST 31, 1997
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 38,505,257,496 $ 38,505,257,496 77,017,818,307 $ 77,017,818,307
- ---------------------------------------------------------------------------------------------
Private Investment
Class 1,166,019,719 1,166,019,719 1,686,727,915 1,686,727,915
- ---------------------------------------------------------------------------------------------
Personal Investment
Class 670,967,916 670,967,916 1,399,754,929 1,399,754,929
- ---------------------------------------------------------------------------------------------
Cash Management Class 4,535,074,434 4,535,074,434 6,007,746,062 6,007,746,062
- ---------------------------------------------------------------------------------------------
Resource Class 2,070,658,061 2,070,658,061 2,959,856,289 2,959,856,289
- ---------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 11,585,402 11,585,402 20,826,765 20,826,765
- ---------------------------------------------------------------------------------------------
Private Investment
Class 3,427,391 3,427,391 6,892,975 6,892,975
- ---------------------------------------------------------------------------------------------
Personal Investment
Class 2,750,748 2,750,748 4,636,763 4,636,763
- ---------------------------------------------------------------------------------------------
Cash Management Class 11,683,282 11,683,282 19,021,334 19,021,334
- ---------------------------------------------------------------------------------------------
Resource Class 4,220,017 4,220,017 3,857,837 3,857,837
- ---------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (38,979,140,130) (38,979,140,130) (76,710,204,729) (76,710,204,729)
- ---------------------------------------------------------------------------------------------
Private Investment
Class (1,095,928,640) (1,095,928,640) (1,667,619,183) (1,667,619,183)
- ---------------------------------------------------------------------------------------------
Personal Investment
Class (662,476,377) (662,476,377) (1,419,820,390) (1,419,820,390)
- ---------------------------------------------------------------------------------------------
Cash Management Class (4,313,225,202) (4,313,225,202) (5,766,709,619) (5,766,709,619)
- ---------------------------------------------------------------------------------------------
Resource Class (2,022,615,601) (2,022,615,601) (2,860,025,131) (2,860,025,131)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) (91,741,484) $ (91,741,484) 702,760,124 $ 702,760,124
=============================================================================================
</TABLE>
17
<PAGE>
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Personal Investment
Class capital stock outstanding during the six months ended February 28, 1998
and each of the years in the five-year period ended August 31, 1997.
<TABLE>
<CAPTION>
AUGUST 31,
FEBRUARY 28, ------------------------------------------
1998 1997 1996 1995 1994 1993
------------ ------- --------- ------- ------ -----
<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 0.03 0.05 0.05 0.05 0.03 0.03
- ----------------------- -------- ------- --------- ------- ------ -----
Less distributions:
Dividends from net
investment income (0.03) (0.05) (0.05) (0.05) (0.03) (0.03)
- ----------------------- -------- ------- --------- ------- ------ -----
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
======================= ======== ======= ========= ======= ====== =====
Total return 5.13%(a) 5.01% 5.11% 5.27% 3.12% 2.74%
======================= ======== ======= ========= ======= ====== =====
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $108,458 $97,215 $112,645 $99,630 $3,065 $904
======================= ======== ======= ========= ======= ====== =====
Ratio of expenses to
average net assets(b) 0.59%(c) 0.59% 0.59% 0.59% 0.58% 0.52%
======================= ======== ======= ========= ======= ====== =====
Ratio of net investment
income to average net
assets(d) 5.08%(c) 4.89% 4.99% 5.23% 3.34% 2.71%
======================= ======== ======= ========= ======= ====== =====
</TABLE>
(a) Annualized.
(b) After fee waivers and/or expense reimbursement. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
0.84% (annualized), 0.84%, 0.89%, 0.86%, 2.39% and 2.33% for the periods
1998-1993, respectively.
(c) Ratios are annualized and based on average net assets of $110,616,291.
(d) After fee waivers and/or expense reimbursement. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 4.83% (annualized), 4.64%, 4.69%, 4.96%, 1.53% and
0.90% for the periods 1998-1993, respectively.
18
<PAGE>
<TABLE>
<S> <C>
DIRECTORS
Charles T. Bauer Robert H. Graham Short-Term
Bruce L. Crockett John F. Kroeger Investments Co.
Owen Daly II Lewis F. Pennock (STIC)
Jack M. Fields Ian W. Robinson
Carl Frischling Louis S. Sklar
OFFICERS
Charles T. Bauer Chairman
Robert H. Graham President
John J. Arthur Sr. Vice President & Treasurer
Gary T. Crum Sr. Vice President Prime Portfolio
Carol F. Relihan Sr. Vice President & Secretary ----------------------------------------
Dana R. Sutton Vice President & Assistant Treasurer Personal SEMI-
Melville B. Cox Vice President Investment ANNUAL
Karen Dunn Kelley Vice President Class REPORT
J. Abbott Sprague Vice President
P. Michelle Grace Assistant Secretary
Nancy L. Martin Assistant Secretary FEBRUARY 28, 1998
Ofelia M. Mayo Assistant Secretary
Kathleen J. Pflueger Assistant Secretary
Samuel D. Sirko Assistant Secretary
Stephen I. Winer Assistant Secretary
Mary J. Benson Assistant Treasurer
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046
(800) 347-1919
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 100
Houston, TX 77046
(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
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 [LOGO APEARS HERE]
to persons who have received a current prospectus. FUND MANAGEMENT COMPANY
</TABLE>
