UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSRS
Investment Company Act file number 811-07507
DWS Investments VIT Funds
(Exact Name of Registrant as Specified in Charter)
Two International Place
Boston, MA 02110
(Address of principal executive offices) (Zip code)
Registrant’s Telephone Number, including Area Code: (212) 454-7190
Paul Schubert
345 Park Avenue
New York, NY 10154
(Name and Address of Agent for Service)
Date of fiscal year end: | 12/31 |
Date of reporting period: | 06/30/06 |
ITEM 1. REPORT TO STOCKHOLDERS
JUNE 30, 2006
SEMIANNUAL REPORT
DWS INVESTMENTS VIT FUNDS
DWS Equity 500 Index VIP
Contents
Click Here Performance Summary
Click Here Information About Your Portfolio's Expenses
Click Here Management Summary
Click Here Portfolio Summary
Click Here Investment Portfolio
Click Here Financial Statements
Click Here Financial Highlights
Click Here Notes to Financial Statements
Click Here Other Information
Click Here Proxy Voting
Click Here Shareholder Meeting Results
This report must be preceded or accompanied by a prospectus. To obtain an additional prospectus, call (800) 778-1482 or your financial representative. We advise you to consider the portfolio's objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the portfolio. Please read the prospectus carefully before you invest.
The portfolio is subject to investment risks, including possible loss of principal amount invested. There is no guarantee that the portfolio will be able to mirror the S&P 500® Index closely enough to track its performance. Please read the prospectus for specific details regarding its investments and risk profile.
"Standard & Poor's," "S&P," "S&P 500," "Standard & Poor's 500" and "500" are trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use by the portfolio's advisor. DWS Equity 500 Index VIP is not sponsored, endorsed, sold, nor promoted by Standard & Poor's, and Standard & Poor's makes no representation regarding the advisability of investing in the portfolio. There is no guarantee that the portfolio will be able to mirror the S&P 500 index closely enough to track its performance.
DWS Scudder is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Asset Management, Inc., Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Performance Summary June 30, 2006
All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when sold, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For the Portfolio's most recent month-end performance call 1-800-621-1048. Performance figures for Classes A, B and B2 differ because each class maintains a distinct expense structure. Performance doesn't reflect charges and fees ("contract charges") associated with the separate account that invests in the Portfolio or any variable life insurance policy or variable annuity contract for which the Portfolio is an investment option. These charges and fees will reduce returns.
Portfolio returns for Classes A, B and B2 shares during the period reflect a fee waiver/and or reimbursement. Without this waiver/reimbursement, returns would have been lower.
Growth of an Assumed $10,000 Investment | ||
[] DWS Equity 500 Index VIP — Class A [] S&P 500 Index | The Standard & Poor's (S&P) 500 Index is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Index returns assume reinvestment of dividends and, unlike Portfolio returns, do not reflect any fees or expenses. It is not possible to invest directly into an index. | |
| ||
Yearly periods ended June 30 |
|
Comparative Results (as of June 30, 2006) | ||||||
DWS Equity 500 Index VIP | 6-Month* | 1-Year | 3-Year | 5-Year | Life of Portfolio* | |
Class A | Growth of $10,000 | $10,256 | $10,834 | $13,642 | $11,140 | $14,876 |
Average annual total return | 2.56% | 8.34% | 10.91% | 2.18% | 4.65% | |
S&P 500 Index | Growth of $10,000 | $10,271 | $10,863 | $13,757 | $11,311 | $15,358 |
Average annual total return | 2.71% | 8.63% | 11.22% | 2.49% | 5.03% | |
DWS Equity 500 Index VIP |
| 6-Month* | 1-Year | 3-Year | Life of Class** | |
Class B | Growth of $10,000 |
| $10,246 | $10,815 | $13,549 | $12,437 |
Average annual total return |
| 2.46% | 8.15% | 10.65% | 5.37% | |
S&P 500 Index | Growth of $10,000 |
| $10,271 | $10,863 | $13,757 | $12,715 |
Average annual total return |
| 2.71% | 8.63% | 11.22% | 5.93% | |
DWS Equity 500 Index VIP |
|
|
| 6-Month* | Life of Class**** | |
Class B2 | Growth of $10,000 |
|
|
| $10,242 | $10,361 |
Average annual total return |
|
|
| 2.42% | 3.61% | |
S&P 500 Index | Growth of $10,000 |
|
|
| $10,271 | $10,485 |
Average annual total return |
|
|
| 2.71% | 4.85% |
The growth of $10,000 is cumulative.
* The Portfolio commenced operations on October 1, 1997. Index returns began on September 30, 1997.
** The Portfolio commenced offering Class B shares on April 30, 2002. Index returns began on April 30, 2002.
*** The Portfolio commenced offering Class B2 shares on September 16, 2005. Index returns began on September 30, 2005.
* Total returns shown for periods less than one year are not annualized.
Information concerning portfolio holdings of the Portfolio as of a month end will be posted to www.dws-scudder.com on or after the last day of the following month.
Information About Your Portfolio's Expenses
As an investor of the Portfolio, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Portfolio expenses. Examples of transaction costs include contract charges, redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Portfolio and to help you compare these expenses with the ongoing expenses of investing in other mutual portfolios. In the most recent period, the Portfolio limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).
The tables illustrate your Portfolio's expenses in two ways:
Actual Portfolio Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Portfolio using the Portfolio's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
Hypothetical 5% Portfolio Return. This helps you to compare your Portfolio's ongoing expenses (but not transaction costs) with those of other mutual funds using the Portfolio's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical Portfolio return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Expenses and Value of a $1,000 Investment for the six months ended June 30, 2006 | |||||
Actual Portfolio Return | Class A |
| Class B |
| Class B2 |
Beginning Account Value 1/1/06 | $ 1,000.00 |
| $ 1,000.00 |
| $ 1,000.00 |
Ending Account Value 6/30/06 | $ 1,025.60 |
| $ 1,024.60 |
| $ 1,024.20 |
Expenses Paid per $1,000* | $ 1.36 |
| $ 2.61 |
| $ 3.16 |
Hypothetical 5% Portfolio Return | Class A |
| Class B |
| Class B2 |
Beginning Account Value 1/1/06 | $ 1,000.00 |
| $ 1,000.00 |
| $ 1,000.00 |
Ending Account Value 6/30/06 | $ 1,023.46 |
| $ 1,022.22 |
| $ 1,021.67 |
Expenses Paid per $1,000* | $ 1.35 |
| $ 2.61 |
| $ 3.16 |
* Expenses are equal to the Portfolio's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
Annualized Expense Ratios | Class A |
| Class B |
| Class B2 |
DWS Equity 500 Index VIP | .27% |
| .52% |
| .63% |
For more information, please refer to the Portfolio's prospectus.
These tables do not reflect charges and fees ("contract charges") associated with the separate account that invests in the Portfolio or any variable life insurance policy or variable annuity contract for which the Portfolio is an investment option.
Management Summary June 30, 2006
The US economy continues to perform well, despite high energy costs and rising interest rates. Corporate profits have been growing, and business investment has been a key driver of economic growth. Consumer spending remains reasonably strong, although there are signs of moderation, especially in housing. Most indicators point to continued economic growth, albeit at a slower rate than in the early months of 2006.
The broad equity market, as measured by the Standard & Poor's 500 (S&P 500) Index, had a return of 2.71% for the six-month period ended June 30, 2006. Value stocks, measured by the Russell 1000 Value Index, performed much better than growth stocks, measured by the Russell 1000 Growth Index, which had a negative return for the six-month period. With a return of 2.56% (Class A shares, unadjusted for contract charges), the Portfolio's return was slightly below that of its benchmark, the S&P 500 Index, for the first half of the year. Since the Portfolio's investment strategy is to replicate, as closely as possible, before the deduction of expenses, the performance of the S&P 500 Index, the Portfolio's return is normally quite close to the return of the index.
For the six months ended June 30, 2006, eight of the 10 industry sectors within the S&P 500 had positive returns. The strongest sector was telecommunications, with a return of 13.81%, followed closely by energy, with a return of 13.71%. The two sectors with negative returns were information technology (5.90%) and health care (3.79%).
Chad M. Rakvin, CFA
Vice President
Northern Trust Investments, N.A. (NTI), Subadvisor to the Portfolio
All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when sold, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For the portfolio's most recent month-end performance call 1-800-621-1048. Performance figures for Classes A and B differ because each class maintains a distinct expense structure. Performance doesn't reflect charges and fees ("contract charges") associated with the separate account that invests in the Portfolio or any variable life insurance policy or variable annuity contract for which the Portfolio is an investment option. These charges and fees will reduce returns.
Portfolio returns for Class A, B and B2 shares during the period reflect a fee waiver and/or reimbursement; without this waiver/reimbursement, returns would have been lower.
Risk Considerations
The Portfolio is subject to investment risks, including possible loss of principal amount invested. The Portfolio may not be able to mirror the S&P 500 index closely enough to track its performance for several reasons, including the Portfolio's cost to buy and sell securities, the flow of money into and out of the Portfolio and the potential underperformance of stocks selected. Please read this Portfolio's prospectus for specific details regarding the Portfolio's investments and risk profile.
The Standard & Poor's 500 (S&P 500) Index is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. It is not possible to invest directly into an index.
"Standard & Poor's," "S&P 500," "Standard & Poor's 500" and "500" are trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use by the Portfolio's investment advisor. This Portfolio is not sponsored, endorsed, sold or promoted by Standard & Poor's, and Standard & Poor's makes no representation regarding the advisability of investing in the Portfolio.
Russell 1000 Growth Index is an unmanaged index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000 Value Index is an unmanaged index that measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
Portfolio management market commentary is as of June 30, 2006, and may not come to pass. This information is subject to change at any time based on market and other conditions and should not be construed as a recommendation.
Asset Allocation (Excludes Securities Lending Collateral) | 6/30/06 | 12/31/05 |
|
|
|
Common Stocks | 97% | 98% |
Cash Equivalents | 3% | 2% |
| 100% | 100% |
Sector Diversification (As a % of Common Stocks) | 6/30/06 | 12/31/05 |
|
|
|
Financials | 22% | 22% |
Information Technology | 15% | 15% |
Health Care | 12% | 13% |
Industrials | 12% | 11% |
Energy | 10% | 9% |
Consumer Discretionary | 10% | 11% |
Consumer Staples | 10% | 10% |
Utilities | 3% | 3% |
Telecommunication Services | 3% | 3% |
Other | 3% | 3% |
| 100% | 100% |
Ten Largest Equity Holdings (18.9% of Net Assets) | |
1. ExxonMobil Corp. Explorer and producer of oil and gas | 3.1% |
2. General Electric Co. Industrial conglomerate | 2.9% |
3. Citigroup, Inc. Provider of diversified financial services | 2.1% |
4. Bank of America Corp. Provider of commercial banking services | 1.9% |
5. Microsoft Corp. Developer of computer software | 1.7% |
6. Procter & Gamble Co. Manufacturer of diversified consumer products | 1.6% |
7. Johnson & Johnson Provider of health care products | 1.5% |
8. Pfizer, Inc. Manufacturer of prescription pharmaceuticals and nonprescription self medications | 1.5% |
9. Altria Group, Inc. Parent company operating in the tobacco and food industries | 1.3% |
10. American International Group, Inc. Provider of insurance services | 1.3% |
Asset allocation, sector diversification, and holdings are subject to change.
For more complete details about the Portfolio's investment portfolio, see page 7. A quarterly fact sheet is available upon request. Information concerning portfolio holdings of the Portfolio as of month end will be posted to www.dws-scudder.com on or after the last day of the following month. In addition, the Portfolio's top ten holdings and other information about the Portfolio is posted on www.dws-scudder.com as of the calendar quarter-end on or after the 15th day following quarter-end.
Following the Portfolio's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330.
Investment Portfolio June 30, 2006 (Unaudited)
|
| Value ($) |
|
| |
Common Stocks 97.2% | ||
Consumer Discretionary 9.8% | ||
Auto Components 0.1% | ||
Cooper Tire & Rubber Co. (a) | 6,549 | 72,956 |
Goodyear Tire & Rubber Co.* (a) | 18,694 | 207,503 |
Johnson Controls, Inc. | 20,446 | 1,681,070 |
| 1,961,529 | |
Automobiles 0.4% | ||
Ford Motor Co. | 230,375 | 1,596,499 |
General Motors Corp. (a) | 67,666 | 2,015,770 |
Harley-Davidson, Inc. | 34,686 | 1,903,914 |
| 5,516,183 | |
Distributors 0.1% | ||
Genuine Parts Co. | 17,909 | 746,089 |
Diversified Consumer Services 0.1% | ||
Apollo Group, Inc. "A"* | 17,844 | 921,999 |
H&R Block, Inc. | 34,696 | 827,847 |
| 1,749,846 | |
Hotels Restaurants & Leisure 1.5% | ||
Carnival Corp. | 46,746 | 1,951,178 |
Darden Restaurants, Inc. | 13,854 | 545,848 |
Harrah's Entertainment, Inc. | 21,719 | 1,545,958 |
Hilton Hotels Corp. | 34,732 | 982,221 |
International Game Technology | 41,356 | 1,569,047 |
Marriott International, Inc. "A" | 34,240 | 1,305,229 |
McDonald's Corp. | 149,391 | 5,019,538 |
Starbucks Corp.* | 92,328 | 3,486,305 |
Starwood Hotels & Resorts Worldwide, Inc. | 27,825 | 1,678,960 |
Wendy's International, Inc. | 12,111 | 705,950 |
YUM! Brands, Inc. | 29,158 | 1,465,773 |
| 20,256,007 | |
Household Durables 0.6% | ||
Black & Decker Corp. | 8,122 | 685,984 |
Centex Corp. | 16,035 | 806,560 |
D.R. Horton, Inc. | 28,600 | 681,252 |
Fortune Brands, Inc. | 15,555 | 1,104,561 |
Harman International Industries, Inc. | 6,900 | 589,053 |
KB Home | 9,892 | 453,548 |
Leggett & Platt, Inc. | 19,064 | 476,219 |
Lennar Corp. "A" | 18,100 | 803,097 |
Newell Rubbermaid, Inc. | 28,397 | 733,495 |
Pulte Homes, Inc. | 22,882 | 658,773 |
Snap-on, Inc. | 4,993 | 201,817 |
The Stanley Works | 8,356 | 394,570 |
Whirlpool Corp. | 10,088 | 833,773 |
| 8,422,702 | |
Internet & Catalog Retail 0.1% | ||
Amazon.com, Inc.* | 32,528 | 1,258,183 |
Leisure Equipment & Products 0.2% | ||
Brunswick Corp. | 10,006 | 332,700 |
Eastman Kodak Co. (a) | 30,707 | 730,212 |
Hasbro, Inc. | 17,986 | 325,726 |
Mattel, Inc. | 40,998 | 676,877 |
| 2,065,515 | |
|
| Value ($) |
|
| |
Media 3.3% | ||
CBS Corp. "B" | 81,487 | 2,204,223 |
Clear Channel Communications, Inc. | 54,552 | 1,688,384 |
Comcast Corp. "A"* | 252,958 | 8,281,845 |
Dow Jones & Co., Inc. | 6,261 | 219,198 |
E.W. Scripps Co. "A" | 9,100 | 392,574 |
Gannett Co., Inc. | 25,042 | 1,400,599 |
Interpublic Group of Companies, Inc.* | 45,497 | 379,900 |
McGraw-Hill Companies, Inc. | 42,664 | 2,143,026 |
Meredith Corp. | 4,124 | 204,303 |
New York Times Co. "A" (a) | 14,510 | 356,075 |
News Corp. "A" | 283,554 | 5,438,566 |
Omnicom Group, Inc. | 22,516 | 2,005,950 |
Time Warner, Inc. | 495,330 | 8,569,209 |
Tribune Co. | 27,783 | 901,003 |
Univision Communications, Inc. "A"* | 23,793 | 797,066 |
Viacom, Inc. "B"* | 81,487 | 2,920,494 |
Walt Disney Co. | 261,280 | 7,838,400 |
| 45,740,815 | |
Multiline Retail 1.1% | ||
Big Lots, Inc.* | 10,092 | 172,371 |
Dillard's, Inc. "A" | 6,451 | 205,464 |
Dollar General Corp. | 33,684 | 470,902 |
Family Dollar Stores, Inc. | 16,370 | 399,919 |
Federated Department Stores, Inc. | 58,708 | 2,148,713 |
J.C. Penney Co., Inc. | 24,622 | 1,662,231 |
Kohl's Corp.* | 37,778 | 2,233,436 |
Nordstrom, Inc. | 28,748 | 1,049,302 |
Sears Holdings Corp.* | 12,343 | 1,911,190 |
Target Corp. | 102,310 | 4,999,890 |
| 15,253,418 | |
Specialty Retail 2.0% | ||
AutoNation, Inc.* | 15,851 | 339,845 |
AutoZone, Inc.* | 5,791 | 510,766 |
Bed Bath & Beyond, Inc.* | 29,516 | 979,046 |
Best Buy Co., Inc. | 49,536 | 2,716,554 |
Circuit City Stores, Inc. | 16,230 | 441,781 |
Home Depot, Inc. | 239,099 | 8,557,353 |
Limited Brands, Inc. | 36,670 | 938,385 |
Lowe's Companies, Inc. | 92,950 | 5,639,277 |
Office Depot, Inc.* | 31,203 | 1,185,714 |
OfficeMax, Inc. | 7,441 | 303,221 |
RadioShack Corp. | 14,545 | 203,630 |
Staples, Inc. | 78,389 | 1,906,420 |
The Gap, Inc. | 67,932 | 1,182,017 |
The Sherwin-Williams Co. | 11,689 | 554,994 |
Tiffany & Co. | 14,900 | 491,998 |
TJX Companies, Inc. | 48,958 | 1,119,180 |
| 27,070,181 | |
Textiles, Apparel & Luxury Goods 0.3% | ||
Coach, Inc.* | 47,300 | 1,414,270 |
Jones Apparel Group, Inc. | 11,994 | 381,289 |
Liz Claiborne, Inc. | 10,724 | 397,432 |
NIKE, Inc. "B" | 22,975 | 1,860,975 |
VF Corp. | 9,287 | 630,773 |
| 4,684,739 | |
|
| Value ($) |
|
| |
Consumer Staples 9.4% | ||
Beverages 2.1% | ||
Anheuser-Busch Companies, Inc. | 94,209 | 4,294,988 |
Brown-Forman Corp. "B" | 8,780 | 627,331 |
Coca-Cola Co. | 243,914 | 10,493,180 |
Coca-Cola Enterprises, Inc. | 32,150 | 654,895 |
Constellation Brands, Inc. "A"* | 20,600 | 515,000 |
Molson Coors Brewing Co. "B" | 5,992 | 406,737 |
Pepsi Bottling Group, Inc. | 15,111 | 485,819 |
PepsiCo, Inc. | 195,746 | 11,752,590 |
| 29,230,540 | |
Food & Staples Retailing 2.3% | ||
Costco Wholesale Corp. | 51,445 | 2,939,053 |
CVS Corp. | 94,134 | 2,889,914 |
Kroger Co. | 76,463 | 1,671,481 |
Safeway, Inc. | 47,727 | 1,240,902 |
SUPERVALU, Inc. | 21,448 | 658,458 |
Sysco Corp. | 65,357 | 1,997,310 |
Wal-Mart Stores, Inc. | 293,527 | 14,139,196 |
Walgreen Co. | 121,696 | 5,456,849 |
Whole Foods Market, Inc. | 15,400 | 995,456 |
| 31,988,619 | |
Food Products 1.1% | ||
Archer-Daniels-Midland Co. | 78,207 | 3,228,385 |
Campbell Soup Co. | 19,785 | 734,221 |
ConAgra Foods, Inc. | 54,905 | 1,213,950 |
Dean Foods Co.* | 14,400 | 535,536 |
General Mills, Inc. | 37,528 | 1,938,696 |
H.J. Heinz Co. | 42,379 | 1,746,862 |
Kellogg Co. | 26,532 | 1,284,945 |
McCormick & Co., Inc. | 13,114 | 439,975 |
Sara Lee Corp. | 80,739 | 1,293,439 |
The Hershey Co. | 18,946 | 1,043,356 |
Tyson Foods, Inc. "A" | 26,500 | 393,790 |
William Wrigley Jr. Co. | 23,433 | 1,062,921 |
| 14,916,076 | |
Household Products 2.2% | ||
Clorox Co. | 16,030 | 977,349 |
Colgate-Palmolive Co. | 63,621 | 3,810,898 |
Kimberly-Clark Corp. | 53,947 | 3,328,530 |
Procter & Gamble Co. | 385,055 | 21,409,058 |
| 29,525,835 | |
Personal Products 0.2% | ||
Alberto-Culver Co. | 8,155 | 397,312 |
Avon Products, Inc. | 47,570 | 1,474,670 |
Estee Lauder Companies, Inc. "A" | 12,600 | 487,242 |
| 2,359,224 | |
Tobacco 1.5% | ||
Altria Group, Inc. | 244,970 | 17,988,147 |
Reynolds American, Inc. | 9,664 | 1,114,259 |
UST, Inc. | 17,235 | 778,850 |
| 19,881,256 | |
Energy 9.9% | ||
Energy Equipment & Services 2.0% | ||
Baker Hughes, Inc. | 40,071 | 3,279,811 |
BJ Services Co. | 34,486 | 1,284,948 |
Halliburton Co. | 61,991 | 4,600,352 |
Nabors Industries Ltd.* | 33,296 | 1,125,072 |
National-Oilwell Varco, Inc.* | 18,400 | 1,165,088 |
|
| Value ($) |
|
| |
Noble Corp. | 14,495 | 1,078,718 |
Rowan Companies, Inc. | 11,582 | 412,204 |
Schlumberger Ltd. | 140,018 | 9,116,572 |
Transocean, Inc.* | 39,803 | 3,196,977 |
Weatherford International Ltd.* | 40,244 | 1,996,907 |
| 27,256,649 | |
Oil, Gas & Consumable Fuels 7.9% | ||
Anadarko Petroleum Corp. | 49,414 | 2,356,554 |
Apache Corp. | 35,653 | 2,433,317 |
Chesapeake Energy Corp. | 39,400 | 1,191,850 |
Chevron Corp. | 261,782 | 16,246,191 |
ConocoPhillips | 194,142 | 12,722,125 |
CONSOL Energy, Inc. | 11,286 | 527,282 |
Devon Energy Corp. | 54,292 | 3,279,780 |
El Paso Corp. | 79,254 | 1,188,810 |
EOG Resources, Inc. | 25,657 | 1,779,056 |
ExxonMobil Corp. | 699,904 | 42,939,110 |
Hess Corp. | 25,350 | 1,339,748 |
Kerr-McGee Corp. | 29,108 | 2,018,640 |
Kinder Morgan, Inc. | 14,422 | 1,440,614 |
Marathon Oil Corp. | 40,771 | 3,396,224 |
Murphy Oil Corp. | 19,100 | 1,066,926 |
Occidental Petroleum Corp. | 51,944 | 5,326,857 |
Sunoco, Inc. | 14,216 | 985,027 |
Valero Energy Corp. | 73,772 | 4,907,314 |
Williams Companies, Inc. | 66,687 | 1,557,808 |
XTO Energy, Inc. | 38,408 | 1,700,322 |
| 108,403,555 | |
Financials 20.9% | ||
Capital Markets 3.4% | ||
Ameriprise Financial, Inc. | 26,105 | 1,166,110 |
Bank of New York Co., Inc. | 95,884 | 3,087,465 |
Bear Stearns Companies, Inc. | 13,730 | 1,923,299 |
Charles Schwab Corp. | 111,889 | 1,787,986 |
E*TRADE Financial Corp.* | 49,100 | 1,120,462 |
Federated Investors, Inc. "B" | 8,900 | 280,350 |
Franklin Resources, Inc. | 16,052 | 1,393,474 |
Janus Capital Group, Inc. | 22,371 | 400,441 |
Legg Mason, Inc. | 15,300 | 1,522,656 |
Lehman Brothers Holdings, Inc. | 65,142 | 4,244,001 |
Mellon Financial Corp. | 43,775 | 1,507,173 |
Merrill Lynch & Co., Inc. | 109,072 | 7,587,048 |
Morgan Stanley | 127,640 | 8,068,125 |
Northern Trust Corp. | 20,549 | 1,136,360 |
State Street Corp. | 41,165 | 2,391,275 |
T. Rowe Price Group, Inc. | 27,720 | 1,048,093 |
The Goldman Sachs Group, Inc. | 51,533 | 7,752,109 |
| 46,416,427 | |
Commercial Banks 4.1% | ||
AmSouth Bancorp. | 36,028 | 952,941 |
BB&T Corp. | 56,434 | 2,347,090 |
Comerica, Inc. | 17,137 | 890,953 |
Commerce Bancorp, Inc. (a) | 21,700 | 774,039 |
Compass Bancshares, Inc. | 12,200 | 678,320 |
Fifth Third Bancorp. | 58,606 | 2,165,492 |
First Horizon National Corp. | 13,298 | 534,580 |
Huntington Bancshares, Inc. | 29,960 | 706,457 |
KeyCorp. | 42,829 | 1,528,139 |
M&T Bank Corp. | 8,450 | 996,424 |
Marshall & Ilsley Corp. | 21,254 | 972,158 |
National City Corp. | 69,976 | 2,532,431 |
|
| Value ($) |
|
| |
North Fork Bancorp., Inc. | 50,146 | 1,512,905 |
PNC Financial Services Group, Inc. | 30,826 | 2,163,060 |
Regions Financial Corp. | 48,433 | 1,604,101 |
SunTrust Banks, Inc. | 46,271 | 3,528,626 |
Synovus Financial Corp. | 31,803 | 851,684 |
US Bancorp. | 215,954 | 6,668,659 |
Wachovia Corp. | 192,197 | 10,394,014 |
Wells Fargo & Co. | 197,424 | 13,243,202 |
Zions Bancorp. | 12,811 | 998,489 |
| 56,043,764 | |
Consumer Finance 1.0% | ||
American Express Co. | 147,625 | 7,856,602 |
Capital One Financial Corp. | 36,437 | 3,113,542 |
SLM Corp. | 45,078 | 2,385,528 |
| 13,355,672 | |
Diversified Financial Services 5.4% | ||
Bank of America Corp. | 527,886 | 25,391,317 |
CIT Group, Inc. | 21,824 | 1,141,177 |
Citigroup, Inc. | 582,631 | 28,106,119 |
JPMorgan Chase & Co. | 409,162 | 17,184,804 |
Moody's Corp. | 30,352 | 1,652,970 |
| 73,476,387 | |
Insurance 4.5% | ||
ACE Ltd. | 35,176 | 1,779,554 |
AFLAC, Inc. | 52,537 | 2,435,090 |
Allstate Corp. | 79,056 | 4,326,735 |
Ambac Financial Group, Inc. | 11,078 | 898,426 |
American International Group, Inc. | 304,381 | 17,973,698 |
Aon Corp. | 33,883 | 1,179,806 |
Chubb Corp. | 49,170 | 2,453,583 |
Cincinnati Financial Corp. | 17,609 | 827,799 |
Genworth Financial, Inc. "A" | 39,900 | 1,390,116 |
Hartford Financial Services Group, Inc. | 37,434 | 3,166,916 |
Lincoln National Corp. | 31,269 | 1,764,822 |
Loews Corp. | 42,970 | 1,523,287 |
Marsh & McLennan Companies, Inc. | 57,413 | 1,543,836 |
MBIA, Inc. | 14,164 | 829,302 |
MetLife, Inc. | 92,432 | 4,733,443 |
Principal Financial Group, Inc. | 29,611 | 1,647,852 |
Progressive Corp. | 84,956 | 2,184,219 |
Prudential Financial, Inc. | 60,363 | 4,690,205 |
Safeco Corp. | 13,118 | 739,199 |
The St. Paul Travelers Companies, Inc. | 85,771 | 3,823,671 |
Torchmark Corp. | 10,310 | 626,023 |
UnumProvident Corp. | 31,565 | 572,274 |
XL Capital Ltd. "A" | 18,577 | 1,138,770 |
| 62,248,626 | |
Real Estate Investment Trusts 0.9% | ||
Apartment Investment & Management Co. "A" (REIT) | 9,600 | 417,120 |
Archstone-Smith Trust (REIT) | 21,800 | 1,108,966 |
Boston Properties, Inc. (REIT) | 9,600 | 867,840 |
Equity Office Properties Trust (REIT) | 53,120 | 1,939,411 |
Equity Residential (REIT) | 30,630 | 1,370,080 |
Kimco Realty Corp. (REIT) | 21,400 | 780,886 |
Plum Creek Timber Co., Inc. (REIT) | 18,700 | 663,850 |
ProLogis (REIT) | 25,700 | 1,339,484 |
|
| Value ($) |
|
| |
Public Storage, Inc. (REIT) | 8,800 | 667,920 |
Simon Property Group, Inc. (REIT) | 24,641 | 2,043,724 |
Vornado Realty Trust (REIT) | 16,300 | 1,590,065 |
| 12,789,346 | |
Thrifts & Mortgage Finance 1.6% | ||
Countrywide Financial Corp. | 73,438 | 2,796,519 |
Fannie Mae | 109,550 | 5,269,355 |
Freddie Mac | 76,963 | 4,387,661 |
Golden West Financial Corp. | 32,587 | 2,417,955 |
MGIC Investment Corp. | 9,242 | 600,730 |
Sovereign Bancorp, Inc. | 39,499 | 802,223 |
Washington Mutual, Inc. (a) | 111,143 | 5,065,898 |
| 21,340,341 | |
Health Care 11.9% | ||
Biotechnology 1.2% | ||
Amgen, Inc.* | 137,816 | 8,989,738 |
Biogen Idec, Inc.* | 36,260 | 1,679,926 |
Genzyme Corp.* | 29,603 | 1,807,263 |
Gilead Sciences, Inc.* | 55,886 | 3,306,216 |
MedImmune, Inc.* | 26,375 | 714,762 |
| 16,497,905 | |
Health Care Equipment & Supplies 1.5% | ||
Bausch & Lomb, Inc. (a) | 7,436 | 364,661 |
Baxter International, Inc. | 74,603 | 2,742,406 |
Becton, Dickinson & Co. | 26,278 | 1,606,374 |
Biomet, Inc. | 26,143 | 818,014 |
Boston Scientific Corp.* | 145,365 | 2,447,947 |
C.R. Bard, Inc. | 10,998 | 805,714 |
Hospira, Inc.* | 16,720 | 717,957 |
Medtronic, Inc. | 143,325 | 6,724,809 |
St. Jude Medical, Inc.* | 38,688 | 1,254,265 |
Stryker Corp. | 31,082 | 1,308,863 |
Zimmer Holdings, Inc.* | 26,184 | 1,485,157 |
| 20,276,167 | |
Health Care Providers & Services 2.6% | ||
Aetna, Inc. | 68,472 | 2,734,087 |
AmerisourceBergen Corp. | 21,782 | 913,101 |
Cardinal Health, Inc. | 46,700 | 3,004,211 |
Caremark Rx, Inc.* | 54,777 | 2,731,729 |
CIGNA Corp. | 14,835 | 1,461,396 |
Coventry Health Care, Inc.* | 16,995 | 933,705 |
Express Scripts, Inc.* | 18,834 | 1,351,151 |
HCA, Inc. | 48,300 | 2,084,145 |
Health Management Associates, Inc. "A" | 25,402 | 500,673 |
Humana, Inc.* | 17,375 | 933,038 |
Laboratory Corp. of America Holdings* | 13,291 | 827,099 |
Manor Care, Inc. | 8,338 | 391,219 |
McKesson Corp. | 32,315 | 1,527,853 |
Medco Health Solutions, Inc.* | 35,964 | 2,060,018 |
Patterson Companies, Inc.* | 14,700 | 513,471 |
Quest Diagnostics, Inc. | 17,216 | 1,031,583 |
Tenet Healthcare Corp.* | 48,500 | 338,530 |
UnitedHealth Group, Inc. | 159,508 | 7,142,768 |
WellPoint, Inc.* | 73,788 | 5,369,553 |
| 35,849,330 | |
Health Care Technology 0.0% | ||
IMS Health, Inc. | 21,030 | 564,655 |
|
| Value ($) |
|
| |
Life Sciences Tools & Services 0.3% | ||
Applera Corp. — Applied Biosystems Group | 19,929 | 644,703 |
Fisher Scientific International, Inc.* | 15,208 | 1,110,945 |
Millipore Corp.* | 5,115 | 322,194 |
PerkinElmer, Inc. | 12,836 | 268,272 |
Thermo Electron Corp.* | 16,605 | 601,765 |
Waters Corp.* | 11,100 | 492,840 |
| 3,440,719 | |
Pharmaceuticals 6.3% | ||
Abbott Laboratories | 182,082 | 7,940,596 |
Allergan, Inc. | 16,362 | 1,754,988 |
Barr Pharmaceuticals, Inc.* | 11,200 | 534,128 |
Bristol-Myers Squibb Co. | 221,062 | 5,716,663 |
Eli Lilly & Co. | 133,537 | 7,380,590 |
Forest Laboratories, Inc.* | 34,695 | 1,342,350 |
Johnson & Johnson | 348,434 | 20,878,165 |
King Pharmaceuticals, Inc.* | 26,086 | 443,462 |
Merck & Co., Inc. | 258,159 | 9,404,732 |
Mylan Laboratories, Inc. | 23,236 | 464,720 |
Pfizer, Inc. | 857,889 | 20,134,655 |
Schering-Plough Corp. | 164,150 | 3,123,775 |
Watson Pharmaceuticals, Inc.* | 10,755 | 250,377 |
Wyeth | 158,776 | 7,051,242 |
| 86,420,443 | |
Industrials 11.4% | ||
Aerospace & Defense 2.4% | ||
Boeing Co. | 94,908 | 7,773,914 |
General Dynamics Corp. | 47,334 | 3,098,483 |
Goodrich Corp. | 13,061 | 526,228 |
Honeywell International, Inc. | 101,047 | 4,072,194 |
L-3 Communications Holdings, Inc. | 15,600 | 1,176,552 |
Lockheed Martin Corp. | 44,793 | 3,213,450 |
Northrop Grumman Corp. | 36,931 | 2,365,800 |
Raytheon Co. | 47,496 | 2,116,897 |
Rockwell Collins, Inc. | 18,331 | 1,024,153 |
United Technologies Corp. | 120,900 | 7,667,478 |
| 33,035,149 | |
Air Freight & Logistics 1.1% | ||
FedEx Corp. | 33,565 | 3,922,406 |
United Parcel Service, Inc. "B" | 128,958 | 10,617,112 |
| 14,539,518 | |
Airlines 0.1% | ||
Southwest Airlines Co. | 82,195 | 1,345,532 |
Building Products 0.2% | ||
American Standard Companies, Inc. | 18,964 | 820,572 |
Masco Corp. | 43,865 | 1,300,159 |
| 2,120,731 | |
Commercial Services & Supplies 0.7% | ||
Allied Waste Industries, Inc.* | 25,475 | 289,396 |
Avery Dennison Corp. | 11,186 | 649,459 |
Cendant Corp. | 124,185 | 2,022,974 |
Cintas Corp. | 16,642 | 661,686 |
Equifax, Inc. | 13,291 | 456,413 |
Monster Worldwide, Inc.* | 18,285 | 780,038 |
Pitney Bowes, Inc. | 23,746 | 980,710 |
R.R. Donnelley & Sons Co. | 22,129 | 707,021 |
Robert Half International, Inc. | 17,700 | 743,400 |
|
| Value ($) |
|
| |
Waste Management, Inc. | 64,569 | 2,316,736 |
| 9,607,833 | |
Construction & Engineering 0.1% | ||
Fluor Corp. | 11,525 | 1,071,018 |
Electrical Equipment 0.5% | ||
American Power Conversion Corp. | 18,114 | 353,042 |
Cooper Industries Ltd. "A" | 9,464 | 879,395 |
Emerson Electric Co. | 50,652 | 4,245,144 |
Rockwell Automation, Inc. | 18,747 | 1,349,972 |
| 6,827,553 | |
Industrial Conglomerates 4.0% | ||
3M Co. | 90,336 | 7,296,439 |
General Electric Co. | 1,213,632 | 40,001,311 |
Textron, Inc. | 17,141 | 1,580,057 |
Tyco International Ltd. | 238,553 | 6,560,207 |
| 55,438,014 | |
Machinery 1.5% | ||
Caterpillar, Inc. | 79,836 | 5,946,185 |
Cummins, Inc. | 6,278 | 767,486 |
Danaher Corp. | 25,065 | 1,612,181 |
Deere & Co. | 27,212 | 2,271,930 |
Dover Corp. | 21,702 | 1,072,730 |
Eaton Corp. | 15,305 | 1,153,997 |
Illinois Tool Works, Inc. | 48,594 | 2,308,215 |
Ingersoll-Rand Co., Ltd. "A" | 34,522 | 1,476,851 |
ITT Industries, Inc. | 19,494 | 964,953 |
Navistar International Corp.* | 6,571 | 161,712 |
PACCAR, Inc. | 19,934 | 1,642,163 |
Pall Corp. | 12,353 | 345,884 |
Parker Hannifin Corp. | 12,679 | 983,890 |
| 20,708,177 | |
Road & Rail 0.8% | ||
Burlington Northern Santa Fe Corp. | 45,538 | 3,608,886 |
CSX Corp. | 23,074 | 1,625,333 |
Norfolk Southern Corp. | 44,386 | 2,362,223 |
Ryder System, Inc. | 5,952 | 347,775 |
Union Pacific Corp. | 32,281 | 3,000,842 |
| 10,945,059 | |
Trading Companies & Distributors 0.0% | ||
W.W. Grainger, Inc. | 8,509 | 640,132 |
Information Technology 14.5% | ||
Communications Equipment 2.7% | ||
ADC Telecommunications, Inc.* | 12,330 | 207,884 |
Andrew Corp.* | 20,880 | 184,997 |
Avaya, Inc.* | 44,092 | 503,531 |
Ciena Corp.* | 61,460 | 295,622 |
Cisco Systems, Inc.* | 718,495 | 14,032,207 |
Comverse Technologies, Inc.* | 21,306 | 421,220 |
Corning, Inc.* | 183,222 | 4,432,140 |
JDS Uniphase Corp.* | 199,831 | 505,572 |
Juniper Networks, Inc.* | 59,600 | 953,004 |
Lucent Technologies, Inc.* | 487,185 | 1,178,988 |
Motorola, Inc. | 294,680 | 5,937,802 |
QUALCOMM, Inc. | 194,720 | 7,802,430 |
Tellabs, Inc.* | 47,516 | 632,438 |
| 37,087,835 | |
Computers & Peripherals 3.3% | ||
Apple Computer, Inc.* | 99,962 | 5,709,830 |
Dell, Inc.* | 262,809 | 6,415,168 |
EMC Corp.* | 265,567 | 2,913,270 |
|
| Value ($) |
|
| |
Gateway, Inc.* | 28,177 | 53,536 |
Hewlett-Packard Co. | 322,727 | 10,223,991 |
International Business Machines Corp. | 184,202 | 14,150,398 |
Lexmark International, Inc. "A"* | 11,568 | 645,841 |
NCR Corp.* | 19,451 | 712,685 |
Network Appliance, Inc.* | 40,784 | 1,439,675 |
QLogic Corp.* | 17,018 | 293,390 |
SanDisk Corp.* | 25,400 | 1,294,892 |
Sun Microsystems, Inc.* | 375,581 | 1,558,661 |
| 45,411,337 | |
Electronic Equipment & Instruments 0.3% | ||
Agilent Technologies, Inc.* | 48,997 | 1,546,345 |
Jabil Circuit, Inc. | 18,147 | 464,563 |
Molex, Inc. | 15,217 | 510,835 |
Sanmina-SCI Corp.* | 60,617 | 278,838 |
Solectron Corp.* | 96,707 | 330,738 |
Symbol Technologies, Inc. | 26,250 | 283,238 |
Tektronix, Inc. | 7,924 | 233,124 |
| 3,647,681 | |
Internet Software & Services 1.4% | ||
eBay, Inc.* | 136,968 | 4,011,793 |
Google, Inc. "A"* | 23,841 | 9,997,246 |
VeriSign, Inc.* | 27,700 | 641,809 |
Yahoo!, Inc.* | 149,688 | 4,939,704 |
| 19,590,552 | |
IT Services 1.0% | ||
Affiliated Computer Services, Inc. "A"* | 13,473 | 695,342 |
Automatic Data Processing, Inc. | 71,708 | 3,251,958 |
Computer Sciences Corp.* | 19,644 | 951,555 |
Convergys Corp.* | 13,472 | 262,704 |
Electronic Data Systems Corp. | 54,191 | 1,303,835 |
First Data Corp. | 93,012 | 4,189,261 |
Fiserv, Inc.* | 21,542 | 977,145 |
Paychex, Inc. | 35,211 | 1,372,525 |
Sabre Holdings Corp. | 12,752 | 280,544 |
Unisys Corp.* | 34,080 | 214,022 |
| 13,498,891 | |
Office Electronics 0.1% | ||
Xerox Corp.* | 103,888 | 1,445,082 |
Semiconductors & Semiconductor Equipment 2.7% | ||
Advanced Micro Devices, Inc.* | 59,760 | 1,459,339 |
Altera Corp.* | 37,886 | 664,899 |
Analog Devices, Inc. | 38,635 | 1,241,729 |
Applied Materials, Inc. | 192,630 | 3,136,016 |
Broadcom Corp. "A"* | 54,421 | 1,635,351 |
Freescale Semiconductor, Inc. "B"* | 43,287 | 1,272,638 |
Intel Corp. | 689,045 | 13,057,403 |
KLA-Tencor Corp. | 25,845 | 1,074,377 |
Linear Technology Corp. | 32,214 | 1,078,847 |
LSI Logic Corp.* | 39,813 | 356,326 |
Maxim Integrated Products, Inc. | 39,601 | 1,271,588 |
Micron Technology, Inc.* (a) | 77,320 | 1,164,439 |
National Semiconductor Corp. | 35,926 | 856,835 |
Novellus Systems, Inc.* | 14,014 | 346,146 |
NVIDIA Corp.* | 41,914 | 892,349 |
PMC-Sierra, Inc.* | 23,410 | 220,054 |
Teradyne, Inc.* | 20,904 | 291,193 |
Texas Instruments, Inc. | 189,879 | 5,751,435 |
|
| Value ($) |
|
| |
Xilinx, Inc. | 36,346 | 823,237 |
| 36,594,201 | |
Software 3.0% | ||
Adobe Systems, Inc.* | 69,110 | 2,098,180 |
Autodesk, Inc.* | 24,348 | 839,032 |
BMC Software, Inc.* | 22,706 | 542,674 |
CA, Inc. | 48,259 | 991,723 |
Citrix Systems, Inc.* | 19,998 | 802,720 |
Compuware Corp.* | 40,346 | 270,318 |
Electronic Arts, Inc.* | 36,558 | 1,573,456 |
Intuit, Inc.* | 18,685 | 1,128,387 |
Microsoft Corp. | 1,014,901 | 23,647,193 |
Novell, Inc.* | 41,036 | 272,069 |
Oracle Corp.* | 450,478 | 6,527,426 |
Parametric Technology Corp.* | 10,716 | 136,200 |
Symantec Corp.* | 127,352 | 1,979,050 |
| 40,808,428 | |
Materials 2.9% | ||
Chemicals 1.5% | ||
Air Products & Chemicals, Inc. | 23,539 | 1,504,613 |
Ashland, Inc. | 7,708 | 514,124 |
Dow Chemical Co. | 116,461 | 4,545,473 |
E.I. du Pont de Nemours & Co. | 112,012 | 4,659,699 |
Eastman Chemical Co. | 8,730 | 471,420 |
Ecolab, Inc. | 19,566 | 793,988 |
Hercules, Inc.* | 9,507 | 145,077 |
International Flavors & Fragrances, Inc. | 8,143 | 286,959 |
Monsanto Co. | 33,258 | 2,799,991 |
PPG Industries, Inc. | 17,450 | 1,151,700 |
Praxair, Inc. | 36,185 | 1,953,990 |
Rohm & Haas Co. | 15,194 | 761,523 |
Sigma-Aldrich Corp. | 7,120 | 517,197 |
| 20,105,754 | |
Construction Materials 0.1% | ||
Vulcan Materials Co. | 10,525 | 820,950 |
Containers & Packaging 0.1% | ||
Ball Corp. | 10,936 | 405,070 |
Bemis Co., Inc. | 9,772 | 299,219 |
Pactiv Corp.* | 14,819 | 366,770 |
Sealed Air Corp. | 8,448 | 439,972 |
Temple-Inland, Inc. | 11,736 | 503,122 |
| 2,014,153 | |
Metals & Mining 0.9% | ||
Alcoa, Inc. | 96,681 | 3,128,597 |
Allegheny Technologies, Inc. | 11,017 | 762,817 |
Freeport-McMoRan Copper & Gold, Inc. "B" | 19,396 | 1,074,732 |
Newmont Mining Corp. | 52,332 | 2,769,933 |
Nucor Corp. | 36,530 | 1,981,753 |
Phelps Dodge Corp. | 24,640 | 2,024,422 |
United States Steel Corp. | 13,659 | 957,769 |
| 12,700,023 | |
Paper & Forest Products 0.3% | ||
International Paper Co. | 54,918 | 1,773,851 |
Louisiana-Pacific Corp. | 11,173 | 244,689 |
MeadWestvaco Corp. | 19,559 | 546,283 |
Weyerhaeuser Co. | 31,445 | 1,957,451 |
| 4,522,274 | |
|
| Value ($) |
|
| |
Telecommunication Services 3.2% | ||
Diversified Telecommunication Services 2.5% | ||
AT&T, Inc. | 457,147 | 12,749,830 |
BellSouth Corp. | 205,741 | 7,447,824 |
CenturyTel, Inc. | 12,119 | 450,221 |
Citizens Communications Co. | 34,490 | 450,094 |
Embarq Corp.* | 15,698 | 643,461 |
Qwest Communications International, Inc.* | 169,740 | 1,373,197 |
Verizon Communications, Inc. | 345,229 | 11,561,719 |
| 34,676,346 | |
Wireless Telecommunication Services 0.7% | ||
ALLTEL Corp. | 40,908 | 2,611,158 |
Sprint Nextel Corp. | 348,268 | 6,961,877 |
| 9,573,035 | |
Utilities 3.3% | ||
Electric Utilities 1.4% | ||
Allegheny Energy, Inc.* | 17,010 | 630,561 |
American Electric Power Co., Inc. | 51,416 | 1,760,998 |
Edison International | 34,467 | 1,344,213 |
Entergy Corp. | 21,856 | 1,546,312 |
Exelon Corp. | 81,442 | 4,628,349 |
FirstEnergy Corp. | 35,254 | 1,911,119 |
FPL Group, Inc. | 52,184 | 2,159,374 |
Pinnacle West Capital Corp. | 9,508 | 379,464 |
PPL Corp. | 39,928 | 1,289,675 |
Progress Energy, Inc. | 26,631 | 1,141,671 |
Southern Co. | 85,704 | 2,746,813 |
| 19,538,549 | |
Gas Utilities 0.0% | ||
Nicor, Inc. | 5,184 | 215,136 |
Peoples Energy Corp. | 2,489 | 89,380 |
| 304,516 | |
Independent Power Producers & Energy Traders 0.5% | ||
AES Corp.* | 69,848 | 1,288,696 |
Constellation Energy Group | 18,810 | 1,025,521 |
Dynegy, Inc. "A"* | 31,872 | 174,340 |
TXU Corp. | 56,112 | 3,354,936 |
| 5,843,493 | |
|
| Value ($) |
|
| |
Multi-Utilities 1.4% | ||
Ameren Corp. | 21,169 | 1,069,034 |
CenterPoint Energy, Inc. | 31,321 | 391,512 |
CMS Energy Corp.* | 24,072 | 311,492 |
Consolidated Edison, Inc. | 27,922 | 1,240,854 |
Dominion Resources, Inc. | 43,717 | 3,269,594 |
DTE Energy Co. | 18,157 | 739,716 |
Duke Energy Corp. | 149,183 | 4,381,505 |
KeySpan Corp. | 19,214 | 776,246 |
NiSource, Inc. | 27,508 | 600,775 |
PG&E Corp. | 45,349 | 1,781,309 |
Public Service Enterprise Group, Inc. | 33,175 | 2,193,531 |
Sempra Energy | 27,287 | 1,241,013 |
TECO Energy, Inc. | 20,700 | 309,258 |
Xcel Energy, Inc. | 41,557 | 797,063 |
| 19,102,902 | |
Total Common Stocks (Cost $1,177,003,404) | 1,330,571,461 |
| Principal Amount ($) | Value ($) |
|
| |
US Treasury Obligation 0.1% | ||
US Treasury Bill, 4.88%**, 9/21/2006 (b) (Cost $2,027,936) | 2,050,000 | 2,028,208 |
|
| Value ($) |
|
| |
Securities Lending Collateral 0.6% | ||
Daily Assets Fund Institutional, 5.1% (c) (d) (Cost $8,115,220) | 8,115,220 | 8,115,220 |
| ||
Cash Equivalents 2.6% | ||
Cash Management QP Trust, 5.07% (e) (Cost $35,730,476) | 35,730,476 | 35,730,476 |
| % of Net Assets | Value ($) |
|
| |
Total Investment Portfolio (Cost $1,222,877,036)+ | 100.5 | 1,376,445,365 |
Other Assets and Liabilities, Net | (0.5) | (6,834,525) |
Net Assets | 100.0 | 1,369,610,840 |
* Non-income producing security.
** Annualized yield at time of purchase; not a coupon rate.
+ The cost for federal income tax purposes was $1,246,708,658. At June 30, 2006, net unrealized appreciation for all securities based on tax cost was $129,736,707. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $219,496,478 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $89,759,771.
(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at June 30, 2006 amounted to $7,938,518 which is 0.60% of net assets.
(b) At June 30, 2006, this security, in part or in whole, has been segregated to cover initial margin requirements for open futures contracts.
(c) Daily Assets Fund Institutional, an affiliated fund, is managed by Deutsche Asset Management, Inc. The rate shown is the annualized seven-day yield at period end.
(d) Represents collateral held in connection with securities lending.
(e) Cash Management QP Trust, an affiliated fund, is managed by Deutsche Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end.
REIT: Real Estate Investment Trust
At June 30, 2006, open future contracts purchased were as follows:
Futures | Expiration Date | Contracts | Aggregate Face Value ($) | Value ($) | Unrealized Appreciation ($) |
S&P 500 Index | 9/14/2006 | 124 | 38,950,910 | 39,661,400 | 710,490 |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of June 30, 2006 (Unaudited) | |
Assets | |
Investments: Investments in securities, at value (cost $1,179,031,340) — including $7,938,518 of securities loaned | $ 1,332,599,669 |
Investment in Daily Assets Fund Institutional (cost $8,115,220)* | 8,115,220 |
Investment in Cash Management QP Trust (cost $35,730,476) | 35,730,476 |
Total investments in securities, at value (cost $1,222,877,036) | 1,376,445,365 |
Receivable for investments sold | 911,671 |
Dividends receivable | 1,480,038 |
Interest receivable | 111,835 |
Receivable for Portfolio shares sold | 853,409 |
Other assets | 60,212 |
Total assets | 1,379,862,530 |
Liabilities | |
Due to custodian | 320,542 |
Payable upon return of securities loaned | 8,115,220 |
Payable for Portfolio shares redeemed | 1,093,584 |
Payable for investments purchased | 43,629 |
Payable for daily variation margin on open futures contracts | 99,259 |
Accrued advisory fee | 134,640 |
Other accrued expenses and payables | 444,816 |
Total liabilities | 10,251,690 |
Net assets, at value | $ 1,369,610,840 |
Net Assets | |
Net assets consist of: Undistributed net investment income | 10,287,959 |
Net unrealized appreciation (depreciation) on: Investments | 153,568,329 |
Futures | 710,490 |
Accumulated net realized gain (loss) | (92,400,196) |
Paid-in capital | 1,297,444,258 |
Net assets, at value | $ 1,369,610,840 |
Class A Net Asset Value, offering and redemption price per share ($1,240,525,811 ÷ 93,334,446 outstanding shares of beneficial interest, $.001 par value, unlimited number of shares authorized) | $ 13.29 |
Class B Net Asset Value, offering and redemption price per share ($69,357,363 ÷ 5,215,381 outstanding shares of beneficial interest, $.001 par value, unlimited number of shares authorized) | $ 13.30 |
Class B2 Net Asset Value, offering and redemption price per share ($59,727,666 ÷ 4,490,681 outstanding shares of beneficial interest, $.001 par value, unlimited number of shares authorized) | $ 13.30 |
* Represents collateral on securities loaned.
Statement of Operations for the six months ended June 30, 2006 (Unaudited) | |
Investment Income | |
Income: Dividends | $ 11,849,754 |
Interest | 29,789 |
Interest — Cash Management QP Trust | 332,439 |
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates | 29,279 |
Total Income | 12,241,261 |
Expenses: Advisory fee | 1,225,374 |
Administrative service fee | 156,996 |
Administration fees | 106,053 |
Custodian fee | 20,689 |
Distribution service fees (Class B and B2) | 157,080 |
Record keeping fee (Class B2) | 39,013 |
Services to shareholders | 55,828 |
Auditing | 27,044 |
Legal | 63,551 |
Trustees' fees and expenses | 20,480 |
Reports to shareholders | 29,760 |
Other | 48,644 |
Total expenses before expense reductions | 1,950,512 |
Expense reductions | (72,273) |
Total expenses after expense reductions | 1,878,239 |
Net investment income (loss) | 10,363,022 |
Realized and Unrealized Gain (Loss) on Investment Transactions | |
Net realized gain (loss) from: Investments | 426,015 |
Futures | (838,544) |
| (412,529) |
Net unrealized appreciation (depreciation) during the period on: Investments | 20,760,428 |
Futures | 921,961 |
| 21,682,389 |
Net gain (loss) on investment transactions | 21,269,860 |
Net increase (decrease) in net assets resulting from operations | $ 31,632,882 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | ||
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2006 (Unaudited) | Year Ended December 31, 2005 |
Operations: Net investment income (loss) | $ 10,363,022 | $ 15,253,658 |
Net realized gain (loss) on investment transactions | (412,529) | (14,168,370) |
Net unrealized appreciation (depreciation) during the period on investment transactions | 21,682,389 | 41,844,749 |
Net increase (decrease) in net assets resulting from operations | 31,632,882 | 42,930,037 |
Distributions to shareholders from: Net investment income: Class A | (13,781,595) | (12,006,950) |
Class B | (640,558) | (714,321) |
Class B2 | (485,019) | — |
Portfolio share transactions: Class A Proceeds from shares sold | 267,823,952 | 176,934,741 |
Proceeds from tax-free reorganization | — | 311,282,616 |
Reinvestment of distributions | 13,781,595 | 12,006,950 |
Cost of shares redeemed | (157,688,115) | (216,433,043) |
Net increase (decrease) in net assets from Class A share transactions | 123,917,432 | 283,791,264 |
Class B Proceeds from shares sold | 10,951,868 | 29,079,301 |
Reinvestment of distributions | 640,558 | 714,321 |
Cost of shares redeemed | (10,721,904) | (17,678,251) |
Net increase (decrease) in net assets from Class B share transactions | 870,522 | 12,115,371 |
Class B2 Proceeds from shares sold | 8,385,524 | 71,422,580 |
Proceeds from tax-free reorganization | — | 69,769,766 |
Reinvestment of distributions | 485,019 | — |
Cost of shares redeemed | (9,127,448) | (82,593,913) |
Net increase (decrease) in net assets from Class B2 share transactions | (256,905) | 58,598,433 |
Increase (decrease) in net assets | 141,256,759 | 384,713,834 |
Net assets at beginning of period | 1,228,354,081 | 843,640,247 |
Net assets at end of period (including undistributed net investment income of $10,287,959 and $14,832,109, respectively) | $ 1,369,610,840 | $ 1,228,354,081 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets (continued) | ||
Other Information | Six Months Ended June 30, 2006 (Unaudited) | Year Ended December 31, 2005 |
Class A Shares outstanding at beginning of period | 84,067,247 | 62,064,495 |
Shares sold | 20,053,321 | 14,056,786 |
Share issued in tax-free reorganization | — | 24,054,780 |
Shares issued to shareholders in reinvestment of distributions | 1,008,902 | 1,010,686 |
Shares redeemed | (11,795,024) | (17,119,500) |
Net increase (decrease) in Class A shares | 9,267,199 | 22,002,752 |
Shares outstanding at end of period | 93,334,446 | 84,067,247 |
Class B Shares outstanding at beginning of period | 5,155,670 | 4,191,602 |
Shares sold | 811,225 | 2,301,387 |
Shares issued to shareholders in reinvestment of distributions | 46,859 | 60,077 |
Shares redeemed | (798,373) | (1,397,396) |
Net increase (decrease) in Class B shares | 59,711 | 964,068 |
Shares outstanding at end of period | 5,215,381 | 5,155,670 |
Class B2 Shares outstanding at beginning of period | 4,506,034 | — |
Shares sold | 630,754 | 5,522,164 |
Share issued in tax-free reorganization | — | 5,392,081 |
Shares issued to shareholders in reinvestment of distributions | 35,455 | — |
Shares redeemed | (681,562) | (6,408,211) |
Net increase (decrease) in Class B2 shares | (15,353) | 4,506,034 |
Shares outstanding at end of period | 4,490,681 | 4,506,034 |
The accompanying notes are an integral part of the financial statements.
Class A Years Ended December 31, | 2006a | 2005 | 2004 | 2003 | 2002 | 2001 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 13.11 | $ 12.73 | $ 11.64 | $ 9.20 | $ 11.98 | $ 13.77 |
Income (loss) from investment operations: Net investment income (loss)b | .11 | .21 | .21 | .15 | .14 | .09 |
Net realized and unrealized gain (loss) on investment transactions | .23 | .37 | 1.01 | 2.41 | (2.81) | (1.77) |
Total from investment operations | .34 | .58 | 1.22 | 2.56 | (2.67) | (1.68) |
Less distributions from: Net investment income | (.16) | (.20) | (.13) | (.12) | (.11) | (.10) |
Net realized gain on investment transactions | — | — | — | — | — | (.01) |
Total distributions | (.16) | (.20) | (.13) | (.12) | (.11) | (.11) |
Net asset value, end of period | $ 13.29 | $ 13.11 | $ 12.73 | $ 11.64 | $ 9.20 | $ 11.98 |
Total Return (%) | 2.56c** | 4.68 | 10.59c | 28.16c | (22.31)c | (12.18)c |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ millions) | 1,241 | 1,102 | 790 | 627 | 395 | 466 |
Ratio of expenses before expense reductions and/or recoupments (%) | .28* | .27 | .28 | .30 | .32 | .31 |
Ratio of expenses after expense reductions and/or recoupments (%) | .27* | .27 | .29 | .30 | .30 | .30 |
Ratio of net investment income (loss) (%) | 1.68* | 1.62 | 1.76 | 1.50 | 1.33 | 1.06 |
Portfolio turnover rate (%) | 14* | 15 | 1 | 1 | 10 | 2d |
a For the six months ended June 30, 2006 (Unaudited). b Based on average shares outstanding during the period. c Total return would have been lower had certain expenses not been reduced. d Portfolio turnover excludes the impact of redemption in kind. * Annualized ** Not annualized |
Class B Years Ended December 31, | 2006a | 2005 | 2004 | 2003 | 2002b |
Selected Per Share Data | |||||
Net asset value, beginning of period | $ 13.10 | $ 12.72 | $ 11.63 | $ 9.20 | $ 11.27 |
Income (loss) from investment operations: Net investment income (loss)c | .10 | .17 | .20 | .14 | .09 |
Net realized and unrealized gain (loss) on investment transactions | .23 | .38 | .99 | 2.40 | (2.07) |
Total from investment operations | .33 | .55 | 1.19 | 2.54 | (1.98) |
Less distributions from: Net investment income | (.13) | (.17) | (.10) | (.11) | (.09) |
Net asset value, end of period | $ 13.30 | $ 13.10 | $ 12.72 | $ 11.63 | $ 9.20 |
Total Return (%) | 2.46d** | 4.42 | 10.32d | 27.83 | (17.56)** |
Ratios to Average Net Assets and Supplemental Data | |||||
Net assets, end of period ($ millions) | 69 | 68 | 53 | 17 | 3 |
Ratio of expenses before expense reductions and/or recoupments (%) | .53* | .52 | .53 | .55 | .55* |
Ratio of expenses after expense reductions and/or recoupments (%) | .52* | .52 | .54 | .55 | .55* |
Ratio of net investment income (loss) (%) | 1.43* | 1.37 | 1.71 | 1.29 | 1.45* |
Portfolio turnover rate (%) | 14* | 15 | 1 | 1 | 10 |
a For the six months ended June 30, 2006 (Unaudited). b For the period April 30, 2002 (commencement of operations) to December 31, 2002. c Based on average shares outstanding during the period. d Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized |
Class B2
| 2006a | 2005b |
Selected Per Share Data | ||
Net asset value, beginning of period | $ 13.09 | $ 12.94 |
Income (loss) from investment operations: Net investment income (loss)c | .09 | .05 |
Net realized and unrealized gain (loss) on investment transactions | .23 | .10 |
Total from investment operations | .32 | .15 |
Less distributions from: Net investment income | (.11) | — |
Net asset value, end of period | $ 13.30 | $ 13.09 |
Total Return (%)d | 2.42** | 1.16** |
Ratios to Average Net Assets and Supplemental Data | ||
Net assets, end of period ($ millions) | 60 | 59 |
Ratio of expenses before expense reductions (%) | .66* | .66* |
Ratio of expenses after expense reductions (%) | .63* | .63* |
Ratio of net investment income (loss) (%) | 1.31* | 1.34* |
Portfolio turnover rate (%) | 14* | 15 |
a For the six months ended June 30, 2006 (Unaudited). b For the period September 16, 2005 (commencement of operations) to December 31, 2005. c Based on average shares outstanding during the period. d Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized |
Notes to Financial Statements (Unaudited)
A. Significant Accounting Policies
DWS Investments VIT Funds (the "Trust") is registered under the Investment Company Act of 1940 as amended, (the "1940 Act"), as a diversified, open-end management investment company. The Trust is organized as a Massachusetts business trust. The Trust is comprised of several portfolios. DWS Equity 500 Index VIP (the "Portfolio") is one of the series the Trust offers to investors. The Portfolio is intended to be the underlying investment vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of certain life insurance companies ("Participating Insurance Companies").
Multiple Classes of Shares of Beneficial Interest. The Portfolio offers three classes of shares to investors: Class A Shares, Class B Shares and Class B2 shares. Class B and Class B2 Shares are subject to Rule 12b-1 distribution fees under the 1940 Act equal to an annual rate up to 0.25% of average daily net assets. In addition, Class B2 shares are subject to record keeping fees equal to an annual rate of up to 0.15% of average daily net assets. Class A shares are not subject to such fees.
Investment income, realized and unrealized gains and losses, and certain Portfolio-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class (including the applicable 12b-1 distribution fee). Differences in class-level expenses may result in payment of different per share dividends by class. All shares have equal rights with respect to voting subject to class-specific arrangements.
The Portfolio's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Portfolio in the preparation of its financial statements.
Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading. Equity securities are valued at the most recent sale price or official closing price reported on the exchange (US or foreign) or over-the-counter market on which the security is traded most extensively. Securities for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation.
Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost. Investments in open-end investment companies and Cash Management QP Trust are valued at their net asset value each business day.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Trustees.
Futures Contracts. A futures contract is an agreement between a buyer or seller and an established futures exchange or its clearinghouse in which the buyer or seller agrees to take or make a delivery of a specific amount of a financial instrument at a specified price on a specific date (settlement date). The Portfolio may enter into futures contracts as a hedge against anticipated interest rate changes and for duration management, risk management and return enhancement purposes.
Upon entering into a futures contract, the Portfolio is required to deposit with a financial intermediary an amount ("initial margin") equal to a certain percentage of the face value indicated in the futures contract. Subsequent payments ("variation margin") are made or received by the Portfolio depending upon the daily fluctuations in the value of the underlying security and are recorded for financial reporting purposes as unrealized gains or losses by the Portfolio. When entering into a closing transaction, the Portfolio will realize a gain or loss equal to the difference between the value of the futures contract to sell and the futures contract to buy. Futures contracts are valued at the most recent settlement price.
Certain risks may arise upon entering into futures contracts, including the risk that an illiquid secondary market will limit the Portfolio's ability to close out a futures contract prior to the settlement date and that a change in the value of a futures contract may not correlate exactly with the changes in the value of the securities or currencies hedged. When utilizing futures contracts to hedge, the Portfolio gives up the opportunity to profit from favorable price movements in the hedged positions during the term of the contract.
Federal Income Taxes. The Portfolio's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable and tax-exempt income to its shareholders. Accordingly, the Portfolio paid no federal income taxes and no federal income tax provision was required.
In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for the Portfolio a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether the Portfolio is taxable in certain jurisdictions), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006. Management will begin to evaluate the application of the Interpretation to the Portfolio and is not in a position at this time to estimate the significance of its impact, if any, on the Portfolio's financial statements.
At December 31, 2005, the Portfolio had a net tax basis capital loss carryforward of approximately $66,871,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until December 31, 2008 ($3,215,000), December 31, 2009 ($9,116,000), December 31, 2010 ($17,081,000), December 31, 2011 ($4,052,000), and December 31, 2012 ($33,407,000), the respective, the expiration dates, whichever occurs first, which may be subject to certain limitations under sections 382-384 of the Internal Revenue Code. In addition, from November 1, 2005 through December 31, 2005, the Portfolio incurred approximately $1,511,000 of net realized capital losses. As permitted by tax regulations, the Portfolio intends to elect to defer these losses and treat them as arising in the fiscal year end December 31, 2006.
The DWS Equity 500 Index VIP inherited approximately $53,808,000 of its capital loss carryforward from its merger with the SVS II Index 500 Portfolio (Note H), which may be applied against any net realized taxable gains. During the year ended December 31, 2005 the Portfolio utilized approximately $500,000 of the inherited amount. At December 31, 2005 the Portfolio had a remaining net tax basis capital loss carryforward of $53,308,000 inherited from the merger which may be applied against any net realized taxable gains of each succeeding year until fully utilized or until December 31, 2008 ($3,215,000), December 31, 2009 ($9,116,000), December 31, 2010 ($3,518,000), December 31, 2011 ($4,052,000), and December 31, 2012 ($33,407,000), the respective expiration dates, whichever occurs first.
Distribution of Income and Gains. Net investment income of the Portfolio, if any, is declared and distributed to shareholders annually. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Portfolio if not distributed, and, therefore, will be distributed to shareholders at least annually.
The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to investments in futures contracts and certain securities sold at a loss. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Portfolio may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Portfolio.
The tax character of current year distributions will be determined at the end of the current fiscal year.
Securities Lending. The Portfolio may lend securities to financial institutions. The Portfolio retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the securities and to participate in any changes in their market value. The Portfolio requires the borrowers of the securities to maintain collateral with the Portfolio consisting of liquid, unencumbered assets having a value at least equal to the value of the securities loaned. The Portfolio may invest the cash collateral into a joint trading account in an affiliated money market fund pursuant to Exemptive Orders issued by the SEC. The Portfolio receives compensation for lending its securities either in the form of fees or by earning interest on invested cash collateral net of fees paid to a lending agent. Either the Portfolio or the borrower may terminate the loan. The Portfolio is subject to all investment risks associated with the value of any cash collateral received, including, but not limited to, interest rate, credit and liquidity risk associated with such investments.
Contingencies. In the normal course of business, the Portfolio may enter into contracts with service providers that contain general indemnification clauses. The Portfolio's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Portfolio that have not yet been made. However, based on experience, the Portfolio expects the risk of loss to be remote.
Expenses. Expenses of the Trust arising in connection with a specific portfolio are allocated to that portfolio. Other Trust expenses which cannot be directly attributed to a portfolio are apportioned among the portfolios in the Trust.
Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset valuation calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Certain dividends from foreign securities may be recorded subsequent to the ex-dividend as soon as the Portfolio is informed of such dividends. Realized gains and losses from investment transactions are recorded on an identified cost basis.
B. Purchases and Sales of Securities
During the six months ended June 30, 2006, purchases and sales of investment securities (excluding short-term investments) aggregated $196,110,076 and $90,758,288, respectively.
C. Related Parties
Investment Advisory Agreement. Deutsche Asset Management, Inc. ("DeAM" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, is the Portfolio's Advisor. Under the investment advisory agreement, the Portfolio pays the Advisor an annual fee equal to an annual rate of 0.200% of the first $1,000,000,000 of the Portfolio's average daily net assets, 0.175% of the next $1,000,000,000 of the Portfolio's average daily net assets and 0.150% of such net assets in excess of $2,000,000,000, which is calculated daily and paid monthly.
Northern Trust Investments, N.A. ("NTI") acts as investment sub-advisor for the Portfolio. As the Portfolio's investment sub-advisor, NTI makes the Portfolio's investment decisions. It buys and sells securities for the Portfolio and conducts the research that leads to these purchase and sale decisions. DeAM, Inc. pays a fee to NTI for acting as investment sub-advisor to the Portfolio.
For the period from January 1, 2006 through May 31, 2006, the Advisor contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Portfolio to the extent necessary to maintain the operating expenses of each class at 0.28%, 0.53%, and 0.63% of average daily net assets for Class A, B and B2 shares, respectively (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest, and organization and offering expenses).
Effective June 1, 2006 through April 31, 2009, the Advisor has contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Portfolio to the extent necessary to maintain the operating expenses of each class at 0.278%, 0.528% and 0.63% of average daily net assets for Class A, B and B2 shares, respectively (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest and organization and offering expenses).
Accordingly, for the six months ended June 30, 2006, the Advisor waived a portion of its Advisory fee aggregating $65,775 and the amount charged aggregated $1,159,599, which was equivalent to an annualized effective rate of 0.18% of the Portfolio's average daily net assets.
In addition, the Advisor reimbursed the Portfolio $6,036 for the record keeping fees of Class B2 shares for the six months ended June 30, 2006.
The Advisor may recoup any of its waived investment advisory fees within the following three years if the Portfolio is able to make the repayment without exceeding its contractual expense limits during the period of waiver/reimbursement. As of December 31, 2005, there were no amounts subject to repayment by the Advisor.
Administrative Service Fee. Prior to June 1, 2006, Investment Company Capital Corp. ("ICCC" or the "Administrator"), an affiliate of the Advisor, was the Portfolio's Administrator. The Portfolio paid the Administrator an annual fee ("Administrative service fee") based on its average daily net assets, computed and accrued daily and payable monthly at an annual rate of 0.03%. For the period January 1, 2006 through May 31, 2006, ICCC received an administrative service fee of $156,996, all of which is paid.
Effective June 1, 2006, the Administrator agreement with ICCC was terminated and the Portfolio entered into an Administrative Service Agreement with Deutsche Investment Management Americas, Inc. ("DeIM"), an indirect, wholly owned subsidiary of Deutsche Bank AG, pursuant to which DeIM provides most administrative services to the Portfolio. For all services provided under the Administrative Services Agreement, the Portfolio pays DeIM an annual fee ("Administration fee") of 0.10% of the Portfolio's average daily net assets, computed and accrued daily and payable monthly. For the period June 1, 2006 through June 30, 2006, DeIM received an administration fee of $106,053, all of which is unpaid.
DeIM has and ICCC had entered into a sub-accounting agreement with DWS Scudder Fund Accounting Corporation ("DWS-SFAC"), a wholly owned subsidiary of Deutsche Bank AG. Under the agreement, DWS-SFAC performs accounting services and other related services to the Portfolio. Pursuant to a sub-accounting agreement between DWS-SFAC and State Street Bank and Trust Company, DWS-SFAC has delegated certain accounting functions to State Street Corporation. The costs and expenses of such delegation are borne by DeIM, and were borne by ICCC, not by the Portfolio.
Distribution Service Agreement. DWS Scudder Distributors, Inc. ("DWS-SDI"), also an affiliate of the Advisor, is the Portfolio's distributor. In accordance with the Distribution Plan, DWS-SDI receives 12b-1 fees of up to 0.25% of average daily net assets of Class B and B2 shares. For the six months ended June 30, 2006, the Distribution Service Fees were as follows:
Distribution Service Fee |
|
| Total Aggregated | Unpaid at June 30, 2006 |
Class B |
|
| $ 85,055 | 20,824 |
Class B2 |
|
| 72,025 | 13,269 |
|
|
| $ 157,080 | $ 34,093 |
Service Provider Fees. DWS Scudder Investments Service Company ("DWS-SISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Portfolio. Pursuant to a sub-transfer agency agreement between DWS-SISC and DST Systems, Inc. ("DST"), DWS-SISC has delegated certain transfer agent and dividend paying agent functions to DST. DWS-SISC compensates DST out of the shareholder servicing fee it receives from the Portfolio. For the six months ended June 30, 2006, the amounts charged to the Portfolio by DWS-SISC and DST aggregated $55,828, of which $190,742 is unpaid.
Typesetting and Filing Service Fees. Under an agreement with DeIM, DeIM is compensated for providing typesetting and certain regulatory filing services to the Portfolio. For the six months ended June 30, 2006, the amount charged to the Portfolio by DeIM included in reports to shareholders aggregated $4,068, of which $2,400 is unpaid.
Trustees Fees and Expenses. As compensation for his or her services, each Independent Trustee receives an aggregated annual fee, plus a fee for each meeting attended (plus reimbursement for reasonable out-of-pocket expenses incurred in connection with his or her attendance at board and committee meetings) from each Fund in the Fund Complex for which he or she serves. In addition, the Lead Trustee of the Board and the Chairman of each committee of the Board receives additional compensation for their services. Payment of such fees and expenses is allocated among all such Funds described above in direct proportion to their relative net assets.
Cash Management QP Trust. Pursuant to an Exemptive Order issued by the SEC, the Portfolio may invest in the Cash Management QP Trust (the "QP Trust") and other affiliated funds managed by the Manager or Advisor. The QP Trust seeks to provide as high a level of current income as is consistent with the preservation of capital and the maintenance of liquidity. The QP Trust does not pay the Manager or Advisor a management fee for the affiliated funds' investments in the QP Trust.
D. Expense Reductions
The Portfolio has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Portfolio's custodian expenses. During the six months ended June 30, 2006, the Portfolio's custodian fees were reduced by $462 for custody credits earned.
E. Line of Credit
The Portfolio and several other affiliated funds (the "Participants") share in a $750 million revolving credit facility administered by JP Morgan Chase Bank N.A. for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, based upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5%. The Portfolio may borrow up to a maximum of 33% of its net assets under the agreement.
F. Ownership of the Portfolio
At June 30, 2006, two participating insurance companies were beneficial owners of record of 10% or more of the total outstanding Class A shares of the Portfolio, each owning 59% and 16%, respectively. At June 30, 2006, two participating insurance companies were beneficial owners of record of 10% or more of the total outstanding Class B shares of the Portfolio, each owning 60% and 34%, respectively. At June 30, 2006, two participating insurance companies were beneficial owners of record of 10% or more of the outstanding Class B2 shares of the Portfolio, each owning 80% and 19%, respectively.
G. Regulatory Matters and Litigation
Market Timing Related Regulatory and Litigation Matters. Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations ("inquiries") into the mutual fund industry, and have requested information from numerous mutual fund companies, including DWS Scudder. The DWS funds' advisors have been cooperating in connection with these inquiries and are in discussions with the regulators concerning proposed settlements. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the DWS funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain DWS funds, the funds' investment advisors and their affiliates, and certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each DWS fund's investment advisor has agreed to indemnify the applicable DWS funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. It is not possible to determine with certainty what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors.
With respect to the lawsuits, based on currently available information, the funds' investment advisors believe the likelihood that the pending lawsuits will have a material adverse financial impact on a DWS fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the DWS funds.
With respect to the regulatory matters, Deutsche Asset Management ("DeAM") has advised the funds as follows:
DeAM expects to reach final agreements with regulators in 2006 regarding allegations of improper trading in the DWS funds. DeAM expects that it will reach settlement agreements with the Securities and Exchange Commission, the New York Attorney General and the Illinois Secretary of State providing for payment of disgorgement, penalties, and investor education contributions totaling approximately $134 million. Approximately $127 million of this amount would be distributed to shareholders of the affected DWS funds in accordance with a distribution plan to be developed by an independent distribution consultant. DeAM does not believe that any of the DWS funds will be named as respondents or defendants in any proceedings. The funds' investment advisors do not believe these amounts will have a material adverse financial impact on them or materially affect their ability to perform under their investment management agreements with the DWS funds. The above-described amounts are not material to Deutsche Bank, and they have already been reserved.
Based on the settlement discussions thus far, DeAM believes that it will be able to reach a settlement with the regulators on a basis that is generally consistent with settlements reached by other advisors, taking into account the particular facts and circumstances of market timing at DeAM and at the legacy Scudder and Kemper organizations prior to their acquisition by DeAM in April 2002. Among the terms of the expected settled orders, DeAM would be subject to certain undertakings regarding the conduct of its business in the future, including maintaining existing management fee reductions for certain funds for a period of five years. DeAM expects that these settlements would resolve regulatory allegations that it violated certain provisions of federal and state securities laws (i) by entering into trading arrangements that permitted certain investors to engage in market timing in certain DWS funds and (ii) by failing more generally to take adequate measures to prevent market timing in the DWS funds, primarily during the 1999-2001 period. With respect to the trading arrangements, DeAM expects that the settlement documents will include allegations related to one legacy DeAM arrangement, as well as three legacy Scudder and six legacy Kemper arrangements. All of these trading arrangements originated in businesses that existed prior to the current DeAM organization, which came together in April 2002 as a result of the various mergers of the legacy Scudder, Kemper and Deutsche fund groups, and all of the arrangements were terminated prior to the start of the regulatory investigations that began in the summer of 2003. No current DeAM employee approved the trading arrangements.
There is no certainty that the final settlement documents will contain the foregoing terms and conditions. The independent Trustees/Directors of the DWS funds have carefully monitored these regulatory investigations with the assistance of independent legal counsel and independent economic consultants.
Other Regulatory Matters. DeAM is also engaged in settlement discussions with the Enforcement Staffs of the SEC and the NASD regarding DeAM's practices during 2001-2003 with respect to directing brokerage commissions for portfolio transactions by certain DWS funds to broker-dealers that sold shares in the DWS funds and provided enhanced marketing and distribution for shares in the DWS funds. In addition, DWS Scudder Distributors, Inc. is in settlement discussions with the Enforcement Staff of the NASD regarding DWS Scudder Distributors' payment of non-cash compensation to associated persons of NASD member firms, as well as DWS Scudder Distributors' procedures regarding non-cash compensation regarding entertainment provided to such associated persons.
H. Acquisition of Assets
On September 16, 2005, the DWS Equity 500 Index VIP acquired all of the net assets of Scudder SVS II Index 500 Portfolio pursuant to a plan of reorganization approved by shareholders on September 2, 2005. The acquisition was accomplished by a tax-free exchange of 33,992,448 Class A shares and 7,616,366 Class B2 shares of the Scudder SVS II Index 500 Portfolio, respectively, for 24,054,780 Class A shares and 5,392,081 Class B2 shares of DWS Equity 500 Index VIP, respectively, outstanding on September 16, 2005. Scudder SVS II Index 500 Portfolio's net assets at that date of $381,052,382, including $69,449,584 of net unrealized appreciation, were combined with those of the DWS Equity 500 Index VIP. The aggregate net assets of the DWS Equity 500 Index VIP immediately before the acquisition were $859,731,509. The combined net assets of the DWS Equity 500 Index VIP immediately following the acquisition were $1,240,783,891.
Additional information announced by Deutsche Asset Management regarding the terms of the expected settlements referred to in the Market Timing Related Regulatory and Litigation Matters and Other Regulatory Matters in the Notes to Financial Statements will be made available at www.dws-scudder.com/regulatory_settlements, which will also disclose the terms of any final settlement agreements once they are announced.
A description of the fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 is available on our Web site — www.dws-scudder.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at 1-800-621-1048.
A Special Meeting of Shareholders (the "Meeting") of DWS Investments VIT Funds (the "Fund") was held on May 5, 2006, at the offices of Deutsche Asset Management, 345 Park Avenue, New York, New York 10154. At the Meeting, the following matters were voted upon by the Shareholders (the resulting votes are presented below).
I. Election of Trustees. ("Number of Votes" represents all funds that are series of DWS Investments VIT Funds.)
| Number of Votes: | |
| For | Withheld |
Henry P. Becton, Jr. | 90,776,022.825 | 3,767,879.874 |
Dawn-Marie Driscoll | 90,634,404.365 | 3,909,498.334 |
Keith R. Fox | 90,791,668.751 | 3,752,233.948 |
Kenneth C. Froewiss | 90,771,594.500 | 3,772,308.199 |
Martin J. Gruber | 90,715,472.102 | 3,828,430.597 |
Richard J. Herring | 90,810,930.620 | 3,732,972.079 |
Graham E. Jones | 90,698,771.929 | 3,845,130.770 |
Rebecca W. Rimel | 90,681,776.859 | 3,862,125.840 |
Philip Saunders, Jr. | 90,716,673.809 | 3,827,228.890 |
William N. Searcy, Jr. | 90,728,370.338 | 3,815,532.361 |
Jean Gleason Stromberg | 90,699,168.340 | 3,844,734.359 |
Carl W. Vogt | 90,735,977.335 | 3,807,925.364 |
Axel Schwarzer | 90,689,970.472 | 3,853,932.227 |
II-A. Approval of an Amended and Restated Investment Management Agreement with Deutsche Asset Management, Inc.
Number of Votes: | ||
Affirmative | Against | Abstain |
58,918,176.846 | 1,955,659.301 | 4,534,705.248 |
II-B. Approval of an Amended and Restated Investment Management Agreement with Deutsche Investment Management Americas Inc.
Number of Votes: | ||
Affirmative | Against | Abstain |
58,986,517.353 | 1,922,312.214 | 4,499,711.828 |
II-C. Approval of a Subadvisor Approval Policy.
Number of Votes: | ||
Affirmative | Against | Abstain |
58,294,736.434 | 2,419,196.325 | 4,694,608.636 |
III. Approval of revised fundamental investment restrictions on:
III-A. Borrowing Money
Number of Votes: | ||
Affirmative | Against | Abstain |
58,605,292.378 | 1,938,789.350 | 4,864,459.667 |
III-B. Pledging Assets
Number of Votes: | ||
Affirmative | Against | Abstain |
58,680,231.294 | 1,875,327.381 | 4,852,982.720 |
III-C. Senior Securities
Number of Votes: | ||
Affirmative | Against | Abstain |
58,766,410.721 | 1,778,938.486 | 4,863,192.188 |
III-D. Concentration
Number of Votes: | ||
Affirmative | Against | Abstain |
58,803,799.959 | 1,751,758.716 | 4,852,982.720 |
III-E. Underwriting of Securities
Number of Votes: | ||
Affirmative | Against | Abstain |
58,850,586.916 | 1,694,762.291 | 4,863,192.188 |
III-F. Real Estate Investments
Number of Votes: | ||
Affirmative | Against | Abstain |
58,829,821.545 | 1,715,527.662 | 4,863,192.188 |
III-G. Commodities
Number of Votes: | ||
Affirmative | Against | Abstain |
58,730,308.501 | 1,815,040.706 | 4,863,192.188 |
III-H. Lending
Number of Votes: | ||
Affirmative | Against | Abstain |
58,745,262.030 | 1,800,087.177 | 4,863,192.188 |
III-I. Portfolio Diversification for Diversified Funds
Number of Votes: | ||
Affirmative | Against | Abstain |
58,850,325.131 | 1,705,230.544 | 4,852,982.720 |
III-K. Oil, Gas and Mineral Programs
Number of Votes: | ||
Affirmative | Against | Abstain |
58,684,673.118 | 1,870,885.557 | 4,852,982.720 |
IV-A. Approval of Amended and Restated Declaration of Trust. ("Number of Votes" represents all funds that are series of DWS Investments VIT Funds.)
Number of Votes: | ||
Affirmative | Against | Abstain |
85,808,378.965 | 2,981,421.936 | 5,754,101.798 |
The Meeting was reconvened on June 1, 2006, at which time the following matter was voted upon by the Shareholders. (The resulting votes are presented below.)
VI-B. Approval of Future Amendments to the Amended and Restated Declaration of Trust. ("Number of Votes" represents all funds that are series of DWS Investments VIT Funds.)
Number of Votes: | ||
Affirmative | Against | Abstain |
89,118,434.930 | 3,652,849.477 | 6,890,954.333 |
* Broker non-votes are proxies received by the fund from brokers or nominees when the broker or nominee neither has received instructions from the beneficial owner or other persons entitled to vote nor has discretionary power to vote on a particular matter.
Notes
Notes
About the Portfolio's Advisor
Deutsche Asset Management, Inc., an indirect, wholly owned subsidiary of Deutsche Bank AG, is the Portfolio's Advisor.
DWS Scudder is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Asset Management, Inc., Deutsche Investment Management Americas Inc. and DWS Trust Company.
The views expressed in this report reflect those of the portfolio managers only through the end of the period of the report as stated on the cover. The managers' views are subject to change at any time based on market and other conditions and should not be construed as a recommendation.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by individual investors.
DWS Scudder Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606
(800) 778-1482
vit-equ500-3 45953 (8/06)
| ITEM 2. | CODE OF ETHICS. |
| Not applicable. |
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
| Not applicable. |
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
| Not applicable. |
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS |
| Not Applicable |
| ITEM 6. | SCHEDULE OF INVESTMENTS |
| Not Applicable |
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
| Not applicable. |
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
| Not applicable. |
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS |
| Not Applicable. |
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
The Nominating and Governance Committee evaluates and nominates Board member candidates. Fund shareholders may also submit nominees that will be considered by the Committee when a Board vacancy occurs. Submissions should be mailed to the attention of the Secretary of the Fund, Two International Place, 10th Floor, Boston, MA 02110.
| ITEM 11. | CONTROLS AND PROCEDURES. |
(a) | The Chief Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. |
(b) | There have been no changes in the registrant's internal control over financial reporting that occurred during the registrant's last half-year (the registrant's second fiscal half-year in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal controls over financial reporting. |
| ITEM 12. | EXHIBITS. |
(a)(1) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
Form N-CSRS Item F
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | DWS Equity 500 Index VIP, a series of DWS Investments VIT Funds |
By: | /s/Michael G. Clark | |
| Michael G. Clark |
|
President
Date: | August 22, 2006 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Registrant: | DWS Equity 500 Index VIP, a series of DWS Investments VIT Funds |
By: | /s/Michael G. Clark | |
| Michael G. Clark |
|
President
Date: | August 22, 2006 |
By: | /s/Paul Schubert | |
| Paul Schubert |
|
Chief Financial Officer and Treasurer
Date: | August 22, 2006 |