UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM N-CSRS Investment Company Act file number 811-03196 CASH RESERVE FUND, INC. -------------------------------- (Exact Name of Registrant as Specified in Charter) One South Street, Baltimore, Maryland 21202 -------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code: (617) 295-2663 -------------- Salvatore Schiavone Two International Place Boston, Massachusetts 02110 --------------------------------------- (Name and Address of Agent for Service) Date of fiscal year end: 3/31 Date of reporting period: 9/30/2004ITEM 1. REPORT TO STOCKHOLDERS
[Scudder Investments logo]
Deutsche Bank Alex. Brown
Cash Reserve Fund, Inc.
Prime Series
Treasury Series
Tax-Free Series
Semiannual Report to Shareholders
September 30, 2004
Table of Contents |
Portfolio Management Review <Click Here> Cash Reserve Fund, Inc. Information About Your Fund's Expenses <Click Here> Investment Summary <Click Here> Schedule of Investments <Click Here> Statements of Assets and Liabilities <Click Here> Statements of Operations <Click Here> Statements of Changes in Net Assets <Click Here> Financial Highlights <Click Here> Notes to Financial Statements <Click Here> Other Information <Click Here> |
This report must be preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, talk to your financial representative or call Shareholder Services at (800) 730-1313. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the fund. Please read the prospectus carefully before you invest.
Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.
In the following interview, Portfolio Manager Geoffrey Gibbs discusses the market environment and the portfolio team's approach to managing Cash Reserve Fund during the fund's most recent semiannual period ended September 30, 2004.
Q: Will you discuss the market environment for the fund during the six-month period?
A: At the start of the second quarter, the nonfarm payroll figure surprised everyone as the government reported that the economy had created more than 300,000 new jobs in March. With this news, fixed-income markets experienced a dramatic turnaround, with one-year LIBOR rates spiking from 1.35% to 1.85% in anticipation of a potential rate hike as early as August.1 The April and May nonfarm payroll report was also strong, and the Fed now stated that it would begin to raise interest rates in the near future. The Fed was signaling its concerns over a possible resurgence in inflation and hinted that it would soon take steps to remove its accommodative posture on short-term interest rates. In anticipation of a change in the Fed's stance, we reduced average maturity. The markets reacted swiftly, with the yield curve steepening from April through June and the one-year LIBOR rate rising to 2.5%. Investors were anticipating that the fed funds rate would eventually rise to 2.25% in four to five increments by year end. As the Fed's June meeting drew closer, we continued to reduce average maturity, purchasing only shorter-term issues, as the market began to "price in" additional Fed rate hikes. When the Fed finally raised the federal funds rate by 25 basis points in late June, it stated that it would conduct its credit-tightening program at a "measured" pace. As the money market yield curve began to stabilize, market participants resumed purchasing longer-term issues.
1 LIBOR, or the London Interbank Offered Rate, is the most widely used benchmark or reference rate for short-term interest rates. LIBOR is the rate of interest at which banks borrow funds from other banks, in large volume, in the international market.As we moved into the third quarter, US economic momentum hit a "soft patch" as consumer purchasing slackened, job creation dipped, oil prices rose to $45 per barrel and the geopolitical situation deteriorated. In reaction, investors began to question whether the number of Fed rate hikes that previously had been priced into the market would actually occur, and the yield curve flattened. Meanwhile, the Fed raised rates in increments of 25 basis points two times, at its August and September meetings. Because of the slackening in the economy, however, the market downgraded its forecast for Fed rate hikes during the remainder of 2004: It predicted one more 25-basis-point move in November, no action in December and a 2% fed funds rate by year end.
Q: How did the fund perform over its most recent semiannual period?
A: We were able to maintain a $1 share price and produce a competitive yield in the Cash Reserve Fund. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
Q: In light of market conditions during the period, what has been the strategy for the Prime Series and the Treasury Series?
A: In the second quarter, the yield curve steepened considerably in response to concerns that the Fed would raise short-term interest rates aggressively over the next 12 to 24 months. Our strategy was to sharply decrease the fund's average maturity, limiting our purchases to three months and shorter. As the employment picture moderated, we selectively purchased securities of slightly longer maturity, while maintaining a weighted average maturity of approximately 37 to 69 days for the Prime Series and 32 to 58 days for the Treasury Series during the period.
During this period, we increased the fund's allocation in floating-rate securities. The interest rate of floating-rate securities adjusts periodically based on indices such as LIBOR and the federal funds rate.
Our decision to increase our allocation in this sector helped performance during the period.
7-Day Current Yield2 | (as of 9/30/04) |
Prime Shares iMoneyNet First Tier Retail Money Funds Average3 | 1.03% 0.90% |
Treasury Shares iMoneyNet Treasury Retail Money Funds Average3 | 0.79% 0.80% |
Tax-Free Shares4 iMoneyNet National Retail Tax-Free Money Funds Average3 | 0.75% 0.78% |
2 The 7-day current yield refers to the income paid by the fund over a 7-day period expressed as an annual percentage rate. Past performance is not indicative of future results. Yields are historical and will fluctuate.
3 Money Fund Report Averages, a service of iMoneyNet, Inc., are averages for categories of similar money market funds.
4 For certain investors a portion of the series' income may be subject to the federal alternative minimum tax. Distribution of the series' income may be subject to state and local taxes.
An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Please read this fund's prospectus for specific details regarding its risk profile.
Q: What has been the strategy for the Tax-Free Series?
A: Over the six-month period, we continued to focus on the highest-quality investments for the Tax-Free Series while seeking competitive yields across the municipal investment spectrum. During the period, the tax-free money markets were whipsawed by dramatic changes in supply, due to (1) the $15 billion of supply from California's Revenue Anticipation Notes and Revenue Anticipation Warrants that had entered the market in October 2003, followed by (2) the sudden withdrawal of this supply from the market in June as California refunded the $15 billion of short-term debt, issuing longer-term debt in its place. It took over a month for the markets, and tax-exempt interest rates, to adjust after this significant withdrawal of supply. Though we were invested in essential service credits from California agencies and counties over the period, we avoided state of California issues because of the state's unsettled financial situation.
During the reporting period, we maintained a cautious stance by targeting an average maturity similar to our peers. At the close of the period, the fund was positioned with an average maturity target of 22 to 36 days. The fund also has a targeted portfolio allocation of 70% of assets in floating-rate securities and 30% in fixed-rate instruments. Our decision to increase the fund's floating-rate position helped performance during the period. In addition, we continued to focus on the highest-quality investments while seeking competitive yields. In particular, we emphasized essential-services revenue issues and what is known as enhanced paper, i.e., securities guaranteed by a third party such as a bank or insurance company.
Q: What detracted from performance during the period?
A: As we moved into the third quarter, when the yield curve began to flatten, we waited to extend maturity until we were certain that one-year rates had peaked. We preferred to err on the side of caution, and missed the recent top of the LIBOR rate at 2.5%. Given the dramatic turns in economic data thus far this year, we feel it is prudent to keep maturity shorter - and forgo some yield pickup - when the direction of interest rates has been so variable.
Q: Do you foresee any change in your management strategies?
A: Going forward, we will continue our insistence on the highest credit quality within the funds. We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the funds and to seek competitive yields for our shareholders.
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.
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include sales charges (loads), redemption fees and account maintenance fees, which are not shown in this section. The following table is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, Treasury Series limited these expenses; had they not done so, expenses would have been higher. The table is based on an investment of $1,000 made at the beginning of the six-month period ended September 30, 2004.
The table illustrates your Fund's expenses in two ways:
• Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund'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% Fund Return. This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund 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.
Prime Series
* Expenses are equal to the Fund'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 | |
Prime Shares | .70% |
Prime Institutional Shares | .31% |
Treasury Series
Expenses and Value of a $1,000 Investment | ||
Actual Fund Return | Treasury Shares | Treasury Institutional Shares |
Beginning Account Value 4/1/04 | $ 1,000.00 | $ 1,000.00 |
Ending Account Value 9/30/04 | $ 1,002.70 | $ 1,004.70 |
Expenses Paid per $1,000* | $ 3.37 | $ 1.42 |
Hypothetical 5% Fund Return | Treasury Shares | Treasury Institutional Shares |
Beginning Account Value 4/1/04 | $ 1,000.00 | $ 1,000.00 |
Ending Account Value 9/30/04 | $ 1,021.70 | $ 1,023.66 |
Expenses Paid per $1,000* | $ 3.40 | $ 1.43 |
* Expenses are equal to the Fund'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 | |
Treasury Shares | .67% |
Treasury Institutional Shares | .28% |
Tax-Free Series
* Expenses are equal to the Fund'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 | |
Tax-Free Shares | .71% |
Tax-Free Institutional Shares | .33% |
For more information, please refer to the Fund's prospectus.
Prime Series
Portfolio Composition | 9/30/04 | 3/31/04 |
Commercial Paper | 32% | 32% |
Floating Rate Notes | 23% | 11% |
Repurchase Agreements | 12% | 20% |
US Government Sponsored Agencies+ | 10% | 9% |
Certificates of Deposit and Bank Notes | 9% | 16% |
Promissory Notes | 5% | - |
Funding Agreements | 4% | 5% |
Government National Mortgage | - | 1% |
Short-Term Notes | 4% | 6% |
US Government Backed | 1% | - |
100% | 100% |
+ Not backed by the full faith and credit of the US Government
Weighted Average Maturity* | ||
Cash Reserve Fund, Inc. - Prime Series | 42 days | 54 days |
First Tier Money Fund Average | 43 days | 54 days |
Treasury Series
Portfolio Composition | 9/30/04 | 3/31/04 |
US Government Backed | 100% | 100% |
Weighted Average Maturity* | ||
Cash Reserve Fund, Inc. - Treasury Series | 43 days | 42 days |
Government Money Fund Average | 41 days | 55 days |
Tax-Free Series
Portfolio Composition | 9/30/04 | 3/31/04 |
Municipal Investments | 100% | 100% |
Weighted Average Maturity* | ||
Cash Reserve Fund, Inc. - Tax-Free Series | 27 days | 30 days |
Tax-Free Money Fund Average | 36 days | 37 days |
* The Funds are compared to their respective iMoneyNet category: the First Tier Money Fund Average consists of all non-institutional taxable money market funds investing in only first tier (highest rating) securities; Government Money Fund Average consists of all non-institutional government money market funds; Tax-Free Money Fund Average consists of all non-institutional tax-free money market funds.
Portfolio composition is subject to change. For more complete details about the Funds' holdings, see pages 9-18. A quarterly Fact Sheet will be available upon request. Information concerning portfolio holdings of the Fund as of month end is available upon request on the 16th of the following month. Please see the Other Information section for contact information.
Schedule of Investments as of September 30, 2004 (Unaudited) | |
Prime Series | Principal Amount ($) | Value ($) |
Certificates of Deposit and Bank Notes 8.8% | ||
BNP Paribas, 2.02%, 3/21/2005 | 20,000,000 | 19,997,135 |
Citibank New York NA, 1.64%, 11/5/2004 | 25,000,000 | 25,000,000 |
Fortis Bank NV, 1.435%, 11/16/2004 | 30,000,000 | 29,999,434 |
HSBC Bank USA, 1.6%, 11/10/2004 | 25,000,000 | 25,000,000 |
National Australia Bank Ltd., 1.45%, 12/13/2004 | 15,000,000 | 15,005,324 |
Norddeutsche Landesbank Girozentrale, 1.91%, 3/29/2005 | 20,000,000 | 19,997,884 |
Northern Rock PLC, 1.55%, 10/18/2004 | 50,000,000 | 50,000,000 |
Societe Generale, 1.85%, 2/17/2005 | 25,000,000 | 24,997,122 |
UniCredito Italiano SpA, 1.505%, 10/6/2004 | 25,000,000 | 25,000,000 |
Total Certificates of Deposit and Bank Notes (Cost $234,996,899) | 234,996,899 | |
Commercial Paper 32.1% | ||
Beta Finance, Inc., 1.54%**, 10/1/2004 | 20,000,000 | 20,000,000 |
British Transco Cap, Inc.: | ||
1.77%**, 10/15/2004 | 30,000,000 | 29,979,350 |
1.78%**, 10/25/2004 | 10,327,000 | 10,314,745 |
1.78%**, 11/4/2004 | 4,905,000 | 4,896,754 |
Cancara Asset Securitization LLC, 1.78%**, 10/19/2004 | 25,000,000 | 24,977,750 |
CIT Group, Inc.: | ||
1.72%**, 12/1/2004 | 18,000,000 | 17,947,540 |
1.88%**, 2/7/2005 | 25,000,000 | 24,831,584 |
1.9%**, 1/18/2005 | 28,000,000 | 27,838,922 |
Depfa Bank PLC, 1.18%**, 11/19/2004 | 50,000,000 | 49,919,695 |
DNB Nor Bank ASA, 1.55%**, 11/5/2004 | 40,000,000 | 39,939,722 |
Falcon Asset Securitization Corp., 1.79%**, 11/1/2004 | 30,000,000 | 29,953,758 |
General Electric Capital Corp.: | ||
1.49%**, 11/9/2004 | 22,000,000 | 21,964,488 |
1.88%**, 2/1/2005 | 75,000,000 | 74,518,250 |
Giro Funding US Corp.: | ||
1.79%**, 10/21/2004 | 20,000,000 | 19,980,111 |
1.8%**, 10/22/2004 | 15,000,000 | 14,984,250 |
Grampian Funding Ltd.: | ||
1.68%**, 12/13/2004 | 25,000,000 | 24,914,834 |
2.04%**, 3/22/2005 | 40,000,000 | 39,610,133 |
Hewlett Packard Co., 1.61%**, 10/28/2004 | 20,000,000 | 19,975,850 |
International Lease Finance Corp., 1.78%**, 11/8/2004 | 6,500,000 | 6,487,787 |
Irish Life & Permanent PLC, 1.76%**, 2/8/2005 | 20,000,000 | 19,872,889 |
Jupiter Securitization Corp., 1.79%**, 10/22/2004 | 40,000,000 | 39,958,233 |
K2 (USA) LLC: | ||
1.87%**, 2/18/2005 | 22,500,000 | 22,336,375 |
2.04%**, 3/23/2005 | 9,000,000 | 8,911,770 |
Lake Constance Funding LLC, 1.91%**, 12/15/2004 | 10,000,000 | 9,960,208 |
Park Avenue Receivables Corp., 1.7%**, 10/8/2004 | 20,000,000 | 19,993,389 |
Province of Quebec, 1.47%**, 1/11/2005 | 23,000,000 | 22,904,205 |
Prudential PLC: | ||
1.5%**, 10/25/2004 | 35,000,000 | 34,965,000 |
1.65%**, 10/29/2004 | 52,000,000 | 51,933,267 |
RWE AG, 1.55%**, 11/5/2004 | 7,500,000 | 7,488,698 |
Scaldis Capital LLC: | ||
1.78%**, 10/19/2004 | 25,971,000 | 25,947,886 |
1.92%**, 2/28/2005 | 20,000,000 | 19,840,000 |
Sheffield Receivables Corp., 1.78%**, 10/8/2004 | 20,000,000 | 19,993,078 |
Tango Finance Corp., 1.57%**, 11/3/2004 | 25,000,000 | 24,964,021 |
WestPac Capital Corp., 1.17%**, 10/12/2004 | 20,000,000 | 19,992,850 |
Total Commercial Paper (Cost $852,097,392) | 852,097,392 | |
Floating Rate Notes* 23.3% | ||
American Express Centurion Bank, 1.84%, 9/1/2005 | 10,000,000 | 10,003,485 |
American Honda Finance Corp.: | ||
144A, 1.65%, 5/6/2005 | 25,000,000 | 25,000,000 |
144A, 1.838%, 9/19/2005 | 20,000,000 | 19,998,076 |
Beta Finance, Inc., 144A, 1.695%, 4/15/2005 | 30,000,000 | 29,995,973 |
Lehman Brothers Holding, Inc., 1.81%, 3/10/2005 | 50,000,000 | 50,000,000 |
Merrill Lynch & Co., Inc., 1.84%, 2/4/2005 | 15,000,000 | 15,000,000 |
Morgan Stanley: | ||
1.86%, 1/6/2005 | 40,000,000 | 40,000,000 |
1.86%, 2/18/2005 | 27,000,000 | 27,000,000 |
1.86%, 4/19/2005 | 60,000,000 | 60,000,000 |
Natexis Banque Populaires: | ||
1.678%, 6/9/2005 | 30,000,000 | 29,994,801 |
1.783%, 10/20/2004 | 20,000,000 | 19,999,790 |
National City Bank: | ||
1.735%, 6/10/2005 | 20,000,000 | 20,004,868 |
1.815%, 5/24/2005 | 20,000,000 | 20,000,000 |
Permanent Financing PLC, "1A", Series 4, 1.69%, 3/10/2005 | 25,000,000 | 25,000,000 |
Pfizer, Inc., 144A, 1.748%, 10/7/2005 | 40,000,000 | 40,000,000 |
Societe Generale: | ||
1.29%, 1/6/2005 | 20,000,000 | 19,962,893 |
1.83%, 2/25/2005 | 25,000,000 | 24,999,879 |
SunTrust Bank NA, 1.81%, 4/1/2005 | 40,000,000 | 40,001,985 |
Toyota Motor Credit Corp., 1.895%, 3/31/2005 | 50,000,000 | 50,000,000 |
Wells Fargo & Co., 2.001%, 10/1/2004 | 30,000,000 | 30,130,252 |
Westpac Banking Corp., 1.79%, 9/9/2005 | 20,000,000 | 19,994,362 |
Total Floating Rate Notes (Cost $617,086,364) | 617,086,364 | |
Short Term Notes 3.8% | ||
Bear Stearns & Co., Inc.: | ||
2.025%, 1/1/2044 | 75,000,000 | 75,000,000 |
2.025%, 1/1/2049 | 25,000,000 | 25,000,000 |
Total Short Term Notes (Cost $100,000,000) | 100,000,000 | |
US Government Sponsored Agencies 10.0% | ||
Federal Home Loan Bank, 1.745%**, 9/12/2005 | 30,000,000 | 29,982,897 |
Federal Home Loan Mortgage Corp.: | ||
1.5%, 2/14/2005 | 15,000,000 | 15,000,000 |
Series RB, 1.6%**, 11/9/2004 | 20,000,000 | 19,965,333 |
1.64%**, 12/1/2004 | 40,000,000 | 39,888,845 |
3.25%, 11/15/2004 | 15,000,000 | 15,031,416 |
Federal National Mortgage Association: | ||
1.51%**, 1/18/2005 | 40,000,000 | 39,994,302 |
1.62%**, 11/3/2004 | 30,000,000 | 29,955,450 |
1.751%**, 2/18/2005 | 40,000,000 | 39,997,693 |
1.8%, 5/27/2005 | 15,000,000 | 15,000,000 |
1.81%, 5/27/2005 | 20,000,000 | 20,000,000 |
Total US Government Sponsored Agencies (Cost $264,815,936) | 264,815,936 | |
US Government Backed 0.7% | ||
US Treasury Notes, 2.0%, 11/30/2004 (Cost $20,028,204) | 20,000,000 | 20,028,204 |
Funding Agreements 4.3% | ||
GE Capital Assurance Co.: | ||
1.88%, 3/1/2005 | 20,000,000 | 20,000,000 |
2.1%, 9/1/2005 | 45,000,000 | 45,000,000 |
Travelers Insurance Co., 1.74%, 1/27/2005 | 50,000,000 | 50,000,000 |
Total Funding Agreements (Cost $115,000,000) | 115,000,000 | |
Promissory Notes 5.0% | ||
Goldman Sachs Group, Inc.: | ||
1.26%, 11/8/2004 | 25,000,000 | 25,000,000 |
1.27%, 11/8/2004 | 22,000,000 | 22,000,000 |
1.94%, 5/26/2005 | 85,000,000 | 85,000,000 |
Total Promissory Notes (Cost $132,000,000) | 132,000,000 | |
Repurchase Agreements 11.9% | ||
Repurchase Agreement with Goldman Sachs Co., Inc., 1.81%, dated 9/27/2004, to be repurchased at $50,017,597 on 10/4/2004 (b) | 50,000,000 | 50,000,000 |
Repurchase Agreement with JPMorgan Chase, Inc., 1.91%, dated 9/30/2004, to be repurchased at $65,551,427 on 10/1/2004 (c) | 65,547,949 | 65,547,949 |
Repurchase Agreement with UBS Warburg, 1.90%, dated 9/30/2004, to be repurchased at $200,010,556 on 10/1/2004 (d) | 200,000,000 | 200,000,000 |
Total Repurchase Agreements (Cost $315,547,949) | 315,547,949 |
% of Net Assets | Value ($) | |
Total Investment Portfolio (Cost $2,651,572,744) (a) | 99.9 | 2,651,572,744 |
Other Assets and Liabilities, Net | 0.1 | 1,487,609 |
Net Assets | 100.0 | 2,653,060,353 |
* Floating rate notes are securities whose yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate. These securities are shown at their current rate as of September 30, 2004.
** Annualized yield at the time of purchase; not a coupon rate.
(a) Cost for federal income tax purpose was $2,651,572,744.
(b) Collateralized by:
Principal Amount ($) | Type | Rate (%) | Maturity | Collateral | |
55,233,573 | Federal National Mortgage Association | 5.00 | 3/1/2034 | 51,500,000 | |
Total Collateral Value | 51,500,000 |
(c) Collateralized by:
Principal Amount ($) | Type | Rate (%) | Maturity | Collateral | |
28,032,143 | Federal National Mortgage Association | 5.50 | 12/1/2017 | 29,220,205 | |
37,558,140 | Federal National Mortgage Association | 5.50 | 9/1/2034 | 38,295,803 | |
Total Collateral Value | 67,516,008 |
(d) Collateralized by:
Principal Amount ($) | Type | Rate (%) | Maturity | Collateral | |
53,528,914 | Federal Home Loan Mortgage Corporation | - | 11/1/2027-12/1/2032 | 55,310,815 | |
145,569,656 | Federal National Mortgage Association | - | 9/1/2027-12/1/2033 | 148,690,115 | |
Total Collateral Value | 204,000,930 |
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
The accompanying notes are an integral part of the financial statements.
Schedule of Investments as of September 30, 2004 (Unaudited) |
Treasury Series | Principal Amount ($) | Value ($) |
US Government Backed 100.0% | ||
US Treasury Bills, 1.3%*, 10/21/2004 | 50,000,000 | 49,964,445 |
US Treasury Bills, 1.32%*, 10/7/2004 | 20,949,000 | 20,944,461 |
US Treasury Bills, 1.38%*, 11/26/2004 | 13,000,000 | 12,972,599 |
US Treasury Bills, 1.41%*, 10/21/2004 | 6,721,000 | 6,715,829 |
US Treasury Bills, 1.48%*, 11/4/2004 | 20,000,000 | 19,972,611 |
US Treasury Bills, 1.49%*, 11/18/2004 | 50,000,000 | 49,902,333 |
US Treasury Bills, 1.52%*, 11/4/2004 | 25,000,000 | 24,964,702 |
US Treasury Bills, 1.58%*, 10/7/2004 | 10,334,000 | 10,331,313 |
US Treasury Bills, 1.58%*, 12/2/2004 | 40,000,000 | 39,892,878 |
US Treasury Bills, 1.59%*, 10/28/2004 | 50,000,000 | 49,941,125 |
US Treasury Bills, 1.63%*, 10/15/2004 | 100,000,000 | 99,937,388 |
US Treasury Bills, 1.73%*, 1/6/2005 | 14,000,000 | 13,935,872 |
US Treasury Bills, 1.74%*, 1/20/2005 | 7,000,000 | 6,963,308 |
US Treasury Bills, 1.9%*, 3/3/2005 | 30,000,000 | 29,762,531 |
US Treasury Note, 2.0%, 11/30/2004 | 14,000,000 | 14,017,300 |
US Treasury Note, 5.875%, 11/15/2004 | 10,000,000 | 10,057,757 |
Total US Government Backed (Cost $460,276,452) | 460,276,452 |
% of Net Assets | Value ($) | |
Total Investment Portfolio (Cost $460,276,452) (a) | 100.0 | 460,276,452 |
Other Assets and Liabilities, Net | 0.0 | (45,267) |
Net Assets | 100.0 | 460,231,185 |
* Annualized yield at time of purchase; not a coupon rate.
(a) Cost for federal income tax purposes was $460,276,452.
The accompanying notes are an integral part of the financial statements.
Schedule of Investments as of September 30, 2004 (Unaudited) |
Tax-Free Series | Principal Amount ($) | Value ($) |
Municipal Investments 99.8% | ||
Alabama 3.1% | ||
Alabama, Housing Finance Authority, Multi-family Housing Revenue, Heatherbrooke Project, Series C, 1.73%*, 6/15/2026 | 8,200,000 | 8,200,000 |
Alabama, Housing Finance Authority, Multi-family Housing Revenue, Rime Village Hoover Project, Series A, 1.73%*, 6/15/2026 | 7,500,000 | 7,500,000 |
Birmingham, AL, Waterworks and Sewer Revenue, Series 2003-A, 1.75%*, 1/1/2043 (c) | 2,500,000 | 2,500,000 |
Evergreen, AL, Industrial Development Authortity, Tenax Manufacturing Project, 1.69%*, 12/1/2012, Wachovia Bank NA (b) | 2,700,000 | 2,700,000 |
Jefferson County, AL, Sewer Revenue, Series A, 1.7%*, 2/1/2042 (c) | 5,950,000 | 5,950,000 |
26,850,000 | ||
Alaska 1.1% | ||
Alaska, State General Obligation, Series 1825, 1.73%*, 2/1/2011 (c) | 6,550,000 | 6,550,000 |
Anchorage, AL, Core City, General Obligation, Series II-R, 1.7%*, 6/1/2019 (c) | 2,975,000 | 2,975,000 |
9,525,000 | ||
Arizona 1.4% | ||
Apache County, AR, Industrial Development Authority, Series 83A, 1.75%*, 12/15/2018, Credit Suisse First Boston (b) | 2,100,000 | 2,100,000 |
Salt River, AZ, Agricultural Improvement and Power District, 1.3%*, 10/13/2004 | 10,000,000 | 10,000,000 |
12,100,000 | ||
California 1.4% | ||
California, Infrastructure & Economic Development Bank Revenue, J. Paul Getty Trust, Series B, 1.17%*, 4/1/2033 | 7,500,000 | 7,500,000 |
Los Angeles County, CA, Tax & Revenue Anticipation Notes, Series A, 3.0%, 6/30/2005 | 3,600,000 | 3,636,962 |
Los Angeles, CA, Unified School District, 144A, 1.78%*, 1/1/2028 (c) | 700,000 | 700,000 |
11,836,962 | ||
Colorado 1.3% | ||
Colorado, General Fund Revenue, Tax & Revenue Anticipation Notes, 3.0%, 6/27/2005 | 1,000,000 | 1,010,366 |
Colorado, State Education Loan Program, 144A, Series L48J, 1.2%*, 8/9/2005 | 7,100,000 | 7,100,000 |
Colorado, Transportation/Tolls Revenue, Transportation Department, 1.75%*, 12/15/2016 (c) | 3,330,000 | 3,330,000 |
11,440,366 | ||
Delaware 0.2% | ||
Delaware, Economic Development Authority, Series A, 1.68%*, 12/1/2015 (c) | 1,700,000 | 1,700,000 |
District of Columbia 1.0% | ||
District of Columbia, General Obligation, Series D, 1.71%*, 6/1/2029 (c) | 4,225,000 | 4,225,000 |
District of Columbia, The Washington Home, Inc., Revenue, 1.69%*, 8/1/2029, First Union National Bank (b) | 3,985,000 | 3,985,000 |
8,210,000 | ||
Florida 11.9% | ||
Florida, Board of Education, Lottery Revenue, 144A, Series PT-1952, 1.7%*, 1/1/2009 (c) | 10,400,000 | 10,400,000 |
Florida, Capital Projects Finance Authority, Glenridge on Palmer Ranch, Series C, 1.72%*, 6/1/2012, Bank of Scotland (b) | 10,500,000 | 10,500,000 |
Florida, Transportation/Tolls Revenue, Turnpike Authority, Series R-4041, 1.75%*, 7/1/2020 (c) | 12,540,000 | 12,540,000 |
Gulf Breeze, FL, Florida Municipal Bond Revenue, Series A, 1.72%*, 3/31/2021, Bank of America (b) | 8,015,000 | 8,015,000 |
Highlands County, FL, Health Facilities Authority Revenue, Adventist Health, Series A, 1.7%*, 11/15/2032, Suntrust Bank (b) | 4,500,000 | 4,500,000 |
Highlands County, FL, Hospital and Health Care Revenue, Health Facilities Authority, Adventist Health Systems, Series B, 1.68%*, 11/15/2009, Suntrust Bank (b) | 27,610,000 | 27,610,000 |
Jacksonville, FL, Capital Project Revenue, Series 2, 1.7%*, 10/1/2022 (c) | 6,700,000 | 6,700,000 |
Miami-Dade County, FL, School Board Certificates of Partnership, Series R-4022, 1.75%*, 8/1/2021 (c) | 3,620,000 | 3,620,000 |
Orlando, FL, Utility Committee, 1.25%*, 12/10/2004 | 3,000,000 | 3,000,000 |
Pasco County, FL, School Board Certificates of Participation, 1.7%*, 8/1/2026 (c) | 10,675,000 | 10,675,000 |
Pinellas County, FL, Health Facilities Authority Revenue, Hospital Facilities, Bayfront Projects, 1.76%*, 7/1/2034, Suntrust Bank (b) | 4,200,000 | 4,200,000 |
101,760,000 | ||
Georgia 7.0% | ||
Atlanta, GA, Airport Revenue: | ||
Series B-1, 1.71%*, 1/1/2030 (c) | 15,000,000 | 15,000,000 |
Series C-1, 1.71%*, 1/1/2030 (c) | 1,000,000 | 1,000,000 |
Cobb County, GA, Development Authority Revenue, MT Paran Christian School Project, 1.69%*, 7/1/2022, Wachovia Bank NA (b) | 2,500,000 | 2,500,000 |
De Kalb County, GA, Housing Authority, Multi-family Housing Revenue, Clairmont Crest Project, 1.7%*, 6/15/2025 | 2,000,000 | 2,000,000 |
De Kalb County, GA, Housing Authority, Multi-family Housing Revenue, Post Asford Project, 1.69%*, 6/1/2025 | 6,245,000 | 6,245,000 |
Fayette County, GA, Development Authority Educational Facilities Revenue, Catholic School Properties, Inc., Project, 1.69%*, 4/1/2024, Wachovia Bank (b) | 3,500,000 | 3,500,000 |
Fulco, GA, Hospital Authority Revenue, Piedmont Hospital Project, 1.69%*, 3/1/2024, Suntrust Bank, Atlanta (b) | 2,705,000 | 2,705,000 |
Fulton County, GA, Development Authority Revenue, Donnellan School Project, 1.69%*, 7/1/2020, Wachovia Bank NA (b) | 1,850,000 | 1,850,000 |
Fulton County, GA, Development Authority Revenue, Lovett School Project, 1.69%*, 7/1/2026, Suntrust Bank (b) | 1,500,000 | 1,500,000 |
Georgia, Medical Center Hospital Authority Revenue, Spring Harbor, Atlanta Green IS, 1.69%*, 7/1/2034, Bank of Scotland (b) | 12,660,000 | 12,660,000 |
La Grange, GA, Development Authority Revenue, LaGrange College Project, 1.74%*, 6/1/2031, Suntrust Bank (b) | 2,930,000 | 2,930,000 |
Macon-Bibb County, GA, Hospital Authority Revenue, Medical Center of Central Georgia, 1.69%*, 12/1/2018, Suntrust Bank (b) | 2,525,000 | 2,525,000 |
Roswell, GA, Housing Authority Revenue, Multi-family Revenue, Post Canyon Project, 1.69%*, 6/1/2025 | 5,700,000 | 5,700,000 |
60,115,000 | ||
Hawaii 1.7% | ||
Hawaii, General Obligation: | ||
Series R-4545, 1.75%*, 8/1/2020 (c) | 5,210,000 | 5,210,000 |
144A, Series R-4553, 1.75%*, 5/1/2023 (c) | 9,030,000 | 9,030,000 |
14,240,000 | ||
Illinois 9.4% | ||
Chicago, IL, General Obligation: | ||
Series B, 1.7%*, 1/1/2037 (c) | 3,900,000 | 3,900,000 |
Series A, 1.75%*, 1/1/2042 (c) | 2,690,000 | 2,690,000 |
Chicago, IL, Sales Tax Revenue, 1.7%*, 1/1/2034 (c) | 9,050,000 | 9,050,000 |
Du Page County, IL, Benedictine University Building Project, 144A, 1.71%*, 7/1/2024, LaSalle Bank NA (b) | 23,950,000 | 23,950,000 |
Illinois, Certificates of Participation, 2.0%, 10/22/2004 | 13,800,000 | 13,806,371 |
Illinois, Development Finance Authority Revenue, Chicago Symphony Project, 1.7%*, 12/1/2033, Bank One NA (b) | 6,200,000 | 6,200,000 |
Illinois, Development Finance Authority, Jewish Federation Projects, 1.7%*, 9/1/2024 (c) | 1,425,000 | 1,425,000 |
Illinois, Educational Facilities Authority Revenue, 1.37%*, 11/16/2004 | 7,500,000 | 7,500,000 |
Illinois, Educational Facilities Authority Revenue, Elmhurst College, 1.7%*, 3/1/2033, Bank One NA (b) | 1,300,000 | 1,300,000 |
Illinois, Finance Authority Revenue, Northwestern University: | ||
Series A, 1.69%*, 12/1/2034 | 9,700,000 | 9,700,000 |
Series B, 1.7%*, 12/1/2034 | 600,000 | 600,000 |
80,121,371 | ||
Indiana 2.6% | ||
ABN Amro Munitops, Munitops Certificate Trust, 144A, Series 2003-32, 1.75%*, 1/15/2012 (c) | 18,000,000 | 18,000,000 |
Indiana, Municipal Power Agency, Power Supplies System Revenue, Refunding, Series A, 1.69%*, 1/1/2018, Toronto - Dominion Bank (b) | 1,200,000 | 1,200,000 |
Indiana, Transportation/Tolls Revenue, Series R-4528, 1.75%*, 6/1/2018 (c) | 2,990,000 | 2,990,000 |
22,190,000 | ||
Iowa 3.1% | ||
Iowa, Finance Authority Hospital Facilities Revenue, Iowa Health Systems, Series B, 1.71%*, 7/1/2020 (c) | 4,625,000 | 4,625,000 |
Iowa, Finance Authority Hospital Facility Revenue, Iowa Health Systems, Series B, 1.71%*, 7/1/2015 (c) | 3,300,000 | 3,300,000 |
Iowa, Finance Authority Revenue, Miss VY Regional Blood Center, 1.71%*, 2/1/2023, Wells Fargo Bank NA (b) | 2,200,000 | 2,200,000 |
Iowa, School Cash Anticipation Program, Warrant Certificates, Series B, 2.0%, 1/28/2005 (c) | 16,500,000 | 16,552,000 |
26,677,000 | ||
Kansas 1.5% | ||
Kansas, Development Finance Authority Hospital Revenue, Adventist Health, Sunbelt, Series C, 1.65%*, 11/15/2034, Suntrust Bank (b) | 12,500,000 | 12,500,000 |
Kentucky 2.5% | ||
Boone County, KY, Pollution Control Revenue, Cincinnati Gas & Electric Co., Series A, 1.35%*, 8/1/2013, Credit Lyonnais (b) | 2,200,000 | 2,200,000 |
Pendleton County, KY, Multi-County Lease Revenue, Kentucky Association Counties Leasing Program, 1.21%*, 10/8/2004, Commonwealth Bank Australia (b) | 9,000,000 | 9,000,000 |
Shelby County, KY, Industrial Improvement Project, Lease Revenue, Series A, 1.72%*, 9/1/2034, US Bank NA (b) | 10,000,000 | 10,000,000 |
21,200,000 | ||
Maryland 1.5% | ||
Montgomery County, MD, Economic Development Revenue, Howard Hughes Medical Facilities, Series A, 1.71%*, 10/15/2020 | 12,500,000 | 12,500,000 |
Michigan 2.2% | ||
ABN Amro Munitops, Certificate Trust, 144A, Series 2003-3, 1.74%*, 1/1/2011 (c) | 6,650,000 | 6,650,000 |
Flushing, MI, General Obligation, Community Schools, 144A, Series R-4517, 1.75%*, 5/1/2023 | 5,100,000 | 5,100,000 |
Garden City, MI, Hospital Revenue, Series A, 1.73%*, 9/1/2026, First of America Bank (b) | 875,000 | 875,000 |
Michigan, Certificate of Participation, Series 350, 1.76%*, 9/1/2011 (c) | 4,850,000 | 4,850,000 |
Michigan, Hospital Finance Authority Revenue, Hospital Equipment Loan Program, Series A, 1.66%*, 12/1/2023, National City Bank (b) | 1,430,000 | 1,430,000 |
18,905,000 | ||
Missouri 0.4% | ||
Missouri, Health & Educational Facilities Authority, Health Facilities Revenue, Barnes Hospital Project, 1.7%*, 12/1/2015, JP Morgan Chase Bank (b) | 3,339,000 | 3,339,000 |
New Jersey 2.1% | ||
New Jersey, Economic Development Authority, Economic Development Revenue, Foreign Trade Zone Project, 1.72%*, 12/1/2007, Bank of New York (b) | 2,195,000 | 2,195,000 |
New Jersey, Floating Rate Trust Receipts, 144A, Series L56J-D, 1.25%*, 6/24/2005 | 14,000,000 | 14,000,000 |
New Jersey, Health Care Facilities Financing Authority Revenue, Hospital Capital Asset Financing, Series B, 1.7%*, 7/1/2035, Chase Manhattan Bank (b) | 750,000 | 750,000 |
Salem County, NJ, Industrial Pollution Control, Financing Authority Revenue, E.I. Du Pont de Nemours and Co., 1.3%*, 3/1/2012 | 1,300,000 | 1,300,000 |
18,245,000 | ||
New Mexico 1.1% | ||
Albuquerque, NM, Airport Facilities Revenue, Series A, 1.8%*, 7/1/2020 (c) | 5,200,000 | 5,200,000 |
Farmington, NM, Hospital Revenue, San Juan Regional Medical Center Project, Series B, 1.72%*, 6/1/2028, Bank of Nova Scotia (b) | 4,500,000 | 4,500,000 |
9,700,000 | ||
New York 3.3% | ||
City of Rochester, NY, 1.25%, 1/13/2005 | 19,000,000 | 19,000,000 |
New York, NY, City Municipal Water Finance Authority, Water & Sewer System Revenue, Series A, 1.77%*, 6/15/2025 (c) | 300,000 | 300,000 |
New York, NY, General Obligations, Series A-3, 1.69%*, 8/1/2031, BNP Paribas (b) | 315,000 | 315,000 |
New York, NY, State Local Government Assistance Corp., Series A-BV, 1.61%*, 4/1/2021 (c) | 1,225,000 | 1,225,000 |
New York, NY, Triborough Bridge & Tunnel Authority, Series A, 1.69%*, 1/1/2031 (c) | 7,675,000 | 7,675,000 |
28,515,000 | ||
North Carolina 0.8% | ||
North Carolina, Medical Care Community Health Care Facilities Revenue, First Mortgage-Friends Homes, 1.68%*, 9/1/2033, Bank of America NA (b) | 7,000,000 | 7,000,000 |
Ohio 5.0% | ||
Akron, OH, Hospital Revenue District, Health Care Facilities Summer Project, 1.7%*, 12/1/2032, KBC Bank NV (b) | 7,260,000 | 7,260,000 |
Cleveland, OH, Waterworks Revenue, Series M, 1.72%*, 1/1/2033 (c) | 13,800,000 | 13,800,000 |
Franklin County, OH, Senior Care Revenue, Hospital Revenue, Sereis II-R-55, 1.75%*, 6/1/2017 | 12,000,000 | 12,000,000 |
Hunron County, OH, Hospital Facilities Revenue, Fisher-Titus Medical Center: | ||
Series A, 1.72%*, 12/1/2027, National City Bank (b) | 8,100,000 | 8,100,000 |
Series A, 1.72%*, 12/4/2027, National City Bank (b) | 1,600,000 | 1,600,000 |
42,760,000 | ||
Oklahoma 1.6% | ||
Payne County, OK, Economic Development Authority, Student Housing Revenue, OSUF Phase III Project: | ||
1.71%*, 6/1/2032 (c) | 5,765,000 | 5,765,000 |
1.71%*, 7/1/2032 (c) | 7,930,000 | 7,930,000 |
13,695,000 | ||
Oregon 3.7% | ||
Oregon, Tax Anticipation Notes, 2.25%, 11/15/2004 | 17,900,000 | 17,922,342 |
Portland, OR, Industrial Development Revenue, 1.7%*, 4/1/2035 (c) | 4,500,000 | 4,500,000 |
Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project, 1.74%*, 5/1/2034, Bank of America NA (b) | 9,560,000 | 9,560,000 |
31,982,342 | ||
Pennsylvania 3.1% | ||
Allegheny County, PA, Hospital Development Authority Revenue, Presbyterian Hospital, Series D, 1.7%*, 3/1/2020 (c) | 2,100,000 | 2,100,000 |
Allegheny County, PA, Hospital Development Authority Revenue, UPMC Senior Living Corp., 1.7%*, 7/15/2028 | 2,450,000 | 2,450,000 |
Dauphin County, PA, General Authority, Education & Health Loan Program, 1.74%*, 11/1/2017 (c) | 70,000 | 70,000 |
Delaware Valley, PA, Regional Finance Authority Revenue, Series PT-784, 1.74%*, 7/1/2026 | 6,200,000 | 6,200,000 |
Delaware Valley, PA, Regional Finance Authority, Local Government Revenue, 1.69%*, 8/1/2016, Toronto - Dominion Bank (b) | 1,065,000 | 1,065,000 |
Pennsylvania, State Higher Educational Facilities Authority Revenue, Modal-Drexel University, Series B, 1.69%*, 5/1/2033, Allied Irish Bank PLC (b) | 5,725,000 | 5,725,000 |
Pennsylvania, State Higher Educational Facilities Authority Revenue, University Properties, Student Housing, Series A, 1.73%*, 8/1/2034, Citizens Bank of Pennsylvania (b) | 3,000,000 | 3,000,000 |
Pennsylvania, State School District (REV) Lease, Public School Building Authority, 144A, Series A42, 1.8%*, 6/1/2028 (c) | 1,300,000 | 1,300,000 |
Philadelphia, Redevelopment Authority Housing Revenue, Multi-family Courts Project, Series A, 1.74%*, 6/1/2025, First Union National Bank (b) | 2,405,000 | 2,405,000 |
Philadelphia, PA, Hospital & Higher Education Facilities Authority Revenue, Children's Hospital Project, Series B, 1.71%*, 7/1/2025 | 1,995,000 | 1,995,000 |
26,310,000 | ||
South Carolina 3.5% | ||
South Carolina, Jobs Economic Development Authority, Health Care Facilties Revenue, Baptist Ministries, Inc., 1.69%*, 7/1/2020, Wachovia Bank NA (b) | 380,000 | 380,000 |
South Carolina, Jobs Economic Development Authority, Heathwood Hall Episcopal, 1.69%*, 8/1/2029, Wachovia Bank NA (b) | 8,600,000 | 8,600,000 |
South Carolina, Project Revenue, Economic Development Authority, Sisters of Charity Hospitals, 1.73%*, 11/1/2032, Wachovia Bank NA (b) | 10,000,000 | 10,000,000 |
South Carolina, Public Service Authority: | ||
1.4%, 10/4/2004 | 2,000,000 | 2,000,000 |
1.4%, 10/5/2004 | 9,024,000 | 9,024,000 |
30,004,000 | ||
Tennessee 1.1% | ||
Clarksville, TN, Public Building Authority Revenue, Pooled Financing: | ||
1.76%*, 7/1/2031, Bank of America NA (b) | 1,500,000 | 1,500,000 |
1.76%*, 1/1/2033, Bank of America NA (b) | 3,805,000 | 3,805,000 |
1.76%*, 7/1/2034, Bank of America NA (b) | 1,800,000 | 1,800,000 |
Memphis, TN, General Obligation, Series A, 1.73%*, 8/1/2007 | 2,180,000 | 2,180,000 |
9,285,000 | ||
Texas 13.8% | ||
Brownsville, TX, Utility Systems Revenue, Series B, 1.72%*, 9/1/2027 (c) | 4,520,000 | 4,520,000 |
Corpus Christi, TX, Electric Revenue, Utility Systems Revenue, 1.75%*, 7/15/2010 (c) | 3,940,000 | 3,940,000 |
Harris County, TX, Health Facilities Development Corp. Revenue, Methodist Hospital, 1.72%*, 12/1/2032 | 4,200,000 | 4,200,000 |
Houston, TX, Airport System Revenue, Special Facilities, 1.74%*, 7/1/2032 (c) | 10,000,000 | 10,000,000 |
Houston, TX, General Obligation, Series C, 1.17%*, 11/9/2004 | 12,500,000 | 12,500,000 |
Houston, TX, Health Facilities Development Corp., Retirement Facilities Revenue, Buckingham Senior Living Center, Series C, 1.69%*, 2/15/2034, LaSalle Bank NA (b) | 18,190,000 | 18,190,000 |
Houston, TX, Utility Systems Revenue, 1.2%*, 10/20/2004 | 5,000,000 | 5,000,000 |
Houston, TX, Water & Sewer Revenue, Series 120, 1.73%*, 12/1/2023 | 4,900,000 | 4,900,000 |
San Antonio, TX, Electric & Gas, Series A, 1.32%*, 10/14/2004 | 5,000,000 | 5,000,000 |
Texas, Higher Education Revenue, University of Texas, Series B-14, 1.72%*, 8/15/2022 | 2,000,000 | 2,000,000 |
Texas, Lower Colorado River Authority, 1.17%, 10/4/2004 | 20,000,000 | 20,000,000 |
Texas, State (REV) Lease, Trust Certificates, Series 9056, 144A, 1.76%*, 7/21/2010 (c) | 10,990,000 | 10,990,000 |
Texas, State General Obligation, Series R-4020, 1.75%*, 10/1/2022 | 2,370,000 | 2,370,000 |
Texas, Tax & Revenue Anticipation Notes, 3.0%, 8/31/2005 | 13,000,000 | 13,163,807 |
Texas, Water & Sewer Revenue, Water Development Board Revenue, State Revolving Fund, 1.72%*, 7/15/2022 | 1,350,000 | 1,350,000 |
118,123,807 | ||
Virginia 0.7% | ||
Chesapeake Bay, VA, Transportation/Tolls Revenue, Bridge and Tunnel Commission, Series A-39, 1.74%*, 7/1/2025 (c) | 4,180,000 | 4,180,000 |
Spotsylvania County, VA, Industrial Development Authority Revenue, 1.74%*, 4/1/2023, Wachovia Bank NA (b) | 1,500,000 | 1,500,000 |
5,680,000 | ||
Washington 5.3% | ||
King County, WA, State General Obligation, 5.25%, 12/1/2004 (c) | 5,525,000 | 5,562,704 |
Port Tacoma, WA, State General Obligation, Core City, Series R-4036, 1.75%*, 12/1/2025 (c) | 5,365,000 | 5,365,000 |
Washington, Electric Revenue, Northwest Energy, 1.75%*, 7/1/2017 (c) | 9,925,000 | 9,925,000 |
Washington, Energy Northwest Electric Revenue, Series R-4524, 1.75%*, 7/1/2018 (c) | 5,470,000 | 5,470,000 |
Washington, Housing Finance Community Nonprofit Housing Revenue, Emerald Heights Project, 1.67%*, 7/1/2033, Bank of America NA (b) | 9,165,000 | 9,165,000 |
Washington, Municipal Securities Trust Certificates, Series 9058, 144A, 1.76%*, 9/23/2010 (c) | 9,990,000 | 9,990,000 |
45,477,704 | ||
West Virginia 0.2% | ||
Monongalia County, WV, Building Commission Hospital Revenue, Monongalia General Hospital, Series A, 1.72%*, 7/1/2017, Bank One of West Virginia (b) | 1,820,000 | 1,820,000 |
Wisconsin 1.2% | ||
Milwaukee, WI, Water & Sewer Revenue, 1.75%*, 6/1/2022 (c) | 3,615,000 | 3,615,000 |
Wisconsin, Transportation Authority Revenue, 1.4%*, 12/10/2004 | 6,400,000 | 6,400,000 |
10,015,000 | ||
Total Municipal Investments (Cost $853,822,552) | 853,822,552 |
% of Net Assets | Value ($) | |
Total Investment Portfolio (Cost $853,822,552) (a) | 99.8 | 853,822,552 |
Other Assets and Liabilities, Net | 0.2 | 1,476,176 |
Net Assets | 100.0 | 855,298,728 |
* Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rate as of September 30, 2004.
(a) The cost for federal income tax purposes was $853,822,552.
(b) Security includes a letter of credit from a major bank.
(c) Bond is insured by one of these companies:
Insurance Coverage | As a % of Total Investment Portfolio | |
AMBAC | AMBAC Assurance Corp. | 8.6% |
FGIC | Financial Guaranty Insurance Company | 7.8% |
FSA | Financial Security Assurance | 8.6% |
MBIA | Municipal Bond Investors Assurance | 10.1% |
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
The accompanying notes are an integral part of the financial statements.
Statements of Assets and Liabilities as of September 30, 2004 (Unaudited) | |||
Assets | Prime Series | Treasury Series | Tax-Free Series |
Investments: Investments, at amortized cost | $ 2,336,024,795 | $ 460,276,452 | $ 853,822,552 |
Repurchase agreements, at amortized cost | 315,547,949 | - | - |
Total Investments, at amortized cost | 2,651,572,744 | 460,276,452 | 853,822,552 |
Cash | 30,130,075 | 911 | - |
Receivable for securities sold | - | 99,901,750 | 235,022 |
Interest receivable | 3,378,970 | 316,007 | 2,279,783 |
Receivable for Fund shares sold | - | - | 109,649 |
Other assets | 37,982 | 7,068 | 43,985 |
Total assets | 2,685,119,771 | 560,502,188 | 856,490,991 |
Liabilities | |||
Due to custodian bank | - | - | 491,765 |
Dividends payable | 244 | 1,386 | - |
Payable for Fund shares redeemed | 9,085 | - | 109,650 |
Payable for investments purchased | 30,130,122 | 99,937,388 | - |
Accrued management fee | 688,240 | 91,945 | 210,583 |
Accrued distribution fees | 481,494 | 69,465 | 157,675 |
Accrued shareholder servicing fees | 135,366 | 20,041 | 38,785 |
Accrued custodian and accounting fees | 23,678 | 11,469 | 17,024 |
Other accrued expenses and payables | 591,189 | 139,309 | 166,781 |
Total liabilities | 32,059,418 | 100,271,003 | 1,192,263 |
Net assets | $ 2,653,060,353 | $ 460,231,185 | $ 855,298,728 |
Composition of Net Assets | |||
Accumulated distributions in excess of net investment income | (444,164) | (90,854) | (150,683) |
Accumulated net realized gain (loss) | 15,952 | 42,947 | (36,992) |
Paid-in capital | 2,653,488,565 | 460,279,092 | 855,486,403 |
Net assets | $ 2,653,060,353 | $ 460,231,185 | $ 855,298,728 |
The accompanying notes are an integral part of the financial statements.
Statements of Assets and Liabilities as of September 30, 2004 (Unaudited) (continued) | |||
Net Asset Value | Prime Series | Treasury Series | Tax-Free Series |
Computation of Net Asset Value, Offering and Redemption Price Per Share | |||
Prime Shares, Treasury Shares, and Tax-Free Shares, respectively Net assets | $ 2,308,746,366 | $ 347,943,174 | $ 594,116,060 |
Shares of capital stock outstanding | 2,308,751,034 | 347,907,989 | 594,210,714 |
Net Asset Value per share | $ 1.00 | $ 1.00 | $ 1.00 |
Prime Institutional Shares, Treasury Institutional Shares and Tax-Free Institutional Shares, respectively Net assets | $ 337,288,145 | $ 112,288,011 | $ 261,182,668 |
Shares of capital stock outstanding | 337,311,230 | 112,297,936 | 261,194,940 |
Net Asset Value per share | $ 1.00 | $ 1.00 | $ 1.00 |
Class A Shares Net assets | $ 3,799,614 | $ - | $ - |
Shares of capital stock outstanding | 3,804,102 | - | - |
Net Asset Value per share | $ 1.00 | $ - | $ - |
Class B Shares Net assets | $ 3,102,542 | $ - | $ - |
Shares of capital stock outstanding | 3,099,929 | - | - |
Net Asset Value per share | $ 1.00 | $ - | $ - |
Class C Shares Net assets | $ 123,686 | $ - | $ - |
Shares of capital stock outstanding | 123,810 | - | - |
Net Asset Value per share | $ 1.00 | $ - | $ - |
The accompanying notes are an integral part of the financial statements.
Statements of Operations for the six months ended September 30, 2004 (Unaudited) | |||
Investment Income | Prime Series | Treasury Series | Tax-Free Series |
Interest | $ 18,783,743 | $ 2,730,957 | $ 5,082,253 |
Expenses: | |||
Management fee | 3,816,279 | 583,181 | 1,229,561 |
Transfer agent fees | 1,021,481 | 156,976 | 266,480 |
Custodian and accounting fees | 136,714 | 67,108 | 85,448 |
Auditing | 21,463 | 13,689 | 16,378 |
Legal | 20,349 | 14,855 | 10,209 |
Directors' fees and expenses | 48,055 | 9,666 | 19,621 |
Reports to shareholders | 167,586 | - | 4,564 |
Registration fees | 58,350 | 22,702 | 30,581 |
Distribution fees | 3,134,562 | 450,935 | 793,038 |
Shareholder servicing fees | 876,150 | 126,262 | 222,051 |
Other | 48,322 | 13,930 | 24,205 |
Total expenses | 9,349,311 | 1,459,304 | 2,702,136 |
Less: fee waivers and/or expense reimbursements | (32,231) | (84,065) | (6,233) |
Net expenses | 9,317,080 | 1,375,239 | 2,695,903 |
Net investment income | 9,466,663 | 1,355,718 | 2,386,350 |
Net realized gain (loss) on investment transactions | 2,623 | 17,349 | 5,851 |
Net increase (decrease) in net assets from operations | $ 9,469,286 | $ 1,373,067 | $ 2,392,201 |
The accompanying notes are an integral part of the financial statements.
Prime Series
Statement of Changes in Net Assets | ||
Increase (Decrease) in Net Assets | Six Months | Year Ended |
Operations: Net investment income | $ 9,466,663 | $ 18,440,390 |
Net realized gain (loss) | 2,623 | 32,960 |
Net increase (decrease) in net assets resulting from operations | 9,469,286 | 18,473,350 |
Distributions to shareholders from: Net investment income: Prime Shares | (8,126,592) | (13,937,204) |
Prime Institutional Shares | (1,894,994) | (4,146,883) |
Class A Shares | (6,383) | (27,001) |
Class B Shares | (878) | (5,702) |
Class C Shares | (31) | (187) |
Quality Shares | (1,264) | (5,308) |
Total distributions | (10,030,142) | (18,122,285) |
Fund share transactions: (at net asset value of $1.00 per share) Proceeds from shares sold | 1,490,249,323 | 3,778,478,261 |
Reinvestment of distributions | 10,012,737 | 18,119,786 |
Cost of shares redeemed | (1,920,098,514) | (4,170,034,415) |
Net increase (decrease) in net assets from Fund share transactions | (419,836,454) | (373,436,368) |
Increase (decrease) in net assets | (420,397,310) | (373,085,303) |
Net assets at beginning of period | 3,073,457,663 | 3,446,542,966 |
Net assets at end of period (including accumulated distributions in excess of net investment income and undistributed net investment income of $444,164 and $119,315, respectively) | $ 2,653,060,353 | $ 3,073,457,663 |
The accompanying notes are an integral part of the financial statements.
Treasury Series
Statement of Changes in Net Assets | ||
Increase (Decrease) in Net Assets | Six Months | Year Ended |
Operations: Net investment income | $ 1,355,718 | $ 2,361,127 |
Net realized gain (loss) | 17,349 | 25,598 |
Net increase (decrease) in net assets resulting from operations | 1,373,067 | 2,386,725 |
Distributions to shareholders from: Net investment income: Treasury Shares | (945,946) | (1,566,997) |
Treasury Institutional Shares | (529,389) | (801,414) |
Total distributions | (1,475,335) | (2,368,411) |
Fund share transactions: (at net asset value of $1.00 per share) Proceeds from shares sold | 439,264,420 | 818,248,199 |
Reinvestment of distributions | 1,467,141 | 2,355,582 |
Cost of shares redeemed | (456,556,163) | (874,905,520) |
Net increase (decrease) in net assets from Fund share transactions | (15,824,602) | (54,301,739) |
Increase (decrease) in net assets | (15,926,870) | (54,283,425) |
Net assets at beginning of period | 476,158,055 | 530,441,480 |
Net assets at end of period (including accumulated distributions in excess of net investment income and undistributed net investment income of $90,854 and $28,763, respectively) | $ 460,231,185 | $ 476,158,055 |
The accompanying notes are an integral part of the financial statements.
Tax-Free Series
Statement of Changes in Net Assets | ||
Increase (Decrease) in Net Assets | Six Months | Year Ended |
Operations: Net investment income | $ 2,386,350 | $ 4,009,761 |
Net realized gain (loss) | 5,851 | 16,332 |
Net increase (decrease) in net assets resulting from operations | 2,392,201 | 4,026,093 |
Distributions to shareholders from: Net investment income: Tax-Free Shares | (1,509,515) | (2,209,091) |
Tax-Free Institutional Shares | (1,087,009) | (1,599,231) |
Total distributions | (2,596,524) | (3,808,322) |
Fund share transactions: (at net asset value of $1.00 per share) Proceeds from shares sold | 708,989,283 | 1,472,948,677 |
Reinvestment of distributions | 2,595,871 | 3,808,152 |
Cost of shares redeemed | (826,956,621) | (1,404,230,862) |
Net increase (decrease) in net assets from Fund share transactions | (115,371,467) | 72,525,967 |
Increase (decrease) in net assets | (115,575,790) | 72,743,738 |
Net assets at beginning of period | 970,874,518 | 898,130,780 |
Net assets at end of period (including accumulated distributions in excess of net investment income and undistributed net investment income of $150,683 and $59,491, respectively) | $ 855,298,728 | $ 970,874,518 |
The accompanying notes are an integral part of the financial statements.
Prime Shares | ||||||
Years Ended March 31, | 2004a | 2004 | 2003 | 2002 | 2001 | 2000 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0033 | .0050 | .0108 | .0270 | .0578 | .0480 |
Less: Distributions from net investment income | (.0033) | (.0050) | (.0108) | (.0270) | (.0578) | (.0480) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | .33** | .47 | 1.08 | 2.74 | 5.94 | 4.90 |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 2,308,746 | 2,665,759 | 2,879,253 | 4,320,764 | 5,735,781 | 5,772,616 |
Ratio of expenses (%) | .70* | .67 | .70 | .67 | .66 | .66 |
Ratio of net investment income (%) | .61* | .51 | 1.10 | 2.76 | 5.77 | 4.86 |
Prime Institutional Shares | ||||||
Years Ended March 31, | 2004a | 2004 | 2003 | 2002 | 2001 | 2000 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0052 | .0087 | .0140 | .0302 | .0610 | .0511 |
Less: Distributions from net investment income | (.0052) | (.0087) | (.0140) | (.0302) | (.0610) | (.0511) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | .52** | .88 | 1.40 | 3.06 | 6.28 | 5.24 |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 337,288 | 394,967 | 544,146 | 750,110 | 671,539 | 637,767 |
Ratio of expenses (%) | .31* | .30 | .38 | .36 | .34 | .34 |
Ratio of net investment income (%) | 1.00* | .88 | 1.42 | 3.01 | 6.01 | 5.18 |
a For the six months ended September 30, 2004 (Unaudited). * Annualized ** Not annualized |
Treasury Shares | ||||||
Years Ended March 31, | 2004a | 2004 | 2003 | 2002 | 2001 | 2000 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0027 | .0039 | .0098 | .0250 | .0539 | .0431 |
Less: Distributions from net investment income | (.0027) | (.0039) | (.0098) | (.0250) | (.0539) | (.0431) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%)b | .27** | .40 | .99 | 2.53 | 5.53 | 4.40 |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 347,943 | 376,821 | 390,982 | 745,638 | 866,508 | 790,443 |
Ratio of expenses before expense reductions (%) | .71* | .68 | .67 | .64 | .61 | .66 |
Ratio of expenses after expense reductions (%) | .67* | .63 | .62 | .59 | .56 | .61 |
Ratio of net investment income (%) | .48* | .39 | 1.01 | 2.47 | 5.36 | 4.31 |
Treasury Institutional Shares | ||||||
Years Ended March 31, | 2004a | 2004 | 2003 | 2002 | 2001 | 2000 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0047 | .0077 | .0130 | .0281 | .0571 | .0462 |
Less: Distributions from net investment income | (.0047) | (.0077) | (.0130) | (.0281) | (.0571) | (.0462) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%)b | .47** | .78 | 1.31 | 2.85 | 5.86 | 4.72 |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 112,288 | 99,337 | 139,460 | 199,932 | 137,520 | 98,668 |
Ratio of expenses before expense reductions (%) | .32* | .29 | .35 | .33 | .31 | .34 |
Ratio of expenses after expense reductions (%) | .28* | .24 | .30 | .28 | .26 | .29 |
Ratio of net investment income (%) | .87* | .78 | 1.33 | 2.71 | 5.66 | 4.62 |
a For the six months ended September 30, 2004 (Unaudited). b Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized |
Tax-Free Shares | ||||||
Years Ended March 31, | 2004a | 2004 | 2003 | 2002 | 2001 | 2000 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0024 | .0031 | .0074 | .0168 | .0333 | .0276 |
Less: Distributions from net investment income | (.0024) | (.0031) | (.0074) | (.0168) | (.0333) | (.0276) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | .24** | .32 | .74 | 1.69 | 3.38 | 2.80 |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 594,116 | 650,986 | 699,983 | 1,006,613 | 1,701,940 | 1,664,370 |
Ratio of expenses (%) | .71* | .70 | .67 | .65 | .64 | .65 |
Ratio of net investment income (%) | .42* | .34 | .74 | 1.76 | 3.31 | 2.78 |
Tax-Free Institutional Shares | ||||||
Years Ended March 31, | 2004a | 2004 | 2003 | 2002 | 2001 | 2000 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0042 | .0070 | .0107 | .0200 | .0363 | .0306 |
Less: Distributions from net investment income | (.0042) | (.0070) | (.0107) | (.0200) | (.0363) | (.0306) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | .42** | .70 | 1.07 | 2.01 | 3.69 | 3.10 |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 261,183 | 319,888 | 198,148 | 168,137 | 173,956 | 117,446 |
Ratio of expenses (%) | .33* | .32 | .35 | .33 | .34 | .35 |
Ratio of net investment income (%) | .81* | .72 | 1.06 | 1.98 | 3.62 | 3.09 |
a For the six months ended September 30, 2004 (Unaudited). * Annualized ** Not annualized |
Note 1-Organization and Significant Accounting Policies
A. Organization
Cash Reserve Fund, Inc. (the `Fund') is registered under the Investment Company Act of 1940 (the `Act'), as amended, as a diversified, open-end management investment company. The Fund is organized as a corporation under the laws of the state of Maryland. The Prime Series, the Treasury Series and the Tax-Free Series (the "Series") are the three series the Fund offers to investors.
The Prime Series offers six classes of shares to investors: Cash Reserve Prime Shares (`Prime Shares'), Scudder Cash Reserve Prime Class A Shares (`Class A Shares'), Scudder Cash Reserve Prime Class B Shares (`Class B Shares'), Scudder Cash Reserve Prime Class C Shares (`Class C Shares'), and Cash Reserve Prime Institutional Shares (`Prime Institutional Shares'). Certain detailed information for the Class A Shares, Class B Shares and Class C Shares is provided separately and is available upon request. Effective May 28, 2004, the last shareholder redeemed their shares in Quality Cash Reserve Prime Shares.
The Treasury Series offers two classes of shares to investors: Cash Reserve Treasury Shares (`Treasury Shares') and Cash Reserve Treasury Institutional Shares (`Treasury Institutional Shares').
The Tax-Free Series offers two classes of shares to investors: Cash Reserve Tax-Free Shares (`Tax-Free Shares') and Cash Reserve Tax-Free Institutional Shares (`Tax-Free Institutional Shares').
All shares have equal rights with respect to voting except that shareholders vote separately on matters affecting their rights as holders of a particular series or class.
The investment objective of each Series is as follows: Prime Series and Treasury Series - to seek as high a level of current income as is consistent with preservation of capital and liquidity; Tax-Free Series - to seek as high a level of current income exempt from federal income tax as is consistent with preservation of capital and liquidity. Details concerning the Series' investment objectives and policies and the risk factors associated with the Series' investments are described in the Series' Prospectus and Statement of Additional Information.
B. Valuation of Securities
Portfolio securities are valued utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium.
C. Securities Transactions and Investment Income
Securities transactions are recorded on trade date. Realized gains and losses are determined by comparing the proceeds of a sale or the cost of a purchase with a specific offsetting transaction.
Interest income, including amortization of premiums and accretion of discounts, is accrued daily. Dividend income is recorded on the ex-dividend date. Estimated expenses are also accrued daily.
Distribution or service fees and transfer agent fees specifically attributable to a class are allocated to that class. All other expenses, income, gains and losses are allocated among the classes based upon their relative net assets.
D. Distributions
The Fund distributes its net investment income in the form of dividends, which are declared and recorded daily. Accumulated daily dividends are distributed to shareholders monthly.
E. Federal Income Taxes
It is the Fund's policy to continue to qualify as a regulated investment company under the Internal Revenue Code and to distribute substantially all of its taxable income to shareholders. Therefore, no federal income taxes have been accrued.
F. Repurchase Agreements
The Prime Series and Treasury Series may enter into repurchase agreements with certain banks and broker/dealers whereby the Series, through its custodian or sub-custodian bank, receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the value is equal to at least the principal amount of the repurchase price plus accrued interest. The custodial bank holds the collateral in a separate account until the agreement matures. If the value of the securities falls below the principal amount of the repurchase agreement plus accrued interest, the financial institution deposits additional collateral by the following business day. If the financial institution either fails to deposit the required additional collateral or fails to repurchase the securities as agreed, the Series has the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Series' claims on the collateral may be subject to legal proceedings.
G. Expenses
Expenses of the Fund arising in connection with a specific Series are allocated to that Series. Other Fund expenses which cannot be directly attributed to a Series are apportioned among the Series in the Fund.
H. Estimates
In preparing its financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions. Actual results may be different.
Note 2-Fees and Transactions with Affiliates
Investment Company Capital Corp. (`ICCC'), an indirect, wholly owned subsidiary of Deutsche Bank AG, is the Advisor for each Series. The Fund pays the Advisor an annual fee based on its aggregate average daily net assets which is calculated daily and paid monthly at the following annual rates: 0.30% of the first $500 million, 0.26% of the next $500 million, 0.25% of the next $500 million, 0.24% of the next $1 billion, 0.23% of the next $1 billion and 0.22% of the amount in excess of $3.5 billion.
In addition, the Advisor is entitled to receive an additional fee with respect to the Prime Series and the Tax-Free Series, calculated daily and payable monthly, at the annual rate of 0.02% of the Prime Series' average daily net assets and 0.03% of the Tax-Free Series' average daily net assets.
Accordingly, for the six months ended September 30, 2004, the fee pursuant to the management agreement was equivalent to an annual effective rate of 0.27%, 0.25% and 0.28% of the average daily net assets of the Prime Series, Treasury Series and Tax-Free Series, respectively.
For the period April 1, 2004 through August 2, 2004, the Advisor voluntarily waived 0.05% of average net assets on the Treasury Series. Accordingly, for the six months ended September 30, 2004, the Advisor waived $80,305 of operating expenses for the Treasury Series.
In addition, the Advisor has agreed to voluntarily waive expenses as necessary to maintain a positive yield. This waiver may be changed or terminated at any time without notice. Under these arrangements, the Advisor waived expenses on Class A, B and C shares of the Prime Series.
ICCC is the Fund's accounting agent. Each Series paid the accounting agent a fixed fee of $13,000 on assets up to $10 million. On assets greater than $10 million, each Series paid the accounting agent an annual fee based on its average daily net assets which was calculated daily and paid monthly. Scudder Fund Accounting Corporation (`SFAC'), an affiliate of the Advisor, is responsible for the general accounting records and determining the daily net asset value per share of the Fund. SFAC has retained State Street Bank and Trust Company (`State Street') as a sub-agent that performs fund accounting and administration services.
Scudder Investments Service Company (`SISC'), an affiliate of the Advisor, is the Fund's transfer agent. Each class paid the transfer agent a per account fee that is accrued daily and paid monthly. For the six months ended September 30, 2004, the amount charged to the Fund by SISC was as follows:
Total Aggregated | Transfer Agent Fees Waived | Unpaid at September 30, 2004 | |
Prime Series: Prime Shares | $ 975,047 | $ - | $ 459,339 |
Prime Institutional Shares | 21,883 | - | 13,303 |
Class A Shares | 9,228 | 58 | 8,030 |
Class B Shares | 9,924 | 9,924 | - |
Class C Shares | 2,429 | 2,429 | - |
Quality Shares | 327 | - | - |
Treasury Series: Treasury Shares | $ 149,783 | $ - | $ 101,858 |
Treasury Institutional Shares | 6,040 | - | 2,876 |
Tax-Free Series: Tax-Free Shares | $ 249,982 | $ - | $ 136,237 |
Tax-Free Institutional Shares | 14,628 | - | 7,942 |
Pursuant to a sub-transfer agency agreement between SISC and DST Systems, Inc. (`DST'), SISC has delegated certain transfer agent and dividend paying agent functions to DST. The cost and expenses of such delegations are borne by SISC, not by the Fund.
As compensation for his or her services, each Independent Director receives an aggregate 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 Chairman of the Fund Complex's Audit Committee receives an annual fee for his services.
Note 3-Distribution and Service Fees
Scudder Distributors, Inc. (`SDI') is the Fund's Distributor. Each Series pays the Distributor an annual fee, pursuant to Rule 12b-1, based on its average daily net assets, which is calculated daily and paid monthly at the following annual rates: 0.25% of the Prime Shares, Class A Shares, Treasury Shares and Tax-Free Shares average daily net assets, 0.60% of the Quality Cash Shares average daily net assets and 0.75% of the Class B Shares and Class C Shares average daily net assets. The Fund does not pay fees on the Prime Institutional Shares, Treasury Institutional Shares and Tax-Free Institutional Shares. For the six months ended September 30, 2004, the Distribution Fee was as follows:
Total Aggregated | Unpaid at September 30, 2004 | |
Prime Series: Prime Shares | $ 3,111,756 | $ 478,850 |
Class A Shares | 5,221 | 817 |
Class B Shares | 14,043 | 1,755 |
Class C Shares | 506 | 72 |
Quality Shares | 3,036 | - |
Treasury Series: Treasury Shares | $ 450,935 | $ 69,465 |
Tax-Free Series: Tax-Free Shares | $ 793,038 | $ 157,675 |
Each Series pays the Distributor a shareholder servicing fee based on the average daily net assets which is calculated daily and paid monthly at the following rates of 0.07% of Prime Shares, Treasury Shares and Tax-Free Shares, and 0.25% of Class B and Class C Shares. The Distributor uses this fee to compensate third parties that provide shareholder services to their clients who own shares. For the six months ended September 30, 2004, the shareholder servicing fee was as follows:
Total Aggregated | Shareholder Servicing Fee Waived | Unpaid at September 30, 2004 | |
Prime Series: Prime Shares | $ 871,301 | $ - | $ 134,066 |
Class B Shares | 4,681 | 1,137 | 1,253 |
Class C Shares | 168 | 28 | 47 |
Treasury Series: Treasury Shares | $ 126,262 | $ - | $ 20,041 |
Tax-Free Series: Tax-Free Shares | $ 222,051 | $ - | $ 38,785 |
For the six months ended September 30, 2004, the Advisor has agreed to reimburse $17,434, $3,744 and $6,079 for expenses for the Prime Series, Treasury Series and Tax-Free Series, respectively.
Note 4-Expense Off-Set Arrangement
The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's custodian expenses. During the six months ended September 30, 2004, the Fund's custodian fees were reduced by $1,221, $16 and $154 for the Prime Series, the Treasury Series, and the Tax-Free Series, respectively, under this arrangement.
Note 5-Share Transactions
The Fund is authorized to issue up to 20.81 billion shares of $.001 par value capital stock (12.66 billion Prime Series, 3.55 billion Treasury Series, 4.25 billion Tax-Free Series and 350 million undesignated). Transactions in capital stock were as follows (at net asset value of $1.00 per share):
Six Months Ended | Year Ended | |||
Prime Series: | Shares | Dollars | Shares | Dollars |
Sold: | ||||
Prime Shares | 849,051,286 | $ 849,051,286 | 2,192,158,383 | $ 2,192,158,382 |
Prime Institutional Shares | 640,798,726 | 640,798,726 | 1,585,368,740 | 1,585,368,740 |
Class A Shares | 397,844 | 397,844 | 491,136 | 491,136 |
Class B Shares | 300 | 300 | 19,023 | 19,023 |
Class C Shares | - | - | - | - |
Quality Cash Shares | 1,092 | 1,167 | 440,980 | 440,980 |
$ 1,490,249,323 | $ 3,778,478,261 | |||
Reinvested: | ||||
Prime Shares | 8,110,863 | $ 8,110,863 | 13,937,204 | $ 13,937,204 |
Prime Institutional Shares | 1,895,044 | 1,895,044 | 4,144,719 | 4,144,719 |
Class A Shares | 5,557 | 5,557 | 27,001 | 27,001 |
Class B Shares | 807 | 807 | 5,327 | 5,327 |
Class C Shares | 30 | 30 | 155 | 155 |
Quality Cash Shares | 436 | 436 | 5,380 | 5,380 |
$ 10,012,737 | $ 18,119,786 | |||
Redeemed: | ||||
Prime Shares | (1,213,673,463) | $ (1,213,673,463) | (2,419,926,242) | $ (2,419,925,662) |
Prime Institutional Shares | (700,317,984) | (700,317,984) | (1,738,713,361) | (1,738,713,361) |
Class A Shares | (1,358,287) | (1,358,287) | (4,558,264) | (4,558,264) |
Class B Shares | (1,487,434) | (1,487,434) | (6,331,370) | (6,331,370) |
Class C Shares | (15,226) | (15,226) | (236,381) | (236,381) |
Quality Cash Shares | (3,246,120) | (3,246,120) | (269,377) | (269,377) |
$ (1,920,098,514) | $ (4,170,034,415) | |||
Net Decrease: | ||||
(419,836,529) | $ (419,836,454) | (373,436,947) | $ (373,436,368) |
Six Months Ended | Year Ended | |||
Treasury Series: | Shares | Dollars | Shares | Dollars |
Sold: | ||||
Treasury Shares | 294,989,461 | $ 294,989,462 | 647,805,963 | $ 647,805,963 |
Treasury Institutional Shares | 144,274,958 | 144,274,958 | 170,442,236 | 170,442,236 |
$ 439,264,420 | $ 818,248,199 | |||
Reinvested: | ||||
Treasury Shares | 937,752 | $ 937,752 | 1,554,168 | $ 1,554,168 |
Treasury Institutional Shares | 529,389 | 529,389 | 801,414 | 801,414 |
$ 1,467,141 | $ 2,355,582 | |||
Redeemed: | ||||
Treasury Shares | (324,728,632) | $ (324,728,633) | (663,529,340) | $ (663,529,340) |
Treasury Institutional Shares | (131,827,530) | (131,827,530) | (211,376,180) | (211,376,180) |
$ (456,556,163) | $ (874,905,520) | |||
Net decrease: | ||||
(15,824,602) | $ (15,824,602) | (54,301,739) | $ (54,301,739) |
Six Months Ended | Year Ended | |||
Tax-Free Series: | Shares | Dollars | Shares | Dollars |
Sold: | ||||
Tax-Free Shares | 432,022,070 | $ 432,022,070 | 987,484,261 | $ 987,484,259 |
Tax-Free Institutional Shares | 276,967,213 | 276,967,213 | 485,464,418 | 485,464,418 |
$ 708,989,283 | $ 1,472,948,677 | |||
Reinvested: | ||||
Tax-Free Shares | 1,508,861 | $ 1,508,862 | 2,208,926 | $ 2,208,926 |
Tax-Free Institutional Shares | 1,087,009 | 1,087,009 | 1,599,226 | 1,599,226 |
$ 2,595,871 | $ 3,808,152 | |||
Redeemed: | ||||
Tax-Free Shares | (490,233,414) | $ (490,233,414) | (1,038,868,940) | $ (1,038,868,940) |
Tax-Free Institutional Shares | (336,723,207) | (336,723,207) | (365,361,922) | (365,361,922) |
$ (826,956,621) | $ (1,404,230,862) | |||
Net increase/(decrease): | ||||
(115,371,468) | $ (115,371,467) | 72,525,969 | $ 72,525,967 |
Note 6-Tax Disclosures
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 distribution reclassifications. 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 Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.
At March 31, 2004, the Tax-Free Series had a net tax basis capital loss carryforward of approximately $41,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until March 31, 2008 ($21,000) and March 31, 2009 ($20,000), the respective expiration dates, whichever occurs first.
The tax character of current year distributions will be determined at the end of the current fiscal year.
Note 7.-Line of Credit
The Fund and several other affiliated funds (the "Participants") share in a $1.25 billion revolving credit facility administered by J.P. Morgan Chase Bank 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 percent. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
Note 8-Regulatory Matters and Litigation
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 Scudder Investments. It is not possible to determine what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the Scudder 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 Scudder funds, the funds' investment advisors and their affiliates, certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each Scudder fund's investment advisor has agreed to indemnify the applicable Scudder 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. 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 Scudder fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the Scudder funds.
Proxy Voting
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 - scudder.com (type "proxy voting" in the search field) - 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 (800) 621-1048.
Portfolio of Investments
Following the fund'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, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330.
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the six-month period ended September 30, 2002, and offer an outlook for the months ahead.
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. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS Not Applicable. ITEM 9. 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, One South Street, Baltimore, MD 21202. ITEM 10. 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 11. 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-CSR 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: Deutsche Bank Alex Brown Cash Reserves Portfolio By: /s/Julian Sluyters --------------------------- Julian Sluyters Chief Executive Officer Date: December 6, 2004 --------------------------- 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: Deutsche Bank Alex Brown Cash Reserves Portfolio By: /s/Julian Sluyters --------------------------- Julian Sluyters Chief Executive Officer Date: December 6, 2004 --------------------------- By: /s/Paul Schubert --------------------------- Paul Schubert Chief Financial Officer Date: December 6, 2004 --------------------------- Form N-CSR 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: Deutsche Bank Alex Brown Cash Reserves Treasury Portfolio By: /s/Julian Sluyters --------------------------- Julian Sluyters Chief Executive Officer Date: December 6, 2004 --------------------------- 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: Deutsche Bank Alex Brown Cash Reserves Treasury Portfolio By: /s/Julian Sluyters --------------------------- Julian Sluyters Chief Executive Officer Date: December 6, 2004 --------------------------- By: /s/Paul Schubert --------------------------- Paul Schubert Chief Financial Officer Date: December 6, 2004 --------------------------- Form N-CSR 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: Deutsche Bank Alex Brown Cash Reserves Tax-Free Portfolio By: /s/Julian Sluyters --------------------------- Julian Sluyters Chief Executive Officer Date: December 6, 2004 --------------------------- 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: Deutsche Bank Alex Brown Cash Reserves Tax-Free Portfolio By: /s/Julian Sluyters --------------------------- Julian Sluyters Chief Executive Officer Date: December 6, 2004 --------------------------- By: /s/Paul Schubert --------------------------- Paul Schubert Chief Financial Officer Date: December 6, 2004 ---------------------------