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: (212) 454-7190 -------------- Paul Schubert 345 Park Avenue New York, NY 10154 --------------------------------------- (Name and Address of Agent for Service) Date of fiscal year end: 3/31 Date of reporting period: 09/30/2005ITEM 1. REPORT TO STOCKHOLDERS
Deutsche Bank Alex. Brown
Cash Reserve Fund
Prime Series
Treasury Series
Tax-Free Series
Semiannual Report to Shareholders
September 30, 2005
Table of Contents |
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Cash Reserve Fund Information About Each 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 Investment Management Agreement Approval 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) 621-1048. 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.
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.
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.
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As an investor, 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 tables are intended to help you understand your ongoing expenses (in dollars) of investing in each Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. The tables are based on an investment of $1,000 made at the beginning of the six-month period ended September 30, 2005.
The tables illustrate each 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 |
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Prime Shares | .70% |
Prime Institutional Shares | .31% |
Treasury Series
Expenses and Value of a $1,000 Investment for the six months ended ended September 30, 2005 | ||
Actual Fund Return | Treasury Shares | Treasury Institutional Shares |
Beginning Account Value 4/1/05 | $ 1,000.00 | $ 1,000.00 |
Ending Account Value 9/30/05 | $ 1,011.40 | $ 1,013.30 |
Expenses Paid per $1,000* | $ 3.63 | $ 1.72 |
Hypothetical 5% Fund Return | Treasury Shares | Treasury Institutional Shares |
Beginning Account Value 4/1/05 | $ 1,000.00 | $ 1,000.00 |
Ending Account Value 9/30/05 | $ 1,021.46 | $ 1,023.36 |
Expenses Paid per $1,000* | $ 3.65 | $ 1.72 |
* 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 |
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Treasury Shares | .72% |
Treasury Institutional Shares | .34% |
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 |
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Tax-Free Shares | .71% |
Tax-Free Institutional Shares | .34% |
For more information, please refer to the Funds' prospectus.
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Prime Series
Asset Allocation | 9/30/05 | 3/31/05 |
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Commercial Paper | 30% | 30% |
Repurchase Agreements | 23% | 22% |
Certificates of Deposit and Bank Notes | 19% | 18% |
Short Term Notes | 16% | 19% |
Funding Agreements | 3% | 2% |
US Government Sponsored Agencies+ | 2% | 4% |
Master Notes | 2% | 2% |
Promissory Notes | 2% | 3% |
Time Deposit | 1% | — |
Asset Backed | 1% | — |
US Government Agency Sponsored Pass-Throughs+ | 1% | — |
| 100% | 100% |
+ Not backed by the full faith and credit of the US Government
Weighted Average Maturity |
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Cash Reserve Fund, Inc. — Prime Series | 54 days | 38 days |
iMoneyNet First Tier Retail Money Funds Average* | 38 days | 36 days |
Treasury Series
Asset Allocation | 9/30/05 | 3/31/05 |
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US Treasury Obligations | 100% | 100% |
Weighted Average Maturity |
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Cash Reserve Fund, Inc. — Treasury Series | 56 days | 33 days |
iMoneyNet Treasury Retail Money Funds Average* | 45 days | 31 days |
Tax-Free Series
Asset Allocation | 9/30/05 | 3/31/05 |
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Municipal Investments |
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Municipal Variable Rate Demand Notes | 78% | 79% |
Municipal Bonds and Notes | 22% | 21% |
| 100% | 100% |
Weighted Average Maturity |
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Cash Reserve Fund, Inc. — Tax-Free Series | 43 days | 25 days |
iMoneyNet National Retail Tax-Free Money Funds Average* | 27 days | 26 days |
* The Funds are compared to their respective iMoneyNet category: First Tier Retail Money Funds Average — Category includes a widely-recognized composite of money market funds that invest in only first tier (highest rating) securities; Treasury Retail Money Funds Average — Category includes only retail funds that hold 100% in US Treasuries; National Tax-Free Retail Money Funds Average — Category consists of all national tax-free and municipal retail funds.
Asset allocation is subject to change. For more complete details about the Funds' holdings, see pages 6-14. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to scudder.com on the 15th day of the following month. Please see the Other Information section for contact information.
Schedule of Investments as of September 30, 2005 (Unaudited) |
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Prime Series | Principal Amount ($) | Value ($) |
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Certificates of Deposit and Bank Notes 19.3% | ||
Bank of Tokyo-Mitsubishi, 3.75%, 12/9/2005 | 40,000,000 | 40,000,000 |
Barclays Bank PLC: |
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3.72%, 11/10/2005 | 25,000,000 | 25,000,000 |
3.76%, 11/1/2005 | 10,000,000 | 9,999,825 |
Calyon: |
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3.27%, 3/6/2006 | 30,000,000 | 30,000,000 |
3.685%, 6/2/2006 | 25,000,000 | 25,000,000 |
Credit Agricole SA, 3.735%, 11/14/2005 | 40,000,000 | 40,000,000 |
Dexia Credit Local, 3.75%, 12/9/2005 | 25,000,000 | 25,000,000 |
HBOS Treasury Services PLC: |
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3.27%, 3/6/2006 | 15,000,000 | 15,000,000 |
3.8%, 7/10/2006 | 70,000,000 | 70,000,000 |
HSH Nordbank, 3.8%, 10/27/2005 | 50,000,000 | 50,000,000 |
Royal Bank of Canada, 4.05%, 7/24/2006 | 15,000,000 | 15,000,000 |
Royal Bank Scotland PLC, 4.08%, 3/27/2006 | 30,000,000 | 30,000,000 |
Toronto Dominion Bank: |
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3.75%, 5/16/2006 | 10,000,000 | 9,999,393 |
3.8%, 7/10/2006 | 25,000,000 | 25,000,000 |
UniCredito Italiano SpA: |
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3.755%, 11/16/2005 | 35,000,000 | 35,000,000 |
3.785%, 12/12/2005 | 25,000,000 | 25,000,000 |
3.98%, 3/10/2006 | 20,000,000 | 20,000,000 |
Total Certificates of Deposit and Bank Notes (Cost $489,999,218) | 489,999,218 | |
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Commercial Paper** 30.3% | ||
Apreco, LLC, 3.8%, 11/7/2005 | 11,475,000 | 11,430,184 |
Atlantis One Funding Corp.: |
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3.71%, 12/8/2005 | 25,000,000 | 24,824,806 |
3.93%, 3/1/2006 | 14,000,000 | 13,769,222 |
Charta, LLC, 4.0%, 10/3/2005 | 50,000,000 | 49,988,889 |
CIT Group, Inc., 3.59%, 10/20/2005 | 40,000,000 | 39,924,211 |
Giro Funding US Corp.: |
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3.72%, 11/10/2005 | 15,000,000 | 14,938,000 |
3.79%, 11/1/2005 | 35,000,000 | 34,885,774 |
Grampian Funding Ltd., 3.71%, 12/9/2005 | 30,000,000 | 29,786,675 |
Greyhawk Funding LLC, 3.8%, 11/1/2005 | 25,000,000 | 24,918,194 |
Irish Life and Permanent PLC: |
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3.75%, 12/7/2005 | 20,000,000 | 19,860,417 |
3.75%, 12/13/2005 | 20,000,000 | 19,847,917 |
Lake Constance Funding LLC: |
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3.79%, 10/28/2005 | 25,000,000 | 24,928,937 |
3.79%, 12/6/2005 | 19,000,000 | 18,867,982 |
Liberty Street Funding, 3.67%, 10/14/2005 | 28,267,000 | 28,229,538 |
Mane Funding Corp.: |
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3.75%, 12/8/2005 | 20,000,000 | 19,858,333 |
3.84%, 12/16/2005 | 35,720,000 | 35,430,430 |
Morgan Stanley: |
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3.64%, 10/3/2005 | 25,000,000 | 24,994,944 |
3.8%, 10/6/2005 | 7,000,000 | 6,996,306 |
3.81%, 10/28/2005 | 25,000,000 | 24,928,562 |
Park Avenue Receivables Co., LLC, 3.68%, 10/7/2005 | 17,000,000 | 16,989,573 |
PepsiCo., Inc., 3.625%, 10/11/2005 | 10,000,000 | 9,989,931 |
Perry Global Funding LLC: |
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Series A, 3.8%, 11/3/2005 | 20,000,000 | 19,930,333 |
Series A, 3.81%, 11/18/2005 | 25,000,000 | 24,873,000 |
Procter & Gamble Co., 3.75%, 10/31/2005 | 70,000,000 | 69,781,250 |
RWE AG, 3.71%, 11/7/2005 | 50,000,000 | 49,809,347 |
San Paolo IMI US Financial Co., 3.86%, 10/3/2005 | 630,000 | 629,865 |
SBC Communications, Inc., 3.7%, 10/5/2005 | 3,000,000 | 2,998,767 |
Scaldis Capital LLC: |
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3.75%, 12/12/2005 | 20,000,000 | 19,850,000 |
3.79%, 10/28/2005 | 25,000,000 | 24,928,937 |
The Goldman Sachs Group, Inc., 3.185%, 3/3/2006 | 40,000,000 | 39,458,550 |
Toyota Motor Credit Corp., 3.71%, 10/17/2005 | 20,000,000 | 19,967,111 |
Total Commercial Paper (Cost $767,615,985) | 767,615,985 | |
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Short Term Notes* 16.4% | ||
Beta Finance, Inc., 3.66%, 11/23/2005 | 45,000,000 | 45,003,281 |
BMW US Capital LLC, 144A, 3.74%, 4/18/2006 | 10,000,000 | 10,000,000 |
BNP Paribas SA, 3.84%, 10/26/2006 | 20,000,000 | 20,000,000 |
Credit Suisse First Boston: |
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3.8%, 9/26/2006 | 25,000,000 | 25,000,000 |
3.931%, 9/26/2006 | 25,000,000 | 25,000,000 |
Greenwich Capital Holdings, Inc., 3.79%, 6/20/2006 | 23,000,000 | 23,000,000 |
HSBC Bank USA, NA, 3.22%, 5/4/2006 | 25,000,000 | 25,006,876 |
HSBC Finance Corp., 3.73%, 10/27/2006 | 75,000,000 | 75,051,934 |
International Business Machines Corp., 3.673%, 3/8/2006 | 20,000,000 | 20,000,000 |
Merrill Lynch & Co., Inc.: |
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3.57%, 1/4/2006 | 15,000,000 | 15,000,000 |
3.748%, 9/15/2006 | 20,000,000 | 20,000,000 |
Metropolitan Life Global Funding I, 3.44%, 3/17/2006 | 20,000,000 | 20,004,459 |
Morgan Stanley, 3.88%, 11/15/2005 | 25,000,000 | 25,000,000 |
Tango Finance Corp.: |
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144A, 3.56%, 9/18/2006 | 33,500,000 | 33,499,138 |
144A, 3.688%, 2/10/2006 | 20,000,000 | 19,999,294 |
The Goldman Sachs Group, Inc., 2.48%, 8/18/2006 | 15,000,000 | 15,025,697 |
Total Short Term Notes (Cost $416,590,679) | 416,590,679 | |
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Master Notes 2.0% | ||
Bear Stearns & Co., Inc., 3.96%, 10/1/2005 (d) (Cost $50,000,000) | 50,000,000 | 50,000,000 |
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US Government Sponsored Agencies 2.5% | ||
Federal National Mortgage Association: |
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3.569%*, 9/7/2006 | 40,000,000 | 39,972,218 |
4.05%, 8/14/2006 | 25,000,000 | 25,000,000 |
Total US Government Sponsored Agencies (Cost $64,972,218) | 64,972,218 | |
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US Government Agency Sponsored Pass-Throughs 0.8% | ||
Federal National Mortgage Association, 3.58%**, 11/1/2005 (Cost $19,938,344) | 20,000,000 | 19,938,344 |
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Funding Agreements 3.3% | ||
GE Capital Assurance Co.: |
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3.01%, 3/1/2006 | 20,000,000 | 20,000,000 |
3.925%, 9/1/2006 | 45,000,000 | 45,000,000 |
New York Life Insurance Co., 3.994%*, 9/19/2006 | 20,000,000 | 20,000,000 |
Total Funding Agreements (Cost $85,000,000) | 85,000,000 | |
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Promissory Notes 2.0% | ||
The Goldman Sachs Group, Inc., 3.92%*, 2/16/2006 (Cost $50,000,000) | 50,000,000 | 50,000,000 |
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Asset Backed 0.8% | ||
Permanent Financing PLC, "1A", Series 8, 3.69%*, 6/10/2006 (Cost $20,000,000) | 20,000,000 | 20,000,000 |
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Time Deposit 1.0% | ||
Societe Generale, 3.92%, 10/3/2005 (Cost $25,000,000) | 25,000,000 | 25,000,000 |
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Repurchase Agreements 23.4% | ||
Banc of America Securities LLC, 3.89%, dated 9/30/2005, to be repurchased at $50,324,167 on 11/29/2005 (a) | 50,000,000 | 50,000,000 |
Banc of America Securities LLC, 3.77%, dated 9/21/2005, to be repurchased at $150,691,167 on 11/4/2005 (b) | 150,000,000 | 150,000,000 |
UBS Securities LLC, 3.90%, dated 9/30/2005, to be repurchased at $393,481,443 on 10/3/2005 (c) | 393,353,603 | 393,353,603 |
Total Repurchase Agreements (Cost $593,353,603) | 593,353,603 |
| % of Net Assets | Value ($) |
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Total Investment Portfolio (Cost $2,582,470,047)+ | 101.8 | 2,582,470,047 |
Other Assets and Liabilities, Net | (1.8) | (46,225,639) |
Net Assets | 100.0 | 2,536,244,408 |
+ The cost for federal income tax purposes was $2,582,470,047.
* 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, 2005.
** Annualized yield at the time of purchase; not a coupon rate.
(a) Collateralized by $52,034,497 Federal National Mortgage Association, 3.824-5.5%, maturing on 12/1/2034-7/1/2035 with a value of $51,000,000.
(b) Collateralized by:
Principal Amount ($) |
| Security | Rate (%) | Maturity | Collateral |
| |||||
119,474,510 |
| Federal National Mortgage Association | 5.0-6.0 | 8/1/2015-9/1/2035 | 119,055,623 |
33,160,659 |
| Federal Home Loan Mortgage Corp. | 4.945 | 10/1/2035 | 33,944,377 |
Total Collateral Value | 153,000,000 |
(c) Collateralized by:
Principal Amount ($) |
| Security | Rate (%) | Maturity | Collateral |
| |||||
251,535,905 |
| Federal National Mortgage Association | 3.872-5.318 | 5/1/2032-6/1/2035 | 253,218,529 |
149,492,099 |
| Federal Home Loan Mortgage Corp. | 3.209-5.068 | 10/1/2032-8/1/2035 | 148,003,066 |
Total Collateral Value | 401,221,595 |
(d) Reset date, not maturity date.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
The accompanying notes are an integral part of the financial statements.
Schedule of Investments as of September 30, 2005 (Unaudited) |
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Treasury Series | Principal Amount ($) | Value ($) |
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US Treasury Obligations 100.0% | ||
US Treasury Bills: |
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3.03%*, 11/3/2005 | 4,052,000 | 4,040,746 |
3.035%*, 10/27/2005 | 16,448,000 | 16,407,849 |
3.06%*, 10/27/2005 | 90,000,000 | 89,801,100 |
3.105%*, 11/3/2005 | 198,000 | 197,437 |
3.125%*, 12/15/2005 | 10,000,000 | 9,934,896 |
3.18%*, 11/17/2005 | 44,319,000 | 44,135,002 |
3.31%*, 11/10/2005 | 20,000,000 | 19,926,445 |
3.33%*, 11/10/2005 | 30,000,000 | 29,889,000 |
3.36%*, 12/8/2005 | 21,827,000 | 21,688,471 |
3.37%*, 12/8/2005 | 24,852,000 | 24,693,803 |
3.38%*, 10/27/2005 | 25,000,000 | 24,945,201 |
3.45%*, 11/17/2005 | 25,000,000 | 24,887,559 |
3.63%*, 3/16/2006 | 15,000,000 | 14,748,925 |
3.725%*, 3/23/2006 | 10,000,000 | 9,820,993 |
| 335,117,427 | |
US Treasury Notes: |
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1.625%, 10/31/2005 | 25,000,000 | 24,968,872 |
1.875%, 1/31/2006 | 5,000,000 | 4,974,215 |
2.375%, 8/15/2006 | 4,000,000 | 3,951,841 |
2.75%, 6/30/2006 | 4,000,000 | 3,971,950 |
| 37,866,878 | |
Total US Treasury Obligations (Cost $372,984,305) | 372,984,305 |
| % of Net Assets | Value ($) |
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Total Investment Portfolio (Cost $372,984,305)+ | 100.0 | 372,984,305 |
Other Assets and Liabilities, Net | 0.0 | (48,790) |
Net Assets | 100.0 | 372,935,515 |
* Annualized yield at time of purchase; not a coupon rate.
+ Cost for federal income tax purposes was $372,984,305.
The accompanying notes are an integral part of the financial statements.
Schedule of Investments as of September 30, 2005 (Unaudited) |
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Tax-Free Series | Principal Amount ($) | Value ($) |
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Municipal Bonds and Notes 99.6% | ||
Alabama 3.0% | ||
Alabama, Housing Finance Authority, Multi-Family Housing Revenue, Heatherbrooke Project, Series C, 2.84%*, 6/15/2026 | 8,200,000 | 8,200,000 |
Alabama, Housing Finance Authority, Multi-Family Housing Revenue, Rime Village Hoover Project, Series A, 2.84%*, 6/15/2026 | 7,500,000 | 7,500,000 |
Alabama, Municipal Securities Trust Certificates, Series 2005-9060, Series A, 144A, 2.81%*, 3/10/2011 (a) | 9,055,000 | 9,055,000 |
24,755,000 | ||
Alaska 0.3% | ||
Anchorage, AK, Core City, General Obligation, Series II-R, 144A, 2.79%*, 6/1/2019 (a) | 2,950,000 | 2,950,000 |
Arizona 0.2% | ||
Arizona, Salt River Pima-Maricopa Indian Community, 2.75%*, 10/1/2025, Bank of America NA (b) | 1,500,000 | 1,500,000 |
California 5.0% | ||
ABN AMRO, Munitops Certificates Trust, Series 2005-43, 144A, 2.76%*, 8/1/2013 (a) | 5,000,000 | 5,000,000 |
Alameda Corridor, CA, Transportation Authority Revenue, Series PZ-72, 144A, 2.81%*, 10/1/2019 (a) | 8,350,000 | 8,350,000 |
California, School Cash Reserve Program Authority, Series A, 4.0%, 7/6/2006 | 6,500,000 | 6,567,527 |
California, State Department of Water Resources, Center Valley Project Revenue, Series B-32, 144A, 2.76%*, 12/1/2025 (a) | 990,000 | 990,000 |
California, State General Obligation, Series PT-1555, 144A, 2.77%*, 10/1/2010 (a) | 10,455,000 | 10,455,000 |
Los Angeles County, CA, Tax & Revenue Anticipation Notes, Series A, 4.0%, 6/30/2006 | 9,000,000 | 9,095,432 |
Los Angeles, CA, Unified School District, 144A, 2.74%*, 1/1/2028 (a) | 700,000 | 700,000 |
41,157,959 | ||
Colorado 3.8% | ||
ABN AMRO, Munitops Certificates Trust, Series 2005-30, 144A, 2.77%*, 6/1/2013 (a) | 8,000,000 | 8,000,000 |
Colorado, Health Facilities Authority Revenue, Adventist Health, Sunbelt, Series B, 2.75%*, 11/15/2034, SunTrust Bank (b) | 14,000,000 | 14,000,000 |
Colorado, Health Facilities Authority Revenue, Frasier Meadows Manor Project, 2.75%*, 6/1/2021, Bank One NA (b) | 5,960,000 | 5,960,000 |
Colorado, Transportation/Tolls Revenue, Transportation Department, 144A, 2.79%*, 12/15/2016 (a) | 3,310,000 | 3,310,000 |
31,270,000 | ||
District of Columbia 0.4% | ||
District of Columbia, The Washington Home, Inc., Revenue, 2.75%*, 8/1/2029, Wachovia Bank NA (b) | 3,730,000 | 3,730,000 |
Florida 8.2% | ||
Charlotte County, FL, Utility Revenue, Series B, 2.75%*, 10/1/2021 (a) | 3,860,000 | 3,860,000 |
Florida, Higher Educational Facilities Financing Authority Revenue, St. Thomas University Project, 2.82%*, 1/1/2019, SunTrust Bank (b) | 700,000 | 700,000 |
Florida, Housing Finance Corp., Multi-Family Revenue, Victoria Park, Series J-1, 2.75%*, 10/15/2032 | 2,230,000 | 2,230,000 |
Florida, State Division Board Finance Department, General Services Revenue, Department of Environmental & Preservation 2000, Series A, 6.0%, 7/1/2006 (a) | 1,500,000 | 1,534,389 |
Florida, State Turnpike Authority Revenue, Series 1074, 144A, 2.79%*, 7/1/2011 (a) | 4,500,000 | 4,500,000 |
Florida, Transportation/Tolls Revenue, Turnpike Authority, Series R-4041, 144A, 2.79%*, 7/1/2020 (a) | 13,150,000 | 13,150,000 |
Gulf Breeze, FL, Municipal Bond Fund Revenue, Series A, 2.76%*, 3/31/2021, Bank of America NA (b) | 4,540,000 | 4,540,000 |
Highlands County, FL, Health Facilities Authority Revenue, Adventist Health Systems, Series B, 2.75%*, 11/15/2009, SunTrust Bank (b) | 19,120,000 | 19,120,000 |
Lee County, FL, Airport Revenue, AMT, Series 811-X, 144A, 2.83%*, 10/1/2029 (a) | 350,000 | 350,000 |
Miami-Dade County, FL, School Board Certificates of Partnership, Series R-4022, 144A, 2.79%*, 8/1/2021 (a) | 3,290,000 | 3,290,000 |
Orange County, FL, Health Facilities Authority Revenue, Presbyterian Retirement Project, 2.8%*, 11/1/2028, Bank of America NA (b) | 360,000 | 360,000 |
Reedy Creek, FL, Improvement District Florida Utilities Revenue, Series 986, 144A, 2.78%*, 10/1/2012 (a) | 1,350,000 | 1,350,000 |
Sarasota County, FL, Health Facility Authority Revenue, Jewish Housing, Series A, 2.76%*, 7/1/2035, Bank of America NA (b) | 8,400,000 | 8,400,000 |
Seminole County, FL, Industrial Development Authority Revenue, Masters Academy Project, 2.77%*, 11/1/2034, Allied Irish Bank PLC (b) | 4,150,000 | 4,150,000 |
67,534,389 | ||
Georgia 3.6% | ||
Atlanta, GA, Airport Revenue, Series C-1, 2.76%*, 1/1/2030 (a) | 1,000,000 | 1,000,000 |
De Kalb County, GA, Housing Authority, Multi-Family Housing Revenue, Post Asford Project, 2.74%*, 6/1/2025 | 8,895,000 | 8,895,000 |
Fulton County, GA, Development Authority Revenue, Donnellan School Project, 2.75%*, 7/1/2020, Wachovia Bank NA (b) | 1,750,000 | 1,750,000 |
Fulton County, GA, Development Authority Revenue, Shepherd Center, Inc. Project, 2.75%*, 9/1/2035, SunTrust Bank (b) | 3,700,000 | 3,700,000 |
La Grange, GA, Development Authority Revenue, La Grange College Project, 2.75%*, 6/1/2031, SunTrust Bank (b) | 6,585,000 | 6,585,000 |
Macon-Bibb County, GA, Hospital Authority Revenue, Anticipation Certificates, Medical Center of Central Georgia: |
|
|
2.75%*, 12/1/2018, SunTrust Bank (b) | 5,225,000 | 5,225,000 |
2.82%*, 5/1/2030, SunTrust Bank (b) | 700,000 | 700,000 |
Roswell, GA, Housing Authority, Multi-Family Revenue, Post Canyon Project, 2.74%*, 6/1/2025 | 1,800,000 | 1,800,000 |
29,655,000 | ||
Hawaii 4.2% | ||
ABN AMRO, Munitops, Certificates Trust, Series 2004-16, 144A, 2.78%*, 7/1/2012 (a) | 1,500,000 | 1,500,000 |
Hawaii, General Obligation: |
|
|
Series R-4545, 144A, 2.79%*, 8/1/2020 (a) | 5,180,000 | 5,180,000 |
Series R-4553, 144A, 2.79%*, 5/1/2023 (a) | 8,995,000 | 8,995,000 |
Hawaii, State Department of Budget & Finance, Special Purpose Revenue, Kahala Nui Project, Series D, 2.75%*, 11/15/2033, LaSalle Bank NA (b) | 4,340,000 | 4,340,000 |
Honolulu, HI, City & County, General Obligation, 2.65%, 10/3/2005 | 14,800,000 | 14,800,000 |
34,815,000 | ||
Idaho 1.2% | ||
Idaho, State Tax Anticipation Notes, 4.0%, 6/30/2006 | 9,500,000 | 9,593,777 |
Illinois 6.4% | ||
Chicago, IL, General Obligation, Series A, 144A, 2.79%*, 1/1/2042 (a) | 2,690,000 | 2,690,000 |
Du Page County, IL, Benedictine University Building Project, 2.76%*, 7/1/2024, LaSalle Bank NA (b) | 9,770,000 | 9,770,000 |
Illinois, Development Finance Authority Revenue, Chicago Symphony Project, 2.77%*, 12/1/2033, Bank One NA (b) | 8,500,000 | 8,500,000 |
Illinois, Educational Facilities Authority Revenue: |
|
|
2.55%, 11/3/2005 | 3,000,000 | 3,000,000 |
2.55%, 11/14/2005 | 5,000,000 | 5,000,000 |
Illinois, Finance Authority Revenue, Lake Forest Country Day, 2.77%*, 7/1/2035, Northern Trust Company (b) | 3,000,000 | 3,000,000 |
Illinois, Finance Authority Revenue, North Park University Project, 2.81%*, 7/1/2035, JPMorgan Chase Bank (b) | 5,000,000 | 5,000,000 |
Illinois, Health Facilities Authority Revenue, The Carle Foundation, Series B, 2.77%*, 7/1/2028 (a) | 5,300,000 | 5,300,000 |
Lake County, IL, Warren Township High School District No. 121 Gurnee, Series R-2157, 144A, 2.79%*, 3/1/2024 (a) | 10,515,000 | 10,515,000 |
52,775,000 | ||
Indiana 1.3% | ||
ABN AMRO, Munitops Certificates Trust, Series 2005-7, 144A, 2.78%*, 7/10/2013 (a) | 8,000,000 | 8,000,000 |
Indiana, Transportation/Tolls Revenue, Series R-4528, 144A, 2.79%*, 6/1/2018 (a) | 2,975,000 | 2,975,000 |
10,975,000 | ||
Iowa 1.1% | ||
Iowa, Finance Authority Hospital Facilities Revenue, Iowa Health Systems: |
|
|
Series B, 2.77%*, 7/1/2015 (a) | 1,300,000 | 1,300,000 |
Series B, 2.77%*, 7/1/2020 (a) | 4,625,000 | 4,625,000 |
Iowa, Finance Authority Revenue, Miss VY Regional Blood Center, 2.76%*, 2/1/2023, Wells Fargo Bank NA (b) | 3,500,000 | 3,500,000 |
9,425,000 | ||
Kansas 2.1% | ||
Kansas, State Development Finance Authority Hospital Revenue, Adventist Health, Sunbelt: |
|
|
Series C, 2.75%*, 11/15/2030, SunTrust Bank (b) | 5,000,000 | 5,000,000 |
Series C, 2.78%*, 11/15/2034, SunTrust Bank (b) | 12,500,000 | 12,500,000 |
17,500,000 | ||
Kentucky 2.0% | ||
Boone County, KY, Pollution Control Revenue, Cincinnati Gas & Electric Co., Series A, 2.65%*, 8/1/2013, Credit Lyonnais (b) | 6,300,000 | 6,300,000 |
Kentucky, Tax & Revenue Anticipation Notes, Series A, 4.0%, 6/28/2006 | 6,500,000 | 6,562,249 |
Pendleton County, Kentucky, County Lease, 2.65%, 11/4/2005 | 4,000,000 | 4,000,000 |
16,862,249 | ||
Maryland 0.2% | ||
Montgomery County, MD, Economic Development Revenue, Howard Hughes Medical Facility, Series A, 2.77%*, 10/15/2020 | 1,500,000 | 1,500,000 |
Michigan 6.1% | ||
ABN AMRO, Munitops Certificates Trust, Series 2003-3, 144A, 2.77%*, 1/1/2011 (a) | 12,365,000 | 12,365,000 |
Detroit, MI, Sewer Disposal Revenue, Series E, 2.55%*, 7/1/2031 (a) | 12,000,000 | 12,000,000 |
Flushing, MI, General Obligation, Community Schools, Series R-4517, 144A, 2.79%*, 5/1/2023 | 5,195,000 | 5,195,000 |
Garden City, MI, Hospital Revenue, Series A, 2.78%*, 9/1/2026, First of America Bank (b) | 660,000 | 660,000 |
Holt, MI, General Obligation, Public Schools, 2.72%*, 5/1/2030 | 375,000 | 375,000 |
Michigan, Certificate of Participation, Series 530, 144A, 2.78%*, 9/1/2011 (a) | 4,975,000 | 4,975,000 |
Michigan, Oakland University Revenue, 2.79%*, 3/1/2031 (a) | 250,000 | 250,000 |
Michigan, State Hospital Finance Authority Revenue, Crittenton Hospital Medical Center, Series B, 2.84%*, 3/1/2014, Comerica Bank (b) | 270,000 | 270,000 |
Michigan, State University Revenue: |
|
|
2.6%, 11/8/2005 | 4,300,000 | 4,300,000 |
2.75%*, 2/15/2034 | 9,750,000 | 9,750,000 |
50,140,000 | ||
Nevada 1.1% | ||
Las Vegas Valley, NV, Water District, Series B-10, 144A, 2.77%*, 6/1/2024 (a) | 8,795,000 | 8,795,000 |
New Jersey 5.0% | ||
New Jersey, Economic Development Authority, Dock Facility Revenue, Bayonne/IMTT Project, Series C, 2.8%*, 12/1/2027, SunTrust Bank (b) | 1,000,000 | 1,000,000 |
New Jersey, State Tax & Revenue Anticipation Notes, Series A, 4.0%, 6/23/2006 | 19,000,000 | 19,163,163 |
New Jersey, State Transportation Trust Fund Authority: |
|
|
Series PT-2488, 144A, 2.78%*, 12/15/2017 (a) | 15,370,000 | 15,370,000 |
Series PT-2494, 144A, 2.78%*, 12/15/2023 (a) | 4,850,000 | 4,850,000 |
Salem County, NJ, Industrial Pollution Control, Financing Authority Revenue, E.I. Du Pont de Nemours and Co., 2.6%*, 3/1/2012 | 1,100,000 | 1,100,000 |
41,483,163 | ||
New Mexico 1.2% | ||
Albuquerque, NM, Airport Facilities Revenue, Series A, 2.86%*, 7/1/2020 (a) | 5,200,000 | 5,200,000 |
Farmington, NM, Hospital Revenue, San Juan Regional Medical Center Project, Series B, 2.78%*, 6/1/2028, Bank of Nova Scotia (b) | 4,500,000 | 4,500,000 |
9,700,000 | ||
Ohio 5.8% | ||
Akron, OH, Hospital Revenue District, Health Care Facilities Summer Project, 2.77%*, 12/1/2032, KBC Bank NV (b) | 6,875,000 | 6,875,000 |
Franklin County, OH, Senior Care Revenue, Hospital Revenue, Sereis II-R-55, 144A, 2.79%*, 6/1/2017 | 11,880,000 | 11,880,000 |
Hamilton County, OH, Health Care Facilities Revenue, Episcopal, Series A, 2.75%*, 6/1/2035, KeyBank NA (b) | 6,500,000 | 6,500,000 |
Huron County, OH, Hospital Facilities Revenue, Fisher-Titus Medical Center, Series A, 2.77%*, 12/1/2027, National City Bank (b) | 7,000,000 | 7,000,000 |
Ohio, State Higher Educational Facility Revenue, Cleveland Institution Music Project, 2.78%*, 5/1/2030, National City Bank (b) | 5,000,000 | 5,000,000 |
Salem, OH, Hospital Revenue, 2.76%*, Salem Community Hospital, 9/1/2035, JPMorgan Chase Bank (b) | 10,500,000 | 10,500,000 |
47,755,000 | ||
Oklahoma 1.6% | ||
Payne County, OK, Economic Development Authority, Student Housing Revenue, OSUF Phase III Project, 2.78%*, 7/1/2032 (a) | 13,470,000 | 13,470,000 |
Oregon 1.7% | ||
Portland, OR, Industrial Development Revenue, 2.77%*, 4/1/2035 (a) | 4,500,000 | 4,500,000 |
Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project, 2.8%*, 5/1/2034, Bank of America NA (b) | 9,420,000 | 9,420,000 |
13,920,000 | ||
Pennsylvania 1.7% | ||
Allegheny County, PA, Hospital Development Authority Revenue, UPMC Senior Living Corp., 2.75%*, 7/15/2028 | 4,925,000 | 4,925,000 |
Dauphin County, PA, General Authority Revenue, Education & Health Loan Program, 2.8%*, 11/1/2017 (a) | 3,000,000 | 3,000,000 |
Delaware River, PA, Port Authority of Pennsylvania & New Jersey Revenue, Floater Certificates, Series 396, 144A, 2.77%*, 1/1/2019 (a) | 250,000 | 250,000 |
Parkland, PA, School District, 2.75%*, 6/1/2022 (a) | 4,500,000 | 4,500,000 |
Pennsylvania, State School District Revenue Lease, Public School Building Authority, Series A42, 144A, 2.85%*, 6/1/2028 (a) | 1,300,000 | 1,300,000 |
13,975,000 | ||
South Carolina 3.7% | ||
South Carolina, Project Revenue, Economic Development Authority, Sisters of Charity Hospitals, 2.78%*, 11/1/2032, Wachovia Bank NA (b) | 11,800,000 | 11,800,000 |
South Carolina, Public Service Authority: |
|
|
2.63%, 10/5/2005 | 10,000,000 | 10,000,000 |
2.68%, 12/7/2005 | 8,724,000 | 8,724,000 |
30,524,000 | ||
Tennessee 1.4% | ||
Chattanooga, TN, Health Educational & Housing Facility Board Revenue, Catholic Health, Series C, 2.78%*, 5/1/2039 | 10,000,000 | 10,000,000 |
Memphis, TN, General Obligation, Series A, 2.8%*, 8/1/2007 | 1,600,000 | 1,600,000 |
11,600,000 | ||
Texas 22.2% | ||
Austin, TX, Higher Education Authority, Inc., University Revenue, Concordia University at Austin, 2.85%*, 4/1/2025, Wachovia Bank NA (b) | 10,200,000 | 10,200,000 |
Bexar County, TX, Health Facilities Development Corp. Revenue, Air Force Village, 2.76%*, 8/15/2030, Bank of America NA (b) | 5,200,000 | 5,200,000 |
Corpus Christi, TX, Utility System Revenue, Series PT-1816, 144A, 2.8%*, 7/15/2010 (a) | 3,915,000 | 3,915,000 |
Granbury, TX, Independent School District, Series RR-II-R-2218, 144A, 2.79%*, 8/1/2024 | 3,485,000 | 3,485,000 |
Harris County, TX, General Obligation, Series B, 2.65%, 10/7/2005 | 10,000,000 | 10,000,000 |
Harris County, TX, Health Facilities Development Corp. Revenue, Special Facilities, Texas Medical Center Project, 2.81%*, 9/1/2031 (a) | 3,000,000 | 3,000,000 |
Harris County, TX, Health Facilities Development Corp. Revenue, St. Lukes Episcopal, Series A, 2.78%*, 2/15/2032 (a) | 12,000,000 | 12,000,000 |
Houston, TX, Airport System Revenue, Series SG-161, 144A, 2.79%*, 7/1/2032 (a) | 10,000,000 | 10,000,000 |
Houston, TX, Independent School District, Series RR-II-R-408, 144A, 2.79%*, 2/15/2029 | 4,000,000 | 4,000,000 |
Houston, TX, Utility Systems Revenue, 2.6%, 10/5/2005 | 5,000,000 | 5,000,000 |
Houston, TX, Water & Sewer System Revenue, Municipal Trust Receipts, Series SG-120, 144A, 2.79%*, 12/1/2023 | 4,900,000 | 4,900,000 |
Humble, TX, Independent School District, School Building, 2.75%*, 6/15/2023 | 970,000 | 970,000 |
Mc Allen, TX, Independent School District, Municipal Securities Trust Receipts, Series 61-A, 144A, 2.79%*, 2/15/2030 | 7,000,000 | 7,000,000 |
Northside, TX, Independent School District, School Building, 2.85%*, 6/15/2035 | 8,000,000 | 8,000,000 |
San Antonio, TX, Water Supply System, 2.6%, 10/6/2005 | 6,450,000 | 6,450,000 |
Texas, A & M University Revenues, Series 945, 144A, 2.79%*, 5/15/2013 | 4,000,000 | 4,000,000 |
Texas, Lower Colorado River Authority, 2.7%, 10/5/2005 | 10,000,000 | 10,000,000 |
Texas, State General Obligation, Series R-4020, 144A, 2.79%*, 10/1/2022 | 2,350,000 | 2,350,000 |
Texas, State Revenue Lease, Trust Certificates, Series 9056, 144A, 2.81%*, 7/21/2010 (a) | 10,990,000 | 10,990,000 |
Texas, State Tax & Revenue Anticipation Notes, 4.5%, 8/31/2006 | 39,200,000 | 39,722,273 |
Texas, State Turnpike Authority, Central Texas Turnpike System Revenue, Series PZ-66, 144A, 2.83%*, 8/15/2026 (a) | 5,585,000 | 5,585,000 |
Texas, University of Texas Revenue: |
|
|
2.68%, 11/8/2005 | 10,000,000 | 10,000,000 |
Series B-14, 144A, 2.77%*, 8/15/2022 | 6,675,000 | 6,675,000 |
183,442,273 | ||
Utah 0.1% | ||
Salt Lake County, UT, Pollution Control Revenue, Service Station Holdings Project, 2.83%*, 2/1/2008 | 630,000 | 630,000 |
Virginia 0.2% | ||
Spotsylvania County, VA, Industrial Development Authority Revenue, 2.8%*, 4/1/2023, Wachovia Bank NA (b) | 1,500,000 | 1,500,000 |
Washington 2.2% | ||
Port Tacoma, WA, State General Obligation, Core City, Series R-4036, 144A, 2.79%*, 12/1/2025 (a) | 4,000,000 | 4,000,000 |
Washington, Municipal Securities Trust Certificates, Series 9058, 144A, 2.81%*, 9/23/2010 (a) | 9,990,000 | 9,990,000 |
Washington, State General Obligation, Series 744, 144A, 2.79%*, 1/1/2013 (a) | 3,995,000 | 3,995,000 |
17,985,000 | ||
Wisconsin 0.4% | ||
Milwaukee, WI, Sewer Revenue, Series RR-II-R-4500, 144A, 2.79%*, 6/1/2022 (a) | 3,600,000 | 3,600,000 |
Multi-State 2.2% | ||
ABN AMRO, Munitops Certificates Trust, Series 2003-32, 144A, 2.78%*, 1/15/2012 (a) | 18,000,000 | 18,000,000 |
| % of Net Assets | Value ($) |
|
| |
Total Investment Portfolio (Cost $822,517,810)+ | 99.6 | 822,517,810 |
Other Assets and Liabilities, Net | 0.4 | 3,210,081 |
Net Assets | 100.0 | 825,727,891 |
* 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, 2005.
+ The cost for federal income tax purposes was $822,517,810.
(a) Bond is insured by one of these companies:
Insurance Coverage | As a % of Total Investment Portfolio | |
AMBAC | Ambac Assurance Corp. | 12.3 |
FGIC | Financial Guaranty Insurance Company | 9.4 |
FSA | Financial Security Assurance | 8.2 |
MBIA | Municipal Bond Investors Assurance | 7.2 |
(b) Security includes a letter of credit from a major bank.
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.
AMT: Subject to alternative minimum tax.
The accompanying notes are an integral part of the financial statements.
|
Statements of Assets and Liabilities as of September 30, 2005 (Unaudited) | |||
Assets | Prime Series | Treasury Series | Tax-Free Series |
Investments: Investments, at amortized cost | $ 1,989,116,444 | $ 372,984,305 | $ 822,517,810 |
Repurchase agreements, at amortized cost | 593,353,603 | — | — |
Total Investments, at amortized cost | 2,582,470,047 | 372,984,305 | 822,517,810 |
Cash | — | 674 | — |
Receivable for securities sold | — | — | 520,578 |
Interest receivable | 5,518,155 | 225,734 | 3,624,462 |
Receivable for Fund shares sold | 47,441 | 16,940 | 280,923 |
Other assets | 60,467 | 19,683 | 21,530 |
Total assets | 2,588,096,110 | 373,247,336 | 826,965,303 |
Liabilities |
| ||
Due to custodian bank | 44,796 | — | 406,702 |
Payable for Fund shares redeemed | — | — | 214,453 |
Payable for investments purchased | 50,000,000 | — | — |
Accrued management fee | 632,935 | 81,440 | 211,851 |
Accrued distribution fees | 441,017 | 62,010 | 166,104 |
Accrued shareholder servicing fees | 122,842 | 17,959 | 41,146 |
Accrued custodian and accounting fees | 9,871 | 11,145 | 14,706 |
Other accrued expenses and payables | 600,241 | 139,267 | 182,450 |
Total liabilities | 51,851,702 | 311,821 | 1,237,412 |
Net assets | $ 2,536,244,408 | $ 372,935,515 | $ 825,727,891 |
Composition of Net Assets |
| ||
Accumulated distributions in excess of net investment income | (422,182) | (43,467) | (145,763) |
Accumulated net realized gain (loss) | 13,985 | 14,370 | 13,463 |
Paid-in capital | 2,536,652,605 | 372,964,612 | 825,860,191 |
Net assets | $ 2,536,244,408 | $ 372,935,515 | $ 825,727,891 |
|
|
|
|
The accompanying notes are an integral part of the financial statements.
|
|
Statements of Assets and Liabilities as of September 30, 2005 (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 | $ 2,069,207,806 | $ 277,678,149 | $ 614,256,650 |
Shares of capital stock outstanding | 2,069,195,441 | 277,630,370 | 614,309,799 |
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 | $ 462,316,862 | $ 95,257,366 | $ 211,471,241 |
Shares of capital stock outstanding | 462,336,903 | 95,261,075 | 211,469,643 |
Net Asset Value per share | $ 1.00 | $ 1.00 | $ 1.00 |
Class A Shares Net assets | $ 3,510,149 | $ — | $ — |
Shares of capital stock outstanding | 3,514,618 | — | — |
Net Asset Value per share | $ 1.00 | $ — | $ — |
Class B Shares Net assets | $ 1,124,790 | $ — | $ — |
Shares of capital stock outstanding | 1,122,246 | — | — |
Net Asset Value per share | $ 1.00 | $ — | $ — |
Class C Shares Net assets | $ 84,801 | $ — | $ — |
Shares of capital stock outstanding | 84,937 | — | — |
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, 2005 (Unaudited) | |||
Investment Income | Prime Series | Treasury Series | Tax-Free Series |
Interest | $ 40,624,376 | $ 5,692,189 | $ 10,852,528 |
Expenses: |
|
|
|
Management fee | 3,333,166 | 475,244 | 1,218,016 |
Transfer agent fees | 853,736 | 119,198 | 246,627 |
Custodian and accounting fees | 137,157 | 61,816 | 86,049 |
Distribution fees | 2,636,799 | 378,225 | 826,428 |
Auditing | 25,059 | 22,175 | 23,183 |
Legal | 14,299 | 13,907 | 13,243 |
Directors' fees and expenses | 51,197 | 10,455 | 18,070 |
Reports to shareholders | 40,730 | 14,620 | 20,099 |
Registration fees | 32,864 | 14,738 | 14,868 |
Shareholder servicing fees | 737,397 | 105,903 | 231,400 |
Other | 40,563 | 7,992 | 20,411 |
Total expenses | 7,902,967 | 1,224,273 | 2,718,394 |
Less: fee waivers and/or expense reimbursements | (18,270) | (3,774) | (7,226) |
Net expenses | 7,884,697 | 1,220,499 | 2,711,168 |
Net investment income | 32,739,679 | 4,471,690 | 8,141,360 |
Net realized gain (loss) on investment transactions | 11,396 | 7,537 | 45,246 |
Net increase (decrease) in net assets from operations | $ 32,751,075 | $ 4,479,227 | $ 8,186,606 |
|
|
|
|
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 Ended September 30, 2005 (Unaudited) | Year Ended March 31, 2005 |
Operations: Net investment income | $ 32,739,679 | $ 30,807,263 |
Net realized gain (loss) | 11,396 | 2,589 |
Net increase (decrease) in net assets resulting from operations | 32,751,075 | 30,809,852 |
Distributions to shareholders from: Net investment income: Prime Shares | (26,940,715) | (25,878,034) |
Prime Institutional Shares | (5,749,744) | (5,445,641) |
Class A Shares | (40,983) | (31,077) |
Class B Shares | (8,561) | (5,668) |
Class C Shares | (22) | (59) |
Quality Shares | — | (1,264) |
Total distributions | (32,740,025) | (31,361,743) |
Fund share transactions: (at net asset value of $1.00 per share) Proceeds from shares sold | 2,167,946,077 | 3,646,713,349 |
Reinvestment of distributions | 32,732,243 | 31,337,109 |
Cost of shares redeemed | (2,287,344,741) | (4,128,056,451) |
Net increase (decrease) in net assets from Fund share transactions | (86,666,421) | (450,005,993) |
Increase (decrease) in net assets | (86,655,371) | (450,557,884) |
Net assets at beginning of period | 2,622,899,779 | 3,073,457,663 |
Net assets at end of period (including accumulated distributions in excess of net investment income of $422,182 and $421,836, respectively) | $ 2,536,244,408 | $ 2,622,899,779 |
|
|
|
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 Ended September 30, 2005 (Unaudited) | Year Ended March 31, 2005 |
Operations: Net investment income | $ 4,471,690 | $ 4,572,225 |
Net realized gain (loss) | 7,537 | 6,833 |
Net increase (decrease) in net assets resulting from operations | 4,479,227 | 4,579,058 |
Distributions to shareholders from: Net investment income: Treasury Shares | (3,406,476) | (3,263,663) |
Treasury Institutional Shares | (1,065,214) | (1,406,390) |
Total distributions | (4,471,690) | (4,670,053) |
Fund share transactions: (at net asset value of $1.00 per share) Proceeds from shares sold | 345,313,822 | 1,001,445,305 |
Reinvestment of distributions | 4,445,043 | 4,646,777 |
Cost of shares redeemed | (404,615,508) | (1,054,374,521) |
Net increase (decrease) in net assets from Fund share transactions | (54,856,643) | (48,282,439) |
Increase (decrease) in net assets | (54,849,106) | (48,373,434) |
Net assets at beginning of period | 427,784,621 | 476,158,055 |
Net assets at end of period (including accumulated distributions in excess of net investment income of $43,467 and $43,467, respectively) | $ 372,935,515 | $ 427,784,621 |
|
|
|
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 Ended September 30, 2005 (Unaudited) | Year Ended March 31, 2005 |
Operations: Net investment income | $ 8,141,360 | $ 7,823,403 |
Net realized gain (loss) | 45,246 | 11,060 |
Net increase (decrease) in net assets resulting from operations | 8,186,606 | 7,834,463 |
Distributions to shareholders from: Net investment income: Tax-Free Shares | (5,850,334) | (4,825,265) |
Tax-Free Institutional Shares | (2,288,782) | (3,205,636) |
Total distributions | (8,139,116) | (8,030,901) |
Fund share transactions: (at net asset value of $1.00 per share) Proceeds from shares sold | 766,668,939 | 1,526,418,906 |
Reinvestment of distributions | 8,138,939 | 8,030,149 |
Cost of shares redeemed | (852,978,296) | (1,601,276,316) |
Net increase (decrease) in net assets from Fund share transactions | (78,170,418) | (66,827,261) |
Increase (decrease) in net assets | (78,122,928) | (67,023,699) |
Net assets at beginning of period | $ 903,850,819 | $ 970,874,518 |
Net assets at end of period (including accumulated distributions in excess of net investment income of $145,763 and $148,007, respectively) | $ 825,727,891 | $ 903,850,819 |
|
|
|
The accompanying notes are an integral part of the financial statements.
|
Prime Shares | ||||||
Years Ended March 31, | 2005a | 2005 | 2004 | 2003 | 2002 | 2001 |
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 | .0130 | .0111 | .0050 | .0108 | .0270 | .0578 |
Less: Distributions from net investment income | (.0130) | (.0111) | (.0050) | (.0108) | (.0270) | (.0578) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 1.30** | 1.12 | .47 | 1.08 | 2.74 | 5.94 |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 2,069,208 | 2,274,611 | 2,665,759 | 2,879,253 | 4,320,764 | 5,735,781 |
Ratio of expenses (%) | .70* | .69 | .67 | .70 | .67 | .66 |
Ratio of net investment income (%) | 2.58* | 1.07 | .51 | 1.10 | 2.76 | 5.77 |
| ||||||
Prime Institutional Shares | ||||||
Years Ended March 31, | 2005a | 2005 | 2004 | 2003 | 2002 | 2001 |
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 | .0149 | .0149 | .0087 | .0140 | .0302 | .0610 |
Less: Distributions from net investment income | (.0149) | (.0149) | (.0087) | (.0140) | (.0302) | (.0610) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 1.50** | 1.50 | .88 | 1.40 | 3.06 | 6.28 |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 462,317 | 342,564 | 394,967 | 544,146 | 750,110 | 671,539 |
Ratio of expenses (%) | .31* | .30 | .30 | .38 | .36 | .34 |
Ratio of net investment income (%) | 2.97* | 1.46 | .88 | 1.42 | 3.01 | 6.01 |
a For the six months ended September 30, 2005 (Unaudited).
* Annualized
** Not annualized
| ||||||
Treasury Shares | ||||||
Years Ended March 31, | 2005a | 2005 | 2004 | 2003 | 2002 | 2001 |
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 | .0113 | .0092 | .0039 | .0098 | .0250 | .0539 |
Less: Distributions from net investment income | (.0113) | (.0092) | (.0039) | (.0098) | (.0250) | (.0539) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 1.14** | .92b | .40b | .99b | 2.53b | 5.53b |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 277,678 | 329,520 | 376,821 | 390,982 | 745,638 | 866,508 |
Ratio of expenses before expense reductions (%) | .72* | .70 | .68 | .67 | .64 | .61 |
Ratio of expenses after expense reductions (%) | .72* | .68 | .63 | .62 | .59 | .56 |
Ratio of net investment income (%) | 2.25* | .89 | .39 | 1.01 | 2.47 | 5.36 |
| ||||||
Treasury Institutional Shares | ||||||
Years Ended March 31, | 2005a | 2005 | 2004 | 2003 | 2002 | 2001 |
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 | .0132 | .0130 | .0077 | .0130 | .0281 | .0571 |
Less: Distributions from net investment income | (.0132) | (.0130) | (.0077) | (.0130) | (.0281) | (.0571) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 1.33** | 1.31b | .78b | 1.31b | 2.85b | 5.86b |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 95,257 | 98,265 | 99,337 | 139,460 | 199,932 | 137,520 |
Ratio of expenses before expense reductions (%) | .34* | .32 | .29 | .35 | .33 | .31 |
Ratio of expenses after expense reductions (%) | .34* | .30 | .24 | .30 | .28 | .26 |
Ratio of net investment income (%) | 2.63* | 1.27 | .78 | 1.33 | 2.71 | 5.66 |
a For the six months ended September 30, 2005 (Unaudited).
b Total return would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
| ||||||
Tax-Free Investment Shares | ||||||
Years Ended March 31, | 2005a | 2005 | 2004 | 2003 | 2002 | 2001 |
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 | .0089 | .0076 | .0031 | .0074 | .0168 | .0333 |
Less: Distributions from net investment income | (.0089) | (.0076) | (.0031) | (.0074) | (.0168) | (.0333) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | .89** | .76 | .32 | .74 | 1.69 | 3.38 |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 614,257 | 627,672 | 650,986 | 699,983 | 1,006,613 | 1,701,940 |
Ratio of expenses (%) | .71* | .71 | .70 | .67 | .65 | .64 |
Ratio of net investment income (%) | 1.77* | .74 | .34 | .74 | 1.76 | 3.31 |
| ||||||
Tax-Free Institutional Shares | ||||||
Years Ended March 31, | 2005a | 2005 | 2004 | 2003 | 2002 | 2001 |
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 | .0107 | .0113 | .0070 | .0107 | .0200 | .0363 |
Less: Distributions from net investment income | (.0107) | (.0113) | (.0070) | (.0107) | (.0200) | (.0363) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 1.08** | 1.14 | .70 | 1.07 | 2.01 | 3.69 |
Ratios to Average Net Assets and Supplemental Data | ||||||
Net assets, end of period ($ in thousands) | 211,471 | 276,178 | 319,888 | 198,148 | 168,137 | 173,956 |
Ratio of expenses (%) | .34* | .33 | .32 | .35 | .33 | .34 |
Ratio of net investment income (%) | 2.14* | 1.12 | .72 | 1.06 | 1.98 | 3.62 |
a For the six months ended September 30, 2005 (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, as amended (the `1940 Act'), 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 currently offers five 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.
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.
The Fund'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 Fund in the preparation of its financial statements.
B. Security Valuation
Portfolio securities are valued utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 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 custodian 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. Contingencies
In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
I. 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' or the `Advisor'), 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, 2005, 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.
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 certain expenses on Class 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 net 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, 2005, the amounts charged to the Fund by SISC were as follows:
| Total Aggregated | Waived | Unpaid at September 30, 2005 |
Prime Series: Prime Shares | $ 808,743 | $ — | $ 415,409 |
Prime Institutional Shares | 18,080 | — | 8,958 |
Class A Shares | 7,490 | — | 5,438 |
Class B Shares | 6,583 | — | 1,223 |
Class C Shares | 2,471 | 1,588 | 260 |
Treasury Series: Treasury Shares | $ 113,077 | $ — | $ 75,611 |
Treasury Institutional Shares | 5,535 | — | 3,213 |
Tax-Free Series: Tax-Free Shares | $ 232,212 | $ — | $ 118,734 |
Tax-Free Institutional Shares | 14,080 | — | 8,305 |
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. SISC compensates DST out of the shareholder servicing fee it receives from 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 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, 2005, the Distribution Fee was as follows:
| Total Aggregated | Unpaid at September 30, 2005 |
Prime Series: Prime Shares | $ 2,626,102 | $ 439,562 |
Class A Shares | 4,432 | 761 |
Class B Shares | 5,920 | 640 |
Class C Shares | 345 | 54 |
Treasury Series: Treasury Shares | $ 378,225 | $ 62,010 |
Tax-Free Series: Tax-Free Shares | $ 826,428 | $ 166,104 |
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, 2005, the shareholder servicing fee was as follows:
| Total Aggregated | Unpaid at September 30, 2005 |
Prime Series: Prime Shares | $ 735,309 | $ 122,574 |
Class B Shares | 1,973 | 249 |
Class C Shares | 115 | 19 |
Treasury Series: Treasury Shares | $ 105,903 | $ 17,959 |
Tax-Free Series: Tax-Free Shares | $ 231,400 | $ 41,146 |
Typesetting and Filing Service Fees. Under an agreement with Deutsche Investment Management Americas Inc. (`DeIM'), an indirect, wholly owned subsidiary of Deutsche Bank AG, DeIM is compensated for providing typesetting and regulatory filing services to the Fund. For the six months ended September 30, 2005, the amount charged to the Fund by DeIM included in the reports to shareholders was as follows:
| Total Aggregated | Unpaid at September 30, 2005 |
Prime Series: | $ 8,487 | $ 4,960 |
Treasury Series: | $ 5,127 | $ 1,600 |
Tax-Free Series: | $ 5,127 | $ 1,600 |
Note 4—Expense Reductions
For the six months ended September 30, 2005, the Advisor agreed to reimburse the Fund $16,456, $3,751 and $6,534 for the Prime Series, the Treasury Series and the Tax-Free Series, respectively, which represents a portion of the fee savings expected to be realized by the Advisor related to the outsourcing by the Advisor of certain administrative services to an unaffiliated service provider.
In addition, 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, 2005, the Fund's custodian fees were reduced by $226, $23 and $692 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 | 1,450,871,639 | $ 1,450,871,640 | 2,369,013,778 | $ 2,369,013,778 |
Prime Institutional Shares | 716,293,707 | 716,293,707 | 1,276,773,498 | 1,276,773,498 |
Class A Shares | 780,730 | 780,730 | 912,564 | 912,564 |
Class B Shares | — | — | 12,342 | 12,342 |
Class C Shares | — | — | — | — |
Quality Cash Shares* | — | — | 1,167 | 1,167 |
|
| $ 2,167,946,077 | $ 3,646,713,349 | |
Reinvested: | ||||
Prime Shares | 26,939,524 | $ 26,939,524 | 25,861,843 | $ 25,861,843 |
Prime Institutional Shares | 5,749,576 | 5,749,576 | 5,442,840 | 5,442,840 |
Class A Shares | 34,894 | 34,894 | 26,556 | 26,556 |
Class B Shares | 8,228 | 8,228 | 5,377 | 5,377 |
Class C Shares | 22 | 21 | 57 | 57 |
Quality Cash Shares* | — | — | 436 | 436 |
|
| $ 32,732,243 |
| $ 31,337,109 |
Redeemed: | ||||
Prime Shares | (1,683,221,048) | $ (1,683,221,048) | (2,785,532,643) | $ (2,785,532,643) |
Prime Institutional Shares | (602,294,647) | (602,294,647) | (1,334,563,515) | (1,334,563,515) |
Class A Shares | (786,778) | (786,778) | (2,212,336) | (2,212,336) |
Class B Shares | (1,029,303) | (1,029,303) | (2,460,654) | (2,460,654) |
Class C Shares | (12,965) | (12,965) | (41,183) | (41,183) |
Quality Cash Shares* | — | — | (3,246,195) | (3,246,120) |
|
| $ (2,287,344,741) | $ (4,128,056,451) | |
Net Decrease: | ||||
| (86,666,421) | $ (86,666,421) | (450,006,068) | $ (450,005,993) |
| Six Months Ended | Year Ended | ||
Treasury Series: | Shares | Dollars | Shares | Dollars |
Sold: | ||||
Treasury Shares | 238,203,753 | $ 238,203,753 | 723,801,290 | $ 723,801,290 |
Treasury Institutional Shares | 107,110,069 | 107,110,069 | 277,644,015 | 277,644,015 |
|
| $ 345,313,822 | $ 1,001,445,305 | |
Reinvested: | ||||
Treasury Shares | 3,379,830 | $ 3,379,830 | 3,240,387 | $ 3,240,387 |
Treasury Institutional Shares | 1,065,213 | 1,065,213 | 1,406,390 | 1,406,390 |
|
| $ 4,445,043 | $ 4,646,777 | |
Redeemed: | ||||
Treasury Shares | (293,429,224) | $ (293,429,224) | (774,275,074) | $ (774,275,074) |
Treasury Institutional Shares | (111,186,284) | (111,186,284) | (280,099,447) | (280,099,447) |
|
| $ (404,615,508) | $ (1,054,374,521) | |
Net increase (decrease): | ||||
| (54,856,643) | $ (54,856,643) | (48,282,439) | $ (48,282,439) |
| Six Months Ended | Year Ended | ||
Tax-Free Series: | Shares | Dollars | Shares | Dollars |
Sold: | ||||
Tax-Free Shares | 590,336,469 | $ 590,336,469 | 911,528,609 | $ 911,528,609 |
Tax-Free Institutional Shares | 176,332,470 | 176,332,470 | 614,890,297 | 614,890,297 |
|
| $ 766,668,939 | $ 1,526,418,906 | |
Reinvested: | ||||
Tax-Free Shares | 5,850,157 | $ 5,850,157 | 4,824,516 | $ 4,824,516 |
Tax-Free Institutional Shares | 2,288,782 | 2,288,782 | 3,205,633 | 3,205,633 |
|
| $ 8,138,939 | $ 8,030,149 | |
Redeemed: | ||||
Tax-Free Shares | (609,638,264) | $ (609,638,264) | (939,504,884) | $ (939,504,884) |
Tax-Free Institutional Shares | (243,340,032) | (243,340,032) | (661,771,432) | (661,771,432) |
|
| $ (852,978,296) | $ (1,601,276,316) | |
Net increase/(decrease): | ||||
| (78,170,418) | $ (78,170,418) | (66,827,261) | $ (66,827,261) |
* Effective May 28, 2004, the last shareholder redeemed their shares in Quality Cash Reserve Prime Shares.
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.
The tax character of current year distributions will be determined at the end of the current fiscal year. At March 31, 2005, the Tax-Free Series had a net tax basis capital loss carryforward of approximately $32,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until March 31, 2008 ($12,000) and March 31, 2009 ($20,000), the respective 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, 2004 through March 31, 2005, the Prime Series and the Treasury Series incurred approximately $34 and $10,600, respectively, of net realized capital losses. As permitted by tax regulations, the Fund intends to elect to defer these losses and treat them as arising in the fiscal year ended March 31, 2006.
Note 7—Line of Credit
The Fund and several other affiliated funds (the `Participants') share in a $1.1 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—Concentration of Ownership
From time to time the Fund may have a concentration of several shareholders holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Fund.
At September 30, 2005, there was one shareholder who held approximately 10% of the outstanding shares of the Tax-Free Series.
Note 9—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. The funds' advisors have been cooperating in connection with these inquiries and are in discussions with these 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 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, and 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. 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. Based on currently available information, however, the funds' investment advisors believe the likelihood that the pending lawsuits and any regulatory settlements 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.
|
The Board of Directors of Cash Reserve Fund, Inc. approved the continuation of the current investment management agreement with Investment Company Capital Corporation (the "Advisor") for investment advisory services for the Prime, Tax-Free and Treasury Portfolios (each a "Fund" and, collectively, the "Funds") in September 2005. In terms of the process the Directors followed prior to approving the contract, shareholders should know that:
At the present time, all but one of your Fund's Directors are independent of the Advisor and its affiliates.
The Directors meet frequently to discuss fund matters. Each year, the Directors dedicate part or all of several meetings to contract review matters.
The Directors regularly meet privately with their independent counsel (and, as needed, other advisors) to discuss contract review and other matters.
The Advisor and its predecessors have managed the Funds since inception, and the Directors believe that a long-term relationship with a capable, conscientious advisor is in the best interest of shareholders. As you may know, the Advisor is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Directors believe that there are significant advantages to being part of a global asset management business with extensive investing expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.
Shareholders may focus primarily on fund performance and fees, but the Funds' Directors consider these and many other factors, including the quality and integrity of the Advisor's personnel and back-office operations, fund valuations, and compliance policies and procedures. The Directors noted that the Advisor has worked to implement new, forward-looking policies and procedures in many important areas, such as those involving brokerage commissions and so-called "soft dollars", even when not obligated to do so by law or regulation.
In determining to approve the continuation of each Fund's current investment management agreement, the Board considered factors that it believes relevant to the interests of shareholders, including:
The investment management fee schedule for the Fund, including (i) comparative information provided by Lipper regarding investment management fee rates paid to other investment advisors by similar funds and (ii) fee rates paid to the Advisor by similar funds and institutional accounts advised by the Advisor. With respect to management fees paid to other investment advisors by similar funds, the Directors noted that the fee rates paid by the Prime Portfolio (Prime Class shares), Tax-Free Portfolio (Tax-Free Class shares) and Treasury Portfolio (Treasury Class shares) were lower than the median (1st quartile, 2nd quartile and 1st quartile, respectively) of the applicable Lipper universe as of December 31, 2004. The Board gave only limited consideration to fees paid by similar institutional accounts advised by the Advisor, in light of the material differences in the scope of services provided to mutual funds as compared to those provided to institutional accounts. The Board concluded that the fee schedules in effect for the Funds represented reasonable compensation in light of the nature, extent and quality of the services being provided to the Funds and fees paid by similar funds.
The extent to which economies of scale would be realized as the Fund grows. In this regard, the Board noted that each Fund's investment management fee schedule includes fee breakpoints. The Board concluded that each Fund's fee schedule represents an appropriate sharing between shareholders and the Advisor of such economies of scale as may exist in the management of the Funds at current asset levels.
The total operating expenses of the Fund relative to the Fund's peer group as determined by Lipper. In this regard, the Board noted that the total expenses of the Prime Portfolio (Prime Class shares), Tax-Free Portfolio (Tax-Free Class shares) and Treasury Portfolio (Treasury Class shares) for the year ending December 31, 2004 were higher than the median (4th quartile, 3rd quartile and 3rd quartile, respectively) of the applicable Lipper universe. The Board also considered the various expense limitations agreed to by the Advisor that serve to ensure that each Fund's total operating expenses would be competitive relative to the applicable Lipper universe.
The investment performance of the Fund and the Advisor relative to industry peer groups. The Board noted that for the one-month, three-month, six-month, year-to-date, three- and five-year periods ended June 30, 2005, the Prime Portfolio (Prime Class shares), Tax-Free Portfolio (Tax-Free Class shares) and Treasury Portfolio (Treasury Class shares) performance was in the 2nd quartile, 3rd quartile and 3rd quartile, respectively, except that the performance for the Tax-Free Portfolio (Tax-Free Class shares) for the one-month period was in the 2nd quartile and for the Treasury Portfolio (Treasury Class shares) for the one-month, three- and five-year periods ended June 30, 2005 was in the 2nd quartile of the applicable Lipper universe. The Board recognized that the Advisor has made significant changes in its investment personnel and processes in recent years in an effort to improve long-term performance.
The nature, extent and quality of the advisory services provided by the Advisor. The Board considered extensive information regarding the Advisor, including the Advisor's personnel, particularly those personnel with responsibilities for providing services to the Funds, resources, policies and investment processes. The Board also considered the terms of the current investment management agreement, including the scope of services provided under the agreement. In this regard, the Board concluded that the quality and range of services provided by the Advisor have benefited, and should continue to benefit, the Funds and their shareholders.
The costs of the services to, and profits realized by, the Advisor and its affiliates from their relationships with the Funds. The Board reviewed information concerning the costs incurred and profits realized by the Advisor during 2004 from providing investment management services to the Funds and, separately, to the entire Scudder fund complex, and reviewed with the Advisor the cost allocation methodology used to determine its profitability. In analyzing the Advisor's costs and profits, the Board also reviewed the fees paid to, and services provided by, the Advisor and its affiliates with respect to administrative services, fund accounting, shareholder servicing and distribution (including fees paid pursuant to 12b-1 plans). As part of this review, the Board considered information provided by an independent accounting firm engaged to review the Advisor's cost allocation methodology and calculations. The Board concluded that each Fund's investment management fee schedule represented reasonable compensation in light of the costs incurred by the Advisor and its affiliates in providing services to the Fund. The Board also reviewed information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited, the Advisor's overall profitability with respect to the Scudder fund complex (after taking into account distribution and other services provided by the Advisor and its affiliates) was lower than the overall profitability levels of most comparable firms for which such data was available.
The practices of the Advisor regarding the selection and compensation of brokers and dealers executing portfolio transactions for the Funds, including the Advisor's soft dollar practices. In this regard, the Board observed that the Advisor had voluntarily terminated the practice of allocating brokerage commissions to acquire research services from third-party service providers. The Board indicated that it would continue to monitor the Funds' trading activities to ensure that the principle of "best price and execution" remains paramount in the portfolio trading process.
The Advisor's commitment to, and record of, compliance including its written compliance policies and procedures. In this regard, the Board considered the Advisor's commitment to indemnify the Funds against any costs and liabilities related to lawsuits or regulatory actions making allegations regarding market timing, revenue sharing, fund valuation or other subjects arising from or relating to pending regulatory inquiries. The Board also considered the significant attention and resources dedicated by the Advisor to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of the Advisor's chief compliance officer, who reports to the Board, (ii) the large number of compliance personnel who report to the Advisor's chief compliance officer, and (iii) the substantial commitment of resources by the Advisor to compliance matters.
Deutsche Bank's commitment to restructuring and growing its US mutual fund business. The Board considered recent and ongoing efforts by Deutsche Bank to restructure its US mutual fund business to improve efficiency and competitiveness and to reduce compliance and operational risk. The Board considered assurances received from Deutsche Bank that it would commit the resources necessary to maintain high quality services to the Funds and their shareholders while various organizational initiatives are being implemented. The Board also considered Deutsche Bank's strategic plans for investing in the growth of its US mutual fund business and the potential benefits to each Fund's shareholders.
Based on all of the foregoing, the Board determined to continue each Fund's current investment management agreement, and concluded that the continuation of such agreement was in the best interests of shareholders. In reaching this conclusion the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, many of which were in executive session with only the Independent Directors and their counsel present. It is possible that individual Directors may have weighed these factors differently in reaching their individual decisions to approve the continuation of the current agreement.
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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. 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, One South Street, Baltimore, MD 21202. 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-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: Prime Series, Treasury Series and Tax-Free Series, a series of Cash Reserve Fund, Inc. By: /s/Vincent J. Esposito ---------------------- Vincent J. Esposito President Date: December 2, 2005 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: Prime Series, Treasury Series and Tax-Free Series, a series of Cash Reserve Fund, Inc. By: /s/Vincent J. Esposito ---------------------- Vincent J. Esposito President Date: December 2, 2005 By: /s/Paul Schubert ---------------------- Paul Schubert Chief Financial Officer and Treasurer Date: December 2, 2005