UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSR
Investment Company Act file number | 811-03196 |
Cash Reserve Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
(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: | 03/31 |
Date of reporting period: | 03/31/06 |
ITEM 1. REPORT TO STOCKHOLDERS
Deutsche Bank Alex. Brown
Cash Reserve Fund
Prime Series
Treasury Series
Tax-Free Series
Annual Report to Shareholders
March 31, 2006
Table of Contents |
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Cash Reserve Fund Portfolio Management Review 3 Information About Each Fund's Expenses 5 Investment Summary 7 Schedule of Investments 8 Statements of Assets and Liabilities 18 Statements of Operations 20 Statements of Changes in Net Assets 21 Financial Highlights 24 Notes to Financial Statements 27 Report of Independent Registered Public Accounting Firm 34 Tax Information 35 Other Information 35 Directors and Officers 36 |
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.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
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In the following interview, Cash Reserve Fund Portfolio Managers Geoffrey Gibbs, Darlene Rasel and Sonelius Kendrick-Smith discuss the market environment and the portfolio team's approach to managing the fund during its most recent fiscal year ended March 31, 2006.
Q: Will you discuss the market environment for the fund during its most recent fiscal year?
A: Over the 12 months ended March 31, 2006, the US economy showed its resiliency, despite devastating hurricanes in the southern United States and continual increases in energy prices. Monthly job growth was the most important economic indicator for the money markets as the year began, but the market's focus gradually shifted to a careful watch for signs of increasing inflation. Going forward, the markets will be watching closely for any changes in monetary policy from the new US Federal Reserve Board (the Fed) chairman Ben Bernanke.
During the period, the Fed continued its policy of increasing short-term interest rates in an attempt to undo the easing of monetary policy that occurred up until June 2004. The Fed raised the federal funds rate — the overnight rate charged by banks when they borrow money from each other, which guides other interest rates — to 4.75% in eight quarter-percentage-point increments over the 12-month period. Despite the increases in the federal funds rate, longer-term yields remained low for most of the period, creating a relatively flat yield curve.1 Throughout 2005 and early 2006 the Fed repeated its statements that additional rate increases might be needed going forward to keep the risks to economic growth and price stability in balance.
1 The yield curve is a graph with a left to right line that shows how high or low yields are, from the shortest to the longest maturities. Typically the line rises from left to right as investors who are willing to tie up their money for a longer period of time are rewarded with higher yields.At the end of March 2006, the one-year London Interbank Offered Rate (LIBOR), an industry standard for measuring one-year money market rates, stood at 5.25%, compared to 3.85% 12 months earlier. The premium level of LIBOR (which is set by the market) over the federal funds rate (which is fixed by the Fed) of 4.75% demonstrated the market's concern that the Fed may raise short-term interest rates at least one to two more times in order to stave off any resurgence of inflation. At the same time, there is a sense within the market that 2006 will be a year of transition, that the Fed will probably discontinue its rate increases this year, and that investors will be looking to see how well Bernanke can fine-tune the economy by utilizing the Fed's control over short-term rates.
Q: How did the fund perform over its most recent fiscal year?
A: We were able to maintain 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?
A: During the period, our strategy was to keep the fund's average maturity relatively short in order to help reduce risk, limiting our purchases, for the most part, to three-month maturity issues and shorter. For the period, we maintained a significant allocation in floating-rate securities. The interest rate of floating rate securities adjusts periodically based on indices (such as the LIBOR) and the federal funds rate. Because the interest rates of these instruments adjust as market conditions change, they provide flexibility in an uncertain interest rate environment. Our decision to maintain a significant allocation in this sector helped performance during the period.
Q: What has been the strategy for the Treasury Series?
A: During the Treasury Series' most recent fiscal year, except for the period immediately following the past hurricane season when yields declined briefly, the Treasury yield curve was relatively flat, due in part to large-volume purchases of short-term Treasury instruments by foreign central banks. These purchases kept even the yields of six-month issues at relatively depressed levels. Because the Treasury Series would not be rewarded with higher yields by extending maturity, our strategy was to limit our purchases to issues with maturities of three months or less, and extend maturity opportunistically, as market conditions warranted.
7-Day Current Yield+ | (as of 3/31/06) |
Prime Shares iMoneyNet First Tier Retail Money Funds Average* | 4.10% 3.87% |
Treasury Shares iMoneyNet Treasury Retail Money Funds Average* | 3.75% 3.71% |
Tax-Free Shares** iMoneyNet National Retail Tax-Free Money Funds Average* | 2.44% 2.47% |
Yields are historical, will fluctuate and do not guarantee future performance. Please call (800) 621-1048 for the funds' most up-to-date performance.
+ The 7-day current yield refers to the income paid by the fund over a 7-day period expressed as an annual percentage rate.* Money Fund Report Averages, a service of iMoneyNet, Inc., are averages for categories of similar money market funds.
** For certain investors a portion of the Tax-Free Series' income may be subject to the federal alternative minimum tax. Distribution of the Tax-Free Series' income may be subject to state and local taxes.
Q: What has been the strategy for the Tax-Free Series?
A: Over the period, we continued to focus on the highest-quality investments for the fund while seeking competitive yields across the municipal investment spectrum. We also maintained a cautious stance by targeting an average maturity similar to the Tax-Free Series' peers. Most years, during "tax season," tax-free money fund investors withdraw substantial amounts of money from the market to pay their tax bills. Last year, tax-related selling pressure extended for a longer period than usual as we saw substantial tax payment withdrawals in April and May of 2005. (In contrast, tax-related selling of municipal money market securities was comparatively restrained through the first quarter of 2006.) As a result of these sales, floating-rate issuers were forced to raise their rates to attract new investors. Our strategy during the first two months of the fund's most recent fiscal year was to increase the portfolio's floating-rate position to take advantage of the increase in rates. Up until year-end 2005, this strategy worked well for the Tax-Free Series, but at the close of the year the overweight position in floating-rate securities detracted slightly from returns.2 The interest rate of floating-rate securities adjusts periodically based on indices such as the Bond Market Association Index of Variable Rate Demand Notes.3 Because the interest rates of these instruments adjust as market conditions change, they provide flexibility in an uncertain interest rate environment.
2 "Overweight" means the fund holds a higher weighting in a given sector or security than the benchmark. "Underweight" means the fund holds a lower weighting.3 The Bond Market Association Index of Variable Rate Demand Notes is a weekly high-grade market index consisting of seven-day, tax-exempt, variable-rate demand notes produced by Municipal Market Data Group. Actual issues are selected from Municipal Market Data's database of more than 10,000 active issues.
Q: What detracted from the fund's performance during the period?
A: Following Hurricanes Katrina and Wilma there was concern that the US economy would falter and that the Fed might halt its series of federal funds rate increases — at least temporarily — so as not to further restrain growth. For this reason, we extended the fund's maturity slightly in early fall 2005. Instead of faltering, the economy continued to perform well, however, and the Fed kept raising rates. For this reason, our decision to briefly extend maturity detracted somewhat from the fund's yield and total return during the period.
Q: Will you describe your investment philosophy?
A: We continue our insistence on the highest credit quality within the fund. We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the fund and to seek competitive yield 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.
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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 March 31, 2006.
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
Annualized Expense Ratios |
|
Prime Shares | .69% |
Prime Institutional Shares | .31% |
Treasury Series
Expenses and Value of a $1,000 Investment for the six months ended March 31, 2006 | ||
Actual Fund Return | Treasury Shares | Treasury Institutional Shares |
Beginning Account Value 10/1/05 | $ 1,000.00 | $ 1,000.00 |
Ending Account Value 3/31/06 | $ 1,016.00 | $ 1,017.90 |
Expenses Paid per $1,000* | $ 3.57 | $ 1.71 |
Hypothetical 5% Fund Return | Treasury Shares | Treasury Institutional Shares |
Beginning Account Value 10/1/05 | $ 1,000.00 | $ 1,000.00 |
Ending Account Value 3/31/06 | $ 1,021.39 | $ 1,023.24 |
Expenses Paid per $1,000* | $ 3.58 | $ 1.72 |
Annualized Expense Ratios |
|
Treasury Shares | .71% |
Treasury Institutional Shares | .34% |
Tax-Free Series
Annualized Expense Ratios |
|
Tax-Free Shares | .72% |
Tax-Free Institutional Shares | .33% |
For more information, please refer to the Funds' prospectus.
|
Prime Series
Asset Allocation | 3/31/06 | 3/31/05 |
| ||
Commercial Paper | 42% | 30% |
Short Term Notes | 22% | 19% |
Repurchase Agreements | 14% | 22% |
Certificates of Deposit and Bank Notes | 12% | 18% |
Funding Agreements | 3% | 2% |
Promissory Notes | 3% | 3% |
Master Notes | 2% | 2% |
US Government Sponsored Agencies | 1% | 4% |
Asset Backed | 1% | — |
| 100% | 100% |
Weighted Average Maturity | | |
Cash Reserve Fund, Inc. — Prime Series | 36 days | 38 days |
iMoneyNet First Tier Retail Money Funds Average* | 38 days | 36 days |
Treasury Series
Asset Allocation | 3/31/06 | 3/31/05 |
| ||
US Treasury Obligations | 100% | 100% |
Weighted Average Maturity | | |
Cash Reserve Fund, Inc. — Treasury Series | 31 days | 33 days |
iMoneyNet Treasury Retail Money Funds Average* | 41 days | 31 days |
Tax-Free Series
Asset Allocation | 3/31/06 | 3/31/05 |
| ||
Municipal Investments | | |
Municipal Variable Rate Demand Notes | 79% | 79% |
Municipal Bonds and Notes | 21% | 21% |
| 100% | 100% |
Weighted Average Maturity | | |
Cash Reserve Fund, Inc. — Tax-Free Series | 17 days | 25 days |
iMoneyNet National Retail Tax-Free Money Funds Average* | 25 days | 26 days |
Asset allocation is subject to change. For more complete details about the Funds' holdings, see pages 8-17. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to www.dws-scudder.com on or after the last day of the following month. In addition, the Fund's top ten holdings and other information about the Fund is posted on www.dws-scudder.com as of the calendar quarter-end on or after the 15th day following quarter-end. Please see the Other Information section for contact information.
|
Prime Series | Principal Amount ($) | Value ($) |
| | |
Certificates of Deposit and Bank Notes 12.9% | ||
Bank of Novia Scotia, 4.8%, 5/10/2006 | 25,000,000 | 25,000,000 |
Bank of Tokyo-Mitsubishi-UFJ, Ltd., 4.8%, 5/10/2006 | 35,000,000 | 35,000,000 |
Calyon, 3.685%, 6/2/2006 | 25,000,000 | 25,000,000 |
HBOS Treasury Services PLC: | | |
3.8%, 7/10/2006 | 70,000,000 | 70,000,000 |
4.75%, 12/4/2006 | 5,000,000 | 5,000,000 |
5.0%, 2/12/2007 | 10,000,000 | 10,000,000 |
International Bank for Reconstruction & Development, 4.65%, 4/3/2006 | 396,000 | 395,898 |
Natexis Banque Populaires: | | |
5.0%, 2/8/2007 | 20,000,000 | 20,000,000 |
5.0%, 2/9/2007 | 10,000,000 | 10,000,000 |
Norinchukin Bank, 4.83%, 5/2/2006 | 20,000,000 | 20,000,000 |
Royal Bank of Canada: | | |
4.05%, 7/24/2006 | 15,000,000 | 15,000,000 |
4.775%, 12/1/2006 | 25,000,000 | 25,000,808 |
Royal Bank of Scotland PLC, 4.75%, 12/4/2006 | 45,000,000 | 45,000,000 |
Toronto Dominion Bank: | | |
3.75%, 5/16/2006 | 10,000,000 | 9,999,880 |
3.8%, 7/10/2006 | 25,000,000 | 25,000,000 |
Total Certificates of Deposit and Bank Notes (Cost $340,396,586) | 340,396,586 | |
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Commercial Paper** 43.9% | ||
American General Finance Corp., 4.9%, 4/3/2006 | 31,270,000 | 31,261,488 |
Apreco, LLC, 4.84%, 4/3/2006 | 83,300,000 | 83,277,602 |
AT&T, Inc.: | | |
4.79%, 4/27/2006 | 15,000,000 | 14,948,108 |
4.86%, 4/3/2006 | 3,000,000 | 2,999,190 |
Atlantis One Funding Corp.: | | |
4.54%, 4/3/2006 | 20,000,000 | 19,994,956 |
4.56%, 4/6/2006 | 9,000,000 | 8,994,300 |
Caisse Nationale des Caisses D'Epargne et Prevoyan, 4.635%, 7/31/2006 | 25,000,000 | 24,610,531 |
Cancara Asset Securitization LLC, 4.775%, 4/7/2006 | 30,000,000 | 29,976,125 |
Chariot Funding LLC, 4.78%, 4/28/2006 | 11,430,000 | 11,389,024 |
Charta, LLC, 4.84%, 4/3/2006 | 125,000,000 | 124,966,389 |
Ciesco, LLC, 4.84%, 4/3/2006 | 125,000,000 | 124,966,389 |
CIT Group, Inc., 4.56%, 4/4/2006 | 10,000,000 | 9,996,200 |
Clipper Receivables Co. LLC, 4.66%, 4/7/2006 | 617,000 | 616,521 |
Cloverleaf International Holdings SA, 4.84%, 4/3/2006 | 10,100,000 | 10,097,284 |
Concentrate Manufacturing Co. of Ireland, 4.64%, 4/12/2006 | 10,000,000 | 9,985,822 |
Davis Square Funding VI Corp., 4.81%, 5/4/2006 | 10,000,000 | 9,955,908 |
Dexia Delaware LLC, 4.8%, 4/5/2006 | 15,000,000 | 14,996,000 |
Falcon Asset Securitization Corp., 4.78%, 5/1/2006 | 11,015,000 | 10,971,124 |
Giro Funding US Corp.: | | |
4.8%, 5/9/2006 | 15,000,000 | 14,924,000 |
4.8%, 5/10/2006 | 20,000,000 | 19,896,000 |
Grampian Funding Ltd., 4.5%, 4/19/2006 | 45,000,000 | 44,898,750 |
Greyhawk Funding LLC: | | |
4.735%, 5/10/2006 | 20,000,000 | 19,897,408 |
4.77%, 5/10/2006 | 5,300,000 | 5,272,612 |
4.78%, 5/1/2006 | 20,000,000 | 19,920,333 |
HSBC Finance Corp., 4.9%, 4/3/2006 | 30,000,000 | 29,991,833 |
Lake Constance Funding LLC, 4.78%, 4/25/2006 | 20,000,000 | 19,936,267 |
Liberty Street Funding: | | |
4.55%, 4/5/2006 | 20,000,000 | 19,989,889 |
4.75%, 4/21/2006 | 20,000,000 | 19,947,222 |
4.78%, 5/1/2006 | 15,262,000 | 15,201,206 |
4.78%, 5/10/2006 | 22,939,000 | 22,820,214 |
Links Finance LLC, 4.85%, 4/3/2006 | 12,540,000 | 12,536,621 |
Mane Funding Corp., 4.75%, 4/24/2006 | 25,000,000 | 24,924,132 |
Nieuw Amsterdam Receivables Corp., 4.78%, 4/25/2006 | 15,000,000 | 14,952,200 |
Park Avenue Receivables Co. LLC, 4.66%, 4/7/2006 | 3,593,000 | 3,590,209 |
Rabobank USA Financial Corp., 4.84%, 4/3/2006 | 27,000,000 | 26,992,740 |
Ranger Funding Co. LLC, 4.78%, 5/3/2006 | 15,000,000 | 14,936,267 |
RWE AG: | | |
4.755%, 5/10/2006 | 14,000,000 | 13,927,883 |
4.8%, 5/1/2006 | 15,000,000 | 14,944,000 |
Scaldis Capital LLC, 4.77%, 4/25/2006 | 50,000,000 | 49,841,000 |
Sysco Corp., 4.85%, 4/3/2006 | 8,039,000 | 8,036,834 |
Tango Finance Corp., 4.57%, 4/12/2006 | 20,000,000 | 19,972,072 |
The Goldman Sachs Group, Inc., 4.83%, 4/3/2006 | 29,000,000 | 28,992,218 |
Total Capital SA, 4.85%, 4/3/2006 | 93,047,000 | 93,021,929 |
UBS Finance (DE) LLC, 4.77%, 5/10/2006 | 30,000,000 | 29,844,975 |
Total Commercial Paper (Cost $1,153,211,775) | 1,153,211,775 | |
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Short Term Notes* 22.8% | ||
Alliance & Leicester PLC, 4.68%, 12/1/2006 | 20,000,000 | 20,000,000 |
American Express Credit Corp., 4.651%, 1/9/2007 | 9,000,000 | 8,999,259 |
BMW US Capital LLC, 144A, 4.72%, 4/18/2006 | 10,000,000 | 10,000,000 |
BNP Paribas, 4.79%, 10/26/2006 | 20,000,000 | 20,000,000 |
Cancara Asset Securitization LLC, 144A, 4.7%, 8/15/2006 | 20,000,000 | 19,998,488 |
CIT Group, Inc., 4.948%, 2/15/2007 | 23,000,000 | 23,040,019 |
Credit Suisse: | | |
4.93%, 9/26/2006 | 25,000,000 | 25,000,000 |
4.79%, 9/26/2006 | 25,000,000 | 25,000,000 |
Greenwich Capital Holdings: | | |
4.74%, 6/20/2006 | 23,000,000 | 23,000,000 |
4.788%, 10/2/2006 | 20,000,000 | 20,000,000 |
HSBC Bank USA, NA, 4.72%, 5/4/2006 | 25,000,000 | 25,001,055 |
HSBC Finance Corp., 4.69%, 10/27/2006 | 75,000,000 | 75,027,760 |
International Business Machine Corp., 4.68%, 4/5/2007 | 20,000,000 | 20,000,000 |
JPMorgan Chase & Co., 4.45%, 8/11/2006 | 20,000,000 | 20,010,707 |
K2 (USA) LLC, 4.8%, 7/24/2006 | 20,000,000 | 20,003,390 |
Merrill Lynch & Co., Inc.: | | |
4.72%, 2/2/2007 | 15,000,000 | 15,000,000 |
4.728%, 9/15/2006 | 20,000,000 | 20,000,000 |
Morgan Stanley, 4.86%, 7/10/2006 | 30,000,000 | 30,000,000 |
Pfizer Investment Capital PLC, 4.708%, 12/15/2006 | 20,000,000 | 20,000,000 |
Skandinaviska Enskilda Banken, 4.681%, 2/9/2007 | 10,000,000 | 10,000,000 |
Tango Finance Corp.: | | |
144A, 4.710%, 9/18/2006 | 33,500,000 | 33,499,584 |
4.733%, 2/15/2007 | 50,000,000 | 50,002,011 |
The Bear Stearns Companies, Inc., 4.935%, 9/18/2006 | 50,000,000 | 50,000,000 |
The Goldman Sachs Group, Inc., 4.94%, 8/18/2006 | 15,000,000 | 15,011,127 |
Total Short Term Notes (Cost $598,593,400) | 598,593,400 | |
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Master Notes 1.9% | ||
The Bear Stearns Companies, Inc., 5.0%*, 4/1/2006 (a) (Cost $50,000,000) | 50,000,000 | 50,000,000 |
US Government Sponsored Agencies 0.9% | ||
Federal National Mortgage Association, 4.05%, 8/14/2006 (Cost $25,000,000) | 25,000,000 | 25,000,000 |
| ||
Funding Agreements 3.2% | ||
Genworth Life Insurance Co.: | | |
4.9%*, 9/1/2006 | 45,000,000 | 45,000,000 |
4.9%*, 3/1/2007 | 20,000,000 | 20,000,000 |
New York Life Insurance Co., 4.57%*, 9/19/2006 | 20,000,000 | 20,000,000 |
Total Funding Agreements (Cost $85,000,000) | 85,000,000 | |
| ||
Asset Backed 0.8% | ||
Permanent Financing PLC, "1A", Series 8, 4.38%*, 6/10/2006 (Cost $20,000,000) | 20,000,000 | 20,000,000 |
| ||
Promissory Notes 2.7% | ||
The Goldman Sachs Group, Inc.: | | |
4.77%*, 11/13/2006 | 50,000,000 | 50,000,000 |
4.86%*, 6/30/2006 | 20,000,000 | 20,000,000 |
Total Promissory Notes (Cost $70,000,000) | 70,000,000 | |
| ||
Repurchase Agreements 14.4% | ||
Merrill Lynch & Co., Inc., 4.85%, dated 3/31/2006, to be repurchased at $150,060,625 on 4/3/2006 (b) | 150,000,000 | 150,000,000 |
UBS Securities LLC, 4.83%, dated 3/31/2006, to be repurchased at $227,575,853 on 4/3/2006 (c) | 227,484,291 | 227,484,291 |
Total Repurchase Agreements (Cost $377,484,291) | 377,484,291 |
| % of Net Assets | Value ($) |
| | |
Total Investment Portfolio (Cost $2,719,686,052)+ | 103.5 | 2,719,686,052 |
Other Assets and Liabilities, Net | (3.5) | (92,220,880) |
Net Assets | 100.0 | 2,627,465,172 |
** Annualized yield at the time of purchase; not a coupon rate.
+ The cost for federal income tax purposes was $2,719,686,052.
(a) Reset date; not maturity date.
(b) Collateralized by:
Principal Amount ($) |
| Security | Rate (%) | Maturity | Collateral |
| |||||
115,711,486 | | Federal National Mortgage Association | 4.5-10.5 | 11/1/2010-3/1/2036 | 113,698,041 |
40,709,847 | | Federal Home Loan Mortgage Corp. | 4.0-8.5 | 5/1/2006-3/1/2036 | 40,805,305 |
Total Collateral Value | 154,503,346 |
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 March 31, 2006 |
|
Treasury Series | Principal Amount ($) | Value ($) |
| | |
US Treasury Obligations 100.0% | ||
US Treasury Bills: | | |
3.98%*, 4/20/2006 | 8,000,000 | 7,983,196 |
4.025%*, 4/20/2006 | 15,000,000 | 14,968,135 |
4.035%*, 4/20/2006 | 15,000,000 | 14,968,056 |
4.19%*, 6/15/2006 | 7,000,000 | 6,938,896 |
4.23%*, 4/13/2006 | 10,000,000 | 9,985,900 |
4.235%*, 4/20/2006 | 2,052,000 | 2,047,413 |
4.26%*, 4/20/2006 | 17,000,000 | 16,961,778 |
4.325%*, 4/27/2006 | 20,000,000 | 19,937,528 |
4.35%*, 4/6/2006 | 14,227,000 | 14,218,405 |
4.385%*, 4/13/2006 | 5,247,000 | 5,239,331 |
4.39%*, 4/13/2006 | 30,000,000 | 29,956,100 |
4.395%*, 4/13/2006 | 30,000,000 | 29,956,050 |
4.405%*, 4/13/2006 | 6,152,000 | 6,142,967 |
4.445%*, 5/4/2006 | 2,535,000 | 2,524,671 |
4.45%*, 5/11/2006 | 20,000,000 | 19,901,111 |
4.475%*, 6/15/2006 | 20,000,000 | 19,813,542 |
4.48%*, 6/15/2006 | 25,100,000 | 24,865,733 |
4.485%*, 6/1/2006 | 17,519,000 | 17,385,863 |
4.52%*, 4/13/2006 | 5,573,000 | 5,564,603 |
4.565%*, 4/27/2006 | 14,139,000 | 14,092,384 |
4.57%*, 4/20/2006 | 44,000,000 | 43,893,874 |
4.575%*, 4/20/2006 | 1,130,000 | 1,127,272 |
4.6%*, 4/20/2006 | 45,000,000 | 44,890,750 |
| 373,363,558 | |
US Treasury Note, 2.375%, 8/15/2006 | 4,000,000 | 3,979,404 |
Total US Treasury Obligations (Cost $ 377,342,962) | 377,342,962 |
| % of Net Assets | Value ($) |
| | |
Total Investment Portfolio (Cost $377,342,962)+ | 100.0 | 377,342,962 |
Other Assets and Liabilities, Net | 0.0 | (103,573) |
Net Assets | 100.0 | 377,239,389 |
+ Cost for federal income tax purposes was $377,342,962.
The accompanying notes are an integral part of the financial statements.
Schedule of Investments as of March 31, 2006 |
|
Tax-Free Series | Principal Amount ($) | Value ($) |
| | |
Municipal Bonds and Notes 99.4% | ||
Alabama 3.3% | ||
Alabama, Housing Finance Authority, Multi-Family Housing Revenue, Heatherbrooke Project, Series C, 3.22%*, 6/15/2026 | 8,200,000 | 8,200,000 |
Alabama, Housing Finance Authority, Multi-Family Housing Revenue, Rime Village Hoover Project, Series A, 3.22%*, 6/15/2026 | 7,500,000 | 7,500,000 |
Alabama, Municipal Securities Trust Certificates, Series 2005-9060, "A", 144A, 3.23%*, 3/10/2011 (a) | 9,055,000 | 9,055,000 |
Jefferson County, AL, Sewer Revenue, Capital Improvement Waste, Series A, 3.22%*, 2/1/2042 (a) | 5,700,000 | 5,700,000 |
30,455,000 | ||
Alaska 0.3% | ||
Anchorage, AK, Core City, General Obligation, Series II-R, 144A, 3.43%*, 6/1/2019 (a) | 2,935,000 | 2,935,000 |
Arizona 3.8% | ||
Arizona, McAllister Academic Village LLC Revenue, Arizona State University Project, Series A, 3.18%*, 7/1/2045 (a) | 4,700,000 | 4,700,000 |
Arizona, Salt River Pima-Maricopa Indian Community, 3.18%*, 10/1/2025, Bank of America NA (b) | 1,470,000 | 1,470,000 |
Arizona, Salt River Project, Agricultural Improvement & Power Distribution Revenue, 3.23%, 5/5/2006 | 5,925,000 | 5,925,000 |
Arizona, Salt River Project, Agricultural Improvement, Series A, 3.13%, 5/4/2006 | 20,000,000 | 20,000,000 |
Arizona, Salt River Project, Agriculture Improvement & Power District, Electric System Revenue, Series 2006-0022, "A", 144A, 3.21%*, 1/1/2035 | 3,000,000 | 3,000,000 |
35,095,000 | ||
California 4.8% | ||
ABN AMRO, Munitops Certificates Trust: | | |
Series 2005-38, 144A, 3.19%*, 5/1/2013 (a) | 8,000,000 | 8,000,000 |
Series 2005-43, 144A, 3.19%*, 8/1/2013 (a) | 3,250,000 | 3,250,000 |
California, Golden State Tobacco Securitization Corp., Tobacco Settlement Revenue, Series R-411CE, 144A, 3.22%*, 6/1/2045 | 4,000,000 | 4,000,000 |
California, School Cash Reserve Program Authority, Series A, 4.0%, 7/6/2006 | 6,500,000 | 6,523,319 |
California, State Department of Water Resources, Center Valley Project Revenue, Series B-32, 144A, 3.2%*, 12/1/2025 (a) | 985,000 | 985,000 |
California, State General Obligation, Series PT-1555, 144A, 3.21%*, 10/1/2010 (a) | 12,790,000 | 12,790,000 |
California, State University Revenue, Series PT-2660, 144A, 3.21%*, 11/1/2025 (a) | 3,500,000 | 3,500,000 |
Fullerton, CA, School District, Series PT-1558, 144A, 3.21%*, 8/1/2021 (a) | 5,120,000 | 5,120,000 |
44,168,319 | ||
Colorado 3.1% | ||
ABN AMRO, Munitops Certificates Trust, Series 2005-30, 144A, 3.21%*, 6/1/2013 (a) | 18,330,000 | 18,330,000 |
Colorado, Educational & Cultural Facilities Authority Revenue, National Jewish Board Program, Series C-1, 3.18%*, 9/1/2035, US Bank NA (b) | 1,915,000 | 1,915,000 |
Colorado, Health Facilities Authority Revenue, Frasier Meadows Manor Project, 3.17%*, 6/1/2021, Bank One NA (b) | 4,500,000 | 4,500,000 |
Colorado, Transportation/Tolls Revenue, Transportation Department, 144A, 3.21%*, 12/15/2016 (a) | 3,300,000 | 3,300,000 |
28,045,000 | ||
Delaware 0.8% | ||
Sussex County, DE, First Mortgage Revenue, Cadbury Lewes, Series C, 3.23%*, 1/1/2016, Citizens Bank of PA (b) | 7,250,000 | 7,250,000 |
District of Columbia 0.4% | ||
District of Columbia, The Washington Home, Inc., Revenue, 3.17%*, 8/1/2029, Wachovia Bank NA (b) | 3,695,000 | 3,695,000 |
Florida 5.0% | ||
Alachua County, FL, Health Facilities Authority Revenue, Shands Teaching, Series A, 3.18%*, 12/1/2032, SunTrust Bank (b) | 1,800,000 | 1,800,000 |
Broward County, FL, Housing Finance Authority, Multi-Family Housing Revenue, Series PT-703, 144A, 3.19%*, 8/1/2026 | 4,200,000 | 4,200,000 |
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 | 1,511,463 |
Florida, Transportation/Tolls Revenue, Turnpike Authority, Series R-4041, 144A, 3.21%*, 7/1/2020 (a) | 12,930,000 | 12,930,000 |
Gulf Breeze, FL, Municipal Bond Fund Revenue, Series A, 3.18%*, 3/31/2021, Bank of America NA (b) | 3,860,000 | 3,860,000 |
Highlands County, FL, Health Facilities Authority Revenue, Hospital Adventist Health Systems, Series B, 3.19%*, 11/15/2009, SunTrust Bank (b) | 7,060,000 | 7,060,000 |
Jacksonville, FL, Electric Authority, Series 2001-C, 3.17%, 4/3/2006 | 10,000,000 | 10,000,000 |
Jacksonville, FL, Health Facilities Revenue, 3.38%, 5/3/2006 | 1,000,000 | 1,000,000 |
Pasco County, FL, School Board Certificates of Participation, 3.17%*, 8/1/2026 (a) | 3,300,000 | 3,300,000 |
45,661,463 | ||
Georgia 4.2% | ||
Atlanta, GA, Airport Revenue, Series C-1, 3.2%*, 1/1/2030 (a) | 1,000,000 | 1,000,000 |
Atlanta, GA, Water & Wastewater Revenue, Municipal Securities Trust Receipts, Series SGA-145, 144A, 3.23%*, 11/1/2033 (a) | 4,000,000 | 4,000,000 |
De Kalb County, GA, Housing Authority, Multi-Family Housing Revenue, Post Asford Project, 3.17%*, 6/1/2025 | 8,895,000 | 8,895,000 |
Fulton County, GA, Development Authority Revenue, Donnellan School Project, 3.18%*, 7/1/2020, Wachovia Bank NA (b) | 1,750,000 | 1,750,000 |
Fulton County, GA, Development Authority Revenue, Shepherd Center, Inc. Project, 3.18%*, 9/1/2035, SunTrust Bank (b) | 6,700,000 | 6,700,000 |
La Grange, GA, Development Authority Revenue, La Grange College Project, 3.18%*, 6/1/2031, SunTrust Bank (b) | 9,485,000 | 9,485,000 |
Macon-Bibb County, GA, Hospital Authority Revenue, Anticipation Certificates, Medical Center of Central Georgia, 3.18%*, 12/1/2018, SunTrust Bank (b) | 5,225,000 | 5,225,000 |
Monroe County, GA, Development Authority, Pollution Control Revenue, Oglethorpe Power Corp. Project, 3.18%*, 1/1/2018 (a) | 1,200,000 | 1,200,000 |
38,255,000 | ||
Hawaii 3.6% | ||
ABN AMRO, Munitops Certificates Trust, Series 2004-16, 144A, 3.22%*, 7/1/2012 (a) | 4,000,000 | 4,000,000 |
Hawaii, General Obligation: | | |
Series R-4553, 144A, 3.21%*, 5/1/2023 (a) | 8,980,000 | 8,980,000 |
Series R-4545, 144A, 3.43%*, 8/1/2020 (a) | 5,165,000 | 5,165,000 |
Hawaii, State Department of Budget & Finance, Special Purpose Revenue, Kahala Nui Project, Series D, 3.17%*, 11/15/2033, LaSalle Bank NA (b) | 200,000 | 200,000 |
Honolulu, HI, City & County, General Obligation, 3.25%, 4/5/2006 | 14,800,000 | 14,800,000 |
33,145,000 | ||
Idaho 1.0% | ||
Idaho, State Tax Anticipation Notes, 4.0%, 6/30/2006 | 9,500,000 | 9,531,029 |
Illinois 6.0% | ||
Chicago, IL, General Obligation, Series A, 144A, 3.2%*, 1/1/2042 (a) | 2,690,000 | 2,690,000 |
Chicago, IL, Water Revenue, Second Lien, 3.17%*, 11/1/2031 (a) | 1,320,000 | 1,320,000 |
Du Page County, IL, Benedictine University Building Project, 3.2%*, 7/1/2024, National City Bank Midwest (b) | 10,770,000 | 10,770,000 |
Illinois, Development Finance Authority Revenue, Chicago Symphony Project, 3.22%*, 12/1/2033, Bank One NA (b) | 9,600,000 | 9,600,000 |
Illinois, Development Finance Authority Revenue, Fenwick High School Project, 3.28%*, 3/1/2032, JPMorgan Chase Bank (b) | 4,500,000 | 4,500,000 |
Illinois, Educational Facilities Authority Revenue, 3.2%, 5/3/2006 | 5,000,000 | 5,000,000 |
Illinois, Finance Authority Revenue, North Park University Project, 3.2%*, 7/1/2035, JPMorgan Chase Bank (b) | 5,000,000 | 5,000,000 |
Illinois, Municipal Securities Trust Certificates, Series 5002-BBT, 144A, 3.3%*, 5/7/2026 (a) | 4,000,000 | 4,000,000 |
Illinois, Regional Transportation Authority, Series A23, 144A, 3.21%*, 7/1/2030 (a) | 4,940,000 | 4,940,000 |
Illinois, State General Obligation, Macon Trust, Series L, 3.21%*, 1/1/2031 | 1,745,000 | 1,745,000 |
Lake County, IL, Warren Township High School District No. 121 Gurnee, Series R-2157, 144A, 3.43%*, 3/1/2024 (a) | 5,495,000 | 5,495,000 |
55,060,000 | ||
Indiana 4.0% | ||
ABN AMRO, Munitops Certificates Trust: | | |
Series 2003-32, 144A, 3.2%*, 1/15/2012 (a) | 6,000,000 | 6,000,000 |
Series 2005-7, 144A, 3.22%*, 7/10/2013 (a) | 8,000,000 | 8,000,000 |
Indiana, State Finance Authority, Environmental Revenue, Ispat Inland, Inc., 3.17%*, 6/1/2035, Royal Bank of Scotland (b) | 20,000,000 | 20,000,000 |
Indiana, Transportation/Tolls Revenue, Series R-4528, 144A, 3.21%*, 6/1/2018 (a) | 2,965,000 | 2,965,000 |
36,965,000 | ||
Iowa 1.0% | ||
Iowa, Finance Authority Hospital Facility Revenue, Iowa Health Systems: | | |
Series B, 3.19%*, 7/1/2015 (a) | 1,300,000 | 1,300,000 |
Series B, 3.19%*, 7/1/2020 (a) | 4,625,000 | 4,625,000 |
Iowa, Finance Authority Revenue, Miss VY Regional Blood Center, 3.19%*, 2/1/2023, Wells Fargo Bank NA (b) | 3,400,000 | 3,400,000 |
9,325,000 | ||
Kansas 1.9% | ||
Kansas, State Development Finance Authority Hospital Revenue, Adventist Health, Sunbelt: | | |
Series C, 3.19%*, 11/15/2030, SunTrust Bank (b) | 5,000,000 | 5,000,000 |
Series C, 3.2%*, 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, 3.31%*, 8/1/2013, Calyon Bank (b) | 6,300,000 | 6,300,000 |
Breckinridge County, KY, Lease Program Revenue, Kentucky Association of Counties Leasing Trust, Series A, 3.18%*, 2/1/2032, US Bank NA (b) | 43,000 | 43,000 |
Kentucky, Asset & Liability Commission Generated Fund, Tax & Revenue Anticipation Notes, Series A, 4.0%, 6/28/2006 | 6,500,000 | 6,520,288 |
Pendleton County, KY, County Lease, 3.37%, 5/24/2006 | 5,000,000 | 5,000,000 |
17,863,288 | ||
Louisiana 0.2% | ||
Louisiana, State Offshore Terminal Authority, Deepwater Port Revenue, Loop LLC Project, Series A, 3.18%*, 9/1/2014, SunTrust Bank (b) | 2,200,000 | 2,200,000 |
Maryland 1.1% | ||
Montgomery County, MD, Economic Development Revenue, Howard Hughes Medical Facility, Series A, 3.19%*, 10/15/2020 | 10,000,000 | 10,000,000 |
Massachusetts 0.2% | ||
Massachusetts, State Development Finance Agency Revenue, ISO New England, Inc., 3.2%*, 2/1/2032, KeyBank NA (b) | 2,000,000 | 2,000,000 |
Michigan 6.9% | ||
ABN AMRO, Munitops Certificates Trust, Series 2003-3, 144A, 3.2%*, 1/1/2011 (a) | 19,660,000 | 19,660,000 |
Detroit, MI, City School District, Series PT-1844, 144A, 3.2%*, 5/1/2011 (a) | 3,920,000 | 3,920,000 |
Detroit, MI, Sewer Disposal Revenue, Series E, 3.0%*, 7/1/2031 (a) | 11,475,000 | 11,475,000 |
Flushing, MI, General Obligation, Community Schools, Series R-4517, 144A, 3.21%*, 5/1/2023 | 5,185,000 | 5,185,000 |
Garden City, MI, Hospital Revenue, Series A, 3.2%*, 9/1/2026, First of America Bank (b) | 510,000 | 510,000 |
Michigan, Certificate of Participation, Series 530, 144A, 3.2%*, 9/1/2011 (a) | 4,975,000 | 4,975,000 |
Michigan, Higher Education Facilities Authority Revenue, Limited Obligation, Spring Arbor, 3.23%*, 11/1/2030, Comerica Bank (b) | 3,355,000 | 3,355,000 |
Michigan, Municipal Bond Authority Revenue, Series B-2, 4.0%, 8/18/2006, JPMorgan Chase Bank (b) | 4,715,000 | 4,721,368 |
Michigan, State General Obligation, Series P-5-D, 144A, 3.18%*, 9/29/2006 | 10,000,000 | 10,000,000 |
63,801,368 | ||
Minnesota 0.5% | ||
Minnesota, MN, State Higher Education Facilities Authority Revenue, University of St. Thomas, Series SIX -H, 3.18%*, 10/1/2032, Bank of New York (b) | 4,100,000 | 4,100,000 |
Nevada 0.7% | ||
Las Vegas Valley, NV, Water District, Series B-10, 144A, 3.21%*, 6/1/2024 (a) | 6,790,000 | 6,790,000 |
New Jersey 1.6% | ||
New Jersey, Economic Development Authority Revenue, First Mortgage, Lions Gate Project, Series C, 3.17%*, 1/1/2020, Citizens Bank of PA (b) | 4,100,000 | 4,100,000 |
New Jersey, Economic Development Authority Revenue, Foreign Trade Zone Project, 3.2%*, 12/1/2007, Bank of New York (b) | 1,825,000 | 1,825,000 |
New Jersey, Economic Development Authority Revenue, Macon Trust, Series B, 3.2%*, 9/1/2025 (a) | 2,000,000 | 2,000,000 |
New Jersey, Economic Development Authority Revenue, Morris Museum Project, 3.17%*, 2/1/2031, JPMorgan Chase Bank (b) | 4,200,000 | 4,200,000 |
New Jersey, State Transportation Trust Fund Authority, Series PT-2494, 144A, 3.2%*, 12/15/2023 (a) | 2,530,000 | 2,530,000 |
14,655,000 | ||
New Mexico 1.0% | ||
Albuquerque, NM, Airport Facilities Revenue, Series A, 3.28%*, 7/1/2020 (a) | 5,000,000 | 5,000,000 |
Farmington, NM, Hospital Revenue, San Juan Regional Medical Center Project, Series B, 3.2%*, 6/1/2028, Bank of Nova Scotia (b) | 4,500,000 | 4,500,000 |
9,500,000 | ||
New York 0.4% | ||
New York City, NY, Industrial Development Agency, Civic Facility Revenue, Allen Stevenson School, 3.2%*, 12/1/2034, Allied Irish Bank PLC (b) | 1,000,000 | 1,000,000 |
New York City, NY, Municipal Water Finance Authority, Water & Sewer Systems Revenue, Series F-2, 3.18%*, 6/15/2033 | 2,450,000 | 2,450,000 |
New York, NY, General Obligation, Series H-3, 3.12%*, 3/1/2034, Bank of New York (b) | 200,000 | 200,000 |
3,650,000 | ||
North Carolina 0.7% | ||
North Carolina, Medical Care Community, Health Care Facilities Revenue, First Mortgage-Friends Homes, 3.2%*, 9/1/2033, Bank of America NA (b) | 3,700,000 | 3,700,000 |
North Carolina, Medical Care Community, Retirement Facilities Revenue, First Mortgage-United Methodist, Series B, 3.2%*, 10/1/2035, Branch Banking & Trust (b) | 3,000,000 | 3,000,000 |
6,700,000 | ||
Ohio 5.2% | ||
Akron Bath Copley, OH, Joint Township Hospital District Revenue, Health Care Facility Summner Project, 3.2%*, 12/1/2032, KBC Bank NV (b) | 6,875,000 | 6,875,000 |
Athens County, OH, Port Authority, Housing Revenue, University Housing for Ohio, Inc. Project, 3.21%*, 6/1/2032, Wachovia Bank NA (b) | 1,840,000 | 1,840,000 |
Hamilton County, OH, Health Care Facilities Revenue, Episcopal, Series A, 3.17%*, 6/1/2035, KeyBank NA (b) | 6,500,000 | 6,500,000 |
Huron County, OH, Hospital Facilities Revenue, Fisher-Titus Medical Center, Series A, 3.19%*, 12/1/2027, National City Bank (b) | 15,000,000 | 15,000,000 |
Ohio, State Higher Educational Facility Revenue, Cleveland Institution Music Project, 3.2%*, 5/1/2030, National City Bank (b) | 5,000,000 | 5,000,000 |
Salem, OH, Hospital Revenue, Salem Community, 3.22%*, 9/1/2035, JPMorgan Chase Bank (b) | 7,000,000 | 7,000,000 |
Summit County, OH, Revenue Anticipation Bonds, Western Reserve Academy Project, 3.2%*, 10/1/2027, KeyBank NA (b) | 5,370,000 | 5,370,000 |
47,585,000 | ||
Oklahoma 1.2% | ||
Oklahoma, State Industries Authority Revenue, Integris Baptist, Series B, 3.18%*, 8/15/2029 (a) | 50,000 | 50,000 |
Payne County, OK, Economic Development Authority, Student Housing Revenue, OSUF Phase III Project, 3.19%*, 7/1/2032 (a) | 4,200,000 | 4,200,000 |
Tulsa County, OK, Industrial Authority Revenue, First Mortgage Montercau, Series A, 3.19%*, 7/1/2032, BNP Paribas (b) | 1,500,000 | 1,500,000 |
Tulsa County, OK, Industrial Authority, Health Care Revenue, Trust Recipients, Series P7U-D, 144A, 3.26%*, 12/15/2018 | 5,000,000 | 5,000,000 |
10,750,000 | ||
Oregon 2.0% | ||
Forest Grove, OR, Student Housing Revenue, Oak Tree Foundation Project, Series A, 3.2%*, 3/1/2036, Keybank NA (b) | 7,000,000 | 7,000,000 |
Portland, OR, Industrial Development Revenue, 3.2%*, 4/1/2035 (a) | 4,500,000 | 4,500,000 |
Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project, 3.22%*, 5/1/2034, Bank of America NA (b) | 6,920,000 | 6,920,000 |
18,420,000 | ||
Pennsylvania 3.5% | ||
Allegheny County, PA, Hospital Development Authority Revenue, UPMC Senior Living Corp., 3.17%*, 7/15/2028 | 4,700,000 | 4,700,000 |
Allegheny County, PA, Port Authority, Grant Anticipation Notes, 4.0%, 6/30/2006, PNC Bank NA (b) | 4,600,000 | 4,607,600 |
Allentown, PA, Area Hospital Authority Revenue, Sacred Heart Hospital, Series B, 3.21%*, 7/1/2023, Wachovia Bank NA (b) | 2,500,000 | 2,500,000 |
Dauphin County, PA, General Authority Revenue, Education & Health Loan Program, 3.22%*, 11/1/2017 (a) | 2,820,000 | 2,820,000 |
Pennsylvania, State Higher Educational Facilities Authority Revenue, Drexel University, Series B, 3.17%*, 5/1/2033, Allied Irish Bank PLC (b) | 8,560,000 | 8,560,000 |
Pennsylvania, State Public School Building Authority, Series A42, 144A, 2.85%*, 6/1/2028 (a) | 1,300,000 | 1,300,000 |
Philadelphia, PA, Hospitals & Higher Education Facilities Authority Revenue, Children's Hospital Project, Series B, 3.14%*, 7/1/2025 | 300,000 | 300,000 |
Red Lion, PA, General Obligation, Area School District, 3.17%*, 5/1/2024 (a) | 7,750,000 | 7,750,000 |
32,537,600 | ||
Puerto Rico 0.5% | ||
ABN AMRO, Munitops Certificates Trust, Series 2000-17, 144A, 3.17%*, 10/1/2008 | 4,730,000 | 4,730,000 |
Rhode Island 0.5% | ||
Narragansett, RI, Bay Commission, Waste Water System Revenue, Series K7-D, 144A, 3.23%*, 8/1/2035 (a) | 4,165,000 | 4,165,000 |
South Carolina 1.3% | ||
South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Sisters of Charity Hospitals, 3.2%*, 11/1/2032, Wachovia Bank NA (b) | 11,740,000 | 11,740,000 |
Tennessee 5.4% | ||
Chattanooga, TN, Health Educational & Housing Facility Board Revenue, Catholic Health, Series C, 3.17%*, 5/1/2039 | 17,000,000 | 17,000,000 |
Clarksville, TN, Public Building Authority Revenue: | | |
3.17%*, 1/1/2033, Bank of America NA (b) | 1,640,000 | 1,640,000 |
3.17%*, 7/1/2034, Bank of America NA (b) | 1,520,000 | 1,520,000 |
3.17%*, 11/1/2035, Bank of America NA (b) | 1,350,000 | 1,350,000 |
3.18%*, 6/1/2024, Bank of America NA (b) | 2,010,000 | 2,010,000 |
Montgomery County, TN, Public Building Authority, Pooled Financing Revenue, Tennessee County Loan Pool, 3.17%*, 4/1/2032, Bank of America NA (b) | 1,000,000 | 1,000,000 |
Tennessee, Tennergy Corp. Gas Revenue, Series 1258Q, 144A, 3.23%*, 11/1/2013 | 15,000,000 | 15,000,000 |
Tennessee, Tennergy Corp. Gas Revenue, Stars Certificates, Series 2006-001, 144A, 3.22%*, 5/1/2016 | 10,000,000 | 10,000,000 |
49,520,000 | ||
Texas 19.1% | ||
ABN AMRO, Munitops Certificates Trust, Series 2004-38, 144A, 3.22%*, 2/15/2011 | 1,500,000 | 1,500,000 |
Bexar County, TX, Health Facilities Development Corp. Revenue, Air Force Village, 3.17%*, 8/15/2030, Bank of America NA (b) | 3,200,000 | 3,200,000 |
Clear Creek, TX, Independent School District, Series 04, 144A, 3.21%*, 2/15/2029 (a) | 2,000,000 | 2,000,000 |
Corpus Christi, TX, Utility System Revenue, Series PT-1816, 144A, 3.22%*, 7/15/2010 (a) | 3,900,000 | 3,900,000 |
Galena Park, TX, Independent School District, Series SG-153, 144A, 3.21%*, 8/15/2023 | 1,500,000 | 1,500,000 |
Granbury, TX, Independent School District, Series R-2218, 144A, 3.21%*, 8/1/2024 | 3,475,000 | 3,475,000 |
Harris County, TX, General Obligation: | | |
3.17%, 4/4/2006 | 15,000,000 | 15,000,000 |
3.3%, 4/4/2006 | 360,000 | 360,000 |
Harris County, TX, Health Facilities Development Corp. Revenue, St. Lukes Episcopal, Series A, 3.22%*, 2/15/2032 (a) | 14,000,000 | 14,000,000 |
Harris County, TX, Health Facilities Development Corp. Revenue, YMCA Greater Houston Area, 3.18%*, 7/1/2037, JPMorgan Chase Bank (b) | 1,390,000 | 1,390,000 |
Houston, TX, Airport System Revenue, Series SG-161, 144A, 3.21%*, 7/1/2032 (a) | 5,000,000 | 5,000,000 |
Houston, TX, General Obligation, Series A, 3.28%, 5/16/2006 | 3,000,000 | 3,000,000 |
Houston, TX, Water & Sewer Systems Revenue, Municipal Trust Receipts, Series SG-120, 144A, 3.21%*, 12/1/2023 | 10,700,000 | 10,700,000 |
Humble, TX, Independent School District, School Building, 3.18%*, 6/15/2023 | 970,000 | 970,000 |
McAllen, TX, Independent School District, Municipal Securities Trust Receipts, Series 61-A, 144A, 3.21%*, 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 |
Texas, Lower Colorado River Authority, 3.23%, 4/3/2006 | 20,000,000 | 20,000,000 |
Texas, Public Finance Authority, Series B, 3.37%, 5/1/2006 | 4,359,000 | 4,359,000 |
Texas, State General Obligation, Series R-4020, 144A, 3.21%*, 10/1/2022 | 2,350,000 | 2,350,000 |
Texas, State Revenue Lease, Trust Certificates, Series 9056, 144A, 3.23%*, 7/21/2010 (a) | 10,990,000 | 10,990,000 |
Texas, State Tax & Revenue Anticipation Notes, 4.5%, 8/31/2006 | 22,200,000 | 22,334,605 |
Texas, University of Texas Revenue: | | |
Series B-14, 144A, 3.21%*, 8/15/2022 | 6,670,000 | 6,670,000 |
3.28%, 5/15/2006 | 10,000,000 | 10,000,000 |
3.3%, 6/5/2006 | 18,000,000 | 18,000,000 |
175,698,605 | ||
Virginia 0.1% | ||
Spotsylvania County, VA, Industrial Development Authority Revenue, 3.23%*, 4/1/2023, Wachovia Bank NA (b) | 1,300,000 | 1,300,000 |
Washington 1.7% | ||
Port Tacoma, WA, State General Obligation, Core City, Series R-4036, 144A, 3.21%*, 12/1/2025 (a) | 3,995,000 | 3,995,000 |
Washington, Municipal Securities Trust Certificates, Series 9058, 144A, 3.23%*, 9/23/2010 (a) | 9,990,000 | 9,990,000 |
Washington, State General Obligation, Series 744, 144A, 3.21%*, 1/1/2013 (a) | 1,555,000 | 1,555,000 |
15,540,000 | ||
Wisconsin 0.4% | ||
Milwaukee, WI, Sewer Revenue, Series R-4500, 144A, 3.43%*, 6/1/2022 (a) | 3,590,000 | 3,590,000 |
| % of Net Assets | Value ($) |
| | |
Total Investment Portfolio (Cost $913,921,672)+ | 99.4 | 913,921,672 |
Other Assets and Liabilities, Net | 0.6 | 5,799,157 |
Net Assets | 100.0 | 919,720,829 |
+ The cost for federal income tax purposes was $913,921,672.
(a) Bond is insured by one of these companies:
Insurance Coverage | As a % of Total Investment Portfolio |
Ambac Assurance Corp. | 7.2 |
Financial Guaranty Insurance Company | 8.1 |
Financial Security Assurance | 7.4 |
Municipal Bond Investors Assurance | 9.9 |
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.
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Statements of Assets and Liabilities as of March 31, 2006 | |||
Assets | Prime Series | Treasury Series | Tax-Free Series |
Investments: Investments, at amortized cost | $ 2,342,201,761 | $ 377,342,962 | $ 913,921,672 |
Repurchase agreements, at amortized cost | 377,484,291 | — | — |
Total Investments, at amortized cost | 2,719,686,052 | 377,342,962 | 913,921,672 |
Cash | — | 102,497 | — |
Receivable for securities sold | — | — | 2,257,340 |
Interest receivable | 9,131,165 | 11,809 | 5,889,849 |
Receivable for Fund shares sold | 115,588 | 3,883,965 | 33,376 |
Other assets | 64,239 | 18,866 | 25,075 |
Total assets | 2,728,997,044 | 381,360,099 | 922,127,312 |
Liabilities | | ||
Due to custodian bank | 49,621,143 | — | 1,825,738 |
Payable for Fund shares redeemed | — | 3,852,298 | — |
Dividend payable | 1,647 | 7,436 | 26 |
Payable for investments purchased | 50,343,828 | — | — |
Accrued management fee | 665,264 | 85,495 | 243,641 |
Other accrued expenses and payables | 899,990 | 175,481 | 337,078 |
Total liabilities | 101,531,872 | 4,120,710 | 2,406,483 |
Net assets | $ 2,627,465,172 | $ 377,239,389 | $ 919,720,829 |
Composition of Net Assets | | ||
Accumulated distributions in excess of net investment income | (365,982) | (26,031) | (8,232) |
Accumulated net realized gain (loss) | — | (15,340) | (41,884) |
Paid-in capital | 2,627,831,154 | 377,280,760 | 919,770,945 |
Net assets | $ 2,627,465,172 | $ 377,239,389 | $ 919,720,829 |
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The accompanying notes are an integral part of the financial statements.
Statements of Assets and Liabilities as of March 31, 2006 (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 | $ 2,035,224,145 | $ 266,586,189 | $ 640,978,530 |
Shares of capital stock outstanding | 2,035,205,255 | 266,545,755 | 641,070,109 |
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 | $ 588,333,666 | $ 110,653,200 | $ 278,742,299 |
Shares of capital stock outstanding | 588,354,541 | 110,661,838 | 278,754,963 |
Net asset value per share | $ 1.00 | $ 1.00 | $ 1.00 |
Class A Shares Net assets | $ 3,610,539 | $ — | $ — |
Shares of capital stock outstanding | 3,612,883 | — | — |
Net asset value per share | $ 1.00 | $ — | $ — |
Class B Shares Net assets | $ 202,562 | $ — | $ — |
Shares of capital stock outstanding | 202,102 | — | — |
Net asset value per share | $ 1.00 | $ — | $ — |
Class C Shares Net assets | $ 94,260 | $ — | $ — |
Shares of capital stock outstanding | 94,395 | — | — |
Net asset value per share | $ 1.00 | $ — | $ — |
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The accompanying notes are an integral part of the financial statements.
Statements of Operations for the year ended March 31, 2006 | |||
Investment Income | Prime Series | Treasury Series | Tax-Free Series |
Interest | $ 93,941,017 | $ 12,846,809 | $ 24,249,734 |
Expenses: | |||
Management fee | 6,709,019 | 931,447 | 2,464,440 |
Services to shareholders | 1,606,283 | 215,001 | 507,371 |
Custodian and accounting fees | 263,345 | 120,878 | 170,832 |
Distribution fees | 6,626,338 | 923,295 | 2,119,942 |
Auditing | 48,225 | 42,797 | 43,411 |
Legal | 30,221 | 26,517 | 39,027 |
Directors' fees and expenses | 105,731 | 19,513 | 37,358 |
Reports to shareholders | 82,798 | 29,890 | 38,415 |
Registration fees | 71,474 | 30,706 | 30,341 |
Other | 111,025 | 13,810 | 49,031 |
Total expenses | 15,654,459 | 2,353,854 | 5,500,168 |
Less: fee waivers and/or expense reimbursements | (33,413) | (5,608) | (12,824) |
Net expenses | 15,621,046 | 2,348,246 | 5,487,344 |
Net investment income | 78,319,971 | 10,498,563 | 18,762,390 |
Net realized gain (loss) on investment transactions | 16,783 | (4,737) | (5,201) |
Net increase (decrease) in net assets from operations | $ 78,336,754 | $ 10,493,826 | $ 18,757,189 |
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The accompanying notes are an integral part of the financial statements.
Prime Series
Statement of Changes in Net Assets | ||
| Years Ended | |
Increase (Decrease) in Net Assets | 2006 | 2005 |
Operations: Net investment income | $ 78,319,971 | $ 30,807,263 |
Net realized gain (loss) | 16,783 | 2,589 |
Net increase (decrease) in net assets resulting from operations | 78,336,754 | 30,809,852 |
Distributions to shareholders from: Net investment income: Prime Shares | (62,826,598) | (25,878,034) |
Prime Institutional Shares | (15,380,149) | (5,445,641) |
Class A Shares | (99,570) | (31,077) |
Class B Shares | (13,615) | (5,668) |
Class C Shares | (39) | (59) |
Quality Shares | — | (1,264) |
Total distributions | (78,319,971) | (31,361,743) |
Fund share transactions: (at net asset value of $1.00 per share) Proceeds from shares sold | 5,138,031,468 | 3,646,713,349 |
Reinvestment of distributions | 78,296,881 | 31,337,109 |
Cost of shares redeemed | (5,211,779,739) | (4,128,056,451) |
Net increase (decrease) in net assets from Fund share transactions | 4,548,610 | (450,005,993) |
Increase (decrease) in net assets | 4,565,393 | (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 $365,982 and $421,836, respectively) | $ 2,627,465,172 | $ 2,622,899,779 |
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The accompanying notes are an integral part of the financial statements.
Treasury Series
Statement of Changes in Net Assets | ||
Increase (Decrease) in Net Assets | Years Ended | |
2006 | 2005 | |
Operations: Net investment income | $ 10,498,563 | $ 4,572,225 |
Net realized gain (loss) | (4,737) | 6,833 |
Net increase (decrease) in net assets resulting from operations | 10,493,826 | 4,579,058 |
Distributions to shareholders from: Net investment income: Treasury Shares | (7,751,774) | (3,263,663) |
Treasury Institutional Shares | (2,746,789) | (1,406,390) |
Total distributions | (10,498,563) | (4,670,053) |
Fund share transactions: (at net asset value of $1.00 per share) Proceeds from shares sold | 814,785,187 | 1,001,445,305 |
Reinvestment of distributions | 10,430,367 | 4,646,777 |
Cost of shares redeemed | (875,756,049) | (1,054,374,521) |
Net increase (decrease) in net assets from Fund share transactions | (50,540,495) | (48,282,439) |
Increase (decrease) in net assets | (50,545,232) | (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 $26,031 and $43,467, respectively) | $ 377,239,389 | $ 427,784,621 |
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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 | Years Ended | |
2006 | 2005 | |
Operations: Net investment income | $ 18,762,390 | $ 7,823,403 |
Net realized gain (loss) | (5,201) | 11,060 |
Net increase (decrease) in net assets resulting from operations | 18,757,189 | 7,834,463 |
Distributions to shareholders from: Net investment income: Tax-Free Shares | (13,355,813) | (4,825,265) |
Tax-Free Institutional Shares | (5,406,577) | (3,205,636) |
Total distributions | (18,762,390) | (8,030,901) |
Fund share transactions: (at net asset value of $1.00 per share) Proceeds from shares sold | 1,723,594,400 | 1,526,418,906 |
Reinvestment of distributions | 18,762,116 | 8,030,149 |
Cost of shares redeemed | (1,726,481,305) | (1,601,276,316) |
Net increase (decrease) in net assets from Fund share transactions | 15,875,211 | (66,827,261) |
Increase (decrease) in net assets | 15,870,010 | (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 $8,232 and $148,007, respectively) | $ 919,720,829 | $ 903,850,819 |
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The accompanying notes are an integral part of the financial statements.
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Prime Shares | |||||
Years Ended March 31, | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per Share Data | |||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0307 | .0111 | .0050 | .0108 | .0270 |
Less: Distributions from net investment income | (.0307) | (.0111) | (.0050) | (.0108) | (.0270) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 3.11 | 1.12 | .47 | 1.08 | 2.74 |
Ratios to Average Net Assets and Supplemental Data | |||||
Net assets, end of period ($ in thousands) | 2,035,224 | 2,274,611 | 2,665,759 | 2,879,253 | 4,320,764 |
Ratio of expenses (%) | .69 | .69 | .67 | .70 | .67 |
Ratio of net investment income (%) | 3.06 | 1.07 | .51 | 1.10 | 2.76 |
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Prime Institutional Shares | |||||
Years Ended March 31, | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per Share Data | |||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0346 | .0149 | .0087 | .0140 | .0302 |
Less: Distributions from net investment income | (.0346) | (.0149) | (.0087) | (.0140) | (.0302) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 3.51 | 1.50 | .88 | 1.40 | 3.06 |
Ratios to Average Net Assets and Supplemental Data | |||||
Net assets, end of period ($ in thousands) | 588,334 | 342,564 | 394,967 | 544,146 | 750,110 |
Ratio of expenses (%) | .31 | .30 | .30 | .38 | .36 |
Ratio of net investment income (%) | 3.54 | 1.46 | .88 | 1.42 | 3.01 |
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Treasury Shares | |||||
Years Ended March 31, | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per Share Data | |||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0272 | .0092 | .0039 | .0098 | .0250 |
Less: Distributions from net investment income | (.0272) | (.0092) | (.0039) | (.0098) | (.0250) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 2.75 | .92a | .40a | .99a | 2.53a |
Ratios to Average Net Assets and Supplemental Data | |||||
Net assets, end of period ($ in thousands) | 266,586 | 329,520 | 376,821 | 390,982 | 745,638 |
Ratio of expenses before expense reductions (%) | .71 | .70 | .68 | .67 | .64 |
Ratio of expenses after expense reductions (%) | .71 | .68 | .63 | .62 | .59 |
Ratio of net investment income (%) | 2.72 | .89 | .39 | 1.01 | 2.47 |
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Treasury Institutional Shares | |||||
Years Ended March 31, | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per Share Data | |||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0310 | .0130 | .0077 | .0130 | .0281 |
Less: Distributions from net investment income | (.0310) | (.0130) | (.0077) | (.0130) | (.0281) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 3.14 | 1.31 | .78 | 1.31 | 2.85 |
Ratios to Average Net Assets and Supplemental Data | |||||
Net assets, end of period ($ in thousands) | 110,653 | 98,265 | 99,337 | 139,460 | 199,932 |
Ratio of expenses before expense reductions (%) | .34 | .32 | .29 | .35 | .33 |
Ratio of expenses after expense reductions (%) | .34 | .30a | .24a | .30a | .28a |
Ratio of net investment income (%) | 3.09 | 1.27 | .78 | 1.33 | 2.71 |
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Tax-Free Shares | |||||
Years Ended March 31, | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per Share Data | |||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0201 | .0076 | .0031 | .0074 | .0168 |
Less: Distributions from net investment income | (.0201) | (.0076) | (.0031) | (.0074) | (.0168) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 2.03 | .76 | .32 | .74 | 1.69 |
Ratios to Average Net Assets and Supplemental Data | |||||
Net assets, end of period ($ in thousands) | 640,979 | 627,672 | 650,986 | 699,983 | 1,006,613 |
Ratio of expenses (%) | .72 | .71 | .70 | .67 | .65 |
Ratio of net investment income (%) | 2.02 | .74 | .34 | .74 | 1.76 |
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Tax-Free Institutional Shares | |||||
Years Ended March 31, | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per Share Data | |||||
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .0240 | .0113 | .0070 | .0107 | .0200 |
Less: Distributions from net investment income | (.0240) | (.0113) | (.0070) | (.0107) | (.0200) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 2.42 | 1.14 | .70 | 1.07 | 2.01 |
Ratios to Average Net Assets and Supplemental Data | |||||
Net assets, end of period ($ in thousands) | 278,742 | 276,178 | 319,888 | 198,148 | 168,137 |
Ratio of expenses (%) | .33 | .33 | .32 | .35 | .33 |
Ratio of net investment income (%) | 2.41 | 1.12 | .72 | 1.06 | 1.98 |
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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'), DWS Cash Reserve Prime Class A Shares (`Class A Shares'), DWS Cash Reserve Prime Class B Shares (`Class B Shares'), DWS 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 a high level of current income consistent with liquidity and the preservation of capital; Tax-Free Series — to seek a high level of tax-exempt current income consistent with liquidity and the preservation of capital. 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.
Note 2—Fees and Transactions with Affiliates
Management Agreement. 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 of the Fund 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 year ended March 31, 2006, 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. ICCC has designated DWS Scudder Fund Accounting Corporation ("DWS-SFAC"), an affiliate of the Advisor, to provide the fund accounting services. DWS-SFAC has retained State Street Bank and Trust Company to provide certain administrative, fund accounting and record-keeping services to the Fund. For the year ended March 31, 2006, the amounts charged to the Fund by DWS-SFAC were as follows:
| Total Aggregated | Unpaid at March 31, 2006 |
Prime Series | $ 154,999 | $ 13,497 |
Treasury Series | $ 107,032 | $ 8,120 |
Tax-Free Series | $ 138,214 | $ 11,694 |
DWS Scudder Investments Service Company (`DWS-SISC'), an affiliate of the Advisor, is the Fund's transfer agent. Each Series paid the transfer agent a per account fee that is accrued daily and paid monthly. For the year ended March 31, 2006, the amounts charged to the Fund by DWS-SISC were as follows:
| Total Aggregated | Waived | Unpaid at March 31, 2006 |
Prime Series: Prime Shares | $ 1,505,881 | $ — | $ 247,956 |
Prime Institutional Shares | 44,288 | — | 6,776 |
Class A Shares | 14,146 | — | 3,528 |
Class B Shares | 11,439 | — | 1,024 |
Class C Shares | 4,928 | 3,013 | 347 |
Treasury Series: Treasury Shares | $ 200,352 | $ — | $ 35,243 |
Treasury Institutional Shares | 9,937 | — | 1,762 |
Tax-Free Series: Tax-Free Shares | $ 481,408 | $ — | $ 83,629 |
Tax-Free Institutional Shares | 23,622 | — | 4,120 |
Pursuant to a sub-transfer agency agreement between DWS-SISC and DST Systems, Inc. (`DST'), DWS-SISC has delegated certain transfer agent and dividend paying agent functions to DST. DWS-SISC compensates DST out of the shareholder servicing fee it receives from the Fund.
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 certain regulatory filing services to the Fund. For the year ended March 31, 2006, the amount charged to each Series by DeIM included in the reports to shareholders was as follows:
| Total Aggregated | Unpaid at March 31, 2006 |
Prime Series | $ 11,840 | $ 4,160 |
Treasury Series | $ 6,320 | $ 1,400 |
Tax-Free Series | $ 6,320 | $ 1,400 |
Note 3—Directors' Fees and Expenses
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 Lead Director of the Board and the Chairman of each committee of the Board receives additional compensation for his or her services. Payment of such fees and expenses is allocated among all such Funds described above in direct proportion to their relative net assets.
Note 4—Distribution and Service Fees
DWS Scudder Distributors, Inc. (`DWS-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 year ended March 31, 2006, the Distribution Fee was as follows:
| Total Aggregated | Unpaid at March 31, 2006 |
Prime Series: Prime Shares | $ 5,160,355 | $ 474,613 |
Class A Shares | 8,837 | 807 |
Class B Shares | 8,574 | 100 |
Class C Shares | 611 | 61 |
Treasury Series: Treasury Shares | $ 721,324 | $ 60,836 |
Tax-Free Series: Tax-Free Shares | $ 1,656,205 | $ 154,491 |
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 year ended March 31, 2006, the shareholder servicing fee was as follows:
| Total Aggregated | Unpaid at March 31, 2006 |
Prime Series: Prime Shares | $ 1,444,899 | $ 132,418 |
Class B Shares | 2,858 | 69 |
Class C Shares | 204 | 21 |
Treasury Series: Treasury Shares | $ 201,971 | $ 17,631 |
Tax-Free Series: Tax-Free Shares | $ 463,737 | $ 45,734 |
Note 5—Expense Reductions
For the year ended March 31, 2006, the Advisor agreed to reimburse the Fund $28,730, $5,536 and $11,763 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 year ended March 31, 2006, the Fund's custodian fees were reduced by $1,670, $72 and $1,061 for the Prime Series, the Treasury Series, and the Tax-Free Series, respectively, under this arrangement.
Note 6—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):
| Year Ended | Year Ended | ||
Prime Series: | Shares | Dollars | Shares | Dollars |
Sold: | ||||
Prime Shares | 3,394,729,634 | $ 3,394,729,634 | 2,369,013,778 | $ 2,369,013,778 |
Prime Institutional Shares | 1,741,672,654 | 1,741,672,654 | 1,276,773,498 | 1,276,773,498 |
Class A Shares | 1,579,179 | 1,579,179 | 912,564 | 912,564 |
Class B Shares | — | — | 12,342 | 12,342 |
Class C Shares | 50,001 | 50,001 | — | — |
Quality Cash Shares* | — | — | 1,167 | 1,167 |
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| $ 5,138,031,468 | $ 3,646,713,349 | |
Reinvested: | ||||
Prime Shares | 62,822,155 | $ 62,822,155 | 25,861,843 | $ 25,861,843 |
Prime Institutional Shares | 15,375,957 | 15,375,957 | 5,442,840 | 5,442,840 |
Class A Shares | 85,949 | 85,949 | 26,556 | 26,556 |
Class B Shares | 12,782 | 12,782 | 5,377 | 5,377 |
Class C Shares | 38 | 38 | 57 | 57 |
Quality Cash Shares* | — | — | 436 | 436 |
|
| $ 78,296,881 |
| $ 31,337,109 |
Redeemed: | ||||
Prime Shares | (3,696,951,860) | $ (3,696,951,860) | (2,785,532,643) | $ (2,785,532,643) |
Prime Institutional Shares | (1,511,282,337) | (1,511,282,337) | (1,334,563,515) | (1,334,563,515) |
Class A Shares | (1,538,017) | (1,538,017) | (2,212,336) | (2,212,336) |
Class B Shares | (1,954,001) | (1,954,001) | (2,460,654) | (2,460,654) |
Class C Shares | (53,524) | (53,524) | (41,183) | (41,183) |
Quality Cash Shares* | — | — | (3,246,195) | (3,246,120) |
|
| $ (5,211,779,739) | $ (4,128,056,451) | |
Net increase/decrease: | ||||
| 4,548,610 | $ 4,548,610 | (450,006,068) | $ (450,005,993) |
| Year Ended | Year Ended | ||
Treasury Series: | Shares | Dollars | Shares | Dollars |
Sold: | ||||
Treasury Shares | 550,444,824 | $ 550,444,824 | 723,801,290 | $ 723,801,290 |
Treasury Institutional Shares | 264,340,363 | 264,340,363 | 277,644,015 | 277,644,015 |
|
| $ 814,785,187 | $ 1,001,445,305 | |
Reinvested: | ||||
Treasury Shares | 7,683,578 | $ 7,683,578 | 3,240,387 | $ 3,240,387 |
Treasury Institutional Shares | 2,746,789 | 2,746,789 | 1,406,390 | 1,406,390 |
|
| $ 10,430,367 | $ 4,646,777 | |
Redeemed: | ||||
Treasury Shares | (621,058,658) | $ (621,058,658) | (774,275,074) | $ (774,275,074) |
Treasury Institutional Shares | (254,697,391) | (254,697,391) | (280,099,447) | (280,099,447) |
|
| $ (875,756,049) | $ (1,054,374,521) | |
Net increase (decrease): | ||||
| (50,540,495) | $ (50,540,495) | (48,282,439) | $ (48,282,439) |
| Year Ended | Year Ended | ||
Tax-Free Series: | Shares | Dollars | Shares | Dollars |
Sold: | ||||
Tax-Free Shares | 1,099,642,059 | $ 1,099,642,059 | 911,528,609 | $ 911,528,609 |
Tax-Free Institutional Shares | 623,952,341 | 623,952,341 | 614,890,297 | 614,890,297 |
|
| $ 1,723,594,400 | $ 1,526,418,906 | |
Reinvested: | ||||
Tax-Free Shares | 13,355,551 | $ 13,355,551 | 4,824,516 | $ 4,824,516 |
Tax-Free Institutional Shares | 5,406,565 | 5,406,565 | 3,205,633 | 3,205,633 |
|
| $ 18,762,116 | $ 8,030,149 | |
Redeemed: | ||||
Tax-Free Shares | (1,099,688,939) | $ (1,099,688,939) | (939,504,884) | $ (939,504,884) |
Tax-Free Institutional Shares | (626,792,366) | (626,792,366) | (661,771,432) | (661,771,432) |
|
| $ (1,726,481,305) | $ (1,601,276,316) | |
Net increase (decrease): | ||||
| 15,875,211 | $ 15,875,211 | (66,827,261) | $ (66,827,261) |
Note 7—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.
Distributions were characterized as follows for tax purposes:
Years Ended | March 31, 2006 | March 31, 2005 |
Prime Series Ordinary income* | $ 78,319,971 | $ 31,361,743 |
Treasury Series Ordinary income* | $ 10,498,563 | $ 4,670,053 |
Tax-Free Series Tax exempt income | $ 18,762,390 | $ 8,030,901 |
At March 31, 2006, the components of distributable earnings on a tax basis were as follows:
Prime Series Undistributed ordinary income | $ — |
Treasury Series Undistributed ordinary income | $ 46,434 |
Treasury Series Capital loss carryforward | $ (11,000) |
Tax-Free Series Undistributed tax exempt income | $ — |
At March 31, 2006, the Treasury Series had a net tax basis capital loss carryforward of approximately $11,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until March 31, 2014, the expiration date, whichever occurs first.
During the year ended March 31, 2006, the Tax-Free Series utilized approximately $32,000 of its capital loss carryforward. At March 31, 2006, the Tax-Free Series had no capital loss carryforward.
In addition, from November 1, 2005 through March 31, 2006, the Treasury Series and Tax-Free Series incurred approximately $4,400 and $42,000, 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, 2007.
Note 8—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 9—Regulatory Matters and Litigation
Market Timing Related Regulatory and Litigation Matters. Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations ("inquiries") into the mutual fund industry, and have requested information from numerous mutual fund companies, including DWS Scudder. The DWS funds' advisors have been cooperating in connection with these inquiries and are in discussions with the regulators concerning proposed settlements. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the DWS funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain DWS funds, the funds' investment advisors and their affiliates, and certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each DWS fund's investment advisor has agreed to indemnify the applicable DWS funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. It is not possible to determine with certainty what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors.
With respect to the lawsuits, based on currently available information, the funds' investment advisors believe the likelihood that the pending lawsuits will have a material adverse financial impact on a DWS fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the DWS funds.
With respect to the regulatory matters, Deutsche Asset Management ("DeAM") has advised the funds as follows:
DeAM expects to reach final agreements with regulators in 2006 regarding allegations of improper trading in the DWS funds. DeAM expects that it will reach settlement agreements with the Securities and Exchange Commission, the New York Attorney General and the Illinois Secretary of State providing for payment of disgorgement, penalties, and investor education contributions totaling approximately $134 million. Approximately $127 million of this amount would be distributed to shareholders of the affected DWS funds in accordance with a distribution plan to be developed by an independent distribution consultant. DeAM does not believe that any of the DWS funds will be named as respondents or defendants in any proceedings. The funds' investment advisors do not believe these amounts will have a material adverse financial impact on them or materially affect their ability to perform under their investment management agreements with the DWS funds. The above-described amounts are not material to Deutsche Bank, and they have already been reserved.
Based on the settlement discussions thus far, DeAM believes that it will be able to reach a settlement with the regulators on a basis that is generally consistent with settlements reached by other advisors, taking into account the particular facts and circumstances of market timing at DeAM and at the legacy Scudder and Kemper organizations prior to their acquisition by DeAM in April 2002. Among the terms of the expected settled orders, DeAM would be subject to certain undertakings regarding the conduct of its business in the future, including maintaining existing management fee reductions for certain funds for a period of five years. DeAM expects that these settlements would resolve regulatory allegations that it violated certain provisions of federal and state securities laws (i) by entering into trading arrangements that permitted certain investors to engage in market timing in certain DWS funds and (ii) by failing more generally to take adequate measures to prevent market timing in the DWS funds, primarily during the 1999-2001 period. With respect to the trading arrangements, DeAM expects that the settlement documents will include allegations related to one legacy DeAM arrangement, as well as three legacy Scudder and six legacy Kemper arrangements. All of these trading arrangements originated in businesses that existed prior to the current DeAM organization, which came together in April 2002 as a result of the various mergers of the legacy Scudder, Kemper and Deutsche fund groups, and all of the arrangements were terminated prior to the start of the regulatory investigations that began in the summer of 2003. No current DeAM employee approved the trading arrangements.
There is no certainty that the final settlement documents will contain the foregoing terms and conditions. The independent Trustees/Directors of the DWS funds have carefully monitored these regulatory investigations with the assistance of independent legal counsel and independent economic consultants.
Other Regulatory Matters. DeAM is also engaged in settlement discussions with the Enforcement Staffs of the SEC and the NASD regarding DeAM's practices during 2001-2003 with respect to directing brokerage commissions for portfolio transactions by certain DWS funds to broker-dealers that sold shares in the DWS funds and provided enhanced marketing and distribution for shares in the DWS funds. In addition, on January 13, 2006, DWS Scudder Distributors, Inc. received a Wells notice from the Enforcement Staff of the NASD regarding DWS Scudder Distributors' payment of non-cash compensation to associated persons of NASD member firms, as well as DWS Scudder Distributors' procedures regarding non-cash compensation regarding entertainment provided to such associated persons.
|
To the Board of Directors of Cash Reserve Fund, Inc. and Shareholders of the Prime, Treasury and Tax-Free Series:
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights included herein present fairly, in all material respects, the financial position of the Prime, Treasury and Tax-Free Series (the three series constituting the Cash Reserve Fund, Inc. hereafter referred to as the "Series") at March 31, 2006, and the results of each of their operations, the changes in each of their net assets and the financial highlights of the classes presented for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Series' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at March 31, 2006 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 18, 2006
|
Tax-Free Series
Of the dividends paid from net investment income for the taxable year ended March 31, 2006, 99% are designated as exempt interest dividends for federal income tax purposes.
|
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 — www.dws-scudder.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at 1-800-621-1048.
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 (202) 551-5850.
Regulatory and Litigation Matters
Additional information announced by Deutsche Asset Management regarding the terms of the expected settlements referred to in the Market Timing Related Regulatory and Litigation Matters and Other Regulatory Matters in the Notes to Financial Statements will be made available at www.dws-scudder.com/regulatory_settlements, which will also disclose the terms of any final settlement agreements once they are announced.
|
The following information is provided for each Trustee and Officer of the fund's Board as of March 31, 2006. The first section of the table lists information for each Trustee who is not an "interested person" of the fund. Information for the Non-Independent Trustee ("Interested Trustee") follows. The Interested Trustee is considered to be an interested person as defined by the 1940 Act because of his employment with either the fund's advisor and/or underwriter. Unless otherwise noted, (i) each individual has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity. The mailing address for the Trustees and Officers with respect to the fund's operations is One South Street, Baltimore, Maryland 21202. Each Trustee holds office until he or she resigns, is removed or a successor is appointed or elected and qualified. Each officer is elected to serve until he or she resigns, is removed or a successor has been duly appointed and qualified.
Independent Directors | ||
Name, Date of Birth, Position with the Fund and Length of Time Served1,2 | Business Experience and Directorships During the Past 5 Years | Number of Funds in the Fund Complex Overseen |
Martin J. Gruber 7/15/37 Director since 2002 | Nomura Professor of Finance, Leonard N. Stern School of Business, New York University (since September 1965); Director, Japan Equity Fund, Inc. (since January 1992), Thai Capital Fund, Inc. (since January 2000) and Singapore Fund, Inc. (since January 2000) (registered investment companies), DWS Global High Income Fund, Inc. (since 2005), DWS Global Commodities Stock Fund, Inc. (since 2005). Formerly, Trustee, TIAA (pension funds) (January 1996-January 2000); Trustee, CREF and CREF Mutual Funds (January 2000-March 2005); Chairman, CREF and CREF Mutual Funds, (February 2004-March 2005) and Director, S.G. Cowen Mutual Funds (January 1985-January 2001). | 51 |
Richard J. Herring 2/18/46 Director since 2002 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Director, Lauder Institute of International Management Studies (since July 2000); Co-Director, Wharton Financial Institutions Center (since July 2000); Director, DWS Global High Income Fund, Inc. (since October 2005), DWS Global Commodities Stock Fund, Inc. (since October 2005). Formerly, Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000). | 51 |
Graham E. Jones 1/31/33 Director since 2002 | Senior Vice President, BGK Realty, Inc. (commercial real estate) (since 1995); Director, DWS Global High Income Fund, Inc. (since 2005), DWS Global Commodities Stock Fund, Inc. (since 2005). Formerly, Trustee, Morgan Stanley Asset Management, various funds (1985-2001); Trustee, Weiss, Peck and Greer, various funds (1985-2005); Trustee of various investment companies managed by Sun Capital Advisers, Inc. (1998-2005). | 51 |
Rebecca W. Rimel 4/10/51 Director since 1995 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable foundation) (1994-present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994-present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-present); Director, DWS Global High Income Fund, Inc. (since 2005), DWS Global Commodities Stock Fund, Inc. (since 2005). Formerly, Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005). | 51 |
Philip Saunders, Jr. 10/11/35 Director since 2002 | Principal, Philip Saunders Associates (economic and financial consulting) (since November 1988). Director, DWS Global High Income Fund, Inc. (since October 2005), DWS Global Commodities Stock Fund, Inc. (since October 2005). Formerly, Director, Financial Industry Consulting, Wolf & Company (consulting) (1987-1988); President, John Hancock Home Mortgage Corporation (1984-1986); Senior Vice President of Treasury and Financial Services, John Hancock Mutual Life Insurance Company, Inc. (1982-1986). | 51 |
William N. Searcy, Jr. 9/3/46 Director since 2002 | Private investor (since October 2003); Trustee of 7 open-end mutual funds managed by Sun Capital Advisers, Inc. (since October 1998). Director, DWS Global High Income Fund, Inc. (since October 2005, DWS Global Commodities Stock Fund, Inc. (since October 2005). Formerly, Pension & Savings Trust Officer, Sprint Corporation (telecommunications) (November 1989-October 2003). | 51 |
Interested Director | ||
Name, Date of Birth, Position with the Fund and Length of Time Served1,2 | Business Experience and Directorships During the Past 5 Years | Number of Funds in the Fund Complex Overseen |
William N. Shiebler3 2/6/42 Director since 2004 | Vice Chairman, Deutsche Asset Management ("DeAM") and a member of the DeAM Global Executive Committee (since 2002). Formerly, Vice Chairman of Putnam Investments, Inc. (1999); Director and Senior Managing Director of Putnam Investments, Inc. and President, Chief Executive Officer, and Director of Putnam Mutual Funds Inc. (1990-1999). | 51 |
Officers | |
Name, Date of Birth, Position with the Fund and Length of Time Served1,2 | Business Experience and Directorships During the Past 5 Years |
Michael Colon5 12/9/69 President since April 2006 | Managing Director4 and Chief Operating Officer, Deutsche Asset Management (since March 2005); President, DWS Global High Income Fund, Inc. (since April 2006), DWS Global Commodities Stock Fund, Inc. (since April 2006), The Brazil Fund, Inc. (since April 2006), The Korea Fund, Inc. (since April 2006); Chief Operating Officer, Deutsche Bank Alex. Brown (2002-2005); Chief Operating Officer, US Equities Division of Deutsche Bank (2000-2002). |
Paul H. Schubert5 1/11/63 Chief Financial Officer since 2004 Treasurer since June 2005 | Managing Director4, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998). |
John Millette6 8/23/62 Secretary since 2003 | Director4, Deutsche Asset Management. |
Patricia DeFilippis5 6/21/63 Assistant Secretary since 2005 | Vice President, Deutsche Asset Management (since June 2005); formerly, Counsel, New York Life Investment Management LLC (2003-2005); legal associate, Lord, Abbett & Co. LLC (1998-2003). |
Elisa D. Metzger5 9/15/62 Assistant Secretary since 2005 | Director4, Deutsche Asset Management (since September 2005); formerly, Counsel, Morrison and Foerster LLP (1999-2005). |
Caroline Pearson6 4/1/62 Assistant Secretary since 2002 | Managing Director4, Deutsche Asset Management. |
Scott M. McHugh6 9/13/71 Assistant Treasurer since 2005 | Director4, Deutsche Asset Management. |
Kathleen Sullivan D'Eramo6 1/25/57 Assistant Treasurer since 2003 | Director4, Deutsche Asset Management. |
John Robbins5 4/8/66 Anti-Money Laundering Compliance Officer since 2005 | Managing Director4, Deutsche Asset Management (since 2005); formerly, Chief Compliance Officer and Anti-Money Laundering Compliance Officer for GE Asset Management (1999-2005). |
Philip Gallo5 8/2/62 Chief Compliance Officer since 2004 | Managing Director4, Deutsche Asset Management (2003-present). Formerly, Co-Head of Goldman Sachs Asset Management Legal (1994-2003). |
A. Thomas Smith5 12/14/56 Chief Legal Officer since 2005 | Managing Director4, Deutsche Asset Management (2004-present); formerly, General Counsel, Morgan Stanley and Van Kampen and Investments (1999-2004); Vice President and Associate General Counsel, New York Life Insurance Company (1994-1999); senior attorney, The Dreyfus Corporation (1991-1993); senior attorney, Willkie Farr & Gallagher (1989-1991); staff attorney, US Securities & Exchange Commission and the Illinois Securities Department (1986-1989). |
2 Length of time served represents the date that each Director or officer first began serving in that position with this fund.
3 Mr. Shiebler is a Trustee who is an "interested person" within the meaning of Section 2(a)(19) of the 1940 Act. Mr. Shiebler is a Managing Director of Deutsche Asset Management, the US asset management unit of Deutsche Bank AG and its affiliates. Mr. Shiebler's business address is 345 Park Avenue, New York, New York 10154.
4 Executive title, not a board directorship.
5 Address: 345 Park Avenue, New York, New York 10154.
6 Address: Two International Place, Boston, Massachusetts 02110.
The fund's Statement of Additional Information includes additional information about the fund's Trustees. To receive your free copy of the Statement of Additional Information, call toll-free: 1-800-621-1048.
Notes |
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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. |
As of the end of the period, March 31, 2006, Cash Reserve Fund has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Principal Executive Officer and Principal Financial Officer.
There have been no amendments to, or waivers from, a provision of the code of ethics during the period covered by this report that would require disclosure under Item 2.
A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
The Fund’s Board of Directors/Trustees has determined that the Fund has at least one “audit committee financial expert” serving on its audit committee: Mr. Graham E. Jones. This audit committee member is “independent,” meaning that he is not an “interested person” of the Fund (as that term is defined in Section 2(a)(19) of the Investment Company Act of 1940) and he does not accept any consulting, advisory, or other compensatory fee from the Fund (except in the capacity as a Board or committee member).
An “audit committee financial expert” is not an “expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933, as a result of being designated as an “audit committee financial expert.” Further, the designation of a person as an “audit committee financial expert” does not mean that the person has any greater duties, obligations, or liability than those imposed on the person without the “audit committee financial expert” designation. Similarly, the designation of a person as an “audit committee financial expert” does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
CASH RESERVE FUND, INC.- PRIME SERIES
FORM N-CSR DISCLOSURE RE: AUDIT FEES
The following table shows the amount of fees that PricewaterhouseCoopers, LLP (“PWC”), the Fund’s independent registered public accounting firm, billed to the Fund during the Fund’s last two fiscal years. The Audit Committee approved in advance all audit services and non-audit services that PWC provided to the Fund.
The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee).
Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Fund
Fiscal Year | Audit Fees Billed to Fund | Audit-Related | Tax Fees Billed to Fund | All |
2006 | $41,350 | $0 | $0 | $0 |
2005 | $40,800 | $225 | $3,255 | $0 |
The above “Audit- Related Fees” were billed for agreed upon procedures performed and the above "Tax Fees" were billed for professional services rendered for tax compliance and tax return preparation.
Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Adviser and Affiliated Fund Service Providers
The following table shows the amount of fees billed by PWC to Deutsche Investment Management Americas, Inc. (“DeIM” or the “Adviser”), and any entity controlling, controlled by or under common control with DeIM (“Control
Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years.
Fiscal Year | Audit-Related | Tax Fees Billed to Adviser and Affiliated Fund Service Providers | All |
2006 | $136,700 | $197,605 | $0 |
2005 | $490,322 | $0 | $0 |
The “Audit-Related Fees” were billed for services in connection with the assessment of internal controls, agreed-upon procedures and additional related procedures and the above “Tax Fees” were billed in connection with consultation services and agreed-upon procedures.
Non-Audit Services
The following table shows the amount of fees that PWC billed during the Fund’s last two fiscal years for non-audit services. The Audit Committee pre-approved all non-audit services that PWC provided to the Adviser and any Affiliated Fund Service Provider that related directly to the Fund’s operations and financial reporting. The Audit Committee requested and received information from PWC about any non-audit services that PWC rendered during the Fund’s last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating PWC’s independence.
Fiscal Year | Total (A) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) (B) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) (C) | Total of (A), (B) |
2006 | $0 | $197,605 | $30,654 | $228,259 |
2005 | $3,255 | $0 | $236,994 | $240,249 |
All other engagement fees were billed for services in connection with risk management, tax services and process improvement/integration initiatives for DeIM and other related entities that provide support for the operations of the fund.
CASH RESERVE FUND, INC.- TAX FREE SERIES
FORM N-CSR DISCLOSURE RE: AUDIT FEES
The following table shows the amount of fees that PricewaterhouseCoopers, LLP (“PWC”), the Fund’s independent registered public accounting firm, billed to the Fund during the Fund’s last two fiscal years. The Audit Committee approved in advance all audit services and non-audit services that PWC provided to the Fund.
The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee).
Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Fund
Fiscal Year | Audit Fees Billed to Fund | Audit-Related | Tax Fees Billed to Fund | All |
2006 | $38,850 | $0 | $0 | $0 |
2005 | $38,300 | $225 | $3,255 | $0 |
The above “Audit- Related Fees” were billed for agreed upon procedures performed and the above "Tax Fees" were billed for professional services rendered for tax compliance and tax return preparation.
Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Adviser and Affiliated Fund Service Providers
The following table shows the amount of fees billed by PWC to Deutsche Investment Management Americas, Inc. (“DeIM” or the “Adviser”), and any entity controlling, controlled by or under common control with DeIM (“Control Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years.
Fiscal Year | Audit-Related | Tax Fees Billed to Adviser and Affiliated Fund Service Providers | All |
2006 | $136,700 | $197,605 | $0 |
2005 | $490,322 | $0 | $0 |
The “Audit-Related Fees” were billed for services in connection with the assessment of internal controls, agreed-upon procedures and additional related procedures and the above “Tax Fees” were billed in connection with consultation services and agreed-upon procedures.
Non-Audit Services
The following table shows the amount of fees that PWC billed during the Fund’s last two fiscal years for non-audit services. The Audit Committee pre-approved all non-audit services that PWC provided to the Adviser and any Affiliated Fund Service Provider that related directly to the Fund’s operations and financial reporting. The Audit Committee requested and received information from PWC about any non-audit services that PWC rendered during the Fund’s last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating PWC’s independence.
Fiscal Year | Total (A) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) (B) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) (C) | Total of (A), (B) |
2006 | $0 | $197,605 | $30,654 | $228,259 |
2005 | $3,255 | $0 | $236,994 | $240,249 |
All other engagement fees were billed for services in connection with risk management, tax services and process improvement/integration initiatives for DeIM and other related entities that provide support for the operations of the fund.
CASH RESERVE FUND, INC.- TREASURY SERIES
FORM N-CSR DISCLOSURE RE: AUDIT FEES
The following table shows the amount of fees that PricewaterhouseCoopers, LLP (“PWC”), the Fund’s independent registered public accounting firm, billed to the Fund during the Fund’s last two fiscal years. The Audit Committee approved in advance all audit services and non-audit services that PWC provided to the Fund.
The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee).
Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Fund
Fiscal Year | Audit Fees Billed to Fund | Audit-Related | Tax Fees Billed to Fund | All |
2006 | $37,350 | $0 | $0 | $0 |
2005 | $36,800 | $225 | $3,255 | $0 |
The above “Audit- Related Fees” were billed for agreed upon procedures performed and the above "Tax Fees" were billed for professional services rendered for tax compliance and tax return preparation.
Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Adviser and Affiliated Fund Service Providers
The following table shows the amount of fees billed by PWC to Deutsche Investment Management Americas, Inc. (“DeIM” or the “Adviser”), and any entity controlling, controlled by or under common control with DeIM (“Control Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years.
Fiscal Year | Audit-Related | Tax Fees Billed to Adviser and Affiliated Fund Service Providers | All |
2006 | $136,700 | $197,605 | $0 |
2005 | $490,322 | $0 | $0 |
The “Audit-Related Fees” were billed for services in connection with the assessment of internal controls, agreed-upon procedures and additional related procedures and the above “Tax Fees” were billed in connection with consultation services and agreed-upon procedures.
Non-Audit Services
The following table shows the amount of fees that PWC billed during the Fund’s last two fiscal years for non-audit services. The Audit Committee pre-approved all non-audit services that PWC provided to the Adviser and any Affiliated Fund Service Provider that related directly to the Fund’s operations and financial reporting. The Audit Committee requested and received information from PWC about any non-audit services that PWC rendered during the Fund’s last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating PWC’s independence.
Fiscal Year | Total (A) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) (B) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) (C) | Total of (A), (B) |
2006 | $0 | $197,605 | $30,654 | $228,259 |
2005 | $3,255 | $0 | $236,994 | $240,249 |
All other engagement fees were billed for services in connection with risk management, tax services and process improvement/integration initiatives for DeIM and other related entities that provide support for the operations of the fund.
| 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) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
(a)(2) | 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, Tax-Free Series and Treasury Series, a series of Cash Reserve Fund, Inc. |
By: | /s/Michael Colon | |
| Michael Colon |
|
President
Date: | May 30, 2006 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Registrant: | Prime Series, Tax-Free Series and Treasury Series, a series of Cash Reserve Fund, Inc. |
By: | /s/Michael Colon | |
| Michael Colon |
|
President
Date: | May 30, 2006 |
By: | /s/Paul Schubert | |
| Paul Schubert |
|
Chief Financial Officer and Treasurer
Date: | May 30, 2006 |