WASHINGTON, D. C. 20549
JULY 31, 2012 Annual Report to Shareholders |
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| DWS Money Market Prime Series |
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Contents
4 Portfolio Management Review 16 Statement of Assets and Liabilities 18 Statement of Operations 19 Statement of Changes in Net Assets 25 Notes to Financial Statements 33 Report of Independent Registered Public Accounting Firm 34 Information About Your Fund's Expenses 36 Summary of Management Fee Evaluation by Independent Fee Consultant 40 Board Members and Officers 45 Account Management Resources |
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain 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 (FDIC) or by 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. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of the fund may have a significant adverse effect on the share prices of all classes of shares of the fund. See the prospectus for specific details regarding the fund's risk profile.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the U.S., represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Portfolio Management Review (Unaudited)
Market Overview
All performance information below is historical and does not guarantee future results. Investment return and principal fluctuate, so your shares may be worth more or less when redeemed. Current performance may differ from performance data shown. Please visit www.dws-investments.com for the fund's most recent month-end 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 of the fund's shares outstanding. Yields fluctuate and are not guaranteed.
| The fund seeks maximum current income to the extent consistent with stability of principal. |
Over the fund's most recent 12-month period ended July 31, 2012, money markets continued to respond to alternating degrees of perceived risk in the global financial markets, with short-term rates rising or falling slightly in response to the current state of the European sovereign debt crisis. In early August 2011, Standard & Poor's decided to downgrade U.S. debt from AAA to AA+ (see "Credit quality" in "Terms to Know" on page 7 for details). However, the United States' role as a perceived "safe haven" for fixed-income investors worldwide has remained unchanged. During the first quarter of 2012, efforts by the European Central Bank (ECB) to ensure adequate funding access at low rates for the Continent's major banks momentarily reassured investors and led to a rally in global financial markets. However, in May we saw another dramatic "flight to quality," as worries concerning Greece's upcoming elections and continuingly worsening conditions for Spanish and Italian banks led global and domestic investors to abandon risk assets. Toward the close of the period, any negative economic data was overshadowed by investor anticipation of more substantial central bank actions. First, the ECB lowered its interest rate for bank reserves. Then, the head of the ECB, Mario Draghi, stated that the central bank would do "whatever is needed" to preserve the euro. In addition, the fact that Germany has hinted that it may be willing to participate in a European quantitative easing program provided substantial encouragement to investors.
Positive Contributors to Fund Performance
Given continued economic and market uncertainty, we continued to hold a large percentage of portfolio assets in short-maturity instruments for yield, high-quality and liquidity purposes during the period. We also maintained a conservative average maturity, with fund assets broadly diversified among a number of sectors, including banks, asset-backed commercial paper, corporate issues, and sovereign debt. In addition, we focused on more favorable geographical areas for money market investment, such as Canada, Australia, Scandinavia and Japan over the period.
| "Going forward, we plan to remain flexible in order to react quickly to any shift in the tone of the investment markets based on the perceived success or failure of anticipated stimulus measures from the European Central Bank." |
Negative Contributors to Fund Performance
Preferring a cautious approach at a time of market uncertainty, we tilted the fund toward securities that tended to have lower yields than issues carrying more risk. While this strategy cost the fund some yield, we believe it represented a prudent approach to preserving principal.
Outlook and Positioning
Given the ECB's recently stated willingness to be much more proactive in bolstering Europe's banks, we note a more optimistic tone in the short-term fixed-income markets than we have observed in quite some time. We are hopeful that a new quantitative easing plan for the Continent to be introduced over the coming weeks could be a watershed event that turns investment markets in Europe and worldwide in a significantly more positive direction. In the United States, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested, and continued strong demand from investors seeking principal stability and safety. At present, we believe that the main risk to U.S. growth comes from the impending "fiscal cliff" (significant tax hikes and spending cuts could derail the U.S. recovery unless Congress takes action to head them off).
Going forward, we plan to remain flexible in order to react quickly to any shift in the tone of the investment markets based on the perceived success or failure of anticipated stimulus measures from the European Central Bank.
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.
Fund Performance (as of July 31, 2012)
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in them.
| DWS Money Market Prime Series | | 7-Day Current Yield | |
| DWS Cash Investment Trust Class A | | | .01 | % |
| DWS Cash Investment Trust Class B | | | .01 | % |
| DWS Cash Investment Trust Class C | | | .01 | % |
| DWS Cash Investment Trust Class S | | | .01 | % |
| DWS Money Market Fund | | | .01 | % |
Yields are historical, will fluctuate, and do not guarantee future performance. The 7-day current yield refers to the income paid by the portfolios over a 7-day period expressed as an annual percentage rate. For the most current yield information, visit our Web site at www.dws-investments.com.
Morningstar Ranking — Taxable Money Funds Category as of 7/31/12 (DWS Money Market Prime Series — DWS Money Market Fund) |
| Period | Rank | | Number of Funds Tracked | Percentile Ranking (%) |
| 1-Year | 330 | of | 976 | 34 |
| 3-Year | 387 | of | 921 | 42 |
| 5-Year | 159 | of | 836 | 19 |
| 10-Year | 123 | of | 622 | 20 |
Morningstar, Inc. rankings are based upon changes in net asset value with all dividends reinvested for the periods indicated as of July 31, 2012. Rankings are historical and do not guarantee future performance. The fund is compared to the Morningstar Taxable Money Funds category. Rankings are for DWS Money Market Prime Series — DWS Money Market Fund; other share classes may vary.
Source: Morningstar, Inc.
Portfolio Management Team
A group of investment professionals is responsible for the day-to-day management of the fund. These investment professionals have a broad range of experience managing money market funds.
The views expressed reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
Sovereign debt is debt that is issued by a national government.
Credit quality measures a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations, such as AAA, AA and so forth. The lower the rating, the higher the probability of default. Credit quality does not remove market risk and is subject to change.
Credit ratings are forward-looking opinions about credit risk. Standard & Poor's credit ratings express the agency's opinion about the ability and willingness of an issuer, such as a corporation or state or city government, to meet its financial obligations in full and on time. An obligation rated "AAA" has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. An obligation rated "AA" differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.
Investment Portfolio as of July 31, 2012 | | | Principal Amount ($) | | | Value ($) | |
| | | | |
| Certificates of Deposit and Bank Notes 11.7% | |
| Banco del Estado de Chile: | |
| 0.33%, 9/20/2012 | | | 12,500,000 | | | | 12,500,000 | |
| 0.36%, 9/7/2012 | | | 5,000,000 | | | | 5,000,000 | |
| Bank of Montreal, 0.2%, 8/13/2012 | | | 15,000,000 | | | | 15,000,000 | |
| Bank of Tokyo-Mitsubishi UFJ Ltd., 0.35%, 8/14/2012 | | | 20,000,000 | | | | 20,000,721 | |
| China Construction Bank Corp.: | |
| 0.35%, 8/27/2012 | | | 5,000,000 | | | | 5,000,000 | |
| 0.4%, 8/1/2012 | | | 3,300,000 | | | | 3,300,000 | |
| 0.4%, 8/7/2012 | | | 5,000,000 | | | | 5,000,000 | |
| 0.4%, 8/14/2012 | | | 5,000,000 | | | | 5,000,000 | |
| DZ Bank: | |
| 0.3%, 8/21/2012 | | | 10,000,000 | | | | 10,000,000 | |
| 0.33%, 8/23/2012 | | | 16,000,000 | | | | 16,000,000 | |
| 0.75%, 9/4/2012 | | | 9,000,000 | | | | 9,003,135 | |
| Export Development Canada, 144A, 0.335%, 5/23/2013 | | | 3,000,000 | | | | 3,000,000 | |
| Industrial & Commercial Bank of China: | |
| 0.35%, 8/3/2012 | | | 5,000,000 | | | | 5,000,000 | |
| 0.4%, 8/1/2012 | | | 5,000,000 | | | | 5,000,000 | |
| Nordea Bank Finland PLC: | |
| 0.28%, 9/18/2012 | | | 10,000,000 | | | | 9,999,599 | |
| 0.29%, 9/7/2012 | | | 15,000,000 | | | | 15,000,000 | |
| Norinchukin Bank, 0.2%, 8/24/2012 | | | 6,000,000 | | | | 6,000,000 | |
| Rabobank Nederland NV: | |
| 0.35%, 8/16/2012 | | | 10,000,000 | | | | 10,000,042 | |
| 0.4%, 12/14/2012 | | | 10,000,000 | | | | 10,001,123 | |
| 0.53%, 10/25/2012 | | | 5,000,000 | | | | 5,002,354 | |
| Skandinaviska Enskilda Banken AB: | |
| 0.25%, 8/3/2012 | | | 12,000,000 | | | | 12,000,000 | |
| 0.49%, 8/23/2012 | | | 13,000,000 | | | | 13,000,000 | |
| Svenska Handelsbanken AB, 0.31%, 9/28/2012 | | | 29,000,000 | | | | 29,000,234 | |
Total Certificates of Deposit and Bank Notes (Cost $228,807,208) | | | | 228,807,208 | |
| | |
| Collateralized Mortgage Obligation 0.2% | |
| The Superannuation Members Home Loan Programme, "A1", Series 2012-1, 0.647%*, 3/20/2013 (Cost $5,000,000) | | | 5,000,000 | | | | 5,000,000 | |
| | |
| Commercial Paper 41.7% | |
| Issued at Discount** 38.6% | |
| Alpine Securitzation: | |
| 144A, 0.22%, 8/6/2012 | | | 10,000,000 | | | | 9,999,694 | |
| 144A, 0.22%, 8/29/2012 | | | 10,000,000 | | | | 9,998,289 | |
| Autobahn Funding Co., LLC, 144A, 0.49%, 10/9/2012 | | | 7,500,000 | | | | 7,492,956 | |
| Barclays Bank PLC, 0.19%, 8/2/2012 | | | 10,000,000 | | | | 9,999,947 | |
| BNP Paribas Finance, Inc., 0.16%, 8/1/2012 | | | 35,000,000 | | | | 35,000,000 | |
| Coca-Cola Co., 0.23%, 9/5/2012 | | | 12,000,000 | | | | 11,997,317 | |
| Collateralized Commercial Paper Co., LLC: | |
| 0.25%, 8/30/2012 | | | 65,000,000 | | | | 64,986,910 | |
| 0.45%, 10/16/2012 | | | 25,000,000 | | | | 24,976,250 | |
| DNB Bank ASA, 0.305%, 9/11/2012 | | | 10,000,000 | | | | 9,996,526 | |
| eBay, Inc., 144A, 0.17%, 9/19/2012 | | | 10,000,000 | | | | 9,997,686 | |
| Erste Abwicklungsanstalt: | |
| 0.385%, 9/10/2012 | | | 10,000,000 | | | | 9,995,722 | |
| 0.4%, 9/5/2012 | | | 8,000,000 | | | | 7,996,889 | |
| 0.45%, 12/7/2012 | | | 5,500,000 | | | | 5,491,200 | |
| 0.52%, 12/4/2012 | | | 10,000,000 | | | | 9,981,944 | |
| 0.54%, 11/9/2012 | | | 6,000,000 | | | | 5,991,000 | |
| 0.57%, 8/31/2012 | | | 10,000,000 | | | | 9,995,250 | |
| 0.57%, 1/8/2013 | | | 4,000,000 | | | | 3,989,867 | |
| 0.58%, 10/18/2012 | | | 7,500,000 | | | | 7,490,575 | |
| 0.64%, 9/28/2012 | | | 8,000,000 | | | | 7,991,751 | |
| 0.68%, 8/13/2012 | | | 4,200,000 | | | | 4,199,048 | |
| 0.72%, 9/4/2012 | | | 3,000,000 | | | | 2,997,960 | |
| 0.8%, 8/13/2012 | | | 6,500,000 | | | | 6,498,267 | |
| 0.83%, 8/2/2012 | | | 9,000,000 | | | | 8,999,793 | |
| General Electric Capital Corp.: | |
| 0.34%, 10/22/2012 | | | 15,000,000 | | | | 14,988,383 | |
| 0.35%, 1/9/2013 | | | 11,000,000 | | | | 10,982,782 | |
| Google, Inc., 0.12%, 10/2/2012 | | | 4,000,000 | | | | 3,999,173 | |
| Gotham Funding Corp.: | |
| 144A, 0.21%, 8/9/2012 | | | 5,000,000 | | | | 4,999,767 | |
| 144A, 0.22%, 8/1/2012 | | | 29,650,000 | | | | 29,650,000 | |
| Hannover Funding Co., LLC: | |
| 0.499%, 8/7/2012 | | | 5,000,000 | | | | 4,999,583 | |
| 0.5%, 8/3/2012 | | | 4,000,000 | | | | 3,999,889 | |
| 0.5%, 8/17/2012 | | | 4,000,000 | | | | 3,999,111 | |
| Kells Funding LLC: | |
| 144A, 0.43%, 8/28/2012 | | | 5,000,000 | | | | 4,998,388 | |
| 144A, 0.54%, 10/1/2012 | | | 30,000,000 | | | | 29,972,550 | |
| 144A, 0.58%, 9/20/2012 | | | 5,000,000 | | | | 4,995,972 | |
| 144A, 0.58%, 11/2/2012 | | | 7,500,000 | | | | 7,488,763 | |
| 144A, 0.59%, 8/23/2012 | | | 12,500,000 | | | | 12,495,493 | |
| 144A, 0.59%, 1/11/2013 | | | 5,000,000 | | | | 4,986,643 | |
| 144A, 0.59%, 1/22/2013 | | | 5,000,000 | | | | 4,985,742 | |
| 144A, 0.65%, 8/3/2012 | | | 3,000,000 | | | | 2,999,892 | |
| 144A, 0.68%, 8/21/2012 | | | 5,000,000 | | | | 4,998,111 | |
| National Australia Funding (Delaware), Inc., 144A, 0.2%, 8/8/2012 | | | 6,000,000 | | | | 5,999,767 | |
| Nieuw Amsterdam Receivables Corp.: | |
| 144A, 0.2%, 8/20/2012 | | | 20,000,000 | | | | 19,997,889 | |
| 144A, 0.2%, 8/24/2012 | | | 20,000,000 | | | | 19,997,444 | |
| Nordea North America, Inc., 0.59%, 8/15/2012 | | | 6,000,000 | | | | 5,998,623 | |
| NRW.Bank: | |
| 0.26%, 8/1/2012 | | | 31,000,000 | | | | 31,000,000 | |
| 0.315%, 9/6/2012 | | | 5,000,000 | | | | 4,998,425 | |
| 0.37%, 9/25/2012 | | | 28,000,000 | | | | 27,984,172 | |
| Rabobank U.S.A. Financial Corp., 0.41%, 12/27/2012 | | | 12,000,000 | | | | 11,979,773 | |
| SBAB Bank AB: | |
| 144A, 0.43%, 10/22/2012 | | | 10,000,000 | | | | 9,990,206 | |
| 144A, 0.48%, 9/5/2012 | | | 5,000,000 | | | | 4,997,667 | |
| 144A, 0.51%, 8/1/2012 | | | 5,000,000 | | | | 5,000,000 | |
| 144A, 0.51%, 9/14/2012 | | | 3,000,000 | | | | 2,998,130 | |
| 144A, 0.51%, 9/17/2012 | | | 10,000,000 | | | | 9,993,342 | |
| 144A, 0.55%, 9/24/2012 | | | 20,000,000 | | | | 19,983,500 | |
| 144A, 0.55%, 9/25/2012 | | | 15,000,000 | | | | 14,987,396 | |
| Siemens Capital Co., LLC, 144A, 0.2%, 9/13/2012 | | | 40,000,000 | | | | 39,990,444 | |
| Skandinaviska Enskilda Banken AB: | |
| 0.25%, 9/7/2012 | | | 5,000,000 | | | | 4,998,715 | |
| 0.27%, 8/24/2012 | | | 15,000,000 | | | | 14,997,412 | |
| Standard Chartered Bank, 0.33%, 10/1/2012 | | | 14,000,000 | | | | 13,992,172 | |
| Straight-A Funding LLC, 144A, 0.18%, 10/4/2012 | | | 5,000,000 | | | | 4,998,400 | |
| Total Capital Canada Ltd., 144A, 0.2%, 12/6/2012 | | | 6,500,000 | | | | 6,495,414 | |
| UOB Funding LLC, 0.3%, 11/5/2012 | | | 12,500,000 | | | | 12,490,000 | |
| Victory Receivables Corp.: | |
| 144A, 0.2%, 8/23/2012 | | | 3,000,000 | | | | 2,999,633 | |
| 144A, 0.21%, 8/6/2012 | | | 3,000,000 | | | | 2,999,913 | |
| Westpac Banking Corp.: | |
| 0.55%, 8/1/2012 | | | 1,000,000 | | | | 1,000,000 | |
| 0.56%, 8/14/2012 | | | 10,000,000 | | | | 9,997,978 | |
| | | | | 752,471,498 | |
| Issued at Par 3.1% | |
| ASB Finance Ltd.: | |
| 144A, 0.498%*, 2/13/2013 | | | 6,000,000 | | | | 6,000,000 | |
| 144A, 0.695%*, 2/1/2013 | | | 5,000,000 | | | | 4,999,494 | |
| Australia & New Zealand Banking Group Ltd., 144A, 0.294%*, 11/26/2012 | | | 28,000,000 | | | | 28,000,000 | |
| Kells Funding LLC, 144A, 0.565%, 1/17/2013 | | | 12,000,000 | | | | 12,000,000 | |
| Westpac Banking Corp., 144A, 0.524%*, 10/26/2012 | | | 10,000,000 | | | | 10,000,000 | |
| | | | | 60,999,494 | |
Total Commercial Paper (Cost $813,470,992) | | | | 813,470,992 | |
| | |
| Short-Term Notes* 15.6% | |
| Bank of Nova Scotia: | |
| 0.31%, 1/9/2013 | | | 19,000,000 | | | | 19,000,000 | |
| 0.37%, 12/14/2012 | | | 12,500,000 | | | | 12,500,000 | |
| 0.39%, 11/9/2012 | | | 12,000,000 | | | | 12,000,000 | |
| 0.546%, 12/11/2012 | | | 12,000,000 | | | | 12,000,000 | |
| 0.66%, 10/1/2012 | | | 10,000,000 | | | | 10,002,891 | |
| Canadian Imperial Bank of Commerce: | |
| 0.468%, 4/26/2013 | | | 10,000,000 | | | | 10,000,000 | |
| 0.505%, 2/7/2013 | | | 11,000,000 | | | | 11,000,000 | |
| 0.51%, 4/26/2013 | | | 15,500,000 | | | | 15,500,000 | |
| Commonwealth Bank of Australia, 144A, 0.505%, 3/1/2013 | | | 24,000,000 | | | | 24,000,000 | |
| JPMorgan Chase Bank NA, 0.527%, 12/7/2012 | | | 21,000,000 | | | | 21,000,000 | |
| National Australia Bank Ltd., 0.508%, 3/8/2013 | | | 25,000,000 | | | | 25,000,000 | |
| Queensland Treasury Corp., 0.49%, 11/19/2012 | | | 17,000,000 | | | | 17,000,000 | |
| Rabobank Nederland NV: | |
| 0.398%, 8/16/2012 | | | 12,000,000 | | | | 12,000,000 | |
| 0.567%, 12/21/2012 | | | 10,000,000 | | | | 10,000,000 | |
| 144A, 0.605%, 8/16/2014 | | | 12,000,000 | | | | 12,000,000 | |
| 0.615%, 5/7/2013 | | | 10,000,000 | | | | 10,000,000 | |
| 0.657%, 10/12/2012 | | | 14,500,000 | | | | 14,500,000 | |
| Royal Bank of Canada: | |
| 0.54%, 6/4/2013 | | | 6,750,000 | | | | 6,750,000 | |
| 0.54%, 6/13/2013 | | | 14,000,000 | | | | 14,000,000 | |
| Sumitomo Mitsui Banking Corp., 0.37%, 3/15/2013 | | | 8,000,000 | | | | 8,000,000 | |
| Svensk Exportkredit AB, 144A, 0.43%, 5/22/2013 | | | 7,100,000 | | | | 7,100,000 | |
| Svenska Handelsbanken AB, 144A, 0.426%, 8/7/2012 | | | 8,000,000 | | | | 8,000,000 | |
| Westpac Banking Corp.: | |
| 0.508%, 8/9/2013 | | | 7,500,000 | | | | 7,500,000 | |
| 0.645%, 2/6/2013 | | | 5,000,000 | | | | 5,000,000 | |
Total Short-Term Notes (Cost $303,852,891) | | | | 303,852,891 | |
| | |
| Government & Agency Obligations 12.4% | |
| U.S. Government Sponsored Agencies 5.6% | |
| Federal Home Loan Bank: | |
| 0.036%**, 8/2/2012 | | | 12,800,000 | | | | 12,799,975 | |
| 0.159%**, 11/13/2012 | | | 5,000,000 | | | | 4,997,689 | |
| 0.17%, 1/23/2013 | | | 10,200,000 | | | | 10,198,859 | |
| 0.18%, 11/21/2012 | | | 12,000,000 | | | | 11,999,895 | |
| 0.22%*, 11/8/2013 | | | 3,500,000 | | | | 3,498,230 | |
| 0.36%, 5/16/2013 | | | 4,000,000 | | | | 4,003,528 | |
| Federal Home Loan Mortgage Corp.: | |
| 0.099%**, 10/2/2012 | | | 14,250,000 | | | | 14,247,546 | |
| 0.116%**, 8/28/2012 | | | 10,500,000 | | | | 10,499,055 | |
| 0.121%**, 8/14/2012 | | | 25,000,000 | | | | 24,998,826 | |
| 0.179%**, 1/9/2013 | | | 5,200,000 | | | | 5,195,814 | |
| 1.375%, 1/9/2013 | | | 3,000,000 | | | | 3,015,483 | |
| Federal National Mortgage Association, 0.128%**, 9/27/2012 | | | 3,000,000 | | | | 2,999,383 | |
| | | | | 108,454,283 | |
| U.S. Treasury Obligations 6.8% | |
| U.S. Treasury Notes: | |
| 0.375%, 8/31/2012 | | | 21,666,000 | | | | 21,669,984 | |
| 0.375%, 9/30/2012 | | | 12,000,000 | | | | 12,004,850 | |
| 0.625%, 2/28/2013 | | | 12,900,000 | | | | 12,934,470 | |
| 1.375%, 10/15/2012 | | | 28,000,000 | | | | 28,069,907 | |
| 1.375%, 1/15/2013 | | | 30,000,000 | | | | 30,162,719 | |
| 1.375%, 3/15/2013 | | | 8,500,000 | | | | 8,563,174 | |
| 2.5%, 3/31/2013 | | | 5,000,000 | | | | 5,077,039 | |
| 3.375%, 11/30/2012 | | | 5,000,000 | | | | 5,052,871 | |
| 4.0%, 11/15/2012 | | | 10,000,000 | | | | 10,110,436 | |
| | | | | 133,645,450 | |
Total Government & Agency Obligations (Cost $242,099,733) | | | | 242,099,733 | |
| | |
| Time Deposits 3.4% | |
| Citibank NA, 0.18%, 8/1/2012 | | | 22,000,000 | | | | 22,000,000 | |
| National Australia Bank Ltd., 0.11%, 8/1/2012 | | | 25,000,000 | | | | 25,000,000 | |
| Royal Bank of Canada 0.1%, 8/1/2012 | | | 18,500,000 | | | | 18,500,000 | |
Total Time Deposits (Cost $65,500,000) | | | | 65,500,000 | |
| | |
| Repurchase Agreements 15.2% | |
| BNP Paribas, 0.18%, dated 7/31/2012, to be repurchased at $45,000,225 on 8/1/2012 (a) | | | 45,000,000 | | | | 45,000,000 | |
| Citigroup Global Markets, Inc., 0.17%, dated 7/26/2012, to be repurchased at $75,002,479 on 8/2/2012 (b) | | | 75,000,000 | | | | 75,000,000 | |
| JPMorgan Securities, Inc., 0.17%, dated 7/31/2012, to be repurchased at $30,000,142 on 8/1/2012 (c) | | | 30,000,000 | | | | 30,000,000 | |
| JPMorgan Securities, Inc., 0.33%, dated 7/25/2012, to be repurchased at $13,000,834 on 8/1/2012 (d) | | | 13,000,000 | | | | 13,000,000 | |
| Merrill Lynch & Co., Inc., 0.16%, dated 7/31/2012, to be repurchased at $40,305,326 on 8/1/2012 (e) | | | 40,305,147 | | | | 40,305,147 | |
| Merrill Lynch & Co., Inc., 0.18%, dated 7/31/2012, to be repurchased at $41,000,205 on 8/1/2012 (f) | | | 41,000,000 | | | | 41,000,000 | |
| Morgan Stanley & Co., Inc., 0.19%, dated 7/31/2012, to be repurchased at $52,000,274 on 8/1/2012 (g) | | | 52,000,000 | | | | 52,000,000 | |
Total Repurchase Agreements (Cost $296,305,147) | | | | 296,305,147 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $1,955,035,971)+ | | | 100.2 | | | | 1,955,035,971 | |
| Other Assets and Liabilities, Net | | | (0.2 | ) | | | (4,072,308 | ) |
| Net Assets | | | 100.0 | | | | 1,950,963,663 | |
* Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the U.S. Treasury Bill rate. These securities are shown at their current rate as of July 31, 2012.
** Annualized yield at time of purchase; not a coupon rate.
+ The cost for federal income tax purposes was $1,955,035,971.
(a) Collateralized by $41,461,418 Government National Mortgage Association, 4.0%, with the various maturity dates of 11/20/2041-2/20/2042 with a value of $45,900,001.
(b) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 15,565,510 | | Federal Home Loan Mortgage Corp. | | | 4.0 | | 2/1/2042 | | | 16,721,877 | |
| | 25,326,842 | | Federal National Mortgage Association | | | 3.5 | | 11/1/2025 | | | 27,008,941 | |
| | 30,581,401 | | Government National Mortgage Association | | | 4.5-5.0 | | 2/20/2041- 3/20/2041 | | | 34,269,183 | |
| Total Collateral Value | | | 78,000,001 | |
(c) Collateralized by $32,074,175 U.S. Treasury STRIPS, with the various maturity dates of 2/15/2017-8/15/2025 with a value of $30,600,743.
(d) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 40,013 | | Chase Funding Mortgage Loan Asset-Backed Certificates | | | 4.707 | | 6/25/2032 | | | 40,450 | |
| | 7,275,000 | | GCO Education Loan Funding Trust | | Zero Coupon | | 8/27/2046 | | | 6,892,464 | |
| | 8,524,000 | | SLM Student Loan Trust | | | 0.738 | | 12/15/2039 | | | 6,591,162 | |
| Total Collateral Value | | | 13,524,076 | |
(e) Collateralized by $40,478,800 U.S. Treasury Note, 0.875%, maturing on 4/30/2017 with a value of $41,111,301.
(f) Collateralized by $39,314,242 Federal National Mortgage Association, 3.5%, maturing on 7/1/2042 with a value of $41,820,001.
(g) Collateralized by $50,392,005 Federal National Mortgage Association, with various coupon rates of 2.813-3.0%, with the various maturity dates of 4/1/2027-6/1/2042 with a value of $53,040,000.
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.
STRIPS: Separate Trading of Registered Interest and Principal Securities
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of July 31, 2012 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | |
| Investments in Securities (h) | | $ | — | | | $ | 1,658,730,824 | | | $ | — | | | $ | 1,658,730,824 | |
| Repurchase Agreements | | | — | | | | 296,305,147 | | | | — | | | | 296,305,147 | |
| Total | | $ | — | | | $ | 1,955,035,971 | | | $ | — | | | $ | 1,955,035,971 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended July 31, 2012.
(h) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of July 31, 2012 | |
| Assets | |
Investments: Investments in non-affiliated securities, valued at amortized cost | | $ | 1,658,730,824 | |
| Repurchase agreements, valued at amortized cost | | | 296,305,147 | |
| Total investments, valued at amortized cost | | | 1,955,035,971 | |
| Receivable for Fund shares sold | | | 3,506,270 | |
| Interest receivable | | | 778,006 | |
| Due from Advisor | | | 4,288 | |
| Other assets | | | 59,541 | |
| Total assets | | | 1,959,384,076 | |
| Liabilities | |
| Payable for Fund shares redeemed | | | 7,515,697 | |
| Distributions payable | | | 3,046 | |
| Accrued management fee | | | 236,473 | |
| Accrued Trustees' fees | | | 12,453 | |
| Other accrued expenses and payables | | | 652,744 | |
| Total liabilities | | | 8,420,413 | |
| Net assets, at value | | $ | 1,950,963,663 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 14,265 | |
| Paid-in capital | | | 1,950,949,398 | |
| Net assets, at value | | $ | 1,950,963,663 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of July 31, 2012 (continued) | |
| Net Asset Value | |
DWS Cash Investment Trust Class A Net Asset Value, offering and redemption price per share ($237,208,236 ÷ 237,249,622 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Cash Investment Trust Class B Net Asset Value, offering and redemption price per share ($3,277,861 ÷ 3,278,423 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Cash Investment Trust Class C Net Asset Value, offering and redemption price per share ($35,160,012 ÷ 35,166,057 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Cash Investment Trust Class S Net Asset Value, offering and redemption price per share ($391,684,910 ÷ 391,751,863 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Money Market Fund Net Asset Value, offering and redemption price per share ($1,283,632,644 ÷ 1,283,852,542 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended July 31, 2012 | |
| Investment Income | |
Income: Interest | | $ | 6,184,816 | |
Expenses: Management fee | | | 4,198,889 | |
| Administration fee | | | 2,112,599 | |
| Services to shareholders | | | 3,265,622 | |
| Distribution and service fees | | | 1,022,015 | |
| Custodian fee | | | 47,210 | |
| Professional fees | | | 109,875 | |
| Reports to shareholders | | | 137,616 | |
| Registration fees | | | 131,333 | |
| Trustees' fees and expenses | | | 79,482 | |
| Other | | | 68,991 | |
| Total expenses before expense reductions | | | 11,173,632 | |
| Expense reductions | | | (5,184,394 | ) |
| Total expenses after expense reductions | | | 5,989,238 | |
| Net investment income | | | 195,578 | |
| Net realized gain (loss) from investments | | | 17,555 | |
| Net increase (decrease) in net assets resulting from operations | | $ | 213,133 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Years Ended July 31, | |
| Increase (Decrease) in Net Assets | | 2012 | | | 2011 | |
Operations: Net investment income | | $ | 195,578 | | | $ | 211,568 | |
| Net realized gain (loss) | | | 17,555 | | | | 21,820 | |
| Net increase (decrease) in net assets resulting from operations | | | 213,133 | | | | 233,388 | |
Distributions to shareholders from: Net investment income: DWS Cash Investment Trust Class A | | | (24,468 | ) | | | (33,124 | ) |
| DWS Cash Investment Trust Class B | | | (418 | ) | | | (1,043 | ) |
| DWS Cash Investment Trust Class C | | | (3,275 | ) | | | (3,945 | ) |
| DWS Cash Investment Trust Class S | | | (37,759 | ) | | | (61,626 | ) |
| DWS Money Market Fund | | | (129,658 | ) | | | (232,835 | ) |
| Total distributions | | | (195,578 | ) | | | (332,573 | ) |
Fund share transactions: Proceeds from shares sold | | | 1,003,281,511 | | | | 968,886,151 | |
| Reinvestment of distributions | | | 194,626 | | | | 324,554 | |
| Payments for shares redeemed | | | (1,194,540,292 | ) | | | (1,376,243,829 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (191,064,155 | ) | | | (407,033,124 | ) |
| Increase (decrease) in net assets | | | (191,046,600 | ) | | | (407,132,309 | ) |
| Net assets at beginning of period | | | 2,142,010,263 | | | | 2,549,142,572 | |
| Net assets at end of period (including undistributed net investment income and distributions in excess of net investment income of $14,265 and $3,290, respectively) | | $ | 1,950,963,663 | | | $ | 2,142,010,263 | |
The accompanying notes are an integral part of the financial statements.
| DWS Cash Investment Trust Class A | |
| | | Years Ended July 31, | |
| | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .000 | * | | | .009 | | | | .034 | |
| Net realized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | (.000 | )* |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .000 | * | | | .009 | | | | .034 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.000 | )* | | | (.009 | ) | | | (.034 | ) |
| Net realized gains | | | — | | | | — | | | | (.000 | )* | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.000 | )* | | | (.009 | ) | | | (.034 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .01 | | | | .02 | | | | .03 | | | | .91 | | | | 3.41 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 237 | | | | 230 | | | | 223 | | | | 218 | | | | 156 | |
| Ratio of expenses before expense reductions (%) | | | .83 | | | | .83 | | | | .86 | | | | .81 | | | | .85 | |
| Ratio of expenses after expense reductions (%) | | | .28 | | | | .32 | | | | .35 | | | | .77 | | | | .84 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | .01 | | | | .96 | | | | 3.37 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
| DWS Cash Investment Trust Class B | |
| | | Years Ended July 31, | |
| | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .000 | * | | | .004 | | | | .026 | |
| Net realized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | (.000 | )* |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .000 | * | | | .004 | | | | .026 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.000 | )* | | | (.004 | ) | | | (.026 | ) |
| Net realized gains | | | — | | | | — | | | | (.000 | )* | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.000 | )* | | | (.004 | ) | | | (.026 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .01 | | | | .02 | | | | .03 | | | | .45 | | | | 2.62 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 3 | | | | 6 | | | | 11 | | | | 23 | | | | 30 | |
| Ratio of expenses before expense reductions (%) | | | 1.56 | | | | 1.58 | | | | 1.68 | | | | 1.56 | | | | 1.62 | |
| Ratio of expenses after expense reductions (%) | | | .28 | | | | .33 | | | | .37 | | | | 1.28 | | | | 1.61 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | .01 | | | | .45 | | | | 2.60 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
| DWS Cash Investment Trust Class C | |
| | | Years Ended July 31, | |
| | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .000 | * | | | .005 | | | | .027 | |
| Net realized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | (.000 | )* |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .000 | * | | | .005 | | | | .027 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.000 | )* | | | (.005 | ) | | | (.027 | ) |
| Net realized gains | | | — | | | | — | | | | (.000 | )* | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.000 | )* | | | (.005 | ) | | | (.027 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .01 | | | | .02 | | | | .03 | | | | .48 | | | | 2.69 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 35 | | | | 26 | | | | 31 | | | | 42 | | | | 42 | |
| Ratio of expenses before expense reductions (%) | | | 1.50 | | | | 1.53 | | | | 1.59 | | | | 1.52 | | | | 1.54 | |
| Ratio of expenses after expense reductions (%) | | | .29 | | | | .32 | | | | .36 | | | | 1.22 | | | | 1.53 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | .01 | | | | .51 | | | | 2.68 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
| DWS Cash Investment Trust Class S | |
| | | Years Ended July 31, | |
| | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .000 | * | | | .012 | | | | .037 | |
| Net realized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | (.000 | )* |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .000 | * | | | .012 | | | | .037 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.000 | )* | | | (.012 | ) | | | (.037 | ) |
| Net realized gains | | | — | | | | — | | | | (.000 | )* | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.000 | )* | | | (.012 | ) | | | (.037 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| Total Return (%) | | | .01 | a | | | .02 | a | | | .03 | a | | | 1.20 | | | | 3.73 | a |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 392 | | | | 430 | | | | 464 | | | | 541 | | | | 579 | |
| Ratio of expenses before expense reductions (%) | | | .52 | | | | .51 | | | | .52 | | | | .49 | | | | .53 | |
| Ratio of expenses after expense reductions (%) | | | .28 | | | | .32 | | | | .36 | | | | .49 | | | | .53 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | .01 | | | | 1.24 | | | | 3.68 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
| DWS Money Market Fund | |
| | | Years Ended July 31, | |
| | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .000 | * | | | .013 | | | | .038 | |
| Net realized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | (.000 | )* |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .000 | * | | | .013 | | | | .038 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.000 | )* | | | (.013 | ) | | | (.038 | ) |
| Net realized gains | | | — | | | | — | | | | (.000 | )* | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.000 | )* | | | (.013 | ) | | | (.038 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| Total Return (%) | | | .01 | a | | | .02 | a | | | .03 | a | | | 1.26 | | | | 3.84 | a |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 1,284 | | | | 1,449 | | | | 1,821 | | | | 2,591 | | | | 3,430 | |
| Ratio of expenses before expense reductions (%) | | | .45 | | | | .45 | | | | .45 | | | | .44 | | | | .43 | |
| Ratio of expenses after expense reductions (%) | | | .28 | | | | .32 | | | | .36 | | | | .44 | | | | .42 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | .01 | | | | 1.29 | | | | 3.79 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
Notes to Financial Statements
A. Organization and Significant Accounting Policies
DWS Money Market Prime Series (the "Fund") is a diversified series of DWS Money Funds (the "Trust"), which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust.
The Fund offers multiple classes of shares which provide investors with different purchase options: DWS Cash Investment Trust Class A shares are offered to investors without an initial sales charge but are subject to the applicable sales charge if exchanged into Class A shares of another DWS Investments Fund. DWS Cash Investment Trust Class B shares of the Fund are closed to new purchases, except exchanges or the reinvestment of dividends or other distributions. DWS Cash Investment Trust Class B shares were offered to investors without an initial sales charge and are subject to higher ongoing expenses than DWS Cash Investment Trust Class A shares and a contingent deferred sales charge payable upon certain redemptions. DWS Cash Investment Trust Class B shares automatically convert to DWS Cash Investment Trust Class A shares six years after issuance. DWS Cash Investment Trust Class C shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than DWS Cash Investment Trust Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. DWS Cash Investment Trust Class C shares do not automatically convert into another class. DWS Money Market Fund and DWS Cash Investment Trust Class S shares are not subject to initial or contingent deferred sales charges. DWS Cash Investment Trust Class S shares are generally not available to new investors except under certain circumstances.
Investment income, realized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Fund have equal rights with respect to voting subject to class-specific arrangements.
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 their financial statements.
Security Valuation. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Portfolio's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The Fund values all securities 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 rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Disclosure about the classification of fair value measurements is included in a table following the Fund's Investment Portfolio.
Repurchase Agreements. The Fund may enter into repurchase agreements with certain banks and broker/dealers whereby the Fund, through its custodian or a 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 market value is equal to at least the principal amount of the repurchase price plus accrued interest. The custodian or another designated sub-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 Fund has the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Fund's claims on the collateral may be subject to legal proceedings.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable income to its shareholders.
The Fund has reviewed the tax positions for the open tax years as of July 31, 2012 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income and Gains. Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. The Fund may take into account capital gains and losses in its daily dividend declarations. The Fund may also make additional distributions for tax purposes if necessary.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Fund.
At July 31, 2012, the Fund's components of distributable earnings (accumulated losses) on a tax basis were as follows:
| Undistributed ordinary income* | | $ | 17,311 | |
The tax character of distributions paid to shareholders by the Fund is summarized as follows:
| | | Years Ended July 31, | |
| | | 2012 | | | 2011 | |
| Distributions from ordinary income* | | $ | 195,578 | | | $ | 332,573 | |
* For tax purposes, short-term capital gain distributions are considered ordinary income distributions.
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.
Other. Investment transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All discounts and premiums are accreted/amortized for both tax and financial reporting purposes.
B. Related Parties
Management Agreement. Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with their investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
Under the Investment Management Agreement with the Advisor, the Fund pays a monthly management fee based on the Fund's average daily net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $215 million of the Fund's average daily net assets | | | .400 | % |
| Next $335 million of such net assets | | | .275 | % |
| Next $250 million of such net assets | | | .200 | % |
| Next $800 million of such net assets | | | .150 | % |
| Next $800 million of such net assets | | | .140 | % |
| Next $800 million of such net assets | | | .130 | % |
| Over $3.2 billion of such net assets | | | .120 | % |
For the period from August 1, 2011 through September 30, 2012, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the Fund to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) of each class as follows:
| DWS Cash Investment Trust Class A | .85% |
| DWS Cash Investment Trust Class B | 1.60% |
| DWS Cash Investment Trust Class C | 1.60% |
| DWS Cash Investment Trust Class S | .57% |
| DWS Money Market Fund | .57% |
In addition, the Advisor has agreed to voluntarily waive additional expenses. This waiver may be changed or terminated at any time without notice. Under this arrangement, the Advisor waived certain expenses on DWS Cash Investment Trust Class A, DWS Cash Investment Trust Class B, DWS Cash Investment Trust Class C, DWS Cash Investment Trust Class S and DWS Money Market Fund shares of the Fund.
For the year ended July 31, 2012, the Advisor waived a portion of its management fee pursuant to the Investment Management Agreement aggregating $1,454,627, and the amount charged aggregated $2,744,262, which was equivalent to an annual effective rate of 0.13% of the Fund's average daily net assets.
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended July 31, 2012, the Administration Fee was $2,112,599, of which $166,727 is unpaid.
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement among DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the year ended July 31, 2012, the amounts charged to the Fund by DISC were as follows:
| Services to Shareholders | | Total Aggregated | | | Waived | | | Unpaid at July 31, 2012 | |
| DWS Cash Investment Trust Class A | | $ | 569,239 | | | $ | 569,239 | | | $ | — | |
| DWS Cash Investment Trust Class B | | | 7,151 | | | | 7,151 | | | | — | |
| DWS Cash Investment Trust Class C | | | 45,562 | | | | 45,562 | | | | — | |
| DWS Cash Investment Trust Class S | | | 706,754 | | | | 695,937 | | | | 10,817 | |
| DWS Money Market Fund | | | 1,375,636 | | | | 1,368,860 | | | | 6,776 | |
| | | $ | 2,704,342 | | | $ | 2,686,749 | | | $ | 17,593 | |
In addition, for the year ended July 31, 2012, the Advisor reimbursed the Fund $21,003 of sub-recordkeeping expenses for Class A, Class B and Class C shares.
Distribution and Service Fees. Under the Fund's DWS Cash Investment Trust Class B and DWS Cash Investment Trust Class C 12b-1 Plans, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee") of 0.75% of average daily net assets of each of DWS Cash Investment Trust Class B and DWS Cash Investment Trust Class C shares. In accordance with the Fund's Underwriting and Distribution Services Agreement, DIDI enters into related selling group agreements with various firms at various rates for sales of DWS Cash Investment Trust Class B and DWS Cash Investment Trust Class C shares. For the year ended July 31, 2012, the Distribution Fee was as follows:
| Distribution Fee | | Total Aggregated | | | Waived | |
| DWS Cash Investment Trust Class B | | $ | 36,890 | | | $ | 36,890 | |
| DWS Cash Investment Trust Class C | | | 256,459 | | | | 256,459 | |
| | | $ | 293,349 | | | $ | 293,349 | |
In addition, DIDI provides information and administrative services for a fee ("Service Fee") to DWS Cash Investment Trust Class A, DWS Cash Investment Trust Class B, and DWS Cash Investment Trust Class C shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. DIDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder accounts the firms service. For the year ended July 31, 2012, the Service Fee was as follows:
| Service Fee | | Total Aggregated | | | Waived | | | Annual Effective Rate | |
| DWS Cash Investment Trust Class A | | $ | 630,884 | | | $ | 630,884 | | | | .00 | % |
| DWS Cash Investment Trust Class B | | | 12,296 | | | | 12,296 | | | | .00 | % |
| DWS Cash Investment Trust Class C | | | 85,486 | | | | 85,486 | | | | .00 | % |
| | | $ | 728,666 | | | $ | 728,666 | | | | | |
Contingent Deferred Sales Charge. DIDI receives any contingent deferred sales charge ("CDSC") from DWS Cash Investment Trust Class B share redemptions occurring within six years of purchase and DWS Cash Investment Trust Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates ranging from 4% to 1% for DWS Cash Investment Trust Class B and 1% for DWS Cash Investment Trust Class C, of the value of the shares redeemed. For the year ended July 31, 2012, the CDSC for DWS Cash Investment Trust Class B and DWS Cash Investment Trust Class C shares aggregated $15,314 and $6,389, respectively. A deferred sales charge of up to 0.85% is assessed on certain redemptions of DWS Cash Investment Trust Class A shares. For the year ended July 31, 2012, DIDI received $1,530 for Class A shares.
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended July 31, 2012, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" aggregated $20,008, of which $6,146 is unpaid.
Trustees' Fees and Expenses. The Fund paid retainer fees to each Trustee not affiliated with the Advisor, plus specified amounts to the Board Chairperson and to each committee Chairperson.
C. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $375 million revolving credit facility provided by a syndication of banks. The Fund may borrow 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 on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus if LIBOR exceeds the Federal Funds Rate the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement. The Fund had no outstanding loans at July 31, 2012.
D. Share Transactions
The following table summarizes share and dollar activity in the Fund:
| | | Year Ended July 31, 2012 | | | Year Ended July 31, 2011 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| DWS Cash Investment Trust Class A | | | 188,623,888 | | | $ | 188,623,888 | | | | 180,647,137 | | | $ | 180,647,137 | |
| DWS Cash Investment Trust Class B | | | 1,078,298 | | | | 1,078,298 | | | | 1,921,200 | | | | 1,921,200 | |
| DWS Cash Investment Trust Class C | | | 37,325,524 | | | | 37,325,524 | | | | 18,264,875 | | | | 18,264,875 | |
| DWS Cash Investment Trust Class S | | | 179,586,638 | | | | 179,586,638 | | | | 192,930,495 | | | | 192,930,495 | |
| DWS Money Market Fund | | | 596,667,163 | | | | 596,667,163 | | | | 575,122,444 | | | | 575,122,444 | |
| | | | | | | $ | 1,003,281,511 | | | | | | | $ | 968,886,151 | |
| Shares issued to shareholders in reinvestment of distributions | |
| DWS Cash Investment Trust Class A | | | 25,133 | | | $ | 25,133 | | | | 32,840 | | | $ | 32,840 | |
| DWS Cash Investment Trust Class B | | | 415 | | | | 415 | | | | 1,011 | | | | 1,011 | |
| DWS Cash Investment Trust Class C | | | 3,172 | | | | 3,172 | | | | 3,822 | | | | 3,822 | |
| DWS Cash Investment Trust Class S | | | 37,454 | | | | 37,454 | | | | 57,425 | | | | 57,425 | |
| DWS Money Market Fund | | | 128,452 | | | | 128,452 | | | | 229,456 | | | | 229,456 | |
| | | | | | | $ | 194,626 | | | | | | | $ | 324,554 | |
| Shares redeemed | |
| DWS Cash Investment Trust Class A | | | (181,666,912 | ) | | $ | (181,666,912 | ) | | | (173,570,002 | ) | | $ | (173,570,002 | ) |
| DWS Cash Investment Trust Class B | | | (4,153,539 | ) | | | (4,153,539 | ) | | | (6,268,310 | ) | | | (6,268,310 | ) |
| DWS Cash Investment Trust Class C | | | (28,413,102 | ) | | | (28,413,102 | ) | | | (22,624,005 | ) | | | (22,624,005 | ) |
| DWS Cash Investment Trust Class S | | | (217,676,768 | ) | | | (217,676,768 | ) | | | (227,144,983 | ) | | | (227,144,983 | ) |
| DWS Money Market Fund | | | (762,629,971 | ) | | | (762,629,971 | ) | | | (946,636,529 | ) | | | (946,636,529 | ) |
| | | | | | | $ | (1,194,540,292 | ) | | | | | | $ | (1,376,243,829 | ) |
| Net increase (decrease) | |
| DWS Cash Investment Trust Class A | | | 6,982,109 | | | $ | 6,982,109 | | | | 7,109,975 | | | $ | 7,109,975 | |
| DWS Cash Investment Trust Class B | | | (3,074,826 | ) | | | (3,074,826 | ) | | | (4,346,099 | ) | | | (4,346,099 | ) |
| DWS Cash Investment Trust Class C | | | 8,915,594 | | | | 8,915,594 | | | | (4,355,308 | ) | | | (4,355,308 | ) |
| DWS Cash Investment Trust Class S | | | (38,052,676 | ) | | | (38,052,676 | ) | | | (34,157,063 | ) | | | (34,157,063 | ) |
| DWS Money Market Fund | | | (165,834,356 | ) | | | (165,834,356 | ) | | | (371,284,629 | ) | | | (371,284,629 | ) |
| | | | | | | $ | (191,064,155 | ) | | | | | | $ | (407,033,124 | ) |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of DWS Money Funds and Shareholders of DWS Money Market Prime Series:
We have audited the accompanying statement of assets and liabilities of DWS Money Market Prime Series (the "Fund"), a series of DWS Money Funds (the "Trust"), including the investment portfolio, as of July 31, 2012, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2012, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of DWS Money Market Prime Series at July 31, 2012, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
| | | |
Boston, Massachusetts September 20, 2012 | | |
Information About Your Fund's Expenses
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 account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (February 1, 2012 to July 31, 2012).
The tables illustrate your Fund's expenses in two ways:
•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
•Hypothetical 5% Fund Return. This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. An account maintenance fee of $6.25 per quarter for DWS Cash Investment Trust Class S may apply for certain accounts whose balances do not meet the applicable minimum initial investment. This fee is not included in these tables. If it was, the estimate of expenses paid for DWS Cash Investment Trust Class S during the period would be higher, and account value during the period would be lower, by this amount.
Expenses and Value of a $1,000 Investment for the six months ended July 31, 2012 (Unaudited) | |
| Actual Fund Return | | DWS Cash Investment Trust Class A | | | DWS Cash Investment Trust Class B | | | DWS Cash Investment Trust Class C | | | DWS Cash Investment Trust Class S | | | DWS Money Market Fund | |
| Beginning Account Value 2/1/12 | | $ | 1,000.00 | | | $ | 1,000.00 | | | $ | 1,000.00 | | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 7/31/12 | | $ | 1,000.05 | | | $ | 1,000.05 | | | $ | 1,000.05 | | | $ | 1,000.05 | | | $ | 1,000.05 | |
| Expenses Paid per $1,000* | | $ | 1.59 | | | $ | 1.59 | | | $ | 1.59 | | | $ | 1.59 | | | $ | 1.59 | |
| Hypothetical 5% Fund Return | | DWS Cash Investment Trust Class A | | | DWS Cash Investment Trust Class B | | | DWS Cash Investment Trust Class C | | | DWS Cash Investment Trust Class S | | | DWS Money Market Fund | |
| Beginning Account Value 2/1/12 | | $ | 1,000.00 | | | $ | 1,000.00 | | | $ | 1,000.00 | | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 7/31/12 | | $ | 1,023.27 | | | $ | 1,023.27 | | | $ | 1,023.27 | | | $ | 1,023.27 | | | $ | 1,023.27 | |
| Expenses Paid per $1,000* | | $ | 1.61 | | | $ | 1.61 | | | $ | 1.61 | | | $ | 1.61 | | | $ | 1.61 | |
* Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by 182 (the number of days in the most recent six-month period), then divided by 366.
| Annualized Expense Ratios | DWS Cash Investment Trust Class A | DWS Cash Investment Trust Class B | DWS Cash Investment Trust Class C | DWS Cash Investment Trust Class S | DWS Money Market Fund |
| DWS Money Market Prime Series | .32% | .32% | .32% | .32% | .32% |
For more information, please refer to the Fund's prospectus.
Tax Information (Unaudited)
A total of 4% of the dividends distributed during the fiscal year was derived from interest on U.S. government securities, which is generally exempt from state income tax.
Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 621-1048.
Summary of Management Fee Evaluation by Independent Fee Consultant
September 26, 2011
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2011, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, 2009 and 2010.
Qualifications
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 109 mutual fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
President, Thomas H. Mack & Co., Inc.
Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the fund as of July 31, 2012. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member 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; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
| Independent Board Members |
Name, Year of Birth, Position with the Fund and Length of Time Served1 | | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen |
Other Directorships Held by Board Member |
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993 | | Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (Chairman of Education Committee); formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 104 | — |
John W. Ballantine (1946) Board Member since 1999 | | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Chairman of the Board, Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity); former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International | 104 | — |
Henry P. Becton, Jr. (1943) Board Member since 1990 | | Vice Chair and former President, WGBH Educational Foundation. Directorships: Public Radio International; Public Radio Exchange (PRX); The PBS Foundation; North Bennett Street School (Boston); former Directorships: Association of Public Television Stations; Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service; Connecticut College | 104 | Lead Director, Becton Dickinson and Company2 (medical technology company); Lead Director, Belo Corporation2 (media company) |
Dawn-Marie Driscoll (1946) Board Member since 1987 | | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization); former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 104 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2007) |
Keith R. Fox, CFA (1954) Board Member since 1996 | | Managing General Partner, Exeter Capital Partners (a series of private investment funds) (since 1986). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies | 104 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2011) |
Kenneth C. Froewiss (1945) Board Member since 2001 | | Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996) | 104 | — |
Richard J. Herring (1946) Board Member since 1990 | | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006) | 104 | Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007), Independent Director of Barclays Bank Delaware (since September 2010) |
William McClayton (1944) Board Member since 2004 | | Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival | 104 | — |
Rebecca W. Rimel (1951) Board Member since 1995 | | President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Washington College (2011 to present); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); Trustee, Pro Publica (charitable organization) (2007-2010); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to 2012) | 104 | Director, CardioNet, Inc.2 (health care) (2009- present); Director, Viasys Health Care2 (January 2007- June 2007) |
William N. Searcy, Jr. (1946) Board Member since 1993 | | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003) | 104 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 1998) |
Jean Gleason Stromberg (1943) Board Member since 1997 | | Retired. Formerly, Consultant (1997-2001); Director, Financial Markets U.S. Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996) | 104 | — |
Robert H. Wadsworth (1940) Board Member since 1999 | | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, National Horizon, Inc. (non-profit organization); Director and Treasurer, The Phoenix Boys Choir Association | 107 | — |
Officers4 |
Name, Year of Birth, Position with the Fund and Length of Time Served5 | Principal Occupation(s) During Past 5 Years and Other Directorships Held |
W. Douglas Beck, CFA6 (1967) President, 2011-present | Managing Director3, Deutsche Asset Management (2006-present); President of DWS family of funds and Head of Product Management, U.S. for DWS Investments; formerly, Executive Director, Head of Product Management (2002-2006) and President (2005-2006) of the UBS Funds at UBS Global Asset Management; Co-Head of Manager Research/Managed Solutions Group, Merrill Lynch (1998-2002) |
John Millette7 (1962) Vice President and Secretary, 1999-present | Director3, Deutsche Asset Management |
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present | Managing Director3, 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) |
Caroline Pearson7 (1962) Chief Legal Officer, 2010-present | Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010) |
Melinda Morrow6 (1970) Vice President, May 2012-present | Director3, Deutsche Asset Management |
Paul Antosca7 (1957) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
Jack Clark7 (1967) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
Diane Kenneally7 (1966) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
John Caruso6 (1965) Anti-Money Laundering Compliance Officer, 2010-present | Managing Director3, Deutsche Asset Management |
Robert Kloby6 (1962) Chief Compliance Officer, 2006-present | Managing Director3, Deutsche Asset Management |
1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.
2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3 Executive title, not a board directorship.
4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.
5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.
6 Address: 60 Wall Street, New York, NY 10005.
7 Address: One Beacon Street, Boston, MA 02108.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
Account Management Resources | |
| For More Information | | The automated telephone system allows you to access personalized account information and obtain information on other DWS funds using either your voice or your telephone keypad. Certain account types within DWS Cash Investment Trust Class A, DWS Cash Investment Trust Class B, DWS Cash Investment Trust Class C and DWS Cash Investment Trust Class S also have the ability to purchase, exchange or redeem shares using this system. For more information, contact your financial advisor. You may also access our automated telephone system or speak with a DWS Investments representative by calling the appropriate number below: For shareholders of DWS Cash Investment Trust Class A, DWS Cash Investment Trust Class B, DWS Cash Investment Trust Class C and DWS Money Market Fund: (800) 621-1048 For shareholders of DWS Cash Investment Trust Class S: (800) 728-3337 |
| Web Site | | www.dws-investments.com View your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day. Obtain prospectuses and applications, blank forms, interactive worksheets, news about DWS funds, subscription to fund updates by e-mail, retirement planning information, and more. |
| Written Correspondence | | DWS Investments PO Box 219151 Kansas City, MO 64121-9151 |
| Proxy Voting | | 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 are available on our Web site — www.dws-investments.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 (800) 621-1048. |
| Portfolio Holdings | | Following the fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month, information about the fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the fund's current prospectus for more information. |
| Principal Underwriter | | If you have questions, comments or complaints, contact: DWS Investments Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 (800) 621-1148 |
| Investment Management | | Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), which is part of Deutsche Asset Management, is the investment advisor for the fund. DIMA and its predecessors have more than 80 years of experience managing mutual funds and DIMA provides a full range of investment advisory services to both institutional and retail clients. DIMA is an indirect, wholly owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global banking institution engaged in a wide variety of financial services, including investment management, retail, private and commercial banking, investment banking and insurance. DWS Investments is the retail brand name in the U.S. for the asset management activities of Deutsche Bank AG and DIMA. As such, DWS is committed to delivering the investing expertise, insight and resources of this global investment platform to American investors. |
| | Nasdaq Symbol | CUSIP Number | Fund Number |
| DWS Money Market Fund | KMMXX | 23339A 101 | 6 |
| DWS Cash Investment Trust Class A | DOAXX | 23339A 408 | 421 |
| DWS Cash Investment Trust Class B | DOBXX | 23339A 507 | 621 |
| DWS Cash Investment Trust Class C | DOCXX | 23339A 606 | 721 |
| DWS Cash Investment Trust Class S | DOSXX | 23339A 705 | 2021 |
Notes
Notes
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.
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.
