UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSR
Investment Company Act file number 811-5970
CASH ACCOUNT TRUST
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(Exact Name of Registrant as Specified in Charter)
222 South Riverside Plaza, Chicago, Illinois, 60606
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 454-7190
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Paul Schubert
345 Park Avenue
New York, NY 10154
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(Name and Address of Agent for Service)
Date of fiscal year end: 04/30
Date of reporting period: 04/30/05
ITEM 1. REPORT TO STOCKHOLDERS
ANNUAL REPORT TO SHAREHOLDERS
Institutional Select
Money Market Shares
Money Market Portfolio
April 30, 2005
This report must be preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, visit scudder.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the fund. Please read the prospectus carefully before you invest.
Portfolio Management Review |
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In the following interview, Portfolio Manager Geoffrey Gibbs discusses Cash Account Trust — Money Market Portfolio — Institutional Select Money Market Shares' performance and the market environment for the 12-month period ended April 30, 2005.
Q: Will you discuss the market environment for the portfolio during the 12-month period?
A: Following months of reasonable gross domestic product growth, or GDP, accompanied by a stubbornly anemic jobs reports in late 2003/early 2004, the April 2004 nonfarm payroll report citing 300,000 new jobs demonstrated that the US economy was in full recovery, meaning that the Federal Reserve Board (the Fed) would soon begin to raise rates. This signaled a dramatic change for the fixed-income markets, including money market securities. It also indicated that the yield curve would steepen substantially, meaning that longer-term money market rates would move higher than shorter-term rates.1
1 The yield curve is a graph with a left-to-right line that shows how high or low yields are, from the shortest to the longest maturities. Typically (and when the yield curve is characterized as ``steep'' this is especially true), the line rises from left to right as investors who are willing to tie up their money for a longer period of time are rewarded with higher yields.
2 LIBOR, or the London Interbank Offered Rate, is the most widely used benchmark or reference rate for short-term interest rates. LIBOR is the rate of interest at which banks borrow funds from other banks, in large volume, in the international market.
With the job market seemingly back on track, the Fed began spelling out what came to be known as its "measured-pace" policy. Under this policy, the Fed has been inching up the federal funds rate by 25 basis points (0.25%) at each of its seven policy meetings beginning in June 2004 and extending through March 2005. At the close of the fund's fiscal year on April 30, 2005 the federal funds rate stood at 2.75%, up from 1.00% at the start of 2004.
Portfolio Performance
As of April 30, 2005
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.
| 7-Day Current Yield |
Institutional Select Money Market Shares | 2.75% |
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.scudder.com.
In the second half of 2004, the US economic expansion displayed resiliency, maintaining a 4% growth rate while weathering a spike in oil prices up to $55 per barrel. As we moved into the fourth quarter of 2004 and the first quarter of 2005, corporate pricing power (the ability of companies to raise prices to boost profits while retaining market share) began to strengthen as inflationary pressures took hold. Monthly job growth remained an economic indicator for the market, but the market's focus gradually shifted to a careful watch for signs of increased inflation. The one-year LIBOR rate, an industry standard for measuring one-year money market rates, closed 2004 at 3.10%, its highest level since March 2002.2 At the end of April 2005, LIBOR stood at 3.68%. The premium level of LIBOR (which is set by the market) over the federal funds rate (which is fixed by the Federal Reserve) of 2.75% represented two factors: (1) the market's concern that the Fed may have to raise short-term interest rates more aggressively if inflation begins to accelerate and (2) the fact that many market participants reevaluated their portfolios and sold some riskier credits following announcements of credit problems in the automobile and airline industries. These actions tended to boost yields and depress prices in the credit markets overall.
Q: How did the portfolio perform over its most recent fiscal year?
A: For the period, the Money Market Portfolio registered favorable performance and achieved its stated objective of providing maximum current income while maintaining stability of capital. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
Q: In light of market conditions during the period, what has been the strategy for the Money Market Portfolio?
A: In the second quarter of 2004, as stated above, one-year money market rates rose sharply in response to concerns that the Fed would raise short-term interest rates aggressively over the next 12 to 24 months. Our strategy was to decrease the fund's average maturity in order to reduce risk, limiting our purchases to three-month-maturity issues and shorter.3 As we moved into the fourth quarter of 2004 and the first quarter of this year, with one-year money market rates stabilizing somewhat, we adjusted the fund's weighted average maturity target back up to approximately 40 days to capture some additional yield. We believe the portfolio's current positioning is in line with the market's expectation of a steady series of fed funds rate hikes.
3 Shorter-term securities are generally less risky than longer-term securities and are therefore potentially more attractive in a difficult environment.
4 A repurchase agreement (repo) is an agreement between a seller and a buyer, usually of government securities, in which the seller agrees to repurchase the securities at a given price and usually at a stated time. Repos are widely used money market instruments that serve as interest-bearing, short-term ``parking places'' for large sums of money.
During the period, we maintained a target allocation of approximately 20% in floating-rate securities. The interest rate of floating-rate securities adjusts periodically based on indices such as LIBOR and the federal funds rate. Because the interest rates of these instruments adjust as market conditions change, the instruments provide flexibility in an uncertain interest rate environment. Our decision to maintain this allocation helped performance during the period. The remainder of the Money Market Portfolio is invested in fixed-rate securities, certificates of deposit and repurchase agreements.4
Q: What detracted from performance during the period?
A: In December, we kept additional cash on hand — as we do each year — to meet any tax-related redemptions as well as investors' year-end liquidity needs. This detracted somewhat from yield and total return.
Q: Will you describe your investment philosophy?
A: We continue our insistence on the highest credit quality within the fund. We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the fund and to seek competitive yield for our shareholders.
A group of investment professionals is responsible for the day-to-day management of the fund. These professionals have a broad range of experience managing money market funds.
The views expressed in this report reflect those of the portfolio managers only through the end of the period stated above. The managers' views are subject to change at any time based on market and other conditions and should not be construed as a recommendation.
Scudder Investments is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Investment Management Americas Inc., Deutsche Asset Management Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Bank Trust Company Americas and Scudder Trust Company.
Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.
Information About Your Portfolio's Expenses |
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As an investor of the Portfolio, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Portfolio expenses. Examples of transaction costs include sales charges (loads), redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Portfolio 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 Portfolio limited these expenses; had it not done so, expenses would have been higher. The tables are based on an investment of $1,000 made at the beginning of the six-month period ended April 30, 2005.
The tables illustrate your Portfolio's expenses in two ways:
Actual Portfolio Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Portfolio using the Portfolio's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
Hypothetical 5% Portfolio Return. This helps you to compare your Portfolio's ongoing expenses (but not transaction costs) with those of other mutual funds using the Portfolio's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2005 |
Actual Fund Return | Money Market Portfolio |
Beginning Account Value 11/1/04 | $ 1,000.00 |
Ending Account Value 4/30/05 | $ 1,011.10 |
Expenses Paid per $1,000* | $ 1.05 |
Hypothetical 5% Fund Return | Money Market Portfolio |
Beginning Account Value 11/1/04 | $ 1,000.00 |
Ending Account Value 4/30/05 | $ 1,023.75 |
Expenses Paid per $1,000* | $ 1.05 |
* Expenses are equal to the Portfolio's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
Annualized Expense Ratios | Money Market Portfolio |
Institutional Select Money Market Shares | .21% |
For more information, please refer to the Portfolio's prospectus.
Cash Account Trust — Money Market Portfolio
Asset Allocation | 4/30/05 | 4/30/04 |
|
Commercial Paper | 36% | 33% |
Certificates of Deposit and Bank Notes | 28% | 24% |
Short Term Notes | 11% | 33% |
Time Deposits | 11% | — |
US Government Sponsored Agencies+ | 6% | 6% |
Repurchase Agreements | 4% | 4% |
Promissory Notes | 4% | — |
| 100% | 100% |
+ Not backed by the full faith and credit of the US Government
Weighted Average Maturity | | |
Cash Account Trust — Money Market Portfolio | 37 days | 74 days |
First Tier Institutional Money Fund Average* | 33 days | 53 days |
* The Fund is compared to its respective iMoneyNet Category: First Tier Institutional Money Fund Average — Category includes a widely-recognized composite of money market funds that invest in only first tier (highest rating) securities. Portfolio Holdings of First Tier funds include US Treasury, US Other, Repos, Time Deposits, Domestic Bank Obligations, Foreign Bank Obligations, First Tier Commercial Paper, Floating Rate Notes and Asset Backed Commercial Paper.
Asset allocation is subject to change. For more complete details about the Portfolio's holdings, see pages 7-10. A quarterly fact sheet is available upon request. Information concerning portfolio holdings of the Portfolio as of month end will be posted to scudder.com on the 15th of the following month.
Portfolio of Investments as of April 30, 2005 |  |
|
Money Market Portfolio | Principal Amount ($) | Value ($) |
| |
Certificates of Deposit and Bank Notes 28.2% |
Abbey National PLC, 2.8%, 5/3/2005 | 50,000,000 | 50,000,000 |
Barclays Bank PLC: | | |
3.01%, 6/21/2005 | 40,000,000 | 39,997,969 |
3.02%, 6/30/2005 | 95,000,000 | 94,999,960 |
3.06%, 8/9/2005 | 46,000,000 | 46,000,000 |
Calyon: | | |
2.8%, 5/3/2005 | 40,000,000 | 40,000,000 |
3.02%, 9/20/2005 | 30,000,000 | 29,996,454 |
Credit Suisse First Boston: | | |
2.8%, 5/3/2005 | 80,000,000 | 80,000,000 |
2.805%, 5/3/2005 | 75,000,000 | 75,000,000 |
Depfa Bank PLC, 2.75%, 5/2/2005 | 40,000,000 | 40,000,000 |
Dexia Banque Belgique, 3.015%, 6/22/2005 | 50,000,000 | 50,000,359 |
First Tennessee Bank NA, 2.8%, 5/3/2005 | 30,000,000 | 30,000,000 |
HBOS Treasury Services PLC: | | |
2.97%, 8/18/2005 | 60,000,000 | 60,000,000 |
3.04%, 7/5/2005 | 50,000,000 | 50,000,000 |
Landesbank Baden Wurttemberg, 2.97%, 6/16/2005 | 20,000,000 | 19,998,922 |
Landesbank Hessen-Thuringen Girozentrale, 3.06%, 7/5/2005 | 50,000,000 | 50,002,688 |
LaSalle Bank, 3.23%, 2/3/2006 | 100,000,000 | 100,000,000 |
M&I Marshall & Isley Bank, 3.04%, 6/29/2005 | 33,000,000 | 33,000,000 |
Northern Rock PLC, 3.0%, 6/22/2005 | 47,000,000 | 47,000,000 |
Royal Bank of Scotland PLC, 2.81%, 5/3/2005 | 40,000,000 | 40,000,000 |
Societe Generale: | | |
2.8%, 5/3/2005 | 60,000,000 | 60,000,000 |
2.955%, 8/8/2005 | 70,000,000 | 70,000,948 |
Toronto Dominion Bank, 2.505%, 5/27/2005 | 30,000,000 | 30,000,107 |
UBS AG, 2.815%, 5/3/2005 | 50,000,000 | 50,000,000 |
Total Certificates of Deposit and Bank Notes (Cost $1,185,997,407) | 1,185,997,407 |
|
Commercial Paper** 35.6% |
AB Spintab, 3.01%, 7/1/2005 | 17,500,000 | 17,410,745 |
Apreco, LLC: | | |
2.95%, 5/2/2005 | 75,000,000 | 74,993,854 |
3.04%, 6/22/2005 | 45,000,000 | 44,802,400 |
Blue Ridge Asset Funding Corp., 2.82%, 5/5/2005 | 70,000,000 | 69,978,067 |
British Transco Capital, Inc.: | | |
2.705%, 5/9/2005 | 50,000,000 | 49,969,944 |
2.77%, 5/6/2005 | 20,000,000 | 19,992,306 |
Calyon North America, Inc., 2.85%, 5/5/2005 | 45,000,000 | 44,985,750 |
Cancara Asset Securitization LLC, 2.81%, 5/3/2005 | 30,000,000 | 29,995,317 |
Charta LLC: | | |
2.8%, 5/2/2005 | 40,000,000 | 39,996,889 |
2.95%, 5/2/2005 | 133,850,000 | 133,839,031 |
CIT Group, Inc.: | | |
2.62%, 6/17/2005 | 22,926,000 | 22,847,581 |
2.93%, 8/15/2005 | 30,000,000 | 29,741,183 |
Colgate-Palmolive Co., 2.99%, 5/11/2005 | 30,000,000 | 29,975,083 |
CRC Funding LLC, 3.04%, 6/23/2005 | 67,000,000 | 66,700,138 |
Depfa Bank PLC, 3.01%, 7/1/2005 | 50,000,000 | 49,744,986 |
General Electric Capital Corp., 3.01%, 7/1/2005 | 50,000,000 | 49,744,986 |
General Electric Co., 3.0%, 6/28/2005 | 80,000,000 | 79,613,333 |
Giro Funding US Corp.: | | |
3.0%, 5/26/2005 | 20,000,000 | 19,958,333 |
3.0%, 5/27/2005 | 25,000,000 | 24,945,834 |
HSBC USA, Inc., 3.05%, 6/28/2005 | 26,000,000 | 25,872,239 |
National Australia Funding, Inc., 2.815%, 5/4/2005 | 50,000,000 | 49,988,271 |
Northern Rock PLC, 3.01%, 7/1/2005 | 100,000,000 | 99,489,972 |
Perry Global Funding LLC: | | |
Series A, 2.89%, 5/12/2005 | 25,000,000 | 24,977,923 |
Series A, 2.985%, 6/20/2005 | 60,000,000 | 59,751,250 |
RWE AG: | | |
2.91%, 8/1/2005 | 32,755,000 | 32,511,412 |
2.92%, 8/2/2005 | 25,000,000 | 24,811,417 |
Sanofi-Aventis: | | |
3.0%, 6/13/2005 | 20,000,000 | 19,928,333 |
3.01%, 6/13/2005 | 16,000,000 | 15,942,476 |
SBC Communications, Inc., 2.84%, 5/4/2005 | 25,000,000 | 24,994,083 |
Societe Generale North America, Inc., 2.97%, 9/12/2005 | 75,000,000 | 74,170,875 |
State Street Corp., 2.94%, 5/2/2005 | 35,660,000 | 35,657,088 |
Swedbank AB, 3.0%, 7/1/2005 | 23,200,000 | 23,082,067 |
Swedish National Housing Finance Corp., 3.04%, 6/27/2005 | 30,000,000 | 29,855,600 |
Total SA, 2.94%, 5/2/2005 | 18,757,000 | 18,755,468 |
Verizon Network Funding Corp., 2.81%, 5/4/2005 | 40,000,000 | 39,990,633 |
Total Commercial Paper (Cost $1,499,014,867) | 1,499,014,867 |
|
Short Term Notes* 11.0% |
Associates Corp. of North America, 3.19%, 6/27/2005 | 10,500,000 | 10,500,000 |
BMW US Capital LLC, 144A, 2.924%, 4/15/2010 | 20,000,000 | 20,000,000 |
Canadian Imperial Bank of Commerce, 3.004%, 5/15/2006 | 45,000,000 | 45,019,774 |
Depfa Bank PLC, 3.01%, 9/15/2005 | 25,000,000 | 25,000,000 |
HSBC Finance Corp., 2.98%, 10/25/2005 | 25,000,000 | 25,000,000 |
International Business Machines Corp., 2.88%, 12/8/2005 | 30,000,000 | 30,000,000 |
Lehman Brothers Holdings, Inc., Series G, 3.2%, 12/23/2005 | 30,000,000 | 30,023,190 |
Merrill Lynch & Co., Inc., 2.9%, 2/3/2009 | 30,000,000 | 30,000,000 |
Morgan Stanley: | | |
2.86%, 2/3/2006 | 30,000,000 | 30,000,000 |
2.99%, 2/3/2006 | 25,000,000 | 25,000,000 |
3.07%, 11/15/2005 | 45,000,000 | 45,000,000 |
3.08%, 5/24/2005 | 50,000,000 | 50,000,000 |
National City Bank of Cleveland: | | |
2.905%, 6/10/2005 | 25,000,000 | 25,000,966 |
2.945%, 5/24/2005 | 20,000,000 | 20,000,000 |
Pfizer, Inc., 144A, 2.85%, 10/7/2005 | 20,000,000 | 20,000,000 |
Tango Finance Corp., 144A, 2.82%, 2/10/2006 | 30,000,000 | 29,997,714 |
Total Short Term Notes (Cost $460,541,644) | 460,541,644 |
|
US Government Sponsored Agencies 5.5% |
Federal Home Loan Mortgage Corp.: | | |
2.725%*, 11/7/2005 | 25,000,000 | 25,000,000 |
3.083%*, 10/7/2005 | 70,000,000 | 70,000,000 |
Federal National Mortgage Association: | | |
2.77%*, 9/7/2006 | 60,000,000 | 59,939,630 |
2.99%*, 10/3/2005 | 55,000,000 | 54,984,762 |
3.0%**, 7/1/2005 | 20,000,000 | 19,898,333 |
Total US Government Sponsored Agencies (Cost $229,822,725) | 229,822,725 |
|
Funding Agreements 0.6% |
New York Life Insurance Co., 3.123%, 9/20/2005 (Cost $25,000,000) | 25,000,000 | 25,000,000 |
|
Promissory Notes 4.0% |
Goldman Sachs Group, Inc.: | | |
3.04%*, 8/10/2005 | 60,000,000 | 60,000,000 |
3.09%*, 5/26/2005 | 110,000,000 | 110,000,000 |
Total Promissory Notes (Cost $170,000,000) | 170,000,000 |
Municipal Investments 0.2% |
Massachusetts, State Housing Finance Agency Revenue, Avalon at Newton, Series A, 3.0%*, 12/1/2034, JPMorgan Chase Bank (b) (Cost $9,890,000) | 9,890,000 | 9,890,000 |
|
Time Deposits 10.7% |
Bank of Tokyo Mitsubishi, 2.83%, 5/3/2005 | 50,000,000 | 50,000,000 |
Fifth Third Bank, 2.95%, 5/2/2005 | 200,000,000 | 200,000,000 |
Natexis Banque Populaires, 3.0%, 5/2/2005 | 200,000,000 | 200,000,000 |
Total Time Deposits (Cost $450,000,000) | 450,000,000 |
|
Repurchase Agreements 4.2% |
Morgan Stanley, 2.97%, dated 4/29/2005, to be repurchased at $173,042,818 on 5/2/2005 (c) | 173,000,000 | 173,000,000 |
State Street Bank and Trust Co., 2.83%, dated 4/29/2005, to be repurchased at $3,685,869 on 5/2/2005 (d) | 3,685,000 | 3,685,000 |
Total Repurchase Agreements (Cost $176,685,000) | 176,685,000 |
| % of Net Assets | Value ($) |
| |
Total Investment Portfolio (Cost $4,206,951,643) (a) | 100.0 | 4,206,951,643 |
Other Assets and Liabilities, Net | (0.0) | 1,573,054 |
Net Assets | 100.0 | 4,208,524,697 |
* Floating rate notes are securities whose yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate. These securities are shown at their current rate as of April 30, 2005.
** Annualized yield at the time of purchase; not a coupon rate.
(a) Cost for federal income tax purposes was $4,206,951,643.
(b) Security incorporates a letter of credit from a major bank.
(c) Collateralized by:
Principal Amount ($) | | Security | Rate (%) | Maturity
Date | Collateral
Value ($) |
|
73,000,000 | | Federal National Mortgage Association | 4.625 | 5/1/2013 | 74,167,858 |
12,215,000 | | Federal Home Loan Mortgage Corp. | 4.5 - 5.75 | 4/15/2008 - 5/6/2013 | 12,515,056 |
89,655,000 | | Federal Home Loan Bank | 2.36 - 5.81 | 6/5/2006 - 2/28/2023 | 90,023,358 |
Total Collateral Value | 176,706,272 |
(d) Collateralized by $3,735,000 Federal Home Loan Mortgage Corp., 1.75%, maturing on 5/15/2005 with a value of $3,762,897.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2005 |
Assets | Money Market Portfolio |
Investments: Investments in securities, at amortized cost | $ 4,030,266,643 |
Repurchase agreements, at amortized cost | 176,685,000 |
Total investments in securities, at amortized cost | 4,206,951,643 |
Receivable for investments sold | 35,000 |
Interest receivable | 6,447,583 |
Receivable for Fund shares sold | 124,032 |
Other assets | 135,746 |
Total assets | 4,213,694,004 |
Liabilities |
Due to custodian bank | 9,996 |
Dividends payable | 378,288 |
Payable for Fund shares redeemed | 610,466 |
Accrued management fee | 539,128 |
Other accrued expenses and payables | 3,631,429 |
Total liabilities | 5,169,307 |
Net assets, at value | $ 4,208,524,697 |
Net Assets |
Net assets consist of: Undistributed net investment income | 107,749 |
Accumulated net realized gain (loss) | (785,503) |
Paid-in capital | 4,209,202,451 |
Net assets, at value | $ 4,208,524,697 |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2005 (continued) |
Net Asset Value | Money Market Portfolio |
Davidson Cash Equivalent Shares Net assets applicable to shares outstanding | $ 316,326,566 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 316,326,539 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
Davidson Cash Equivalent Plus Shares Net assets applicable to shares outstanding | $ 109,113,435 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 109,113,426 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
Institutional Money Market Shares Net assets applicable to shares outstanding | $ 74,652,199 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 74,649,314 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
Institutional Select Money Market Shares Net assets applicable to shares outstanding | $ 1,242 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 1,241 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
Premier Money Market Shares Net assets applicable to shares outstanding | $ 3,380,904,367 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 3,380,777,158 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
Premium Reserve Money Market Shares Net assets applicable to shares outstanding | $ 327,092,909 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 327,009,001 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
Service Shares Net assets applicable to shares outstanding | $ 433,979 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 434,877 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
The accompanying notes are an integral part of the financial statements.
Statement of Operations for the year ended April 30, 2005 |
Investment Income | Money Market Portfolio |
Income: Interest | $ 74,789,250 |
Expenses: Management fee | 6,250,764 |
Services to shareholders | 10,190,113 |
Custodian fees | 194,100 |
Distribution service fees | 17,930,289 |
Auditing | 46,246 |
Legal | 73,659 |
Trustees' fees and expenses | 75,490 |
Reports to shareholders | 284,864 |
Registration fees | 130,684 |
Other | 157,477 |
Total expenses, before expense reductions | 35,333,686 |
Expense reductions | (149,823) |
Total expenses, after expense reductions | 35,183,863 |
Net investment income | 39,605,387 |
Net realized gain (loss) on investment transactions | 1,874 |
Net increase (decrease) in net assets resulting from operations | $ 39,607,261 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets |
| Money Market Portfolio |
Years Ended April 30, |
Increase (Decrease) in Net Assets | 2005 | 2004 |
Operations: Net investment income | $ 39,605,387 | $ 5,610,385 |
Net realized gain (loss) on investment transactions | 1,874 | 86,771 |
Net increase in net assets resulting from operations | 39,607,261 | 5,697,156 |
Distributions to shareholders from: Net investment income: Davidson Cash Equivalent Shares | (2,426,184) | — |
Davidson Cash Equivalent Plus Shares | (860,296) | — |
Institutional Money Market Shares | (1,599,818) | (952,664) |
Institutional Select Money Market Shares | (21) | (9) |
Premier Money Market Shares | (30,622,657) | (3,416,386) |
Premium Reserve Money Market Shares | (4,091,309) | (1,191,736) |
Service Shares | (4,876) | (1,145) |
Portfolio share transactions: Proceeds from shares sold | 3,693,493,597 | 3,642,546,705 |
Reinvestment of distributions | 38,220,516 | 5,149,061 |
Cost of shares redeemed | (2,812,299,102) | (3,625,088,308) |
Net increase (decrease) in net assets from Fund share transactions | 919,415,011 | 22,607,458 |
Increase (decrease) in net assets | 919,417,111 | 22,742,674 |
Net assets at beginning of period | 3,289,107,586 | 3,266,364,912 |
Net assets at end of period (Including undistributed net investment income of $107,749 and $107,523, respectively) | $ 4,208,524,697 | $ 3,289,107,586 |
The accompanying notes are an integral part of the financial statements.
Money Market Portfolio — Institutional Select Money Market Shares
Years Ended April 30, | 2005 | 2004 | 2003a |
Selected Per Share Data |
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .017 | .010 | .005 |
Less distributions from net investment income | (.017) | (.010) | (.005) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 1.75 | .99 | .52** |
Ratios to Average Net Assets and Supplemental Data |
Net assets, end of period ($ millions) | .001 | .001 | .001 |
Ratio of expenses (%) | .20 | .18 | .19* |
Ratio of net investment income (%) | 1.73 | .98 | 1.33* |
a For the period from December 2, 2002 (commencement of sales of Institutional Select Money Market Shares) to April 30, 2003.
* Annualized
** Not annualized
Notes to Financial Statements |
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1. Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, diversified management investment company organized as a Massachusetts business trust.
The Trust offers three portfolios: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio (the "Portfolios"). The financial statements of the Government & Agency Securities Portfolio and Tax-Exempt Portfolio are presented in separate annual reports. Money Market Portfolio offers seven classes of shares: Davidson Cash Equivalent Shares (commencement of operations September 27, 2004), Davidson Cash Equivalent Plus Shares (commencement of operations September 28, 2004), Institutional Money Market Shares, Institutional Select Money Market Shares, Premier Money Market Shares, Premium Reserve Money Market Shares and Service Shares. The financial highlights for the Davidson Cash Equivalent Shares, the Premier Money Market Shares, the Davidson Cash Equivalent Plus Shares, the Institutional Money Market Shares, the Premium Reserve Money Market Shares and the Service Shares are provided separately and are available upon request.
The Portfolio's investment income, realized and unrealized gains and losses, and certain Portfolio-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of that portfolio, except that each class bears certain expenses unique to that class such as distribution service fees, shareholder service fees 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 Trust have equal rights with respect to voting subject to class-specific arrangements.
The Portfolio's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Portfolios in the preparation of their financial statements.
Security Valuation. Portfolio securities are valued utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium.
Repurchase Agreements. The Portfolio may enter into repurchase agreements with certain banks and broker/dealers whereby the Portfolio, through its custodian or sub-custodian bank, receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the value is equal to at least the principal amount of the repurchase price plus accrued interest. The custodial bank holds the collateral in a separate account until the agreement matures. If the value of the securities falls below the principal amount of the repurchase agreement plus accrued interest, the financial institution deposits additional collateral by the following business day. If the financial institution either fails to deposit the required additional collateral or fails to repurchase the securities as agreed, the Portfolios have the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Portfolios' claims on the collateral may be subject to legal proceedings.
Federal Income Taxes. The Portfolio's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable and tax-exempt income to its shareholders. Accordingly, each Portfolio paid no federal income taxes and no federal income tax provision was required.
During the year ended April 30, 2005, the Money Market Portfolio utilized approximately $1,874 of its capital loss carryforward. At April 30, 2005, the Money Market Portfolio had a net tax basis capital loss carryforward of approximately ($786,000) which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until April 30, 2010, the expiration date, whichever occurs first.
Distribution of Income. Net investment income of each Portfolio is declared as a daily dividend and is distributed to shareholders monthly.
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 Portfolio.
At April 30, 2005, the Portfolio's components of distribute earnings on a tax-basis are as follows:
Money Market Portfolio: |
Undistributed ordinary income | $ 513,713 |
Undistributed net long-term capital gains | $ — |
Capital loss carryforwards | $ (786,000) |
In addition, during the years ended April 30, 2005 and April 30, 2004, the tax character of distributions paid to shareholders by each Portfolio is summarized as follows:
Portfolio | 2005 | 2004 |
Money Market Portfolio: |
Distributions from ordinary income | $ 39,605,161 | $ 5,561,940 |
Expenses. Expenses of the Trust arising in connection with a specific Portfolio are allocated to that Portfolio. Other Trust expenses which cannot be directly attributed to a Portfolio are apportioned pro rata on the basis of relative net assets among the Portfolios in the Trust.
Contingencies. In the normal course of business, the Portfolios may enter into contracts with service providers that contain general indemnification clauses. The Portfolio's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Portfolio that have not yet been made. However, based on experience, the Portfolio expects the risk of loss to be remote.
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 premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
2. Related Parties
Management Agreement. Under the Management Agreement, Deutsche Investment Management Americas Inc. ("DeIM" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Trust in accordance with its 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 each Portfolio. In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Management Agreement. The management fee payable under the Management Agreement is equal to 1/12 of the annual rate of 0.22% of the first $500,000,000 of the Portfolios' combined average daily net assets, 0.20% of the next $500,000,000 of such net assets, 0.175% of the next $1,000,000,000 of such net assets, 0.16% of the next $1,000,000,000 of such net assets and 0.15% of such net assets in excess of $3,000,000,000, computed and accrued daily and payable monthly. Accordingly, for the the year ended April 30, 2005, the Portfolios incurred management fees equivalent to the following annual effective rates of each Portfolio's average daily net assets:
Portfolio | Annual Effective Rate (%) |
Money Market Portfolio | .16 |
The Advisor and certain of its subsidiaries have voluntarily agreed to maintain the annualized expenses at 0.95%, 0.80%, 0.25% and 0.20% of the Davidson Cash Equivalent Shares, the Davidson Cash Equivalent Plus Shares, Institutional Money Market Shares and Institutional Select Money Market Shares, respectively, of the Money Market Portfolio for the year ended April 30, 2005. Effective March 17, 2005 through July 31, 2005, the Advisor has contractually agreed to waive or reimburse all or a portion of its management fee and reimburse or pay operating expenses at 1.00% of the Service Shares of the Money Market Portfolio.
Service Provider Fees. Scudder Investments Service Company ("SISC"), an affiliate of the Advisor, is the transfer, dividend-paying and shareholder service agent of the Trust. For the the year ended April 30, 2005, the amounts charged to the Portfolio by SISC were as follows:
Portfolio | Total Aggregated | Waived | Unpaid at April 30, 2005 |
Money Market Portfolio: |
Davidson Cash Equivalent Shares | $ 424,286 | $ 96,544 | $ 52,072 |
Davidson Cash Equivalent Plus Shares | 89,715 | 11,222 | 21,599 |
Institutional Money Market Shares | 23,686 | — | 3,848 |
Institutional Select Money Market Shares* | — | — | — |
Premier Money Market Shares | 8,952,852 | — | 1,516,136 |
Premium Reserve Money Market Shares | 341,816 | — | 55,506 |
Service Shares | 1,975 | 147 | — |
* Fee for period is less than $1.
Pursuant to a sub-transfer agency agreement between SISC and DST Systems, Inc. ("DST"), SISC has delegated certain transfer agent and dividend paying agent functions to DST. SISC compensates DST out of the shareholder servicing fee it receives from the Portfolio.
Distribution Service Agreement. The Trust has a distribution service agreement with Scudder Distributors, Inc. ("SDI"), a subsidiary of the Advisor. For its services as primary distributor, the Trust pays SDI an annual fee ("Distribution Fee") of 0.30% of the average daily net assets of the Davidson Cash Equivalent Shares, 0.25% of the average daily net assets of the Davidson Cash Equivalent Plus Shares, 0.60% of average daily net assets for the Service Shares, 0.25% of average daily net assets for the Premier Money Market Shares, up to 0.075% (currently 0.01%) of the average daily net assets for the Institutional Money Market Shares and 0.10% of the average daily net assets for the Premium Reserve Shares of the Portfolio.
For the year ended April 30, 2005, the Distribution Fee was as follows:
Portfolio | Distribution Fee | Unpaid at April 30, 2005 |
Money Market Portfolio: | |
Davidson Cash Equivalent Shares | $ 493,993 | $ 79,761 |
Davidson Cash Equivalent Plus Shares | 131,910 | 22,006 |
Institutional Money Market Shares | 9,717 | 722 |
Premier Money Market Shares | 8,008,803 | 701,758 |
Premium Reserve Money Market Shares | 298,476 | 26,416 |
Service Shares | 4,301 | 232 |
In addition, SDI provides information and administrative services to the Davidson Cash Equivalent Shares, the Davidson Cash Equivalent Plus Shares, the Premier Money Market Shares, the Premium Reserve Money Market Shares and the Institutional Money Market Shares of the Portfolio, which pay SDI a fee ("Service Fee") as follows:
The Davidson Cash Equivalent Shares of the Portfolio pay SDI an annual fee of 0.25% of average daily net assets. The Davidson Cash Equivalent Plus Shares of the Portfolio pay SDI an annual fee of 0.20% of average daily net assets. The Premier Money Market Shares of the Portfolio pay SDI an annual fee of 0.25% of average daily net assets. The Premium Reserve Money Market Shares of the Portfolio pay SDI an annual fee of 0.15% of average daily net assets. The Institutional Money Market Shares of the Portfolio pay SDI an annual fee of up to 0.075% (currently 0.01%) of average daily net assets. A portion of these fees may be paid pursuant to a Rule 12b-1 Plan.
For the year ended April 30, 2005, the Service Fee was as follows:
Portfolio | Service Fee | Unpaid at April 30, 2005 |
Money Market Portfolio: | |
Davidson Cash Equivalent Shares | $ 411,657 | $ 66,057 |
Davidson Cash Equivalent Plus Shares | 105,536 | 17,730 |
Institutional Money Market Shares | 9,717 | 711 |
Premier Money Market Shares | 8,008,801 | 690,025 |
Premium Reserve Money Market Shares | 447,378 | 39,624 |
Trustees' Fees and Expenses. The Trust pays each Trustee not affiliated with the Advisor retainer fees plus specified amounts for attended board and committee meetings.
Insurance Brokerage Commissions. The Portfolio paid insurance premiums to an unaffiliated insurance broker in 2002 and 2003. This broker in turn paid a portion of its commissions to an affiliate of the Advisor, which performed certain insurance brokerage services for the broker. The Advisor has reimbursed the Portfolios for the portion of commissions (plus interest) paid to the affiliate of the Advisor attributable to the premiums paid by the Portfolios. The amounts for 2002 and 2003 were as follows:
Portfolio | 2002 | 2003 |
Money Market Portfolio | $ 3,343 | $ 1,007 |
3. Expense Reductions
For the year ended April 30, 2005, the Advisor has agreed to reimburse the Trust the following amounts, which represent a portion of the fee savings expected to be realized by the Advisor related to the outsourcing by the Advisor of certain administrative services to an unaffiliated service provider:
Portfolio | Amount ($) |
Money Market Portfolio | 39,854 |
In addition, the Trust has entered into arrangements with its custodian whereby credits realized as a result of uninvested cash balances were used to reduce a portion of each Portfolio's expenses. During the year ended April 30, 2005, the Money Market Portfolio's custody fees were reduced as follows:
Portfolio | Amount ($ |
Money Market Portfolio | 2,056 |
4. Line of Credit
The Trust and several other affiliated funds (the "Participants") share in a $1.1 billion revolving credit facility administered by J.P. Morgan Chase Bank for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, based upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. Each Portfolio may borrow up to a maximum of 33 percent of its net assets under the agreement.
5. Share Transactions
The following table summarizes share and dollar activity in the Portfolio:
Money Market Portfolio | Year Ended April 30, 2005 | Year Ended April 30, 2004 |
| Shares | Dollars | Shares | Dollars |
Shares sold |
Davidson Cash Equivalent Shares* | 482,713,708 | $ 482,713,708 | — | $ — |
Davidson Cash Equivalent Plus Shares** | 175,333,419 | 175,333,419 | — | — |
Institutional Money Market Shares | 284,068,975 | 284,068,975 | 243,026,732 | 243,027,111 |
Institutional Select Money Market Shares | — | — | 207 | 207 |
Premier Money Market Shares | 2,099,220,930 | 2,099,220,930 | 2,883,284,993 | 2,883,296,580 |
Premium Reserve Money Market Shares | 649,802,859 | 649,802,859 | 511,412,653 | 511,413,148 |
Service Shares | 2,353,706 | 2,353,706 | 4,797,136 | 4,809,659 |
| | $ 3,693,493,597 | | $ 3,642,546,705 |
Shares issued to shareholders in reinvestment of distributions |
Davidson Cash Equivalent Shares* | 2,408,404 | $ 2,408,404 | — | $ — |
Davidson Cash Equivalent Plus Shares** | 853,710 | 853,710 | — | — |
Institutional Money Market Shares | 1,580,498 | 1,580,498 | 848,891 | 848,891 |
Institutional Select Money Market Shares | 21 | 21 | 9 | 9 |
Premier Money Market Shares | 30,412,821 | 30,412,821 | 3,403,721 | 3,403,721 |
Premium Reserve Money Market Shares | 2,960,491 | 2,960,491 | 895,295 | 895,295 |
Service Shares | 4,571 | 4,571 | 1,145 | 1,145 |
| | $ 38,220,516 | | $ 5,149,061 |
Shares redeemed |
Davidson Cash Equivalent Shares* | (168,795,573) | $ (168,795,573) | — | $ — |
Davidson Cash Equivalent Plus Shares** | (67,073,703) | (67,073,703) | — | — |
Institutional Money Market Shares | (316,541,585) | (316,541,585) | (248,329,358) | (248,329,738) |
Institutional Select Money Market Shares | — | — | — | — |
Premier Money Market Shares | (1,673,996,930) | (1,673,996,930) | (2,984,475,523) | (2,984,487,247) |
Premium Reserve Money Market Shares | (582,814,600) | (582,814,600) | (387,041,574) | (387,042,059) |
Service Shares | (3,076,711) | (3,076,711) | (5,216,785) | (5,229,264) |
| | $ (2,812,299,102) |
| $ (3,625,088,308) |
Net increase (decrease) |
Davidson Cash Equivalent Shares* | 316,326,539 | $ 316,326,539 | — | $ — |
Davidson Cash Equivalent Plus Shares** | 109,113,426 | 109,113,426 | — | — |
Institutional Money Market Shares | (30,892,112) | (30,892,112) | (4,453,735) | (4,453,736) |
Institutional Select Money Market Shares | 21 | 21 | 216 | 216 |
Premier Money Market Shares | 455,636,821 | 455,636,821 | (97,786,809) | (97,786,946) |
Premium Reserve Money Market Shares | 69,948,750 | 69,948,750 | 125,266,374 | 125,266,384 |
Service Shares | (718,434) | (718,434) | (418,504) | (418,460) |
| | $ 919,415,011 |
| $ 22,607,458 |
* For the period from September 27, 2004 (commencement of operations) to April 30, 2005.
** For the period from September 28, 2004 (commencement of operations) to April 30, 2005.
6. Regulatory Matters and Litigation
Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations ("inquiries") into the mutual fund industry, and have requested information from numerous mutual fund companies, including Scudder Investments. It is not possible to determine what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the Scudder funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain Scudder funds, the funds' investment advisors and their affiliates, certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each Scudder fund's investment advisor has agreed to indemnify the applicable Scudder funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. Based on currently available information, the funds' investment advisors believe the likelihood that the pending lawsuits will have a material adverse financial impact on a Scudder fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the Scudder funds.
Report of Independent Registered Public Accounting Firm |
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To the Shareholders and Board of Trustees of
Cash Account Trust:
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Money Market Portfolio (the "Portfolio"), one of the portfolios constituting Cash Account Trust (the "Trust"), as of April 30, 2005, 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 periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust'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 Portfolio'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 Portfolio'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 April 30, 2005, 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 the Money Market Portfolio of Cash Account Trust at April 30, 2005, 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 eachof the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
Boston, Massachusetts
June 16, 2005
Tax Information (Unaudited) |
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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 1-800-621-1048.
Proxy Voting
A description of the Portfolio's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 is available on our Web site — scudder.com (type "proxy voting" in the search field) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the Portfolio's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
Portfolio of Investments
Following the Portfolio's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330.
The following table presents certain information regarding the Trustees and Officers of the fund as of April 30, 2005. Each individual's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each individual has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity, and (ii) the address of each individual is c/o Deutsche Asset Management, 222 South Riverside Plaza, Chicago, Illinois 60606. Each Trustee's term of office extends until the next shareholders' meeting called for the purpose of electing Trustees and until the election and qualification of a successor, or until such Trustee sooner dies, retires, resigns or is removed as provided in the governing documents of the fund.
Independent Trustees |
Name, Year of Birth, Position(s) Held with the Fund and Length of Time Served1 | Principal Occupation(s) During Past 5 Years and
Other Directorships Held | Number of Funds in Fund Complex Overseen |
Shirley D. Peterson (1941) Chairman, 2004-present Trustee, 1995-present | Retired; formerly, President, Hood College (1995-2000); prior thereto, Partner, Steptoe & Johnson (law firm); Commissioner, Internal Revenue Service; Assistant Attorney General (Tax), US Department of Justice. Directorships: Federal Mogul Corp. (supplier of automotive components and subsystems); AK Steel (steel production); Goodyear Tire & Rubber Co. (April 2004-present) ; Champion Enterprises, Inc. (manufactured home building); Wolverine World Wide, Inc. (designer, manufacturer and marketer of footwear) (April 2005-present); Trustee, Bryn Mawr College. Former Directorship: Bethlehem Steel Corp. | 76 |
John W. Ballantine (1946) Trustee, 1999-present | 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: First Oak Brook Bancshares, Inc.; Oak Brook Bank; American Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company) | 76 |
Lewis A. Burnham (1933) Trustee, 1977-present | Retired; formerly, Director of Management Consulting, McNulty & Company (1990-1998); prior thereto, Executive Vice President, Anchor Glass Container Corporation | 76 |
Donald L. Dunaway (1937) Trustee, 1980-present | Retired; formerly, Executive Vice President, A.O. Smith Corporation (diversified manufacturer) (1963-1994) | 76 |
James R. Edgar (1946) Trustee, 1999-present | Distinguished Fellow, University of Illinois, Institute of Government and Public Affairs (1999-present); formerly, Governor, State of Illinois (1991-1999). Directorships: Kemper Insurance Companies; John B. Sanfilippo & Son, Inc. (processor/packager/marketer of nuts, snacks and candy products); Horizon Group Properties, Inc.; Youbet.com (online wagering platform); Alberto-Culver Company (manufactures, distributes and markets health and beauty care products) | 76 |
Paul K. Freeman (1950) Trustee, 2002-present | President, Cook Street Holdings (consulting); Senior Visiting Research Scholar, Graduate School of International Studies, University of Denver; Consultant, World Bank/Inter-American Development Bank; formerly, Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 76 |
Robert B. Hoffman (1936) Trustee, 1981-present | Retired; formerly, Chairman, Harnischfeger Industries, Inc. (machinery for the mining and paper industries) (1999-2000); prior thereto, Vice Chairman and Chief Financial Officer, Monsanto Company (agricultural, pharmaceutical and nutritional/food products) (1994-1999). Directorships: RCP Advisors, LLC (a private equity investment advisory firm) | 76 |
William McClayton (1944) Trustee, 2004-present | Managing Director of Finance and Administration, DiamondCluster International, Inc. (global management consulting firm) (2001-present); formerly, Partner, Arthur Andersen LLP (1986-2001). Formerly: Trustee, Ravinia Festival; Board of Managers, YMCA of Metropolitan Chicago | 76 |
Robert H. Wadsworth (1940) Trustee, 2004-present | President, Robert H. Wadsworth Associates, Inc. (consulting firm) (1983-present). Director, The Germany Fund, Inc. (since 1986), The New Germany Fund, Inc. (since 1992), The Central Europe and Russia Fund, Inc. (since 1990). Formerly, Trustee of New York Board Scudder Funds; President and Trustee, Trust for Investment Managers (registered investment company) (1999-2002). President, Investment Company Administration, L.L.C. (1992*-2001); President, Treasurer and Director, First Fund Distributors, Inc. (June 1990-January 2002); Vice President, Professionally Managed Portfolios (May 1991-January 2002) and Advisors Series Trust (October 1996-January 2002) (registered investment companies). * Inception date of the corporation which was the predecessor to the L.L.C. | 79 |
John G. Weithers (1933) Trustee, 1993-present | Retired; formerly, Chairman of the Board and Chief Executive Officer, Chicago Stock Exchange. Directorships: Federal Life Insurance Company; Chairman of the Members of the Corporation and Trustee, DePaul University; formerly, International Federation of Stock Exchanges; Records Management Systems | 76 |
Interested Trustee and Officers2 |
Name, Year of Birth, Position(s) Held with the Fund and Length of Time Served1 | Principal Occupation(s) During Past 5 Years and
Other Directorships Held | Number of Funds in Fund Complex Overseen |
William N. Shiebler4 (1942) Trustee, 2004-present | Vice Chairman, Deutsche Asset Management ("DeAM") and a member of the DeAM Global Executive Committee (since 2002); Vice Chairman of Putnam Investments, Inc. (1999); Director and Senior Managing Director of Putnam Investments, Inc. and President, Chief Executive Officer, and Director of Putnam Mutual Funds Inc. (1990-1999) | 127 |
Julian F. Sluyters4 (1960) President and Chief Executive Officer, 2004-present | Managing Director3, Deutsche Asset Management (since May 2004); President and Chief Executive Officer of The Germany Fund, Inc., The New Germany Fund, Inc., The Central Europe and Russia Fund, Inc., The Brazil Fund, Inc., The Korea Fund, Inc., Scudder Global High Income Fund, Inc. and Scudder New Asia Fund, Inc. (since May 2004); President and Chief Executive Officer, UBS Fund Services (2001-2003); Chief Administrative Officer (1998-2001) and Senior Vice President and Director of Mutual Fund Operations (1991-1998) UBS Global Asset Management | n/a |
Philip J. Collora (1945) Vice President and Assistant Secretary, 1986-present | Director3, Deutsche Asset Management | n/a |
Kenneth Murphy5 (1963) Vice President, 2002-present | Vice President, Deutsche Asset Management (2000-present); formerly, Director, John Hancock Signature Services (1992-2000) | n/a |
Paul H. Schubert4 (1963) Chief Financial Officer, 2004-present | Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds at UBS Global Asset Management (1994-2004) | n/a |
Charles A. Rizzo5 (1957) Treasurer, 2002-present | Managing Director3, Deutsche Asset Management (since April 2004); formerly, Director, Deutsche Asset Management (April 2000-March 2004); Vice President and Department Head, BT Alex. Brown Incorporated (now Deutsche Bank Securities Inc.) (1998-1999); Senior Manager, Coopers & Lybrand L.L.P. (now PricewaterhouseCoopers LLP) (1993-1998) | n/a |
John Millette5 (1962) Secretary, 2001-present | Director3, Deutsche Asset Management | n/a |
Lisa Hertz4 (1970) Assistant Secretary, 2003-present | Vice President, Deutsche Asset Management | n/a |
Daniel O. Hirsch6 (1954) Assistant Secretary, 2002-present | Consultant. Formerly, Managing Director, Deutsche Asset Management (2002-2005); Director, Deutsche Asset Management (1999-2002), Principal, BT Alex. Brown Incorporated (now Deutsche Bank Securities Inc.) (1998-1999); Assistant General Counsel, United States Securities and Exchange Commission (1993-1998); Director, Deutsche Global Funds Ltd. (2002-2004) | n/a |
Caroline Pearson5 (1962) Assistant Secretary, 1998-present | Managing Director3, Deutsche Asset Management | n/a |
Kevin M. Gay5 (1959) Assistant Treasurer, 2004-present | Vice President, Deutsche Asset Management | n/a |
Salvatore Schiavone5 (1965) Assistant Treasurer, 2003-present | Director3, Deutsche Asset Management | n/a |
Kathleen Sullivan D'Eramo5 (1957) Assistant Treasurer, 2003-present | Director3, Deutsche Asset Management | n/a |
Philip Gallo4 (1962) Chief Compliance Officer, 2004-present | Managing Director3, Deutsche Asset Management (2003-present); formerly, Co-Head of Goldman Sachs Asset Management Legal (1994-2003) | n/a |
1 Length of time served represents the date that each Trustee was first elected to the common board of Trustees which oversees a number of investment companies, including the fund, managed by the Advisor. For the Officers of the fund, the length of time served represents the date that each Officer was first elected to serve as an Officer of any fund overseen by the aforementioned common board of Trustees.
2 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.
3 Executive title, not a board directorship.
4 Address: 345 Park Avenue, New York, New York 10154
5 Address: Two International Place, Boston, Massachusetts 02110
6 Address: One South Street, Baltimore, Maryland 21202
The fund's Statement of Additional Information ("SAI") includes additional information about the Trustees. 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: 1-800-621-1048.
Principal Underwriter
Scudder Distributors, Inc.
222 S. Riverside Plaza
Chicago, IL 60606
ITEM 2. CODE OF ETHICS.
As of the end of the period, April 30, 2005, Cash Account Trust has adopted a
code of ethics, as defined in Item 2 of Form N-CSR, that applies to its
Principal Executive Officer and Principal Financial Officer.
There have been no amendments to, or waivers from, a provision of the code of
ethics during the period covered by this report that would require disclosure
under Item 2.
A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Fund's Board of Directors/Trustees has determined that the Fund has at least
one "audit committee financial expert" serving on its audit committee: Mr.
Donald L. Dunaway. This audit committee member is "independent," meaning that he
is not an "interested person" of the Fund (as that term is defined in Section
2(a)(19) of the Investment Company Act of 1940) and he does not accept any
consulting, advisory, or other compensatory fee from the Fund (except in the
capacity as a Board or committee member).
An "audit committee financial expert" is not an "expert" for any purpose,
including for purposes of Section 11 of the Securities Act of 1933, as a result
of being designated as an "audit committee financial expert." Further, the
designation of a person as an "audit committee financial expert" does not mean
that the person has any greater duties, obligations, or liability than those
imposed on the person without the "audit committee financial expert"
designation. Similarly, the designation of a person as an "audit committee
financial expert" does not affect the duties, obligations, or liability of any
other member of the audit committee or board of directors.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
CASH ACCOUNT TRUST - MONEY MARKET PORTFOLIO
FORM N-CSR DISCLOSURE RE: AUDIT FEES
The following table shows the amount of fees that Ernst & Young, LLP
("E&Y"), the Fund's independent registered public accounting firm, billed to
the Fund during the Fund's last two fiscal years. For engagements with E&Y
entered into on or after May 6, 2003, the Audit Committee approved in advance
all audit services and non-audit services that E&Y provided to the Fund.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
Services that the Fund's Independent Registered Public Accounting Firm
Billed to the Fund
- ----------- ----------- ------------------- -------------- -------------------
Fiscal Year Audit Tax Fees All
Ended Fees Billed Audit-Related Billed to Other Fees Billed
April 30 to Fund Fees Billed to Fund Fund to Fund
- ----------- ----------- ------------------- -------------- -------------------
2005 $44,484 $0 $6,066 $0
- ----------- ----------- ------------------- -------------- -------------------
2004 $44,608 $0 $6,066 $364
- ----------- ----------- ------------------- -------------- -------------------
The above "Tax Fees" were billed for professional services rendered for tax
compliance.
Services that the Fund's Independent Registered Public Accounting Firm
Billed to the Adviser and Affiliated Fund Service Providers
The following table shows the amount of fees billed by E&Y to Deutsche
Investment Management Americas, Inc. ("DeIM" or the "Adviser"), and any entity
controlling, controlled by or under common control with DeIM ("Control
Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service
Provider"), for engagements directly related to the Fund's operations and
financial reporting, during the Fund's last two fiscal years.
- -------------- ------------------- ---------------------- -------------------
Audit-Related All
Fees Billed to Tax Fees Billed to Other Fees Billed
Fiscal Year Adviser and Adviser and to Adviser and
Ended Affiliated Fund Affiliated Fund Affiliated Fund
April 30 Service Providers Service Providers Service Providers
- -------------- ------------------- ---------------------- -------------------
2005 $511,500 $0 $0
- -------------- ------------------- ---------------------- -------------------
2004 $149,900 $0 $0
- -------------- ------------------- ---------------------- -------------------
The "Audit-Related Fees" were billed for services in connection with the
assessment of internal controls and additional related procedures.
1
Non-Audit Services
The following table shows the amount of fees that E&Y billed during the
Fund's last two fiscal years for non-audit services. For engagements entered
into on or after May 6, 2003, the Audit Committee pre-approved all non-audit
services that E&Y provided to the Adviser and any Affiliated Fund Service
Provider that related directly to the Fund's operations and financial reporting.
The Audit Committee requested and received information from E&Y about any
non-audit services that E&Y rendered during the Fund's last fiscal year to
the Adviser and any Affiliated Fund Service Provider. The Committee considered
this information in evaluating E&Y's independence.
- ----------- -------------- -------------------- ------------------ ------------
Total Non-Audit
Fees billed to
Adviser and
Affiliated Fund Total Non-Audit
Service Providers Fees billed to
(engagements related Adviser and
directly to the Affiliated Fund
Total operations and Service Providers
Non-Audit Fees financial reporting (all other Total of
Fiscal Year Billed to Fund of the Fund) engagements) (A), (B)
Ended
April 30 (A) (B) (C) and (C)
- ----------- -------------- -------------------- ------------------ ------------
2005 $6,066 $0 $228,856 $234,922
- ----------- -------------- -------------------- ------------------ ------------
2004 $6,066 $0 $2,795,500 $2,801,066
- ----------- -------------- -------------------- ------------------ ------------
All other engagement fees were billed for services in connection with risk
management and process improvement initiatives for DeIM and other related
entities that provide support for the operations of the fund.
***
E&Y recently advised the Fund's Audit Committee that various E&Y member
firms provided certain non-audit services to Deutsche Bank entities and
affiliates (collectively, the "DB entities") between 2003 and 2005 that raise
issues under the SEC auditor independence rules. The DB entities are within the
"Investment Company Complex" (as defined by SEC rules) and therefore covered by
the SEC auditor independence rules applicable to the Fund.
First, E&Y advised the Audit Committee that in connection with providing
permitted expatriate tax compliance services for DB entities during 2003 and
2004, member firms in China and Japan ("E&Y China" and "E&Y Japan,"
respectively) received funds from the DB entities that went into E&Y
"representative bank trust accounts" and were used to pay the foreign income
taxes of the expatriates. E&Y has advised the Audit Committee that handling
those funds was in violation of Rule 2-01 of Regulation S-X. (Rule
2-01(c)(4)(viii) provides that an accountant's independence is impaired if the
accountant has custody of assets of the audit client.)
2
Second, E&Y advised the Audit Committee that in connection with providing
monthly payroll services to employees of certain DB entities from May 2003 to
February 2005, a member firm in Chile ("E&Y Chile") received funds from the
DB entities that went into an E&Y trust account and were used to pay the net
salaries and social security taxes of executives of the DB entities. E&Y has
advised the Audit Committee that handling those funds was in violation of Rule
2-01 of Regulation S-X.
Third, E&Y advised the Audit Committee that in connection with providing
certain services in assisting a DB entity with various regulatory reporting
requirements, a member firm in France ("E&Y France") entered into an
engagement with the DB entity that resulted in E&Y France staff functioning
under the direct responsibility and direction of a DB entity supervisor. E&Y
advised the Audit Committee that, although the services provided were "permitted
services" under Rule 2-01 of Regulation S-X, the structure of the engagement was
in violation of Rule 2-01 of Regulation S-X. (Rule 2-01(c)(4)(vi) provides that
an accountant's independence is impaired if the accountant acts as an employee
of an audit client.)
The Audit Committee was informed that E&Y China received approximately
$1,500, E&Y Japan received approximately $41,000, E&Y Chile received
approximately $11,724 and E&Y France received approximately $100,000 for the
services they provided to the DB entities. E&Y advised the Audit Committee
that it conducted an internal review of the situation and, in view of the fact
that similar expatriate tax compliance services were provided to a number of
E&Y audit clients unrelated to DB or the Fund, E&Y has advised the SEC
and the PCAOB of the independence issues arising from those services. E&Y
advised the Audit Committee that E&Y believes its independence as
independent registered public accounting firm for the Fund was not impaired
during the period the services were provided. In reaching this conclusion,
E&Y noted a number of factors, including that none of the E&Y personnel
who provided the non-audit services to the DB entities were involved in the
provision of audit services to the Fund, the E&Y professionals responsible
for the Fund's audits were not aware that these non-audit services took place,
and that the fees charged were not significant to E&Y overall or to the fees
charged to the Investment Company Complex. E&Y also noted that E&Y
China, E&Y Japan and E&Y Chile are no longer providing these services
and that the E&Y France engagement has been restructured.
3
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not Applicable
ITEM 6. SCHEDULE OF INVESTMENTS
Not Applicable
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not Applicable
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS
Not Applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The primary function of the Nominating and Governance Committee is to identify
and recommend individuals for membership on the Board and oversee the
administration of the Board Governance Procedures and Guidelines. Shareholders
may recommend candidates for Board positions by forwarding their correspondence
by U.S. mail or courier service to the Fund's Secretary for the attention of the
Chairman of the Nominating and Governance Committee, Two International Place,
Boston, MA 02110. Suggestions for candidates must include a resume of the
candidate.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Chief Executive and Financial Officers concluded that the Registrant's
Disclosure Controls and Procedures are effective based on the evaluation of the
Disclosure Controls and Procedures as of a date within 90 days of the filing
date of this report.
(b) There have been no changes in the registrant's internal control over
financial reporting that occurred during the registrant's last half-year (the
registrant's second fiscal half-year in the case of the annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal controls over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached
hereto as EX-99.CODE ETH.
(a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as
Exhibit 99.CERT.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as
Exhibit 99.906CERT.
Form N-CSR Item F
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: Money Market Portfolio (Institutional Select
Shares), a series of Cash Account Trust
By: /s/Julian Sluyters
----------------------------
Julian Sluyters
Chief Executive Officer
Date: July 1, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Registrant: Money Market Portfolio (Institutional Select
Shares), a series of Cash Account Trust
By: /s/Julian Sluyters
----------------------------
Julian Sluyters
Chief Executive Officer
Date: July 1, 2005
By: /s/Paul Schubert
----------------------------
Paul Schubert
Chief Financial Officer
Date: July 1, 2005
