UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSR
Investment Company Act file number | 811-5970 |
Cash Account Trust
(Exact Name of Registrant as Specified in Charter)
222 South Riverside Plaza
Chicago, IL 60606
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, including Area Code: (212) 454-7190
Paul Schubert
345 Park Avenue
New York, NY 10154
(Name and Address of Agent for Service)
Date of fiscal year end: | 04/30 |
Date of reporting period: | 04/30/06 |
ITEM 1. REPORT TO STOCKHOLDERS
ANNUAL REPORT TO SHAREHOLDERS
Institutional Select
Money Market Shares
Money Market Portfolio
April 30, 2006
This report must be preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, visit www.dws-scudder.com. We advise you to consider the portfolio's objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the portfolio. Please read the prospectus carefully before you invest.
Portfolio Management Review |
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In the following interview, Portfolio Manager Geoffrey Gibbs discusses the market environment and the performance of Cash Account Trust — Money Market Portfolio — Institutional Select Money Market Shares during the 12-month period ended April 30, 2006.
Q: Will you discuss the market environment for the portfolio during its most recent fiscal year?
A: During the 12-month period ended April 30, 2006, the US economy showed its resiliency despite a devastating 2005 hurricane season and continual increases in energy and commodity prices. Monthly job growth was the most important economic indicator for the money markets as the period began, but the market's focus gradually shifted to a careful watch for signs of increasing inflation. Going forward, the markets will be watching closely for any changes in monetary policy from new US Federal Reserve Board (the Fed) Chairman Ben Bernanke.
During the period, the Fed continued to increase short-term interest rates in an attempt to undo the easing of monetary policy that occurred up until June 2004. The Fed raised the federal funds rate — the overnight rate charged by banks when they borrow money from each other, which guides other interest rates — to 4.75% in eight quarter-percentage-point increments over the 12-month period. Despite the increases in the federal funds rate, longer-term yields remained low for most of the period, creating a relatively flat yield curve.1 Throughout 2005 and early 2006, the Fed repeated its statements that additional rate increases might be needed going forward to keep the risks to economic growth and price stability in balance.
1 The yield curve is a graph with a horizontal line that shows how high or low yields are, from the shortest to the longest maturities. Typically, the line rises from left to right as investors who are willing to tie up their money for a longer period of time are rewarded with higher yields.
Portfolio Performance
As of April 30, 2006
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 | 4.51% |
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-scudder.com.
At the end of April 2006, the one-year London Interbank Offered Rate (LIBOR), an industry standard for measuring one-year money market rates, stood at 5.33%, compared with 3.68% 12 months earlier. The premium level of the LIBOR (which is set by the market) over the federal funds rate (which is fixed by the Fed) of 4.75% demonstrated the market's concern that the Fed may raise short-term interest rates at least one to two more times in order to stave off any resurgence of inflation. At the same time, there is a sense within the market that 2006 may be a year of transition, that the Fed will probably discontinue its rate increases this year and that investors will be looking to see how well Bernanke can fine-tune the economy by utilizing the Fed's control over short-term rates. The market consensus at the close of the period was that Bernanke had stumbled somewhat by confiding to a television reporter that he felt that his congressional testimony (from which investors had concluded that the Fed would pause in raising rates) had been misinterpreted. The market will be hoping that the Fed can prevent undue volatility by making a smooth transition to the anticipated change in monetary policy over the course of 2006.
Q: How did the portfolio perform over its most recent fiscal year?
A: We were able to maintain a competitive yield in Cash Account Trust — Money Market Portfolio — Institutional Select Money Market Shares. (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: During the period, our strategy was to keep the portfolio's average maturity relatively short in order to help reduce risk, limiting our purchases, for the most part, to issues with maturities of three months or less. For the period, we maintained a significant allocation in floating-rate securities. The interest rate of floating-rate securities adjusts periodically based on indices (such as the LIBOR) and the federal funds rate. Because the interest rates of these instruments adjust as market conditions change, they provide flexibility in an uncertain interest rate environment. Our decision to maintain a significant allocation in this sector helped performance during the period.
Q: What detracted from the portfolio's performance during the period?
A: There was concern that the economy might pull back in response to Hurricanes Katrina and Wilma, and that the Fed might halt its series of federal funds rate increases — at least temporarily — so as not to further restrain growth. For this reason, we extended the fund's maturity slightly in early fall 2005. Instead of faltering, the economy continued to perform well, however, and the Fed kept raising rates. For this reason, our decision to briefly extend maturity detracted somewhat from the fund's yield and total return during the period.
Q: Will you describe your investment philosophy?
A: We continue our insistence on the highest credit quality within the portfolio. We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the portfolio and to seek competitive yield for our shareholders.
A group of investment professionals is responsible for the day-to-day management of the portfolio. 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.
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. The tables are based on an investment of $1,000 made at the beginning of the six-month period ended April 30, 2006.
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, 2006 |
Actual Fund Return | Money Market Portfolio |
Beginning Account Value 11/1/05 | $ 1,000.00 |
Ending Account Value 4/30/06 | $ 1,021.10 |
Expenses Paid per $1,000* | $ .90 |
Hypothetical 5% Fund Return | Money Market Portfolio |
Beginning Account Value 11/1/05 | $ 1,000.00 |
Ending Account Value 4/30/06 | $ 1,023.90 |
Expenses Paid per $1,000* | $ .90 |
* 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 | .18% |
For more information, please refer to the Portfolio's prospectus.
Cash Account Trust — Money Market Portfolio
Asset Allocation | 4/30/06 | 4/30/05 |
|
Short Term Notes | 30% | 11% |
Commercial Paper | 22% | 36% |
Certificates of Deposit and Bank Notes | 21% | 28% |
Time Deposits | 18% | 11% |
Promissory Notes | 4% | 4% |
Repurchase Agreements | 3% | 4% |
US Government Sponsored Agencies | 1% | 6% |
Funding Agreements | 1% | — |
| 100% | 100% |
Weighted Average Maturity | | |
Cash Account Trust — Money Market Portfolio | 35 days | 37 days |
First Tier Retail Money Fund Average* | 39 days | 35 days |
* The Portfolio is compared to its respective iMoneyNet Category: First Tier Retail 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 and weighted average maturity are 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 Portfolios as of month end will be posted to www.dws-scudder.com on or after the last day of the following month. In addition, the Portfolio's top ten holdings and other information about the Portfolio is posted on www.dws-scudder.com as of the calendar quarter-end on or after the 15th day following quarter-end.
Portfolio of Investments as of April 30, 2006 |
|
Money Market Portfolio | Principal Amount ($) | Value ($) |
| |
Certificates of Deposit and Bank Notes 20.5% |
Banco Bilbao Vizcaya Argentaria SA, 4.98%, 9/1/2006 | 6,000,000 | 5,999,246 |
Bank of Ireland, 4.01%, 7/14/2006 | 10,000,000 | 10,000,197 |
Bank of Novia Scotia, 4.8%, 5/10/2006 | 110,000,000 | 110,000,000 |
Bank of Tokyo-Mitsubishi-UFJ, Ltd.: | | |
4.8%, 5/1/2006 | 21,000,000 | 21,000,000 |
4.8%, 5/10/2006 | 75,000,000 | 75,000,000 |
CC (USA), Inc., 3.805%, 6/22/2006 | 50,000,000 | 49,999,644 |
Fortis Bank NV SA, 4.83%, 5/8/2006 | 60,000,000 | 60,000,000 |
HBOS Treasury Services PLC: | | |
4.0%, 7/18/2006 | 75,000,000 | 75,000,000 |
5.0%, 2/12/2007 | 60,000,000 | 60,000,000 |
5.305%, 4/19/2007 | 60,000,000 | 60,000,000 |
LaSalle Bank NA, 4.02%, 7/5/2006 | 75,000,000 | 75,000,000 |
Natexis Banque Populaires: | | |
5.0%, 2/8/2007 | 40,000,000 | 40,000,000 |
5.0%, 2/9/2007 | 25,000,000 | 25,000,000 |
5.03%, 6/29/2006 | 49,600,000 | 49,600,000 |
Royal Bank of Canada: | | |
4.05%, 7/24/2006 | 20,000,000 | 20,000,000 |
4.775%, 12/1/2006 | 125,000,000 | 125,003,546 |
Societe Generale: | | |
4.795%, 5/10/2006 | 75,000,000 | 75,000,000 |
4.8%, 5/10/2006 | 90,000,000 | 90,000,000 |
5.305%, 5/2/2007 | 35,000,000 | 35,000,000 |
Toronto Dominion Bank, 3.815%, 6/16/2006 | 70,000,000 | 70,000,000 |
UniCredito Italiano SpA, 3.8%, 6/15/2006 | 190,000,000 | 190,000,000 |
Wells Fargo Bank, NA: | | |
4.82%, 5/4/2006 | 42,500,000 | 42,500,000 |
4.87%, 5/10/2006 | 50,000,000 | 50,000,000 |
Total Certificates of Deposit and Bank Notes (Cost $1,414,102,633) | 1,414,102,633 |
|
Commercial Paper** 22.3% |
Caisse Nationale des Caisses D'Epargne et Prevoyan, 4.635%, 7/31/2006 | 75,000,000 | 74,121,281 |
Cancara Asset Securitization LLC, 5.03%, 7/28/2006 | 55,711,000 | 55,026,002 |
Concentrate Manufacturing Co. of Ireland, 4.8%, 5/12/2006 | 23,300,000 | 23,265,827 |
Davis Square Funding VI Corp., 4.81%, 5/4/2006 | 25,000,000 | 24,989,979 |
Falcon Asset Securitization Corp., 4.78%, 5/1/2006 | 35,000,000 | 35,000,000 |
General Electric Capital Corp., 4.77%, 5/10/2006 | 180,000,000 | 179,785,350 |
General Electric Capital Services, Inc., 4.77%, 5/10/2006 | 35,000,000 | 34,958,263 |
Giro Funding US Corp.: | | |
4.8%, 5/9/2006 | 25,000,000 | 24,973,333 |
4.8%, 5/10/2006 | 40,000,000 | 39,952,000 |
Grampian Funding Ltd.: | | |
4.64%, 7/28/2006 | 75,000,000 | 74,149,333 |
5.03%, 10/25/2006 | 50,000,000 | 48,763,458 |
HSBC USA, Inc.: | | |
4.77%, 5/8/2006 | 50,000,000 | 49,953,625 |
4.82%, 5/12/2006 | 25,000,000 | 24,963,181 |
KBC Financial Products International Ltd., 5.04%, 10/20/2006 | 30,000,000 | 29,277,600 |
Kitty Hawk Funding Corp., 4.78%, 5/1/2006 | 21,385,000 | 21,385,000 |
Lake Constance Funding LLC, 4.79%, 5/10/2006 | 54,000,000 | 53,935,335 |
Liberty Street Funding: | | |
4.78%, 5/1/2006 | 40,000,000 | 40,000,000 |
4.78%, 5/10/2006 | 45,000,000 | 44,946,225 |
4.85%, 5/9/2006 | 27,000,000 | 26,970,900 |
Mane Funding Corp.: | | |
4.85%, 5/16/2006 | 46,205,000 | 46,111,627 |
4.85%, 5/19/2006 | 40,000,000 | 39,903,000 |
Nieuw Amsterdam Receivables Corp., 4.79%, 5/5/2006 | 38,346,000 | 38,325,592 |
Perry Global Funding LLC, Series A, 4.88%, 5/18/2006 | 75,000,000 | 74,827,167 |
Ranger Funding Co. LLC, 4.78%, 5/3/2006 | 41,531,000 | 41,519,971 |
Three Rivers Funding Corp., 4.84%, 5/12/2006 | 49,000,000 | 48,927,535 |
Toyota Motor Credit Corp., 4.78%, 5/2/2006 | 40,600,000 | 40,594,609 |
UBS Finance (DE) LLC, 4.77%, 5/10/2006 | 80,000,000 | 79,904,600 |
UniCredito Italiano (DE), Inc., 4.95%, 7/6/2006 | 30,000,000 | 29,727,750 |
Verizon Communications, Inc.: | | |
4.94%, 5/23/2006 | 15,000,000 | 14,954,717 |
4.95%, 5/22/2006 | 60,000,000 | 59,826,750 |
4.98%, 5/24/2006 | 16,000,000 | 15,949,093 |
5.0%, 5/23/2006 | 50,000,000 | 49,847,222 |
5.0%, 5/24/2006 | 50,000,000 | 49,840,278 |
Total Commercial Paper (Cost $1,536,676,603) | 1,536,676,603 |
|
Short Term Notes* 29.7% |
Alliance & Leicester PLC, 4.838%, 12/1/2006 | 50,000,000 | 50,000,000 |
American Honda Finance Corp.: | | |
144A, 4.67%, 11/7/2006 | 110,000,000 | 110,000,000 |
4.895%, 6/22/2006 | 21,000,000 | 21,000,000 |
4.96%, 9/21/2006 | 65,500,000 | 65,513,787 |
Australia & New Zealand Banking Group Ltd., 4.93%, 6/23/2010 | 20,000,000 | 20,000,000 |
Bank of Ireland, 144A, 4.892%, 11/17/2006 | 100,000,000 | 100,000,000 |
Barclays Bank PLC, 4.774%, 4/4/2007 | 125,000,000 | 124,977,150 |
BMW US Capital LLC, 144A, 4.871%, 4/16/2007 | 20,000,000 | 20,000,000 |
BNP Paribas, 4.94%, 10/26/2026 | 35,000,000 | 35,000,000 |
Calyon, 4.757%, 7/5/2006 | 35,500,000 | 35,498,089 |
Canadian Imperial Bank of Commerce: | | |
4.9%, 12/4/2006 | 17,000,000 | 17,007,450 |
4.981%, 4/13/2007 | 45,000,000 | 45,007,424 |
Cancara Asset Securitization LLC, 144A, 4.83%, 8/15/2006 | 40,000,000 | 39,997,643 |
CIT Group, Inc.: | | |
4.948%, 2/15/2007 | 33,000,000 | 33,050,388 |
5.15%, 6/19/2006 | 50,000,000 | 50,014,673 |
Commonwealth Bank of Australia, 4.92%, 8/24/2006 | 30,000,000 | 30,000,000 |
Dexia Banque Belgique, 4.94%, 8/30/2006 | 30,000,000 | 29,998,019 |
Dorada Finance, Inc., 4.775%, 11/1/2006 | 30,000,000 | 29,998,488 |
Greenwich Capital Holdings: | | |
4.788%, 10/2/2006 | 40,000,000 | 40,000,000 |
4.811%, 11/13/2006 | 40,000,000 | 40,000,000 |
4.889%, 8/21/2006 | 30,000,000 | 30,000,000 |
4.96%, 5/30/2006 | 50,000,000 | 50,000,000 |
HSBC Bank USA, NA, 4.72%, 5/4/2006 | 40,000,000 | 40,000,154 |
HSBC Finance Corp.: | | |
4.827%, 2/6/2007 | 30,000,000 | 30,000,000 |
4.965%, 10/19/2006 | 30,000,000 | 30,013,181 |
HSBC USA, Inc., 4.881%, 12/15/2006 | 150,000,000 | 150,000,000 |
International Business Machine Corp., 4.838%, 12/8/2010 | 30,000,000 | 30,000,000 |
Marshall & Ilsley Bank, 4.881%, 12/15/2006 | 35,000,000 | 35,000,000 |
Merrill Lynch & Co., Inc.: | | |
4.881%, 9/15/2006 | 50,000,000 | 50,000,000 |
4.889%, 2/2/2007 | 30,000,000 | 30,000,000 |
4.925%, 2/27/2007 | 37,000,000 | 37,040,597 |
5.06%, 6/2/2006 | 35,000,000 | 35,004,382 |
5.125%, 2/27/2007 | 25,000,000 | 25,038,607 |
Morgan Stanley, 4.89%, 7/10/2006 | 80,000,000 | 80,000,000 |
Nordea Bank AB, 4.828%, 4/8/2011 | 30,000,000 | 30,000,000 |
Pfizer Investment Capital PLC, 4.861%, 12/15/2006 | 50,000,000 | 50,000,000 |
Skandinaviska Enskilda Banken: | | |
4.838%, 2/9/2011 | 50,000,000 | 50,000,000 |
4.891%, 7/18/2006 | 25,000,000 | 25,000,000 |
The Bear Stearns Companies, Inc., 4.935%, 9/18/2006 | 140,000,000 | 140,000,000 |
The Goldman Sachs Group, Inc., 4.94%, 8/18/2006 | 34,070,000 | 34,089,818 |
UniCredito Italiano Bank (Ireland) PLC, 4.858%, 3/9/2007 | 42,000,000 | 42,000,000 |
UniCredito Italiano SpA, 4.807%, 9/8/2006 | 30,000,000 | 29,995,722 |
Wells Fargo Bank, NA, 4.78%, 8/7/2006 | 61,000,000 | 60,997,056 |
Total Short Term Notes (Cost $2,051,242,628) | 2,051,242,628 |
|
US Government Sponsored Agencies 1.0% |
Federal Home Loan Bank: | | |
2.3%, 6/16/2006 | 2,000,000 | 1,996,219 |
4.3%, 7/13/2006 | 10,000,000 | 10,000,000 |
Federal National Mortgage Association, 4.03%, 7/21/2006 | 53,700,000 | 53,700,000 |
Total US Government Sponsored Agencies (Cost $65,696,219) | 65,696,219 |
|
Asset Backed 0.5% |
Permanent Financing PLC, "1A", Series 8, 4.809%*, 6/10/2006 (Cost $35,000,000) | 35,000,000 | 35,000,000 |
Funding Agreements 0.7% |
New York Life Insurance Co., 5.05%*, 9/19/2006 (Cost $50,000,000) | 50,000,000 | 50,000,000 |
|
Promissory Notes 4.3% |
The Goldman Sachs Group, Inc.: | | |
4.77%*, 11/13/2006 | 185,000,000 | 185,000,000 |
4.985%*, 6/30/2006 | 110,000,000 | 110,000,000 |
Total Promissory Notes (Cost $295,000,000) | 295,000,000 |
|
Time Deposits 18.5% |
Bank of Tokyo-Mitsubishi-UFJ, Ltd., 4.83%, 5/1/2006 | 225,000,000 | 225,000,000 |
Danske Bank AS, 4.88%, 5/2/2006 | 300,000,000 | 300,000,000 |
Dexia Banque Belgique, 4.94%, 5/2/2006 | 200,000,000 | 200,000,000 |
ING Bank NV, 4.86%, 5/1/2006 | 225,000,000 | 225,000,000 |
Rabobank Nederland NV, 4.83%, 5/1/2006 | 300,000,000 | 300,000,000 |
Societe Generale, 4.83%, 5/1/2006 | 25,600,000 | 25,600,000 |
Total Time Deposit (Cost $1,275,600,000) | 1,275,600,000 |
|
Repurchase Agreements 2.6% |
Banc of America Securities LLC, 4.79%, dated 4/7/2006, to be repurchased at $100,439,083 on 5/10/2006 (a) | 100,000,000 | 100,000,000 |
BNP Paribas, 4.78%, dated 4/28/2006, to be repurchased at $79,031,468 on 5/1/2006 (b) | 79,000,000 | 79,000,000 |
State Street Bank and Trust Co., 4.5%, dated 4/28/2006, to be repurchased at $322,121 on 5/1/2006 (c) | 322,000 | 322,000 |
Total Repurchase Agreements (Cost $179,322,000) | 179,322,000 |
| % of Net Assets | Value ($) |
| |
Total Investment Portfolio (Cost $6,902,640,083)+ | 100.1 | 6,902,640,083 |
Other Assets and Liabilities, Net | (0.1) | (6,349,024) |
Net Assets | 100.0 | 6,896,291,059 |
* 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, 2006.
** Annualized yield at the time of purchase; not a coupon rate.
+ Cost for federal income tax purposes was $6,902,640,083.
(a) Collateralized by:
Principal Amount ($) | | Security | Rate (%) | Maturity
Date | Collateral
Value ($) |
|
80,766,036 | | Federal National Mortgage Association | 5.0-5.5 | 4/1/2021-4/1/2036 | 79,033,867 |
23,524,677 | | Federal Home Loan Mortgage Corp. | 5.0-5.5 | 3/1/2019-10/1/2033 | 22,966,134 |
Total Collateral Value | 102,000,001 |
(b) Collateralized by $82,758,000 Federal Home Loan Mortgage Corp., 4.75%, maturing on 11/17/2015 with a value of $80,580,761.
(c) Collateralized by $350,000 Federal National Mortgage Association, 5.174%, maturing on 8/18/2035 with a value of $331,582.
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, 2006 |
Assets | Money Market Portfolio |
Investments: Investments in securities, at amortized cost | $ 6,723,318,083 |
Repurchase agreements, at amortized cost | 179,322,000 |
Total investments in securities, at amortized cost | 6,902,640,083 |
Cash | 958,677 |
Interest receivable | 34,932,511 |
Receivable for Portfolio shares sold | 909,458 |
Other assets | 163,395 |
Total assets | 6,939,604,124 |
Liabilities |
Payable for investments purchased | 35,000,000 |
Dividends payable | 1,600,233 |
Accrued management fee | 856,889 |
Other accrued expenses and payables | 5,855,943 |
Total liabilities | 43,313,065 |
Net assets, at value | $ 6,896,291,059 |
Net Assets |
Net assets consist of: Undistributed net investment income | 107,749 |
Accumulated net realized gain (loss) | (771,325) |
Paid-in capital | 6,896,954,635 |
Net assets, at value | $ 6,896,291,059 |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2006 (continued) |
Net Asset Value | Money Market Portfolio |
Capital Assets Funds Shares Net assets applicable to shares outstanding | $ 775,275,437 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 775,273,011 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
Capital Assets Funds Preferred Shares Net assets applicable to shares outstanding | $ 74,199 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 74,199 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
Davidson Cash Equivalent Shares Net assets applicable to shares outstanding | $ 378,377,857 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 378,377,100 |
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 | $ 149,803,373 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 149,803,161 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
Institutional Shares* Net assets applicable to shares outstanding | $ 106,842,939 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 106,839,864 |
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 | $ 212 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 211 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
* Institutional Money Market Shares of the Money Market Portfolio and DWS Tax-Exempt Cash Institutional Shares of the Tax-Exempt Portfolio.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2006 (continued) |
| Money Market Portfolio |
Premier Money Market Shares Net assets applicable to shares outstanding | $ 4,095,466,868 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 4,095,331,352 |
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 | $ 508,694,986 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 508,610,525 |
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) | $ 1.00 |
Service Shares Net assets applicable to shares outstanding | $ 881,755,188 |
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized | 881,754,317 |
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, 2006 |
Investment Income | Money Market Portfolio |
Income: Interest | $ 240,007,199 |
Expenses: Management fee | 9,606,370 |
Services to shareholders | 16,392,991 |
Custodian fees | 263,890 |
Distribution service fees | 30,029,963 |
Auditing | 76,240 |
Legal | 122,056 |
Trustees' fees and expenses | 96,746 |
Reports to shareholders | 706,217 |
Registration fees | 170,177 |
Other | 209,252 |
Total expenses, before expense reductions | 57,673,902 |
Expense reductions | (1,058,410) |
Total expenses, after expense reductions | 56,615,492 |
Net investment income | 183,391,707 |
Net realized gain (loss) on investment transactions | 14,178 |
Net increase (decrease) in net assets resulting from operations | $ 183,405,885 |
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 | 2006 | 2005 |
Operations: Net investment income | $ 183,391,707 | $ 39,605,387 |
Net realized gain (loss) on investment transactions | 14,178 | 1,874 |
Net increase in net assets resulting from operations | 183,405,885 | 39,607,261 |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | (19,916,031) | — |
Capital Assets Funds Preferred Shares | (300,099) | — |
Davidson Cash Equivalent Shares | (10,505,196) | (2,426,184) |
Davidson Cash Equivalent Plus Shares | (4,264,968) | (860,296) |
Institutional Money Market Shares | (3,401,909) | (1,599,818) |
Institutional Select Money Market Shares | (10) | (21) |
Premier Money Market Shares | (108,744,331) | (30,622,657) |
Premium Reserve Money Market Shares | (13,272,109) | (4,091,309) |
Service Shares | (22,987,054) | (4,876) |
Portfolio share transactions: Proceeds from shares sold | 8,313,486,956 | 3,693,493,597 |
Reinvestment of distributions | 180,071,658 | 38,220,516 |
Cost of shares redeemed | (5,805,806,430) | (2,812,299,102) |
Net increase (decrease) in net assets from Fund share transactions | 2,687,752,184 | 919,415,011 |
Increase (decrease) in net assets | 2,687,766,362 | 919,417,111 |
Net assets at beginning of period | 4,208,524,697 | 3,289,107,586 |
Net assets at end of period (Including undistributed net investment income of $107,749 and $107,749, respectively) | $ 6,896,291,059 | $ 4,208,524,697 |
The accompanying notes are an integral part of the financial statements.
Money Market Portfolio — Institutional Select Money Market Shares
Years Ended April 30, | 2006 | 2005 | 2004 | 2003a |
Selected Per Share Data |
Net asset value, beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Net investment income | .038 | .017 | .010 | .005 |
Less distributions from net investment income | (.038) | (.017) | (.010) | (.005) |
Net asset value, end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
Total Return (%) | 3.82 | 1.75 | .99 | .52** |
Ratios to Average Net Assets and Supplemental Data |
Net assets, end of period ($ millions) | .0002 | .001 | .001 | .001 |
Ratio of expenses (%) | .19 | .20 | .18 | .19* |
Ratio of net investment income (%) | 3.80 | 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 (the "Portfolio") offers nine classes of shares: Capital Assets Funds Shares (commencement of operations June 15, 2005), Capital Assets Funds Preferred Shares (commencement of operations June 23, 2005), Davidson Cash Equivalent Shares, Davidson Cash Equivalent Plus Shares, 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 Capital Assets Funds Shares, Davidson Cash Equivalent Shares, Premier Money Market Shares, Capital Assets Funds Preferred Shares, Davidson Cash Equivalent Plus Shares, Institutional Money Market Shares, Premium Reserve Money Market Shares and Service Shares of the Money Market Portfolio 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 Portfolio 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 Portfolio has the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Portfolio's 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, the Portfolio paid no federal income taxes and no federal income tax provision was required.
During the year ended April 30, 2006, the Money Market Portfolio utilized approximately $35,300 of its capital loss carryforward. At April 30, 2006, the Money Market Portfolio had a net tax basis capital loss carryforward of approximately ($750,000) 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.
In addition, from November 1, 2005 through April 30, 2006, the Money Market Portfolio incurred approximately $22,000 of net realized capital losses. As permitted by tax regulations, the Portfolio intends to elect to defer these losses and treat them as arising in the fiscal year ended April 30, 2007.
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, 2006, the Portfolio's components of distributable earnings on a tax-basis are as follows:
Money Market Portfolio: |
Undistributed ordinary income | $ 1,733,558 |
Capital loss carryforwards | $ (750,000) |
In addition, during the years ended April 30, 2006 and April 30, 2005, the tax character of distributions paid to shareholders by the Portfolio is summarized as follows:
| 2006 | 2005 |
Money Market Portfolio: |
Distributions from ordinary income | $ 183,391,707 | $ 39,605,161 |
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 Portfolio 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 the 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 year ended April 30, 2006, the Portfolio incurred management fees equivalent to the following annualized effective rates of the Portfolio's average daily net assets:
| Annual Effective Rate (%) |
Money Market Portfolio | .16 |
The Advisor and certain of its subsidiaries have voluntarily agreed to maintain the annualized expenses at 0.20% of the Institutional Select Money Market Shares for the year ended April 30, 2006.
The Advisor and certain of its subsidiaries also have agreed to maintain the expenses of the Capital Assets Funds Shares, Davidson Cash Equivalent Shares, Service Shares, Capital Assets Funds Preferred Shares, Davidson Cash Equivalent Plus Shares and Institutional Money Market Shares of the Money Market Portfolio at certain rates for the year ended April 30, 2006. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
Service Provider Fees. DWS Scudder Investments Service Company ("DWS-SISC"), an affiliate of the Advisor, is the transfer, dividend-paying and shareholder service agent of the Trust. For the year ended April 30, 2006, the amounts charged to the Portfolio by DWS-SISC were as follows:
| Total Aggregated | Waived | Unpaid at April 30, 2006 |
Money Market Portfolio: |
Capital Assets Funds Shares | $ 1,645,136 | $ 137,364 | $ 267,781 |
Capital Assets Funds Preferred Shares | 17,251 | 3,979 | — |
Davidson Cash Equivalent Shares | 982,436 | 178,917 | 137,066 |
Davidson Cash Equivalent Plus Shares | 260,656 | 19,031 | 44,519 |
Institutional Money Market Shares | 19,928 | — | 3,778 |
Premier Money Market Shares | 10,578,170 | — | 1,917,718 |
Premium Reserve Money Market Shares | 394,641 | — | 83,679 |
Service Shares | 2,152,121 | 592,686 | 257,186 |
Pursuant to a sub-transfer agency agreement between DWS-SISC and DST Systems, Inc. ("DST"), DWS-SISC has delegated certain transfer agent and dividend paying agent functions to DST. DWS-SISC compensates DST out of the shareholder servicing fee it receives from the Portfolio.
Distribution Service Agreement. The Trust has a distribution service agreement with DWS Scudder Distributors, Inc. ("DWS-SDI"), a subsidiary of the Advisor.
For the year ended April 30, 2006, the Distribution Fee was as follows:
| Distribution Fee | Unpaid at April 30, 2006 | Annual Effective Rate | Contractual Rate (Up To) |
Money Market Portfolio: |
Capital Assets Funds Shares | $ 2,155,846 | $ 208,098 | .33% | .33% |
Capital Assets Funds Preferred Shares | 22,989 | — | .20% | .20% |
Davidson Cash Equivalent Shares | 1,052,332 | 94,381 | .30% | .30% |
Davidson Cash Equivalent Plus Shares | 334,638 | 32,224 | .25% | .25% |
Institutional Money Market Shares | 9,058 | 833 | .01% | .075% |
Premier Money Market Shares | 9,109,489 | 844,370 | .25% | .25% |
Service Shares | 4,474,109 | 447,564 | .60% | .60% |
In addition, DWS-SDI provides information and administrative services to the Capital Assets Funds Shares, the Capital Assets Funds Preferred Shares, 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 which pay DWS-SDI a fee ("Service Fee"). A portion of these fees may be paid pursuant to a Rule 12b-1 plan.
For the year ended April 30, 2006, the Service Fee was as follows:
| Service Fee | Unpaid at April 30, 2006 | Annual Effective Rate | Contractual Rate (up To) |
Money Market Portfolio: |
Capital Assets Funds Shares | $ 1,639,059 | $ 157,686 | .25% | .25% |
Capital Assets Funds Preferred Shares | 11,495 | 6 | .10% | .10% |
Davidson Cash Equivalent Shares | 876,944 | 78,260 | .25% | .25% |
Davidson Cash Equivalent Plus Shares | 267,710 | 25,911 | .20% | .20% |
Institutional Money Market Shares | 9,265 | 820 | .01% | .075% |
Premier Money Market Shares | 9,113,242 | 832,697 | .25% | .25% |
Premium Reserve Money Market Shares | 953,787 | 103,559 | .25% | .25% |
Typesetting and Filing Service Fees. Under an agreement with DeIM, the Advisor is compensated for providing typesetting and certain regulatory filing services to the Portfolio. For the year ended April 30, 2006, the amounts charged to the Portfolio by DeIM included in reports to shareholders were as follows:
| Total Aggregated | Unpaid at April 30, 2006 |
Money Market Portfolio | $ 46,670 | $ 15,400 |
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.
3. Expense Reductions
For the year ended April 30, 2006, the Advisor has agreed to reimburse the Portfolio 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:
| Amount ($) |
Money Market Portfolio | 124,144 |
In addition, the Trust has entered into arrangements with its custodian whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Portfolio's expenses. During the year ended April 30, 2006, the Portfolio's custody fee was reduced as follows:
| Amount ($) |
Money Market Portfolio | 2,289 |
4. Line of Credit
The Trust and several other affiliated funds (the "Participants") share in a $750 million revolving credit facility administered by J.P. Morgan Chase Bank for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, based upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. The 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, 2006 | Year Ended April 30, 2005 |
| Shares | Dollars | Shares | Dollars |
Shares sold |
Capital Assets Funds Shares* | 1,412,944,127 | $ 1,412,944,127 | — | $ — |
Capital Assets Funds Preferred Shares** | 835,462,891 | 835,462,891 | — | — |
Davidson Cash Equivalent Shares | 445,286,567 | 445,286,567 | 482,713,708*** | 482,713,708*** |
Davidson Cash Equivalent Plus Shares | 301,619,048 | 301,619,048 | 175,333,419**** | 175,333,419**** |
Institutional Money Market Shares | 374,803,822 | 374,803,822 | 284,068,975 | 284,068,975 |
Premier Money Market Shares | 2,405,152,436 | 2,405,152,436 | 2,099,220,930 | 2,099,220,930 |
Premium Reserve Money Market Shares | 796,824,800 | 796,824,800 | 649,802,859 | 649,802,859 |
Service Shares | 1,741,393,265 | 1,741,393,265 | 2,353,706 | 2,353,706 |
| | $ 8,313,486,956 | | $ 3,693,493,597 |
Shares issued to shareholders in reinvestment of distributions |
Capital Assets Funds Shares* | 19,796,024 | $ 19,796,024 | — | $ — |
Capital Assets Funds Preferred Shares** | 300,083 | 300,083 | — | — |
Davidson Cash Equivalent Shares | 10,443,501 | 10,443,501 | 2,408,404*** | 2,408,404*** |
Davidson Cash Equivalent Plus Shares | 4,239,364 | 4,239,364 | 853,710**** | 853,710**** |
Institutional Money Market Shares | 3,380,800 | 3,380,800 | 1,580,498 | 1,580,498 |
Institutional Select Money Market Shares | 4 | 4 | 21 | 21 |
Premier Money Market Shares | 108,063,865 | 108,063,865 | 30,412,821 | 30,412,821 |
Premium Reserve Money Market Shares | 11,047,966 | 11,047,966 | 2,960,491 | 2,960,491 |
Service Shares | 22,800,051 | 22,800,051 | 4,571 | 4,571 |
| | $ 180,071,658 | | $ 38,220,516 |
Shares redeemed |
Capital Assets Funds Shares* | (657,467,140) | $ (657,467,140) | — | $ — |
Capital Assets Funds Preferred Shares** | (835,688,775) | (835,688,775) | — | — |
Davidson Cash Equivalent Shares | (393,679,507) | (393,679,507) | (168,795,573)*** | (168,795,573)*** |
Davidson Cash Equivalent Plus Shares | (265,168,677) | (265,168,677) | (67,073,703)**** | (67,073,703)**** |
Institutional Money Market Shares | (345,994,072) | (345,994,072) | (316,541,585) | (316,541,585) |
Institutional Select Money Market Shares | (1,034) | (1,034) | — | — |
Premier Money Market Shares | (1,798,662,107) | (1,798,662,107) | (1,673,996,930) | (1,673,996,930) |
Premium Reserve Money Market Shares | (626,271,242) | (626,271,242) | (582,814,600) | (582,814,600) |
Service Shares | (882,873,876) | (882,873,876) | (3,076,711) | (3,076,711) |
|
| $ (5,805,806,430) | | $ (2,812,299,102) |
Net increase (decrease) |
Capital Assets Funds Shares* | 775,273,011 | $ 775,273,011 | — | $ — |
Capital Assets Funds Preferred Shares** | 74,199 | 74,199 | — | — |
Davidson Cash Equivalent Shares | 62,050,561 | 62,050,561 | 316,326,539*** | 316,326,539*** |
Davidson Cash Equivalent Plus Shares | 40,689,735 | 40,689,735 | 109,113,426**** | 109,113,426**** |
Institutional Money Market Shares | 32,190,550 | 32,190,550 | (30,892,112) | (30,892,112) |
Institutional Select Money Market Shares | (1,030) | (1,030) | 21 | 21 |
Premier Money Market Shares | 714,554,194 | 714,554,194 | 455,636,821 | 455,636,821 |
Premium Reserve Money Market Shares | 181,601,524 | 181,601,524 | 69,948,750 | 69,948,750 |
Service Shares | 881,319,440 | 881,319,440 | (718,434) | (718,434) |
|
| $ 2,687,752,184 | | $ 919,415,011 |
* For the period from June 15, 2005 (commencement of operations) to April 30, 2006.
** For the period from June 23, 2005 (commencement of operations) to April 30, 2006.
*** 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
Market Timing Related Regulatory and Litigation Matters. Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations ("inquiries") into the mutual fund industry, and have requested information from numerous mutual fund companies, including DWS Scudder. The DWS funds' advisors have been cooperating in connection with these inquiries and are in discussions with the regulators concerning proposed settlements. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the DWS funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain DWS funds, the funds' investment advisors and their affiliates, and certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each DWS fund's investment advisor has agreed to indemnify the applicable DWS funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. It is not possible to determine with certainty what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors.
With respect to the lawsuits, based on currently available information, the funds' investment advisors believe the likelihood that the pending lawsuits will have a material adverse financial impact on a DWS fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the DWS funds.
With respect to the regulatory matters, Deutsche Asset Management ("DeAM") has advised the funds as follows:
DeAM expects to reach final agreements with regulators in 2006 regarding allegations of improper trading in the DWS funds. DeAM expects that it will reach settlement agreements with the Securities and Exchange Commission, the New York Attorney General and the Illinois Secretary of State providing for payment of disgorgement, penalties, and investor education contributions totaling approximately $134 million. Approximately $127 million of this amount would be distributed to shareholders of the affected DWS funds in accordance with a distribution plan to be developed by an independent distribution consultant. DeAM does not believe that any of the DWS funds will be named as respondents or defendants in any proceedings. The funds' investment advisors do not believe these amounts will have a material adverse financial impact on them or materially affect their ability to perform under their investment management agreements with the DWS funds. The above-described amounts are not material to Deutsche Bank, and they have already been reserved.
Based on the settlement discussions thus far, DeAM believes that it will be able to reach a settlement with the regulators on a basis that is generally consistent with settlements reached by other advisors, taking into account the particular facts and circumstances of market timing at DeAM and at the legacy Scudder and Kemper organizations prior to their acquisition by DeAM in April 2002. Among the terms of the expected settled orders, DeAM would be subject to certain undertakings regarding the conduct of its business in the future, including maintaining existing management fee reductions for certain funds for a period of five years. DeAM expects that these settlements would resolve regulatory allegations that it violated certain provisions of federal and state securities laws (i) by entering into trading arrangements that permitted certain investors to engage in market timing in certain DWS funds and (ii) by failing more generally to take adequate measures to prevent market timing in the DWS funds, primarily during the 1999-2001 period. With respect to the trading arrangements, DeAM expects that the settlement documents will include allegations related to one legacy DeAM arrangement, as well as three legacy Scudder and six legacy Kemper arrangements. All of these trading arrangements originated in businesses that existed prior to the current DeAM organization, which came together in April 2002 as a result of the various mergers of the legacy Scudder, Kemper and Deutsche fund groups, and all of the arrangements were terminated prior to the start of the regulatory investigations that began in the summer of 2003. No current DeAM employee approved the trading arrangements.
There is no certainty that the final settlement documents will contain the foregoing terms and conditions. The independent Trustees/Directors of the DWS funds have carefully monitored these regulatory investigations with the assistance of independent legal counsel and independent economic consultants.
Other Regulatory Matters. DeAM is also engaged in settlement discussions with the Enforcement Staffs of the SEC and the NASD regarding DeAM's practices during 2001-2003 with respect to directing brokerage commissions for portfolio transactions by certain DWS funds to broker-dealers that sold shares in the DWS funds and provided enhanced marketing and distribution for shares in the DWS funds. In addition, on January 13, 2006, DWS Scudder Distributors, Inc. received a Wells notice from the Enforcement Staff of the NASD regarding DWS Scudder Distributors' payment of non-cash compensation to associated persons of NASD member firms, as well as DWS Scudder Distributors' procedures regarding non-cash compensation regarding entertainment provided to such associated persons.
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, 2006, and the related statement of operations for the year then ended, the statements 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, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. 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, 2006, 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 periods indicated therein, in conformity with U.S. generally accepted accounting principles.
Boston, Massachusetts
June 12, 2006
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 portfolio voted proxies related to its portfolio securities during the 12-month period ended June 30 is available on our Web site — www.dws-scudder.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at 1-800-621-1048.
Portfolio of Investments
Following the 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 1-800-SEC-0330.
Regulatory and Litigation Matters
Additional information announced by Deutsche Asset Management regarding the terms of the expected settlements referred to in the Market Timing Related Regulatory and Litigation Matters and Other Regulatory Matters in the Notes to Financial Statements will be made available at www.dws-scudder.com/regulatory_settlements, which will also disclose the terms of any final settlement agreements once they are announced.
The following table presents certain information regarding the Trustees and Officers of the fund as of April 30, 2006. 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) Chairperson, 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. | 71 |
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; Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company) | 71 |
Donald L. Dunaway (1937) Trustee, 1980-present | Retired; formerly, Executive Vice President, A.O. Smith Corporation (diversified manufacturer) (1963-1994) | 71 |
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) | 71 |
Paul K. Freeman (1950) Trustee, 2002-present | President, Cook Street Holdings (consulting); 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) | 71 |
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) | 71 |
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 | 71 |
Robert H. Wadsworth (1940) Trustee, 2004-present | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present). Director, The European Equity 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 DWS 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. | 74 |
Interested 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 |
Michael Colon4 (1969) President, 2006-present | Managing Director3 and Chief Operating Officer, Deutsche Asset Management (since March 2005); President, DWS Global High Income Fund, Inc. (since April 2006), DWS Global Commodities Stock Fund, Inc. (since April 2006), The Brazil Fund, Inc. (since April 2006), The Korea Fund, Inc. (since April 2006); Chief Operating Officer, Deutsche Bank Alex. Brown (2002-2005); Chief Operating Officer, US Equities Division of Deutsche Bank (2000-2002) | n/a |
Philip J. Collora (1945) Vice President and Assistant Secretary, 1986-present | Director3, Deutsche Asset Management | n/a |
Paul H. Schubert4 (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) | n/a |
John Millette5 (1962) Secretary, 2001-present | Director3, Deutsche Asset Management | n/a |
Patricia DeFilippis4 (1963) Assistant Secretary, 2005-present | Vice President, Deutsche Asset Management (since June 2005); formerly, Counsel, New York Life Investment Management LLC (2003-2005); legal associate, Lord, Abbett & Co. LLC (1998-2003) | n/a |
Elisa D. Metzger4, (1962) Assistant Secretary 2005-present | Director3, Deutsche Asset Management (since September 2005); formerly, Counsel, Morrison and Foerster LLP (1999-2005) | n/a |
Caroline Pearson5 (1962) Assistant Secretary, 1998-present | Managing Director3, Deutsche Asset Management | n/a |
Scott M. McHugh5 (1971) Assistant Treasurer, 2005-present | Director3, Deutsche Asset Management | n/a |
Kathleen Sullivan D'Eramo5 (1957) Assistant Treasurer, 2003-present | Director3, Deutsche Asset Management | n/a |
John Robbins4 (1966) Anti-Money Laundering Compliance Officer, 2005-present | Managing Director3, Deutsche Asset Management (since 2005); formerly, Chief Compliance Officer and Anti-Money Laundering Compliance Officer for GE Asset Management (1999-2005) | 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.
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.
DWS Scudder is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Asset Management, Inc., 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
Principal Underwriter
DWS Scudder Distributors, Inc.
222 S. Riverside Plaza
Chicago, IL 60606
As of the end of the period, April 30, 2006, 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 auditor, billed to the Fund during the Fund’s last two fiscal years. The Audit Committee approved in advance all audit services and non-audit services that 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 Auditor Billed to the Fund
Fiscal Year
Ended
April 30 | Audit Fees Billed to Fund | Audit-Related
Fees Billed to Fund | Tax Fees Billed to Fund | All
Other Fees Billed to Fund |
2006 | $61,234 | $0 | $8,350 | $0 |
2005 | $44,484 | $0 | $6,066 | $0 |
The above "Tax Fees" were billed for professional services rendered for tax compliance and tax return preparation.
Services that the Fund’s Auditor 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.
Fiscal Year
Ended
April 30 | Audit-Related
Fees Billed to Adviser and Affiliated Fund Service Providers | Tax Fees Billed to Adviser and Affiliated Fund Service Providers | All
Other Fees Billed to Adviser and Affiliated Fund Service Providers |
2006 | $169,000 | $386,824 | $0 |
2005 | $511,500 | $0 | $0 |
The “Audit-Related Fees” were billed for services in connection with the assessment of internal controls, agreed upon procedures and additional related procedures and the above “Tax Fees” were billed in connection with tax compliance services and agreed upon procedures.
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. 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.
Fiscal Year
Ended
April 30 | Total
Non-Audit Fees Billed to Fund (A) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) (B) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) (C) | Total of (A), (B)
and (C) |
2006 | $8,350 | $386,824 | $535,406 | $930,580 |
2005 | $6,066 | $0 | $228,856 | $234,922 |
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.
In connection with the audit of the 2005 and financial statements, the Fund entered into an engagement letter with E&Y. The terms of the engagement letter required by E&Y, and agreed to by the Audit Committee, include provisions in which the parties consent to the sole jurisdiction of federal courts in New York, Boston or the Northern District of Illinois, as well as a waiver of right to a trial by jury and an exclusion of punitive damages.
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS |
| ITEM 6. | SCHEDULE OF INVESTMENTS |
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS |
| 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. |
(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/Michael Colon |
| Michael Colon | |
President
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/Michael Colon |
| Michael Colon | |
President
By: | /s/Paul Schubert |
| Paul Schubert | |
Chief Financial Officer and Treasurer
