In the following interview, Portfolio Managers Geoffrey Gibbs, Lee Rodon and Sonelius Kendrick-Smith discuss the market environment and the performance of Cash Account Trust — Service Shares during the 12-month period ended April 30, 2007.
Beginning at its August 2006 meeting, the Fed "paused" from further short-term rate hikes, believing that the rate increases already in the pipeline would bring inflation back to within the Fed's target range. At the close of the 12-month period ended April 30, 2007, the federal funds rate — the overnight rate charged by banks when they borrow money from each other, which guides other interest rates — remained at 5.25%. In the first quarter of this year, increasing defaults by subprime mortgage borrowers sparked volatility in the financial markets as investors wondered how badly Wall Street and the banking community would be hurt by a retrenchment in this market. But by mid-March, it seemed evident that the negative effects of the subprime crisis would be
well contained. With oil prices rising but still below their record highs of last year, the economy appeared poised to maintain a moderate growth rate.
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 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.
As an investor of a 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 each 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 Portfolios limited these expenses; had they not done so, expenses would have been higher for the Service Shares. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (November 1, 2006 to April 30, 2007).
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 $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
For more information, please refer to each Portfolio's prospectus.
| Principal Amount ($) | Value ($) |
| |
Municipal Investments 97.3% |
Alabama 1.2% |
Alabama, Housing Finance Authority, Multi-Family Housing Revenue, Heatherbrooke Project, Series C, 3.97%*, 6/15/2026 | 9,800,000 | 9,800,000 |
Alabama, Municipal Securities Trust Certificates, "A", Series 2005-9060, 144A, 3.97%*, 3/10/2011 (a) | 9,055,000 | 9,055,000 |
Alabama, Puttable Floating Options, Tax-Exempt Receipts, Birmingham Waterworks & Sewer Revenue, Series PT-3935, 144A, 3.99%*, 1/1/2039 (a) | 5,645,000 | 5,645,000 |
Hoover, AL, Board of Education Capital Outlay Warrants, Series D-11, 144A, 3.99%*, 2/15/2027 (a) | 4,425,000 | 4,425,000 |
Jefferson County, AL, Sewer Revenue, Capital Improvement Warrants, Series A, 3.91%*, 2/1/2042 (a) | 5,350,000 | 5,350,000 |
| 34,275,000 |
Alaska 0.2% |
ABN AMRO, Munitops Certificates Trust, Series 2006-9, 144A, 3.99%*, 10/1/2014 (a) | 2,100,000 | 2,100,000 |
Anchorage, AK, Core City, General Obligation, Series II-R, 144A, 3.98%*, 6/1/2019 (a) | 2,900,000 | 2,900,000 |
| 5,000,000 |
Arizona 3.2% |
Apache County, AZ, Industrial Development Authority Revenue, Tucson Electric Power Co., Series 83-C, 3.95%*, 12/15/2018, Bank of New York (b) | 9,961,000 | 9,961,000 |
Apache County, AZ, Industrial Development Authority Revenue, Tucson Electric Power Co., Springerville, 3.95%*, 12/1/2020, Wells Fargo Bank NA (b) | 8,300,000 | 8,300,000 |
Arizona, Salt River Project, 3.96%, 5/2/2007 | 29,400,000 | 29,400,000 |
Arizona, Salt River Project, Agriculture Improvement & Power District Electric System Revenue, "A", 144A, 3.99%*, 1/1/2035 | 3,000,000 | 3,000,000 |
Phoenix, AZ, General Obligation, 3.63%, 6/7/2007 | 20,000,000 | 20,000,000 |
Phoenix, AZ, Industrial Development Authority, Multi-Family Housing Revenue, CenterTree Apartments Project, Series A, AMT, 4.02%*, 10/15/2030 | 1,780,000 | 1,780,000 |
Pinal County, AZ, Electrical District No. 3, Electrical Systems Revenue, Series U-1, 144A, 3.97%*, 10/3/2011 | 16,995,000 | 16,995,000 |
| 89,436,000 |
Arkansas 0.1% |
Pocahontas, AR, Industrial Development Revenue, MacLean Esna LP Project, AMT, 4.04%*, 5/1/2015, Northern Trust Co. (b) | 2,500,000 | 2,500,000 |
California 0.9% |
California, Municipal Securities Trust Certificates, Golden State Tobacco, Series 7046, 144A, 3.98%*, 6/1/2047 | 6,500,000 | 6,500,000 |
California, Statewide Communities Development Authority, Multi-Family Housing Revenue, Series 3704, AMT, 144A, 4.01%*, 7/1/2045 | 8,945,000 | 8,945,000 |
Sacramento, CA, Housing Authority Multi-Family Revenue, Series 3705, AMT, 144A, 4.01%*, 11/1/2038 | 10,265,000 | 10,265,000 |
| 25,710,000 |
Colorado 1.9% |
Adams & Weld Counties, CO, Brighton School District No. 27J, Series R-6514, 144A, 3.98%*, 12/1/2024 (a) | 13,410,000 | 13,410,000 |
Colorado, Educational & Cultural Facilities Authority Revenue, Vail Mountain School Project, 4.03%*, 5/1/2033, KeyBank NA (b) | 5,000,000 | 5,000,000 |
Colorado, Health Facilities Authority Revenue, Catholic Health Initiatives, Series B-6, 3.92%*, 3/1/2044 | 14,200,000 | 14,200,000 |
Colorado, Municipal Securities Trust Certificates, Series 2004-220-A, 144A, 3.98%*, 2/15/2023 (a) | 12,930,000 | 12,930,000 |
Colorado, Regional Transportation District, Sales Tax Revenue, "A", 144A, 3.99%*, 11/1/2036 (a) | 4,150,000 | 4,150,000 |
Larimer County, CO, School District No. R-1 Poudre, Series R-4535, 144A, 3.98%*, 12/15/2021 (a) | 2,780,000 | 2,780,000 |
| 52,470,000 |
Delaware 0.6% |
Sussex County, DE, First Mortgage Revenue, Cadbury Lewes, Series C, 4.01%*, 1/1/2016, Citizens Bank of PA (b) | 13,250,000 | 13,250,000 |
Sussex County, DE, Industrial Development Revenue, Perdue Agrirecycle LLC Project, AMT, 4.01%*, 1/1/2013, SunTrust Bank (b) | 5,000,000 | 5,000,000 |
| 18,250,000 |
District of Columbia 2.3% |
District of Columbia, Center for Internships & Academic Revenue, 3.95%*, 7/1/2036, Branch Banking & Trust (b) | 1,700,000 | 1,700,000 |
District of Columbia, General Obligation: | | |
Series PT-2440, 144A, 3.99%*, 6/1/2024 (a) | 1,880,000 | 1,880,000 |
Series B-33, 144A, 3.99%*, 6/1/2025 (a) | 3,000,000 | 3,000,000 |
Series B-34, 144A, 3.99%*, 6/1/2026 (a) | 4,000,000 | 4,000,000 |
District of Columbia, Housing Finance Agency, Multi-Family Housing Revenue, Series R-433, AMT, 144A, 4.01%*, 6/1/2038 | 7,780,000 | 7,780,000 |
District of Columbia, JFK Center for the Performing Arts Revenue, 3.63%*, 10/1/2029 (a) | 8,380,000 | 8,380,000 |
District of Columbia, Maret School, Inc. Revenue, 3.96%*, 10/1/2033, Suntrust Bank (b) | 3,550,000 | 3,550,000 |
District of Columbia, Tax & Revenue Anticipation Notes, 4.25%, 9/28/2007 | 20,000,000 | 20,045,206 |
District of Columbia, Water & Sewer System Revenue, 3.75%, 6/7/2007 | 7,500,000 | 7,500,000 |
Washington D.C., Metropolitan Airport Authority System, Series C, AMT, 3.97%*, 10/1/2021 (a) | 7,370,000 | 7,370,000 |
| 65,205,206 |
Florida 6.1% |
Austin Trust, Certificate of Participation, Various States, Series 2007-129, 144A, 3.97%*, 7/1/2032 (a) | 8,000,000 | 8,000,000 |
Brevard County, FL, Housing Finance Authority, Multi-Family Housing Revenue, Timber Trace Apartments Project, AMT, 3.98%*, 3/15/2045, Citibank NA (b) | 13,600,000 | 13,600,000 |
Broward County, FL, School Board Certificates of Participation, Series R-1056, 144A, 3.98%*, 7/1/2019 (a) | 5,795,000 | 5,795,000 |
Collier County, FL, Industrial Development Authority Revenue, Allete Inc. Project, AMT, 3.99%*, 10/1/2025, Wells Fargo Bank NA (b) | 2,000,000 | 2,000,000 |
Florida, Capital Trust Agency Revenue, Aero Miami FX Project-Air Cargo, AMT, 3.98%*, 8/1/2034, Bank One NA (b) | 10,385,000 | 10,385,000 |
Florida, Greater Orlando Aviation Authority, 3.67%, 5/3/2007 | 6,000,000 | 6,000,000 |
Florida, Municipal Securities Trust Certificates, "A", Series 7007, AMT, 144A, 4.0%*, 3/1/2040 (a) | 8,250,000 | 8,250,000 |
Florida, State Board of Education Lottery Revenue, Series R-542, 144A, 3.98%*, 7/1/2025 (a) | 695,000 | 695,000 |
Florida, State Turnkpike Authority Revenue, Series R-4041, 144A, 3.98%*, 7/1/2020 (a) | 13,390,000 | 13,390,000 |
Florida, Sunshine State Governmental Financing Revenue: | | |
3.63%, 5/1/2007 | 25,000,000 | 25,000,000 |
3.67%, 5/1/2007 | 7,800,000 | 7,800,000 |
3.78%, 5/10/2007 | 20,000,000 | 20,000,000 |
Highlands County, FL, Health Facilities Authority Revenue, Adventist Health System, Series A, 3.91%*, 11/15/2032, SunTrust Bank (b) | 525,000 | 525,000 |
Lee County, FL, Airport Revenue, Series 811-X, AMT, 144A, 4.0%*, 10/1/2029 (a) | 2,000,000 | 2,000,000 |
Lehman Municipal Trust Receipts, Florida Housing Finance, Series 06-K49-D, AMT, 144A, 4.08%*, 7/1/2026 | 3,120,000 | 3,120,000 |
Miami-Dade County, FL, Housing Finance Authority, Multi-Family Revenue, Series PT-3679, AMT, 144A, 4.03%*, 10/1/2042 | 5,205,000 | 5,205,000 |
Miami-Dade County, FL, Industrial Development Authority Revenue, Gulliver Schools Project, 3.97%*, 9/1/2029, Bank of America NA (b) | 6,455,000 | 6,455,000 |
Miami-Dade County, FL, Industrial Development Authority Revenue, Palmer Trinity Private College Project, 4.03%*, 9/1/2035, KeyBank NA (b) | 5,000,000 | 5,000,000 |
Miami-Dade County, FL, School District Revenue, 5.0%, 2/15/2008 (a) | 6,495,000 | 6,565,336 |
Orange County, FL, Housing Finance Authority, Multi-Family Revenue, Series E, AMT, 4.08%*, 3/1/2035, Bank of America NA (b) | 1,480,000 | 1,480,000 |
Orange County, FL, Housing Finance Authority, Multi-Family Revenue, Marbella Pointe, Series A, AMT, 4.01%*, 4/15/2040 | 6,000,000 | 6,000,000 |
Palm Beach County, FL, Jewish Community Campus Project Revenue, 3.92%*, 3/1/2030, Northern Trust Company (b) | 1,110,000 | 1,110,000 |
Sarasota County, FL, Health Facilities Authority Revenue, Health Care Facilities, Bay Village Project, 3.97%*, 12/1/2023, Bank of America NA (b) | 4,820,000 | 4,820,000 |
Sarasota County, FL, Utility System Revenue, Series 852, 144A, 3.98%*, 4/1/2013 (a) | 4,490,000 | 4,490,000 |
Seminole County, FL, Industrial Development Authority Revenue, Masters Academy Project, 3.97%*, 11/1/2034, Allied Irish Bank PLC (b) | 4,890,000 | 4,890,000 |
| 172,575,336 |
Georgia 0.9% |
Atlanta, GA, Airport Revenue, Series C-1, 3.97%*, 1/1/2030 (a) | 5,000,000 | 5,000,000 |
Fulton County, GA, Development Authority Revenue, Kings Ridge Christian School, 3.95%*, 5/1/2026, Branch Banking & Trust (b) | 2,500,000 | 2,500,000 |
Fulton County, GA, Development Authority Revenue, Mount Vernon Presbyterian School, 3.95%*, 8/1/2035, Branch Banking & Trust (b) | 2,500,000 | 2,500,000 |
Georgia, Municipal Securities Trust Certificates, Main Street Natural Gas, Inc., "A", Series 5025, 144A, 3.97%*, 12/19/2018 | 3,625,000 | 3,625,000 |
Georgia, Private Colleges & Universities Authority Revenue, Mercer University Project, Series A, 4.0%*, 10/1/2036, Branch Banking & Trust (b) | 5,500,000 | 5,500,000 |
Macon-Bibb County, GA, Hospital Authority Revenue, Anticipation Certificates, Medical Center of Central Georgia: | | |
3.96%*, 8/1/2018, SunTrust Bank, Atlanta (b) | 3,435,000 | 3,435,000 |
3.96%*, 12/1/2018, SunTrust Bank, Atlanta (b) | 3,000,000 | 3,000,000 |
| 25,560,000 |
Hawaii 1.0% |
ABN AMRO, Munitops Certificates Trust, Series 2004-16, 144A, 3.99%*, 7/1/2012 (a) | 7,200,000 | 7,200,000 |
Hawaii, General Obligation: | | |
Series R-4545, 144A, 3.98%*, 8/1/2020 (a) | 5,135,000 | 5,135,000 |
Series R-4553, 144A, 3.98%*, 5/1/2023 (a) | 8,925,000 | 8,925,000 |
Hawaii, Reset Option Certificates Trust II, Series R-686, AMT, 144A, 4.01%*, 10/1/2027 (a) | 7,310,000 | 7,310,000 |
| 28,570,000 |
Illinois 12.8% |
ABN AMRO, Munitops Certificates Trust, Series 2006-53, 144A, 3.99%*, 7/1/2014 (a) | 12,000,000 | 12,000,000 |
Chicago, IL, De La Salle Institute Project Revenue, 4.0%*, 4/1/2027, Fifth Third Bank (b) | 5,053,000 | 5,053,000 |
Chicago, IL, General Obligation: | | |
Series Z-10, 144A, 3.98%*, 6/29/2029 (a) | 123,000 | 123,000 |
144A, 3.99%*, 1/1/2042 (a) | 2,690,000 | 2,690,000 |
Chicago, IL, Midway Apartment Revenue, 3.6%, 6/6/2007 | 5,269,000 | 5,269,000 |
Chicago, IL, Multi-Family Housing Revenue, Series F3-D, AMT, 144A, 4.1%*, 7/15/2039 | 13,305,000 | 13,305,000 |
Chicago, IL, Multi-Family Housing Revenue, Central Station Project, Series A, AMT, 3.99%*, 7/15/2039 | 5,450,000 | 5,450,000 |
Chicago, IL, O'Hare International Airport Revenue, Series MT-049, AMT, 144A, 4.0%*, 1/1/2017 (a) | 1,995,000 | 1,995,000 |
Chicago, IL, O'Hare International Airport Revenue, Pool Trust National, Series 1438, AMT, 144A, 4.07%*, 7/1/2026 | 29,375,000 | 29,375,000 |
Chicago, IL, Sales & Tax Revenue, Series SG-131, 144A, 3.98%*, 1/1/2027 (a) | 3,925,000 | 3,925,000 |
Chicago, IL, Solar Eclipse Funding Trust, Series 2006-0003, 144A, 3.98%*, 1/1/2026 (a) | 9,335,000 | 9,335,000 |
Chicago, IL, Tender Notes, 3.64%*, 2/20/2009, Harris NA (b) | 23,000,000 | 23,000,000 |
Cook County, IL, Industrial Development Revenue, Devorahco LLC Project, Series A, AMT, 4.01%*, 12/1/2034, LaSalle Bank NA (b) | 2,000,000 | 2,000,000 |
Hillside, IL, Economic Development Revenue, L&J Technologies Project, AMT, 4.04%*, 7/1/2024, Northern Trust Company (b) | 3,720,000 | 3,720,000 |
Illinois, Development Finance Authority, Series D-10, 144A, 4.05%*, 7/15/2023 | 12,580,000 | 12,580,000 |
Illinois, Development Finance Authority, Industrial Development Revenue, Home Run Inn Frozen Foods, AMT, 4.2%*, 4/1/2020, Bank One NA (b) | 2,515,000 | 2,515,000 |
Illinois, Development Finance Authority, Industrial Development Revenue, Katlaw Tretam & Co. Project, AMT, 4.01%*, 8/1/2027, LaSalle Bank NA (b) | 3,940,000 | 3,940,000 |
Illinois, Development Finance Authority, Industrial Project Revenue, Grecian Delight Foods Project, AMT, 4.01%*, 8/1/2019, LaSalle Bank NA (b) | 4,100,000 | 4,100,000 |
Illinois, Development Finance Authority Revenue, Fenwick High School Project, 3.95%*, 3/1/2032, JPMorgan Chase Bank (b) | 5,600,000 | 5,600,000 |
Illinois, Development Finance Authority Revenue, FXD Chicago Symphony Project, 3.91%*, 12/1/2033, Bank One NA (b) | 11,600,000 | 11,600,000 |
Illinois, Development Finance Authority Revenue, Goodman Theatre Project, 3.93%*, 12/1/2033, Bank One NA (b) | 675,000 | 675,000 |
Illinois, Development Finance Authority Revenue, Museum of Contemporary Art Project, 3.91%*, 2/1/2029, Bank One NA (b) | 2,500,000 | 2,500,000 |
Illinois, Development Finance Authority Revenue, Regional Organization Bank of Illinois Project, 4.15%*, 12/1/2020, Bank One NA (b) | 3,500,000 | 3,500,000 |
Illinois, Finance Authority, Student Housing Revenue, Dekalb LLC Project, Series A, 3.99%*, 7/1/2038, Sovereign Bank FSB (b) | 4,500,000 | 4,500,000 |
Illinois, Finance Authority Revenue, Series PA-1286, 144A, 3.99%*, 11/15/2023 (a) | 7,015,000 | 7,015,000 |
Illinois, Finance Authority Revenue, "A", 144A, 3.99%*, 12/1/2042 | 8,565,000 | 8,565,000 |
Illinois, Finance Authority Revenue, Clare Oaks: | | |
Series C, 3.98%*, 11/1/2040, Sovereign Bank FSB (b) | 5,000,000 | 5,000,000 |
Series D, 3.98%*, 11/1/2040, Sovereign Bank FSB (b) | 10,000,000 | 10,000,000 |
Illinois, Finance Authority Revenue, North Park University Project, 3.7%*, 7/1/2035, JPMorgan Chase Bank (b) | 5,000,000 | 5,000,000 |
Illinois, Finance Authority Revenue, UBS Municipal CRV Floaters, Series 06-2001, 144A, 3.97%*, 7/1/2009 | 5,000,000 | 5,000,000 |
Illinois, Metropolitan Pier & Exposition Authority, Dedicated State Tax Revenue, Series 89Z, 144A, 3.99%*, 12/15/2036 (a) | 4,665,000 | 4,665,000 |
Illinois, Regional Transportation Authority, Series A-23, 144A, 3.99%*, 7/1/2030 (a) | 4,920,000 | 4,920,000 |
Illinios, Reset Optional Certificates Trust II, Series R-1076, 144A, 3.98%*, 4/1/2029 (a) | 6,040,000 | 6,040,000 |
Illinois, Sales Tax Revenue, Series R-4516, 144A, 3.98%*, 6/15/2023 | 4,455,000 | 4,455,000 |
Illinois, State General Obligation: | | |
Series PT-3524, 144A, 3.98%*, 1/1/2020 | 10,500,000 | 10,500,000 |
Series PT-1750, 144A, 3.99%*, 12/1/2010 (a) | 5,260,000 | 5,260,000 |
4.25%, 6/7/2007 | 43,000,000 | 43,027,047 |
4.5%, 6/7/2007 | 2,000,000 | 2,001,258 |
Illinois, State General Obligation, Stars Certificates, Series 03-20, 144A, 3.98%*, 11/1/2019 (a) | 5,655,000 | 5,655,000 |
Illinois, University of Illinois Revenue, "A", 144A, 3.99%*, 4/1/2035 (a) | 14,300,000 | 14,300,000 |
Lake Zurich, IL, Industrial Development Revenue, Screenco LLC/ScreenFlex Project, AMT, 4.01%*, 3/1/2018, LaSalle National Bank (b) | 1,435,000 | 1,435,000 |
Mundelein, IL, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 4.04%*, 1/1/2015, Northern Trust Company (b) | 6,500,000 | 6,500,000 |
Municipal Securities Trust Certificates, "A", Series 3031, 144A, 3.98%*, 4/10/2025 (a) | 6,665,000 | 6,665,000 |
Tinley Park, IL, Industrial Development Revenue, Harbor Tool Manufacturing, Inc., Project, AMT, 4.01%*, 7/1/2020, LaSalle Bank NA (b) | 2,240,000 | 2,240,000 |
Vernon Hills, IL, Industrial Development Revenue, Northwestern Tool & Die Project, AMT, 4.07%*, 4/1/2025, Harris Trust & Savings Bank (b) | 745,000 | 745,000 |
Will & Kendall Counties, IL, Community School District No. 202, Series R-4031, 144A, 3.98%*, 1/1/2023 (a) | 2,565,000 | 2,565,000 |
Woodridge, IL, Du Page Will & Cook Counties, Industrial Development Revenue, Morey Realty Group, Inc. Project, AMT, 4.08%*, 12/1/2016, Bank One NA (b) | 3,430,000 | 3,430,000 |
Woodstock, IL, Multi-Family Housing Revenue, Willow Brooke Apartments, AMT, 4.01%*, 4/1/2042, Wells Fargo Bank NA (b) | 28,000,000 | 28,000,000 |
| 361,733,305 |
Indiana 4.0% |
ABN AMRO, Munitops Certificates Trust, Series 2005-7, 144A, 3.68%*, 7/10/2013 (a) | 24,210,000 | 24,210,000 |
Columbia City, IN, Economic Development Revenue, Precision Plastics Project, AMT, 4.04%*, 11/30/2017, Northern Trust Co. (b) | 3,700,000 | 3,700,000 |
Indiana, Health & Educational Facility, Financing Authority Revenue, Greenwood Village South Project, Series A, 3.98%*, 5/1/2036, Sovereign Bank FSB (b) | 6,000,000 | 6,000,000 |
Indiana, Health Facility Financing Authority Revenue, Clark Memorial Hospital, Series A, 3.95%*, 4/1/2024, Bank One NA (b) | 2,000,000 | 2,000,000 |
Indiana, Health Facility Financing Authority Revenue, Macon Trust Hospital Revenue, Series F, 144A, 3.96%*, 5/1/2035 (a) | 4,995,000 | 4,995,000 |
Indiana, State Development Finance Authority, Industrial Development Revenue, Enterprise Center V Project, AMT, 4.01%*, 6/1/2022, LaSalle Bank NA (b) | 5,000,000 | 5,000,000 |
Indiana, State Development Finance Authority, Industrial Development Revenue, Enterprise Center VI Project, AMT, 4.01%*, 6/1/2022, LaSalle Bank NA (b) | 4,900,000 | 4,900,000 |
Indiana, State Development Finance Authority Revenue, Educational Facilities, Indiana Museum of Art, 3.91%*, 2/1/2039, Bank One NA (b) | 1,400,000 | 1,400,000 |
Indiana, State Finance Authority, Environmental Revenue, Ispat Inland, Inc., 3.95%*, 6/1/2035, Royal Bank of Scotland (b) | 11,000,000 | 11,000,000 |
Indiana, State Finance Authority, Water Facilities Revenue, Series 111, 144A, AMT, 4.0%*, 10/1/2036 (a) | 2,695,000 | 2,695,000 |
Indiana, Transportation Finance Authority Highway Revenue: | | |
Series B-21, 144A, 3.99%*, 12/1/2022 (a) | 2,075,000 | 2,075,000 |
Series R-4528, 144A, 3.98%*, 6/1/2018 (a) | 2,270,000 | 2,270,000 |
Indiana University, State General Obligation, 3.64%, 5/17/2007 | 25,300,000 | 25,300,000 |
Indianapolis, IN, Local Public Import Bond Bank, Macon Trust, Series P, 144A, AMT, 4.0%*, 1/1/2030 (a) | 3,120,000 | 3,120,000 |
Portage, IN, Economic Development Revenue, Breckenridge Apartments Project, AMT, 4.0%*, 5/1/2025, LaSalle National Bank (b) | 4,650,000 | 4,650,000 |
Terre Haute, IN, Westminster Village Revenue, Series A, 3.98%*, 8/1/2036, Sovereign Bank FSB (b) | 9,245,000 | 9,245,000 |
| 112,560,000 |
Iowa 1.3% |
Iowa, State School Cash Anticipation Program, Warrant Certificates, Series A, 4.5%, 6/28/2007 (a) | 25,000,000 | 25,030,232 |
Iowa, State Tax & Revenue Anticipation Notes, 4.25%, 6/29/2007 | 12,000,000 | 12,008,514 |
| 37,038,746 |
Kansas 0.1% |
Kansas, State Development Finance Authority, Multi-Family Revenue, Oak Ridge Park II Project, Series X, AMT, 4.08%*, 12/1/2036, Marshall & Ilsley (b) | 3,650,000 | 3,650,000 |
Kentucky 1.8% |
Danville, KY, General Obligation: | | |
3.63%, 5/4/2007 | 12,745,000 | 12,745,000 |
3.73%, 5/9/2007 | 13,025,000 | 13,025,000 |
Jeffersontown, KY, Lease Progam Revenue, Kentucky League of Cities Funding Trust, 4.04%*, 3/1/2030, US Bank NA (b) | 3,820,000 | 3,820,000 |
Kentucky, Economic Development Finance Authority, Hospital Facilities Revenue, Baptist Healthcare, Series B, 3.95%*, 8/15/2031 (a) | 15,000,000 | 15,000,000 |
Louisville & Jefferson County, KY, Lehman Municipal Trust Receipts, Various States, Series 06-F10, 144A, 4.05%*, 8/1/2022 | 6,675,000 | 6,675,000 |
| 51,265,000 |
Louisiana 0.7% |
Louisiana, State Gas & Fuels Tax Revenue, "A", 144A, 3.99%*, 5/1/2036 (a) | 5,000,000 | 5,000,000 |
Louisiana, State Municipal Natural Gas Purchasing & District Authority, Series 1411Q, 144A, 3.98%*, 3/15/2014, JPMorgan Chase & Co. (b) | 14,600,000 | 14,600,000 |
| 19,600,000 |
Maine 1.0% |
Maine, Health & Higher Educational Facilities Authority Revenue, Series A, 3.95%*, 7/1/2022 (a) | 9,270,000 | 9,270,000 |
Maine, State General Obligation, Board Anticipation Notes, 4.5%, 6/8/2007 | 9,725,000 | 9,735,097 |
Maine, State Housing Authority Mortgage Purchase: | | |
Series H, AMT, 3.62%*, 11/15/2034 | 5,000,000 | 5,000,000 |
Series G, AMT, 3.98%*, 11/15/2037 | 5,000,000 | 5,000,000 |
| 29,005,097 |
Maryland 0.7% |
Gaithersburg, MD, Economic Development Revenue, Asbury Maryland Obligation, Series B, 3.97%*, 1/1/2036, KBC Bank NV (b) | 3,900,000 | 3,900,000 |
Maryland, State Economic Development Corp. Revenue, YMCA Central Maryland Project, 3.95%*, 4/1/2031, Branch Banking & Trust (b) | 1,900,000 | 1,900,000 |
Montgomery County, MD, Economic Development Revenue, Howard Hughes Medical Facility, Series A, 3.93%*, 10/15/2020 | 15,000,000 | 15,000,000 |
| 20,800,000 |
Massachusetts 2.1% |
Massachusetts, General Obligation, 3.67%, 5/3/2007 | 27,000,000 | 27,000,000 |
Massachusetts, State Development Finance Agency Revenue, Bridgewell, Inc., Series A, 3.96%*, 6/1/2030, KeyBank NA (b) | 6,000,000 | 6,000,000 |
Massachusetts, State Development Finance Agency Revenue, Buckingham Brown & Nichols, 3.97%*, 6/1/2036, JPMorgan Chase Bank (b) | 2,000,000 | 2,000,000 |
Massachusetts, State Development Finance Agency Revenue, Governor Dummer Academy, 3.98%*, 8/1/2036, Citizens Bank of MA (b) | 5,000,000 | 5,000,000 |
Massachussetts, State Development Finance Agency Revenue, Tabor Academy, Series A, 3.98%*, 12/1/2036, Citizens Bank of MA (b) | 4,805,000 | 4,805,000 |
Massachusetts, State Development Finance Agency Revenue, YMCA of Greater Worcester, 4.0%*, 9/1/2041, TD BankNorth NA (b) | 4,000,000 | 4,000,000 |
Massachusetts, State Industrial Finance Agency Revenue, Groton School Issue, Series B, 4.0%*, 3/1/2028 | 9,000,000 | 9,000,000 |
| 57,805,000 |
Michigan 1.5% |
Detroit, MI, City School District, Series PT-1844, 144A, 3.98%*, 5/1/2011 (a) | 6,680,000 | 6,680,000 |
Flushing, MI, General Obligation, Community Schools, Series R-4517, 144A, 3.98%*, 5/1/2023 | 5,145,000 | 5,145,000 |
Holt, MI, General Obligation, Public Schools, 3.94%*, 5/1/2030 | 4,495,000 | 4,495,000 |
Michigan, Municipal Bond Authority Revenue, Series A, 4.5%, 8/20/2007, Bank of Nova Scotia (b) | 7,125,000 | 7,142,489 |
Michigan, Municipal Securities Trust Certificates, "A", Series 9054, 144A, 3.97%*, 4/20/2011 | 6,770,000 | 6,770,000 |
Michigan, State Building Authority Revenue, Series PZ-140, 144A, 3.99%*, 10/15/2023 (a) | 6,435,000 | 6,435,000 |
Michigan, State Certificates of Participation, Series 530, 144A, 3.97%*, 9/1/2011 (a) | 4,625,000 | 4,625,000 |
| 41,292,489 |
Minnesota 1.2% |
Minnesota, Municipal Securities Trust Certificates, Minneapolis & St. Paul, "A", Series 2007-290, 144A, 3.98%*, 12/23/2014 (a) | 5,000,000 | 5,000,000 |
Minnesota, State General Obligation: | | |
Series R-4065, 144A, 3.98%*, 8/1/2023 | 3,845,000 | 3,845,000 |
5.0%, 8/1/2007 | 5,500,000 | 5,520,296 |
Minnesota, State Housing Finance Agency, Residential Housing Finance, Series M, AMT, 3.99%*, 1/1/2036 | 18,400,000 | 18,400,000 |
| 32,765,296 |
Missouri 1.8% |
Kansas City, MO, Industrial Development Authority Revenue, KC Downtown Arena Project, Series C, 3.98%*, 4/1/2040 (a) | 21,930,000 | 21,930,000 |
Missouri, Development Finance Board, Air Cargo Facility Revenue, St. Louis Airport, AMT, 4.01%*, 3/1/2030, American National Bank & Trust (b) | 14,000,000 | 14,000,000 |
Platte County, MO, Industrial Development Authority Industrial Revenue, Complete Home Concepts, Series A, AMT, 4.03%*, 1/1/2039, Columbian Bank (b) | 6,800,000 | 6,800,000 |
Springfield, MO, Public Utilities Revenue, Series 1559, 144A, 3.98%*, 8/1/2014 (a) | 6,795,000 | 6,795,000 |
| 49,525,000 |
Montana 0.2% |
Montana, RBC Municipal Products, Inc., Pollution Control, Series I-7, 144A, 3.97%*, 8/1/2014 (a) | 5,000,000 | 5,000,000 |
Nebraska 0.2% |
Nebraska, Investment Finance Authority, Single Family Housing Revenue, AMT, Series D, 4.01%*, 9/1/2034 | 4,545,000 | 4,545,000 |
Nevada 0.1% |
Truckee Meadows, NV, Water Authority Revenue, Series 2007-120, 144A, 3.97%*, 7/1/2023 (a) | 4,000,000 | 4,000,000 |
New Hampshire 1.0% |
New Hampshire, Health & Education Facilities Authority Revenue, Currier Museum of Art, 3.95%*, 8/1/2036, Citizens Bank of NH (b) | 14,000,000 | 14,000,000 |
New Hampshire, Health & Education Facilities Authority Revenue, LRG Healthcare, Series B, 4.0%*, 1/1/2032, JPMorgan Chase Bank (b) | 8,390,000 | 8,390,000 |
New Hampshire, State Business Finance Authority, Exempt Facilities Revenue, Waste Management of New Hampshire, Inc. Project, AMT, 4.0%*, 9/1/2012, Wachovia Bank NA (b) | 6,000,000 | 6,000,000 |
| 28,390,000 |
New Jersey 1.0% |
New Jersey, Economic Development Authority, Industrial Development Revenue, CST-Products LLC Project, AMT, 4.03%*, 4/1/2026, National Bank of Canada (b) | 3,000,000 | 3,000,000 |
New Jersey, Municipal Securities Trust Certificates, "A", Series 2006-3009, 144A, 3.98%*, 8/24/2023 (a) | 7,085,000 | 7,085,000 |
New Jersey, Reset Option Certificates Trust, Various States, Series R-684Z, 144A, 3.98%*, 12/15/2036 (a) | 2,580,000 | 2,580,000 |
New Jersey, State Tax & Revenue Anticipation Notes, 4.5%, 6/22/2007 | 12,500,000 | 12,511,646 |
New Jersey, State Transportation Trust Fund Authority, Series PZ-139, 144A, 3.97%*, 12/15/2032 (a) | 3,615,000 | 3,615,000 |
| 28,791,646 |
New Mexico 0.3% |
Albuquerque, NM, Airport Facilities Revenue, Series A, 3.97%*, 7/1/2020 (a) | 5,200,000 | 5,200,000 |
Farmington, NM, Hospital Revenue, San Juan Regional Medical Center Project, Series B, 3.95%*, 6/1/2028, Bank of Nova Scotia (b) | 4,500,000 | 4,500,000 |
| 9,700,000 |
New York 3.0% |
Austin Trust, Certificate of Participation, Variable States, Series 2007-132, 144A, 3.97%*, 6/15/2030 | 25,000,000 | 25,000,000 |
Erie County, NY, Industrial Development Agency, Civic Facility Revenue, Suburban Adult Services, Inc., 4.01%*, 6/1/2022, KeyBank NA (b) | 2,500,000 | 2,500,000 |
Mineola, NY, Union Free School District, Tax Anticipation Notes, 4.5%, 6/29/2007 | 6,000,000 | 6,005,592 |
Nassau County, NY, Industrial Development Agency Revenue, Series MT-315, AMT, 144A, 4.02%*, 11/1/2029 | 8,000,000 | 8,000,000 |
New York, Metropolitan Transportation Authority Revenue, Series G-2, 3.89%*, 11/1/2026 (a) | 1,800,000 | 1,800,000 |
New York, Municipal Securities Trust Certificates, "A", Series 5020, 144A, 4.02%*, 7/1/2018 | 2,700,000 | 2,700,000 |
New York, State General Obligation, Series B, 3.58%*, 3/15/2030, Dexia Credit Local France (b) | 6,855,000 | 6,855,000 |
New York, State Local Assistance Corp., Series B, 3.87%*, 4/1/2023, Westdeutsche Landesbank (b) | 1,000,000 | 1,000,000 |
New York, Tobacco Settlement Financing Corp.: | | |
Series R-2033, 144A, 3.98%*, 6/1/2021 (a) | 1,950,000 | 1,950,000 |
Series R-6500, 144A, 3.98%*, 6/1/2021 (a) | 2,620,000 | 2,620,000 |
New York, NY, General Obligation, Series I-4, 3.97%*, 4/1/2036, Bank of New York (b) | 16,500,000 | 16,500,000 |
New York City, NY, Industrial Development Agency, Civic Facility Revenue, Abraham Joshua Heschel Project, 3.99%*, 4/1/2032, Allied Irish Bank PLC (b) | 1,365,000 | 1,365,000 |
New York City, NY, Industrial Development Agency, Civic Facilities Revenue, Jewish Board of Family Services, 3.93%*, 7/1/2025, Allied Irish Bank PLC (b) | 4,000,000 | 4,000,000 |
Schenectady County, NY, Industrial Development Agency, Civic Facility Revenue, Sunnyview Hospital, Series B, 3.96%*, 8/1/2033, KeyBank NA (b) | 2,205,000 | 2,205,000 |
Yates County, NY, Industrial Development Agency, Civic Facility Revenue, Series B, 3.96%*, 9/1/2015, KeyBank NA (b) | 1,940,000 | 1,940,000 |
| 84,440,592 |
North Carolina 0.6% |
North Carolina, Capital Facilities Finance Agency Educational Revenue, Forsyth Country Day School, 3.95%*, 12/1/2031, Branch Banking & Trust (b) | 5,400,000 | 5,400,000 |
North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Salem Academy & College Project, 3.95%*, 8/1/2030, Branch Banking & Trust (b) | 5,000,000 | 5,000,000 |
North Carolina, Medical Care Community Hospital Revenue, Southeastern Regional Medical Center, 3.95%*, 6/1/2037, Branch Banking & Trust (b) | 2,500,000 | 2,500,000 |
North Carolina, Medical Care Community, Retirement Facilities Revenue, First Mortgage-United Methodist, Series B, 3.95%*, 10/1/2035, Branch Banking & Trust (b) | 5,000,000 | 5,000,000 |
| 17,900,000 |
Ohio 6.4% |
ABN AMRO, Munitops Certificates Trust, Series 2003-37, 144A, 3.99%*, 12/1/2011 (a) | 3,000,000 | 3,000,000 |
Akron Bath Copley, OH, Joint Township Hospital District Revenue, Health Care Facility Summner Project, 3.96%*, 12/1/2032, KBC Bank NV (b) | 5,130,000 | 5,130,000 |
Athens County, OH, Port Authority, Housing Revenue, University Housing for Ohio, Inc. Project, 4.0%*, 6/1/2032, Wachovia Bank NA (b) | 9,405,000 | 9,405,000 |
Cleveland, OH, Airport Systems Revenue, Series PT-3731, 144A, 3.95%*, 1/1/2021 (a) | 38,780,000 | 38,780,000 |
Cuyahoga, OH, Community College District, General Receipts, Series B, 3.96%*, 12/1/2032 (a) | 7,325,000 | 7,325,000 |
Cuyahoga County, OH, Hospital Revenue, Improvement Metrohealth System, 3.96%*, 2/1/2035, National City Bank (b) | 9,920,000 | 9,920,000 |
Huron County, OH, Hospital Facilities Revenue, Fisher-Titus Medical Center, Series A, 3.94%*, 12/1/2027, National City Bank (b) | 10,730,000 | 10,730,000 |
Montgomery County, OH, Catholic Health Revenue, Series B-1, 3.92%*, 4/1/2037 | 32,500,000 | 32,500,000 |
Ohio, Clipper Tax-Exempt Certificate Trust, Series 2006-8, AMT, 144A, 4.01%*, 11/1/2008 | 9,000,000 | 9,000,000 |
Ohio, Lehman Municipal Trust Reciepts, Dayton Ohio School, Series 06-P98, REG D, 144A, 4.0%*, 12/1/2031 (a) | 13,705,000 | 13,705,000 |
Ohio, Reset Optional Certificates Trust II, Series R-9033, 144A, 3.98%*, 12/1/2031 (a) | 2,290,000 | 2,290,000 |
Ohio, State Higher Educational Facilities Communication Revenue, Series R-751-CE, 144A, 3.98%*, 1/15/2046 | 6,500,000 | 6,500,000 |
Ohio, State Higher Educational Facility Revenue, Cleveland Institution Music Project, 3.96%*, 5/1/2030, National City Bank (b) | 5,000,000 | 5,000,000 |
Ohio, State Housing Finance Agency, Residential Mortgage Revenue, Series J, AMT, 4.01%*, 9/1/2036 | 23,150,000 | 23,150,000 |
Summit County, OH, Revenue Bonds, Western Reserve Academy Project, 3.96%*, 10/1/2027, KeyBank NA (b) | 5,235,000 | 5,235,000 |
| 181,670,000 |
Oklahoma 0.8% |
Blaine County, OK, Industrial Development Authority Revenue, Seaboard Project, AMT, 4.01%*, 11/1/2018, SunTrust Bank (b) | 5,200,000 | 5,200,000 |
Payne County, OK, Economic Development Authority, Student Housing Revenue, OSUF Phase III Project, 3.95%*, 7/1/2032 (a) | 15,890,000 | 15,890,000 |
| 21,090,000 |
Oregon 1.2% |
Forest Grove, OR, Student Housing Revenue, Oak Tree Foundation Project, Series A, 3.96%*, 3/1/2036, KeyBank NA (b) | 8,000,000 | 8,000,000 |
Oregon, State Department of Administrative Services, Certificates of Participation, Series PT-1679, 144A, 3.99%*, 11/1/2012 (a) | 4,125,000 | 4,125,000 |
Portland, OR, Economic Development, Broadway Project, Series A, 3.96%*, 4/1/2035 (a) | 4,500,000 | 4,500,000 |
Portland, OR, Sewer System Revenue, Series PT-2435, 144A, 3.99%*, 10/1/2023 (a) | 1,990,000 | 1,990,000 |
Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project: | | |
3.97%*, 5/1/2034, Bank of America NA (b) | 9,175,000 | 9,175,000 |
3.97%*, 5/1/2037, Bank of America NA (b) | 5,665,000 | 5,665,000 |
| 33,455,000 |
Pennsylvania 3.9% |
Allentown, PA, Area Hospital Authority Revenue, Sacred Heart Hospital, Series B, 3.94%*, 7/1/2023, Wachovia Bank NA (b) | 5,980,000 | 5,980,000 |
Beaver County, PA, Industrial Development Authority, Pollution Control Revenue, First Energy, Series B, 3.96%*, 12/1/2041, Barclays Bank PLC (b) | 5,000,000 | 5,000,000 |
Dallastown, PA, General Obligation, Area School District, 3.94%*, 2/1/2018 (a) | 5,810,000 | 5,810,000 |
Dauphin County, PA, General Authority, Education & Health Loan Program, 3.97%*, 11/1/2017 (a) | 18,965,000 | 18,965,000 |
Latrobe, PA, Industrial Development Authority Revenue, Greensburg Diocese, 3.93%*, 6/1/2033, Allied Irish Bank PLC (b) | 2,255,000 | 2,255,000 |
Lehman Municipal Trust Receipts, Pennsylvania Economic Development, Series 06-FC3-D, AMT, 144A, 4.1%*, 6/1/2031 | 5,900,000 | 5,900,000 |
Luzerne County, PA, Industrial Development Authority Revenue, Pennsummit Tubular LLC, Series A, AMT, 4.05%*, 2/1/2021, Wachovia Bank NA (b) | 3,100,000 | 3,100,000 |
Montgomery County, PA, Series 94-B, 3.62%, 5/17/2007 | 13,340,000 | 13,340,000 |
Montgomery County, PA, Industrial Development Authority, Pollution Control Revenue, Series B, AMT, 3.96%*, 10/1/2034, Wachovia Bank NA (b) | 4,160,000 | 4,160,000 |
Pennsylvania, Economic Development Financing Authority, Exempt Facilities Revenue, Amtrak Project, Series B, AMT, 4.04%*, 11/1/2041, Morgan Guaranty Trust (b) | 1,090,000 | 1,090,000 |
Pennsylvania, Economic Development Financing Authority, Solid Waste Disposal Revenue: | | |
Series MT-047, AMT, 144A, 3.99%*, 11/1/2021 | 10,490,000 | 10,490,000 |
Series V, AMT, 144A, 4.02%*, 11/1/2028 | 1,000,000 | 1,000,000 |
Pennsylvania, Reset Option Certificates Trust, Various States, Series R-682, 144A, 3.98%*, 11/1/2031 (a) | 2,600,000 | 2,600,000 |
Pennsylvania, State Higher Educational Facilities Authority, Hospital Revenue, Series MT-042, 144A, 3.98%*, 1/1/2024 | 6,385,000 | 6,385,000 |
Pennsylvania, State Higher Educational Facilities Authority Revenue, Association of Independent Colleges & Universities, Series L-3, 3.97%*, 5/1/2028, PNC Bank NA (b) | 2,600,000 | 2,600,000 |
Philadelphia, PA, School District, Tax & Revenue Anticipation Notes, Series A, 4.5%, 6/29/2007, Bank of America NA (b) | 8,000,000 | 8,008,965 |
Washington County, PA, Hospital Authority Revenue, Washington Hospital, Series A, 3.68%*, 7/1/2037, Wachovia Bank NA (b) | 13,500,000 | 13,500,000 |
| 110,183,965 |
South Carolina 1.6% |
Greenwood County, SC, Exempt Facility Industrial Revenue, Fuji Photo Film Project, AMT, 4.07%*, 9/1/2011 | 3,300,000 | 3,300,000 |
South Carolina, Educational Facilities Authority for Private Nonprofit Institutions, Coker College, 4.0%*, 6/1/2019, Wachovia Bank NA (b) | 3,945,000 | 3,945,000 |
South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Sisters of Charity Hospitals, 3.96%*, 11/1/2032, Wachovia Bank NA (b) | 13,385,000 | 13,385,000 |
South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Upper South Carolina, Inc., Project, 3.95%*, 9/1/2028, Branch Banking & Trust (b) | 2,800,000 | 2,800,000 |
South Carolina, Macron Trust, Series 2007-303, 144A, 3.98%*, 2/1/2012, Bank of America NA (b) | 9,080,000 | 9,080,000 |
South Carolina, Municipal Securities Trust Certificates, "A", Series 2005-245, 144A, 3.98%*, 5/15/2024 (a) | 10,480,000 | 10,480,000 |
South Carolina, Municipal Securities Trust Certificates, Scago Educational Facilities Corp., "A", Series 2006-293, 144A, 3.97%*, 12/8/2014 (a) | 2,500,000 | 2,500,000 |
| 45,490,000 |
Tennessee 4.9% |
Clarksville, TN, Public Building Authority Revenue, Pooled Financing Tennessee Municipal Bond Fund, 3.95%*, 11/1/2027, Bank of America NA (b) | 6,560,000 | 6,560,000 |
Memphis-Shelby County, TN, Sports Authority Income Revenue, Memphis Arena Project, Series A, 3.95%*, 11/1/2028 (a) | 9,150,000 | 9,150,000 |
Nashville & Davidson County, TN, Metropolitan Government Health & Educational Facilities Board Revenue, Ensworth School Project, 3.96%*, 12/1/2027, Suntrust Bank (b) | 3,400,000 | 3,400,000 |
Nashville & Davidson County, TN, Metropolitan Government Health & Educational Facilities Board Revenue, Housing Old Hickory Towers, Series A, AMT, 144A, 4.06%*, 1/1/2030, Wachovia Bank NA (b) | 3,596,000 | 3,596,000 |
Nashville & Davidson County, TN, Metropolitan Government Health & Educational Facilities Board Revenue, Jackson Grove Apartments, Series A, AMT, 4.01%*, 4/1/2036, Marshall & Ilsley (b) | 8,000,000 | 8,000,000 |
Tennessee, Energy Acquisition Corp., Gas Revenue: | | |
Series C05, 144A, 4.0%*, 9/1/2026 | 9,220,000 | 9,220,000 |
Series 1418, 144A, 3.98%*, 3/1/2018 | 24,960,000 | 24,960,000 |
Tennessee, Municipal Securities Trust "A", Certificates, Tennessee Energy, Series 2006-275, 144A, 3.97%*, 4/2/2020 | 4,995,000 | 4,995,000 |
Tennessee, Tennergy Corp., Gas Revenue, Series 1258Q, 144A, 3.98%*, 11/1/2013 | 28,000,000 | 28,000,000 |
Tennessee, Tennergy Corp., Gas Revenue, Stars Certificates, Series 2006-001, 144A, 3.98%*, 5/1/2016 | 41,700,000 | 41,700,000 |
| 139,581,000 |
Texas 13.2% |
ABN AMRO, Munitops Certificates Trust: | | |
Series 2004-38, 144A, 3.99%*, 2/15/2011 | 9,205,000 | 9,205,000 |
Series 2006-59, 144A, 3.99%*, 8/1/2013 | 10,000,000 | 10,000,000 |
Series 2007-01, 144A, 3.99%*, 2/15/2027 | 15,050,000 | 15,050,000 |
Aldine, TX, Independent School District, Series 827, 144A, 3.98%*, 1/1/2012 | 2,905,000 | 2,905,000 |
Austin, TX, Electric Utility Systems Revenue, Series R-1057, 144A, 3.98%*, 11/15/2021 (a) | 4,755,000 | 4,755,000 |
Austin Trust, General Obligation, Various States, Series 2007-127, 144A, 3.97%*, 8/15/2028 (a) | 8,000,000 | 8,000,000 |
Clear Creek, TX, Independent School District, Series 04, 144A, 3.99%*, 2/15/2029 (a) | 4,495,000 | 4,495,000 |
Corpus Christi, TX, Utility System Revenue, Series PT-1816, 144A, 4.0%*, 7/15/2010 (a) | 3,870,000 | 3,870,000 |
Cypress-FairBanks, TX, Independent School District, Series PT-2512, 144A, 3.99%*, 2/15/2022 | 2,600,000 | 2,600,000 |
Dallas, TX, Independent School District, Series 6038, 144A, 3.98%*, 8/15/2024 | 6,110,000 | 6,110,000 |
Harris County, TX, Health Facilities Development Corp. Revenue, St. Luke's Episcopal Health Charities, Series A, 3.93%*, 2/15/2032 (a) | 14,000,000 | 14,000,000 |
Harris County, TX: | | |
Series 1099, 144A, 3.98%*, 8/15/2009 (a) | 2,800,000 | 2,800,000 |
Series 1111, 144A, 3.98%*, 8/15/2009 (a) | 6,470,000 | 6,470,000 |
Harris County, TX: | | |
3.69%, 5/2/2007 | 5,000,000 | 5,000,000 |
3.69%, 5/2/2007 | 14,954,000 | 14,954,000 |
Hidalgo County, TX, General Obligation, Series R-2148, 144A, 3.98%*, 8/15/2024 (a) | 7,310,000 | 7,310,000 |
Houston, TX, General Obligation, 3.65%, 6/7/2007 | 7,500,000 | 7,500,000 |
Houston, TX, Tax & Revenue Anticipation Notes, 4.5%, 6/29/2007 | 33,000,000 | 33,041,516 |
Houston, TX, Utility System Revenue: | | |
3.62%, 6/14/2007 | 22,500,000 | 22,500,000 |
3.65%, 6/21/2007 | 21,900,000 | 21,900,000 |
Houston, TX, Water & Sewer System Revenue, Municipal Trust Receipts, Series SG-120, 144A, 3.98%*, 12/1/2023 | 7,700,000 | 7,700,000 |
Jefferson County, TX, Health Facilities Development Corp., Series A-83, 144A, 3.99%*, 8/15/2021 (a) | 3,535,000 | 3,535,000 |
Keller, TX, Independent School District, Series 2007-122, 144A, 3.97%*, 8/15/2032 | 3,090,000 | 3,090,000 |
Lubbock, TX, Independent School District, School Building, 3.94%*, 2/1/2030 | 8,550,000 | 8,550,000 |
North Texas, Higher Educational Authority, Inc., Student Loan Revenue, Series A, AMT, 4.0%*, 12/1/2041, Bank of America NA (b) | 25,000,000 | 25,000,000 |
Northside, TX, Independent School District, Series 1301, 144A, 3.98%*, 12/15/2013 | 4,605,000 | 4,605,000 |
Plano, TX, Independent School District, Series PT-2428, 144A, 3.99%*, 2/15/2024 | 5,370,000 | 5,370,000 |
San Antonio, TX, Electric & Gas Revenue, Series PT-1700, 144A, 4.0%*, 2/1/2010 | 6,485,000 | 6,485,000 |
San Antonio, TX, Water Revenue: | | |
Series 66, 144A, 3.97%*, 5/15/2037 (a) | 7,100,000 | 7,100,000 |
Series 2007-009, 144A, 3.97%*, 5/15/2037 (a) | 1,920,000 | 1,920,000 |
Texas, A & M University Revenues, Series 944, 144A, 3.98%*, 5/15/2013 | 1,790,000 | 1,790,000 |
Texas, Capital Area Housing Finance Corp., Cypress Creek at River Apartments, AMT, 4.04%*, 10/1/2039, CitiBank NA (b) | 5,500,000 | 5,500,000 |
Texas, Lower Colorado River Authority, 3.64%, 6/4/2007 | 20,000,000 | 20,000,000 |
Texas, Macon Trust, Series 2007-307, AMT, 4.02%*, 4/1/2009 | 23,995,000 | 23,995,000 |
Texas, Municipal Securities Trust Certificates, "A", Series 2005-235, 144A, 3.98%*, 4/5/2023 (a) | 6,035,000 | 6,035,000 |
Texas, State Turnpike Authority, Central Texas Turnpike Systems Revenue, Series 1408, 144A, 3.97%*, 8/15/2042 (a) | 2,000,000 | 2,000,000 |
Texas, University of Texas Systems Revenue Financing, 3.7%, 6/5/2007 | 12,461,000 | 12,461,000 |
Texas, Upper Trinity Regional Water Distribution Revenue: | | |
3.55%, 6/1/2007 | 14,300,000 | 14,300,000 |
3.57%, 6/1/2007 | 1,250,000 | 1,250,000 |
Texas, Water Development Board Revenue, Series PT-2187, 144A, 3.99%*, 7/15/2021 | 10,000,000 | 10,000,000 |
| 373,151,516 |
Utah 2.8% |
Davis County, UT, School District, Tax Anticipation Notes, 4.5%, 6/29/2007 | 30,000,000 | 30,035,022 |
Salt Lake City, UT, Tax & Revenue Anticipation Notes, 4.5%, 6/29/2007 | 20,000,000 | 20,025,874 |
Utah, Water Finance Agency Revenue: | | |
Series A-12, 3.98%*, 10/1/2035 (a) | 10,000,000 | 10,000,000 |
Series A-16, 3.98%*, 7/1/2036 (a) | 5,000,000 | 5,000,000 |
Series A-17, 4.01%*, 12/1/2032 (a) | 5,000,000 | 5,000,000 |
Utah, Water Finance Agency Revenue, Tender Option, Series A-18, 4.01%*, 3/1/2027 (a) | 10,000,000 | 10,000,000 |
| 80,060,896 |
Vermont 0.1% |
Vermont, State Student Assistance Corp., Student Loan Revenue, 3.76%*, 1/1/2008, State Street Bank & Trust Co. (b) | 2,000,000 | 2,000,000 |
Virginia 1.3% |
Alexandria, VA, Redevelopment & Multi-Family Housing Authority Revenue, Fairfield Village Square Project, Series A, AMT, 4.02%*, 1/15/2039 | 4,000,000 | 4,000,000 |
Henrico County, VA, Economic Development Authority, Industrial Development Revenue, Colonial Mechanical Corp., AMT, 4.0%*, 8/1/2020, Wachovia Bank NA (b) | 3,800,000 | 3,800,000 |
Norfolk, VA, State General Obligations, AMT, 4.01%*, 8/1/2037 | 12,000,000 | 12,000,000 |
Virginia, Capital Region Airport Commission, Passenger Facility Charge Revenue, Series A, AMT, 4.0%*, 6/1/2035, Wachovia Bank NA (b) | 3,555,000 | 3,555,000 |
Virginia Port Authority, Facility Revenue, "A", AMT, 144A, 4.02%*, 7/1/2036 (a) | 9,390,000 | 9,390,000 |
Winchester, VA, Industrial Development Authority, Residential Care Facility Revenue, Westminster Cantenbury, Series B, 3.95%*, 1/1/2010, Branch Banking & Trust (b) | 3,000,000 | 3,000,000 |
| 35,745,000 |
Washington 4.7% |
Clark County, WA, Public Utility District No. 001, Electric Revenue, Series F4-D, 144A, 4.05%*, 10/1/2007 | 11,390,000 | 11,390,000 |
Grant County, WA, Public Utility District Number 002, Electric Revenue, Series PT-780, 144A, 3.98%*, 1/1/2010 (a) | 13,125,000 | 13,125,000 |
King County, WA, Housing Authority Revenue, Summerfield Apartments Project, 3.94%*, 9/1/2035, US Bank NA (b) | 1,655,000 | 1,655,000 |
King County, WA, Public Hospital District No. 002, Series R-6036, 144A, 3.98%*, 12/1/2023 (a) | 1,265,000 | 1,265,000 |
Port Seattle, WA, General Obligation: | | |
3.7%, 6/18/2007 | 5,100,000 | 5,100,000 |
3.71%, 8/2/2007 | 13,625,000 | 13,625,000 |
Port Tacoma, WA, General Obligation, Series R-4036, 144A, 3.98%*, 12/1/2025 (a) | 5,820,000 | 5,820,000 |
Washington, Metropolitan Apartments Authority, 3.7%, 5/23/2007 | 10,500,000 | 10,500,000 |
Washington, Municipal Securities Trust Certificates: | | |
"A", Series 9058, 144A, 3.97%*, 9/23/2010 (a) | 9,990,000 | 9,990,000 |
"A", Series 2006-250, 144A, 3.97%*, 8/14/2015 (a) | 7,555,000 | 7,555,000 |
Washington, Port of Seattle Revenue, AMT, 3.97%*, 9/1/2035, Fortis Bank (b) | 2,600,000 | 2,600,000 |
Washington, State General Obligation, Series PZ-106, 144A, 3.99%*, 1/1/2020 (a) | 8,370,000 | 8,370,000 |
Washington, State Health Care Facilities Authority Revenue, Seattle Cancer Care, 3.97%*, 3/1/2035, KeyBank NA (b) | 3,885,000 | 3,885,000 |
Washington, State Housing Finance Commission, Series PA-1430, AMT, 144A, 4.0%*, 6/1/2037 | 2,935,000 | 2,935,000 |
Washington, State Housing Finance Commission, Multi-Family Housing Revenue, Echo Lake Senior Apartment Project, AMT, 4.02%*, 7/15/2040 | 8,985,000 | 8,985,000 |
Washington, State Housing Finance Commission, Multi-Family Housing Revenue, Lake City Senior Apartments Project, Series A, AMT, 4.01%*, 7/1/2039 | 2,000,000 | 2,000,000 |
Washington, State Housing Finance Commission, Multi-Family Housing Revenue, Vintage Silverdale, Series A, AMT, 4.02%*, 9/15/2039 | 4,000,000 | 4,000,000 |
Washington, State Housing Finance Commission, Multi-Family Revenue, Cedar Ridge Retirement, Series A, AMT, 4.03%*, 10/1/2041, Wells Fargo Bank NA (b) | 3,525,000 | 3,525,000 |
Washington, State Housing Finance Commission, Multi-Family Revenue, Deer Run West Apartments Project, Series A, AMT, 4.05%*, 6/15/2037, Bank of America NA (b) | 5,200,000 | 5,200,000 |
Washington, State Housing Finance Commission, Multi-Family Revenue, Merrill Gardenes of Tacoma, Series A, AMT, 4.03%*, 9/15/2040, Bank of America NA (b) | 8,000,000 | 8,000,000 |
Washington, State Housing Finance Commission, Nonprofit Revenue, Eastside Catholic School, Series A, 3.96%*, 7/1/2038, KeyBank NA (b) | 4,000,000 | 4,000,000 |
| 133,525,000 |
Wisconsin 1.3% |
Milwaukee, WI, Sewer Revenue, Series R-4500, 144A, 3.98%*, 6/1/2022 (a) | 3,575,000 | 3,575,000 |
Milwaukee County, WI, Airport Revenue, Series PT-3726, AMT, 144A, 4.0%*, 12/1/2026 (a) | 2,625,000 | 2,625,000 |
Whitewater, WI, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 4.0%*, 12/1/2009, Bank of America NA (b) | 3,000,000 | 3,000,000 |
Wisconsin, Clipper Tax-Exempt Certificates Trust, 144A, 3.97%*, 9/1/2017 | 6,755,000 | 6,755,000 |
Wisconsin, Puttable Floating Options, Tax-Exempts Receipts, Wisconsin State Transition Revenue, Series PT-3929, 144A, 3.99%*, 7/1/2026 (a) | 6,830,000 | 6,830,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, Amery Regional Medical Center, Inc., Series A, 4.01%*, 5/1/2036, Fifth Third Bank (b) | 7,000,000 | 7,000,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, Marshfield Clinic, Series B, 3.98%*, 1/15/2036, Marshall & Ilsley (b) | 5,000,000 | 5,000,000 |
Wisconsin, State Transportation Authority, 3.65%, 6/14/2007 | 2,500,000 | 2,500,000 |
| 37,285,000 |
Multi-State 1.3% |
Puttable Floating Option, Tax-Exempt Receipts, Series PZP-020, 144A, 4.02%*, 8/1/2031 | 10,385,000 | 10,385,000 |
UBS Municipal Custodial Residual and Variable Securities, Various States, 144A, 4.02%*, 8/1/2036 | 25,000,000 | 25,000,000 |
| 35,385,000 |
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management 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").
Money Market Portfolio offers nine classes of shares: Capital Assets Funds Shares, Capital Assets Funds Preferred Shares, 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.
Government & Agency Securities Portfolio offers eight classes of shares: Capital Assets Funds Shares, Davidson Cash Equivalent Shares, Davidson Cash Equivalent Plus Shares, DWS Government & Agency Money Fund (effective March 19, 2007), DWS Government Cash Institutional Shares (effective February 16, 2007), Government Cash Managed Shares (effective February 16, 2007), Premier Money Market Shares and Service Shares.
Tax-Exempt Portfolio offers nine classes of shares: Capital Assets Funds Shares, Davidson Cash Equivalent Shares, DWS Tax-Exempt Cash Institutional Shares, DWS Tax-Exempt Money Fund (effective March 19, 2007), DWS Tax-Free Money Fund Class S (effective March 19, 2007), Premier Money Market Shares, Service Shares, Tax-Exempt Cash Managed Shares and Tax-Free Investment Class (effective March 19, 2007).
The financial highlights for all classes of shares, other than Service Shares, are provided separately and are available upon request.
Each 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.
Each 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.
In September 2006, the Financial Accounting Standards Board ("FASB") released Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007. As of April 30, 2007, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the statement of operations for a fiscal period.
At April 30, 2007, the Money Market Portfolio had a net tax basis capital loss carryforward of approximately ($761,500) which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until April 30, 2010 ($750,000) and April 30, 2015 ($11,500), the respective expiration dates, whichever occurs first.
In addition, from November 1, 2006 through April 30, 2007, the Money Market Portfolio incurred approximately $200 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, 2008.
During the year ended April 30, 2007, the Government & Agency Securities Portfolio inherited and utilized $1,031 of prior year capital loss carryforward from its merger with DWS Government & Agency Money Fund. During the year ended April 30, 2007 the Portfolio utilized $632 of a prior year capital loss carryforward.
During the year ended April 30, 2007, the Tax-Exempt Portfolio inherited and utilized $15,510 of prior year capital loss carryforward from its merger with DWS Cash Reserves Tax Free Series. In addition, the Portfolio inherited and utilized $1,339 of prior year capital loss carryforward from its merger with DWS Tax-Free Money Fund Investment.
During the period from November 1, 2006 through April 30, 2007, the Tax-Exempt Portfolio incurred approximately $67,996 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, 2008.
In July 2006, FASB issued Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for the Portfolios a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether the Portfolios are taxable in certain jurisdictions), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006. On December 22, 2006, the SEC indicated that they would not object if a Portfolios implements FIN 48 in the first required financial statement reporting period for its fiscal year beginning after December 15, 2006. Management has begun to evaluate the application of the Interpretation to the Portfolios and is not in a position at this time to estimate the significance of its impact, if any, on the Portfolios' financial statements.
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 Portfolios.
At April 30, 2007, the Portfolios' components of distributable earnings on a tax-basis are as follows:
In addition, during the years ended April 30, 2007 and April 30, 2006, the tax character of distributions paid to shareholders by each Portfolio is summarized as follows:
Accordingly, for the year ended April 30, 2007, the Portfolios incurred management fees equivalent to the following annual effective rates of each Portfolio's average daily net assets:
For the period from May 1, 2006 through July 31, 2007, the Advisor has contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Service Shares of the Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio to the extent necessary to maintain total operating expenses at 1.00% of average daily net assets (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest and organizational and offering costs).
In addition, for the period February 16, 2007 through March 16, 2010, the Advisor has agreed to contractually waive 0.012% of its management fee for the Government & Agency Securities Portfolio.
Accordingly, for the year ended April 30, 2007, the Advisor waived a portion of its management fee on the Government & Agency Securities Portfolio aggregating $69,497 and the amount charged aggregated $3,783,788, which was equivalent to an annual effective rate of 0.16% of the Portfolio's average daily net assets.
For the year ended April 30, 2007, the Advisor voluntarily waived a portion of its management fee on the Tax-Exempt Portfolio aggregating $22,576 to reimburse costs associated with a trading error. Accordingly, the net management fee charged aggregated $2,114,306, which was equivalent to an annual effective rate of 0.16% of the Portfolio's average net assets.
The Advisor also has agreed to maintain expenses of the Capital Assets Funds Shares and Davidson Cash Equivalent Shares of each Portfolio, Davidson Cash Equivalent Plus Shares of the Government & Agency Securities Portfolio and Money Market Portfolio, DWS Government & Agency Money Fund, DWS Government Cash Institutional Shares and Government Cash Managed Shares of the Government & Agency Securities Portfolio and the Capital Assets Funds Preferred Shares, Institutional Money Market Shares and Institutional Select Money Market Shares of the Money Market Portfolio and DWS Tax-Exempt Cash Institutional Shares, DWS Tax-Exempt Money Fund, DWS Tax-Free Money Fund Class S and Tax-Free Investment Class of the Tax-Exempt Portfolio at certain rates for the year ended April 30, 2007. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
In addition, DWS-SDI provides information and administrative services for a fee ("Service Fee") for the shares listed in the following table. A portion of these fees may be paid pursuant to a Rule 12b-1 plan.
For the year ended April 30, 2007, the Advisor has agreed to reimburse the Portfolios 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:
In addition, the Portfolios have entered into an arrangement with its custodian and transfer agent whereby credits realized as a result of uninvested cash balances are used to reduce a portion of each Portfolio's custodian expenses. During the year ended April 30, 2007, each Portfolio's custodian fees were reduced as follows:
The Portfolios and other affiliated funds (the "Participants") share in a $750 million revolving credit facility administered by JPMorgan Chase Bank N.A. 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 0.35 percent. Each Portfolio may borrow up to a maximum of 33 percent of its net assets under the agreement.
The terms of the SEC settlement, which identified improper trading in the legacy Deutsche and Kemper mutual funds only, provide for payment of disgorgement in the amount of $17.2 million. The terms of the settlement with the New York Attorney General provide for payment of disgorgement in the amount of $102.3 million, which is inclusive of the amount payable under the SEC settlement, plus a civil penalty in the amount of $20 million. The total amount payable by DeAM, approximately $122.3 million, would be distributed to funds in accordance with a distribution plan to be developed by a distribution consultant. 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 have already been reserved.
Among the terms of the settled orders, DeAM is subject to certain undertakings regarding the conduct of its business in the future, including: formation of a Code of Ethics Oversight Committee to oversee all matters relating to issues arising under the advisors' Code of Ethics; establishment of an Internal Compliance Controls Committee having overall compliance oversight responsibility of the advisors; engagement of an Independent Compliance Consultant to conduct a comprehensive review of the advisors' supervisory compliance and other policies and procedures designed to prevent and detect breaches of fiduciary duty, breaches of the Code of Ethics and federal securities law violations by the advisors and their employees; and commencing in 2008, the advisors shall undergo a compliance review by an independent third party.
In addition, DeAM is subject to certain further undertakings relating to the governance of the mutual funds, including that: at least 75% of the members of the Boards of Trustees/Directors overseeing the DWS Funds continue to be independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors continue to be independent of DeAM; DeAM maintain existing management fee reductions for certain funds for a period of five years and not increase management fees for certain funds during this period; the funds retain a senior officer (or independent consultants) responsible for assisting in the review of fee arrangements and monitoring compliance by the funds and the investment advisors with securities laws, fiduciary duties, codes of ethics and other compliance policies, the expense of which shall be borne by DeAM; and periodic account statements, fund prospectuses and the mutual funds' web site contain additional disclosure and/or tools that assist investors in understanding the fees and costs associated with an investment in the funds and the impact of fees and expenses on fund returns.
DeAM has also settled proceedings with the Illinois Secretary of State regarding market timing matters. The terms of the Illinois settlement provide for investor education contributions totaling approximately $4 million and a payment in the amount of $2 million to the Securities Audit and Enforcement Fund.
On September 28, 2006, the SEC and the National Association of Securities Dealers ("NASD") announced final agreements in which Deutsche Investment Management Americas Inc. ("DIMA"), Deutsche Asset Management, Inc. ("DAMI") and Scudder Distributors, Inc. ("SDI") (now known as DWS Scudder Distributors, Inc.) settled administrative proceedings regarding disclosure of brokerage allocation practices in connection with sales of the Scudder Funds' (now known as the DWS Scudder Funds) shares during 2001-2003. The agreements with the SEC and NASD are reflected in orders which state, among other things, that DIMA and DAMI failed to disclose potential conflicts of interest to the fund Boards and to shareholders relating to SDI's use of certain funds' brokerage commissions to reduce revenue sharing costs to broker-dealer firms with whom it had arrangements to market and distribute Scudder Fund shares. These directed brokerage practices were discontinued in October 2003.
Under the terms of the settlements, in which DIMA, DAMI and SDI neither admitted nor denied any of the regulators' findings, DIMA, DAMI and SDI agreed to pay disgorgement, prejudgment interest and civil penalties in the total amount of $19.3 million. The portion of the settlements distributed to the funds was approximately $17.8 million and was paid to the funds as prescribed by the settlement orders based upon the amount of brokerage commissions from each fund used to satisfy revenue sharing agreements with broker-dealers who sold fund shares. Based on the prescribed settlement order, the Portfolios were not entitled to a portion of the settlement.
As part of the settlements, DIMA, DAMI and SDI also agreed to implement certain measures and undertakings relating to revenue sharing payments including making additional disclosures in the fund Prospectuses or Statements of Additional Information, adopting or modifying relevant policies and procedures and providing regular reporting to the fund Boards.
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.
On February 16, 2007, Cash Account Trust: Government & Agency Securities Portfolio acquired all of the net assets of Investors Cash Trust: Government & Agency Securities Portfolio pursuant to an agreement and plan of reorganization approved by shareholders on January 25, 2007. The acquisition was accomplished by a tax-free exchange of 217,331,694 Service Shares and 81,291,534 DWS Government Cash Institutional Shares, respectively, of Investors Cash Trust: Government & Agency Securities Portfolio for 298,623,228 DWS Government Cash Institutional Shares of Cash Account Trust: Government & Agency Securities Portfolio, and 141,887,406 Government Cash Managed Shares of Investors Cash Trust: Government & Agency Securities Portfolio for 141,887,406 Government Cash Managed Shares of Cash Account Trust: Government & Agency Securities Portfolio outstanding on February 16, 2007. Investors Cash Trust: Government & Agency Securities Portfolio's net assets at that date of $440,488,675 were combined with those of Cash Account Trust: Government & Agency Securities Portfolio. The aggregate net assets of Cash Account Trust: Government & Agency Securities Portfolio immediately before the acquisition were $2,121,296,000. The combined net assets of Cash Account Trust: Government & Agency Securities Portfolio immediately following the acquisition were $2,561,784,675.
On March 19, 2007, Cash Account Trust: Government & Agency Securities Portfolio acquired all of the net assets of DWS Government & Agency Money Fund pursuant to an agreement and plan of reorganization approved by shareholders on January 25, 2007. The acquisition was accomplished by a tax-free exchange of 438,858,379 shares of DWS Government & Agency Money Fund for 438,858,379 DWS Government & Agency Money Fund shares of Cash Account Trust: Government & Agency Securities Portfolio outstanding on March 19, 2007. DWS Government & Agency Money Fund's net assets at that date of $438,851,445 were combined with those of Cash Account Trust: Government & Agency Securities Portfolio. The aggregate net assets of Cash Account Trust: Government & Agency Securities Portfolio immediately before the acquisition were $2,684,924,760. The combined net assets of Cash Account Trust: Government & Agency Securities Portfolio immediately following the acquisition were $3,123,776,205.
On March 19, 2007, Cash Account Trust: Tax-Exempt Portfolio acquired all of the net assets of DWS Tax-Free Money Fund, DWS Tax-Exempt Money Fund, and Cash Reserve Fund, Inc. Tax-Free Series pursuant to an agreement and plan of reorganization approved by shareholders on January 25, 2007 for DWS Tax-Free Money Fund and DWS Tax-Exempt Money Fund, and on February 7, 2007 for Cash Reserve Fund, Inc. Tax-Free Series. The acquisition was accomplished by a tax-free exchange of 173,481,265 shares of DWS Tax Free Money Fund, 640,985,030 shares of DWS Tax-Exempt Money Fund, 268,985,283 Tax-Free Shares and 562,136,851 Tax-Free Institutional Shares of Cash Reserve Fund, Inc. Tax-Free Series, respectively, for 173,481,265 DWS Tax-Free Money Fund Class S shares, 640,985,030 DWS Tax-Exempt Money Fund shares, 268,985,283 DWS Tax-Exempt Cash Institutional Shares and 562,136,851 Tax-Free Investment Class shares of Cash Account Trust: Tax-Exempt Portfolio, respectively, outstanding on March 19, 2007. DWS Tax Free Money Fund's, DWS Tax-Exempt Money Fund's, and Cash Reserve Fund, Inc. Tax-Free Series' net assets at that date of $173,664,739, $641,044,754, and $831,044,266, respectively, were combined with those of Cash Account Trust: Tax-Exempt Portfolio. The aggregate net assets of Cash Account Trust: Tax-Exempt Portfolio immediately before the acquisition were $1,363,024,909. The combined net assets of Cash Account Trust: Tax-Exempt Portfolio immediately following the acquisition were $3,008,778,668.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Cash Account Trust (the "Trust") (comprising the Money Market, Government & Agency Securities and Tax-Exempt Portfolios) (collectively, the "Portfolios"), as of April 30, 2007, and the related statements 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 Portfolios' 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 Portfolios' 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, 2007, 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 each of the portfolios comprising Cash Account Trust at April 30, 2007, the results of their operations for the year then ended, the changes in their 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.
For the Tax-Exempt Portfolio, of the dividends paid from net investment income for the taxable year ended April 30, 2007, 100% are designated as exempt interest dividends for federal income tax purposes.
Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 621-1048.
A description of each Portfolio's policies and procedures for voting proxies for portfolio securities and information about how each 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 each Portfolio's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
Following each 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.
DWS Scudder Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606
The following table presents certain information regarding the Board Members and Officers of the Trust as of April 30, 2007. 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 Board Member's term of office extends until the next shareholders' meeting called for the purpose of electing such Board Members and until the election and qualification of a successor, or until such Board Member sooner dies, retires, resigns or is removed as provided in the governing documents of the Trust.
