In the following interview, the portfolio management team discusses the market environment and the performance of Cash Account Trust — Service Shares during the 12-month period ended April 30, 2008.
December ended with an optimistic tone to the markets, but in January 2008 investors' anxieties returned in full force as pressures on the financial markets seemed to come from every direction. Economic data weakened significantly, the equity markets struggled, short-term credit markets experienced further dislocations and large and small investors tried to rid themselves of questionable credits. In addition, during the first quarter of 2008, large hedge funds with sizeable portfolios of mortgage securities received margin calls from lenders, as the mortgage securities they were employing as collateral for other transactions were devalued by the marketplace. This led to more forced selling of billions of dollars of mortgage securities and additional credit market instability. In addition, Bear Stearns, the nation's fifth largest investment bank, had to be rescued from near bankruptcy by the New York Federal Reserve Bank and JPMorgan Chase.
In the general "flight to quality" that ensued from these major events — amid a market atmosphere of fear and uncertainty over perceived credit quality — demand for short-term Treasury securities reached overwhelming levels as investors prized safety over all other considerations, including yield. By mid-March, the unprecedented level of market demand forced Treasury yields to historic lows.
As of April 30, 2008, the three-month LIBOR stood at 2.85%, compared with 5.36% 12 months earlier.
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, 2007 to April 30, 2008).
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 98.1% |
Alabama 0.9% |
Alabama, Huntsville-Randolph School, Educational Building Authority Lease Revenue, Randolph School Project, 2.53%*, 2/1/2038, Compass Bank (a) | 10,000,000 | 10,000,000 |
Daphne, AL, Special Care Facilities Financing Authority Revenue, Accretion-Second Mortgage, Series A, Prerefunded, Zero Coupon, 8/15/2028 | 24,975,000 | 24,803,498 |
| 34,803,498 |
Alaska 0.8% |
Alaska, State Housing Finance Corp., Governmental Purpose, Series A, 2.55%*, 12/1/2030 (b) | 32,100,000 | 32,100,000 |
Arizona 0.8% |
Arizona, Health Facilities Authority Revenue, The Terraces, 2.48%*, 12/1/2037, Sovereign Bank FSB (a) | 10,000,000 | 10,000,000 |
Arizona, Salt River Project, Agricultural Improvement & Power District, Electric Systems Revenue, Series R-12039, 144A, 2.44%*, 1/1/2035 | 3,000,000 | 3,000,000 |
Pinal County, AZ, Electrical District No. 3, Electrical Systems Revenue, Series U-1, 144A, 2.47%*, 10/3/2011 | 16,995,000 | 16,995,000 |
| 29,995,000 |
Arkansas 0.1% |
Pocahontas, AR, Industrial Development Revenue, MacLean Esna LP Project, AMT, 2.75%*, 5/1/2015, Northern Trust Co. (a) | 2,500,000 | 2,500,000 |
California 3.6% |
California, Austin Trust, Various States, Series 2008-1065, 144A, 2.42%*, 3/1/2033 | 19,225,000 | 19,225,000 |
California, Bay Area Toll Authority, Toll Bridge Revenue, Series R-12019, 144A, 2.41%*, 4/1/2031 | 9,915,000 | 9,915,000 |
California, Desert Community College District, Series 2675, 144A, 2.51%*, 8/1/2013 (b) | 4,995,000 | 4,995,000 |
California, Lehman Municipal Trust Receipts, Various States: | | |
Series P131W-D, 144A, 2.86%*, 5/15/2043 (b) | 14,550,000 | 14,550,000 |
Series 07-K14-D, 144A, 2.95%*, 5/15/2047 (b) | 17,500,000 | 17,500,000 |
California, State Daily Kindergarten University, Series A-1, 2.4%*, 5/1/2034, Citibank NA (a) | 3,575,000 | 3,575,000 |
California, State General Obligation: | | |
Series 2178, 144A, 2.45%*, 12/1/2037 | 5,395,000 | 5,395,000 |
Series DCL-009, 144A, 2.48%*, 8/1/2027 (b) | 6,790,000 | 6,790,000 |
California, Statewide Communities Development Authority, Multi-Family Housing Revenue: | | |
Series 2680, 144A, 2.53%*, 5/15/2016, JPMorgan Chase Bank (a) | 21,600,000 | 21,600,000 |
Series 2681, 144A, AMT, 2.63%*, 5/15/2018, JPMorgan Chase Bank (a) | 8,100,000 | 8,100,000 |
Series R-13057CE, 144A, AMT, 2.75%*, 12/1/2041 | 4,000,000 | 4,000,000 |
Fresno, CA, Water System Revenue, Municipal Securities Trust Receipts, SGA 153, "A", 144A, 2.75%*, 6/1/2024, Societe Generale (a) | 700,000 | 700,000 |
Peralta, CA, Community College District, Series R-12122, 144A, 2.46%*, 8/1/2037 (b) | 3,000,000 | 3,000,000 |
Poway, CA, Unified School District, Series R-12224, 144A, 2.46%*, 8/1/2030 (b) | 7,110,000 | 7,110,000 |
San Francisco, CA, City & County Public Utilities Commission, Water Revenue, Series 2190, 144A, 2.44%*, 11/1/2031 (b) | 8,155,000 | 8,155,000 |
University of California Revenues, Series 2169, 144A, 2.45%*, 5/15/2031 (b) | 6,435,000 | 6,435,000 |
| 141,045,000 |
Colorado 5.0% |
Austin Trust, Various States, Series 2007-319, 144A, 2.47%*, 6/7/2010, Bank of America NA (a) | 16,850,000 | 16,850,000 |
Colorada, Centerra Metropolitan District 1 Revenue, Refunding and Improvement, 2.65%*, 12/1/2029, Compass Bank (a) | 15,000,000 | 15,000,000 |
Colorado, Educational & Cultural Facilities Authority Revenue, Lutheran Church Extension, 2.68%*, 5/15/2038, Bank of America NA (a) | 11,000,000 | 11,000,000 |
Colorado, Educational & Cultural Facilities Authority Revenue, Trinity School Project, 2.48%*, 9/1/2026, Branch Banking & Trust (a) | 2,000,000 | 2,000,000 |
Colorado, Educational & Cultural Facilities Authority Revenue, Vail Mountain School Project, 2.56%*, 5/1/2033, KeyBank NA (a) | 5,000,000 | 5,000,000 |
Colorado, Housing & Finance Authority, Single Family Mortgage Revenue, "I", Series B-1, 3.55%*, 5/1/2038 | 47,500,000 | 47,500,000 |
Colorado, Housing & Finance Authority, Solid Waste Revenue, Waste Management, Inc. Projects, AMT, 2.6%*, 7/1/2027, JPMorgan Chase Bank (a) | 10,000,000 | 10,000,000 |
Colorado, Regional Transportation District, Sales Tax Revenue, Series R-10117, 144A,2.61%*, 11/1/2036 (b) | 4,395,000 | 4,395,000 |
Colorado, State General Fund Revenue, Anticipation Notes, Series A, 4.25%, 6/27/2008 | 50,000,000 | 50,040,274 |
Colorado Springs, CO, School District No. 11, Facilities Corp., Certificates of Participation, 2.45%*, 12/1/2017 (b) | 5,630,000 | 5,630,000 |
Greenwood Village, CO, Fiddlers Business Improvement District, Series 2, 2.45%*, 12/1/2036, KeyBank NA (a) | 10,000,000 | 10,000,000 |
RBC Municipal Products, Inc. Trust, Various States, Series C-11, 144A, 2.51%*, 12/1/2031, Royal Bank of Canada (a) | 17,580,000 | 17,580,000 |
| 194,995,274 |
Delaware 0.8% |
Delaware, Lehman Municipal Trust Receipts, Various States, Series P54W-D, AMT, 144A, 3.38%*, 1/1/2039 | 8,475,000 | 8,475,000 |
Delaware, State Economic Development Authority Revenue, YMCA Delaware Project, 2.45%*, 5/1/2036, PNC Bank NA (a) | 6,490,000 | 6,490,000 |
Delaware, UBS Municipal (CRVS), Various States, Series 2007-11, AMT, 144A, 2.54%*, 7/1/2015 | 8,965,000 | 8,965,000 |
Sussex County, DE, First Mortgage Revenue, Cadbury Lewes, Series C, 2.44%*, 1/1/2016, Citizens Bank of PA (a) | 6,515,000 | 6,515,000 |
| 30,445,000 |
District of Columbia 0.5% |
District of Columbia, Center for Internships & Academic Revenue, 2.48%*, 7/1/2036, Branch Banking & Trust (a) | 3,400,000 | 3,400,000 |
District of Columbia, General Obligation, Series B-34, 144A, 2.82%*, 6/1/2026 (b) | 3,980,000 | 3,980,000 |
District of Columbia, Housing Finance Agency, Mortgage Revenue, Series L22-D, AMT, 3.35%*, 12/1/2025 | 5,090,000 | 5,090,000 |
District of Columbia, Housing Finance Agency, Multi-Family Housing Revenue, Series R-433, AMT, 144A, 2.51%*, 6/1/2038 | 7,780,000 | 7,780,000 |
| 20,250,000 |
Florida 3.4% |
Collier County, FL, Industrial Development Authority Revenue, Allete, Inc. Project, AMT, 2.5%*, 10/1/2025, Wells Fargo Bank NA (a) | 2,000,000 | 2,000,000 |
Florida, BB&T Municipal Trust, Various States, Series 1012, 144A, 2.51%*, 11/1/2024, Branch Banking & Trust (a) | 9,900,000 | 9,900,000 |
Florida, Housing Finance Corp., Multi-Family Revenue, Lakeside North, 2.46%*, 6/1/2034 | 3,385,000 | 3,385,000 |
Florida, Housing Finance Corp., Multi-Family Revenue, Victoria Park, Series J-1, 2.43%*, 10/15/2032 | 7,120,000 | 7,120,000 |
Florida, Housing Finance Corp., Multi-Family Mortgage Revenue, Clear Harbor Apartments, AMT, 2.59%*, 6/15/2042, Citibank NA (a) | 5,950,000 | 5,950,000 |
Florida, Lehman Municipal Trust Receipts, Various States, Series K86W-D, 144A, 3.0%*, 7/1/2032 (b) | 4,000,000 | 4,000,000 |
Florida, State Turnpike Authority Revenue, Series 2655, 144A, 2.51%*, 7/1/2015 | 1,275,000 | 1,275,000 |
Gulf Breeze, FL, Municipal Bond Fund Revenue, Series A, 2.48%*, 3/31/2021, Bank of America NA (a) | 10,710,000 | 10,710,000 |
Lee County, FL, Airport Revenue, Series 811-X, AMT, 144A, 2.51%*, 10/1/2029 (b) | 2,000,000 | 2,000,000 |
Leesburg, FL, Hospital Revenue, The Villages Regional Hospital Project, 2.5%*, 7/1/2036, Scotiabank (a) | 8,000,000 | 8,000,000 |
Miami-Dade County, FL, Industrial Development Authority Revenue, Palmer Trinity Private College Project, 2.56%*, 9/1/2035, KeyBank NA (a) | 5,000,000 | 5,000,000 |
Orange County, FL, Housing Finance Authority, Multi-Family Revenue: | | |
Series 1179, AMT, 144A, 2.61%*, 10/1/2031 | 8,400,000 | 8,400,000 |
Series E, AMT, 2.7%*, 3/1/2035, Bank of America NA (a) | 1,460,000 | 1,460,000 |
Orange County, FL, Housing Finance Authority, Multi-Family Revenue, Laurel Oaks Apartments, Phase I, AMT, 2.55%*, 8/15/2042, SunTrust Bank (a) | 10,780,000 | 10,780,000 |
Orange County, FL, Housing Finance Authority, Multi-Family Revenue, Laurel Oaks Apartments, Phase II, AMT, 2.55%*, 8/15/2042, SunTrust Bank (a) | 8,660,000 | 8,660,000 |
Orange County, FL, Industrial Development Authority Revenue, Catholic Charities Centennial, 2.58%*, 7/1/2037, Suntrust Bank (a) | 6,300,000 | 6,300,000 |
Orlando, FL, Sunshine State Government Financing, 2.7%, 5/8/2008 | 6,720,000 | 6,720,000 |
Osceola County, FL, Housing Finance Authority, Multi-Family Revenue, Arrow Ridge Apartments, Series A, AMT, 2.85%*, 10/1/2032 | 4,300,000 | 4,300,000 |
Palm Beach County, FL, Community Foundation, Palm Beach Project Revenue, 2.45%*, 3/1/2034, Northern Trust Co. (a) | 4,165,000 | 4,165,000 |
Sarasota County, FL, Health Facilities Authority Revenue, Health Care Facilities, Bay Village Project, 2.47%*, 12/1/2023, Bank of America NA (a) | 4,620,000 | 4,620,000 |
Seminole County, FL, Industrial Development Authority Revenue, Masters Academy Project, 2.48%*, 11/1/2034, Allied Irish Bank PLC (a) | 8,640,000 | 8,640,000 |
Tallahassee, FL, Energy Systems Revenue, "A", 144A, 2.5%*, 10/1/2037 (b) | 9,905,000 | 9,905,000 |
| 133,290,000 |
Georgia 3.3% |
Atlanta, GA, Development Authority Revenue, Botanical Garden Improvements Project, 2.7%*, 11/1/2029, SunTrust Bank (a) | 9,500,000 | 9,500,000 |
Burke County, GA, Development Authority Pollution Control Revenue, Vogtle Project, Series 2, 2.58%*, 10/1/2032 | 7,000,000 | 7,000,000 |
Fulton County, GA, Development Authority Revenue, Doris & Alex Weber School Project, 2.48%*, 12/1/2030, Branch Banking & Trust (a) | 5,000,000 | 5,000,000 |
Fulton County, GA, Development Authority Revenue, Georgia Tech Facilities Project: | | |
Series B, 2.6%*, 6/1/2032, SunTrust Bank (a) | 3,400,000 | 3,400,000 |
Series A, 2.6%*, 5/1/2037, SunTrust Bank (a) | 3,500,000 | 3,500,000 |
Fulton County, GA, Development Authority Revenue, Kings Ridge Christian School, 2.48%*, 5/1/2026, Branch Banking & Trust (a) | 2,500,000 | 2,500,000 |
Fulton County, GA, Development Authority Revenue, Metro Atlanta YMCA Project, 2.43%*, 11/1/2022, SunTrust Bank (a) | 5,000,000 | 5,000,000 |
Fulton County, GA, Development Authority Revenue, Mount Vernon Presbyterian School, 2.48%*, 8/1/2035, Branch Banking & Trust (a) | 2,500,000 | 2,500,000 |
Fulton County, GA, Development Authority Revenue, Piedmont Healthcare, Inc. Project, 2.7%*, 6/1/2037, SunTrust Bank (a) | 9,000,000 | 9,000,000 |
Fulton County, GA, Development Authority Revenue, The Lovett School Project, 2.7%*, 4/1/2033, SunTrust Bank (a) | 8,000,000 | 8,000,000 |
Georgia, Lehman Municipal Trust Receipts, Various States, Series K5W-D, 144A, 2.9%*, 7/1/2020 | 12,200,000 | 12,200,000 |
Georgia, Private Colleges & Universities Authority Revenue, Mercer University Project, Series A, 2.53%*, 10/1/2036, Branch Banking & Trust (a) | 5,500,000 | 5,500,000 |
Georgia, Solar Eclipse Funding Trust, Series 2007-0072, 144A, 2.46%*, 6/1/2032, US Bank NA (a) | 11,660,000 | 11,660,000 |
Macon-Bibb County, GA, Hospital Authority Revenue, Anticipation Certificates, Medical Center of Central Georgia, 3.6%*, 8/1/2035 (b) | 5,000,000 | 5,000,000 |
RBC Municipal Products, Inc. Trust, Various States: | | |
Series C-3, 144A, AMT, 2.58%*, 3/1/2016, Royal Bank of Canada (a) | 10,000,000 | 10,000,000 |
Series C-9, AMT, 2.58%*, 8/1/2016, Royal Bank of Canada (a) | 30,495,000 | 30,495,000 |
| 130,255,000 |
Hawaii 0.5% |
ABN AMRO, Munitops Certificates Trust, Series 2004-16, 144A, 2.51%*, 7/1/2012 (b) | 9,200,000 | 9,200,000 |
Hawaii, General Obligation, Series R-4553, 144A, 2.51%*, 5/1/2023 (b) | 8,890,000 | 8,890,000 |
| 18,090,000 |
Idaho 1.1% |
Idaho, Housing & Finance Association, Single Family Mortgage: | | |
Series B, AMT, 2.95%*, 7/1/2032 | 6,785,000 | 6,785,000 |
Series A, AMT, 2.95%*, 7/1/2033 | 3,000,000 | 3,000,000 |
"I", Series B, AMT, 2.95%*, 7/1/2033 | 8,210,000 | 8,210,000 |
Idaho, Lehman Municipal Trust Receipts, Various States, Series K39W-D, AMT, 144A,3.35%*, 7/1/2038 | 5,710,000 | 5,710,000 |
Idaho, State General Obligations, Tax Anticipation Notes, 4.5%, 6/30/2008 | 20,000,000 | 20,024,329 |
| 43,729,329 |
Illinois 11.2% |
ABN AMRO, Munitops Certificates Trust: | | |
Series 2006-36, 144A, 2.45%*, 1/1/2014 (b) | 10,995,000 | 10,995,000 |
Series 2006-53, 144A, 2.45%*, 7/1/2014 (b) | 12,000,000 | 12,000,000 |
Series 2006-68, 144A, AMT, 2.48%*, 9/20/2012 | 6,890,000 | 6,890,000 |
Series 2004-47, 144A, 2.51%*, 11/15/2012 (b) | 18,360,000 | 18,360,000 |
Aurora, IL, Single Family Mortgage Revenue, Series C55, 144A, AMT, 2.87%*, 6/1/2045 | 12,985,000 | 12,985,000 |
Austin Trust, General Obligation, Various States: | | |
Series 2001, 144A, 2.45%*, 12/1/2026 (b) | 4,175,000 | 4,175,000 |
Series 2007-2014, 144A, 2.45%*, 6/1/2034 (b) | 17,722,000 | 17,722,000 |
Chicago, IL, Board of Education, Series 2391, 144A, 2.51%*, 12/1/2015 (b) | 4,475,000 | 4,475,000 |
Chicago, IL, De La Salle Institute Project Revenue, 2.62%*, 4/1/2027, Fifth Third Bank (a) | 4,877,000 | 4,877,000 |
Chicago, IL, General Obligation, Series R-12217, 144A, 2.49%*, 1/1/2017 (b) | 2,050,000 | 2,050,000 |
Chicago, IL, Metropolitan Water Reclamation District, Greater Chicago, Series R-11283, 144A, 2.43%*, 12/1/2021 | 2,390,000 | 2,390,000 |
Chicago, IL, Solar Eclipse Funding Trust, Series 2006-0003, 144A, 3.8%*, 1/1/2026 (b) | 9,285,000 | 9,285,000 |
Chicago, IL, Tender Notes, 3.2%*, 2/20/2009, Harris NA (a) | 6,650,000 | 6,650,000 |
Cook County, IL, Catholic Theological Union Project Revenue, 2.65%*, 2/1/2035, Harris Trust & Savings Bank (a) | 6,000,000 | 6,000,000 |
Evanston, IL, Capital Improvement Projects, Series D, 2.43%*, 12/1/2021 | 3,900,000 | 3,900,000 |
Hillside, IL, Economic Development Revenue, L&J Technologies Project, AMT, 2.75%*, 7/1/2024, Northern Trust Co. (a) | 3,420,000 | 3,420,000 |
Illinois, Development Finance Authority, Industrial Development Revenue, Home Run Inn Frozen Foods, AMT, 3.1%*, 4/1/2020, Bank One NA (a) | 1,880,000 | 1,880,000 |
Illinois, Development Finance Authority Revenue, Fenwick High School Project, 2.85%*, 3/1/2032, JPMorgan Chase Bank (a) | 5,600,000 | 5,600,000 |
Illinois, Development Finance Authority Revenue, Regional Organization Bank of Illinois Project, 3.0%*, 12/1/2020, Bank One NA (a) | 3,250,000 | 3,250,000 |
Illinois, Finance Authority, Student Housing Revenue, Dekalb LLC Project, Series A, 2.5%*, 7/1/2038, Sovereign Bank FSB (a) | 4,500,000 | 4,500,000 |
Illinois, Finance Authority Revenue, "A", 144A, 2.44%*, 12/1/2042 | 8,565,000 | 8,565,000 |
Illinois, Finance Authority Revenue, Bradley University, Series A, 2.4%*, 4/1/2033, Northern Trust Company (a) | 3,385,000 | 3,385,000 |
Illinois, Finance Authority Revenue, Clare Oaks: | | |
Series C, 2.49%*, 11/1/2040, Sovereign Bank FSB (a) | 5,000,000 | 5,000,000 |
Series D, 2.49%*, 11/1/2040, Sovereign Bank FSB (a) | 10,000,000 | 10,000,000 |
Illinois, Finance Authority Revenue, UBS Municipal (CRVS), Series 06-2001, 2.49%*, 7/1/2009 | 5,000,000 | 5,000,000 |
Illinois, Housing Development Authority Revenue, Homeowner Mortgage, Series H-2, AMT, 3.48%*, 2/1/2039 | 10,430,000 | 10,430,000 |
Illinois, Lehman Municipal Trust Receipts, Various States: | | |
Series P21W-D, 144A, 2.9%*, 1/1/2024 (b) | 13,000,000 | 13,000,000 |
Series P78W-D, AMT, 144A, 3.18%*, 2/1/2038 | 6,000,000 | 6,000,000 |
Illinois, Munitops II Trust, Series 2007-29, 144A, 2.51%*, 6/1/2027 (b) | 16,200,000 | 16,200,000 |
Illinois, Regional Transportation Authority, Series A-23, 144A, 2.97%*, 7/1/2030 (b) | 4,900,000 | 4,900,000 |
Illinois, Sales Tax Revenue, Series R-4516, 144A, 2.43%*, 6/15/2023 | 8,865,000 | 8,865,000 |
Illinois, State General Obligation: | | |
Series PT-3524, 2.46%*, 1/1/2020 | 10,470,000 | 10,470,000 |
3.0%, 5/23/2008 | 100,000,000 | 100,054,621 |
Illinois, State Toll Highway Authority Revenue, Series A-1, 2.5%*, 7/1/2030 | 27,000,000 | 27,000,000 |
Illinois, University of Illinois Revenue, "A", 144A, 2.52%*, 4/1/2035 (b) | 14,300,000 | 14,300,000 |
Justice, IL, Multi-Family Housing Revenue, Candlewood Apartments Project, AMT, 2.62%*, 1/15/2033 | 10,700,000 | 10,700,000 |
Kane County, IL, Community Unit School District Number 304 Geneva, Series 2272, 144A, 2.51%*, 1/1/2015 (b) | 7,795,000 | 7,795,000 |
Mundelein, IL, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 2.75%*, 1/1/2015, Northern Trust Co. (a) | 6,500,000 | 6,500,000 |
Woodstock, IL, Multi-Family Housing Revenue, Willow Brooke Apartments, AMT, 2.59%*, 4/1/2042, Wells Fargo Bank NA (a) | 28,000,000 | 28,000,000 |
| 437,568,621 |
Indiana 1.4% |
Columbia City, IN, Economic Development Revenue, Precision Plastics Project, AMT, 2.75%*, 11/30/2017, Northern Trust Co. (a) | 2,300,000 | 2,300,000 |
Crown Point, IN, Multi-School Building Corp., Series 1056, ETM, 144A, 2.43%*, 7/15/2013 | 6,595,000 | 6,595,000 |
Indiana, Health & Educational Facility, Financing Authority Revenue, Greenwood Village South Project, Series A, 2.49%*, 5/1/2036, Sovereign Bank FSB (a) | 9,345,000 | 9,345,000 |
Indiana, Health Facility Financing Authority Revenue, Clark Memorial Hospital, Series A, 2.65%*, 4/1/2024, Bank One NA (a) | 2,000,000 | 2,000,000 |
Indiana, State Development Finance Authority, Industrial Development Revenue, Red Gold Inc., Project, Series A, 2.8%*, 6/30/2009, Harris Trust and Savings Bank (a) | 3,700,000 | 3,700,000 |
Indianapolis, IN, Airport Authority Revenue, 1.45%, 6/9/2008 | 12,000,000 | 12,000,000 |
Indianapolis, IN, Airport Authority Revenue, Municipal Securities Trust Receipts, SGA 154, "A", 144A, 5.65%, 7/1/2015, Societe Generale (a) (b) | 4,855,000 | 4,855,000 |
Indianapolis, IN, Local Public Import Bond Bank, Macon Trust, Series P, AMT, 144A, 3.23%*, 1/1/2030 (b) | 3,120,000 | 3,120,000 |
Terre Haute, IN, Westminster Village Revenue, Series A, 2.49%*, 8/1/2036, Sovereign Bank FSB (a) | 9,245,000 | 9,245,000 |
| 53,160,000 |
Iowa 2.3% |
Iowa, Finance Authority, Multi-Family Revenue, Housing Windsor on River, Series A, AMT, 2.6%*, 5/1/2042, Wells Fargo Bank NA (a) | 17,000,000 | 17,000,000 |
Iowa, Finance Authority, Private College Revenue, Drake University Project, 144A, 2.6%*, 4/1/2031, Wells Fargo Bank NA (a) | 8,750,000 | 8,750,000 |
Iowa, Finance Authority, Student Housing Revenue, Des Moines LLC Project, Series A,2.52%*, 6/1/2039, Citibank NA (a) | 10,000,000 | 10,000,000 |
Iowa, Higher Education Loan Authority Revenue, Private College Facility, Grinnell College, 2.43%*, 12/1/2011 | 12,500,000 | 12,500,000 |
Iowa, State Tax & Revenue Anticipation Notes, 4.0%, 6/30/2008 | 40,000,000 | 40,048,345 |
| 88,298,345 |
Kansas 0.4% |
Kansas, State Development Finance Authority, Multi-Family Revenue, Oak Ridge Park II Project, Series X, AMT, 2.66%*, 12/1/2036, Marshall & Ilsley (a) | 3,650,000 | 3,650,000 |
Lenexa, KS, Series 2007-302, 144A, 2.47%*, 2/1/2012 | 12,495,000 | 12,495,000 |
| 16,145,000 |
Kentucky 0.0% |
Kentucky, Housing Corp. Revenue, Series F, AMT, 2.77%*, 7/1/2029 | 1,940,000 | 1,940,000 |
Louisiana 2.2% |
Louisiana, Lehman Municipal Trust Receipts, Various States, Series K29-D, 144A, 3.1%*, 12/1/2038 | 6,010,000 | 6,010,000 |
Louisiana, Local Government Environmental Facilities & Community Development Authority Revenue, Downreit, Inc., Series B, 2.6%*, 10/1/2037, ABN AMRO Bank NV (a) | 10,635,000 | 10,635,000 |
Louisiana, Public Facilities Authority Revenue, Series 2006-153, 144A, 2.53%*, 7/1/2034 | 2,900,000 | 2,900,000 |
Louisiana, St. Tammany Parish Development District Revenue, 2.7%*, 7/1/2038, SunTrust Bank (a) | 5,000,000 | 5,000,000 |
Louisiana, State Gas & Fuels Tax Revenue, "A", 144A, 2.49%*, 5/1/2036 (b) | 5,000,000 | 5,000,000 |
Louisiana, State Municipal Natural Gas Purchasing & District Authority, Series 1411Q, 144A, 2.51%*, 3/15/2014, JPMorgan Chase & Co. (a) | 50,902,000 | 50,902,000 |
Louisiana, State Offshore Term Authority, Deep Water Port Revenue, Loop LLC Project, 2.7%*, 10/1/2019, JPMorgan Chase Bank (a) | 5,900,000 | 5,900,000 |
| 86,347,000 |
Maine 0.3% |
Maine, State Board Anticipation Notes, 3.25%, 6/10/2008 | 3,900,000 | 3,902,828 |
Maine, State Housing Authority Mortgage Purchase: | | |
Series G, AMT, 2.65%*, 11/15/2037 | 5,000,000 | 5,000,000 |
Series B, AMT, 2.65%*, 11/15/2041 | 5,000,000 | 5,000,000 |
| 13,902,828 |
Maryland 1.1% |
Baltimore, MD, Municipal Securities Trust Receipts, SGA 152, "A", 144A, 2.75%*, 7/1/2020, Societe Generale (a) (b) | 10,000,000 | 10,000,000 |
Maryland, State Economic Development Corp. Revenue, YMCA Central Maryland Project, 2.68%*, 4/1/2031, Branch Banking & Trust (a) | 3,850,000 | 3,850,000 |
Maryland, State Economic Development Corp. Revenue, Howard Hughes Medical Institute, Series A, 2.45%*, 2/15/2043 | 8,000,000 | 8,000,000 |
Maryland, State Health & Higher Educational Facilities Authority Revenue, Sheppard Pratt, Series B, 2.44%*, 7/1/2028, SunTrust Bank (a) | 7,000,000 | 7,000,000 |
Montgomery County, MD, Economic Development Revenue, Howard Hughes Medical Facility, Series A, 2.73%*, 10/15/2020 | 15,000,000 | 15,000,000 |
| 43,850,000 |
Massachusetts 3.9% |
Massachusetts, Macon Trust, Various States: | | |
Series 2007-310, 144A, 2.47%*, 6/15/2012, Bank of America NA (a) | 4,250,000 | 4,250,000 |
Series 2007-343, 144A, 2.68%*, 12/1/2012, Bank of America NA (a) | 23,088,000 | 23,088,000 |
Massachusetts, State Development Finance Agency Revenue, Bridgewell, Inc., Series A,2.44%*, 6/1/2030, KeyBank NA (a) | 5,000,000 | 5,000,000 |
Massachusetts, State Development Finance Agency Revenue, Charles River School, 2.46%*, 5/1/2037, Citizens Bank of MA (a) | 5,000,000 | 5,000,000 |
Massachusetts, State Development Finance Agency Revenue, Clark University, 2.55%*, 10/1/2038, TD BankNorth NA (a) | 5,000,000 | 5,000,000 |
Massachusetts, State Development Finance Agency Revenue, Governor Dummer Academy, 2.68%*, 8/1/2036, Citizens Bank of MA (a) | 2,000,000 | 2,000,000 |
Massachusetts, State Development Finance Agency Revenue, Northfield Mount Hermon, 2.53%*, 10/1/2042, JPMorgan Chase Bank (a) | 14,000,000 | 14,000,000 |
Massachusetts, State Development Finance Agency Revenue, Tabor Academy, Series A, 2.68%*, 12/1/2036, Citizens Bank of MA (a) | 7,670,000 | 7,670,000 |
Massachusetts, State Development Finance Agency Revenue, YMCA of Greater Worcester, 2.68%*, 9/1/2041, TD BankNorth NA (a) | 5,775,000 | 5,775,000 |
Massachusetts, State Health & Educational Facilities Authority Revenue, Amherst College, Series H, 2.63%*, 11/1/2033 | 12,750,000 | 12,750,000 |
Massachusetts, State Health & Educational Facilities Authority Revenue, Tufts University, Series N-2, 3.0%*, 8/15/2034 | 9,200,000 | 9,200,000 |
Massachusetts, State Health & Educational University Revenue, Harvard University, 1.55%, 5/15/2008 | 9,000,000 | 9,000,000 |
Massachusetts, State Housing Finance Agency Revenue, Series L-27-D, AMT, 144A, 3.13%*, 12/1/2025 | 14,430,000 | 14,430,000 |
Massachusetts, State Industrial Finance Agency Revenue, Groton School Issue, Series B, 2.51%*, 3/1/2028 | 8,710,000 | 8,710,000 |
Massachusetts, State Water Resources Authority: | | |
Series DCL 015, 144A, 2.48%*, 2/1/2022 (b) | 13,100,000 | 13,100,000 |
Series DCL 014, 144A, 2.48%*, 8/1/2022 (b) | 11,950,000 | 11,950,000 |
Series 2660, 144A, 2.51%*, 8/1/2014 | 3,745,000 | 3,745,000 |
| 154,668,000 |
Michigan 2.5% |
Detroit, MI, City School District, Series DC-8032, 144A, 2.48%*, 5/1/2029 (b) | 5,790,000 | 5,790,000 |
Forest Hills, MI, Public Schools, Series 1791, 144A, 2.51%*, 5/1/2009 | 10,325,000 | 10,325,000 |
Michigan, Lehman Municipal Trust Receipts, Various States, Series K83W-D, 144A, 3.0%*, 5/1/2027 (b) | 3,290,000 | 3,290,000 |
Michigan, State Strategic Fund, Limited Obligation Revenue, Consumers Energy Co., 2.56%*, 4/15/2018, Wells Fargo Bank NA (a) | 5,700,000 | 5,700,000 |
RBC Municipal Products, Inc. Trust, Various States, Series L-25, 144A, AMT, 2.73%*, 9/1/2033, Royal Bank of Canada (a) | 66,745,000 | 66,745,000 |
Wayne, MI, State University Revenues, Series 2669Z, 144A, 2.51%*, 5/15/2016 (b) | 4,995,000 | 4,995,000 |
| 96,845,000 |
Minnesota 1.1% |
Coon Rapids, MN, Industrial Development Revenue, Kurt Manufacturing Project, AMT: | | |
2.62%*, 11/1/2017, US Bank NA (a) | 3,750,000 | 3,750,000 |
2.62%*, 11/1/2027, US Bank NA (a) | 5,000,000 | 5,000,000 |
Minneapolis & St. Paul, MN, Housing & Redevelopment Authority, Children's Health Care System Revenue, Series B, 2.63%*, 8/15/2025 (b) | 8,275,000 | 8,275,000 |
Minnesota, Northern Municipal Power Agency, Electric Systems Revenue, Series 46, 2.48%*, 1/1/2016 (b) | 4,995,000 | 4,995,000 |
Minnesota, State General Obligation: | | |
Series R-4065, 144A, 2.43%*, 8/1/2023 | 3,830,000 | 3,830,000 |
5.0%, 8/1/2008 | 5,000,000 | 5,043,605 |
University of Minnesota, Series A, 2.63%*, 1/1/2034 | 4,500,000 | 4,500,000 |
University of Minnesota, Special Purpose Revenue, Series 2487, 144A, 2.43%*, 8/1/2029 | 6,170,000 | 6,170,000 |
| 41,563,605 |
Mississippi 0.4% |
Mississippi, Redstone Partners Floaters/Residuals Trust: | | |
Series A, AMT, 144A, 2.67%*, 12/1/2047 | 7,995,000 | 7,995,000 |
Series C, AMT, 144A, 2.67%*, 12/1/2047 | 9,375,000 | 9,375,000 |
| 17,370,000 |
Missouri 0.8% |
Missouri, Development Finance Board, Air Cargo Facility Revenue, St. Louis Airport, AMT, 2.64%*, 3/1/2030, American National Bank & Trust (a) | 12,000,000 | 12,000,000 |
Missouri, State Health & Educational Facilities Authority Revenue, Series 2657, 144A, 2.51%*, 1/15/2015 | 2,300,000 | 2,300,000 |
Missouri, State Health & Educational Facilities Authority Revenue, Rockhurst High School, 2.5%*, 9/1/2027, Allied Irish Bank PLC (a) | 4,640,000 | 4,640,000 |
Platte County, MO, Industrial Development Authority Industrial Revenue, Complete Home Concepts, Series A, AMT, 2.61%*, 1/1/2039, Columbian Bank (a) | 6,800,000 | 6,800,000 |
St Louis, MO, Airport Revenue, Series 004, 144A, 2.47%*, 7/1/2026 (b) | 4,320,000 | 4,320,000 |
| 30,060,000 |
Nebraska 0.2% |
Nebraska, Investment Finance Authority, Single Family Housing Revenue: | | |
Series B, AMT, 3.05%*, 9/1/2034 | 4,755,000 | 4,755,000 |
Series E, AMT, 3.05%*, 9/1/2034 | 4,080,000 | 4,080,000 |
| 8,835,000 |
Nevada 1.2% |
Clark County, NV, Airport Revenue, Series D-3, 2.56%*, 7/1/2029, Bayerische Landesbank (a) | 14,350,000 | 14,350,000 |
Clark County, NV, Water Reclamation District, Series 2295, 144A, 2.58%*, 7/1/2015 (b) | 4,815,000 | 4,815,000 |
Nevada, Housing Division Single Family Mortgage Revenue: | | |
Series A, AMT, 2.8%*, 10/1/2039 | 14,700,000 | 14,700,000 |
Series B, AMT, 2.8%*, 4/1/2042 | 8,000,000 | 8,000,000 |
Nevada, Housing Division, Multi-Unit Housing, Apache Project, Series A, AMT, 2.65%*, 10/15/2032 | 4,400,000 | 4,400,000 |
| 46,265,000 |
New Hampshire 1.5% |
New Hampshire, Health & Education Facilities Authority Revenue, Currier Museum of Art, 2.46%*, 8/1/2036, Citizens Bank of NH (a) | 11,000,000 | 11,000,000 |
New Hampshire, Health & Education Facilities Authority Revenue, Kendal at Hanover, Series B, 2.47%*, 10/1/2030, RBS Citizens NA (a) | 13,895,000 | 13,895,000 |
New Hampshire, Health & Education Facilities Authority Revenue, LRG Healthcare, Series B, 2.53%*, 1/1/2032, JPMorgan Chase Bank (a) | 8,335,000 | 8,335,000 |
New Hampshire, Health & Educational Facilities Authority Revenue, Androscoggin Valley Hospital, 2.53%*, 11/1/2027, JPMorgan Chase Bank (a) | 15,000,000 | 15,000,000 |
New Hampshire, Health & Educational Facilities Authority Revenue, University of New Hampshire, Series A, 2.65%*, 7/1/2035 | 5,050,000 | 5,050,000 |
New Hampshire, Higher Educational & Health Facilities Authority Revenue, Greater Manchester YMCA, 2.55%*, 10/1/2028, RBS Citizens NA (a) | 3,800,000 | 3,800,000 |
| 57,080,000 |
New Jersey 0.1% |
New Jersey, Economic Development Authority, Industrial Development Revenue, CST-Products LLC Project, AMT, 2.56%*, 4/1/2026, National Bank of Canada (a) | 2,960,000 | 2,960,000 |
New Mexico 1.0% |
Bernalillo County, NM, Gross Receipts Tax Revenue, Series 2004-B, 144A, 2.51%*, 4/1/2027 (b) | 10,320,000 | 10,320,000 |
New Mexico, UBS Municipal (CRVS), Various States, Series 07-23, AMT, 144A, 2.54%*, 2/1/2017 | 10,670,000 | 10,670,000 |
University of New Mexico Revenues, 2.7%*, 6/1/2026 | 20,185,000 | 20,185,000 |
| 41,175,000 |
New York 5.0% |
Albany County, NY, Airport Authority Revenue, Series A, AMT, 2.55%*, 12/15/2023, Bank of America NA (a) | 6,000,000 | 6,000,000 |
New York, Austin Trust, Various States: | | |
Series 2008-1064, 144A, 2.43%*, 6/1/2032 | 20,600,000 | 20,600,000 |
Series 2008-1066, AMT, 144A, 2.47%*, 4/1/2036 | 9,175,000 | 9,175,000 |
New York, Metropolitan Transportation Authority Revenue, 144A, 2.46%*, 11/15/2026 (b) | 5,410,000 | 5,410,000 |
New York, State Housing Finance Agency Revenue, 316 Eleventh Ave. Housing, Series A, AMT, 2.7%*, 5/15/2041 | 3,000,000 | 3,000,000 |
New York, State Mortgage Agency Homeowner Revenue, Series 153, AMT, 2.63%*, 4/1/2047 | 20,000,000 | 20,000,000 |
New York, Triborough Bridge & Tunnel Authority Revenues, Series C, 6.0%*, 1/1/2032 (b) | 18,800,000 | 18,800,000 |
New York & New Jersey Port Authority, Series R-9207, AMT, 144A, 2.51%*, 9/15/2028 | 6,000,000 | 6,000,000 |
New York City, NY, Municipal Water Finance Authority, Water & Sewer Systems Revenue: | | |
Series DDD, 144A, 2.72%*, 6/15/2031 | 12,255,000 | 12,255,000 |
Series K2-D, 144A, 3.12%*, 6/15/2026 (b) | 7,300,000 | 7,300,000 |
Series 2553, 144A, 2.46%*, 6/15/2036 (b) | 3,000,000 | 3,000,000 |
New York, NY, General Obligation: | | |
Series H-1, 2.4%*, 3/1/2034, Bank of New York (a) | 22,255,000 | 22,255,000 |
Series L-6, 2.5%*, 4/1/2032 | 50,000,000 | 50,000,000 |
Ontario County, NY, Industrial Development Agency, Civic Facility Revenue, Frederick Ferris Thompson Hospital, Series B, 2.73%*, 7/1/2030, KeyBank of New York (a) | 3,000,000 | 3,000,000 |
Ontario County, NY, Industrial Development Agency, Civic Facility Revenue, Greater Canadaigua Family, 2.51%*, 10/1/2040, RBS Citizens NA (a) | 8,360,000 | 8,360,000 |
| 195,155,000 |
North Carolina 2.2% |
North Carolina, BB&T Municipal Trust, Various States: | | |
Series 1008, 144A, 2.51%*, 3/1/2024, Branch Banking & Trust (a) | 6,395,000 | 6,395,000 |
Series 1009, 144A, 2.51%*, 3/1/2024, Branch Banking & Trust (a) | 6,865,000 | 6,865,000 |
Series 1011, 144A, 2.51%*, 4/1/2024, Branch Banking & Trust (a) | 8,750,000 | 8,750,000 |
North Carolina, Capital Educational Facilities Finance Agency Revenue, High Point University Project, 2.48%*, 12/1/2028, Branch Banking & Trust (a) | 3,755,000 | 3,755,000 |
North Carolina, Capital Facilities Finance Agency, Educational Revenue, Forsyth Country Day School, 2.48%*, 12/1/2031, Branch Banking & Trust (a) | 11,860,000 | 11,860,000 |
North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Salem Academy & College Project, 2.48%*, 8/1/2030, Branch Banking & Trust (a) | 7,400,000 | 7,400,000 |
North Carolina, Medical Care Commission, Health Care Facilities Revenue, Lutheran Retirement Project, 2.42%*, 1/1/2037, SunTrust Bank (a) | 9,725,000 | 9,725,000 |
North Carolina, Medical Care Commission, Retirement Facilities Revenue, First Mortgage Southminster, Series C, 2.46%*, 10/1/2014, Sovereign Bank FSB (a) | 10,000,000 | 10,000,000 |
North Carolina, Medical Care Commission, Hospital Revenue, Iredell Memorial Hospital, 2.55%*, 10/1/2037, Bank of America NA (a) | 1,200,000 | 1,200,000 |
North Carolina, Medical Care Commission, Hospital Revenue, Southeastern Regional Medical Center, 2.48%*, 6/1/2037, Branch Banking & Trust (a) | 2,500,000 | 2,500,000 |
North Carolina, Medical Care Commission, Retirement Facilities Revenue, First Mortgage-United Methodist, Series B, 2.48%*, 10/1/2035, Branch Banking & Trust (a) | 5,000,000 | 5,000,000 |
North Carolina, Piedmont Triad Airport Authority Revenue: | | |
Series A, 2.45%*, 7/1/2032, Branch Banking & Trust (a) | 5,000,000 | 5,000,000 |
Series B, AMT, 2.6%*, 7/1/2029, Branch Banking & Trust (a) | 4,100,000 | 4,100,000 |
University of North Carolina Revenues: | | |
Series R-11292, 144A, 2.43%*, 12/1/2036 | 3,090,000 | 3,090,000 |
Series 2661, 144A, 2.51%*, 12/1/2015 | 2,500,000 | 2,500,000 |
| 88,140,000 |
Ohio 3.0% |
Akron, Bath & Copley, OH, Joint Township Hospital District Revenue, Health Care Facility, Summner Project, 2.48%*, 12/1/2032, KBC Bank NV (a) | 5,130,000 | 5,130,000 |
Athens County, OH, Port Authority, Housing Revenue, University Housing for Ohio, Inc. Project, 2.53%*, 6/1/2032, Wachovia Bank NA (a) | 11,175,000 | 11,175,000 |
Butler County, OH, Healthcare Facilities Revenue, LifeSphere Project, 2.46%*, 5/1/2030, US Bank NA (a) | 5,575,000 | 5,575,000 |
Columbus, OH, General Obligation, Series R-11293, 144A, 2.43%*, 9/1/2020 | 6,000,000 | 6,000,000 |
Hamilton County, OH, Hospital Facilities Revenue, Children's Hospital Medical Center, Series N, 2.43%*, 5/15/2037, JPMorgan Chase Bank (a) | 6,000,000 | 6,000,000 |
Ohio, Clipper Tax-Exempt Certificate Trust, Series 2006-8, AMT, 144A, 2.55%*, 11/1/2008 | 6,981,000 | 6,981,000 |
Ohio, Housing Finance Agency, Mortgage Revenue, Residential-Mortgage Backed, Series D, AMT, 2.71%*, 9/1/2036 | 45,000,000 | 45,000,000 |
Ohio, State Air Quality Development Authority Revenue, Pollution Control, First Energy Generation, Series A, 2.65%*, 12/1/2023, KeyBank NA (a) | 25,000,000 | 25,000,000 |
Summit County, OH, Revenue Bonds, Western Reserve Academy Project, 2.44%*, 10/1/2027, KeyBank NA (a) | 5,125,000 | 5,125,000 |
| 115,986,000 |
Oklahoma 1.2% |
Oklahoma, Development Finance Authority, Continuing Care Retirement, Inverness Village Project, Series A, 2.49%*, 1/1/2042, KBC Bank NV (a) | 16,000,000 | 16,000,000 |
Oklahoma, State Turnpike Authority Revenue: | | |
Series B, 2.05%*, 1/1/2028 | 6,670,000 | 6,670,000 |
Series C, 2.05%*, 1/1/2028 | 9,405,000 | 9,405,000 |
Series D, 2.5%*, 1/1/2028 | 14,900,000 | 14,900,000 |
| 46,975,000 |
Oregon 3.6% |
Austin Trust, Various States, Series 2007-313, 144A, 2.47%*, 12/1/2039 | 8,805,000 | 8,805,000 |
Oregon, Munitops II Trust: | | |
Series 2007-38, 144A, 2.45%*, 6/15/2015 (b) | 8,471,000 | 8,471,000 |
Series 2007-64, 144A, 2.45%*, 6/15/2015 (b) | 10,980,000 | 10,980,000 |
Oregon, State General Obligation, Tax Anticipation Notes, Series A, 4.5%, 6/30/2008 | 90,000,000 | 90,124,420 |
Oregon, State General Obligation, Veterans Welfare, Series 89B, AMT, 2.65%*, 12/1/2038 | 7,500,000 | 7,500,000 |
Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project: | | |
2.48%*, 5/1/2034, Bank of America NA (a) | 8,985,000 | 8,985,000 |
2.48%*, 5/1/2037, Bank of America NA (a) | 5,665,000 | 5,665,000 |
| 140,530,420 |
Pennsylvania 3.9% |
Adams County, PA, Industrial Development Authority Revenue, Brethren Home Community Project, 2.48%*, 6/1/2032, PNC Bank NA (a) | 7,785,000 | 7,785,000 |
Alleghany County, PA, Gateway School District, Series 2315, 144A, 2.51%*, 7/15/2015 (b) | 2,840,000 | 2,840,000 |
Allentown, PA, Area Hospital Authority Revenue, Sacred Heart Hospital, Series B, 2.38%*, 7/1/2023, Wachovia Bank NA (a) | 5,785,000 | 5,785,000 |
Beaver County, PA, Industrial Development Authority, Pollution Control Revenue, First Energy, Series B, 2.61%*, 12/1/2041, Royal Bank of Scotland (a) | 5,000,000 | 5,000,000 |
Chester County, PA, Industrial Development Authority, Student Housing Revenue, University Student Housing LLC, Series A, 2.43%*, 2/1/2043, Citizens Bank of PA (a) | 8,000,000 | 8,000,000 |
Cumberland County, PA, Municipal Authority Revenue, Diakon Lutheran Social, Series B, 2.35%*, 1/1/2025, Wachovia Bank NA (a) | 11,500,000 | 11,500,000 |
Cumberland County, PA, Municipal Authority Revenue, LSN/TLS Obligated Group Project, Series D, 2.35%*, 1/1/2033, Wachovia Bank NA (a) | 14,205,000 | 14,205,000 |
Dauphin County, PA, General Authority Revenue, Series H, 2.65%*, 6/1/2026 (b) | 15,000,000 | 15,000,000 |
Delaware County, PA, Authority Revenue, Riddle Village Project, 2.45%*, 6/1/2037, Sovereign Bank FSB (a) | 9,800,000 | 9,800,000 |
Hamburg, PA, Area School District, 2.45%*, 5/15/2025 (b) | 3,900,000 | 3,900,000 |
Latrobe, PA, Industrial Development Authority Revenue, Greensburg Diocese, 2.44%*, 6/1/2033, Allied Irish Bank PLC (a) | 2,180,000 | 2,180,000 |
Monroe County, PA, Hospital Authority Revenue, Stars-Pocono Medical Center, Series B, 2.35%*, 1/1/2032, PNC Bank NA (a) | 7,250,000 | 7,250,000 |
Pennsylvania, BB&T Municipal Trust, Various States, Series 1, 2.45%*, 9/15/2015 | 5,000,000 | 5,000,000 |
Pennsylvania, State Higher Educational Facilities Authority Revenue, Association of Independent Colleges & Universities, Series L-3, 2.43%*, 5/1/2028, PNC Bank NA (a) | 5,100,000 | 5,100,000 |
Philadelphia, PA, Authority for Industrial Development Revenues, Retirement Evangelical, 2.48%*, 10/1/2038, Citizens Bank NA (a) | 5,000,000 | 5,000,000 |
Philadelphia, PA, Redstone Partners Floaters Residuals Trust, Series B, AMT, 144A, 2.67%*, 4/1/2048, Wachovia Bank NA (a) | 8,995,000 | 8,995,000 |
Philadelphia, PA, School District, Tax & Revenue Anticipation Notes, Series A, 4.5%, 6/27/2008, Bank of America NA (a) | 35,000,000 | 35,041,129 |
| 152,381,129 |
Rhode Island 0.2% |
Rhode Island, UBS Municipal (CRVS), Various States, Series 07-1038, AMT, 144A, 2.54%*, 9/1/2027 | 6,665,000 | 6,665,000 |
South Carolina 2.2% |
Greenwood County, SC, Exempt Facility Industrial Revenue, Fuji Photo Film Project, AMT, 2.58%*, 9/1/2011 | 3,300,000 | 3,300,000 |
South Carolina, Educational Facilities Authority for Private Nonprofit Institutions, Coker College, 2.45%*, 6/1/2019, Wachovia Bank NA (a) | 3,675,000 | 3,675,000 |
South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Lower South Carolina, 2.43%*, 10/1/2028, Wachovia Bank NA (a) | 16,620,000 | 16,620,000 |
South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Upper South Carolina, Inc., Project, 2.48%*, 9/1/2028, Branch Banking & Trust (a) | 6,400,000 | 6,400,000 |
South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Sisters of Charity Hospitals, 2.42%*, 11/1/2032, Wachovia Bank NA (a) | 13,090,000 | 13,090,000 |
South Carolina, Lehman Municipal Trust Receipts, Various States: | | |
Series P138-D, 144A, 2.85%*, 5/15/2024 (b) | 15,095,000 | 15,095,000 |
Series 2007-P93W, AMT, 144A, 3.38%*, 7/1/2037 | 4,975,000 | 4,975,000 |
South Carolina, Macron Trust, Various States, Series 2007-303, 144A, 2.47%*, 2/1/2012, Bank of America NA (a) | 9,080,000 | 9,080,000 |
South Carolina, Medical University Hospital Authority Facilities Revenue, Series A-5, 144A, 2.51%*, 8/15/2027 (b) | 8,765,000 | 8,765,000 |
South Carolina, Transportation Infrastructure Bank Revenue, Series 316, 144A, 2.43%*, 10/1/2021 (b) | 5,190,000 | 5,190,000 |
| 86,190,000 |
South Dakota 1.3% |
South Dakota, Conservancy District Revenue, State Revolving Fund Program, 2.35%*, 8/1/2029 | 40,000,000 | 40,000,000 |
South Dakota, Economic Development Finance Authority, Industrial Development Revenue, Wilson Trailer Project, AMT, 144A, 2.66%*, 2/1/2028, First American Bank (a) | 10,000,000 | 10,000,000 |
| 50,000,000 |
Tennessee 1.0% |
Chattanooga, TN, Health Educational & Housing Facility Board Revenue, Catholic Health, Series C, 2.5%*, 5/1/2039 | 8,650,000 | 8,650,000 |
Clarksville, TN, Public Building Authority Revenue, Murfreesboro Lane, 2.44%*, 7/1/2024, SunTrust Bank (a) | 7,000,000 | 7,000,000 |
Nashville & Davidson County, TN, Metropolitan Government Health & Educational Facilities Board Revenue, Housing Old Hickory Towers, Series A, AMT, 144A, 2.75%*, 1/1/2030, Wachovia Bank NA (a) | 3,596,000 | 3,596,000 |
Nashville & Davidson County, TN, Metropolitan Government Health & Educational Facilities Board Revenue, Jackson Grove Apartments, Series A, AMT, 2.59%*, 4/1/2036, Marshall & Ilsley (a) | 10,000,000 | 10,000,000 |
Shelby County, TN, Health, Educational & Housing Facilities Board Revenue, Trezevant Manor Project, Series A, 2.43%*, 9/1/2039, LaSalle Bank NA (a) | 7,225,000 | 7,225,000 |
Tennessee, Redstone Partners Floaters/Residuals Trust, Series B, AMT, 144A, 2.67%*, 12/1/2047 | 3,120,000 | 3,120,000 |
| 39,591,000 |
Texas 13.9% |
ABN AMRO, Munitops Certificates Trust: | | |
Series 2002-15, 144A, 2.44%*, 8/1/2010 | 15,925,000 | 15,925,000 |
Series 2004-38, 144A, 2.44%*, 2/15/2011 | 9,205,000 | 9,205,000 |
Series 2006-23, 144A, 2.44%*, 6/15/2014 | 14,825,000 | 14,825,000 |
Series 2006-59, 144A, 2.44%*, 8/1/2013 | 10,000,000 | 10,000,000 |
Series 2007-01, 144A, 2.44%*, 2/15/2027 | 15,650,000 | 15,650,000 |
City of Houston, TX, 2.35%, 6/11/2008 | 10,000,000 | 10,000,000 |
Clear Creek, TX, Independent School District, Series 04, 144A, 2.82%*, 2/15/2029 (b) | 4,495,000 | 4,495,000 |
Galveston County, TX, Series R-11275WF, 2.48%*, 2/1/2028 (b) | 4,000,000 | 4,000,000 |
Harris County, TX, Flood Control District, Series B, 2.43%*, 10/1/2024 | 14,200,000 | 14,200,000 |
Harris County, TX, Health Facilities Development Corp. Revenue, Methodist Hospital: | | |
Series A-3, 2.65%*, 12/1/2039 (b) | 20,000,000 | 20,000,000 |
Series A-4, 2.65%*, 12/1/2039 | 39,250,000 | 39,250,000 |
Series C, 2.65%*, 12/1/2041 (b) | 25,000,000 | 25,000,000 |
Harris County, TX, Health Facilities Development Corp., Hospital Revenue, Memorial Hermann Healthcare System, Series A, 2.65%*, 6/1/2027 (b) | 20,000,000 | 20,000,000 |
Harris County, TX, Series 1111, 144A, 2.51%*, 8/15/2009 (b) | 3,845,000 | 3,845,000 |
Hays, TX, Consolidated Independent School District, Series D32, 144A, 2.72%*, 8/15/2026 | 7,950,000 | 7,950,000 |
Houston, TX, Housing Finance Corp., Series 2110, AMT, 144A, 2.58%*, 12/1/2040 | 7,395,000 | 7,395,000 |
Houston, TX, Utility System Revenue, Series 2227, 144A, 2.51%*, 5/15/2015 (b) | 5,570,000 | 5,570,000 |
Humble, TX, Independent School District, School Building, 2.75%*, 6/15/2023 | 3,365,000 | 3,365,000 |
Kendall County, TX, Health Facilities Development Corp. Revenue, Morningside Ministries, Series A, 2.45%*, 1/1/2041, Allied Irish Bank PLC (a) | 6,100,000 | 6,100,000 |
Lubbock, TX, Independent School District, School Building, 2.43%*, 2/1/2030 | 8,550,000 | 8,550,000 |
North Texas, Higher Education Authority Inc., Student Loan Revenue, Series A, AMT, 2.75%*, 12/1/2038, Lloyds TSB Bank PLC (a) | 2,600,000 | 2,600,000 |
North Texas Tollway Authority, 1.35%, 6/5/2008 | 6,000,000 | 6,000,000 |
Northside, TX, Independent School District, Series 1301, 144A, 2.51%*, 12/15/2013 | 4,590,000 | 4,590,000 |
San Antonio, TX, Airport Systems Revenue, Series 2408, AMT, 144A, 2.61%*, 7/1/2015 (b) | 8,645,000 | 8,645,000 |
Socorro, TX, Independent School District, Series 2328T, 144A, 2.51%*, 8/15/2014 | 4,000,000 | 4,000,000 |
Texas, A&M University Revenues, Series 944, 144A, 2.51%*, 5/15/2013 | 1,775,000 | 1,775,000 |
Texas, Alliance Airport Authority, Inc., Special Facilities Revenue, Series 2088, AMT, 144A, 2.53%*, 4/1/2021 | 19,910,000 | 19,910,000 |
Texas, Capital Area Housing Finance Corp., Cypress Creek at River Apartments, AMT, 2.65%*, 10/1/2039, Citibank NA (a) | 11,000,000 | 11,000,000 |
Texas, Lehman Municipal Trust Receipts, Various States, Series 2007-P94W, AMT, 144A, 3.38%*, 3/1/2039 | 7,650,000 | 7,650,000 |
Texas, Macon Trust, Various States, Series 2007-307, AMT, 2.51%*, 4/1/2009 | 23,995,000 | 23,995,000 |
Texas, North East Independent School District, "A", 144A, 2.42%*, 8/1/2037 | 8,935,000 | 8,935,000 |
Texas, Redstone Partners Floaters / Residuals Trust: | | |
Series A, AMT, 144A, 2.67%*, 12/1/2047 | 12,200,000 | 12,200,000 |
Series D, AMT, 144A, 2.67%*, 12/1/2047 | 7,945,000 | 7,945,000 |
Texas, State Department of Housing & Community Affairs, Multi-Family Housing Revenue, Series 2108, AMT, 144A, 2.58%*, 6/20/2047 | 5,060,000 | 5,060,000 |
Texas, State General Obligation, Series 2337, 144A, 2.51%*, 4/1/2015 | 2,960,000 | 2,960,000 |
Texas, State General Obligation, Veteran Housing Assistance Fund II, Series A, AMT, 2.55%*, 12/1/2038 | 16,000,000 | 16,000,000 |
Texas, State Tax & Revenue Anticipation Notes, 4.5%, 8/28/2008 | 96,000,000 | 96,240,890 |
Texas, State Transportation Commission Revenue, Series 2393, 144A, 2.51%*, 4/1/2015 | 2,195,000 | 2,195,000 |
Texas, Upper Trinity Regional Water District, 2.55%, 6/18/2008 | 15,550,000 | 15,550,000 |
Travis County, TX, Health Facilities Development Corp., Retirement Facilities Revenue, Longhorn Village Project, Series B, 2.5%*, 7/1/2037, Bank of Scotland (a) | 13,800,000 | 13,800,000 |
Travis County, TX, Housing Finance Corp., Single Family Mortgage Revenue, Series P21U-D, AMT, 144A, 3.35%*, 6/1/2039 | 2,965,000 | 2,965,000 |
University of Texas, Systems Revenue, 2.58%, 6/5/2008 | 25,000,000 | 25,000,000 |
| 544,340,890 |
Utah 2.5% |
Utah, Water Finance Agency Revenue: | | |
Series A-3, 3.15%*, 7/1/2023 (b) | 4,900,000 | 4,900,000 |
Series A-9, 3.15%*, 7/1/2034 (b) | 23,355,000 | 23,355,000 |
Series A-11, 3.15%*, 7/1/2031 (b) | 12,400,000 | 12,400,000 |
Series A-16, 3.15%*, 7/1/2036 (b) | 26,600,000 | 26,600,000 |
Series B, 2.7%*, 10/1/2037 | 32,665,000 | 32,665,000 |
| 99,920,000 |
Vermont 0.3% |
Vermont, Housing Finance Agency, Series A, AMT, 2.85%*, 5/1/2037 (b) | 12,800,000 | 12,800,000 |
Virginia 1.9% |
Norfolk, VA, State General Obligations, AMT, 2.52%*, 8/1/2037 | 12,000,000 | 12,000,000 |
RBC Municipal Products, Inc. Trust, Various States: | | |
Series C-2, AMT, 144A, 2.58%*, 1/1/2014, Royal Bank of Canada (a) | 9,715,000 | 9,715,000 |
Series C-8, AMT, 144A, 2.58%*, 9/1/2039, Royal Bank of Canada (a) | 25,665,000 | 25,665,000 |
Roanoke, VA, Industrial Development Authority Hospital Revenue, Carilion Health Systems, Series B-1, 2.54%*, 7/1/2038 (b) | 10,000,000 | 10,000,000 |
Virginia, Chesapeake Bay Bridge & Tunnel District Revenue, Series A, 2.44%*, 5/28/2021, Branch Banking & Trust (a) | 8,250,000 | 8,250,000 |
Virginia, Pocahontas Parkway Association, Toll Road Revenue Prerefunded: | | |
Series B, Zero Coupon, 8/15/2012 | 2,100,000 | 1,708,893 |
Series B, Zero Coupon, 8/15/2014 | 5,100,000 | 3,701,722 |
Winchester, VA, Industrial Development Authority, Residential Care Facility Revenue, Westminster-Cantenbury, Series B, 2.48%*, 1/1/2035, Branch Banking & Trust (a) | 3,000,000 | 3,000,000 |
| 74,040,615 |
Washington 1.4% |
King County, WA, General Obligation, 5.0%, 6/1/2008 | 8,000,000 | 8,016,330 |
King County, WA, Housing Authority Revenue, Summerfield Apartments Project, 2.31%*, 9/1/2035, US Bank NA (a) | 1,655,000 | 1,655,000 |
King County, WA, Public Hospital District No. 002, Series R-6036, 144A, 2.51%*,12/1/2023 (b) | 1,260,000 | 1,260,000 |
RBC Municipal Products, Inc. Trust, Various States, Series C-7, AMT, 144A, 2.58%*, 12/1/2009, Royal Bank of Canada (a) | 10,000,000 | 10,000,000 |
Washington, Solar Eclipse Funding Trust, Series 2007-0094, 144A, 2.49%*, 10/1/2036, US Bank NA (a) (b) | 4,205,000 | 4,205,000 |
Washington, State Economic Development Finance Authority, Solid Waste Disposal Revenue, Waste Management, Inc. Project, Series D, AMT, 2.6%*, 7/1/2030, JPMorgan Chase Bank (a) | 3,200,000 | 3,200,000 |
Washington, State General Obligation, Series 2599, 144, 2.51%*, 1/1/2016 | 4,505,000 | 4,505,000 |
Washington, State Health Care Facilities Authority Revenue, Highline Medical Center, 2.45%*, 8/15/2034, Bank of America NA (a) | 3,000,000 | 3,000,000 |
Washington, State Health Care Facilities Authority Revenue, Seattle Cancer Care, 2.48%*, 3/1/2035, KeyBank NA (a) | 3,815,000 | 3,815,000 |
Washington, State Higher Education Facilities Authority Revenue, Seattle University Project, Series A, 2.51%*, 5/1/2028, US Bank NA (a) | 9,595,000 | 9,595,000 |
Washington, State Housing Finance Commission, Multi-Family Housing Revenue, Lake City Senior Apartments Project, Series A, AMT, 2.56%*, 7/1/2039 | 2,000,000 | 2,000,000 |
Washington, State Housing Finance Commission, Nonprofit Revenue, Eastside Catholic School, Series A, 2.47%*, 7/1/2038, KeyBank NA (a) | 4,000,000 | 4,000,000 |
| 55,251,330 |
Wisconsin 1.6% |
Wisconsin, Clipper Tax-Exempt Certificates Trust, Series 2007-5, 144A, 2.53%*, 9/1/2017 | 6,755,000 | 6,755,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, Amery Regional Medical Center, Inc., Series A, 2.62%*, 5/1/2036, Fifth Third Bank (a) | 8,630,000 | 8,630,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, Franciscan Sisters, Series B, 2.35%*, 9/1/2033, Marshall & Ilsley (a) | 5,020,000 | 5,020,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, Marshfield Clinic, Series B, 2.49%*, 1/15/2036, Marshall & Ilsley (a) | 16,500,000 | 16,500,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, Mercy Alliance, Inc., 2.49%*, 6/1/2022, Marshall & Ilsley (a) | 10,000,000 | 10,000,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, St. Norbert College, Inc., 2.68%*, 2/1/2038, JPMorgan Chase & Co. (a) | 14,500,000 | 14,500,000 |
| 61,405,000 |
Multi-State 0.5% |
ABN AMRO, Munitops Certificates Trust, Series 2004-7, 144A, 2.44%*, 8/1/2012 | 19,995,000 | 19,995,000 |
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, DWS Government Cash Institutional Shares, Government Cash Managed Shares, 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, DWS Tax-Free Money Fund Class S, Premier Money Market Shares, Service Shares, Tax-Exempt Cash Managed Shares and Tax-Free Investment Class.
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 and 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.
During the year ended April 30, 2008, the Money Market Portfolio utilized $761,500 of prior year capital loss carryforward.
The Portfolios have reviewed the tax positions for the open tax years as of April 30, 2008 and have determined that no provision for income tax is required in the Portfolios' financial statements. The Portfolios' federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
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, 2008, the Portfolios' components of distributable earnings on a tax-basis are as follows:
In addition, during the years ended April 30, 2008 and April 30, 2007, the tax character of distributions paid to shareholders by each Portfolio is summarized as follows:
For the period from February 15, 2007 through March 16, 2010, the Advisor has agreed to contractually reduce its management fee for the Government & Agency Securities Portfolio such that the annual effective rate is limited to 0.15% of the Government & Agency Securities Portfolio's average daily net assets.
Accordingly, for the year ended April 30, 2008, the Advisor waived a portion of its management fee on the Government & Agency Securities Portfolio aggregating $419,682 and the amount charged aggregated $6,295,225.
Accordingly, for the year ended April 30, 2008, 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, 2007 through July 31, 2008, 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).
The Advisor also has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' semiannual 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.
In connection with the board consolidation on April 1, 2008, of the two DWS Portfolios' Boards of Trustees, certain Independent Board Members retired prior to their normal retirement date, and received a one-time retirement benefit. DIMA has agreed to reimburse the Portfolios for the cost of this benefit. During the period ended April 30, 2008, the Money Market Portfolio, the Government & Agency Securities Portfolio, and the Tax-Exempt Portfolio paid its allocated portion of the retirement benefit of $242,124, $265,519 and $192,513, respectively, to the non-continuing Independent Board Members, and the Portfolios were reimbursed by DIMA for this payment.
For the year ended April 30, 2008, the Advisor agreed to reimburse the Portfolios the following amounts, which represent a portion of the expected fee savings for the Advisor through December 31, 2007, 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, 2008, each Portfolio's custodian fees were reduced as follows:
The Portfolios and other affiliated funds (the "Participants") share in a $490 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.
During the year ended April 30, 2008, the Advisor fully reimbursed Cash Account Trust: Tax-Exempt Portfolio $3,191 for a loss on the disposal of securities purchased in violation of investment restrictions.
The amount of the loss was less than 0.01% of the Portfolio's average net assets, thus having no impact on the Portfolio's total return.
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, 2008, 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, 2008, 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, 2008, 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.
Pursuant to Section 852 of the Internal Revenue Code, the Tax-Exempt Portfolio designates $122,000 as capital gain dividends for its year ended April 30, 2008, of which 100% represents 15% rate gains.
For the Tax-Exempt Portfolio, of the dividends paid from net investment income for the taxable year ended April 30, 2008, 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
On November 14, 2007, the Board, including all the Independent Trustees, approved an Amended and Restated Investment Management Agreement (the "Amended Management Agreement") with respect to each Portfolio. The Amended Management Agreement and an Administrative Services Agreement were presented to the Board and considered by it as part of a broader program initiated by DIMA to simplify and standardize the expense structures and related contracts for the DWS Funds.
The Board conducted a thorough review of the potential implications of the Amended Management Agreement and Administrative Services Agreement on each Portfolio's shareholders. The Independent Trustees met on several occasions to review and discuss the Amended Management Agreement and Administrative Services Agreement, both among themselves and with representatives of DIMA. They were assisted in this review by their independent legal counsel.
In approving the Amended Management Agreement, the Board considered the following factors, among others:
The Board also considered that it renewed the Current Investment Management Agreement (the "Current Management Agreement") for each Portfolio as part of its annual contract renewal process in September 2007. As part of that renewal process, the Board requested and evaluated all information it deemed reasonably necessary to evaluate the Current Management Agreement. Over the course of several months, the Contract Review Committee, in coordination with the Fixed-Income Oversight Committee and the Operations Committee of the Board, reviewed comprehensive materials received from DIMA, independent third parties and independent legal counsel. These materials included an analysis of each Portfolio's performance, fees and expenses, and profitability compiled by an independent fee consultant. The Board also received extensive information throughout the year regarding performance and operating results for each Portfolio. Based on their evaluation of the information provided, the Committees presented their findings and recommendations to the Independent Trustees as a group. The Independent Trustees then reviewed the Committees' findings and recommendations and presented their recommendations to the Board. Throughout their consideration of the Current Management Agreement, the Independent Trustees were advised by their independent legal counsel and by an independent fee consultant.
In connection with its review of the Amended Management Agreement, the Board considered DIMA's representation that the Board may rely on and take into account the information provided in connection with the renewal of the Current Management Agreement for each Portfolio. Accordingly, the Board took note of the following factors, among others, that it considered in approving the renewal of the Current Management Agreement for each Portfolio: (1) the nature, quality and extent of services provided by DIMA; (2) the management fee rate, operating expenses and total expense ratios; (3) the pre-tax profits realized by DIMA in managing each Portfolio; (4) the benefits to each Portfolio from any economies of scale; and (5) the character and amount of other incidental benefits realized by DIMA and its affiliates. With respect to these factors, the Board reached the following conclusions in approving the renewal of the Current Management Agreement for each Portfolio: (1) the nature, quality and extent of services provided by DIMA historically have been and continue to be satisfactory; (2) the management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DIMA; (3) the pre-tax profits realized by DIMA were not unreasonable; (4) the management fee schedule, together with the expense caps, reflects an appropriate level of sharing of any economies of scale; and (5) the management fees were reasonable in light of the fallout benefits to DIMA. The Board believes that the factors considered and the conclusions that were reached in connection with the renewal of the Current Management Agreement are relevant in approving the Amended Management Agreement.
Based on all of the information considered and the conclusions reached, the Board determined that the terms of the Amended Management Agreement are fair and reasonable and that the approval of the Amended Management Agreement is in the best interests of each Portfolio. No single factor was determinative in the Board's analysis.
The Special Meeting of Shareholders of the Money Market Portfolio of Cash Account Trust (the "Fund") was held on March 31, 2008 at the offices of Deutsche Asset Management, 345 Park Avenue, New York, NY 10154. The following matter was voted upon by the shareholders of said Fund (the resulting votes are presented below):
1. Election of the Board of Trustees.
The Special Meeting of Shareholders of the Government & Agency Securities Portfolio of Cash Account Trust (the "Fund") was held on March 31, 2008 at the offices of Deutsche Asset Management, 345 Park Avenue, New York, NY 10154. The following matters were voted upon by the shareholders of said Fund (the resulting votes are presented below):
1. Election of the Board of Trustees.
The Special Meeting of Shareholders was reconvened on May 1, 2008, at which time the following matters were voted upon by the shareholders (the resulting votes are presented below):
2-A. Approval of an Amended and Restated Investment Management Agreement.
2-B. Approval of a Subadvisor Approval Policy.
3. Approval of Revised Fundamental Investment Policies Regarding:
4-A. Approval of a Reclassification of Fundamental Investment Objectives as Non-Fundamental.
4-B. Approval of a Reclassification of Fundamental Investment Policies as Non-Fundamental.
The Special Meeting of Shareholders of the Tax-Exempt Portfolio of Cash Account Trust (the "Fund") was held on March 31, 2008 at the offices of Deutsche Asset Management, 345 Park Avenue, New York, NY 10154. The following matters were voted upon by the shareholders of said Fund (the resulting votes are presented below):
1. Election of the Board of Trustees of the Fund.
The Special Meeting of Shareholders was reconvened on May 1, 2008, at which time the following matters were voted upon by the shareholders (the resulting votes are presented below):
2-A. Approval of an Amended and Restated Investment Management Agreement.
2-B. Approval of a Subadvisor Approval Policy.
3. Approval of Revised Fundamental Investment Policies Regarding:
4-A. Approval of a Reclassification of Fundamental Investment Objectives as Non-Fundamental.
4-B. Approval of a Reclassification of Fundamental Investment Policies as Non-Fundamental.
5. Approval of Amended and Restated Declaration of Trust.
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Scudder Funds. My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2007, including my qualifications, the evaluation process for each of the DWS Scudder Funds, consideration of certain complex-level factors, and my conclusions.
For more than 30 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past several years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University; and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds, serve on the board of directors of a private market research company, and have served in various leadership and financial oversight capacities with non-profit organizations.
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 136 Fund portfolios in the DWS Scudder Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper, Strategic Insight, and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Scudder Fund. These similar products included the other DWS Scudder Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Scudder Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Scudder funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Scudder Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Scudder Funds are reasonable.
The following table presents certain information regarding the Board Members and Officers of the Trust as of April 30, 2008. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the board of one or more DWS funds now overseen by the Board.
