This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, visit www.dws-investments.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.
The funds' policies and procedures for voting proxies for portfolio securities and information about how the funds voted proxies related to their portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the funds' policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
We were able to maintain a competitive yield for the funds during the period ended April 30, 2011. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
Our main focus, as always, is on preservation of capital, and during the period ending April 30, 2011, we maintained a short maturity and attempted to ensure ample liquidity for the funds.
For all three funds, the types of securities that we were investing in tended to have lower yields than issues carrying more risk. We preferred to be cautious during a time of market uncertainty. In the end this cost each fund some yield, but we believe that this represented a prudent approach to preserving principal in light of the circumstances during the period.
Assuming that Congress can agree to raise the US debt ceiling in the near future, significant short-term Treasury supply should return to the market in the coming months and remove some downward pressure on money market rates that carry the shortest maturities. In general, however, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested and continued strong demand from investors seeking principal stability and safety.
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
Index returns, unlike fund returns, do not reflect any fees of expenses. It is not possible to invest directly into an index.
As an investor of a Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in each Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Funds 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, 2010 to April 30, 2011).
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 Fund's prospectus.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying morgages or mortgage-backed securities.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
Interest Only: Interest Only (IO) bonds represent the "interest only" portion of payments on a pool of underlying mortgages or mortgage-backed securities. IO securities are subject to prepayment risk of the pool of underlying mortgages.
Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying mortgages or mortgage-backed securities.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
There have been no transfers between Level 1 and Level 2 fair value measurements during the period ended April 30, 2011.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
AGMC: Assured Guaranty Municipal Corp.
AMBAC: Ambac Financial Group, Inc.
AMT: Subject to alternative minimum tax.
NATL: National Public Finance Guarantee Corp.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
1. Organization and Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three funds: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio (the "Funds").
Money Market Portfolio offers six classes of shares: Capital Assets Funds Shares, Capital Assets Funds Preferred Shares, Davidson Cash Equivalent Shares, Davidson Cash Equivalent Plus Shares, Premium Reserve Money Market Shares and Service Shares. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Government & Agency Securities Portfolio offers seven 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 and Service Shares.
Tax-Exempt Portfolio offers eight 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, Service Shares, Tax-Exempt Cash Managed Shares and Tax-Free Investment Class. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
The financial highlights for all classes of shares, other than Service Shares, are provided separately and are available upon request.
Each Fund's investment income, realized gains and losses, and certain Fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of that Fund, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
Each Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Funds in the preparation of their financial statements.
The Funds value all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
At April 30, 2011, DWS Government & Agency Securities Portfolio had a net tax basis capital loss carryforward of approximately $602,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until April 30, 2019 (the expiration date), whichever occurs first.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the "Act") was enacted. Under the Act, net capital losses may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses. As a result of this ordering rule, pre-enactment capital loss carryforwards may expire unused, whereas under the previous rules these losses may have been utilized. This change is effective for fiscal years beginning after the date of enactment.
The Funds have reviewed the tax positions for the open tax years as of April 30, 2011 and have determined that no provision for income tax is required in the Funds' financial statements. The Funds' federal tax returns for the prior three fiscal years remain open 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 Funds.
At April 30, 2011, the Funds' components of distributable earnings on a tax basis are as follows:
In addition, the tax character of distributions paid to shareholders by each Fund is summarized as follows:
2. Related Parties
In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Investment Management Agreement to the Money Market Portfolio. The Money Market Portfolio pays a monthly management fee based on the combined average daily net assets of the three Funds and allocated to Money Market Portfolio based on its relative net assets, computed and accrued daily and payable monthly, at 1/12 of the following annual rates:
The Government & Agency Securities Portfolio and Tax-Exempt Portfolio pay a monthly management fee based on the combined average daily net assets of the three Funds and allocated to Government & Agency Securities Portfolio and Tax-Exempt Portfolio based on their relative net assets, computed and accrued daily and payable monthly, at the following annual rates:
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 0.05% of the Government & Agency Securities Portfolio's average daily net assets.
The Advisor has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
In addition, the Advisor has agreed to voluntarily waive additional expenses. The waiver may be changed or terminated at any time without notice. Under these arrangements, the Advisor waived certain expenses on Service Shares for Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio.
Accordingly, for the year ended April 30, 2011, the Advisor waived a portion of its management fee on the Government & Agency Securities Portfolio aggregating $713,093, and the amount charged aggregated $1,793,022.
For the year ended April 30, 2011, the Funds incurred management fees equivalent to the following annual effective rates of each Fund's average daily net assets:
In addition, DIDI 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.
3. Concentration of Ownership
From time to time, the Funds may have a concentration of several shareholder accounts holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Funds.
At April 30, 2011, there were two shareholder accounts that held approximately 13% and 11%, respectively, of the outstanding shares of the Tax-Exempt Portfolio.
4. Line of Credit
The Funds and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. Each Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus, if LIBOR exceeds the Federal Funds Rate, the amount of such excess. Each Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
5. Share Transactions
We have audited the accompanying statements of assets and liabilities of Cash Account Trust (the "Trust") (comprising the Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio) (collectively, the "Portfolios"), including the investment portfolios, as of April 30, 2011, 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 Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Portfolios of Cash Account Trust at April 30, 2011, 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 Money Market Portfolio, a total of 6% of the dividends distributed during the fiscal year was derived from interest on US government securities, which is generally exempt from state income tax.
For the Government & Agency Securities Portfolio, a total of 44% of the dividends distributed during the fiscal year was derived from interest on US government securities, which is generally exempt from state income tax.
For the Tax-Exempt Portfolio, of the dividends paid from net investment income for the taxable year ended April 30, 2011, 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.
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
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 Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
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 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 Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of a proposed pass-through to the funds of certain reporting costs associated with new regulations for money funds. My evaluation considered the follow
Based on the foregoing considerations, in my opinion the proposed fees and expenses for the affected DWS-sponsored money funds are reasonable.
Thomas H. Mack
The following table presents certain information regarding the Board Members and Officers of the fund as of April 30, 2011. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
ANNUAL REPORT TO SHAREHOLDERS
Capital Assets Funds Shares
Money Market Portfolio
Government & Agency Securities Portfolio
Tax-Exempt Portfolio
Capital Assets Funds Preferred Shares
Money Market Portfolio
April 30, 2011
Contents
3 Portfolio Management Review 7 Information About Each Fund's Expenses DWS Money Market Portfolio 18 Statement of Assets and Liabilities 20 Statement of Operations 21 Statement of Changes in Net Assets DWS Government & Agency Securities Portfolio 31 Statement of Assets and Liabilities 33 Statement of Operations 34 Statement of Changes in Net Assets DWS Tax-Exempt Portfolio 49 Statement of Assets and Liabilities 51 Statement of Operations 52 Statement of Changes in Net Assets 55 Notes to Financial Statements 72 Report of Independent Registered Public Accounting Firm 74 Summary of Management Fee Evaluation by Independent Fee Consultant 78 Summary of Administrative Fee Evaluation by Independent Fee Consultant 79 Board Members and Officers |
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, visit www.dws-investments.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.
An investment in these funds is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the funds. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the funds' $1.00 share price. The credit quality of the funds' holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the funds' share price. The funds' share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of the funds may have a significant adverse effect on the share prices of all classes of shares of the funds. See the prospectus for specific details regarding the funds' risk profile.
The funds' policies and procedures for voting proxies for portfolio securities and information about how the funds voted proxies related to their portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the funds' policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Portfolio Management Review
Market Overview
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
In September 2010, investors responded positively to US Federal Reserve Board (the Fed) Chairman Ben Bernanke's statement that the Fed would take additional steps in the form of "quantitative easing" to prop up the US economy as needed.1 Over the funds' most recent 12-month period, the money market yield curve has gradually steepened as longer-term rates rose in response to improved economic data and shorter maturities declined significantly based on a number of market influences.2 These included continuing strong demand and shrinking supply in the money market area; the removal (or unwind) of $200 billion in two-month Treasury bills from the market until Congress once again raises the US debt ceiling; a new FDIC fee assessment that has, in effect, removed some of the incentive for certain large banks to create supply in the money market area; and; lastly, the fact that the federal funds rate remains "on hold," keeping short-term rates lower overall.3
Positive Contributors to Fund Performance
We were able to maintain a competitive yield for the funds during the period ended April 30, 2011. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
For the Money Market Portfolio, with yields trending lower through most of the period, we continued to hold a large percentage of portfolio assets in short-maturity instruments for yield, high-quality and liquidity purposes. We also maintained a conservative average maturity, with portfolio assets broadly diversified among a number of sectors, including banks, asset-backed securities, commercial paper and sovereign debt.4,5 Toward the end of the period, we permitted the fund's average maturity to shorten, as we believed that money market yields could move up if Congress again raises the US debt ceiling.
For the Government & Agency Securities Portfolio, we maintained an increased focus on overnight repurchase agreements and one- to three-month government and agency securities, as we believe that there was not a great deal of value in longer-maturity issues during the period ending April 30, 2011.6
For the Tax-Exempt Portfolio, in light of the continued fiscal stress on state and local governments, and with dynamic rule changes regarding money market funds coming from the SEC, we believed it was prudent to maintain a short average maturity. Toward the end of the period ending April 30, 2011, the fund was invested mainly in short-term commercial paper and floating-rate securities. (The interest rate of floating-rate securities adjusts periodically based on indices such as the Securities Industry and Financial Market Association Index of Variable Rate Demand Notes.)7 Because the interest rates of these instruments adjust as market conditions change, they provide flexibility in an uncertain interest rate environment.
Our main focus, as always, is on preservation of capital, and during the period ending April 30, 2011, we maintained a short maturity and attempted to ensure ample liquidity for the funds.
Negative Contributors to Fund Performance
For all three funds, the types of securities that we were investing in tended to have lower yields than issues carrying more risk. We preferred to be cautious during a time of market uncertainty. In the end this cost each fund some yield, but we believe that this represented a prudent approach to preserving principal in light of the circumstances during the period.
Outlook and Positioning
Assuming that Congress can agree to raise the US debt ceiling in the near future, significant short-term Treasury supply should return to the market in the coming months and remove some downward pressure on money market rates that carry the shortest maturities. In general, however, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested and continued strong demand from investors seeking principal stability and safety.
We continue our insistence on the highest credit quality within the funds.8 We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the funds and to seek competitive yield for our shareholders.
Fund Performance (as of April 30, 2011)
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
An investment in these funds is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the funds. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the funds' $1.00 share price. The credit quality of the funds' holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the funds' share price. The funds' share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of a fund may have a significant adverse effect on the share prices of all classes of shares of that fund. See the prospectus for specific details regarding the funds' risk profile.
| | |
| | | 7-Day Current Yield | |
| Money Market Portfolio — Capital Assets Funds Shares | | | 0.02 | %* |
| Government & Agency Securities Portfolio — Capital Assets Funds Shares | | | 0.01 | %* |
| Tax-Exempt Portfolio — Capital Assets Funds Shares | | | 0.01 | %* |
| (Equivalent Taxable Yield) | | | 0.02 | %** |
| Money Market Portfolio — Capital Assets Funds Preferred Shares | | | 0.05 | %* |
Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the funds over a 7-day period expressed as an annual percentage rate of the funds' shares outstanding. For the most current yield information, call (888) 466-4250. * The investment advisor has agreed to voluntarily waive fees/reimburse expenses. This waiver may be changed or terminated at any time without notice. Otherwise, the 7-day current yield for Capital Assets Funds Shares would have been -0.77%, -0.81% and -0.68% for the Money Market Portfolio, Government & Agency Securities Portfolio and the Tax-Exempt Portfolio, respectively, and -0.43% for the Money Market Portfolio — Capital Assets Funds Preferred Shares, as of April 30, 2011. ** The equivalent taxable yield allows you to compare with the performance of taxable money market funds. For the Tax-Exempt Portfolio, the equivalent taxable yield is based upon the marginal income tax rate of 35%. Income may be subject to local taxes and, for some investors, the alternative minimum tax. | |
1 Quantitative easing — a monetary policy used by the government to increase the money supply. With this policy, the government purchases government and other securities from the market to create additional capital which financial institutions can use to promote lending and liquidity.
2 The yield curve — a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.
3 Treasury bill — a short-term (maturity up to 1 year) discounted government security sold through competitive bidding at weekly and monthly auctions in denominations of $10,000 to $1 million. Debt ceiling is the maximum borrowing power of a government entity. FDIC (Federal Deposit Insurance Corporation) is a federal agency that insures deposits in member banks and thrifts up to a specific dollar amount. Federal funds rate is the overnight bank lending rate.
4 Average maturity — the average length of time until the principal amount of a bond must be repaid.
5 Asset-backed securities are securities backed by a loan, lease or receivables against assets other than real estate and mortgage-backed securities. Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates. Sovereign debt is bonds issued by a national government in a foreign currency, in order to finance the issuing country's growth.
6 Overnight repurchase agreements — a form of short-term borrowing whereby a government security is sold on an overnight basis and purchased back the next day.
7 The Securities Industry and Financial Market Association Index of Variable Rate Demand Notes is a weekly high-grade market index consisting of seven-day, tax-exempt, variable-rate demand notes produced by Municipal Market Data Group. Actual issues are selected from Municipal Market Data's database of more than 10,000 active issues.
Index returns, unlike fund returns, do not reflect any fees of expenses. It is not possible to invest directly into an index.
8 Credit quality — a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default. The fund's credit quality does not remove market risk and is subject to change.
Information About Each Fund's Expenses
As an investor of a Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in each Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Funds limited these expenses; had they not done so, expenses would have been higher for the Capital Assets Funds Shares and the Capital Assets Funds Preferred 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, 2010 to April 30, 2011).
The tables illustrate each Fund's expenses in two ways:
•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in each Fund using each Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
• Hypothetical 5% Fund Return. This helps you to compare each Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using each Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Capital Assets Funds Shares
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | Money Market Portfolio | | | Government & Agency Securities Portfolio | | | Tax-Exempt Portfolio | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.12 | | | $ | 1,000.05 | | | $ | 1,000.05 | |
| Expenses Paid per $1,000* | | $ | 1.59 | | | $ | .84 | | | $ | 1.64 | |
| Hypothetical 5% Fund Return | | | | | | | | | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,023.21 | | | $ | 1,023.95 | | | $ | 1,023.16 | |
| Expenses Paid per $1,000* | | $ | 1.61 | | | $ | .85 | | | $ | 1.66 | |
* Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratios | Money Market Portfolio | Government & Agency Securities Portfolio | Tax-Exempt Portfolio |
| Capital Assets Funds Shares | .32% | .17% | .33% |
For more information, please refer to each Fund's prospectus.
Capital Assets Funds Preferred Shares
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | Money Market Portfolio | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.27 | |
| Expenses Paid per $1,000* | | $ | 1.44 | |
| Hypothetical 5% Fund Return | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,023.36 | |
| Expenses Paid per $1,000* | | $ | 1.45 | |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratio | Money Market Portfolio |
| Capital Assets Funds Preferred Shares | .29% |
For more information, please refer to the Fund's prospectus.
Money Market Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
| Commercial Paper | 34% | 38% |
| Short-Term Notes | 17% | 26% |
| Repurchase Agreements | 16% | 12% |
| Certificates of Deposit and Bank Notes | 16% | 13% |
| Government & Agency Obligations | 14% | 10% |
| Time Deposits | 3% | — |
| Supranational | — | 1% |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Money Market Portfolio | 48 days | 41 days |
| iMoneyNet First Tier Retail Money Fund Average* | 40 days | 46 days |
* The Fund is compared to its respective iMoneyNet Category: First Tier Retail Money Fund Average — Category includes a widely recognized composite of money market funds that invest in only first tier (highest rating) securities. Portfolio holdings of First Tier funds include US Treasury, US Other, Repos, Time Deposits, Domestic Bank Obligations, Foreign Bank Obligations, First Tier Commercial Paper, Floating Rate Notes and Asset Backed Commercial Paper.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 10-17. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Money Market Portfolio
| | Principal Amount ($) | Value ($) | |
| | | |
| Certificates of Deposit and Bank Notes 15.8% | |
| Bank Nederlandse Gemeenten NV, 6.0%, 3/26/2012 | 6,500,000 | 6,828,336 | |
| Bank of Tokyo-Mitsubishi UFJ Ltd., 0.38%, 5/16/2011 | 25,000,000 | 25,000,000 | |
| BNP Paribas: | |
| | 0.35%, 8/8/2011 | | 20,000,000 | 20,000,000 | |
| | 0.45%, 7/25/2011 | | 7,000,000 | 6,999,834 | |
| | 0.55%, 5/13/2011 | | 7,000,000 | 7,000,093 | |
| Credit Agricole SA, 0.3%, 8/4/2011 | 12,000,000 | 12,000,000 | |
| Dexia Credit Local: | |
| | 0.24%, 5/3/2011 | | 23,437,000 | 23,437,000 | |
| | 144A, 2.375%, 9/23/2011 | | 8,000,000 | 8,055,854 | |
| International Finance Corp., 3.0%, 11/15/2011 | 6,000,000 | 6,084,144 | |
| KBC Bank NV, 0.3%, 5/6/2011 | 6,500,000 | 6,500,000 | |
| Landesbank Hessen-Thueringen Girozentrale: | |
| | 0.2%, 5/12/2011 | | 3,000,000 | 3,000,000 | |
| | 0.2%, 5/20/2011 | | 6,000,000 | 6,000,000 | |
| Mitsubishi UFJ Trust & Banking Corp., 0.33%, 5/20/2011 | 8,500,000 | 8,500,000 | |
| Mizuho Corporate Bank Ltd., 0.31%, 5/3/2011 | 12,000,000 | 12,000,000 | |
| Natixis, 0.22%, 6/24/2011 | 20,000,000 | 20,000,000 | |
| Nederlandse Waterschapsbank NV, 1.375%, 2/17/2012 | 10,000,000 | 10,078,955 | |
| Nordea Bank Finland PLC: | |
| | 0.27%, 6/28/2011 | | 12,000,000 | 12,000,000 | |
| | 0.28%, 7/5/2011 | | 25,000,000 | 25,000,226 | |
| | 0.44%, 6/30/2011 | | 10,000,000 | 10,000,498 | |
| | 0.67%, 7/20/2011 | | 15,000,000 | 15,008,950 | |
| Skandinaviska Enskilda Banken AB: | |
| | 0.24%, 6/20/2011 | | 25,000,000 | 25,000,000 | |
| | 0.25%, 6/10/2011 | | 6,000,000 | 6,000,000 | |
| | 0.26%, 6/3/2011 | | 15,000,000 | 15,000,000 | |
| | 0.26%, 6/6/2011 | | 15,000,000 | 15,000,000 | |
| | 0.31%, 5/27/2011 | | 18,000,000 | 18,000,000 | |
| Societe Generale: | |
| | 0.2%, 7/5/2011 | | 6,000,000 | 6,000,000 | |
| | 0.35%, 5/16/2011 | | 12,000,000 | 12,000,000 | |
| Sumitomo Mitsui Banking Corp.: | |
| | 0.28%, 6/1/2011 | | 28,000,000 | 28,000,000 | |
| | 0.3%, 5/3/2011 | | 6,000,000 | 6,000,000 | |
| Svenska Handelsbanken AB: | |
| | 0.24%, 7/6/2011 | | 20,500,000 | 20,500,000 | |
| | 0.275%, 6/23/2011 | | 15,000,000 | 15,000,055 | |
Total Certificates of Deposit and Bank Notes (Cost $409,993,945) | 409,993,945 | |
| | |
| Commercial Paper 34.6% | |
| Issued at Discount** | |
| Abbey National North America LLC, 0.3%, 6/27/2011 | 6,500,000 | 6,496,912 | |
| Alpine Securitization, 144A, 0.16%, 6/2/2011 | 40,000,000 | 39,994,311 | |
| Argento Variable Funding: | |
| | 144A, 0.31%, 6/20/2011 | | 15,000,000 | 14,993,542 | |
| | 144A, 0.319%, 5/3/2011 | | 6,500,000 | 6,499,884 | |
| Atlantis One Funding Corp., 144A, 0.19%, 5/5/2011 | 25,000,000 | 24,999,472 | |
| Barclays Bank PLC, 0.31%, 5/26/2011 | 12,500,000 | 12,497,309 | |
| BPCE SA, 0.27%, 7/26/2011 | 9,000,000 | 8,994,195 | |
| Caisse d'Amortissement de la Dette Sociale: | |
| | 0.22%, 8/5/2011 | | 12,000,000 | 11,992,960 | |
| | 0.25%, 7/25/2011 | | 18,000,000 | 17,989,375 | |
| | 0.27%, 5/31/2011 | | 16,620,000 | 16,616,261 | |
| | 0.28%, 6/1/2011 | | 12,800,000 | 12,796,914 | |
| | 0.29%, 5/31/2011 | | 15,000,000 | 14,996,375 | |
| Chariot Funding LLC, 144A, 0.16%, 5/20/2011 | 20,000,000 | 19,998,311 | |
| Comcast Corp., 0.31%, 5/6/2011 | 10,000,000 | 9,999,569 | |
| Eksportfinans ASA, 0.15%, 5/5/2011 | 37,500,000 | 37,499,375 | |
| ENI Coordination Center SA, 0.3%, 5/26/2011 | 12,500,000 | 12,497,396 | |
| Google, Inc., 0.4%, 9/16/2011 | 8,000,000 | 7,987,733 | |
| Grampian Funding LLC: | |
| | 144A, 0.26%, 7/14/2011 | | 10,000,000 | 9,994,656 | |
| | 144A, 0.26%, 7/19/2011 | | 3,000,000 | 2,998,288 | |
| | 144A, 0.27%, 7/8/2011 | | 12,000,000 | 11,993,880 | |
| | 144A, 0.27%, 7/11/2011 | | 25,000,000 | 24,986,688 | |
| | 144A, 0.28%, 7/7/2011 | | 10,000,000 | 9,994,789 | |
| | 144A, 0.28%, 7/8/2011 | | 13,000,000 | 12,993,124 | |
| Johnson & Johnson: | |
| | 144A, 0.18%, 6/3/2011 | | 12,850,000 | 12,847,880 | |
| | 144A, 0.19%, 8/22/2011 | | 15,000,000 | 14,991,054 | |
| Kells Funding LLC: | |
| | 144A, 0.33%, 5/9/2011 | | 6,000,000 | 5,999,560 | |
| | 144A, 0.35%, 5/18/2011 | | 3,000,000 | 2,999,504 | |
| | 144A, 0.35%, 6/6/2011 | | 6,000,000 | 5,997,900 | |
| | 144A, 0.36%, 5/17/2011 | | 18,000,000 | 17,997,120 | |
| | 144A, 0.37%, 6/17/2011 | | 15,000,000 | 14,992,754 | |
| | 144A, 0.38%, 6/17/2011 | | 12,000,000 | 11,994,047 | |
| | 144A, 0.39%, 7/5/2011 | | 10,000,000 | 9,992,958 | |
| | 144A, 0.39%, 9/6/2011 | | 13,750,000 | 13,730,933 | |
| | 144A, 0.4%, 7/1/2011 | | 8,000,000 | 7,994,578 | |
| LMA Americas LLC, 144A, 0.17%, 5/9/2011 | 6,000,000 | 5,999,773 | |
| Market Street Funding LLC, 144A, 0.27%, 5/16/2011 | 12,419,000 | 12,417,603 | |
| Natixis Commercial Paper Corp., 0.3%, 7/12/2011 | 12,500,000 | 12,492,500 | |
| Nieuw Amsterdam Receivables Corp.: | |
| | 144A, 0.24%, 6/2/2011 | | 13,500,000 | 13,497,120 | |
| | 144A, 0.25%, 5/6/2011 | | 12,000,000 | 11,999,583 | |
| NRW.Bank: | |
| | 0.19%, 6/28/2011 | | 13,500,000 | 13,495,868 | |
| | 0.22%, 7/14/2011 | | 6,000,000 | 5,997,287 | |
| | 0.275%, 6/10/2011 | | 8,000,000 | 7,997,556 | |
| | 0.3%, 5/2/2011 | | 12,000,000 | 11,999,900 | |
| | 0.3%, 5/3/2011 | | 30,000,000 | 29,999,500 | |
| | 0.3%, 5/23/2011 | | 12,500,000 | 12,497,708 | |
| Procter & Gamble Co., 0.19%, 6/3/2011 | 16,513,000 | 16,510,124 | |
| Regency Markets No. 1 LLC, 144A, 0.19%, 5/25/2011 | 26,000,000 | 25,996,707 | |
| Romulus Funding Corp., 144A, 0.3%, 5/24/2011 | 3,000,000 | 2,999,425 | |
| Sanofi-Aventis SA, 0.3%, 8/15/2011 | 12,500,000 | 12,488,958 | |
| SBAB Bank AB: | |
| | 144A, 0.35%, 7/19/2011 | | 6,000,000 | 5,995,392 | |
| | 144A, 0.37%, 7/13/2011 | | 12,500,000 | 12,490,622 | |
| | 144A, 0.39%, 6/9/2011 | | 12,000,000 | 11,994,930 | |
| | 144A, 0.39%, 7/5/2011 | | 12,500,000 | 12,491,198 | |
| | 144A, 0.4%, 6/23/2011 | | 6,000,000 | 5,996,467 | |
| Scaldis Capital LLC: | |
| | 0.32%, 5/20/2011 | | 5,000,000 | 4,999,156 | |
| | 0.32%, 6/2/2011 | | 9,000,000 | 8,997,440 | |
| Shell International Finance BV, 0.4%, 5/2/2011 | 5,000,000 | 4,999,944 | |
| Skandinaviska Enskilda Banken AB, 0.3%, 5/6/2011 | 15,000,000 | 14,999,375 | |
| Standard Chartered Bank, 0.29%, 5/24/2011 | 20,000,000 | 19,996,294 | |
| Straight-A Funding LLC, 144A, 0.25%, 5/2/2011 | 15,000,000 | 14,999,896 | |
| Svenska Handelsbanken AB, 0.28%, 5/18/2011 | 6,000,000 | 5,999,207 | |
| Swedbank AB: | |
| | 0.26%, 7/27/2011 | | 12,000,000 | 11,992,460 | |
| | 0.27%, 7/11/2011 | | 10,000,000 | 9,994,675 | |
| | 0.27%, 7/26/2011 | | 10,000,000 | 9,993,550 | |
| | 0.285%, 5/23/2011 | | 12,000,000 | 11,997,910 | |
| | 0.3%, 5/13/2011 | | 28,000,000 | 27,997,200 | |
| | 0.34%, 7/5/2011 | | 20,000,000 | 19,987,722 | |
| Total Capital Canada Ltd., 144A, 0.31%, 9/15/2011 | 12,500,000 | 12,485,253 | |
Total Commercial Paper (Cost $894,147,910) | 894,147,910 | |
| | |
| Short-Term Notes* 17.7% | |
| Abbey National Treasury Services PLC: | |
| | 0.38%, 4/16/2012 | | 18,000,000 | 18,000,000 | |
| | 0.49%, 11/2/2011 | | 12,500,000 | 12,500,000 | |
| Australia & New Zealand Banking Group Ltd., 144A, 0.33%, 1/20/2012 | 12,500,000 | 12,500,000 | |
| Bank of Nova Scotia: | |
| | 0.22%, 8/25/2011 | | 16,500,000 | 16,500,000 | |
| | 0.27%, 9/12/2011 | | 7,000,000 | 7,000,000 | |
| | 0.35%, 12/8/2011 | | 8,000,000 | 8,000,000 | |
| Barclays Bank PLC, 0.533%, 7/19/2011 | 15,000,000 | 15,000,000 | |
| BNP Paribas, 0.492%, 8/22/2011 | 25,000,000 | 25,000,000 | |
| Caisse d'Amortissement de la Dette Sociale, 144A, 0.273%, 5/25/2012 | 26,000,000 | 25,996,945 | |
| Canadian Imperial Bank of Commerce: | |
| | 0.18%, 5/12/2011 | | 20,000,000 | 20,000,000 | |
| | 0.292%, 4/26/2012 | | 21,600,000 | 21,600,000 | |
| Commonwealth Bank of Australia, 144A, 0.331%, 2/3/2012 | 12,000,000 | 12,000,000 | |
| Credit Suisse, 0.19%, 6/3/2011 | 12,000,000 | 12,000,000 | |
| JPMorgan Chase Bank NA, 0.211%, 5/31/2011 | 11,500,000 | 11,500,000 | |
| Kells Funding LLC: | |
| | 144A, 0.318%, 8/15/2011 | | 12,500,000 | 12,500,000 | |
| | 144A, 0.342%, 2/24/2012 | | 13,750,000 | 13,750,000 | |
| | 144A, 0.383%, 12/1/2011 | | 10,000,000 | 10,000,000 | |
| National Australia Bank Ltd.: | |
| | 0.261%, 10/5/2011 | | 12,500,000 | 12,500,000 | |
| | 0.291%, 6/10/2011 | | 15,000,000 | 15,000,000 | |
| Nordea Bank Finland PLC: | |
| | 0.56%, 2/3/2012 | | 3,000,000 | 3,004,662 | |
| | 0.574%, 10/20/2011 | | 12,500,000 | 12,517,260 | |
| | 0.58%, 10/14/2011 | | 10,000,000 | 10,013,284 | |
| Rabobank Nederland NV: | |
| | 0.263%, 5/13/2011 | | 14,000,000 | 14,000,001 | |
| | 0.307%, 4/24/2012 | | 7,750,000 | 7,749,616 | |
| | 0.311%, 1/10/2012 | | 8,000,000 | 8,000,000 | |
| | 144A, 0.384%, 3/16/2012 | | 12,000,000 | 12,000,000 | |
| | 144A, 0.458%, 9/28/2011 | | 6,000,000 | 6,003,687 | |
| Royal Bank of Canada, 0.31%, 8/12/2011 | 11,300,000 | 11,300,000 | |
| Societe Generale, 0.32%, 5/19/2011 | 24,000,000 | 24,000,000 | |
| Westpac Banking Corp.: | |
| | 0.27%, 10/12/2011 | | 16,000,000 | 16,000,000 | |
| | 0.293%, 6/1/2011 | | 8,000,000 | 8,000,000 | |
| | 0.321%, 5/9/2012 | | 17,000,000 | 17,000,000 | |
| | 144A, 0.323%, 10/28/2011 | | 12,000,000 | 12,001,367 | |
| | 0.36%, 1/10/2012 | | 14,000,000 | 14,000,000 | |
Total Short-Term Notes (Cost $456,936,822) | 456,936,822 | |
| | |
| Government & Agency Obligations 13.9% | |
| Foreign Government Obligations 0.5% | |
| Kingdom of Denmark, 2.75%, 11/15/2011 | 11,500,000 | 11,643,626 | |
| Other Government Related (a) 1.6% | |
| European Investment Bank: | |
| | 0.24%, 6/28/2011 | | 13,000,000 | 12,994,973 | |
| | 2.625%, 5/16/2011 | | 7,000,000 | 7,006,628 | |
| | 2.625%, 11/15/2011 | | 22,000,000 | 22,267,637 | |
| | 42,269,238 | |
| US Government Sponsored Agencies 5.5% | |
| Federal Farm Credit Bank: | |
| | 0.223%*, 11/2/2011 | | 12,250,000 | 12,249,690 | |
| | 0.259%**, 10/20/2011 | | 5,000,000 | 4,993,789 | |
| | 0.259%**, 4/4/2012 | | 5,000,000 | 4,987,758 | |
| | 0.319%**, 12/16/2011 | | 10,200,000 | 10,179,237 | |
| Federal Home Loan Bank: | |
| | 0.24%, 10/28/2011 | | 14,000,000 | 13,995,584 | |
| | 0.25%, 10/28/2011 | | 14,000,000 | 13,999,429 | |
| | 0.268%**, 9/12/2011 | | 10,000,000 | 9,989,950 | |
| | 0.54%, 5/24/2011 | | 4,400,000 | 4,400,022 | |
| | 1.0%, 12/28/2011 | | 10,000,000 | 10,053,762 | |
| Federal National Mortgage Association: | |
| | 0.113%*, 7/27/2011 | | 12,500,000 | 12,498,033 | |
| | 0.159%**, 11/21/2011 | | 15,000,000 | 14,986,400 | |
| | 0.182%**, 6/16/2011 | | 12,500,000 | 12,497,045 | |
| | 4.68%, 6/15/2011 | | 7,000,000 | 7,038,043 | |
| | 5.375%, 11/15/2011 | | 10,000,000 | 10,280,209 | |
| | 142,148,951 | |
| US Treasury Obligations 6.3% | |
| US Treasury Bills: | |
| | 0.155%**, 7/28/2011 | | 996,000 | 995,623 | |
| | 0.16%**, 9/1/2011 | | 12,500,000 | 12,493,167 | |
| US Treasury Notes: | |
| | 0.875%, 5/31/2011 | | 39,500,000 | 39,518,687 | |
| | 0.875%, 1/31/2012 | | 13,500,000 | 13,567,775 | |
| | 1.0%, 9/30/2011 | | 37,000,000 | 37,117,154 | |
| | 4.5%, 11/30/2011 | | 7,000,000 | 7,170,545 | |
| | 4.625%, 8/31/2011 | | 27,500,000 | 27,899,749 | |
| | 4.625%, 10/31/2011 | | 17,000,000 | 17,369,535 | |
| | 5.125%, 6/30/2011 | | 7,500,000 | 7,560,710 | |
| | 163,692,945 | |
Total Government & Agency Obligations (Cost $359,754,760) | 359,754,760 | |
| | |
| Time Deposits 2.6% | |
| Citibank NA, 0.13%, 5/5/2011 | 58,000,000 | 58,000,000 | |
| National Australia Bank Ltd., 0.08%, 5/2/2011 | 9,315,483 | 9,315,483 | |
Total Time Deposits (Cost $67,315,483) | 67,315,483 | |
| | |
| Municipal Bonds and Notes 0.2% | |
| Henrico County, VA, Economic Development Authority, Residential Care Facility Revenue, Westminster Canterbury, 0.32%***, 10/1/2037, LOC: Branch Banking & Trust (Cost $4,085,000) | 4,085,000 | 4,085,000 | |
| | |
| Repurchase Agreements 16.2% | |
| Barclays Capital PLC, 0.03%, dated 4/29/2011, to be repurchased at $5,000,012 on 5/2/2011 (b) | 5,000,000 | 5,000,000 | |
| BNP Paribas, 0.03%, dated 4/29/2011, to be repurchased at $39,285,813 on 5/2/2011 (c) | 39,285,715 | 39,285,715 | |
| BNP Paribas, 0.04%, dated 4/29/2011, to be repurchased at $124,000,413 on 5/2/2011 (d) | 124,000,000 | 124,000,000 | |
| JPMorgan Securities, Inc., 0.01%, dated 4/29/2011, to be repurchased at $64,281,482 on 5/2/2011 (e) | 64,281,428 | 64,281,428 | |
| JPMorgan Securities, Inc., 0.04%, dated 4/29/2011, to be repurchased at $23,000,077 on 5/2/2011 (f) | 23,000,000 | 23,000,000 | |
| Merrill Lynch & Co., Inc., 0.05%, dated 4/29/2011, to be repurchased at $15,000,062 on 5/2/2011 (g) | 15,000,000 | 15,000,000 | |
| Morgan Stanley & Co., Inc., 0.04%, dated 4/29/2011, to be repurchased at $142,000,473 on 5/2/2011 (h) | 142,000,000 | 142,000,000 | |
| The Goldman Sachs & Co., 0.05%, dated 4/29/2011, to be repurchased at $6,000,025 on 5/2/2011 (i) | 6,000,000 | 6,000,000 | |
Total Repurchase Agreements (Cost $418,567,143) | 418,567,143 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $2,610,801,063)+ | | | 101.0 | | | | 2,610,801,063 | |
| Other Assets and Liabilities, Net | | | (1.0 | ) | | | (24,871,551 | ) |
| Net Assets | | | 100.0 | | | | 2,585,929,512 | |
* These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
** Annualized yield at time of purchase; not a coupon rate.
*** Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of April 30, 2011.
+ The cost for federal income tax purposes was $2,610,801,063.
(a) Government-backed debt issued by financial companies or government sponsored enterprises.
(b) Collateralized by $5,100,300 US Treasury Bill, maturing on 7/7/2011 with a value of $5,100,045.
(c) Collateralized by $41,890,600 US Treasury Note, 2.625%, maturing on 11/15/2020 with a value of $40,071,491.
(d) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 29,000,000 | | Federal Home Loan Bank | | | 3.125 | | 3/11/2016 | | | 30,474,263 | |
| | 91,202,000 | | Federal National Mortgage Association | | | 2.625 | | 11/20/2014 | | | 96,010,512 | |
| Total Collateral Value | | | | | | | | 126,484,775 | |
(e) Collateralized by $87,016,788 US Treasury STRIPS, with various maturity dates of 5/15/2019-8/15/2020 with a value of $65,568,029.
(f) Collateralized by $23,827,802 Federal Home Loan Mortgage Corp., with various coupon rates from 2.0-2.75%, with various maturity dates of 11/15/2038-9/15/2040 with a value of $23,464,662.
(g) Collateralized by $14,787,810 Federal Home Loan Mortgage Corp., 3.295%, maturing on 1/1/2041 with a value of $15,300,001.
(h) Collateralized by $138,402,899 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-6.0%, with various maturity dates of 8/1/2038-4/1/2041 with a value of $144,840,000.
(i) Collateralized by $7,977,887 Federal National Mortgage Association — Principal Only, with various maturity dates of 3/25/2036-5/25/2040 with a value of $6,120,000.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
LOC: Letter of Credit
Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying morgages or mortgage-backed securities.
STRIPS: Separate Trading of Registered Interest and Principal Securities
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Investments in Securities (j) | | $ | — | | | $ | 2,192,233,920 | | | $ | — | | | $ | 2,192,233,920 | |
| Repurchase Agreements | | | — | | | | 418,567,143 | | | | — | | | | 418,567,143 | |
| Total | | $ | — | | | $ | 2,610,801,063 | | | $ | — | | | $ | 2,610,801,063 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
(j) See Investment Portfolio for additional categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Money Market Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,192,233,920 | |
| Repurchase agreements, valued at amortized cost | | | 418,567,143 | |
| Total investments, valued at amortized cost | | | 2,610,801,063 | |
| Cash | | | 2,856 | |
| Receivable for Fund shares sold | | | 3,963 | |
| Interest receivable | | | 2,616,479 | |
| Due from Advisor | | | 16,735 | |
| Other assets | | | 93,812 | |
| Total assets | | | 2,613,534,908 | |
| Liabilities | |
| Payable for investments purchased | | | 25,996,945 | |
| Payable for Fund shares redeemed | | | 22,024 | |
| Accrued management fee | | | 322,306 | |
| Other accrued expenses and payables | | | 1,264,121 | |
| Total liabilities | | | 27,605,396 | |
| Net assets, at value | | $ | 2,585,929,512 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 39,083 | |
| Paid-in capital | | | 2,585,890,429 | |
| Net assets, at value | | $ | 2,585,929,512 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Money Market Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($845,877,944 ÷ 845,573,745 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Capital Assets Funds Preferred Shares Net Asset Value, offering and redemption price per share ($4,717,958 ÷ 4,716,261 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($13,123,785 ÷ 13,119,065 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Plus Shares Net Asset Value, offering and redemption price per share ($1,311,279 ÷ 1,310,807 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Premium Reserve Money Market Shares Net Asset Value, offering and redemption price per share ($61,599,618 ÷ 61,577,466 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($1,659,298,928 ÷ 1,658,702,190 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Money Market Portfolio | |
Income: Interest | | $ | 8,798,068 | |
Expenses: Management fee | | | 3,881,269 | |
| Services to shareholders | | | 6,076,379 | |
| Custodian fee | | | 74,890 | |
| Distribution and service fees | | | 14,110,025 | |
| Professional fees | | | 138,516 | |
| Trustees' fees and expenses | | | 77,791 | |
| Reports to shareholders | | | 320,727 | |
| Registration fees | | | 165,621 | |
| Other | | | 109,278 | |
| Total expenses before expense reductions | | | 24,954,496 | |
| Expense reductions | | | (16,494,317 | ) |
| Total expenses after expense reductions | | | 8,460,179 | |
| Net investment income | | | 337,889 | |
| Net realized gain (loss) from investments | | | 46,708 | |
| Net increase (decrease) in net assets resulting from operations | | $ | 384,597 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Money Market Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 337,889 | | | $ | 1,401,172 | |
| Net realized gain (loss) | | | 46,708 | | | | 163,092 | |
| Net increase in net assets resulting from operations | | | 384,597 | | | | 1,564,264 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (187,975 | ) | | | (325,020 | ) |
| Capital Assets Funds Preferred Shares | | | (13,299 | ) | | | (22,211 | ) |
| Davidson Cash Equivalent Shares | | | (1,869 | ) | | | (2,135 | ) |
| Davidson Cash Equivalent Plus Shares | | | (221 | ) | | | (304 | ) |
| Institutional Money Market Shares | | | — | | | | (739,919 | ) |
| Institutional Select Money Market Shares | | | — | | | | (18 | ) |
| Premier Money Market Shares | | | (5,042 | ) | | | (80,727 | ) |
| Premium Reserve Money Market Shares | | | (7,826 | ) | | | (119,850 | ) |
| Service Shares | | | (183,668 | ) | | | (110,887 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (185,696 | ) |
| Capital Assets Funds Preferred Shares | | | — | | | | (11,952 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (4,764 | ) |
| Davidson Cash Equivalent Plus Shares | | | — | | | | (692 | ) |
| Institutional Money Market Shares | | | — | | | | (48,898 | ) |
| Institutional Select Money Market Shares | | | — | | | | (1 | ) |
| Premier Money Market Shares | | | — | | | | (232,203 | ) |
| Premium Reserve Money Market Shares | | | — | | | | (48,826 | ) |
| Service Shares | | | — | | | | (238,491 | ) |
| Total distributions | | | (399,900 | ) | | | (2,172,594 | ) |
Fund share transactions: Proceeds from shares sold | | | 2,807,221,339 | | | | 3,753,564,969 | |
| Reinvestment of distributions | | | 395,534 | | | | 2,086,161 | |
| Cost of shares redeemed | | | (2,616,619,588 | ) | | | (6,446,352,321 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | 190,997,285 | | | | (2,690,701,191 | ) |
| Increase (decrease) in net assets | | | 190,981,982 | | | | (2,691,309,521 | ) |
| Net assets at beginning of period | | | 2,394,947,530 | | | | 5,086,257,051 | |
| Net assets at end of period (including undistributed net investment income of $39,083 and $54,386, respectively) | | $ | 2,585,929,512 | | | $ | 2,394,947,530 | |
The accompanying notes are an integral part of the financial statements.
Money Market Portfolio Capital Assets Funds Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .001 | | | | .012 | | | | .038 | | | | .043 | |
| Net realized and unrealized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * |
| Total from investment operations | | | .000 | * | | | .001 | | | | .012 | | | | .038 | | | | .043 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.001 | ) | | | (.012 | ) | | | (.038 | ) | | | (.043 | ) |
| Net realized gain | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.001 | ) | | | (.012 | ) | | | (.038 | ) | | | (.043 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .02 | | | | .06 | | | | 1.21 | | | | 3.90 | | | | 4.38 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 846 | | | | 897 | | | | 919 | | | | 1,057 | | | | 979 | |
| Ratio of expenses before expense reductions (%) | | | 1.03 | | | | 1.03 | | | | 1.04 | | | | 1.05 | | | | 1.04 | |
| Ratio of expenses after expense reductions (%) | | | .34 | | | | .42 | | | | 1.00 | | | | 1.03 | | | | 1.00 | |
| Ratio of net investment income (%) | | | .02 | | | | .04 | | | | 1.16 | | | | 3.78 | | | | 4.28 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
Money Market Portfolio Capital Assets Funds Preferred Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .001 | | | | .001 | | | | .016 | | | | .042 | | | | .047 | |
| Net realized and unrealized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * |
| Total from investment operations | | | .001 | | | | .001 | | | | .016 | | | | .042 | | | | .047 | |
Less distributions from: Net investment income | | | (.001 | ) | | | (.001 | ) | | | (.016 | ) | | | (.042 | ) | | | (.047 | ) |
| Net realized gain | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.001 | ) | | | (.001 | ) | | | (.016 | ) | | | (.042 | ) | | | (.047 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .05 | | | | .06 | | | | 1.60 | | | | 4.30 | | | | 4.80 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 5 | | | | 53 | | | | 49 | | | | 75 | | | | .063 | |
| Ratio of expenses before expense reductions (%) | | | .65 | | | | .65 | | | | .65 | | | | .66 | | | | .67 | |
| Ratio of expenses after expense reductions (%) | | | .33 | | | | .41 | | | | .61 | | | | .61 | | | | .60 | |
| Ratio of net investment income (%) | | | .05 | | | | .04 | | | | 1.55 | | | | 4.20 | | | | 4.68 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
Government & Agency Securities Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
| Government & Agency Obligations | 50% | 85% |
| Repurchase Agreements | 48% | 15% |
| Commercial Paper | 2% | — |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Government & Agency Securities Portfolio | 49 days | 52 days |
| iMoneyNet Government & Agencies Retail Money Fund Average* | 38 days | 45 days |
* The Fund is compared to its respective iMoney Net Category: Government & Agencies Retail Money Fund Average consists of all non-institutional government money market funds. Category includes the most broadly based of the government retail funds. These funds can invest in US Treasuries, US Other, Repos, whether or not they are backed by US Treasuries and government-backed Floating Rate Notes.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 26-30. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Government & Agency Securities Portfolio
| | Principal Amount ($) | Value ($) | |
| | | |
| Commercial Paper 1.8% | |
| Issued at Discount | |
| Straight-A Funding LLC: | |
| | 144A, 0.15%, 5/11/2011 | | 20,000,000 | 19,999,167 | |
| | 144A, 0.2%, 7/5/2011 | | 80,000,000 | 79,971,111 | |
Total Commercial Paper (Cost $99,970,278) | 99,970,278 | |
| | |
| Government & Agency Obligations 51.6% | |
| US Government Sponsored Agencies 45.9% | |
| Federal Farm Credit Bank: | |
| | 0.119%**, 5/18/2012 | | 165,000,000 | 164,991,321 | |
| | 0.12%**, 1/12/2012 | | 100,000,000 | 100,001,775 | |
| | 0.129%*, 9/9/2011 | | 25,000,000 | 24,988,174 | |
| | 0.134%**, 7/15/2011 | | 85,000,000 | 84,999,308 | |
| | 0.164%*, 5/24/2011 | | 50,000,000 | 49,994,569 | |
| | 0.208%*, 8/3/2011 | | 43,500,000 | 43,476,148 | |
| | 0.259%*, 10/20/2011 | | 34,500,000 | 34,457,143 | |
| | 0.259%*, 4/4/2012 | | 12,500,000 | 12,469,396 | |
| | 0.269%*, 3/23/2012 | | 25,000,000 | 24,938,688 | |
| | 0.319%*, 12/16/2011 | | 28,000,000 | 27,943,004 | |
| | 0.319%*, 1/12/2012 | | 33,000,000 | 32,924,907 | |
| Federal Home Loan Bank: | |
| | 0.018%*, 5/2/2011 | | 12,737,000 | 12,737,000 | |
| | 0.064%*, 7/20/2011 | | 100,000,000 | 99,985,556 | |
| | 0.068%*, 5/27/2011 | | 50,000,000 | 49,997,472 | |
| | 0.076%*, 5/18/2011 | | 55,000,000 | 54,997,922 | |
| | 0.089%*, 9/6/2011 | | 50,000,000 | 49,984,000 | |
| | 0.149%*, 8/12/2011 | | 7,500,000 | 7,496,781 | |
| | 0.149%*, 8/17/2011 | | 12,207,000 | 12,201,507 | |
| | 0.17%**, 1/18/2012 | | 22,000,000 | 22,006,379 | |
| | 0.183%**, 9/26/2011 | | 12,500,000 | 12,499,749 | |
| | 0.24%, 10/28/2011 | | 36,275,000 | 36,266,384 | |
| | 0.248%*, 8/22/2011 | | 5,000,000 | 4,996,076 | |
| | 0.268%*, 9/12/2011 | | 15,900,000 | 15,884,021 | |
| | 0.3%, 12/27/2011 | | 75,000,000 | 75,022,455 | |
| | 0.76%, 7/19/2011 | | 15,000,000 | 15,017,910 | |
| | 1.0%, 12/28/2011 | | 13,460,000 | 13,532,363 | |
| | 5.375%, 8/19/2011 | | 14,900,000 | 15,129,895 | |
| Federal Home Loan Mortgage Corp.: | |
| | 0.028%*, 5/19/2011 | | 15,000,000 | 14,999,775 | |
| | 0.08%**, 11/9/2011 | | 75,000,000 | 74,967,946 | |
| | 0.14%**, 11/10/2011 | | 200,000,000 | 200,000,000 | |
| | 0.149%*, 7/27/2011 | | 85,000,000 | 84,969,188 | |
| | 0.164%*, 9/1/2011 | | 8,935,000 | 8,929,963 | |
| | 0.167%*, 6/13/2011 | | 27,061,000 | 27,055,505 | |
| | 0.193%*, 7/25/2011 | | 34,494,000 | 34,478,118 | |
| | 0.198%*, 7/12/2011 | | 100,000,000 | 99,960,000 | |
| Federal National Mortgage Association: | |
| | 0.059%*, 6/13/2011 | | 75,000,000 | 74,994,625 | |
| | 0.079%*, 7/21/2011 | | 100,000,000 | 99,982,000 | |
| | 0.099%*, 8/8/2011 | | 32,500,000 | 32,491,063 | |
| | 0.113%**, 7/27/2011 | | 190,000,000 | 189,983,791 | |
| | 0.119%*, 8/22/2011 | | 25,000,000 | 24,990,583 | |
| | 0.119%*, 9/13/2011 | | 100,000,000 | 99,955,000 | |
| | 0.129%*, 9/26/2011 | | 65,000,000 | 64,965,261 | |
| | 0.159%*, 11/21/2011 | | 100,000,000 | 99,909,333 | |
| | 0.174%**, 9/19/2011 | | 30,000,000 | 29,999,404 | |
| | 0.178%*, 7/20/2011 | | 44,000,000 | 43,982,400 | |
| | 0.178%*, 7/27/2011 | | 51,659,000 | 51,636,528 | |
| | 0.182%*, 6/16/2011 | | 35,000,000 | 34,991,726 | |
| | 5.0%, 10/15/2011 | | 50,000,000 | 51,082,031 | |
| | 5.375%, 11/15/2011 | | 16,040,000 | 16,489,455 | |
| | 2,559,753,598 | |
| US Treasury Obligations 5.7% | |
| US Treasury Bill, 0.16%*, 9/1/2011 | | 17,500,000 | 17,490,433 | |
| US Treasury Notes: | |
| | 0.875%, 5/31/2011 | | 25,000,000 | 25,014,282 | |
| | 1.0%, 9/30/2011 | | 84,500,000 | 84,768,848 | |
| | 1.75%, 11/15/2011 | | 50,000,000 | 50,394,064 | |
| | 4.625%, 8/31/2011 | | 43,500,000 | 44,134,573 | |
| | 4.625%, 10/31/2011 | | 45,000,000 | 45,986,196 | |
| | 5.125%, 6/30/2011 | | 50,000,000 | 50,404,731 | |
| | 318,193,127 | |
Total Government & Agency Obligations (Cost $2,877,946,725) | 2,877,946,725 | |
| | |
| Repurchase Agreements 49.5% | |
| Barclays Capital PLC, 0.03%, dated 4/29/2011, to be repurchased at $215,000,538 on 5/2/2011 (a) | 215,000,000 | 215,000,000 | |
| BNP Paribas, 0.03%, dated 4/29/2011, to be repurchased at $42,428,677 on 5/2/2011 (b) | 42,428,571 | 42,428,571 | |
| BNP Paribas, 0.04%, dated 4/29/2011, to be repurchased at $704,002,347 on 5/2/2011 (c) | 704,000,000 | 704,000,000 | |
| Citigroup, Inc., 0.03%, dated 4/29/2011, to be repurchased at $22,000,055 on 5/2/2011 (d) | 22,000,000 | 22,000,000 | |
| JPMorgan Securities, Inc., 0.01%, dated 4/29/2011, to be repurchased at $432,619,312 on 5/2/2011 (e) | 432,618,951 | 432,618,951 | |
| JPMorgan Securities, Inc., 0.04%, dated 4/29/2011, to be repurchased at $233,000,743 on 5/2/2011 (f) | 223,000,000 | 223,000,000 | |
| Merrill Lynch & Co., Inc., 0.05%, dated 4/29/2011, to be repurchased at $123,927,019 on 5/2/2011 (g) | 123,926,503 | 123,926,503 | |
| Morgan Stanley & Co., Inc., 0.04%, dated 4/29/2011, to be repurchased at $252,000,840 on 5/2/2011 (h) | 252,000,000 | 252,000,000 | |
| The Goldman Sachs & Co., 0.05%, dated 4/29/2011, to be repurchased at $441,001,838 on 5/2/2011 (i) | 441,000,000 | 441,000,000 | |
| The Goldman Sachs & Co., 0.06%, dated 4/28/2011, to be repurchased at $300,003,500 on 5/5/2011 (j) | 300,000,000 | 300,000,000 | |
Total Repurchase Agreements (Cost $2,755,974,025) | 2,755,974,025 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $5,733,891,028)+ | | | 102.9 | | | | 5,733,891,028 | |
| Other Assets and Liabilities, Net | | | (2.9 | ) | | | (162,027,136 | ) |
| Net Assets | | | 100.0 | | | | 5,571,863,892 | |
* Annualized yield at time of purchase; not a coupon rate.
** These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
+ The cost for federal income tax purposes was $5,733,891,028.
(a) Collateralized by $207,105,300 US Treasury Note, 3.125%, maturing on 9/30/2013 with a value of $219,300,094.
(b) Collateralized by $45,241,800 US Treasury Note, 2.625%, maturing on 11/15/2020 with a value of $43,277,165.
(c) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 522,522,000 | | Federal Home Loan Mortgage Corp. | | | 1.65-5.5 | | 4/28/2014- 4/8/2030 | | | 546,732,677 | |
| | 161,294,000 | | Federal National Mortgage Association | | | 3.25-4.75 | | 2/21/2013- 4/9/2013 | | | 171,348,112 | |
| Total Collateral Value | | | 718,080,789 | |
(d) Collateralized by $22,443,000 Federal Home Loan Bank, maturing on 7/29/2011 with a value of $22,440,082.
(e) Collateralized by $531,439,126 US Treasury STRIPS, maturing on 11/15/2013-2/15/2020 with a value of $441,272,531.
(f) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 185,181,947 | | Federal Home Loan Mortgage Corp. | | Zero Coupon-6.5 | | 7/15/2015- 8/15/2039 | | | 192,999,725 | |
| | 54,470,688 | | Federal Home Loan Mortgage Corp. —
Interest only | | | 5.281 | | 1/15/2039 | | | 5,749,091 | |
| | 7,680,197 | | Federal Home Loan Mortgage Corp. — Principal only | | Zero Coupon | | 11/15/2036- 5/15/2037 | | | 6,713,414 | |
| | 23,268,926 | | Federal National Mortgage Association | | | 0.513-6.47 | | 2/25/2029- 6/25/2037 | | | 22,905,889 | |
| Total Collateral Value | | | 228,368,119 | |
(g) Collateralized by $124,768,369 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-4.5%, with various maturity dates of 3/1/2039-12/1/2040 with a value of $126,405,034.
(h) Collateralized by $242,597,416 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-6.0%, with various maturity dates of 3/1/2038-4/1/2041 with a value of $257,040,001.
(i) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 22,370,889 | | Federal Home Loan Mortgage Corp. | | | 4.0-5.5 | | 4/15/2040- 4/15/2041 | | | 21,981,083 | |
| | 491,792,871 | | Federal Home Loan Mortgage Corp. —
Interest only | | | 5.781-6.431 | | 9/15/2033- 11/15/2038 | | | 77,032,731 | |
| | 210,576,230 | | Federal National Mortgage Association | | Zero Coupon — 5.5 | | 6/25/2021- 3/25/2041 | | | 213,820,002 | |
| | 914,052,013 | | Federal National Mortgage Association — Interest only | | | 5.787-6.266 | | 6/25/2038- 1/25/2041 | | | 136,986,185 | |
| Total Collateral Value | | | 449,820,001 | |
(j) Collateralized by $295,084,262 Federal National Mortgage Association, with various coupon rates from 3.5-4.5%, with various maturity dates of 10/25/2039-2/25/2041 with a value of $306,000,000.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
Interest Only: Interest Only (IO) bonds represent the "interest only" portion of payments on a pool of underlying mortgages or mortgage-backed securities. IO securities are subject to prepayment risk of the pool of underlying mortgages.
Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying mortgages or mortgage-backed securities.
STRIPS: Separate Trading of Registered Interest and Principal Securities
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Investments in Securities (k) | | $ | — | | | $ | 2,977,917,003 | | | $ | — | | | $ | 2,977,917,003 | |
| Repurchase Agreements | | | — | | | | 2,755,974,025 | | | | — | | | | 2,755,974,025 | |
| Total | | $ | — | | | $ | 5,733,891,028 | | | $ | — | | | $ | 5,733,891,028 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the period ended April 30, 2011.
(k) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Government & Agency Securities Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,977,917,003 | |
| Repurchase agreements, valued at amortized cost | | | 2,755,974,025 | |
| Total investments, valued at amortized cost | | | 5,733,891,028 | |
| Receivable for Fund shares sold | | | 142,451 | |
| Interest receivable | | | 3,670,502 | |
| Due from Advisor | | | 136,428 | |
| Other assets | | | 95,442 | |
| Total assets | | | 5,737,935,851 | |
| Liabilities | |
| Payable for investments purchased | | | 164,991,321 | |
| Payable for Fund shares redeemed | | | 126,472 | |
| Distributions payable | | | 106,265 | |
| Accrued management fee | | | 99,239 | |
| Other accrued expenses and payables | | | 748,662 | |
| Total liabilities | | | 166,071,959 | |
| Net assets, at value | | $ | 5,571,863,892 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 201,484 | |
| Accumulated net realized gain (loss) | | | (602,497 | ) |
| Paid-in capital | | | 5,572,264,905 | |
| Net assets, at value | | $ | 5,571,863,892 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Government & Agency Securities Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($284,348,907 ÷ 284,368,469 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($19,057,230 ÷ 19,058,540 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Plus Shares Net Asset Value, offering and redemption price per share ($33,261,953 ÷ 33,264,241 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Government & Agency Money Fund Net Asset Value, offering and redemption price per share ($170,093,183 ÷ 170,104,883 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Government Cash Institutional Shares Net Asset Value, offering and redemption price per share ($4,771,880,106 ÷ 4,772,208,337 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Government Cash Managed Shares Net Asset Value, offering and redemption price per share ($179,819,975 ÷ 179,832,348 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($113,402,538 ÷ 113,410,339 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Government & Agency Securities Portfolio | |
Income: Interest | | $ | 9,770,345 | |
Expenses: Management fee | | | 2,506,115 | |
| Administration fee | | | 4,222,727 | |
| Services to shareholders | | | 1,845,325 | |
| Custodian fee | | | 76,975 | |
| Distribution and service fees | | | 3,146,324 | |
| Professional fees | | | 150,210 | |
| Trustees' fees and expenses | | | 127,065 | |
| Reports to shareholders | | | 10,937 | |
| Registration fees | | | 141,522 | |
| Other | | | 393,329 | |
| Total expenses before expense reductions | | | 12,620,529 | |
| Expense reductions | | | (5,190,147 | ) |
| Total expenses after expense reductions | | | 7,430,382 | |
| Net investment income | | | 2,339,963 | |
| Net realized gain (loss) from investments | | | (602,497 | ) |
| Net increase (decrease) in net assets resulting from operations | | $ | 1,737,466 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Government & Agency Securities Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 2,339,963 | | | $ | 18,279,158 | |
| Net realized gain (loss) | | | (602,497 | ) | | | 683,254 | |
| Net increase in net assets resulting from operations | | | 1,737,466 | | | | 18,962,412 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (29,745 | ) | | | (30,842 | ) |
| Davidson Cash Equivalent Shares | | | (2,133 | ) | | | (2,419 | ) |
| Davidson Cash Equivalent Plus Shares | | | (5,528 | ) | | | (3,042 | ) |
| DWS Government & Agency Money Fund | | | (28,169 | ) | | | (168,152 | ) |
| DWS Government Cash Institutional Shares | | | (2,230,405 | ) | | | (17,853,361 | ) |
| Government Cash Managed Shares | | | (21,680 | ) | | | (46,318 | ) |
| Premier Money Market Shares | | | — | | | | (176,438 | ) |
| Service Shares | | | (12,160 | ) | | | (13,091 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (34,871 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (2,710 | ) |
| Davidson Cash Equivalent Plus Shares | | | — | | | | (2,843 | ) |
| DWS Government & Agency Money Fund | | | — | | | | (32,168 | ) |
| DWS Government Cash Institutional Shares | | | — | | | | (1,560,440 | ) |
| Government Cash Managed Shares | | | — | | | | (38,058 | ) |
| Premier Money Market Shares | | | — | | | | (242,870 | ) |
| Service Shares | | | — | | | | (14,378 | ) |
| Total distributions | | | (2,329,820 | ) | | | (20,222,001 | ) |
Fund share transactions: Proceeds from shares sold | | | 38,138,317,757 | | | | 89,328,240,895 | |
| Reinvestment of distributions | | | 1,201,174 | | | | 9,173,740 | |
| Cost of shares redeemed | | | (40,469,462,394 | ) | | | (101,467,650,200 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (2,329,943,463 | ) | | | (12,130,235,565 | ) |
| Increase (decrease) in net assets | | | (2,330,535,817 | ) | | | (12,131,495,154 | ) |
| Net assets at beginning of period | | | 7,902,399,709 | | | | 20,033,894,863 | |
| Net assets at end of period (including undistributed net investment income of $201,484 and $191,341, respectively) | | $ | 5,571,863,892 | | | $ | 7,902,399,709 | |
The accompanying notes are an integral part of the financial statements.
Government & Agency Securities Portfolio Capital Assets Funds Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .007 | | | | .036 | | | | .043 | |
| Net realized and unrealized gain (loss) | | | (.000 | )* | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .007 | | | | .036 | | | | .043 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.007 | ) | | | (.036 | ) | | | (.043 | ) |
| Net realized gain | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.007 | ) | | | (.036 | ) | | | (.043 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .01 | | | | .02 | | | | .75 | | | | 3.67 | | | | 4.37 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 284 | | | | 304 | | | | 280 | | | | 199 | | | | 76 | |
| Ratio of expenses before expense reductions (%) | | | 1.01 | | | | 1.03 | | | | 1.03 | | | | 1.03 | | | | 1.05 | |
| Ratio of expenses after expense reductions (%) | | | .22 | | | | .30 | | | | .92 | | | | 1.01 | | | | 1.00 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | .60 | b | | | 3.44 | | | | 4.30 | |
a Total return would have been lower had certain expenses not been reduced. b Due to the timing of the subscriptions and redemptions, the amount shown does not correspond to the total return during the period. * Amount is less than $.0005. | |
Tax-Exempt Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
Municipal Investments Municipal Variable Rate Demand Notes | 70% | 72% |
| Municipal Bonds and Notes | 27% | 28% |
| Municipal Floating Rate Notes | 3% | — |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Tax-Exempt Portfolio | 33 days | 44 days |
| National Tax-Free Retail Money Fund Average* | 28 days | 31 days |
* The Fund is compared to its respective iMoneyNet Category: National Tax-Free Retail Money Fund Average — Category consists of all national tax-free and municipal retail funds. Portfolio holdings of tax-free funds include Rated and Unrated Demand Notes, Rated and Unrated General Market Notes; Commercial Paper; Put Bonds — 6 months and less; Put Bonds — over 6 months; AMT Paper and Other Tax-Free Holdings.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 37-48. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Tax-Exempt Portfolio
| | | Principal Amount ($) | | | Value ($) | |
| | | | |
| Municipal Investments 99.8% | |
| Alabama 0.4% | |
| Tuscaloosa County, AL, Industrial Development Gulf Opportunity Zone, Hunt Refining Project, Series C, 0.3%*, 12/1/2027 | | | 10,000,000 | | | | 10,000,000 | |
| Alaska 1.1% | |
| Anchorage, AK, Tax Anticipation Notes, 1.5%, 12/29/2011 | | | 30,000,000 | | | | 30,237,724 | |
| Arkansas 0.3% | |
| Fort Smith, AR, Mitsubishi Power Systems Revenue, Recovery Zone Facility Bonds, 0.31%*, 10/1/2040, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 8,000,000 | | | | 8,000,000 | |
| California 7.4% | |
| California, Beaumont Utility Authority Revenue, Wastewater Enterprise Project, Series A, 0.31%*, 9/1/2041, LOC: Union Bank of CA | | | 4,450,000 | | | | 4,450,000 | |
| California, Clipper Tax-Exempt Certificate Trust, Series 2009-66, 144A, 0.29%*, 5/15/2030, LIQ: State Street Bank & Trust Co. | | | 13,100,000 | | | | 13,100,000 | |
| California, Educational Facilities Authority Revenue, Series R-11734, 144A, 0.25%*, 6/1/2011, LIQ: Citibank NA | | | 8,910,000 | | | | 8,910,000 | |
| California, Inland Valley Development Agency, Tax Allocation, 0.3%*, 3/1/2027, LOC: Union Bank of CA | | | 32,695,000 | | | | 32,695,000 | |
| California, Statewide Communities Development Authority Revenue, Retirement Housing Foundation, 0.3%*, 9/1/2030, LOC: KBC Bank NV | | | 26,200,000 | | | | 26,200,000 | |
| California, Statewide Communities Development Authority, Multi-Family Housing Revenue: | | | | | | | | |
| Series 2680, 144A, 0.36%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 15,110,000 | | | | 15,110,000 | |
| Series 29G, 144A, AMT, 0.4%*, 5/1/2039, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 61,000,000 | | | | 61,000,000 | |
| Series 2681, 144A, AMT, 0.46%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 11,190,000 | | | | 11,190,000 | |
| California, Wells Fargo Stage Trust, Series 72C, 144A, 0.28%*, 8/15/2039, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 21,500,000 | | | | 21,500,000 | |
| Palo Alto, CA, General Obligation, Series R-11859, 144A, 0.26%*, 2/1/2018, LIQ: Citibank NA | | | 3,120,000 | | | | 3,120,000 | |
| | | | | 197,275,000 | |
| Colorado 3.5% | |
| Colorado, Cornerstar Metropolitan District, Special Revenue, 0.66%*, 12/1/2037, LOC: Compass Bank | | | 15,500,000 | | | | 15,500,000 | |
| Colorado, Housing & Finance Authority, Single Family, "I", Series B-2, 144A, AMT, 0.8%*, 11/1/2026, SPA: Dexia Credit Local | | | 18,350,000 | | | | 18,350,000 | |
| Colorado, Lowry Economic Redevelopment Authority Revenue, Series A, 1.0%*, 12/1/2020, LOC: Compass Bank | | | 5,000,000 | | | | 5,000,000 | |
| Colorado Springs, CO, Utilities Revenue, Series A, 0.8%*, 11/1/2023, SPA: Dexia Credit Local | | | 55,500,000 | | | | 55,500,000 | |
| | | | | 94,350,000 | |
| Delaware 0.5% | |
| Delaware, BB&T Municipal Trust, Series 5000, 144A, 0.34%*, 10/1/2028, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 13,020,062 | | | | 13,020,062 | |
| Florida 7.2% | |
| Alachua County, FL, Housing Finance Authority, Multi-Family Revenue, Santa Fe I Apartments, AMT, 0.31%*, 12/15/2038, LOC: Citibank NA | | | 3,440,000 | | | | 3,440,000 | |
| Broward County, FL, Housing Finance Authority, Multi-Family Housing Revenue, Series 51G, 144A, AMT, 0.29%*, 6/1/2046, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 28,520,000 | | | | 28,520,000 | |
| Florida, BB&T Municipal Trust: | |
| Series 1010, 144A, 0.29%*, 1/15/2019, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 6,670,000 | | | | 6,670,000 | |
| Series 1029, 0.34%*, 7/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,510,000 | | | | 10,510,000 | |
| Series 1012, 144A, 0.34%*, 11/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 9,825,000 | | | | 9,825,000 | |
| Florida, Capital Trust Agency Housing Revenue, Atlantic Housing Foundation, Series A, 0.26%*, 7/15/2024, INS: Fannie Mae, LIQ: Fannie Mae | | | 19,000,000 | | | | 19,000,000 | |
| Florida, State Board of Public Education: | |
| "A", 0.25%*, 6/1/2027, SPA: Citibank NA | | | 5,840,000 | | | | 5,840,000 | |
| Series 3834Z, 144A, 0.26%*, 12/1/2015, LIQ: JPMorgan Chase Bank | | | 9,000,000 | | | | 9,000,000 | |
| Highlands County, FL, Health Facilities Authority Revenue, Series II R-11564, 144A, 0.27%*, 11/15/2014, LIQ: Citibank NA | | | 9,365,000 | | | | 9,365,000 | |
| Hillsborough County, FL, Aviation Revenue, 0.27%, 5/12/2011 | | | 3,625,000 | | | | 3,625,000 | |
| Hillsborough County, FL, Housing Finance Authority, Multi-Family Revenue, Hunt Club Apartments, 0.3%*, 8/15/2041, LOC: SunTrust Bank | | | 5,445,000 | | | | 5,445,000 | |
| Hillsborough County, FL, School Board, Certificates of Participation, Master Lease, Series C, 0.23%*, 7/1/2030, INS: NATL, LOC: Wells Fargo Bank NA | | | 33,040,000 | | | | 33,040,000 | |
| Jacksonville, FL, Health Facilities Authority Hospital Revenue, Series A, 0.25%*, 8/15/2033, LOC: Bank of America NA | | | 8,200,000 | | | | 8,200,000 | |
| Lee County, FL, Industrial Development Authority, Health Care Facilities Revenue, Hope Hospice Project, 0.27%*, 10/1/2027, LOC: Northern Trust Co. | | | 21,000,000 | | | | 21,000,000 | |
| Palm Beach County, FL, Community Foundation, Palm Beach Project Revenue, 0.29%*, 3/1/2034, LOC: Northern Trust Co. | | | 4,750,000 | | | | 4,750,000 | |
| Pinellas County, FL, Educational Facilities Authority Revenue, Barry University Project, 0.31%*, 10/1/2037, LOC: Bank of America NA | | | 9,005,000 | | | | 9,005,000 | |
| Sarasota County, FL, Health Care Facilities Authority Revenue, Bay Village Project, 0.4%*, 12/1/2023, LOC: Bank of America NA | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 191,935,000 | |
| Georgia 2.8% | |
| Georgia, Main Street Natural Gas, Inc., Gas Project Revenue, Series A, 0.26%*, 8/1/2040, SPA: Royal Bank of Canada | | | 65,200,000 | | | | 65,200,000 | |
| Georgia, Private Colleges & Universities Authority Revenue, Mercer University Project, Series C, 0.27%*, 10/1/2031, LOC: Branch Banking & Trust | | | 8,580,000 | | | | 8,580,000 | |
| | | | | 73,780,000 | |
| Hawaii 0.3% | |
| Hawaii, Pacific Health Special Purpose Revenue, Series 6C, 144A, 0.29%*, 7/1/2040, LIQ: Wells Fargo Bank NA | | | 8,820,000 | | | | 8,820,000 | |
| Idaho 2.0% | |
| Idaho, State Tax Anticipation Notes, 144A, 2.0%, 6/30/2011 | | | 52,000,000 | | | | 52,135,343 | |
| Illinois 11.6% | |
| Chicago, IL, Board of Education, Dedicated Revenues, Series A-2, 0.26%*, 3/1/2026, LOC: Northern Trust Co. | | | 5,900,000 | | | | 5,900,000 | |
| Chicago, IL, General Obligation, Series 2008-068, 144A, 1.01%*, 1/1/2022, INS: AGMC, AMBAC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 11,480,000 | | | | 11,480,000 | |
| Chicago, IL, Metropolitan Water Reclamation District, Greater Chicago: | | | | | | | | |
| Series 2008-051, 144A, 0.86%*, 12/1/2028, LIQ: Dexia Credit Local | | | 5,360,000 | | | | 5,360,000 | |
| Series 2008-052, 144A, 0.86%*, 12/1/2035, LIQ: Dexia Credit Local | | | 25,110,000 | | | | 25,110,000 | |
| Cook County, IL, Catholic Theological Union Project Revenue, 0.31%*, 2/1/2035, LOC: Harris Trust & Savings Bank | | | 6,000,000 | | | | 6,000,000 | |
| Illinois, BB&T Municipal Trust, Series 5001, 144A, 0.34%*, 6/1/2020, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 17,314,484 | | | | 17,314,484 | |
| Illinois, Development Finance Authority, Industrial Project Revenue, Grecian Delight Foods Project, AMT, 0.49%*, 8/1/2019, LOC: LaSalle Bank NA | | | 1,765,000 | | | | 1,765,000 | |
| Illinois, Education Facility Authority Revenue, Series N, 0.3%, 6/1/2011 | | | 74,465,000 | | | | 74,465,000 | |
| Illinois, Finance Authority Industrial Development Revenue, Fitzpatrick Brothers, 0.27%*, 4/1/2033, LOC: Northern Trust Co. | | | 4,600,000 | | | | 4,600,000 | |
| Illinois, Finance Authority Revenue, "A", 144A, 0.25%*, 12/1/2042, LIQ: Citibank NA | | | 5,445,000 | | | | 5,445,000 | |
| Illinois, Finance Authority Revenue, Clare Oaks, Series C, 0.36%*, 11/1/2040, LOC: Sovereign Bank FSB | | | 27,680,000 | | | | 27,680,000 | |
| Illinois, Finance Authority Revenue, Northwestern University: | |
| Series A, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 14,000,000 | | | | 14,000,000 | |
| Series C, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 10,000,000 | | | | 10,000,000 | |
| Illinois, Finance Authority, Pollution Control Revenue, Commonwealth Edison Co., Series F, 144A, 0.25%*, 3/1/2017, LOC: JPMorgan Chase Bank | | | 3,700,000 | | | | 3,700,000 | |
| Illinois, State Toll Highway Authority Revenue, Senior Priority, Series A-2A, 0.29%*, 7/1/2030, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 15,000,000 | | | | 15,000,000 | |
| Illinois, State Wells Fargo Stage Trust, Series 47C, 144A, 0.29%*, 12/1/2024, INS: AGMC, LIQ: Wells Fargo Bank NA | | | 33,190,000 | | | | 33,190,000 | |
| Illinois, University of Illinois Revenue, "A", 144A, 0.27%*, 4/1/2035, INS: NATL, LIQ: Citibank NA | | | 14,300,000 | | | | 14,300,000 | |
| Mundelein, IL, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 0.54%*, 1/1/2015, LOC: Northern Trust Co. | | | 6,500,000 | | | | 6,500,000 | |
| Woodstock, IL, Multi-Family Housing Revenue, Willow Brooke Apartments, AMT, 0.29%*, 4/1/2042, LOC: Wells Fargo Bank NA | | | 25,905,000 | | | | 25,905,000 | |
| | | | | 307,714,484 | |
| Indiana 0.6% | |
| Indiana, Health & Educational Facility, Financing Authority Revenue, Greenwood Village South Project, Series A, 0.36%*, 5/1/2036, LOC: Sovereign Bank FSB | | | 6,155,000 | | | | 6,155,000 | |
| Terre Haute, IN, Westminster Village Revenue, Series A, 0.36%*, 8/1/2036, LOC: Sovereign Bank FSB | | | 9,245,000 | | | | 9,245,000 | |
| | | | | 15,400,000 | |
| Iowa 0.6% | |
| Iowa, Finance Authority, Multi-Family Revenue, Housing Windsor on River, Series A, AMT, 0.29%*, 5/1/2042, LOC: Wells Fargo Bank NA | | | 17,000,000 | | | | 17,000,000 | |
| Kansas 1.7% | |
| Kansas, State Department of Transportation Highway Revenue, Series D, 0.37%*, 3/1/2012, LIQ: Dexia Credit Local | | | 5,040,000 | | | | 5,040,000 | |
| Kansas, State Development Finance Authority, Multi-Family Revenue, Oak Ridge Park II Project, Series X, AMT, 0.34%*, 12/1/2036, LOC: US Bank NA | | | 3,650,000 | | | | 3,650,000 | |
| Lenexa, KS, Revenue Bond, Series 2007-302, 144A, 0.38%*, 2/1/2012, LIQ: Bank of America NA | | | 11,565,000 | | | | 11,565,000 | |
| Wichita, KS, General Obligation, Series 240, 0.45%, 9/15/2011 | | | 23,800,000 | | | | 23,800,000 | |
| | | | | 44,055,000 | |
| Kentucky 0.2% | |
| Mason County, KY, Pollution Control Revenue, East Kentucky Power Corp., Inc., Series B-2, 0.85%*, 10/15/2014, SPA: National Rural Utilities Cooperative Finance Corp. | | | 4,500,000 | | | | 4,500,000 | |
| Louisiana 0.9% | |
| Lake Charles, LA, Harbor & Terminal District Revenue, Lake Charles Cogeneration, 0.37%, Mandatory Put 5/31/2011 @ 100, 11/1/2040 | | | 20,000,000 | | | | 20,000,000 | |
| Louisiana, Public Facilities Authority Revenue, C-Port LLC Project, Series C, 0.29%*, 10/1/2028, LOC: Bank of America NA | | | 4,950,000 | | | | 4,950,000 | |
| | | | | 24,950,000 | |
| Maine 0.4% | |
| Maine, State Housing Authority Mortgage Purchase, Series B, AMT, 0.31%*, 11/15/2041, SPA: KBC Bank NV | | | 10,000,000 | | | | 10,000,000 | |
| Maryland 0.8% | |
| Baltimore, MD, Municipal Securities Trust Receipts, SGA 152, "A", 144A, 0.3%*, 7/1/2020, INS: NATL, LOC: Societe Generale | | | 10,000,000 | | | | 10,000,000 | |
| Montgomery County, MD, 0.26%, 5/12/2011 | | | 11,400,000 | | | | 11,400,000 | |
| | | | | 21,400,000 | |
| Massachusetts 3.2% | |
| Massachusetts, Bay Transportation Authority, General Transportation Systems, 0.6%*, 3/1/2030, SPA: Dexia Credit Local | | | 11,000,000 | | | | 11,000,000 | |
| Massachusetts, Health & Education University Revenue, 0.26%, 7/8/2011 | | | 8,500,000 | | | | 8,500,000 | |
| Massachusetts, Macon Trust, Series 2007-310, 144A, 0.38%*, 6/15/2012, LIQ: Bank of America NA, LOC: Bank of America NA | | | 7,620,000 | | | | 7,620,000 | |
| Massachusetts, State Development Finance Agency Revenue, New Bedford Waste Services LLC, AMT, 0.32%*, 6/1/2021, LOC: Comerica Bank | | | 3,280,000 | | | | 3,280,000 | |
| Massachusetts, State Development Finance Agency Revenue, Northfield Mount Hermon, 0.28%*, 10/1/2042, LOC: JPMorgan Chase Bank | | | 4,700,000 | | | | 4,700,000 | |
| Massachusetts, State Revenue Anticipation Notes, Series C, 2.0%, 6/23/2011 | | | 50,000,000 | | | | 50,121,935 | |
| | | | | 85,221,935 | |
| Michigan 6.7% | |
| BlackRock MuniYield Michigan Quality Fund, Inc., Series W-7-1446, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,000,000 | | | | 15,000,000 | |
| Michigan, Finance Authority Revenue, State Aid Notes, Series D-3, 144A, 2.0%, 8/22/2011, LOC: Scotiabank | | | 43,000,000 | | | | 43,215,907 | |
| Michigan, RBC Municipal Products, Inc. Trust, Series L-25, 144A, AMT, 0.29%*, 9/1/2033, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 50,000,000 | | | | 50,000,000 | |
| Michigan, State Hospital Finance Authority Revenue, Ascension Health Senior Credit Group: | | | | | | | | |
| Series F-7, 0.35%*, 11/15/2047 | | | 11,200,000 | | | | 11,200,000 | |
| Series F-6, 0.35%**, 11/15/2049 | | | 10,000,000 | | | | 10,000,000 | |
| Series F-8, 0.35%**, 11/15/2049 | | | 5,000,000 | | | | 5,000,000 | |
| Series F-2, 0.45%, Mandatory Put 3/1/2012 @ 100, 11/15/2047 | | | 35,000,000 | | | | 35,000,000 | |
| Michigan, State Strategic Fund Ltd. Obligation Revenue, Kroger Co. Recovery Zone Facility, 0.32%*, 1/1/2026, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 178,915,907 | |
| Minnesota 0.3% | |
| Coon Rapids, MN, Industrial Development Revenue, Kurt Manufacturing Project: | | | | | | | | |
| AMT, 0.29%*, 11/1/2027, LOC: US Bank NA | | | 5,000,000 | | | | 5,000,000 | |
| AMT, 0.44%*, 11/1/2017, LOC: US Bank NA | | | 1,635,000 | | | | 1,635,000 | |
| | | | | 6,635,000 | |
| Mississippi 0.9% | |
| Mississippi, Redstone Partners Floaters/Residuals Trust: | |
| Series C, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 9,350,000 | | | | 9,350,000 | |
| Series B, AMT, 0.6%*, 12/1/2047, LIQ: Wells Fargo Bank NA, LOC: Wells Fargo Bank NA | | | 5,696,368 | | | | 5,696,368 | |
| Series A, AMT, 0.6%*, 4/1/2048, LOC: Wells Fargo Bank NA | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 24,546,368 | |
| Missouri 0.9% | |
| Missouri, State Development Finance Board, 0.3%, 5/24/2011 | | | 12,114,000 | | | | 12,114,000 | |
| Missouri, State Health & Educational Facilities Authority Revenue, St. Louis University, Series B-2, 0.2%*, 10/1/2035, LOC: Bank of America NA | | | 5,765,000 | | | | 5,765,000 | |
| Platte County, MO, Industrial Development Authority Revenue, Complete Home Concepts, Series A, AMT, 0.29%*, 1/1/2039, LOC: Columbian Bank | | | 6,800,000 | | | | 6,800,000 | |
| | | | | 24,679,000 | |
| Nebraska 0.4% | |
| Washington County, NE, Wastewater & Solid Waste Disposal Facilities Revenue, Series 24C, 144A, AMT, 0.36%*, 4/1/2035, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 9,670,000 | | | | 9,670,000 | |
| Nevada 0.5% | |
| Nevada, Housing Division, Single Family Mortgage Revenue: | |
| Series B, AMT, 0.32%*, 4/1/2042, INS: Fannie Mae, Freddie Mac & Ginnie Mae, SPA: JPMorgan Chase Bank | | | 8,000,000 | | | | 8,000,000 | |
| Series A, AMT, 0.42%*, 10/1/2039, INS: Fannie Mae, Freddie Mac & Ginnie Mae | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 12,700,000 | |
| New Hampshire 0.2% | |
| New Hampshire, Health & Education Facilities Authority Revenue, Easter Seals Rehabilitation Center, Series A, 0.27%*, 12/1/2034, LOC: Citizens Bank of NH | | | 4,600,000 | | | | 4,600,000 | |
| New Jersey 0.7% | |
| BlackRock MuniYield New Jersey Quality Fund, Inc., Series W-7-1022, AMT, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,200,000 | | | | 15,200,000 | |
| New Jersey, Economic Development Authority, Industrial Development Revenue, CST-Products LLC Project, AMT, 0.43%*, 4/1/2026, LOC: National Bank of Canada | | | 2,600,000 | | | | 2,600,000 | |
| | | | | 17,800,000 | |
| New Mexico 2.7% | |
| New Mexico, State Tax & Revenue Anticipation Notes: | |
| 1.5%, 6/30/2011 | | | 25,000,000 | | | | 25,049,099 | |
| 2.0%, 6/30/2011 | | | 25,000,000 | | | | 25,069,593 | |
| Santa Fe, NM, Gross Receipts Tax Revenue, Wastewater Systems, Series B, 0.28%*, 6/1/2022, LOC: BNP Paribas | | | 15,900,000 | | | | 15,900,000 | |
| University of New Mexico, Systems Improvement Revenues, 0.27%*, 6/1/2026, SPA: JPMorgan Chase Bank | | | 5,820,000 | | | | 5,820,000 | |
| | | | | 71,838,692 | |
| New York 7.9% | |
| Albany, NY, Industrial Development Agency, Civic Facility Revenue, The College of Saint Rose, Series A, 0.35%*, 7/1/2037, INS: NATL, LOC: Bank of America NA | | | 9,820,000 | | | | 9,820,000 | |
| Hempstead, NY, Industrial Development Agency Revenue, Series 92G, 144A, AMT, 0.4%*, 10/1/2045, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 23,775,000 | | | | 23,775,000 | |
| Monroe County, NY, Industrial Development Corp. Revenue, St. Ann's Home Aged Project, 0.26%*, 12/1/2040, LOC: HSBC Bank USA NA | | | 6,105,000 | | | | 6,105,000 | |
| Nassau County, NY, Industrial Development Agency Revenue, Series 75G, 144A, AMT, 0.28%*, 12/1/2033, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 29,995,000 | | | | 29,995,000 | |
| New York, Liberty Development Corp., World Trade Center, Series A-2, 144A, 0.35%, Mandatory Put 2/1/2012 @ 100, 12/1/2049 | | | 11,000,000 | | | | 11,000,000 | |
| New York, State Energy Research & Development Authority Facilities Revenue, Consolidated Edison Co. of New York, Inc., Series A-3, 144A, 0.27%*, 5/1/2039, LOC: Mizuho Corporate Bank | | | 15,000,000 | | | | 15,000,000 | |
| New York, State Mortgage Agency, Homeowner Mortgage Revenue: | | | | | | | | |
| Series 135, AMT, 0.5%*, 4/1/2037, SPA: Dexia Credit Local | | | 5,500,000 | | | | 5,500,000 | |
| Series 157, 0.75%*, 4/1/2047, SPA: Dexia Credit Local | | | 11,200,000 | | | | 11,200,000 | |
| New York, Wells Fargo Stage Trust, Series 4C, 144A, 0.29%*, 9/1/2040, LIQ: Wells Fargo Bank NA | | | 11,540,000 | | | | 11,540,000 | |
| New York City, NY, Municipal Water Finance Authority, Water & Sewer Revenue, Series F-2, 0.26%*, 6/15/2033, SPA: JPMorgan Chase Bank | | | 5,000,000 | | | | 5,000,000 | |
| New York City, NY, Transitional Finance Authority Revenue, Series 3866, 144A, 0.27%*, 8/1/2011, LIQ: JPMorgan Chase & Co. | | | 60,000,000 | | | | 60,000,000 | |
| Oyster Bay, NY, Bond Anticipation Notes, 2.0%, 3/9/2012 | | | 21,800,000 | | | | 22,089,387 | |
| | | | | 211,024,387 | |
| North Carolina 4.6% | |
| Cleveland County, NC, Industrial Facilities & Pollution Control Financing Authority, Curtiss-Wright Flight Systems, AMT, 0.35%*, 11/1/2023, LOC: Bank of America NA | | | 8,400,000 | | | | 8,400,000 | |
| North Carolina, BB&T Municipal Trust: | |
| Series 1027, 144A, 0.34%*, 3/1/2016, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,725,000 | | | | 10,725,000 | |
| Series 1032, 0.34%*, 1/7/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 11,625,000 | | | | 11,625,000 | |
| Series 1008, 144A, 0.34%*, 3/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,865,000 | | | | 5,865,000 | |
| Series 1011, 144A, 0.34%*, 4/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 7,520,000 | | | | 7,520,000 | |
| Series 1024, 144A, 0.34%*, 5/31/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 4,860,000 | | | | 4,860,000 | |
| Series 1009, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 17,075,000 | | | | 17,075,000 | |
| Series 1025, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,800,000 | | | | 10,800,000 | |
| North Carolina, Capital Educational Facilities Finance Agency Revenue, High Point University Project, 0.29%*, 12/1/2028, LOC: Branch Banking & Trust | | | 5,555,000 | | | | 5,555,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Campbell University, 0.29%*, 10/1/2034, LOC: Branch Banking & Trust | | | 5,845,000 | | | | 5,845,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Salem Academy & College Project, 0.29%*, 8/1/2030, LOC: Branch Banking & Trust | | | 7,200,000 | | | | 7,200,000 | |
| North Carolina, Medical Care Commission, Health Care Facilities Revenue, First Mortgage Deerfield, Series B, 0.29%*, 11/1/2038, LOC: Branch Banking & Trust | | | 10,035,000 | | | | 10,035,000 | |
| Person County, NC, Industrial Facilities & Pollution Control Financing Authority, Certainteed Gypsum, Inc., 0.24%*, 11/1/2035, LOC: Credit Industrial et Commercial | | | 16,625,000 | | | | 16,625,000 | |
| | | | | 122,130,000 | |
| Ohio 0.6% | |
| Ohio, Clipper Tax-Exempt Certificate Trust, Certificate of Participation, Series 2009-28, 144A, AMT, 0.38%*, 3/1/2035, LIQ: State Street Bank & Trust Co. | | | 2,460,000 | | | | 2,460,000 | |
| Ohio, Redstone Partners Floaters/Residuals Trust, Housing Finance Authority: | | | | | | | | |
| Series C, 144A, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 9,780,000 | | | | 9,780,000 | |
| Series D, 144A, AMT, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 4,340,000 | | | | 4,340,000 | |
| | | | | 16,580,000 | |
| Oregon 6.2% | |
| Oregon, State Tax Anticipation Notes, Series A, 144A, 2.0%, 6/30/2011 | | | 152,000,000 | | | | 152,400,629 | |
| Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project: | | | | | | | | |
| 0.29%*, 5/1/2034, LOC: Bank of America NA | | | 8,515,000 | | | | 8,515,000 | |
| 0.29%*, 5/1/2037, LOC: Bank of America NA | | | 5,385,000 | | | | 5,385,000 | |
| | | | | 166,300,629 | |
| Other 1.3% | |
| BlackRock Municipal Intermediate Duration Fund, Inc., Series W-7-2871, 144A, AMT, 0.51%**, 3/1/2041, LIQ: JPMorgan Chase Bank | | | 35,600,000 | | | | 35,600,000 | |
| Pennsylvania 1.3% | |
| Adams County, PA, Industrial Development Authority Revenue, Brethren Home Community Project, 0.3%*, 6/1/2032, LOC: PNC Bank NA | | | 7,180,000 | | | | 7,180,000 | |
| Allegheny County, PA, RBC Municipal Products, Inc. Trust Certificates, Series E-16, 144A, 0.27%*, 4/15/2039, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 22,490,000 | | | | 22,490,000 | |
| Beaver County, PA, Industrial Development Authority, Pollution Control Revenue, FirstEnergy Generation Corp., 0.22%*, 4/1/2041, LOC: UBS AG | | | 5,700,000 | | | | 5,700,000 | |
| | | | | 35,370,000 | |
| Puerto Rico 0.2% | |
| Puerto Rico, Commonwealth Highway & Transportation Authority Revenue, Series DCL 019, 144A, 0.9%*, 1/1/2029, INS: AGMC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 6,000,000 | | | | 6,000,000 | |
| South Carolina 0.4% | |
| South Carolina, BB&T Municipal Trust, Series 1013, 144A, 0.34%*, 1/1/2020, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,755,000 | | | | 5,755,000 | |
| South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Upper South Carolina, Inc. Project, 0.29%*, 9/1/2028, LOC: Branch Banking & Trust | | | 6,105,000 | | | | 6,105,000 | |
| | | | | 11,860,000 | |
| Tennessee 0.4% | |
| Blount County, TN, Public Building Authority, Local Government Public Improvement, Series E-5-B, 0.29%*, 6/1/2042, LOC: Branch Banking & Trust | | | 9,300,000 | | | | 9,300,000 | |
| Texas 11.0% | |
| Atascosa County, TX, Industrial Development Corp., Pollution Control Revenue, San Miguel Electric Cooperative, Inc., 0.4%*, 6/30/2020, GTY: National Rural Utilities Cooperative Finance Corp., SPA: National Rural Utilities Cooperative Finance Corp. | | | 44,200,000 | | | | 44,200,000 | |
| East Texas, Housing Finance, Redstone Partners Floaters/Residuals Trust, Series D, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 7,930,000 | | | | 7,930,000 | |
| Harris County, TX, Cultural Education Facilities Finance Corp. Revenue, Memorial Hermann Hospital Systems, Series D-3, 0.27%*, 6/1/2029, LOC: Bank of America NA | | | 14,900,000 | | | | 14,900,000 | |
| Harris County, TX, Health Facilities Development Corp., Hospital Revenue, Baylor College of Medicine, Series B, 0.24%*, 11/15/2047, LOC: Northern Trust Co. | | | 8,100,000 | | | | 8,100,000 | |
| Katy, TX, Independent School Building District, 0.27%*, 8/15/2033, SPA: Bank of America NA | | | 8,300,000 | | | | 8,300,000 | |
| North East, TX, Independent School District, Series 002, 144A, 0.65%*, 2/1/2029, LIQ: Dexia Credit Local | | | 11,325,000 | | | | 11,325,000 | |
| Tarrant County, TX, Redstone Partners Floaters/Residuals Trust, Series A, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 12,190,000 | | | | 12,190,000 | |
| Texas, Department of Housing, Series 2008-3022X, 144A, AMT, 0.4%*, 9/1/2032, INS: Fannie Mae, Freddie Mac & Ginnie Mae, LIQ: Bank of America NA | | | 4,980,000 | | | | 4,980,000 | |
| Texas, North East Independent School District, "A", 144A, 0.26%*, 8/1/2037, LIQ: Citibank NA | | | 8,935,000 | | | | 8,935,000 | |
| Texas, RBC Municipal Products, Inc. Trust, Series L-46, 144A, AMT, 0.29%*, 12/1/2034, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 52,995,000 | | | | 52,995,000 | |
| Texas, State General Obligation, "A", 144A, 0.26%*, 4/1/2029, LIQ: Citibank NA | | | 8,685,000 | | | | 8,685,000 | |
| Texas, State Tax & Revenue Anticipation Notes: | |
| Series 3812, 144A, 0.27%*, 8/31/2011, LIQ: JPMorgan Chase & Co. | | | 29,500,000 | | | | 29,500,000 | |
| Series 3813, 144A, 0.3%*, 8/31/2011, LIQ: JPMorgan Chase Bank | | | 38,000,000 | | | | 38,000,000 | |
| 2.0%, 8/31/2011 | | | 25,000,000 | | | | 25,135,681 | |
| Texas A&M University Revenue, 144A, 0.26%*, 5/15/2018, LIQ: Citibank NA | | | 2,800,000 | | | | 2,800,000 | |
| Texas City, TX, Industrial Development Corp. Revenue, Del Papa Realty Holdings, 0.28%*, 1/1/2051, LOC: Bank of America NA | | | 10,300,000 | | | | 10,300,000 | |
| Weslaco, TX, Health Facilities Development, Knapp Medical Center, Series A, 0.91%*, 6/1/2038, LOC: Compass Bank | | | 4,625,000 | | | | 4,625,000 | |
| | | | | 292,900,681 | |
| Vermont 0.2% | |
| Vermont, Educational & Health Buildings Financing Agency Revenue, Fletcher Allen Health Care, Series A, 0.24%*, 12/1/2030, LOC: TD Bank NA | | | 4,070,000 | | | | 4,070,000 | |
| Virginia 1.2% | |
| Arlington County, VA, Industrial Development Authority, Multi-Family Revenue, Series A, AMT, 0.31%*, 8/1/2047, INS: Freddie Mac, LIQ: Freddie Mac | | | 3,000,000 | | | | 3,000,000 | |
| Virginia, Federal Home Loan Mortgage Corp., Multi-Family Variable Rate Certificates, AMT, 0.31%*, 7/15/2050, LIQ: Freddie Mac | | | 19,085,000 | | | | 19,085,000 | |
| Virginia, RBC Municipal Products, Inc. Trust, Series C-2, 144A, AMT, 0.38%*, 1/1/2014, LOC: Royal Bank of Canada, SPA: Royal Bank of Canada | | | 9,050,000 | | | | 9,050,000 | |
| | | | | 31,135,000 | |
| Washington 1.3% | |
| University of Washington, 0.28%, 5/10/2011 | | | 23,000,000 | | | | 23,000,000 | |
| Washington, State Health Care Facilities Authority, Swedish Health Services, Series C, 0.25%*, 11/15/2046, LOC: Citibank NA | | | 3,900,000 | | | | 3,900,000 | |
| Washington, State Higher Education Facilities Authority Revenue, Seattle University Project, Series A, 0.27%*, 5/1/2028, LOC: US Bank NA | | | 8,545,000 | | | | 8,545,000 | |
| | | | | 35,445,000 | |
| West Virginia 3.2% | |
| Cabell County, WV, University Facilities Revenue, Provident Group Marshall Properties, Series A, 0.27%*, 7/1/2039, LOC: Bank of America NA | | | 20,000,000 | | | | 20,000,000 | |
| West Virginia, Public Energy Authority Revenue, Morgantown Association Project, AMT, 0.4%*, 7/1/2017, LOC: Dexia Credit Local | | | 65,000,000 | | | | 65,000,000 | |
| | | | | 85,000,000 | |
| Wisconsin 0.6% | |
| Plymouth, WI, Industrial Development Revenue, Masters Gallery Foods, Series A, AMT, 0.45%*, 5/1/2038, LOC: Wells Fargo Bank NA | | | 5,300,000 | | | | 5,300,000 | |
| Wisconsin, State Health & Educational Facilities Authority Revenue, Prohealth Care, Inc., Series B, 0.3%*, 2/1/2034, LOC: Chase Manhattan Bank | | | 11,225,000 | | | | 11,225,000 | |
| | | | | 16,525,000 | |
| Wyoming 0.6% | |
| Sweetwater County, WY, 0.3%, 6/10/2011 | | | 14,775,000 | | | | 14,775,000 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $2,655,195,212)+ | | | 99.8 | | | | 2,655,195,212 | |
| Other Assets and Liabilities, Net | | | 0.2 | | | | 6,012,980 | |
| Net Assets | | | 100.0 | | | | 2,661,208,192 | |
* Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of April 30, 2011.
** These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
+ The cost for federal income tax purposes was $2,655,195,212.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
AGMC: Assured Guaranty Municipal Corp.
AMBAC: Ambac Financial Group, Inc.
AMT: Subject to alternative minimum tax.
FSB: Federal Savings Bank
GTY: Guaranty Agreement
INS: Insured
LIQ: Liquidity Facility
LOC: Letter of Credit
NATL: National Public Finance Guarantee Corp.
SPA: Standby Bond Purchase Agreement
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Municipal Investments (a) | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
| Total | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
(a) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Tax-Exempt Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,655,195,212 | |
| Receivable for investments sold | | | 4,620,000 | |
| Receivable for Fund shares sold | | | 934,515 | |
| Interest receivable | | | 7,077,878 | |
| Due from Advisor | | | 4,095 | |
| Other assets | | | 105,818 | |
| Total assets | | | 2,667,937,518 | |
| Liabilities | |
| Cash overdraft | | | 4,581,713 | |
| Payable for Fund shares redeemed | | | 918,070 | |
| Distributions payable | | | 62,767 | |
| Accrued management fee | | | 133,641 | |
| Other accrued expenses and payables | | | 1,033,135 | |
| Total liabilities | | | 6,729,326 | |
| Net assets, at value | | $ | 2,661,208,192 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 676,116 | |
| Paid-in capital | | | 2,660,532,076 | |
| Net assets, at value | | $ | 2,661,208,192 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Tax-Exempt Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($10,598,969 ÷ 10,595,483 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($75,044,850 ÷ 75,020,161 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Cash Institutional Shares Net Asset Value, offering and redemption price per share ($1,492,310,747 ÷ 1,491,819,969 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Money Fund Net Asset Value, offering and redemption price per share ($366,030,472 ÷ 365,909,997 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Free Money Fund Class S Net Asset Value, offering and redemption price per share ($124,763,547 ÷ 124,722,636 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($81,988,417 ÷ 81,961,452 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Exempt Cash Managed Shares Net Asset Value, offering and redemption price per share ($127,448,310 ÷ 127,406,394 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Free Investment Class Net Asset Value, offering and redemption price per share ($383,022,880 ÷ 382,896,908 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Tax-Exempt Portfolio | |
Income: Interest | | $ | 12,045,887 | |
Expenses: Management fee | | | 1,955,813 | |
| Administration fee | | | 3,350,131 | |
| Services to shareholders | | | 1,364,156 | |
| Custodian fee | | | 68,016 | |
| Distribution and service fees | | | 2,569,390 | |
| Professional fees | | | 150,070 | |
| Trustees' fees and expenses | | | 102,796 | |
| Reports to shareholders | | | 197,069 | |
| Registration fees | | | 179,038 | |
| Other | | | 177,139 | |
| Total expenses before expense reductions | | | 10,113,618 | |
| Expense reductions | | | (2,277,709 | ) |
| Total expenses after expense reductions | | | 7,835,909 | |
| Net investment income | | | 4,209,978 | |
| Net realized gain (loss) from investments | | | 26,953 | |
| Net increase (decrease) in net assets resulting from operations | | $ | 4,236,931 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Tax-Exempt Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 4,209,978 | | | $ | 6,786,569 | |
| Net realized gain (loss) | | | 26,953 | | | | 42,867 | |
| Net increase in net assets resulting from operations | | | 4,236,931 | | | | 6,829,436 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (1,440 | ) | | | (2,046 | ) |
| Davidson Cash Equivalent Shares | | | (8,101 | ) | | | (9,092 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (3,424,889 | ) | | | (5,359,767 | ) |
| DWS Tax-Exempt Money Fund | | | (551,022 | ) | | | (1,068,021 | ) |
| DWS Tax-Free Money Fund Class S | | | (156,176 | ) | | | (283,931 | ) |
| Premier Money Market Shares | | | (1,265 | ) | | | (24,737 | ) |
| Service Shares | | | (7,236 | ) | | | (5,804 | ) |
| Tax-Exempt Cash Managed Shares | | | (18,703 | ) | | | (160,260 | ) |
| Tax-Free Investment Class | | | (41,260 | ) | | | (198,503 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (597 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (2,251 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | — | | | | (74,322 | ) |
| DWS Tax-Exempt Money Fund | | | — | | | | (13,853 | ) |
| DWS Tax-Free Money Fund Class S | | | — | | | | (4,326 | ) |
| Premier Money Market Shares | | | — | | | | (782 | ) |
| Service Shares | | | — | | | | (1,849 | ) |
| Tax-Exempt Cash Managed Shares | | | — | | | | (7,679 | ) |
| Tax-Free Investment Class | | | — | | | | (14,341 | ) |
| Total distributions | | | (4,210,092 | ) | | | (7,232,161 | ) |
Fund share transactions: Proceeds from shares sold | | | 9,995,553,494 | | | | 11,211,632,894 | |
| Reinvestment of distributions | | | 2,851,124 | | | | 5,434,005 | |
| Cost of shares redeemed | | | (10,411,552,190 | ) | | | (11,989,083,579 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (413,147,572 | ) | | | (772,016,680 | ) |
| Increase (decrease) in net assets | | | (413,120,733 | ) | | | (772,419,405 | ) |
| Net assets at beginning of period | | | 3,074,328,925 | | | | 3,846,748,330 | |
| Net assets at end of period (including undistributed net investment income of $676,116 and $649,277, respectively) | | $ | 2,661,208,192 | | | $ | 3,074,328,925 | |
The accompanying notes are an integral part of the financial statements.
Tax-Exempt Portfolio Capital Assets Funds Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .008 | | | | .024 | | | | .026 | |
| Net realized and unrealized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | (.000 | )* |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .008 | | | | .024 | | | | .026 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.008 | ) | | | (.024 | ) | | | (.026 | ) |
| Net realized gain | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.008 | ) | | | (.024 | ) | | | (.026 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .01 | | | | .01 | | | | .83 | | | | 2.38 | | | | 2.64 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 11 | | | | 18 | | | | 26 | | | | 17 | | | | 18 | |
| Ratio of expenses before expense reductions (%) | | | 1.02 | | | | 1.03 | | | | 1.03 | | | | 1.02 | | | | 1.04 | |
| Ratio of expenses after expense reductions (%) | | | .35 | | | | .46 | | | | .96 | | | | 1.00 | | | | 1.00 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | .82 | | | | 2.32 | | | | 2.61 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three funds: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio (the "Funds").
Money Market Portfolio offers six classes of shares: Capital Assets Funds Shares, Capital Assets Funds Preferred Shares, Davidson Cash Equivalent Shares, Davidson Cash Equivalent Plus Shares, Premium Reserve Money Market Shares and Service Shares. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Government & Agency Securities Portfolio offers seven 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 and Service Shares.
Tax-Exempt Portfolio offers eight 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, Service Shares, Tax-Exempt Cash Managed Shares and Tax-Free Investment Class. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
The financial highlights for all classes of shares, other than Capital Assets Funds Shares and Capital Assets Funds Preferred Shares, are provided separately and are available upon request.
Each Fund's investment income, realized gains and losses, and certain Fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of that Fund, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
Each Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Funds in the preparation of their financial statements.
Security Valuation. Various inputs are used in determining the value of each Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including each Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The Funds value all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Repurchase Agreements. Each Fund may enter into repurchase agreements with certain banks and broker/dealers whereby each Fund, through its custodian or a sub-custodian bank, receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is equal to at least the principal amount of the repurchase price plus accrued interest. The custodial bank holds the collateral in a separate account until the agreement matures. If the value of the securities falls below the principal amount of the repurchase agreement plus accrued interest, the financial institution deposits additional collateral by the following business day. If the financial institution either fails to deposit the required additional collateral or fails to repurchase the securities as agreed, the Funds have the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Funds' claims on the collateral may be subject to legal proceedings.
Federal Income Taxes. Each of the Funds' policies is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders.
At April 30, 2011, DWS Government & Agency Securities Portfolio had a net tax basis capital loss carryforward of approximately $602,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until April 30, 2019 (the expiration date), whichever occurs first.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the "Act") was enacted. Under the Act, net capital losses may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses. As a result of this ordering rule, pre-enactment capital loss carryforwards may expire unused, whereas under the previous rules these losses may have been utilized. This change is effective for fiscal years beginning after the date of enactment.
The Funds have reviewed the tax positions for the open tax years as of April 30, 2011 and have determined that no provision for income tax is required in the Funds' financial statements. The Funds' federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income. Net investment income of each Fund is declared as a daily dividend and is distributed to shareholders monthly. Each Fund may take into account capital gains and losses in its daily dividend declarations. Each Fund may also make additional distributions for tax purposes if necessary.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Funds.
At April 30, 2011, the Funds' components of distributable earnings on a tax basis are as follows:
Money Market Portfolio: Undistributed ordinary income* | | $ | 39,083 | |
Government & Agency Securities Portfolio: Undistributed ordinary income* | | $ | 307,749 | |
| Capital loss carryforwards | | $ | (602,000 | ) |
Tax-Exempt Portfolio: Undistributed tax-exempt income* | | $ | 738,883 | |
In addition, the tax character of distributions paid to shareholders by each Fund is summarized as follows:
| | | Years Ended April 30, | |
| Portfolio | | 2011 | | | 2010 | |
Money Market Portfolio: Distributions from ordinary income* | | $ | 399,900 | | | $ | 2,172,594 | |
Government & Agency Securities Portfolio: Distributions from ordinary income* | | $ | 2,329,820 | | | $ | 20,222,001 | |
Tax-Exempt Portfolio: Distributions from tax-exempt income | | $ | 4,210,092 | | | $ | 7,201,436 | |
| Distributions from long-term capital gains | | $ | — | | | $ | 30,725 | |
* For tax purposes, short-term capital gains distributions are considered ordinary income distributions.
Expenses. Expenses of the Trust arising in connection with a specific Fund are allocated to that Fund. Other Trust expenses which cannot be directly attributed to a Fund are apportioned pro rata on the basis of relative net assets among the Funds in the Trust.
Contingencies. In the normal course of business, the Funds may enter into contracts with service providers that contain general indemnification clauses. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet been made. However, based on experience, the Funds expect the risk of loss to be remote.
Other. Investment transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
2. Related Parties
Management Agreement for Money Market Portfolio. Under an Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of Money Market Portfolio in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Investment Management Agreement to the Money Market Portfolio. The Money Market Portfolio pays a monthly management fee based on the combined average daily net assets of the three Funds and allocated to Money Market Portfolio based on its relative net assets, computed and accrued daily and payable monthly, at 1/12 of the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .220 | % |
| Next $500 million of such net assets | | | .200 | % |
| Next $1 billion of such net assets | | | .175 | % |
| Next $1 billion of such net assets | | | .160 | % |
| Over $3 billion of such net assets | | | .150 | % |
Management Agreement for Government & Agency Securities Portfolio and Tax-Exempt Portfolio. Under an Amended and Restated Investment Management Agreement with the Advisor, the Advisor directs the investments of Government & Agency Securities Portfolio and Tax-Exempt Portfolio in accordance with their respective investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by each Fund.
The Government & Agency Securities Portfolio and Tax-Exempt Portfolio pay a monthly management fee based on the combined average daily net assets of the three Funds and allocated to Government & Agency Securities Portfolio and Tax-Exempt Portfolio based on their relative net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .120 | % |
| Next $500 million of such net assets | | | .100 | % |
| Next $1 billion of such net assets | | | .075 | % |
| Next $1 billion of such net assets | | | .060 | % |
| Over $3 billion of such net assets | | | .050 | % |
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 0.05% of the Government & Agency Securities Portfolio's average daily net assets.
For the period from May 1, 2010 through September 30, 2011, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the Capital Assets Funds Shares of the Tax-Exempt Portfolio, and for Capital Assets Funds Preferred Shares of the Money Market Portfolio to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 1.03% and 0.60%, respectively.
The Advisor has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
Accordingly, for the year ended April 30, 2011, the Advisor waived a portion of its management fee on the Government & Agency Securities Portfolio aggregating $713,093, and the amount charged aggregated $1,793,022.
For the year ended April 30, 2011, the Funds incurred management fees equivalent to the following annual effective rates of each Fund's average daily net assets:
| Fund | Annual Effective Rate |
| Money Market Portfolio | .16% |
| Government & Agency Securities Portfolio | .04% |
| Tax-Exempt Portfolio | .06% |
In addition, the Advisor and Pension Financial Services, Inc., the sole sub-distributor, have agreed to voluntarily waive additional expenses. These waivers may be changed or terminated at any time without notice. Under these arrangements, certain expenses were waived on Capital Assets Funds Shares for Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio, and on Capital Assets Funds Preferred Shares for Money Market Portfolio.
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Government & Agency Securities Portfolio and Tax-Exempt Portfolio. For all services provided under the Administrative Services Agreement, each of these two Funds pays the Advisor an annual fee ("Administration Fee") of 0.10% of each of these two Funds' average daily net assets, computed and accrued daily and payable monthly. For the year ended April 30, 2011, the Administration Fee from the Government & Agency Securities Portfolio and the Tax-Exempt Portfolio was as follows:
| Fund | | Administration Fee | | | Unpaid at April 30, 2011 | |
| Government & Agency Securities Portfolio | | $ | 4,222,727 | | | $ | 388,699 | |
| Tax-Exempt Portfolio | | $ | 3,350,131 | | | $ | 226,253 | |
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Funds. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Funds. For the year ended April 30, 2011, the amounts charged to the Funds by DISC were as follows:
| Money Market Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 2,080,639 | | | $ | 876,994 | | | $ | 307,215 | |
| Capital Assets Funds Preferred Shares | | | 39,377 | | | | 5,147 | | | | 1,069 | |
| Davidson Cash Equivalent Shares | | | 40,021 | | | | 16,669 | | | | 6,168 | |
| Davidson Cash Equivalent Plus Shares | | | 4,140 | | | | 1,364 | | | | 470 | |
| Premier Money Market Shares | | | 126,996 | | | | 39,884 | | | | — | |
| Premium Reserve Money Market Shares | | | 85,973 | | | | — | | | | 30,586 | |
| Service Shares | | | 3,662,660 | | | | 1,457,787 | | | | 594,910 | |
| | | $ | 6,039,806 | | | $ | 2,397,845 | | | $ | 940,418 | |
| Government & Agency Securities Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 719,797 | | | $ | 567,755 | | | $ | 74,011 | |
| Davidson Cash Equivalent Shares | | | 53,615 | | | | 42,434 | | | | 4,461 | |
| Davidson Cash Equivalent Plus Shares | | | 107,807 | | | | 80,013 | | | | 10,625 | |
| DWS Government & Agency Money Fund | | | 183,413 | | | | 87,726 | | | | 38,977 | |
| DWS Government Cash Institutional Shares | | | 268,801 | | | | 268,801 | | | | — | |
| Government Cash Managed Shares | | | 153,563 | | | | 42,737 | | | | 35,695 | |
| Service Shares | | | 303,676 | | | | 241,264 | | | | 21,188 | |
| | | $ | 1,790,672 | | | $ | 1,330,730 | | | $ | 184,957 | |
| Tax-Exempt Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 12,532 | | | $ | 5,364 | |
| Davidson Cash Equivalent Shares | | | 121,647 | | | | — | | | | 41,015 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 196,624 | | | | — | | | | 61,668 | |
| DWS Tax-Exempt Money Fund | | | 134,008 | | | | — | | | | 39,976 | |
| DWS Tax-Free Money Fund Class S | | | 68,702 | | | | — | | | | 25,134 | |
| Premier Money Market Shares | | | 31,484 | | | | 6,558 | | | | — | |
| Service Shares | | | 182,607 | | | | 72,945 | | | | 41,130 | |
| Tax-Exempt Cash Managed Shares | | | 77,147 | | | | — | | | | 33,219 | |
| Tax-Free Investment Class | | | 444,553 | | | | — | | | | 153,350 | |
| | | $ | 1,292,741 | | | $ | 92,035 | | | $ | 400,856 | |
Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee"), calculated as a percentage of average daily net assets for the shares listed in the following table.
For the year ended April 30, 2011, the Distribution Fee was as follows:
| Money Market Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 2,755,491 | | | $ | 2,755,491 | | | | .00 | % | | | .33 | % |
| Capital Assets Funds Preferred Shares | | | 52,348 | | | | 52,348 | | | | .00 | % | | | .20 | % |
| Davidson Cash Equivalent Shares | | | 45,045 | | | | 45,045 | | | | .00 | % | | | .30 | % |
| Davidson Cash Equivalent Plus Shares | | | 4,430 | | | | 4,430 | | | | .00 | % | | | .25 | % |
| Premier Money Market Shares | | | 126,560 | | | | 126,560 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 8,684,015 | | | | 8,684,015 | | | | .00 | % | | | .60 | % |
| | | $ | 11,667,889 | | | $ | 11,667,889 | | | | | | | | | |
| Government & Agency Securities Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 981,550 | | | $ | 981,550 | | | | .00 | % | | | .33 | % |
| Davidson Cash Equivalent Shares | | | 63,985 | | | | 63,985 | | | | .00 | % | | | .30 | % |
| Davidson Cash Equivalent Plus Shares | | | 138,178 | | | | 138,178 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 729,893 | | | | 729,893 | | | | .00 | % | | | .60 | % |
| | | $ | 1,913,606 | | | $ | 1,913,606 | | | | | | | | | |
| Tax-Exempt Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 47,479 | | | $ | 47,479 | | | | .00 | % | | | .33 | % |
| Davidson Cash Equivalent Shares | | | 243,294 | | | | 243,294 | | | | .00 | % | | | .30 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 434,433 | | | | 434,433 | | | | .00 | % | | | .60 | % |
| Tax-Free Investment Class | | | 1,032,179 | | | | 1,032,179 | | | | .00 | % | | | .25 | % |
| | | $ | 1,789,098 | | | $ | 1,789,098 | | | | | | | | | |
In addition, DIDI 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, 2011, the Service Fee was as follows:
| Money Market Portfolio: | | Service Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 2,087,493 | | | $ | 2,087,493 | | | | .00 | % | | | .25 | % |
| Capital Assets Funds Preferred Shares | | | 26,174 | | | | 26,174 | | | | .00 | % | | | .10 | % |
| Davidson Cash Equivalent Shares | | | 37,537 | | | | 37,537 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Plus Shares | | | 3,544 | | | | 3,544 | | | | .00 | % | | | .20 | % |
| Premier Money Market Shares | | | 126,561 | | | | 126,561 | | | | .00 | % | | | .25 | % |
| Premium Reserve Money Market Shares | | | 160,827 | | | | 147,274 | | | | .02 | % | | | .25 | % |
| | | $ | 2,442,136 | | | $ | 2,428,583 | | | | | | | | | |
| Government & Agency Securities Portfolio: | | Service Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 743,598 | | | $ | 743,598 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Shares | | | 53,321 | | | | 53,321 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Plus Shares | | | 110,542 | | | | 110,542 | | | | .00 | % | | | .20 | % |
| Government Cash Managed Shares | | | 325,257 | | | | 325,257 | | | | .00 | % | | | .15 | % |
| | | $ | 1,232,718 | | | $ | 1,232,718 | | | | | | | | | |
| Tax-Exempt Portfolio: | | Service Fee | | | Waived | | | Unpaid at April 30, 2011 | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 35,969 | | | $ | — | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Shares | | | 202,745 | | | | 194,185 | | | | — | | | | .01 | % | | | .25 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | — | | | | .00 | % | | | .25 | % |
| Tax-Exempt Cash Managed Shares | | | 220,855 | | | | 61,372 | | | | 10,827 | | | | .11 | % | | | .15 | % |
| Tax-Free Investment Class | | | 289,010 | | | | 73,337 | | | | 22,721 | | | | .05 | % | | | .07 | % |
| | | $ | 780,292 | | | $ | 396,576 | | | $ | 33,548 | | | | | | | | | |
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Funds. For the year ended April 30, 2011, the amounts charged to the Funds by DIMA included in the Statement of Operations under "reports to shareholders" were as follows:
| Fund | | Total Aggregated | | | Unpaid at April 30, 2011 | |
| Money Market Portfolio | | $ | 46,559 | | | $ | 16,156 | |
| Government & Agency Securities Portfolio | | $ | 10,937 | | | $ | 10,937 | |
| Tax-Exempt Portfolio | | $ | 105,603 | | | $ | 41,114 | |
Trustees' Fees and Expenses. The Funds paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.
3. Concentration of Ownership
From time to time, the Funds may have a concentration of several shareholder accounts holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Funds.
At April 30, 2011, there were two shareholder accounts that held approximately 13% and 11%, respectively, of the outstanding shares of the Tax-Exempt Portfolio.
4. Line of Credit
The Funds and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. Each Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus, if LIBOR exceeds the Federal Funds Rate, the amount of such excess. Each Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
5. Share Transactions
The following table summarizes share and dollar activity in the Funds:
Money Market Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 839,154,629 | | | $ | 839,154,629 | | | | 751,023,837 | | | $ | 751,023,837 | |
| Capital Assets Funds Preferred Shares | | | 16,426,872 | | | | 16,426,872 | | | | 46,317,102 | | | | 46,317,102 | |
| Davidson Cash Equivalent Shares | | | 3,734,002 | | | | 3,734,002 | | | | 4,223,891 | | | | 4,223,891 | |
| Davidson Cash Equivalent Plus Shares | | | 870,248 | | | | 870,248 | | | | 1,119,054 | | | | 1,119,054 | |
| Institutional Money Market Shares* | | | — | | | | — | | | | 878,782,978 | | | | 878,782,978 | |
| Premier Money Market Shares*** | | | 44,284,933 | | | | 44,284,933 | | | | 564,549,506 | | | | 564,549,506 | |
| Premium Reserve Money Market Shares | | | 111,139,828 | | | | 111,139,828 | | | | 250,797,721 | | | | 250,797,721 | |
| Service Shares | | | 1,791,610,827 | | | | 1,791,610,827 | | | | 1,256,750,880 | | | | 1,256,750,880 | |
| | | | | | | $ | 2,807,221,339 | | | | | | | $ | 3,753,564,969 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 187,455 | | | $ | 187,455 | | | | 511,699 | | | $ | 511,699 | |
| Capital Assets Funds Preferred Shares | | | 13,160 | | | | 13,160 | | | | 34,310 | | | | 34,310 | |
| Davidson Cash Equivalent Shares | | | 1,863 | | | | 1,863 | | | | 6,909 | | | | 6,909 | |
| Davidson Cash Equivalent Plus Shares | | | 220 | | | | 220 | | | | 997 | | | | 997 | |
| Institutional Money Market Shares* | | | — | | | | — | | | | 781,281 | | | | 781,281 | |
| Institutional Select Money Market Shares** | | | — | | | | — | | | | 17 | | | | 17 | |
| Premier Money Market Shares*** | | | 4,160 | | | | 4,160 | | | | 259,732 | | | | 259,732 | |
| Premium Reserve Money Market Shares | | | 5,371 | | | | 5,371 | | | | 141,496 | | | | 141,496 | |
| Service Shares | | | 183,305 | | | | 183,305 | | | | 349,720 | | | | 349,720 | |
| | | | | | | $ | 395,534 | | | | | | | $ | 2,086,161 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (890,506,653 | ) | | $ | (890,506,653 | ) | | | (773,833,097 | ) | | $ | (773,833,097 | ) |
| Capital Assets Funds Preferred Shares | | | (64,951,835 | ) | | | (64,951,835 | ) | | | (42,319,981 | ) | | | (42,319,981 | ) |
| Davidson Cash Equivalent Shares | | | (8,417,805 | ) | | | (8,417,805 | ) | | | (15,960,223 | ) | | | (15,960,223 | ) |
| Davidson Cash Equivalent Plus Shares | | | (1,850,907 | ) | | | (1,850,907 | ) | | | (3,704,435 | ) | | | (3,704,435 | ) |
| Institutional Money Market Shares* | | | — | | | | — | | | | (1,394,027,289 | ) | | | (1,394,027,289 | ) |
| Institutional Select Money Market Shares** | | | — | | | | — | | | | (10,576 | ) | | | (10,576 | ) |
| Premier Money Market Shares*** | | | (163,286,900 | ) | | | (163,286,900 | ) | | | (2,466,530,608 | ) | | | (2,466,530,608 | ) |
| Premium Reserve Money Market Shares | | | (119,115,201 | ) | | | (119,115,201 | ) | | | (592,438,461 | ) | | | (592,438,461 | ) |
| Service Shares | | | (1,368,490,287 | ) | | | (1,368,490,287 | ) | | | (1,157,527,651 | ) | | | (1,157,527,651 | ) |
| | | | | | | $ | (2,616,619,588 | ) | | | | | | $ | (6,446,352,321 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (51,164,569 | ) | | $ | (51,164,569 | ) | | | (22,297,561 | ) | | $ | (22,297,561 | ) |
| Capital Assets Funds Preferred Shares | | | (48,511,803 | ) | | | (48,511,803 | ) | | | 4,031,431 | | | | 4,031,431 | |
| Davidson Cash Equivalent Shares | | | (4,681,940 | ) | | | (4,681,940 | ) | | | (11,729,423 | ) | | | (11,729,423 | ) |
| Davidson Cash Equivalent Plus Shares | | | (980,439 | ) | | | (980,439 | ) | | | (2,584,384 | ) | | | (2,584,384 | ) |
| Institutional Money Market Shares* | | | — | | | | — | | | | (514,463,030 | ) | | | (514,463,030 | ) |
| Institutional Select Money Market Shares** | | | — | | | | — | | | | (10,559 | ) | | | (10,559 | ) |
| Premier Money Market Shares*** | | | (118,997,807 | ) | | | (118,997,807 | ) | | | (1,901,721,370 | ) | | | (1,901,721,370 | ) |
| Premium Reserve Money Market Shares | | | (7,970,002 | ) | | | (7,970,002 | ) | | | (341,499,244 | ) | | | (341,499,244 | ) |
| Service Shares | | | 423,303,845 | | | | 423,303,845 | | | | 99,572,949 | | | | 99,572,949 | |
| | | | | | | $ | 190,997,285 | | | | | | | $ | (2,690,701,191 | ) |
* The Institutional Money Market Shares class was liquidated on February 16, 2010 and is no longer offered.
** The Institutional Select Money Market Shares class was liquidated on October 27, 2009 and is no longer offered.
*** The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Government & Agency Securities Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 628,481,114 | | | $ | 628,481,114 | | | | 649,627,293 | | | $ | 649,627,293 | |
| Davidson Cash Equivalent Shares | | | 24,463,758 | | | | 24,463,758 | | | | 14,397,365 | | | | 14,397,365 | |
| Davidson Cash Equivalent Plus Shares | | | 275,786,862 | | | | 275,786,862 | | | | 185,485,990 | | | | 185,485,990 | |
| DWS Government & Agency Money Fund | | | 72,103,322 | | | | 72,103,322 | | | | 105,758,351 | | | | 105,758,351 | |
| DWS Government Cash Institutional Shares | | | 34,835,288,142 | | | | 34,835,288,142 | | | | 86,737,251,385 | | | | 86,737,251,385 | |
| Government Cash Managed Shares | | | 2,032,853,974 | | | | 2,032,853,974 | | | | 1,141,762,346 | | | | 1,141,762,346 | |
Premier Money Market Shares**** | | | — | | | | — | | | | 265,266,569 | | | | 265,266,569 | |
| Service Shares | | | 269,340,585 | | | | 269,340,585 | | | | 228,691,596 | | | | 228,691,596 | |
| | | | | | | $ | 38,138,317,757 | | | | | | | $ | 89,328,240,895 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 29,657 | | | $ | 29,657 | | | | 65,880 | | | $ | 65,880 | |
| Davidson Cash Equivalent Shares | | | 2,127 | | | | 2,127 | | | | 5,141 | | | | 5,141 | |
| Davidson Cash Equivalent Plus Shares | | | 5,509 | | | | 5,509 | | | | 5,913 | | | | 5,913 | |
| DWS Government & Agency Money Fund | | | 27,796 | | | | 27,796 | | | | 195,740 | | | | 195,740 | |
| DWS Government Cash Institutional Shares | | | 1,118,270 | | | | 1,118,270 | | | | 8,526,918 | | | | 8,526,918 | |
| Government Cash Managed Shares | | | 5,696 | | | | 5,696 | | | | 8,301 | | | | 8,301 | |
Premier Money Market Shares**** | | | — | | | | — | | | | 338,346 | | | | 338,346 | |
| Service Shares | | | 12,119 | | | | 12,119 | | | | 27,501 | | | | 27,501 | |
| | | | | | | $ | 1,201,174 | | | | | | | $ | 9,173,740 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (648,126,914 | ) | | $ | (648,126,914 | ) | | | (625,330,611 | ) | | $ | (625,330,611 | ) |
| Davidson Cash Equivalent Shares | | | (25,307,057 | ) | | | (25,307,057 | ) | | | (23,739,455 | ) | | | (23,739,455 | ) |
| Davidson Cash Equivalent Plus Shares | | | (292,761,983 | ) | | | (292,761,983 | ) | | | (158,769,431 | ) | | | (158,769,431 | ) |
| DWS Government & Agency Money Fund | | | (134,495,012 | ) | | | (134,495,012 | ) | | | (198,527,517 | ) | | | (198,527,517 | ) |
| DWS Government Cash Institutional Shares | | | (36,963,523,481 | ) | | | (36,963,523,481 | ) | | | (94,492,111,010 | ) | | | (94,492,111,010 | ) |
| Government Cash Managed Shares | | | (2,132,755,829 | ) | | | (2,132,755,829 | ) | | | (1,338,740,329 | ) | | | (1,338,740,329 | ) |
Premier Money Market Shares**** | | | — | | | | — | | | | (4,366,260,819 | ) | | | (4,366,260,819 | ) |
| Service Shares | | | (272,492,118 | ) | | | (272,492,118 | ) | | | (264,171,028 | ) | | | (264,171,028 | ) |
| | | | | | | $ | (40,469,462,394 | ) | | | | | | $ | (101,467,650,200 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (19,616,143 | ) | | $ | (19,616,143 | ) | | | 24,362,562 | | | $ | 24,362,562 | |
| Davidson Cash Equivalent Shares | | | (841,172 | ) | | | (841,172 | ) | | | (9,336,949 | ) | | | (9,336,949 | ) |
| Davidson Cash Equivalent Plus Shares | | | (16,969,612 | ) | | | (16,969,612 | ) | | | 26,722,472 | | | | 26,722,472 | |
| DWS Government & Agency Money Fund | | | (62,363,894 | ) | | | (62,363,894 | ) | | | (92,573,426 | ) | | | (92,573,426 | ) |
| DWS Government Cash Institutional Shares | | | (2,127,117,069 | ) | | | (2,127,117,069 | ) | | | (7,746,332,707 | ) | | | (7,746,332,707 | ) |
| Government Cash Managed Shares | | | (99,896,159 | ) | | | (99,896,159 | ) | | | (196,969,682 | ) | | | (196,969,682 | ) |
Premier Money Market Shares**** | | | — | | | | — | | | | (4,100,655,904 | ) | | | (4,100,655,904 | ) |
| Service Shares | | | (3,139,414 | ) | | | (3,139,414 | ) | | | (35,451,931 | ) | | | (35,451,931 | ) |
| | | | | | | $ | (2,329,943,463 | ) | | | | | | $ | (12,130,235,565 | ) |
**** The Premier Money Market Shares Class was liquidated on February 16, 2010 and is no longer offered.
Tax-Exempt Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 37,505,008 | | | $ | 37,505,008 | | | | 49,394,797 | | | $ | 49,394,797 | |
| Davidson Cash Equivalent Shares | | | 108,372,167 | | | | 108,372,167 | | | | 140,991,927 | | | | 140,991,927 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 8,705,410,264 | | | | 8,705,410,264 | | | | 9,545,076,388 | | | | 9,545,076,388 | |
| DWS Tax-Exempt Money Fund | | | 234,765,709 | | | | 234,765,709 | | | | 183,055,619 | | | | 183,055,619 | |
| DWS Tax-Free Money Fund Class S | | | 40,065,751 | | | | 40,065,751 | | | | 39,784,180 | | | | 39,784,180 | |
Premier Money Market Shares***** | | | 17,963,464 | | | | 17,963,464 | | | | 109,396,548 | | | | 109,396,548 | |
| Service Shares | | | 171,592,837 | | | | 171,592,837 | | | | 277,971,196 | | | | 277,971,196 | |
| Tax-Exempt Cash Managed Shares | | | 270,920,971 | | | | 270,920,971 | | | | 471,983,176 | | | | 471,983,176 | |
| Tax-Free Investment Class | | | 408,957,323 | | | | 408,957,323 | | | | 393,979,063 | | | | 393,979,063 | |
| | | | | | | $ | 9,995,553,494 | | | | | | | $ | 11,211,632,894 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 1,433 | | | $ | 1,433 | | | | 2,653 | | | $ | 2,653 | |
| Davidson Cash Equivalent Shares | | | 8,078 | | | | 8,078 | | | | 11,387 | | | | 11,387 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 2,103,424 | | | | 2,103,424 | | | | 3,842,512 | | | | 3,842,512 | |
| DWS Tax-Exempt Money Fund | | | 541,218 | | | | 541,218 | | | | 1,065,790 | | | | 1,065,790 | |
| DWS Tax-Free Money Fund Class S | | | 147,957 | | | | 147,957 | | | | 270,634 | | | | 270,634 | |
Premier Money Market Shares***** | | | 1,023 | | | | 1,023 | | | | 23,773 | | | | 23,773 | |
| Service Shares | | | 7,238 | | | | 7,238 | | | | 7,673 | | | | 7,673 | |
| Tax-Exempt Cash Managed Shares | | | 84 | | | | 84 | | | | 886 | | | | 886 | |
| Tax-Free Investment Class | | | 40,669 | | | | 40,669 | | | | 208,697 | | | | 208,697 | |
| | | | | | | $ | 2,851,124 | | | | | | | $ | 5,434,005 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (44,799,949 | ) | | | | $ (44,799,949) | | | (57,387,875 | ) | | $ | (57,387,875 | ) |
| Davidson Cash Equivalent Shares | | | (113,236,507 | ) | | | (113,236,507 | ) | | | (128,403,019 | ) | | | (128,403,019 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (8,940,648,532 | ) | | | (8,940,648,532 | ) | | | (9,593,718,982 | ) | | | (9,593,718,982 | ) |
| DWS Tax-Exempt Money Fund | | | (297,512,567 | ) | | | (297,512,567 | ) | | | (258,965,066 | ) | | | (258,965,066 | ) |
| DWS Tax-Free Money Fund Class S | | | (55,821,788 | ) | | | (55,821,788 | ) | | | (63,795,223 | ) | | | (63,795,223 | ) |
Premier Money Market Shares***** | | | (47,338,154 | ) | | | (47,338,154 | ) | | | (571,302,157 | ) | | | (571,302,157 | ) |
| Service Shares | | | (126,254,371 | ) | | | (126,254,371 | ) | | | (303,098,913 | ) | | | (303,098,913 | ) |
| Tax-Exempt Cash Managed Shares | | | (352,406,232 | ) | | | (352,406,232 | ) | | | (455,851,093 | ) | | | (455,851,093 | ) |
| Tax-Free Investment Class | | | (433,534,090 | ) | | | (433,534,090 | ) | | | (556,561,251 | ) | | | (556,561,251 | ) |
| | | | | | | $ | (10,411,552,190 | ) | | | | | | $ | (11,989,083,579 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (7,293,508 | ) | | | (7,293,508 | ) | | | (7,990,425 | ) | | $ | (7,990,425 | ) |
| Davidson Cash Equivalent Shares | | | (4,856,262 | ) | | | (4,856,262 | ) | | | 12,600,295 | | | | 12,600,295 | |
| DWS Tax-Exempt Cash Institutional Shares | | | (233,134,844 | ) | | | (233,134,844 | ) | | | (44,800,082 | ) | | | (44,800,082 | ) |
| DWS Tax-Exempt Money Fund | | | (62,205,640 | ) | | | (62,205,640 | ) | | | (74,843,657 | ) | | | (74,843,657 | ) |
| DWS Tax-Free Money Fund Class S | | | (15,608,080 | ) | | | (15,608,080 | ) | | | (23,740,409 | ) | | | (23,740,409 | ) |
Premier Money Market Shares***** | | | (29,373,667 | ) | | | (29,373,667 | ) | | | (461,881,836 | ) | | | (461,881,836 | ) |
| Service Shares | | | 45,345,704 | | | | 45,345,704 | | | | (25,120,044 | ) | | | (25,120,044 | ) |
| Tax-Exempt Cash Managed Shares | | | (81,485,177 | ) | | | (81,485,177 | ) | | | 16,132,969 | | | | 16,132,969 | |
| Tax-Free Investment Class | | | (24,536,098 | ) | | | (24,536,098 | ) | | | (162,373,491 | ) | | | (162,373,491 | ) |
| | | | | | | $ | (413,147,572 | ) | | | | | | $ | (772,016,680 | ) |
***** The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Cash Account Trust:
We have audited the accompanying statements of assets and liabilities of Cash Account Trust (the "Trust") (comprising the Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio) (collectively, the "Portfolios"), including the investment portfolios, as of April 30, 2011, 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 Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Portfolios of Cash Account Trust at April 30, 2011, 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.
| | | |
Boston, Massachusetts June 20, 2011 | | |
Tax Information (Unaudited)
For the Money Market Portfolio, a total of 6% of the dividends distributed during the fiscal year was derived from interest on US government securities, which is generally exempt from state income tax.
For the Government & Agency Securities Portfolio, a total of 44% of the dividends distributed during the fiscal year was derived from interest on US government securities, which is generally exempt from state income tax.
For the Tax-Exempt Portfolio, of the dividends paid from net investment income for the taxable year ended April 30, 2011, 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.
Summary of Management Fee Evaluation by Independent Fee Consultant
October 3, 2010
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.
Qualifications
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
Summary of Administrative Fee Evaluation by Independent Fee Consultant
October 4, 2010
Government & Agency Securities Portfolio
Tax-Exempt Portfolio
Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of a proposed pass-through to the funds of certain reporting costs associated with new regulations for money funds. My evaluation considered the following:
• My recently completed annual evaluation (please see my summary report of October 3, 2010), concluding that the prospective fees and expenses of all the DWS-sponsored money funds are reasonable.
• The fact that in my opinion the services DWS would provide under the combination of the Advisory and proposed Administration Agreements continues to be comparable with those typically provided to competitive funds under their management agreements.
• Management's analysis showing that the maximum total expense ratio impact of this change on any fund share class would be 1.3 basis points, which in my opinion is not material to my conclusions about the reasonableness of expenses.
Based on the foregoing considerations, in my opinion the proposed fees and expenses for the affected DWS-sponsored money funds are reasonable.
Thomas H. Mack
Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the fund as of April 30, 2011. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
| Independent Board Members |
Name, Year of Birth, Position with the Fund and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen |
Other Directorships Held by Board Member |
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993 | Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (education committees); formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 118 | — |
John W. Ballantine (1946) Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Chairman of the Board, Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity); former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International | 118 | — |
Henry P. Becton, Jr. (1943) Board Member since 1990 | Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Public Radio International; Public Radio Exchange (PRX); The PBS Foundation; former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service | 118 | Lead Director, Becton Dickinson and Company2 (medical technology company); Lead Director, Belo Corporation2 (media company) |
Dawn-Marie Driscoll (1946) Board Member since 1987 | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization); former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2007) |
Keith R. Fox (1954) Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies | 118 | — |
Kenneth C. Froewiss (1945) Board Member since 2001 | Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996) | 118 | — |
Richard J. Herring (1946) Board Member since 1990 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; Independent Director of Barclays Bank Delaware (since September 2010); formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006) | 118 | Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007) |
William McClayton (1944) Board Member since 2004 | Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival | 118 | — |
Rebecca W. Rimel (1951) Board Member since 1995 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Trustee, Pro Publica (charitable organization) (2007-2010) | 118 | Director, CardioNet, Inc. (health care) (2009- present); Director, Viasys Health Care2 (January 2007- June 2007); |
William N. Searcy, Jr. (1946) Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 1998) |
Jean Gleason Stromberg (1943) Board Member since 1997 | Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996) | 118 | — |
Robert H. Wadsworth (1940) Board Member since 1999 | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association | 121 | — |
Officers4 |
Name, Year of Birth, Position with the Fund and Length of Time Served5 | Principal Occupation(s) During Past 5 Years and Other Directorships Held |
W. Douglas Beck, CFA9,10 (1967) President and CEO, 2011-present | Managing Director3, Deutsche Asset Management (2006-present); President and CEO of DWS family of funds and Head of Product Management, US for DWS Investments; formerly, Executive Director, Head of Product Management (2002-2006) and President (2005-2006) of the UBS Funds at UBS Global Asset Management; Co-Head of Manager Research/Managed Solutions Group, Merrill Lynch (1998-2002) |
John Millette7 (1962) Vice President and Secretary, 1999-present | Director3, Deutsche Asset Management |
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present | Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998) |
Caroline Pearson7 (1962) Chief Legal Officer, April 2010-present | Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010) |
Rita Rubin8 (1970) Assistant Secretary, 2009-present | Director3 and Senior Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007) |
Paul Antosca7 (1957) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006) |
Jack Clark7 (1967) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007) |
Diane Kenneally7 (1966) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
John Caruso8 (1965) Anti-Money Laundering Compliance Officer, 2010-present | Managing Director3, Deutsche Asset Management |
Robert Kloby8 (1962) Chief Compliance Officer, 2006-present | Managing Director3, Deutsche Asset Management |
1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.
2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3 Executive title, not a board directorship.
4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.
5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.
6 Address: 100 Plaza One, Jersey City, NJ 07311.
7 Address: One Beacon Street, Boston, MA 02108.
8 Address: 60 Wall Street, New York, NY 10005.
9 Address: 345 Park Avenue, New York, NY 10154.
10 Appointed May 17, 2011, effective June 1, 2011.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
Notes
Notes
Notes
Notes
Notes
ANNUAL REPORT TO SHAREHOLDERS
Davidson Cash Equivalent Shares
Money Market Portfolio
Government & Agency Securities Portfolio
Tax-Exempt Portfolio
Davidson Cash Equivalent Plus Shares
Money Market Portfolio
Government & Agency Securities Portfolio
April 30, 2011
Contents
3 Portfolio Management Review 7 Information About Each Fund's Expenses DWS Money Market Portfolio 18 Statement of Assets and Liabilities 20 Statement of Operations 21 Statement of Changes in Net Assets DWS Government & Agency Securities Portfolio 31 Statement of Assets and Liabilities 33 Statement of Operations 34 Statement of Changes in Net Assets DWS Tax-Exempt Portfolio 50 Statement of Assets and Liabilities 52 Statement of Operations 53 Statement of Changes in Net Assets 56 Notes to Financial Statements 73 Report of Independent Registered Public Accounting Firm 75 Summary of Management Fee Evaluation by Independent Fee Consultant 79 Summary of Administrative Fee Evaluation by Independent Fee Consultant 80 Board Members and Officers |
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, visit www.dws-investments.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.
An investment in these funds is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the funds. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the funds' $1.00 share price. The credit quality of the funds' holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the funds' share price. The funds' share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of the funds may have a significant adverse effect on the share prices of all classes of shares of the funds. See the prospectus for specific details regarding the funds' risk profile.
The funds' policies and procedures for voting proxies for portfolio securities and information about how the funds voted proxies related to their portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the funds' policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Portfolio Management Review
Market Overview
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
In September 2010, investors responded positively to US Federal Reserve Board (the Fed) Chairman Ben Bernanke's statement that the Fed would take additional steps in the form of "quantitative easing" to prop up the US economy as needed.1 Over the funds' most recent 12-month period, the money market yield curve has gradually steepened as longer-term rates rose in response to improved economic data and shorter maturities declined significantly based on a number of market influences.2 These included continuing strong demand and shrinking supply in the money market area; the removal (or unwind) of $200 billion in two-month Treasury bills from the market until Congress once again raises the US debt ceiling; a new FDIC fee assessment that has, in effect, removed some of the incentive for certain large banks to create supply in the money market area; and; lastly, the fact that the federal funds rate remains "on hold," keeping short-term rates lower overall.3
Positive Contributors to Fund Performance
We were able to maintain a competitive yield for the funds during the period ended April 30, 2011. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
For the Money Market Portfolio, with yields trending lower through most of the period, we continued to hold a large percentage of portfolio assets in short-maturity instruments for yield, high-quality and liquidity purposes. We also maintained a conservative average maturity, with portfolio assets broadly diversified among a number of sectors, including banks, asset-backed securities, commercial paper and sovereign debt.4,5 Toward the end of the period, we permitted the fund's average maturity to shorten, as we believed that money market yields could move up if Congress again raises the US debt ceiling.
For the Government & Agency Securities Portfolio, we maintained an increased focus on overnight repurchase agreements and one- to three-month government and agency securities, as we believe that there was not a great deal of value in longer-maturity issues during the period ending April 30, 2011.6
For the Tax-Exempt Portfolio, in light of the continued fiscal stress on state and local governments, and with dynamic rule changes regarding money market funds coming from the SEC, we believed it was prudent to maintain a short average maturity. Toward the end of the period ending April 30, 2011, the fund was invested mainly in short-term commercial paper and floating-rate securities. (The interest rate of floating-rate securities adjusts periodically based on indices such as the Securities Industry and Financial Market Association Index of Variable Rate Demand Notes.)7 Because the interest rates of these instruments adjust as market conditions change, they provide flexibility in an uncertain interest rate environment.
Our main focus, as always, is on preservation of capital, and during the period ending April 30, 2011, we maintained a short maturity and attempted to ensure ample liquidity for the funds.
Negative Contributors to Fund Performance
For all three funds, the types of securities that we were investing in tended to have lower yields than issues carrying more risk. We preferred to be cautious during a time of market uncertainty. In the end this cost each fund some yield, but we believe that this represented a prudent approach to preserving principal in light of the circumstances during the period.
Outlook and Positioning
Assuming that Congress can agree to raise the US debt ceiling in the near future, significant short-term Treasury supply should return to the market in the coming months and remove some downward pressure on money market rates that carry the shortest maturities. In general, however, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested and continued strong demand from investors seeking principal stability and safety.
We continue our insistence on the highest credit quality within the funds.8 We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the funds and to seek competitive yield for our shareholders.
Fund Performance (as of April 30, 2011)
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
An investment in these funds is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the funds. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the funds' $1.00 share price. The credit quality of the funds' holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the funds' share price. The funds' share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of a fund may have a significant adverse effect on the share prices of all classes of shares of that fund. See the prospectus for specific details regarding the funds' risk profile.
| | | 7-Day Current Yield | |
| Money Market Portfolio — Davidson Cash Equivalent Shares | | | 0.01 | %* |
| Government & Agency Securities Portfolio — Davidson Cash Equivalent Shares | | | 0.01 | %* |
| Tax-Exempt Portfolio — Davidson Cash Equivalent Shares | | | 0.01 | %* |
| (Equivalent Taxable Yield) | | | 0.02 | %** |
| Money Market Portfolio — Davidson Cash Equivalent Plus Shares | | | 0.01 | %* |
| Government & Agency Securities Portfolio — Davidson Cash Equivalent Plus Shares | | | 0.01 | %* |
Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the funds over a 7-day period expressed as an annual percentage rate of the funds' shares outstanding. For the most current yield information, call (800) 332-5915. * The investment advisor has agreed to voluntarily waive fees/reimburse expenses. This waiver may be changed or terminated at any time without notice. Otherwise, the 7-day current yield for Davidson Cash Equivalent Shares would have been -0.75%, -0.72% and -0.55% for the Money Market Portfolio, the Government & Agency Securities Portfolio and the Tax-Exempt Portfolio, respectively, and -0.71% and -0.45% for Davidson Cash Equivalent Plus Shares for the Money Market Portfolio and Government & Agency Securities Portfolio, respectively, as of April 30, 2011. ** The equivalent taxable yield allows you to compare with the performance of taxable money market funds. For the Tax-Exempt Portfolio, the equivalent taxable yield is based upon the marginal income tax rate of 35%. Income may be subject to local taxes and, for some investors, the alternative minimum tax. | |
1 Quantitative easing — a monetary policy used by the government to increase the money supply. With this policy, the government purchases government and other securities from the market to create additional capital which financial institutions can use to promote lending and liquidity.
2 The yield curve — a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.
3 Treasury bill — a short-term (maturity up to 1 year) discounted government security sold through competitive bidding at weekly and monthly auctions in denominations of $10,000 to $1 million. Debt ceiling is the maximum borrowing power of a government entity. FDIC (Federal Deposit Insurance Corporation) is a federal agency that insures deposits in member banks and thrifts up to a specific dollar amount. Federal funds rate is the overnight bank lending rate.
4 Average maturity — the average length of time until the principal amount of a bond must be repaid.
5 Asset-backed securities are securities backed by a loan, lease or receivables against assets other than real estate and mortgage-backed securities. Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates. Sovereign debt is bonds issued by a national government in a foreign currency, in order to finance the issuing country's growth.
6 Overnight repurchase agreements — a form of short-term borrowing whereby a government security is sold on an overnight basis and purchased back the next day.
7 The Securities Industry and Financial Market Association Index of Variable Rate Demand Notes is a weekly high-grade market index consisting of seven-day, tax-exempt, variable-rate demand notes produced by Municipal Market Data Group. Actual issues are selected from Municipal Market Data's database of more than 10,000 active issues.
Index returns, unlike fund returns, do not reflect any fees of expenses. It is not possible to invest directly into an index.
8 Credit quality — a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default. The fund's credit quality does not remove market risk and is subject to change.
Information About Each Fund's Expenses
As an investor of a Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in each Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Funds limited these expenses; had they not done so, expenses would have been higher for the Davidson Cash Equivalent Shares and the Davidson Cash Equivalent Plus 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, 2010 to April 30, 2011).
The tables illustrate each Fund's expenses in two ways:
•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in each Fund using each Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
• Hypothetical 5% Fund Return. This helps you to compare each Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using each Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Davidson Cash Equivalent Shares
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | Money Market Portfolio | | | Government & Agency Securities Portfolio | | | Tax-Exempt Portfolio | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.08 | | | $ | 1,000.05 | | | $ | 1,000.05 | |
| Expenses Paid per $1,000* | | $ | 1.64 | | | $ | .89 | | | $ | 1.64 | |
| Hypothetical 5% Fund Return | | | | | | | | | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,023.16 | | | $ | 1,023.90 | | | $ | 1,023.16 | |
| Expenses Paid per $1,000* | | $ | 1.66 | | | $ | .90 | | | $ | 1.66 | |
* Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratios | Money Market Portfolio | Government & Agency Securities Portfolio | Tax-Exempt Portfolio |
| Davidson Cash Equivalent Shares | .33% | .18% | .33% |
For more information, please refer to each Fund's prospectus.
Davidson Cash Equivalent Plus Shares
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | Money Market Portfolio | | | Government & Agency Securities Portfolio | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.08 | | | $ | 1,000.05 | |
| Expenses Paid per $1,000* | | $ | 1.64 | | | $ | .89 | |
| Hypothetical 5% Fund Return | | | | | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,023.16 | | | $ | 1,023.90 | |
| Expenses Paid per $1,000* | | $ | 1.66 | | | $ | .90 | |
* Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratios | Money Market Portfolio | Government & Agency Securities Portfolio |
| Davidson Cash Equivalent Plus Shares | .33% | .18% |
For more information, please refer to each Fund's prospectus.
Money Market Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
| Commercial Paper | 34% | 38% |
| Short-Term Notes | 17% | 26% |
| Repurchase Agreements | 16% | 12% |
| Certificates of Deposit and Bank Notes | 16% | 13% |
| Government & Agency Obligations | 14% | 10% |
| Time Deposits | 3% | — |
| Supranational | — | 1% |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Money Market Portfolio | 48 days | 41 days |
| iMoneyNet First Tier Retail Money Fund Average* | 40 days | 46 days |
* The Fund is compared to its respective iMoneyNet Category: First Tier Retail Money Fund Average — Category includes a widely recognized composite of money market funds that invest in only first tier (highest rating) securities. Portfolio holdings of First Tier funds include US Treasury, US Other, Repos, Time Deposits, Domestic Bank Obligations, Foreign Bank Obligations, First Tier Commercial Paper, Floating Rate Notes and Asset Backed Commercial Paper.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 10-17. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Money Market Portfolio
| | Principal Amount ($) | Value ($) | |
| | | |
| Certificates of Deposit and Bank Notes 15.8% | |
| Bank Nederlandse Gemeenten NV, 6.0%, 3/26/2012 | 6,500,000 | 6,828,336 | |
| Bank of Tokyo-Mitsubishi UFJ Ltd., 0.38%, 5/16/2011 | 25,000,000 | 25,000,000 | |
| BNP Paribas: | |
| | 0.35%, 8/8/2011 | | 20,000,000 | 20,000,000 | |
| | 0.45%, 7/25/2011 | | 7,000,000 | 6,999,834 | |
| | 0.55%, 5/13/2011 | | 7,000,000 | 7,000,093 | |
| Credit Agricole SA, 0.3%, 8/4/2011 | 12,000,000 | 12,000,000 | |
| Dexia Credit Local: | |
| | 0.24%, 5/3/2011 | | 23,437,000 | 23,437,000 | |
| | 144A, 2.375%, 9/23/2011 | | 8,000,000 | 8,055,854 | |
| International Finance Corp., 3.0%, 11/15/2011 | 6,000,000 | 6,084,144 | |
| KBC Bank NV, 0.3%, 5/6/2011 | 6,500,000 | 6,500,000 | |
| Landesbank Hessen-Thueringen Girozentrale: | |
| | 0.2%, 5/12/2011 | | 3,000,000 | 3,000,000 | |
| | 0.2%, 5/20/2011 | | 6,000,000 | 6,000,000 | |
| Mitsubishi UFJ Trust & Banking Corp., 0.33%, 5/20/2011 | 8,500,000 | 8,500,000 | |
| Mizuho Corporate Bank Ltd., 0.31%, 5/3/2011 | 12,000,000 | 12,000,000 | |
| Natixis, 0.22%, 6/24/2011 | 20,000,000 | 20,000,000 | |
| Nederlandse Waterschapsbank NV, 1.375%, 2/17/2012 | 10,000,000 | 10,078,955 | |
| Nordea Bank Finland PLC: | |
| | 0.27%, 6/28/2011 | | 12,000,000 | 12,000,000 | |
| | 0.28%, 7/5/2011 | | 25,000,000 | 25,000,226 | |
| | 0.44%, 6/30/2011 | | 10,000,000 | 10,000,498 | |
| | 0.67%, 7/20/2011 | | 15,000,000 | 15,008,950 | |
| Skandinaviska Enskilda Banken AB: | |
| | 0.24%, 6/20/2011 | | 25,000,000 | 25,000,000 | |
| | 0.25%, 6/10/2011 | | 6,000,000 | 6,000,000 | |
| | 0.26%, 6/3/2011 | | 15,000,000 | 15,000,000 | |
| | 0.26%, 6/6/2011 | | 15,000,000 | 15,000,000 | |
| | 0.31%, 5/27/2011 | | 18,000,000 | 18,000,000 | |
| Societe Generale: | |
| | 0.2%, 7/5/2011 | | 6,000,000 | 6,000,000 | |
| | 0.35%, 5/16/2011 | | 12,000,000 | 12,000,000 | |
| Sumitomo Mitsui Banking Corp.: | |
| | 0.28%, 6/1/2011 | | 28,000,000 | 28,000,000 | |
| | 0.3%, 5/3/2011 | | 6,000,000 | 6,000,000 | |
| Svenska Handelsbanken AB: | |
| | 0.24%, 7/6/2011 | | 20,500,000 | 20,500,000 | |
| | 0.275%, 6/23/2011 | | 15,000,000 | 15,000,055 | |
Total Certificates of Deposit and Bank Notes (Cost $409,993,945) | 409,993,945 | |
| | |
| Commercial Paper 34.6% | |
| Issued at Discount** | |
| Abbey National North America LLC, 0.3%, 6/27/2011 | 6,500,000 | 6,496,912 | |
| Alpine Securitization, 144A, 0.16%, 6/2/2011 | 40,000,000 | 39,994,311 | |
| Argento Variable Funding: | |
| | 144A, 0.31%, 6/20/2011 | | 15,000,000 | 14,993,542 | |
| | 144A, 0.319%, 5/3/2011 | | 6,500,000 | 6,499,884 | |
| Atlantis One Funding Corp., 144A, 0.19%, 5/5/2011 | 25,000,000 | 24,999,472 | |
| Barclays Bank PLC, 0.31%, 5/26/2011 | 12,500,000 | 12,497,309 | |
| BPCE SA, 0.27%, 7/26/2011 | 9,000,000 | 8,994,195 | |
| Caisse d'Amortissement de la Dette Sociale: | |
| | 0.22%, 8/5/2011 | | 12,000,000 | 11,992,960 | |
| | 0.25%, 7/25/2011 | | 18,000,000 | 17,989,375 | |
| | 0.27%, 5/31/2011 | | 16,620,000 | 16,616,261 | |
| | 0.28%, 6/1/2011 | | 12,800,000 | 12,796,914 | |
| | 0.29%, 5/31/2011 | | 15,000,000 | 14,996,375 | |
| Chariot Funding LLC, 144A, 0.16%, 5/20/2011 | 20,000,000 | 19,998,311 | |
| Comcast Corp., 0.31%, 5/6/2011 | 10,000,000 | 9,999,569 | |
| Eksportfinans ASA, 0.15%, 5/5/2011 | 37,500,000 | 37,499,375 | |
| ENI Coordination Center SA, 0.3%, 5/26/2011 | 12,500,000 | 12,497,396 | |
| Google, Inc., 0.4%, 9/16/2011 | 8,000,000 | 7,987,733 | |
| Grampian Funding LLC: | |
| | 144A, 0.26%, 7/14/2011 | | 10,000,000 | 9,994,656 | |
| | 144A, 0.26%, 7/19/2011 | | 3,000,000 | 2,998,288 | |
| | 144A, 0.27%, 7/8/2011 | | 12,000,000 | 11,993,880 | |
| | 144A, 0.27%, 7/11/2011 | | 25,000,000 | 24,986,688 | |
| | 144A, 0.28%, 7/7/2011 | | 10,000,000 | 9,994,789 | |
| | 144A, 0.28%, 7/8/2011 | | 13,000,000 | 12,993,124 | |
| Johnson & Johnson: | |
| | 144A, 0.18%, 6/3/2011 | | 12,850,000 | 12,847,880 | |
| | 144A, 0.19%, 8/22/2011 | | 15,000,000 | 14,991,054 | |
| Kells Funding LLC: | |
| | 144A, 0.33%, 5/9/2011 | | 6,000,000 | 5,999,560 | |
| | 144A, 0.35%, 5/18/2011 | | 3,000,000 | 2,999,504 | |
| | 144A, 0.35%, 6/6/2011 | | 6,000,000 | 5,997,900 | |
| | 144A, 0.36%, 5/17/2011 | | 18,000,000 | 17,997,120 | |
| | 144A, 0.37%, 6/17/2011 | | 15,000,000 | 14,992,754 | |
| | 144A, 0.38%, 6/17/2011 | | 12,000,000 | 11,994,047 | |
| | 144A, 0.39%, 7/5/2011 | | 10,000,000 | 9,992,958 | |
| | 144A, 0.39%, 9/6/2011 | | 13,750,000 | 13,730,933 | |
| | 144A, 0.4%, 7/1/2011 | | 8,000,000 | 7,994,578 | |
| LMA Americas LLC, 144A, 0.17%, 5/9/2011 | 6,000,000 | 5,999,773 | |
| Market Street Funding LLC, 144A, 0.27%, 5/16/2011 | 12,419,000 | 12,417,603 | |
| Natixis Commercial Paper Corp., 0.3%, 7/12/2011 | 12,500,000 | 12,492,500 | |
| Nieuw Amsterdam Receivables Corp.: | |
| | 144A, 0.24%, 6/2/2011 | | 13,500,000 | 13,497,120 | |
| | 144A, 0.25%, 5/6/2011 | | 12,000,000 | 11,999,583 | |
| NRW.Bank: | |
| | 0.19%, 6/28/2011 | | 13,500,000 | 13,495,868 | |
| | 0.22%, 7/14/2011 | | 6,000,000 | 5,997,287 | |
| | 0.275%, 6/10/2011 | | 8,000,000 | 7,997,556 | |
| | 0.3%, 5/2/2011 | | 12,000,000 | 11,999,900 | |
| | 0.3%, 5/3/2011 | | 30,000,000 | 29,999,500 | |
| | 0.3%, 5/23/2011 | | 12,500,000 | 12,497,708 | |
| Procter & Gamble Co., 0.19%, 6/3/2011 | 16,513,000 | 16,510,124 | |
| Regency Markets No. 1 LLC, 144A, 0.19%, 5/25/2011 | 26,000,000 | 25,996,707 | |
| Romulus Funding Corp., 144A, 0.3%, 5/24/2011 | 3,000,000 | 2,999,425 | |
| Sanofi-Aventis SA, 0.3%, 8/15/2011 | 12,500,000 | 12,488,958 | |
| SBAB Bank AB: | |
| | 144A, 0.35%, 7/19/2011 | | 6,000,000 | 5,995,392 | |
| | 144A, 0.37%, 7/13/2011 | | 12,500,000 | 12,490,622 | |
| | 144A, 0.39%, 6/9/2011 | | 12,000,000 | 11,994,930 | |
| | 144A, 0.39%, 7/5/2011 | | 12,500,000 | 12,491,198 | |
| | 144A, 0.4%, 6/23/2011 | | 6,000,000 | 5,996,467 | |
| Scaldis Capital LLC: | |
| | 0.32%, 5/20/2011 | | 5,000,000 | 4,999,156 | |
| | 0.32%, 6/2/2011 | | 9,000,000 | 8,997,440 | |
| Shell International Finance BV, 0.4%, 5/2/2011 | 5,000,000 | 4,999,944 | |
| Skandinaviska Enskilda Banken AB, 0.3%, 5/6/2011 | 15,000,000 | 14,999,375 | |
| Standard Chartered Bank, 0.29%, 5/24/2011 | 20,000,000 | 19,996,294 | |
| Straight-A Funding LLC, 144A, 0.25%, 5/2/2011 | 15,000,000 | 14,999,896 | |
| Svenska Handelsbanken AB, 0.28%, 5/18/2011 | 6,000,000 | 5,999,207 | |
| Swedbank AB: | |
| | 0.26%, 7/27/2011 | | 12,000,000 | 11,992,460 | |
| | 0.27%, 7/11/2011 | | 10,000,000 | 9,994,675 | |
| | 0.27%, 7/26/2011 | | 10,000,000 | 9,993,550 | |
| | 0.285%, 5/23/2011 | | 12,000,000 | 11,997,910 | |
| | 0.3%, 5/13/2011 | | 28,000,000 | 27,997,200 | |
| | 0.34%, 7/5/2011 | | 20,000,000 | 19,987,722 | |
| Total Capital Canada Ltd., 144A, 0.31%, 9/15/2011 | 12,500,000 | 12,485,253 | |
Total Commercial Paper (Cost $894,147,910) | 894,147,910 | |
| | |
| Short-Term Notes* 17.7% | |
| Abbey National Treasury Services PLC: | |
| | 0.38%, 4/16/2012 | | 18,000,000 | 18,000,000 | |
| | 0.49%, 11/2/2011 | | 12,500,000 | 12,500,000 | |
| Australia & New Zealand Banking Group Ltd., 144A, 0.33%, 1/20/2012 | 12,500,000 | 12,500,000 | |
| Bank of Nova Scotia: | |
| | 0.22%, 8/25/2011 | | 16,500,000 | 16,500,000 | |
| | 0.27%, 9/12/2011 | | 7,000,000 | 7,000,000 | |
| | 0.35%, 12/8/2011 | | 8,000,000 | 8,000,000 | |
| Barclays Bank PLC, 0.533%, 7/19/2011 | 15,000,000 | 15,000,000 | |
| BNP Paribas, 0.492%, 8/22/2011 | 25,000,000 | 25,000,000 | |
| Caisse d'Amortissement de la Dette Sociale, 144A, 0.273%, 5/25/2012 | 26,000,000 | 25,996,945 | |
| Canadian Imperial Bank of Commerce: | |
| | 0.18%, 5/12/2011 | | 20,000,000 | 20,000,000 | |
| | 0.292%, 4/26/2012 | | 21,600,000 | 21,600,000 | |
| Commonwealth Bank of Australia, 144A, 0.331%, 2/3/2012 | 12,000,000 | 12,000,000 | |
| Credit Suisse, 0.19%, 6/3/2011 | 12,000,000 | 12,000,000 | |
| JPMorgan Chase Bank NA, 0.211%, 5/31/2011 | 11,500,000 | 11,500,000 | |
| Kells Funding LLC: | |
| | 144A, 0.318%, 8/15/2011 | | 12,500,000 | 12,500,000 | |
| | 144A, 0.342%, 2/24/2012 | | 13,750,000 | 13,750,000 | |
| | 144A, 0.383%, 12/1/2011 | | 10,000,000 | 10,000,000 | |
| National Australia Bank Ltd.: | |
| | 0.261%, 10/5/2011 | | 12,500,000 | 12,500,000 | |
| | 0.291%, 6/10/2011 | | 15,000,000 | 15,000,000 | |
| Nordea Bank Finland PLC: | |
| | 0.56%, 2/3/2012 | | 3,000,000 | 3,004,662 | |
| | 0.574%, 10/20/2011 | | 12,500,000 | 12,517,260 | |
| | 0.58%, 10/14/2011 | | 10,000,000 | 10,013,284 | |
| Rabobank Nederland NV: | |
| | 0.263%, 5/13/2011 | | 14,000,000 | 14,000,001 | |
| | 0.307%, 4/24/2012 | | 7,750,000 | 7,749,616 | |
| | 0.311%, 1/10/2012 | | 8,000,000 | 8,000,000 | |
| | 144A, 0.384%, 3/16/2012 | | 12,000,000 | 12,000,000 | |
| | 144A, 0.458%, 9/28/2011 | | 6,000,000 | 6,003,687 | |
| Royal Bank of Canada, 0.31%, 8/12/2011 | 11,300,000 | 11,300,000 | |
| Societe Generale, 0.32%, 5/19/2011 | 24,000,000 | 24,000,000 | |
| Westpac Banking Corp.: | |
| | 0.27%, 10/12/2011 | | 16,000,000 | 16,000,000 | |
| | 0.293%, 6/1/2011 | | 8,000,000 | 8,000,000 | |
| | 0.321%, 5/9/2012 | | 17,000,000 | 17,000,000 | |
| | 144A, 0.323%, 10/28/2011 | | 12,000,000 | 12,001,367 | |
| | 0.36%, 1/10/2012 | | 14,000,000 | 14,000,000 | |
Total Short-Term Notes (Cost $456,936,822) | 456,936,822 | |
| | |
| Government & Agency Obligations 13.9% | |
| Foreign Government Obligations 0.5% | |
| Kingdom of Denmark, 2.75%, 11/15/2011 | 11,500,000 | 11,643,626 | |
| Other Government Related (a) 1.6% | |
| European Investment Bank: | |
| | 0.24%, 6/28/2011 | | 13,000,000 | 12,994,973 | |
| | 2.625%, 5/16/2011 | | 7,000,000 | 7,006,628 | |
| | 2.625%, 11/15/2011 | | 22,000,000 | 22,267,637 | |
| | 42,269,238 | |
| US Government Sponsored Agencies 5.5% | |
| Federal Farm Credit Bank: | |
| | 0.223%*, 11/2/2011 | | 12,250,000 | 12,249,690 | |
| | 0.259%**, 10/20/2011 | | 5,000,000 | 4,993,789 | |
| | 0.259%**, 4/4/2012 | | 5,000,000 | 4,987,758 | |
| | 0.319%**, 12/16/2011 | | 10,200,000 | 10,179,237 | |
| Federal Home Loan Bank: | |
| | 0.24%, 10/28/2011 | | 14,000,000 | 13,995,584 | |
| | 0.25%, 10/28/2011 | | 14,000,000 | 13,999,429 | |
| | 0.268%**, 9/12/2011 | | 10,000,000 | 9,989,950 | |
| | 0.54%, 5/24/2011 | | 4,400,000 | 4,400,022 | |
| | 1.0%, 12/28/2011 | | 10,000,000 | 10,053,762 | |
| Federal National Mortgage Association: | |
| | 0.113%*, 7/27/2011 | | 12,500,000 | 12,498,033 | |
| | 0.159%**, 11/21/2011 | | 15,000,000 | 14,986,400 | |
| | 0.182%**, 6/16/2011 | | 12,500,000 | 12,497,045 | |
| | 4.68%, 6/15/2011 | | 7,000,000 | 7,038,043 | |
| | 5.375%, 11/15/2011 | | 10,000,000 | 10,280,209 | |
| | 142,148,951 | |
| US Treasury Obligations 6.3% | |
| US Treasury Bills: | |
| | 0.155%**, 7/28/2011 | | 996,000 | 995,623 | |
| | 0.16%**, 9/1/2011 | | 12,500,000 | 12,493,167 | |
| US Treasury Notes: | |
| | 0.875%, 5/31/2011 | | 39,500,000 | 39,518,687 | |
| | 0.875%, 1/31/2012 | | 13,500,000 | 13,567,775 | |
| | 1.0%, 9/30/2011 | | 37,000,000 | 37,117,154 | |
| | 4.5%, 11/30/2011 | | 7,000,000 | 7,170,545 | |
| | 4.625%, 8/31/2011 | | 27,500,000 | 27,899,749 | |
| | 4.625%, 10/31/2011 | | 17,000,000 | 17,369,535 | |
| | 5.125%, 6/30/2011 | | 7,500,000 | 7,560,710 | |
| | 163,692,945 | |
Total Government & Agency Obligations (Cost $359,754,760) | 359,754,760 | |
| | |
| Time Deposits 2.6% | |
| Citibank NA, 0.13%, 5/5/2011 | 58,000,000 | 58,000,000 | |
| National Australia Bank Ltd., 0.08%, 5/2/2011 | 9,315,483 | 9,315,483 | |
Total Time Deposits (Cost $67,315,483) | 67,315,483 | |
| | |
| Municipal Bonds and Notes 0.2% | |
| Henrico County, VA, Economic Development Authority, Residential Care Facility Revenue, Westminster Canterbury, 0.32%***, 10/1/2037, LOC: Branch Banking & Trust (Cost $4,085,000) | 4,085,000 | 4,085,000 | |
| | |
| Repurchase Agreements 16.2% | |
| Barclays Capital PLC, 0.03%, dated 4/29/2011, to be repurchased at $5,000,012 on 5/2/2011 (b) | 5,000,000 | 5,000,000 | |
| BNP Paribas, 0.03%, dated 4/29/2011, to be repurchased at $39,285,813 on 5/2/2011 (c) | 39,285,715 | 39,285,715 | |
| BNP Paribas, 0.04%, dated 4/29/2011, to be repurchased at $124,000,413 on 5/2/2011 (d) | 124,000,000 | 124,000,000 | |
| JPMorgan Securities, Inc., 0.01%, dated 4/29/2011, to be repurchased at $64,281,482 on 5/2/2011 (e) | 64,281,428 | 64,281,428 | |
| JPMorgan Securities, Inc., 0.04%, dated 4/29/2011, to be repurchased at $23,000,077 on 5/2/2011 (f) | 23,000,000 | 23,000,000 | |
| Merrill Lynch & Co., Inc., 0.05%, dated 4/29/2011, to be repurchased at $15,000,062 on 5/2/2011 (g) | 15,000,000 | 15,000,000 | |
| Morgan Stanley & Co., Inc., 0.04%, dated 4/29/2011, to be repurchased at $142,000,473 on 5/2/2011 (h) | 142,000,000 | 142,000,000 | |
| The Goldman Sachs & Co., 0.05%, dated 4/29/2011, to be repurchased at $6,000,025 on 5/2/2011 (i) | 6,000,000 | 6,000,000 | |
Total Repurchase Agreements (Cost $418,567,143) | 418,567,143 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $2,610,801,063)+ | | | 101.0 | | | | 2,610,801,063 | |
| Other Assets and Liabilities, Net | | | (1.0 | ) | | | (24,871,551 | ) |
| Net Assets | | | 100.0 | | | | 2,585,929,512 | |
* These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
** Annualized yield at time of purchase; not a coupon rate.
*** Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of April 30, 2011.
+ The cost for federal income tax purposes was $2,610,801,063.
(a) Government-backed debt issued by financial companies or government sponsored enterprises.
(b) Collateralized by $5,100,300 US Treasury Bill, maturing on 7/7/2011 with a value of $5,100,045.
(c) Collateralized by $41,890,600 US Treasury Note, 2.625%, maturing on 11/15/2020 with a value of $40,071,491.
(d) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 29,000,000 | | Federal Home Loan Bank | | | 3.125 | | 3/11/2016 | | | 30,474,263 | |
| | 91,202,000 | | Federal National Mortgage Association | | | 2.625 | | 11/20/2014 | | | 96,010,512 | |
| Total Collateral Value | | | | | | | | 126,484,775 | |
(e) Collateralized by $87,016,788 US Treasury STRIPS, with various maturity dates of 5/15/2019-8/15/2020 with a value of $65,568,029.
(f) Collateralized by $23,827,802 Federal Home Loan Mortgage Corp., with various coupon rates from 2.0-2.75%, with various maturity dates of 11/15/2038-9/15/2040 with a value of $23,464,662.
(g) Collateralized by $14,787,810 Federal Home Loan Mortgage Corp., 3.295%, maturing on 1/1/2041 with a value of $15,300,001.
(h) Collateralized by $138,402,899 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-6.0%, with various maturity dates of 8/1/2038-4/1/2041 with a value of $144,840,000.
(i) Collateralized by $7,977,887 Federal National Mortgage Association — Principal Only, with various maturity dates of 3/25/2036-5/25/2040 with a value of $6,120,000.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
LOC: Letter of Credit
Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying morgages or mortgage-backed securities.
STRIPS: Separate Trading of Registered Interest and Principal Securities
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Investments in Securities (j) | | $ | — | | | $ | 2,192,233,920 | | | $ | — | | | $ | 2,192,233,920 | |
| Repurchase Agreements | | | — | | | | 418,567,143 | | | | — | | | | 418,567,143 | |
| Total | | $ | — | | | $ | 2,610,801,063 | | | $ | — | | | $ | 2,610,801,063 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
(j) See Investment Portfolio for additional categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Money Market Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,192,233,920 | |
| Repurchase agreements, valued at amortized cost | | | 418,567,143 | |
| Total investments, valued at amortized cost | | | 2,610,801,063 | |
| Cash | | | 2,856 | |
| Receivable for Fund shares sold | | | 3,963 | |
| Interest receivable | | | 2,616,479 | |
| Due from Advisor | | | 16,735 | |
| Other assets | | | 93,812 | |
| Total assets | | | 2,613,534,908 | |
| Liabilities | |
| Payable for investments purchased | | | 25,996,945 | |
| Payable for Fund shares redeemed | | | 22,024 | |
| Accrued management fee | | | 322,306 | |
| Other accrued expenses and payables | | | 1,264,121 | |
| Total liabilities | | | 27,605,396 | |
| Net assets, at value | | $ | 2,585,929,512 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 39,083 | |
| Paid-in capital | | | 2,585,890,429 | |
| Net assets, at value | | $ | 2,585,929,512 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Money Market Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($845,877,944 ÷ 845,573,745 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Capital Assets Funds Preferred Shares Net Asset Value, offering and redemption price per share ($4,717,958 ÷ 4,716,261 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($13,123,785 ÷ 13,119,065 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Plus Shares Net Asset Value, offering and redemption price per share ($1,311,279 ÷ 1,310,807 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Premium Reserve Money Market Shares Net Asset Value, offering and redemption price per share ($61,599,618 ÷ 61,577,466 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($1,659,298,928 ÷ 1,658,702,190 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Money Market Portfolio | |
Income: Interest | | $ | 8,798,068 | |
Expenses: Management fee | | | 3,881,269 | |
| Services to shareholders | | | 6,076,379 | |
| Custodian fee | | | 74,890 | |
| Distribution and service fees | | | 14,110,025 | |
| Professional fees | | | 138,516 | |
| Trustees' fees and expenses | | | 77,791 | |
| Reports to shareholders | | | 320,727 | |
| Registration fees | | | 165,621 | |
| Other | | | 109,278 | |
| Total expenses before expense reductions | | | 24,954,496 | |
| Expense reductions | | | (16,494,317 | ) |
| Total expenses after expense reductions | | | 8,460,179 | |
| Net investment income | | | 337,889 | |
| Net realized gain (loss) from investments | | | 46,708 | |
| Net increase (decrease) in net assets resulting from operations | | $ | 384,597 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Money Market Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 337,889 | | | $ | 1,401,172 | |
| Net realized gain (loss) | | | 46,708 | | | | 163,092 | |
| Net increase in net assets resulting from operations | | | 384,597 | | | | 1,564,264 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (187,975 | ) | | | (325,020 | ) |
| Capital Assets Funds Preferred Shares | | | (13,299 | ) | | | (22,211 | ) |
| Davidson Cash Equivalent Shares | | | (1,869 | ) | | | (2,135 | ) |
| Davidson Cash Equivalent Plus Shares | | | (221 | ) | | | (304 | ) |
| Institutional Money Market Shares | | | — | | | | (739,919 | ) |
| Institutional Select Money Market Shares | | | — | | | | (18 | ) |
| Premier Money Market Shares | | | (5,042 | ) | | | (80,727 | ) |
| Premium Reserve Money Market Shares | | | (7,826 | ) | | | (119,850 | ) |
| Service Shares | | | (183,668 | ) | | | (110,887 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (185,696 | ) |
| Capital Assets Funds Preferred Shares | | | — | | | | (11,952 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (4,764 | ) |
| Davidson Cash Equivalent Plus Shares | | | — | | | | (692 | ) |
| Institutional Money Market Shares | | | — | | | | (48,898 | ) |
| Institutional Select Money Market Shares | | | — | | | | (1 | ) |
| Premier Money Market Shares | | | — | | | | (232,203 | ) |
| Premium Reserve Money Market Shares | | | — | | | | (48,826 | ) |
| Service Shares | | | — | | | | (238,491 | ) |
| Total distributions | | | (399,900 | ) | | | (2,172,594 | ) |
Fund share transactions: Proceeds from shares sold | | | 2,807,221,339 | | | | 3,753,564,969 | |
| Reinvestment of distributions | | | 395,534 | | | | 2,086,161 | |
| Cost of shares redeemed | | | (2,616,619,588 | ) | | | (6,446,352,321 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | 190,997,285 | | | | (2,690,701,191 | ) |
| Increase (decrease) in net assets | | | 190,981,982 | | | | (2,691,309,521 | ) |
| Net assets at beginning of period | | | 2,394,947,530 | | | | 5,086,257,051 | |
| Net assets at end of period (including undistributed net investment income of $39,083 and $54,386, respectively) | | $ | 2,585,929,512 | | | $ | 2,394,947,530 | |
The accompanying notes are an integral part of the financial statements.
Money Market Portfolio Davidson Cash Equivalent Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .012 | | | | .039 | | | | .043 | |
| Net realized and unrealized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .012 | | | | .039 | | | | .043 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.012 | ) | | | (.039 | ) | | | (.043 | ) |
| Net realized gains | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.012 | ) | | | (.039 | ) | | | (.043 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .01 | | | | .03 | | | | 1.25 | | | | 3.93 | | | | 4.39 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 13 | | | | 18 | | | | 30 | | | | 59 | | | | 240 | |
| Ratio of expenses before expense reductions (%) | | | 1.01 | | | | .94 | | | | .98 | | | | 1.00 | | | | 1.07 | |
| Ratio of expenses after expense reductions (%) | | | .35 | | | | .46 | | | | .97 | | | | .99 | | | | 1.00 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | 1.19 | | | | 3.82 | | | | 4.28 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
Money Market Portfolio Davidson Cash Equivalent Plus Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .013 | | | | .040 | | | | .044 | |
| Net realized and unrealized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .013 | | | | .040 | | | | .044 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.013 | ) | | | (.040 | ) | | | (.044 | ) |
| Net realized gains | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.013 | ) | | | (.040 | ) | | | (.044 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .01 | | | | .03 | | | | 1.35 | | | | 4.07 | | | | 4.54 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 1 | | | | 2 | | | | 5 | | | | 12 | | | | 83 | |
| Ratio of expenses before expense reductions (%) | | | .88 | | | | .86 | | | | .86 | | | | .85 | | | | .88 | |
| Ratio of expenses after expense reductions (%) | | | .35 | | | | .46 | | | | .86 | | | | .85 | | | | .85 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | 1.30 | | | | 3.96 | | | | 4.43 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
Government & Agency Securities Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
| Government & Agency Obligations | 50% | 85% |
| Repurchase Agreements | 48% | 15% |
| Commercial Paper | 2% | — |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Government & Agency Securities Portfolio | 49 days | 52 days |
| iMoneyNet Government & Agencies Retail Money Fund Average* | 38 days | 45 days |
* The Fund is compared to its respective iMoney Net Category: Government & Agencies Retail Money Fund Average consists of all non-institutional government money market funds. Category includes the most broadly based of the government retail funds. These funds can invest in US Treasuries, US Other, Repos, whether or not they are backed by US Treasuries and government-backed Floating Rate Notes.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 26-30. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Government & Agency Securities Portfolio
| | Principal Amount ($) | Value ($) | |
| | | |
| Commercial Paper 1.8% | |
| Issued at Discount | |
| Straight-A Funding LLC: | |
| | 144A, 0.15%, 5/11/2011 | | 20,000,000 | 19,999,167 | |
| | 144A, 0.2%, 7/5/2011 | | 80,000,000 | 79,971,111 | |
Total Commercial Paper (Cost $99,970,278) | 99,970,278 | |
| | |
| Government & Agency Obligations 51.6% | |
| US Government Sponsored Agencies 45.9% | |
| Federal Farm Credit Bank: | |
| | 0.119%**, 5/18/2012 | | 165,000,000 | 164,991,321 | |
| | 0.12%**, 1/12/2012 | | 100,000,000 | 100,001,775 | |
| | 0.129%*, 9/9/2011 | | 25,000,000 | 24,988,174 | |
| | 0.134%**, 7/15/2011 | | 85,000,000 | 84,999,308 | |
| | 0.164%*, 5/24/2011 | | 50,000,000 | 49,994,569 | |
| | 0.208%*, 8/3/2011 | | 43,500,000 | 43,476,148 | |
| | 0.259%*, 10/20/2011 | | 34,500,000 | 34,457,143 | |
| | 0.259%*, 4/4/2012 | | 12,500,000 | 12,469,396 | |
| | 0.269%*, 3/23/2012 | | 25,000,000 | 24,938,688 | |
| | 0.319%*, 12/16/2011 | | 28,000,000 | 27,943,004 | |
| | 0.319%*, 1/12/2012 | | 33,000,000 | 32,924,907 | |
| Federal Home Loan Bank: | |
| | 0.018%*, 5/2/2011 | | 12,737,000 | 12,737,000 | |
| | 0.064%*, 7/20/2011 | | 100,000,000 | 99,985,556 | |
| | 0.068%*, 5/27/2011 | | 50,000,000 | 49,997,472 | |
| | 0.076%*, 5/18/2011 | | 55,000,000 | 54,997,922 | |
| | 0.089%*, 9/6/2011 | | 50,000,000 | 49,984,000 | |
| | 0.149%*, 8/12/2011 | | 7,500,000 | 7,496,781 | |
| | 0.149%*, 8/17/2011 | | 12,207,000 | 12,201,507 | |
| | 0.17%**, 1/18/2012 | | 22,000,000 | 22,006,379 | |
| | 0.183%**, 9/26/2011 | | 12,500,000 | 12,499,749 | |
| | 0.24%, 10/28/2011 | | 36,275,000 | 36,266,384 | |
| | 0.248%*, 8/22/2011 | | 5,000,000 | 4,996,076 | |
| | 0.268%*, 9/12/2011 | | 15,900,000 | 15,884,021 | |
| | 0.3%, 12/27/2011 | | 75,000,000 | 75,022,455 | |
| | 0.76%, 7/19/2011 | | 15,000,000 | 15,017,910 | |
| | 1.0%, 12/28/2011 | | 13,460,000 | 13,532,363 | |
| | 5.375%, 8/19/2011 | | 14,900,000 | 15,129,895 | |
| Federal Home Loan Mortgage Corp.: | |
| | 0.028%*, 5/19/2011 | | 15,000,000 | 14,999,775 | |
| | 0.08%**, 11/9/2011 | | 75,000,000 | 74,967,946 | |
| | 0.14%**, 11/10/2011 | | 200,000,000 | 200,000,000 | |
| | 0.149%*, 7/27/2011 | | 85,000,000 | 84,969,188 | |
| | 0.164%*, 9/1/2011 | | 8,935,000 | 8,929,963 | |
| | 0.167%*, 6/13/2011 | | 27,061,000 | 27,055,505 | |
| | 0.193%*, 7/25/2011 | | 34,494,000 | 34,478,118 | |
| | 0.198%*, 7/12/2011 | | 100,000,000 | 99,960,000 | |
| Federal National Mortgage Association: | |
| | 0.059%*, 6/13/2011 | | 75,000,000 | 74,994,625 | |
| | 0.079%*, 7/21/2011 | | 100,000,000 | 99,982,000 | |
| | 0.099%*, 8/8/2011 | | 32,500,000 | 32,491,063 | |
| | 0.113%**, 7/27/2011 | | 190,000,000 | 189,983,791 | |
| | 0.119%*, 8/22/2011 | | 25,000,000 | 24,990,583 | |
| | 0.119%*, 9/13/2011 | | 100,000,000 | 99,955,000 | |
| | 0.129%*, 9/26/2011 | | 65,000,000 | 64,965,261 | |
| | 0.159%*, 11/21/2011 | | 100,000,000 | 99,909,333 | |
| | 0.174%**, 9/19/2011 | | 30,000,000 | 29,999,404 | |
| | 0.178%*, 7/20/2011 | | 44,000,000 | 43,982,400 | |
| | 0.178%*, 7/27/2011 | | 51,659,000 | 51,636,528 | |
| | 0.182%*, 6/16/2011 | | 35,000,000 | 34,991,726 | |
| | 5.0%, 10/15/2011 | | 50,000,000 | 51,082,031 | |
| | 5.375%, 11/15/2011 | | 16,040,000 | 16,489,455 | |
| | 2,559,753,598 | |
| US Treasury Obligations 5.7% | |
| US Treasury Bill, 0.16%*, 9/1/2011 | | 17,500,000 | 17,490,433 | |
| US Treasury Notes: | |
| | 0.875%, 5/31/2011 | | 25,000,000 | 25,014,282 | |
| | 1.0%, 9/30/2011 | | 84,500,000 | 84,768,848 | |
| | 1.75%, 11/15/2011 | | 50,000,000 | 50,394,064 | |
| | 4.625%, 8/31/2011 | | 43,500,000 | 44,134,573 | |
| | 4.625%, 10/31/2011 | | 45,000,000 | 45,986,196 | |
| | 5.125%, 6/30/2011 | | 50,000,000 | 50,404,731 | |
| | 318,193,127 | |
Total Government & Agency Obligations (Cost $2,877,946,725) | 2,877,946,725 | |
| | |
| Repurchase Agreements 49.5% | |
| Barclays Capital PLC, 0.03%, dated 4/29/2011, to be repurchased at $215,000,538 on 5/2/2011 (a) | 215,000,000 | 215,000,000 | |
| BNP Paribas, 0.03%, dated 4/29/2011, to be repurchased at $42,428,677 on 5/2/2011 (b) | 42,428,571 | 42,428,571 | |
| BNP Paribas, 0.04%, dated 4/29/2011, to be repurchased at $704,002,347 on 5/2/2011 (c) | 704,000,000 | 704,000,000 | |
| Citigroup, Inc., 0.03%, dated 4/29/2011, to be repurchased at $22,000,055 on 5/2/2011 (d) | 22,000,000 | 22,000,000 | |
| JPMorgan Securities, Inc., 0.01%, dated 4/29/2011, to be repurchased at $432,619,312 on 5/2/2011 (e) | 432,618,951 | 432,618,951 | |
| JPMorgan Securities, Inc., 0.04%, dated 4/29/2011, to be repurchased at $233,000,743 on 5/2/2011 (f) | 223,000,000 | 223,000,000 | |
| Merrill Lynch & Co., Inc., 0.05%, dated 4/29/2011, to be repurchased at $123,927,019 on 5/2/2011 (g) | 123,926,503 | 123,926,503 | |
| Morgan Stanley & Co., Inc., 0.04%, dated 4/29/2011, to be repurchased at $252,000,840 on 5/2/2011 (h) | 252,000,000 | 252,000,000 | |
| The Goldman Sachs & Co., 0.05%, dated 4/29/2011, to be repurchased at $441,001,838 on 5/2/2011 (i) | 441,000,000 | 441,000,000 | |
| The Goldman Sachs & Co., 0.06%, dated 4/28/2011, to be repurchased at $300,003,500 on 5/5/2011 (j) | 300,000,000 | 300,000,000 | |
Total Repurchase Agreements (Cost $2,755,974,025) | 2,755,974,025 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $5,733,891,028)+ | | | 102.9 | | | | 5,733,891,028 | |
| Other Assets and Liabilities, Net | | | (2.9 | ) | | | (162,027,136 | ) |
| Net Assets | | | 100.0 | | | | 5,571,863,892 | |
* Annualized yield at time of purchase; not a coupon rate.
** These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
+ The cost for federal income tax purposes was $5,733,891,028.
(a) Collateralized by $207,105,300 US Treasury Note, 3.125%, maturing on 9/30/2013 with a value of $219,300,094.
(b) Collateralized by $45,241,800 US Treasury Note, 2.625%, maturing on 11/15/2020 with a value of $43,277,165.
(c) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 522,522,000 | | Federal Home Loan Mortgage Corp. | | | 1.65-5.5 | | 4/28/2014- 4/8/2030 | | | 546,732,677 | |
| | 161,294,000 | | Federal National Mortgage Association | | | 3.25-4.75 | | 2/21/2013- 4/9/2013 | | | 171,348,112 | |
| Total Collateral Value | | | 718,080,789 | |
(d) Collateralized by $22,443,000 Federal Home Loan Bank, maturing on 7/29/2011 with a value of $22,440,082.
(e) Collateralized by $531,439,126 US Treasury STRIPS, maturing on 11/15/2013-2/15/2020 with a value of $441,272,531.
(f) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 185,181,947 | | Federal Home Loan Mortgage Corp. | | Zero Coupon-6.5 | | 7/15/2015- 8/15/2039 | | | 192,999,725 | |
| | 54,470,688 | | Federal Home Loan Mortgage Corp. —
Interest only | | | 5.281 | | 1/15/2039 | | | 5,749,091 | |
| | 7,680,197 | | Federal Home Loan Mortgage Corp. — Principal only | | Zero Coupon | | 11/15/2036- 5/15/2037 | | | 6,713,414 | |
| | 23,268,926 | | Federal National Mortgage Association | | | 0.513-6.47 | | 2/25/2029- 6/25/2037 | | | 22,905,889 | |
| Total Collateral Value | | | 228,368,119 | |
(g) Collateralized by $124,768,369 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-4.5%, with various maturity dates of 3/1/2039-12/1/2040 with a value of $126,405,034.
(h) Collateralized by $242,597,416 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-6.0%, with various maturity dates of 3/1/2038-4/1/2041 with a value of $257,040,001.
(i) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 22,370,889 | | Federal Home Loan Mortgage Corp. | | | 4.0-5.5 | | 4/15/2040- 4/15/2041 | | | 21,981,083 | |
| | 491,792,871 | | Federal Home Loan Mortgage Corp. —
Interest only | | | 5.781-6.431 | | 9/15/2033- 11/15/2038 | | | 77,032,731 | |
| | 210,576,230 | | Federal National Mortgage Association | | Zero Coupon — 5.5 | | 6/25/2021- 3/25/2041 | | | 213,820,002 | |
| | 914,052,013 | | Federal National Mortgage Association — Interest only | | | 5.787-6.266 | | 6/25/2038- 1/25/2041 | | | 136,986,185 | |
| Total Collateral Value | | | 449,820,001 | |
(j) Collateralized by $295,084,262 Federal National Mortgage Association, with various coupon rates from 3.5-4.5%, with various maturity dates of 10/25/2039-2/25/2041 with a value of $306,000,000.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
Interest Only: Interest Only (IO) bonds represent the "interest only" portion of payments on a pool of underlying mortgages or mortgage-backed securities. IO securities are subject to prepayment risk of the pool of underlying mortgages.
Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying mortgages or mortgage-backed securities.
STRIPS: Separate Trading of Registered Interest and Principal Securities
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Investments in Securities (k) | | $ | — | | | $ | 2,977,917,003 | | | $ | — | | | $ | 2,977,917,003 | |
| Repurchase Agreements | | | — | | | | 2,755,974,025 | | | | — | | | | 2,755,974,025 | |
| Total | | $ | — | | | $ | 5,733,891,028 | | | $ | — | | | $ | 5,733,891,028 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the period ended April 30, 2011.
(k) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Government & Agency Securities Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,977,917,003 | |
| Repurchase agreements, valued at amortized cost | | | 2,755,974,025 | |
| Total investments, valued at amortized cost | | | 5,733,891,028 | |
| Receivable for Fund shares sold | | | 142,451 | |
| Interest receivable | | | 3,670,502 | |
| Due from Advisor | | | 136,428 | |
| Other assets | | | 95,442 | |
| Total assets | | | 5,737,935,851 | |
| Liabilities | |
| Payable for investments purchased | | | 164,991,321 | |
| Payable for Fund shares redeemed | | | 126,472 | |
| Distributions payable | | | 106,265 | |
| Accrued management fee | | | 99,239 | |
| Other accrued expenses and payables | | | 748,662 | |
| Total liabilities | | | 166,071,959 | |
| Net assets, at value | | $ | 5,571,863,892 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 201,484 | |
| Accumulated net realized gain (loss) | | | (602,497 | ) |
| Paid-in capital | | | 5,572,264,905 | |
| Net assets, at value | | $ | 5,571,863,892 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Government & Agency Securities Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($284,348,907 ÷ 284,368,469 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($19,057,230 ÷ 19,058,540 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Plus Shares Net Asset Value, offering and redemption price per share ($33,261,953 ÷ 33,264,241 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Government & Agency Money Fund Net Asset Value, offering and redemption price per share ($170,093,183 ÷ 170,104,883 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Government Cash Institutional Shares Net Asset Value, offering and redemption price per share ($4,771,880,106 ÷ 4,772,208,337 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Government Cash Managed Shares Net Asset Value, offering and redemption price per share ($179,819,975 ÷ 179,832,348 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($113,402,538 ÷ 113,410,339 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Government & Agency Securities Portfolio | |
Income: Interest | | $ | 9,770,345 | |
Expenses: Management fee | | | 2,506,115 | |
| Administration fee | | | 4,222,727 | |
| Services to shareholders | | | 1,845,325 | |
| Custodian fee | | | 76,975 | |
| Distribution and service fees | | | 3,146,324 | |
| Professional fees | | | 150,210 | |
| Trustees' fees and expenses | | | 127,065 | |
| Reports to shareholders | | | 10,937 | |
| Registration fees | | | 141,522 | |
| Other | | | 393,329 | |
| Total expenses before expense reductions | | | 12,620,529 | |
| Expense reductions | | | (5,190,147 | ) |
| Total expenses after expense reductions | | | 7,430,382 | |
| Net investment income | | | 2,339,963 | |
| Net realized gain (loss) from investments | | | (602,497 | ) |
| Net increase (decrease) in net assets resulting from operations | | $ | 1,737,466 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Government & Agency Securities Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 2,339,963 | | | $ | 18,279,158 | |
| Net realized gain (loss) | | | (602,497 | ) | | | 683,254 | |
| Net increase in net assets resulting from operations | | | 1,737,466 | | | | 18,962,412 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (29,745 | ) | | | (30,842 | ) |
| Davidson Cash Equivalent Shares | | | (2,133 | ) | | | (2,419 | ) |
| Davidson Cash Equivalent Plus Shares | | | (5,528 | ) | | | (3,042 | ) |
| DWS Government & Agency Money Fund | | | (28,169 | ) | | | (168,152 | ) |
| DWS Government Cash Institutional Shares | | | (2,230,405 | ) | | | (17,853,361 | ) |
| Government Cash Managed Shares | | | (21,680 | ) | | | (46,318 | ) |
| Premier Money Market Shares | | | — | | | | (176,438 | ) |
| Service Shares | | | (12,160 | ) | | | (13,091 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (34,871 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (2,710 | ) |
| Davidson Cash Equivalent Plus Shares | | | — | | | | (2,843 | ) |
| DWS Government & Agency Money Fund | | | — | | | | (32,168 | ) |
| DWS Government Cash Institutional Shares | | | — | | | | (1,560,440 | ) |
| Government Cash Managed Shares | | | — | | | | (38,058 | ) |
| Premier Money Market Shares | | | — | | | | (242,870 | ) |
| Service Shares | | | — | | | | (14,378 | ) |
| Total distributions | | | (2,329,820 | ) | | | (20,222,001 | ) |
Fund share transactions: Proceeds from shares sold | | | 38,138,317,757 | | | | 89,328,240,895 | |
| Reinvestment of distributions | | | 1,201,174 | | | | 9,173,740 | |
| Cost of shares redeemed | | | (40,469,462,394 | ) | | | (101,467,650,200 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (2,329,943,463 | ) | | | (12,130,235,565 | ) |
| Increase (decrease) in net assets | | | (2,330,535,817 | ) | | | (12,131,495,154 | ) |
| Net assets at beginning of period | | | 7,902,399,709 | | | | 20,033,894,863 | |
| Net assets at end of period (including undistributed net investment income of $201,484 and $191,341, respectively) | | $ | 5,571,863,892 | | | $ | 7,902,399,709 | |
The accompanying notes are an integral part of the financial statements.
Government & Agency Securities Portfolio Davidson Cash Equivalent Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .008 | | | | .036 | | | | .043 | |
| Net realized and unrealized gain (loss) | | | (.000 | )* | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .008 | | | | .036 | | | | .043 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.008 | ) | | | (.036 | ) | | | (.043 | ) |
| Net realized gains | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.008 | ) | | | (.036 | ) | | | (.043 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .01 | | | | .02 | | | | .76 | | | | 3.70 | | | | 4.37 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 19 | | | | 20 | | | | 29 | | | | 40 | | | | 135 | |
| Ratio of expenses before expense reductions (%) | | | .99 | | | | .96 | | | | .99 | | | | 1.00 | | | | 1.09 | |
| Ratio of expenses after expense reductions (%) | | | .22 | | | | .31 | | | | .90 | | | | .98 | | | | 1.00 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | .82 | b | | | 3.47 | | | | 4.28 | |
a Total return would have been lower had certain expenses not been reduced. b Due to the timing of the subscriptions and redemptions, the amount shown does not correspond to the total return during the period. * Amount is less than $.0005. | |
Government & Agency Securities Portfolio Davidson Cash Equivalent Plus Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .009 | | | | .038 | | | | .044 | |
| Net realized and unrealized gain (loss) | | | (.000 | )* | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .009 | | | | .038 | | | | .044 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.009 | ) | | | (.038 | ) | | | (.044 | ) |
| Net realized gains | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.009 | ) | | | (.038 | ) | | | (.044 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .01 | | | | .02 | | | | .89 | | | | 3.84 | | | | 4.52 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 33 | | | | 50 | | | | 24 | | | | 31 | | | | 36 | |
| Ratio of expenses before expense reductions (%) | | | .84 | | | | .85 | | | | .83 | | | | .87 | | | | .89 | |
| Ratio of expenses after expense reductions (%) | | | .23 | | | | .29 | | | | .78 | | | | .86 | | | | .85 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | .96 | b | | | 3.59 | | | | 4.43 | |
a Total return would have been lower had certain expenses not been reduced. b Due to the timing of the subscriptions and redemptions, the amount shown does not correspond to the total return during the period. * Amount is less than $.0005. | |
Tax-Exempt Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
Municipal Investments Municipal Variable Rate Demand Notes | 70% | 72% |
| Municipal Bonds and Notes | 27% | 28% |
| Municipal Floating Rate Notes | 3% | — |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Tax-Exempt Portfolio | 33 days | 44 days |
| National Tax-Free Retail Money Fund Average* | 28 days | 31 days |
* The Fund is compared to its respective iMoneyNet Category: National Tax-Free Retail Money Fund Average — Category consists of all national tax-free and municipal retail funds. Portfolio holdings of tax-free funds include Rated and Unrated Demand Notes, Rated and Unrated General Market Notes; Commercial Paper; Put Bonds — 6 months and less; Put Bonds — over 6 months; AMT Paper and Other Tax-Free Holdings.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 38-49. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Tax-Exempt Portfolio
| | | Principal Amount ($) | | | Value ($) | |
| | | | |
| Municipal Investments 99.8% | |
| Alabama 0.4% | |
| Tuscaloosa County, AL, Industrial Development Gulf Opportunity Zone, Hunt Refining Project, Series C, 0.3%*, 12/1/2027 | | | 10,000,000 | | | | 10,000,000 | |
| Alaska 1.1% | |
| Anchorage, AK, Tax Anticipation Notes, 1.5%, 12/29/2011 | | | 30,000,000 | | | | 30,237,724 | |
| Arkansas 0.3% | |
| Fort Smith, AR, Mitsubishi Power Systems Revenue, Recovery Zone Facility Bonds, 0.31%*, 10/1/2040, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 8,000,000 | | | | 8,000,000 | |
| California 7.4% | |
| California, Beaumont Utility Authority Revenue, Wastewater Enterprise Project, Series A, 0.31%*, 9/1/2041, LOC: Union Bank of CA | | | 4,450,000 | | | | 4,450,000 | |
| California, Clipper Tax-Exempt Certificate Trust, Series 2009-66, 144A, 0.29%*, 5/15/2030, LIQ: State Street Bank & Trust Co. | | | 13,100,000 | | | | 13,100,000 | |
| California, Educational Facilities Authority Revenue, Series R-11734, 144A, 0.25%*, 6/1/2011, LIQ: Citibank NA | | | 8,910,000 | | | | 8,910,000 | |
| California, Inland Valley Development Agency, Tax Allocation, 0.3%*, 3/1/2027, LOC: Union Bank of CA | | | 32,695,000 | | | | 32,695,000 | |
| California, Statewide Communities Development Authority Revenue, Retirement Housing Foundation, 0.3%*, 9/1/2030, LOC: KBC Bank NV | | | 26,200,000 | | | | 26,200,000 | |
| California, Statewide Communities Development Authority, Multi-Family Housing Revenue: | | | | | | | | |
| Series 2680, 144A, 0.36%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 15,110,000 | | | | 15,110,000 | |
| Series 29G, 144A, AMT, 0.4%*, 5/1/2039, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 61,000,000 | | | | 61,000,000 | |
| Series 2681, 144A, AMT, 0.46%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 11,190,000 | | | | 11,190,000 | |
| California, Wells Fargo Stage Trust, Series 72C, 144A, 0.28%*, 8/15/2039, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 21,500,000 | | | | 21,500,000 | |
| Palo Alto, CA, General Obligation, Series R-11859, 144A, 0.26%*, 2/1/2018, LIQ: Citibank NA | | | 3,120,000 | | | | 3,120,000 | |
| | | | | 197,275,000 | |
| Colorado 3.5% | |
| Colorado, Cornerstar Metropolitan District, Special Revenue, 0.66%*, 12/1/2037, LOC: Compass Bank | | | 15,500,000 | | | | 15,500,000 | |
| Colorado, Housing & Finance Authority, Single Family, "I", Series B-2, 144A, AMT, 0.8%*, 11/1/2026, SPA: Dexia Credit Local | | | 18,350,000 | | | | 18,350,000 | |
| Colorado, Lowry Economic Redevelopment Authority Revenue, Series A, 1.0%*, 12/1/2020, LOC: Compass Bank | | | 5,000,000 | | | | 5,000,000 | |
| Colorado Springs, CO, Utilities Revenue, Series A, 0.8%*, 11/1/2023, SPA: Dexia Credit Local | | | 55,500,000 | | | | 55,500,000 | |
| | | | | 94,350,000 | |
| Delaware 0.5% | |
| Delaware, BB&T Municipal Trust, Series 5000, 144A, 0.34%*, 10/1/2028, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 13,020,062 | | | | 13,020,062 | |
| Florida 7.2% | |
| Alachua County, FL, Housing Finance Authority, Multi-Family Revenue, Santa Fe I Apartments, AMT, 0.31%*, 12/15/2038, LOC: Citibank NA | | | 3,440,000 | | | | 3,440,000 | |
| Broward County, FL, Housing Finance Authority, Multi-Family Housing Revenue, Series 51G, 144A, AMT, 0.29%*, 6/1/2046, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 28,520,000 | | | | 28,520,000 | |
| Florida, BB&T Municipal Trust: | |
| Series 1010, 144A, 0.29%*, 1/15/2019, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 6,670,000 | | | | 6,670,000 | |
| Series 1029, 0.34%*, 7/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,510,000 | | | | 10,510,000 | |
| Series 1012, 144A, 0.34%*, 11/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 9,825,000 | | | | 9,825,000 | |
| Florida, Capital Trust Agency Housing Revenue, Atlantic Housing Foundation, Series A, 0.26%*, 7/15/2024, INS: Fannie Mae, LIQ: Fannie Mae | | | 19,000,000 | | | | 19,000,000 | |
| Florida, State Board of Public Education: | |
| "A", 0.25%*, 6/1/2027, SPA: Citibank NA | | | 5,840,000 | | | | 5,840,000 | |
| Series 3834Z, 144A, 0.26%*, 12/1/2015, LIQ: JPMorgan Chase Bank | | | 9,000,000 | | | | 9,000,000 | |
| Highlands County, FL, Health Facilities Authority Revenue, Series II R-11564, 144A, 0.27%*, 11/15/2014, LIQ: Citibank NA | | | 9,365,000 | | | | 9,365,000 | |
| Hillsborough County, FL, Aviation Revenue, 0.27%, 5/12/2011 | | | 3,625,000 | | | | 3,625,000 | |
| Hillsborough County, FL, Housing Finance Authority, Multi-Family Revenue, Hunt Club Apartments, 0.3%*, 8/15/2041, LOC: SunTrust Bank | | | 5,445,000 | | | | 5,445,000 | |
| Hillsborough County, FL, School Board, Certificates of Participation, Master Lease, Series C, 0.23%*, 7/1/2030, INS: NATL, LOC: Wells Fargo Bank NA | | | 33,040,000 | | | | 33,040,000 | |
| Jacksonville, FL, Health Facilities Authority Hospital Revenue, Series A, 0.25%*, 8/15/2033, LOC: Bank of America NA | | | 8,200,000 | | | | 8,200,000 | |
| Lee County, FL, Industrial Development Authority, Health Care Facilities Revenue, Hope Hospice Project, 0.27%*, 10/1/2027, LOC: Northern Trust Co. | | | 21,000,000 | | | | 21,000,000 | |
| Palm Beach County, FL, Community Foundation, Palm Beach Project Revenue, 0.29%*, 3/1/2034, LOC: Northern Trust Co. | | | 4,750,000 | | | | 4,750,000 | |
| Pinellas County, FL, Educational Facilities Authority Revenue, Barry University Project, 0.31%*, 10/1/2037, LOC: Bank of America NA | | | 9,005,000 | | | | 9,005,000 | |
| Sarasota County, FL, Health Care Facilities Authority Revenue, Bay Village Project, 0.4%*, 12/1/2023, LOC: Bank of America NA | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 191,935,000 | |
| Georgia 2.8% | |
| Georgia, Main Street Natural Gas, Inc., Gas Project Revenue, Series A, 0.26%*, 8/1/2040, SPA: Royal Bank of Canada | | | 65,200,000 | | | | 65,200,000 | |
| Georgia, Private Colleges & Universities Authority Revenue, Mercer University Project, Series C, 0.27%*, 10/1/2031, LOC: Branch Banking & Trust | | | 8,580,000 | | | | 8,580,000 | |
| | | | | 73,780,000 | |
| Hawaii 0.3% | |
| Hawaii, Pacific Health Special Purpose Revenue, Series 6C, 144A, 0.29%*, 7/1/2040, LIQ: Wells Fargo Bank NA | | | 8,820,000 | | | | 8,820,000 | |
| Idaho 2.0% | |
| Idaho, State Tax Anticipation Notes, 144A, 2.0%, 6/30/2011 | | | 52,000,000 | | | | 52,135,343 | |
| Illinois 11.6% | |
| Chicago, IL, Board of Education, Dedicated Revenues, Series A-2, 0.26%*, 3/1/2026, LOC: Northern Trust Co. | | | 5,900,000 | | | | 5,900,000 | |
| Chicago, IL, General Obligation, Series 2008-068, 144A, 1.01%*, 1/1/2022, INS: AGMC, AMBAC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 11,480,000 | | | | 11,480,000 | |
| Chicago, IL, Metropolitan Water Reclamation District, Greater Chicago: | | | | | | | | |
| Series 2008-051, 144A, 0.86%*, 12/1/2028, LIQ: Dexia Credit Local | | | 5,360,000 | | | | 5,360,000 | |
| Series 2008-052, 144A, 0.86%*, 12/1/2035, LIQ: Dexia Credit Local | | | 25,110,000 | | | | 25,110,000 | |
| Cook County, IL, Catholic Theological Union Project Revenue, 0.31%*, 2/1/2035, LOC: Harris Trust & Savings Bank | | | 6,000,000 | | | | 6,000,000 | |
| Illinois, BB&T Municipal Trust, Series 5001, 144A, 0.34%*, 6/1/2020, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 17,314,484 | | | | 17,314,484 | |
| Illinois, Development Finance Authority, Industrial Project Revenue, Grecian Delight Foods Project, AMT, 0.49%*, 8/1/2019, LOC: LaSalle Bank NA | | | 1,765,000 | | | | 1,765,000 | |
| Illinois, Education Facility Authority Revenue, Series N, 0.3%, 6/1/2011 | | | 74,465,000 | | | | 74,465,000 | |
| Illinois, Finance Authority Industrial Development Revenue, Fitzpatrick Brothers, 0.27%*, 4/1/2033, LOC: Northern Trust Co. | | | 4,600,000 | | | | 4,600,000 | |
| Illinois, Finance Authority Revenue, "A", 144A, 0.25%*, 12/1/2042, LIQ: Citibank NA | | | 5,445,000 | | | | 5,445,000 | |
| Illinois, Finance Authority Revenue, Clare Oaks, Series C, 0.36%*, 11/1/2040, LOC: Sovereign Bank FSB | | | 27,680,000 | | | | 27,680,000 | |
| Illinois, Finance Authority Revenue, Northwestern University: | |
| Series A, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 14,000,000 | | | | 14,000,000 | |
| Series C, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 10,000,000 | | | | 10,000,000 | |
| Illinois, Finance Authority, Pollution Control Revenue, Commonwealth Edison Co., Series F, 144A, 0.25%*, 3/1/2017, LOC: JPMorgan Chase Bank | | | 3,700,000 | | | | 3,700,000 | |
| Illinois, State Toll Highway Authority Revenue, Senior Priority, Series A-2A, 0.29%*, 7/1/2030, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 15,000,000 | | | | 15,000,000 | |
| Illinois, State Wells Fargo Stage Trust, Series 47C, 144A, 0.29%*, 12/1/2024, INS: AGMC, LIQ: Wells Fargo Bank NA | | | 33,190,000 | | | | 33,190,000 | |
| Illinois, University of Illinois Revenue, "A", 144A, 0.27%*, 4/1/2035, INS: NATL, LIQ: Citibank NA | | | 14,300,000 | | | | 14,300,000 | |
| Mundelein, IL, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 0.54%*, 1/1/2015, LOC: Northern Trust Co. | | | 6,500,000 | | | | 6,500,000 | |
| Woodstock, IL, Multi-Family Housing Revenue, Willow Brooke Apartments, AMT, 0.29%*, 4/1/2042, LOC: Wells Fargo Bank NA | | | 25,905,000 | | | | 25,905,000 | |
| | | | | 307,714,484 | |
| Indiana 0.6% | |
| Indiana, Health & Educational Facility, Financing Authority Revenue, Greenwood Village South Project, Series A, 0.36%*, 5/1/2036, LOC: Sovereign Bank FSB | | | 6,155,000 | | | | 6,155,000 | |
| Terre Haute, IN, Westminster Village Revenue, Series A, 0.36%*, 8/1/2036, LOC: Sovereign Bank FSB | | | 9,245,000 | | | | 9,245,000 | |
| | | | | 15,400,000 | |
| Iowa 0.6% | |
| Iowa, Finance Authority, Multi-Family Revenue, Housing Windsor on River, Series A, AMT, 0.29%*, 5/1/2042, LOC: Wells Fargo Bank NA | | | 17,000,000 | | | | 17,000,000 | |
| Kansas 1.7% | |
| Kansas, State Department of Transportation Highway Revenue, Series D, 0.37%*, 3/1/2012, LIQ: Dexia Credit Local | | | 5,040,000 | | | | 5,040,000 | |
| Kansas, State Development Finance Authority, Multi-Family Revenue, Oak Ridge Park II Project, Series X, AMT, 0.34%*, 12/1/2036, LOC: US Bank NA | | | 3,650,000 | | | | 3,650,000 | |
| Lenexa, KS, Revenue Bond, Series 2007-302, 144A, 0.38%*, 2/1/2012, LIQ: Bank of America NA | | | 11,565,000 | | | | 11,565,000 | |
| Wichita, KS, General Obligation, Series 240, 0.45%, 9/15/2011 | | | 23,800,000 | | | | 23,800,000 | |
| | | | | 44,055,000 | |
| Kentucky 0.2% | |
| Mason County, KY, Pollution Control Revenue, East Kentucky Power Corp., Inc., Series B-2, 0.85%*, 10/15/2014, SPA: National Rural Utilities Cooperative Finance Corp. | | | 4,500,000 | | | | 4,500,000 | |
| Louisiana 0.9% | |
| Lake Charles, LA, Harbor & Terminal District Revenue, Lake Charles Cogeneration, 0.37%, Mandatory Put 5/31/2011 @ 100, 11/1/2040 | | | 20,000,000 | | | | 20,000,000 | |
| Louisiana, Public Facilities Authority Revenue, C-Port LLC Project, Series C, 0.29%*, 10/1/2028, LOC: Bank of America NA | | | 4,950,000 | | | | 4,950,000 | |
| | | | | 24,950,000 | |
| Maine 0.4% | |
| Maine, State Housing Authority Mortgage Purchase, Series B, AMT, 0.31%*, 11/15/2041, SPA: KBC Bank NV | | | 10,000,000 | | | | 10,000,000 | |
| Maryland 0.8% | |
| Baltimore, MD, Municipal Securities Trust Receipts, SGA 152, "A", 144A, 0.3%*, 7/1/2020, INS: NATL, LOC: Societe Generale | | | 10,000,000 | | | | 10,000,000 | |
| Montgomery County, MD, 0.26%, 5/12/2011 | | | 11,400,000 | | | | 11,400,000 | |
| | | | | 21,400,000 | |
| Massachusetts 3.2% | |
| Massachusetts, Bay Transportation Authority, General Transportation Systems, 0.6%*, 3/1/2030, SPA: Dexia Credit Local | | | 11,000,000 | | | | 11,000,000 | |
| Massachusetts, Health & Education University Revenue, 0.26%, 7/8/2011 | | | 8,500,000 | | | | 8,500,000 | |
| Massachusetts, Macon Trust, Series 2007-310, 144A, 0.38%*, 6/15/2012, LIQ: Bank of America NA, LOC: Bank of America NA | | | 7,620,000 | | | | 7,620,000 | |
| Massachusetts, State Development Finance Agency Revenue, New Bedford Waste Services LLC, AMT, 0.32%*, 6/1/2021, LOC: Comerica Bank | | | 3,280,000 | | | | 3,280,000 | |
| Massachusetts, State Development Finance Agency Revenue, Northfield Mount Hermon, 0.28%*, 10/1/2042, LOC: JPMorgan Chase Bank | | | 4,700,000 | | | | 4,700,000 | |
| Massachusetts, State Revenue Anticipation Notes, Series C, 2.0%, 6/23/2011 | | | 50,000,000 | | | | 50,121,935 | |
| | | | | 85,221,935 | |
| Michigan 6.7% | |
| BlackRock MuniYield Michigan Quality Fund, Inc., Series W-7-1446, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,000,000 | | | | 15,000,000 | |
| Michigan, Finance Authority Revenue, State Aid Notes, Series D-3, 144A, 2.0%, 8/22/2011, LOC: Scotiabank | | | 43,000,000 | | | | 43,215,907 | |
| Michigan, RBC Municipal Products, Inc. Trust, Series L-25, 144A, AMT, 0.29%*, 9/1/2033, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 50,000,000 | | | | 50,000,000 | |
| Michigan, State Hospital Finance Authority Revenue, Ascension Health Senior Credit Group: | | | | | | | | |
| Series F-7, 0.35%*, 11/15/2047 | | | 11,200,000 | | | | 11,200,000 | |
| Series F-6, 0.35%**, 11/15/2049 | | | 10,000,000 | | | | 10,000,000 | |
| Series F-8, 0.35%**, 11/15/2049 | | | 5,000,000 | | | | 5,000,000 | |
| Series F-2, 0.45%, Mandatory Put 3/1/2012 @ 100, 11/15/2047 | | | 35,000,000 | | | | 35,000,000 | |
| Michigan, State Strategic Fund Ltd. Obligation Revenue, Kroger Co. Recovery Zone Facility, 0.32%*, 1/1/2026, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 178,915,907 | |
| Minnesota 0.3% | |
| Coon Rapids, MN, Industrial Development Revenue, Kurt Manufacturing Project: | | | | | | | | |
| AMT, 0.29%*, 11/1/2027, LOC: US Bank NA | | | 5,000,000 | | | | 5,000,000 | |
| AMT, 0.44%*, 11/1/2017, LOC: US Bank NA | | | 1,635,000 | | | | 1,635,000 | |
| | | | | 6,635,000 | |
| Mississippi 0.9% | |
| Mississippi, Redstone Partners Floaters/Residuals Trust: | |
| Series C, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 9,350,000 | | | | 9,350,000 | |
| Series B, AMT, 0.6%*, 12/1/2047, LIQ: Wells Fargo Bank NA, LOC: Wells Fargo Bank NA | | | 5,696,368 | | | | 5,696,368 | |
| Series A, AMT, 0.6%*, 4/1/2048, LOC: Wells Fargo Bank NA | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 24,546,368 | |
| Missouri 0.9% | |
| Missouri, State Development Finance Board, 0.3%, 5/24/2011 | | | 12,114,000 | | | | 12,114,000 | |
| Missouri, State Health & Educational Facilities Authority Revenue, St. Louis University, Series B-2, 0.2%*, 10/1/2035, LOC: Bank of America NA | | | 5,765,000 | | | | 5,765,000 | |
| Platte County, MO, Industrial Development Authority Revenue, Complete Home Concepts, Series A, AMT, 0.29%*, 1/1/2039, LOC: Columbian Bank | | | 6,800,000 | | | | 6,800,000 | |
| | | | | 24,679,000 | |
| Nebraska 0.4% | |
| Washington County, NE, Wastewater & Solid Waste Disposal Facilities Revenue, Series 24C, 144A, AMT, 0.36%*, 4/1/2035, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 9,670,000 | | | | 9,670,000 | |
| Nevada 0.5% | |
| Nevada, Housing Division, Single Family Mortgage Revenue: | |
| Series B, AMT, 0.32%*, 4/1/2042, INS: Fannie Mae, Freddie Mac & Ginnie Mae, SPA: JPMorgan Chase Bank | | | 8,000,000 | | | | 8,000,000 | |
| Series A, AMT, 0.42%*, 10/1/2039, INS: Fannie Mae, Freddie Mac & Ginnie Mae | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 12,700,000 | |
| New Hampshire 0.2% | |
| New Hampshire, Health & Education Facilities Authority Revenue, Easter Seals Rehabilitation Center, Series A, 0.27%*, 12/1/2034, LOC: Citizens Bank of NH | | | 4,600,000 | | | | 4,600,000 | |
| New Jersey 0.7% | |
| BlackRock MuniYield New Jersey Quality Fund, Inc., Series W-7-1022, AMT, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,200,000 | | | | 15,200,000 | |
| New Jersey, Economic Development Authority, Industrial Development Revenue, CST-Products LLC Project, AMT, 0.43%*, 4/1/2026, LOC: National Bank of Canada | | | 2,600,000 | | | | 2,600,000 | |
| | | | | 17,800,000 | |
| New Mexico 2.7% | |
| New Mexico, State Tax & Revenue Anticipation Notes: | |
| 1.5%, 6/30/2011 | | | 25,000,000 | | | | 25,049,099 | |
| 2.0%, 6/30/2011 | | | 25,000,000 | | | | 25,069,593 | |
| Santa Fe, NM, Gross Receipts Tax Revenue, Wastewater Systems, Series B, 0.28%*, 6/1/2022, LOC: BNP Paribas | | | 15,900,000 | | | | 15,900,000 | |
| University of New Mexico, Systems Improvement Revenues, 0.27%*, 6/1/2026, SPA: JPMorgan Chase Bank | | | 5,820,000 | | | | 5,820,000 | |
| | | | | 71,838,692 | |
| New York 7.9% | |
| Albany, NY, Industrial Development Agency, Civic Facility Revenue, The College of Saint Rose, Series A, 0.35%*, 7/1/2037, INS: NATL, LOC: Bank of America NA | | | 9,820,000 | | | | 9,820,000 | |
| Hempstead, NY, Industrial Development Agency Revenue, Series 92G, 144A, AMT, 0.4%*, 10/1/2045, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 23,775,000 | | | | 23,775,000 | |
| Monroe County, NY, Industrial Development Corp. Revenue, St. Ann's Home Aged Project, 0.26%*, 12/1/2040, LOC: HSBC Bank USA NA | | | 6,105,000 | | | | 6,105,000 | |
| Nassau County, NY, Industrial Development Agency Revenue, Series 75G, 144A, AMT, 0.28%*, 12/1/2033, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 29,995,000 | | | | 29,995,000 | |
| New York, Liberty Development Corp., World Trade Center, Series A-2, 144A, 0.35%, Mandatory Put 2/1/2012 @ 100, 12/1/2049 | | | 11,000,000 | | | | 11,000,000 | |
| New York, State Energy Research & Development Authority Facilities Revenue, Consolidated Edison Co. of New York, Inc., Series A-3, 144A, 0.27%*, 5/1/2039, LOC: Mizuho Corporate Bank | | | 15,000,000 | | | | 15,000,000 | |
| New York, State Mortgage Agency, Homeowner Mortgage Revenue: | | | | | | | | |
| Series 135, AMT, 0.5%*, 4/1/2037, SPA: Dexia Credit Local | | | 5,500,000 | | | | 5,500,000 | |
| Series 157, 0.75%*, 4/1/2047, SPA: Dexia Credit Local | | | 11,200,000 | | | | 11,200,000 | |
| New York, Wells Fargo Stage Trust, Series 4C, 144A, 0.29%*, 9/1/2040, LIQ: Wells Fargo Bank NA | | | 11,540,000 | | | | 11,540,000 | |
| New York City, NY, Municipal Water Finance Authority, Water & Sewer Revenue, Series F-2, 0.26%*, 6/15/2033, SPA: JPMorgan Chase Bank | | | 5,000,000 | | | | 5,000,000 | |
| New York City, NY, Transitional Finance Authority Revenue, Series 3866, 144A, 0.27%*, 8/1/2011, LIQ: JPMorgan Chase & Co. | | | 60,000,000 | | | | 60,000,000 | |
| Oyster Bay, NY, Bond Anticipation Notes, 2.0%, 3/9/2012 | | | 21,800,000 | | | | 22,089,387 | |
| | | | | 211,024,387 | |
| North Carolina 4.6% | |
| Cleveland County, NC, Industrial Facilities & Pollution Control Financing Authority, Curtiss-Wright Flight Systems, AMT, 0.35%*, 11/1/2023, LOC: Bank of America NA | | | 8,400,000 | | | | 8,400,000 | |
| North Carolina, BB&T Municipal Trust: | |
| Series 1027, 144A, 0.34%*, 3/1/2016, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,725,000 | | | | 10,725,000 | |
| Series 1032, 0.34%*, 1/7/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 11,625,000 | | | | 11,625,000 | |
| Series 1008, 144A, 0.34%*, 3/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,865,000 | | | | 5,865,000 | |
| Series 1011, 144A, 0.34%*, 4/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 7,520,000 | | | | 7,520,000 | |
| Series 1024, 144A, 0.34%*, 5/31/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 4,860,000 | | | | 4,860,000 | |
| Series 1009, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 17,075,000 | | | | 17,075,000 | |
| Series 1025, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,800,000 | | | | 10,800,000 | |
| North Carolina, Capital Educational Facilities Finance Agency Revenue, High Point University Project, 0.29%*, 12/1/2028, LOC: Branch Banking & Trust | | | 5,555,000 | | | | 5,555,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Campbell University, 0.29%*, 10/1/2034, LOC: Branch Banking & Trust | | | 5,845,000 | | | | 5,845,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Salem Academy & College Project, 0.29%*, 8/1/2030, LOC: Branch Banking & Trust | | | 7,200,000 | | | | 7,200,000 | |
| North Carolina, Medical Care Commission, Health Care Facilities Revenue, First Mortgage Deerfield, Series B, 0.29%*, 11/1/2038, LOC: Branch Banking & Trust | | | 10,035,000 | | | | 10,035,000 | |
| Person County, NC, Industrial Facilities & Pollution Control Financing Authority, Certainteed Gypsum, Inc., 0.24%*, 11/1/2035, LOC: Credit Industrial et Commercial | | | 16,625,000 | | | | 16,625,000 | |
| | | | | 122,130,000 | |
| Ohio 0.6% | |
| Ohio, Clipper Tax-Exempt Certificate Trust, Certificate of Participation, Series 2009-28, 144A, AMT, 0.38%*, 3/1/2035, LIQ: State Street Bank & Trust Co. | | | 2,460,000 | | | | 2,460,000 | |
| Ohio, Redstone Partners Floaters/Residuals Trust, Housing Finance Authority: | | | | | | | | |
| Series C, 144A, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 9,780,000 | | | | 9,780,000 | |
| Series D, 144A, AMT, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 4,340,000 | | | | 4,340,000 | |
| | | | | 16,580,000 | |
| Oregon 6.2% | |
| Oregon, State Tax Anticipation Notes, Series A, 144A, 2.0%, 6/30/2011 | | | 152,000,000 | | | | 152,400,629 | |
| Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project: | | | | | | | | |
| 0.29%*, 5/1/2034, LOC: Bank of America NA | | | 8,515,000 | | | | 8,515,000 | |
| 0.29%*, 5/1/2037, LOC: Bank of America NA | | | 5,385,000 | | | | 5,385,000 | |
| | | | | 166,300,629 | |
| Other 1.3% | |
| BlackRock Municipal Intermediate Duration Fund, Inc., Series W-7-2871, 144A, AMT, 0.51%**, 3/1/2041, LIQ: JPMorgan Chase Bank | | | 35,600,000 | | | | 35,600,000 | |
| Pennsylvania 1.3% | |
| Adams County, PA, Industrial Development Authority Revenue, Brethren Home Community Project, 0.3%*, 6/1/2032, LOC: PNC Bank NA | | | 7,180,000 | | | | 7,180,000 | |
| Allegheny County, PA, RBC Municipal Products, Inc. Trust Certificates, Series E-16, 144A, 0.27%*, 4/15/2039, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 22,490,000 | | | | 22,490,000 | |
| Beaver County, PA, Industrial Development Authority, Pollution Control Revenue, FirstEnergy Generation Corp., 0.22%*, 4/1/2041, LOC: UBS AG | | | 5,700,000 | | | | 5,700,000 | |
| | | | | 35,370,000 | |
| Puerto Rico 0.2% | |
| Puerto Rico, Commonwealth Highway & Transportation Authority Revenue, Series DCL 019, 144A, 0.9%*, 1/1/2029, INS: AGMC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 6,000,000 | | | | 6,000,000 | |
| South Carolina 0.4% | |
| South Carolina, BB&T Municipal Trust, Series 1013, 144A, 0.34%*, 1/1/2020, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,755,000 | | | | 5,755,000 | |
| South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Upper South Carolina, Inc. Project, 0.29%*, 9/1/2028, LOC: Branch Banking & Trust | | | 6,105,000 | | | | 6,105,000 | |
| | | | | 11,860,000 | |
| Tennessee 0.4% | |
| Blount County, TN, Public Building Authority, Local Government Public Improvement, Series E-5-B, 0.29%*, 6/1/2042, LOC: Branch Banking & Trust | | | 9,300,000 | | | | 9,300,000 | |
| Texas 11.0% | |
| Atascosa County, TX, Industrial Development Corp., Pollution Control Revenue, San Miguel Electric Cooperative, Inc., 0.4%*, 6/30/2020, GTY: National Rural Utilities Cooperative Finance Corp., SPA: National Rural Utilities Cooperative Finance Corp. | | | 44,200,000 | | | | 44,200,000 | |
| East Texas, Housing Finance, Redstone Partners Floaters/Residuals Trust, Series D, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 7,930,000 | | | | 7,930,000 | |
| Harris County, TX, Cultural Education Facilities Finance Corp. Revenue, Memorial Hermann Hospital Systems, Series D-3, 0.27%*, 6/1/2029, LOC: Bank of America NA | | | 14,900,000 | | | | 14,900,000 | |
| Harris County, TX, Health Facilities Development Corp., Hospital Revenue, Baylor College of Medicine, Series B, 0.24%*, 11/15/2047, LOC: Northern Trust Co. | | | 8,100,000 | | | | 8,100,000 | |
| Katy, TX, Independent School Building District, 0.27%*, 8/15/2033, SPA: Bank of America NA | | | 8,300,000 | | | | 8,300,000 | |
| North East, TX, Independent School District, Series 002, 144A, 0.65%*, 2/1/2029, LIQ: Dexia Credit Local | | | 11,325,000 | | | | 11,325,000 | |
| Tarrant County, TX, Redstone Partners Floaters/Residuals Trust, Series A, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 12,190,000 | | | | 12,190,000 | |
| Texas, Department of Housing, Series 2008-3022X, 144A, AMT, 0.4%*, 9/1/2032, INS: Fannie Mae, Freddie Mac & Ginnie Mae, LIQ: Bank of America NA | | | 4,980,000 | | | | 4,980,000 | |
| Texas, North East Independent School District, "A", 144A, 0.26%*, 8/1/2037, LIQ: Citibank NA | | | 8,935,000 | | | | 8,935,000 | |
| Texas, RBC Municipal Products, Inc. Trust, Series L-46, 144A, AMT, 0.29%*, 12/1/2034, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 52,995,000 | | | | 52,995,000 | |
| Texas, State General Obligation, "A", 144A, 0.26%*, 4/1/2029, LIQ: Citibank NA | | | 8,685,000 | | | | 8,685,000 | |
| Texas, State Tax & Revenue Anticipation Notes: | |
| Series 3812, 144A, 0.27%*, 8/31/2011, LIQ: JPMorgan Chase & Co. | | | 29,500,000 | | | | 29,500,000 | |
| Series 3813, 144A, 0.3%*, 8/31/2011, LIQ: JPMorgan Chase Bank | | | 38,000,000 | | | | 38,000,000 | |
| 2.0%, 8/31/2011 | | | 25,000,000 | | | | 25,135,681 | |
| Texas A&M University Revenue, 144A, 0.26%*, 5/15/2018, LIQ: Citibank NA | | | 2,800,000 | | | | 2,800,000 | |
| Texas City, TX, Industrial Development Corp. Revenue, Del Papa Realty Holdings, 0.28%*, 1/1/2051, LOC: Bank of America NA | | | 10,300,000 | | | | 10,300,000 | |
| Weslaco, TX, Health Facilities Development, Knapp Medical Center, Series A, 0.91%*, 6/1/2038, LOC: Compass Bank | | | 4,625,000 | | | | 4,625,000 | |
| | | | | 292,900,681 | |
| Vermont 0.2% | |
| Vermont, Educational & Health Buildings Financing Agency Revenue, Fletcher Allen Health Care, Series A, 0.24%*, 12/1/2030, LOC: TD Bank NA | | | 4,070,000 | | | | 4,070,000 | |
| Virginia 1.2% | |
| Arlington County, VA, Industrial Development Authority, Multi-Family Revenue, Series A, AMT, 0.31%*, 8/1/2047, INS: Freddie Mac, LIQ: Freddie Mac | | | 3,000,000 | | | | 3,000,000 | |
| Virginia, Federal Home Loan Mortgage Corp., Multi-Family Variable Rate Certificates, AMT, 0.31%*, 7/15/2050, LIQ: Freddie Mac | | | 19,085,000 | | | | 19,085,000 | |
| Virginia, RBC Municipal Products, Inc. Trust, Series C-2, 144A, AMT, 0.38%*, 1/1/2014, LOC: Royal Bank of Canada, SPA: Royal Bank of Canada | | | 9,050,000 | | | | 9,050,000 | |
| | | | | 31,135,000 | |
| Washington 1.3% | |
| University of Washington, 0.28%, 5/10/2011 | | | 23,000,000 | | | | 23,000,000 | |
| Washington, State Health Care Facilities Authority, Swedish Health Services, Series C, 0.25%*, 11/15/2046, LOC: Citibank NA | | | 3,900,000 | | | | 3,900,000 | |
| Washington, State Higher Education Facilities Authority Revenue, Seattle University Project, Series A, 0.27%*, 5/1/2028, LOC: US Bank NA | | | 8,545,000 | | | | 8,545,000 | |
| | | | | 35,445,000 | |
| West Virginia 3.2% | |
| Cabell County, WV, University Facilities Revenue, Provident Group Marshall Properties, Series A, 0.27%*, 7/1/2039, LOC: Bank of America NA | | | 20,000,000 | | | | 20,000,000 | |
| West Virginia, Public Energy Authority Revenue, Morgantown Association Project, AMT, 0.4%*, 7/1/2017, LOC: Dexia Credit Local | | | 65,000,000 | | | | 65,000,000 | |
| | | | | 85,000,000 | |
| Wisconsin 0.6% | |
| Plymouth, WI, Industrial Development Revenue, Masters Gallery Foods, Series A, AMT, 0.45%*, 5/1/2038, LOC: Wells Fargo Bank NA | | | 5,300,000 | | | | 5,300,000 | |
| Wisconsin, State Health & Educational Facilities Authority Revenue, Prohealth Care, Inc., Series B, 0.3%*, 2/1/2034, LOC: Chase Manhattan Bank | | | 11,225,000 | | | | 11,225,000 | |
| | | | | 16,525,000 | |
| Wyoming 0.6% | |
| Sweetwater County, WY, 0.3%, 6/10/2011 | | | 14,775,000 | | | | 14,775,000 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $2,655,195,212)+ | | | 99.8 | | | | 2,655,195,212 | |
| Other Assets and Liabilities, Net | | | 0.2 | | | | 6,012,980 | |
| Net Assets | | | 100.0 | | | | 2,661,208,192 | |
* Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of April 30, 2011.
** These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
+ The cost for federal income tax purposes was $2,655,195,212.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
AGMC: Assured Guaranty Municipal Corp.
AMBAC: Ambac Financial Group, Inc.
AMT: Subject to alternative minimum tax.
FSB: Federal Savings Bank
GTY: Guaranty Agreement
INS: Insured
LIQ: Liquidity Facility
LOC: Letter of Credit
NATL: National Public Finance Guarantee Corp.
SPA: Standby Bond Purchase Agreement
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Municipal Investments (a) | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
| Total | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
(a) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Tax-Exempt Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,655,195,212 | |
| Receivable for investments sold | | | 4,620,000 | |
| Receivable for Fund shares sold | | | 934,515 | |
| Interest receivable | | | 7,077,878 | |
| Due from Advisor | | | 4,095 | |
| Other assets | | | 105,818 | |
| Total assets | | | 2,667,937,518 | |
| Liabilities | |
| Cash overdraft | | | 4,581,713 | |
| Payable for Fund shares redeemed | | | 918,070 | |
| Distributions payable | | | 62,767 | |
| Accrued management fee | | | 133,641 | |
| Other accrued expenses and payables | | | 1,033,135 | |
| Total liabilities | | | 6,729,326 | |
| Net assets, at value | | $ | 2,661,208,192 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 676,116 | |
| Paid-in capital | | | 2,660,532,076 | |
| Net assets, at value | | $ | 2,661,208,192 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Tax-Exempt Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($10,598,969 ÷ 10,595,483 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($75,044,850 ÷ 75,020,161 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Cash Institutional Shares Net Asset Value, offering and redemption price per share ($1,492,310,747 ÷ 1,491,819,969 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Money Fund Net Asset Value, offering and redemption price per share ($366,030,472 ÷ 365,909,997 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Free Money Fund Class S Net Asset Value, offering and redemption price per share ($124,763,547 ÷ 124,722,636 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($81,988,417 ÷ 81,961,452 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Exempt Cash Managed Shares Net Asset Value, offering and redemption price per share ($127,448,310 ÷ 127,406,394 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Free Investment Class Net Asset Value, offering and redemption price per share ($383,022,880 ÷ 382,896,908 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Tax-Exempt Portfolio | |
Income: Interest | | $ | 12,045,887 | |
Expenses: Management fee | | | 1,955,813 | |
| Administration fee | | | 3,350,131 | |
| Services to shareholders | | | 1,364,156 | |
| Custodian fee | | | 68,016 | |
| Distribution and service fees | | | 2,569,390 | |
| Professional fees | | | 150,070 | |
| Trustees' fees and expenses | | | 102,796 | |
| Reports to shareholders | | | 197,069 | |
| Registration fees | | | 179,038 | |
| Other | | | 177,139 | |
| Total expenses before expense reductions | | | 10,113,618 | |
| Expense reductions | | | (2,277,709 | ) |
| Total expenses after expense reductions | | | 7,835,909 | |
| Net investment income | | | 4,209,978 | |
| Net realized gain (loss) from investments | | | 26,953 | |
| Net increase (decrease) in net assets resulting from operations | | $ | 4,236,931 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Tax-Exempt Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 4,209,978 | | | $ | 6,786,569 | |
| Net realized gain (loss) | | | 26,953 | | | | 42,867 | |
| Net increase in net assets resulting from operations | | | 4,236,931 | | | | 6,829,436 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (1,440 | ) | | | (2,046 | ) |
| Davidson Cash Equivalent Shares | | | (8,101 | ) | | | (9,092 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (3,424,889 | ) | | | (5,359,767 | ) |
| DWS Tax-Exempt Money Fund | | | (551,022 | ) | | | (1,068,021 | ) |
| DWS Tax-Free Money Fund Class S | | | (156,176 | ) | | | (283,931 | ) |
| Premier Money Market Shares | | | (1,265 | ) | | | (24,737 | ) |
| Service Shares | | | (7,236 | ) | | | (5,804 | ) |
| Tax-Exempt Cash Managed Shares | | | (18,703 | ) | | | (160,260 | ) |
| Tax-Free Investment Class | | | (41,260 | ) | | | (198,503 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (597 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (2,251 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | — | | | | (74,322 | ) |
| DWS Tax-Exempt Money Fund | | | — | | | | (13,853 | ) |
| DWS Tax-Free Money Fund Class S | | | — | | | | (4,326 | ) |
| Premier Money Market Shares | | | — | | | | (782 | ) |
| Service Shares | | | — | | | | (1,849 | ) |
| Tax-Exempt Cash Managed Shares | | | — | | | | (7,679 | ) |
| Tax-Free Investment Class | | | — | | | | (14,341 | ) |
| Total distributions | | | (4,210,092 | ) | | | (7,232,161 | ) |
Fund share transactions: Proceeds from shares sold | | | 9,995,553,494 | | | | 11,211,632,894 | |
| Reinvestment of distributions | | | 2,851,124 | | | | 5,434,005 | |
| Cost of shares redeemed | | | (10,411,552,190 | ) | | | (11,989,083,579 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (413,147,572 | ) | | | (772,016,680 | ) |
| Increase (decrease) in net assets | | | (413,120,733 | ) | | | (772,419,405 | ) |
| Net assets at beginning of period | | | 3,074,328,925 | | | | 3,846,748,330 | |
| Net assets at end of period (including undistributed net investment income of $676,116 and $649,277, respectively) | | $ | 2,661,208,192 | | | $ | 3,074,328,925 | |
The accompanying notes are an integral part of the financial statements.
Tax-Exempt Portfolio Davidson Cash Equivalent Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .000 | * | | | .009 | | | | .025 | | | | .028 | |
| Net realized and unrealized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | (.000 | )* |
| Total from investment operations | | | .000 | * | | | .000 | * | | | .009 | | | | .025 | | | | .028 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.000 | )* | | | (.009 | ) | | | (.025 | ) | | | (.028 | ) |
| Net realized gains | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.000 | )* | | | (.009 | ) | | | (.025 | ) | | | (.028 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)a | | | .01 | | | | .01 | | | | .94 | | | | 2.53 | | | | 2.79 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 75 | | | | 80 | | | | 67 | | | | 75 | | | | 58 | |
| Ratio of expenses before expense reductions (%) | | | .89 | | | | .90 | | | | .91 | | | | .90 | | | | .91 | |
| Ratio of expenses after expense reductions (%) | | | .35 | | | | .43 | | | | .86 | | | | .85 | | | | .85 | |
| Ratio of net investment income (%) | | | .01 | | | | .01 | | | | .92 | | | | 2.47 | | | | 2.76 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three funds: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio (the "Funds").
Money Market Portfolio offers six classes of shares: Capital Assets Funds Shares, Capital Assets Funds Preferred Shares, Davidson Cash Equivalent Shares, Davidson Cash Equivalent Plus Shares, Premium Reserve Money Market Shares and Service Shares. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Government & Agency Securities Portfolio offers seven 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 and Service Shares.
Tax-Exempt Portfolio offers eight 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, Service Shares, Tax-Exempt Cash Managed Shares and Tax-Free Investment Class. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
The financial highlights for all classes of shares, other than Davidson Cash Equivalent Shares and Davidson Cash Equivalent Plus Shares, are provided separately and are available upon request.
Each Fund's investment income, realized gains and losses, and certain Fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of that Fund, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
Each Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Funds in the preparation of their financial statements.
Security Valuation. Various inputs are used in determining the value of each Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including each Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The Funds value all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Repurchase Agreements. Each Fund may enter into repurchase agreements with certain banks and broker/dealers whereby each Fund, through its custodian or a sub-custodian bank, receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is equal to at least the principal amount of the repurchase price plus accrued interest. The custodial bank holds the collateral in a separate account until the agreement matures. If the value of the securities falls below the principal amount of the repurchase agreement plus accrued interest, the financial institution deposits additional collateral by the following business day. If the financial institution either fails to deposit the required additional collateral or fails to repurchase the securities as agreed, the Funds have the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Funds' claims on the collateral may be subject to legal proceedings.
Federal Income Taxes. Each of the Funds' policies is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders.
At April 30, 2011, DWS Government & Agency Securities Portfolio had a net tax basis capital loss carryforward of approximately $602,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until April 30, 2019 (the expiration date), whichever occurs first.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the "Act") was enacted. Under the Act, net capital losses may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses. As a result of this ordering rule, pre-enactment capital loss carryforwards may expire unused, whereas under the previous rules these losses may have been utilized. This change is effective for fiscal years beginning after the date of enactment.
The Funds have reviewed the tax positions for the open tax years as of April 30, 2011 and have determined that no provision for income tax is required in the Funds' financial statements. The Funds' federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income. Net investment income of each Fund is declared as a daily dividend and is distributed to shareholders monthly. Each Fund may take into account capital gains and losses in its daily dividend declarations. Each Fund may also make additional distributions for tax purposes if necessary.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Funds.
At April 30, 2011, the Funds' components of distributable earnings on a tax basis are as follows:
Money Market Portfolio: Undistributed ordinary income* | | $ | 39,083 | |
Government & Agency Securities Portfolio: Undistributed ordinary income* | | $ | 307,749 | |
| Capital loss carryforwards | | $ | (602,000 | ) |
Tax-Exempt Portfolio: Undistributed tax-exempt income* | | $ | 738,883 | |
In addition, the tax character of distributions paid to shareholders by each Fund is summarized as follows:
| | | Years Ended April 30, | |
| Portfolio | | 2011 | | | 2010 | |
Money Market Portfolio: Distributions from ordinary income* | | $ | 399,900 | | | $ | 2,172,594 | |
Government & Agency Securities Portfolio: Distributions from ordinary income* | | $ | 2,329,820 | | | $ | 20,222,001 | |
Tax-Exempt Portfolio: Distributions from tax-exempt income | | $ | 4,210,092 | | | $ | 7,201,436 | |
| Distributions from long-term capital gains | | $ | — | | | $ | 30,725 | |
* For tax purposes, short-term capital gains distributions are considered ordinary income distributions.
Expenses. Expenses of the Trust arising in connection with a specific Fund are allocated to that Fund. Other Trust expenses which cannot be directly attributed to a Fund are apportioned pro rata on the basis of relative net assets among the Funds in the Trust.
Contingencies. In the normal course of business, the Funds may enter into contracts with service providers that contain general indemnification clauses. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet been made. However, based on experience, the Funds expect the risk of loss to be remote.
Other. Investment transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
2. Related Parties
Management Agreement for Money Market Portfolio. Under an Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of Money Market Portfolio in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Investment Management Agreement to the Money Market Portfolio. The Money Market Portfolio pays a monthly management fee based on the combined average daily net assets of the three Funds and allocated to Money Market Portfolio based on its relative net assets, computed and accrued daily and payable monthly, at 1/12 of the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .220 | % |
| Next $500 million of such net assets | | | .200 | % |
| Next $1 billion of such net assets | | | .175 | % |
| Next $1 billion of such net assets | | | .160 | % |
| Over $3 billion of such net assets | | | .150 | % |
Management Agreement for Government & Agency Securities Portfolio and Tax-Exempt Portfolio. Under an Amended and Restated Investment Management Agreement with the Advisor, the Advisor directs the investments of Government & Agency Securities Portfolio and Tax-Exempt Portfolio in accordance with their respective investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by each Fund.
The Government & Agency Securities Portfolio and Tax-Exempt Portfolio pay a monthly management fee based on the combined average daily net assets of the three Funds and allocated to Government & Agency Securities Portfolio and Tax-Exempt Portfolio based on their relative net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .120 | % |
| Next $500 million of such net assets | | | .100 | % |
| Next $1 billion of such net assets | | | .075 | % |
| Next $1 billion of such net assets | | | .060 | % |
| Over $3 billion of such net assets | | | .050 | % |
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 0.05% of the Government & Agency Securities Portfolio's average daily net assets.
For the period from May 1, 2010 through September 30, 2011, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the Davidson Cash Equivalent Shares of the Tax-Exempt Portfolio to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 0.85%.
For the period from May 1, 2010 through April 30, 2011, the Advisor voluntarily agreed to waive its fees and/or reimburse certain operating expenses of the Davidson Cash Equivalent Shares of the Money Market Portfolio and Government & Agency Securities Portfolio to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 1.00% and 1.00%, respectively.
For the period from May 1, 2010 through April 30, 2011, the Advisor voluntarily agreed to waive its fees and/or reimburse certain operating expenses of the Davidson Cash Equivalent Plus Shares of the Money Market Portfolio and Government & Agency Securities Portfolio to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 0.85% and 0.85%, respectively.
The Advisor has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
Accordingly, for the year ended April 30, 2011, the Advisor waived a portion of its management fee on the Government & Agency Securities Portfolio aggregating $713,093, and the amount charged aggregated $1,793,022.
For the year ended April 30, 2011, the Funds incurred management fees equivalent to the following annual effective rates of each Fund's average daily net assets:
| Fund | Annual Effective Rate |
| Money Market Portfolio | .16% |
| Government & Agency Securities Portfolio | .04% |
| Tax-Exempt Portfolio | .06% |
In addition, the Advisor and D.A. Davidson & Co., the sole sub-distributor, have agreed to voluntarily waive additional expenses. These waivers may be changed or terminated at any time without notice. Under these arrangements, certain expenses were waived on Davidson Cash Equivalent Shares for Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio and Davidson Cash Equivalent Plus Shares for Money Market Portfolio and Government & Agency Securities Portfolio.
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Government & Agency Securities Portfolio and Tax-Exempt Portfolio. For all services provided under the Administrative Services Agreement, each of these two Funds pays the Advisor an annual fee ("Administration Fee") of 0.10% of each of these two Funds' average daily net assets, computed and accrued daily and payable monthly. For the year ended April 30, 2011, the Administration Fee from the Government & Agency Securities Portfolio and the Tax-Exempt Portfolio was as follows:
| Fund | | Administration Fee | | | Unpaid at April 30, 2011 | |
| Government & Agency Securities Portfolio | | $ | 4,222,727 | | | $ | 388,699 | |
| Tax-Exempt Portfolio | | $ | 3,350,131 | | | $ | 226,253 | |
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Funds. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Funds. For the year ended April 30, 2011, the amounts charged to the Funds by DISC were as follows:
| Money Market Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 2,080,639 | | | $ | 876,994 | | | $ | 307,215 | |
| Capital Assets Funds Preferred Shares | | | 39,377 | | | | 5,147 | | | | 1,069 | |
| Davidson Cash Equivalent Shares | | | 40,021 | | | | 16,669 | | | | 6,168 | |
| Davidson Cash Equivalent Plus Shares | | | 4,140 | | | | 1,364 | | | | 470 | |
| Premier Money Market Shares | | | 126,996 | | | | 39,884 | | | | — | |
| Premium Reserve Money Market Shares | | | 85,973 | | | | — | | | | 30,586 | |
| Service Shares | | | 3,662,660 | | | | 1,457,787 | | | | 594,910 | |
| | | $ | 6,039,806 | | | $ | 2,397,845 | | | $ | 940,418 | |
| Government & Agency Securities Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 719,797 | | | $ | 567,755 | | | $ | 74,011 | |
| Davidson Cash Equivalent Shares | | | 53,615 | | | | 42,434 | | | | 4,461 | |
| Davidson Cash Equivalent Plus Shares | | | 107,807 | | | | 80,013 | | | | 10,625 | |
| DWS Government & Agency Money Fund | | | 183,413 | | | | 87,726 | | | | 38,977 | |
| DWS Government Cash Institutional Shares | | | 268,801 | | | | 268,801 | | | | — | |
| Government Cash Managed Shares | | | 153,563 | | | | 42,737 | | | | 35,695 | |
| Service Shares | | | 303,676 | | | | 241,264 | | | | 21,188 | |
| | | $ | 1,790,672 | | | $ | 1,330,730 | | | $ | 184,957 | |
| Tax-Exempt Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 12,532 | | | $ | 5,364 | |
| Davidson Cash Equivalent Shares | | | 121,647 | | | | — | | | | 41,015 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 196,624 | | | | — | | | | 61,668 | |
| DWS Tax-Exempt Money Fund | | | 134,008 | | | | — | | | | 39,976 | |
| DWS Tax-Free Money Fund Class S | | | 68,702 | | | | — | | | | 25,134 | |
| Premier Money Market Shares | | | 31,484 | | | | 6,558 | | | | — | |
| Service Shares | | | 182,607 | | | | 72,945 | | | | 41,130 | |
| Tax-Exempt Cash Managed Shares | | | 77,147 | | | | — | | | | 33,219 | |
| Tax-Free Investment Class | | | 444,553 | | | | — | | | | 153,350 | |
| | | $ | 1,292,741 | | | $ | 92,035 | | | $ | 400,856 | |
Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee"), calculated as a percentage of average daily net assets for the shares listed in the following table.
For the year ended April 30, 2011, the Distribution Fee was as follows:
| Money Market Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 2,755,491 | | | $ | 2,755,491 | | | | .00 | % | | | .33 | % |
| Capital Assets Funds Preferred Shares | | | 52,348 | | | | 52,348 | | | | .00 | % | | | .20 | % |
| Davidson Cash Equivalent Shares | | | 45,045 | | | | 45,045 | | | | .00 | % | | | .30 | % |
| Davidson Cash Equivalent Plus Shares | | | 4,430 | | | | 4,430 | | | | .00 | % | | | .25 | % |
| Premier Money Market Shares | | | 126,560 | | | | 126,560 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 8,684,015 | | | | 8,684,015 | | | | .00 | % | | | .60 | % |
| | | $ | 11,667,889 | | | $ | 11,667,889 | | | | | | | | | |
| Government & Agency Securities Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 981,550 | | | $ | 981,550 | | | | .00 | % | | | .33 | % |
| Davidson Cash Equivalent Shares | | | 63,985 | | | | 63,985 | | | | .00 | % | | | .30 | % |
| Davidson Cash Equivalent Plus Shares | | | 138,178 | | | | 138,178 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 729,893 | | | | 729,893 | | | | .00 | % | | | .60 | % |
| | | $ | 1,913,606 | | | $ | 1,913,606 | | | | | | | | | |
| Tax-Exempt Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 47,479 | | | $ | 47,479 | | | | .00 | % | | | .33 | % |
| Davidson Cash Equivalent Shares | | | 243,294 | | | | 243,294 | | | | .00 | % | | | .30 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 434,433 | | | | 434,433 | | | | .00 | % | | | .60 | % |
| Tax-Free Investment Class | | | 1,032,179 | | | | 1,032,179 | | | | .00 | % | | | .25 | % |
| | | $ | 1,789,098 | | | $ | 1,789,098 | | | | | | | | | |
In addition, DIDI 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, 2011, the Service Fee was as follows:
| Money Market Portfolio: | | Service Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 2,087,493 | | | $ | 2,087,493 | | | | .00 | % | | | .25 | % |
| Capital Assets Funds Preferred Shares | | | 26,174 | | | | 26,174 | | | | .00 | % | | | .10 | % |
| Davidson Cash Equivalent Shares | | | 37,537 | | | | 37,537 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Plus Shares | | | 3,544 | | | | 3,544 | | | | .00 | % | | | .20 | % |
| Premier Money Market Shares | | | 126,561 | | | | 126,561 | | | | .00 | % | | | .25 | % |
| Premium Reserve Money Market Shares | | | 160,827 | | | | 147,274 | | | | .02 | % | | | .25 | % |
| | | $ | 2,442,136 | | | $ | 2,428,583 | | | | | | | | | |
| Government & Agency Securities Portfolio: | | Service Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 743,598 | | | $ | 743,598 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Shares | | | 53,321 | | | | 53,321 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Plus Shares | | | 110,542 | | | | 110,542 | | | | .00 | % | | | .20 | % |
| Government Cash Managed Shares | | | 325,257 | | | | 325,257 | | | | .00 | % | | | .15 | % |
| | | $ | 1,232,718 | | | $ | 1,232,718 | | | | | | | | | |
| Tax-Exempt Portfolio: | | Service Fee | | | Waived | | | Unpaid at April 30, 2011 | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 35,969 | | | $ | — | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Shares | | | 202,745 | | | | 194,185 | | | | — | | | | .01 | % | | | .25 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | — | | | | .00 | % | | | .25 | % |
| Tax-Exempt Cash Managed Shares | | | 220,855 | | | | 61,372 | | | | 10,827 | | | | .11 | % | | | .15 | % |
| Tax-Free Investment Class | | | 289,010 | | | | 73,337 | | | | 22,721 | | | | .05 | % | | | .07 | % |
| | | $ | 780,292 | | | $ | 396,576 | | | $ | 33,548 | | | | | | | | | |
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Funds. For the year ended April 30, 2011, the amounts charged to the Funds by DIMA included in the Statement of Operations under "reports to shareholders" were as follows:
| Fund | | Total Aggregated | | | Unpaid at April 30, 2011 | |
| Money Market Portfolio | | $ | 46,559 | | | $ | 16,156 | |
| Government & Agency Securities Portfolio | | $ | 10,937 | | | $ | 10,937 | |
| Tax-Exempt Portfolio | | $ | 105,603 | | | $ | 41,114 | |
Trustees' Fees and Expenses. The Funds paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.
3. Concentration of Ownership
From time to time, the Funds may have a concentration of several shareholder accounts holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Funds.
At April 30, 2011, there were two shareholder accounts that held approximately 13% and 11%, respectively, of the outstanding shares of the Tax-Exempt Portfolio.
4. Line of Credit
The Funds and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. Each Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus, if LIBOR exceeds the Federal Funds Rate, the amount of such excess. Each Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
5. Share Transactions
The following table summarizes share and dollar activity in the Funds:
Money Market Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 839,154,629 | | | $ | 839,154,629 | | | | 751,023,837 | | | $ | 751,023,837 | |
| Capital Assets Funds Preferred Shares | | | 16,426,872 | | | | 16,426,872 | | | | 46,317,102 | | | | 46,317,102 | |
| Davidson Cash Equivalent Shares | | | 3,734,002 | | | | 3,734,002 | | | | 4,223,891 | | | | 4,223,891 | |
| Davidson Cash Equivalent Plus Shares | | | 870,248 | | | | 870,248 | | | | 1,119,054 | | | | 1,119,054 | |
| Institutional Money Market Shares* | | | — | | | | — | | | | 878,782,978 | | | | 878,782,978 | |
| Premier Money Market Shares*** | | | 44,284,933 | | | | 44,284,933 | | | | 564,549,506 | | | | 564,549,506 | |
| Premium Reserve Money Market Shares | | | 111,139,828 | | | | 111,139,828 | | | | 250,797,721 | | | | 250,797,721 | |
| Service Shares | | | 1,791,610,827 | | | | 1,791,610,827 | | | | 1,256,750,880 | | | | 1,256,750,880 | |
| | | | | | | $ | 2,807,221,339 | | | | | | | $ | 3,753,564,969 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 187,455 | | | $ | 187,455 | | | | 511,699 | | | $ | 511,699 | |
| Capital Assets Funds Preferred Shares | | | 13,160 | | | | 13,160 | | | | 34,310 | | | | 34,310 | |
| Davidson Cash Equivalent Shares | | | 1,863 | | | | 1,863 | | | | 6,909 | | | | 6,909 | |
| Davidson Cash Equivalent Plus Shares | | | 220 | | | | 220 | | | | 997 | | | | 997 | |
| Institutional Money Market Shares* | | | — | | | | — | | | | 781,281 | | | | 781,281 | |
| Institutional Select Money Market Shares** | | | — | | | | — | | | | 17 | | | | 17 | |
| Premier Money Market Shares*** | | | 4,160 | | | | 4,160 | | | | 259,732 | | | | 259,732 | |
| Premium Reserve Money Market Shares | | | 5,371 | | | | 5,371 | | | | 141,496 | | | | 141,496 | |
| Service Shares | | | 183,305 | | | | 183,305 | | | | 349,720 | | | | 349,720 | |
| | | | | | | $ | 395,534 | | | | | | | $ | 2,086,161 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (890,506,653 | ) | | $ | (890,506,653 | ) | | | (773,833,097 | ) | | $ | (773,833,097 | ) |
| Capital Assets Funds Preferred Shares | | | (64,951,835 | ) | | | (64,951,835 | ) | | | (42,319,981 | ) | | | (42,319,981 | ) |
| Davidson Cash Equivalent Shares | | | (8,417,805 | ) | | | (8,417,805 | ) | | | (15,960,223 | ) | | | (15,960,223 | ) |
| Davidson Cash Equivalent Plus Shares | | | (1,850,907 | ) | | | (1,850,907 | ) | | | (3,704,435 | ) | | | (3,704,435 | ) |
| Institutional Money Market Shares* | | | — | | | | — | | | | (1,394,027,289 | ) | | | (1,394,027,289 | ) |
| Institutional Select Money Market Shares** | | | — | | | | — | | | | (10,576 | ) | | | (10,576 | ) |
| Premier Money Market Shares*** | | | (163,286,900 | ) | | | (163,286,900 | ) | | | (2,466,530,608 | ) | | | (2,466,530,608 | ) |
| Premium Reserve Money Market Shares | | | (119,115,201 | ) | | | (119,115,201 | ) | | | (592,438,461 | ) | | | (592,438,461 | ) |
| Service Shares | | | (1,368,490,287 | ) | | | (1,368,490,287 | ) | | | (1,157,527,651 | ) | | | (1,157,527,651 | ) |
| | | | | | | $ | (2,616,619,588 | ) | | | | | | $ | (6,446,352,321 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (51,164,569 | ) | | $ | (51,164,569 | ) | | | (22,297,561 | ) | | $ | (22,297,561 | ) |
| Capital Assets Funds Preferred Shares | | | (48,511,803 | ) | | | (48,511,803 | ) | | | 4,031,431 | | | | 4,031,431 | |
| Davidson Cash Equivalent Shares | | | (4,681,940 | ) | | | (4,681,940 | ) | | | (11,729,423 | ) | | | (11,729,423 | ) |
| Davidson Cash Equivalent Plus Shares | | | (980,439 | ) | | | (980,439 | ) | | | (2,584,384 | ) | | | (2,584,384 | ) |
| Institutional Money Market Shares* | | | — | | | | — | | | | (514,463,030 | ) | | | (514,463,030 | ) |
| Institutional Select Money Market Shares** | | | — | | | | — | | | | (10,559 | ) | | | (10,559 | ) |
| Premier Money Market Shares*** | | | (118,997,807 | ) | | | (118,997,807 | ) | | | (1,901,721,370 | ) | | | (1,901,721,370 | ) |
| Premium Reserve Money Market Shares | | | (7,970,002 | ) | | | (7,970,002 | ) | | | (341,499,244 | ) | | | (341,499,244 | ) |
| Service Shares | | | 423,303,845 | | | | 423,303,845 | | | | 99,572,949 | | | | 99,572,949 | |
| | | | | | | $ | 190,997,285 | | | | | | | $ | (2,690,701,191 | ) |
* The Institutional Money Market Shares class was liquidated on February 16, 2010 and is no longer offered.
** The Institutional Select Money Market Shares class was liquidated on October 27, 2009 and is no longer offered.
*** The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Government & Agency Securities Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 628,481,114 | | | $ | 628,481,114 | | | | 649,627,293 | | | $ | 649,627,293 | |
| Davidson Cash Equivalent Shares | | | 24,463,758 | | | | 24,463,758 | | | | 14,397,365 | | | | 14,397,365 | |
| Davidson Cash Equivalent Plus Shares | | | 275,786,862 | | | | 275,786,862 | | | | 185,485,990 | | | | 185,485,990 | |
| DWS Government & Agency Money Fund | | | 72,103,322 | | | | 72,103,322 | | | | 105,758,351 | | | | 105,758,351 | |
| DWS Government Cash Institutional Shares | | | 34,835,288,142 | | | | 34,835,288,142 | | | | 86,737,251,385 | | | | 86,737,251,385 | |
| Government Cash Managed Shares | | | 2,032,853,974 | | | | 2,032,853,974 | | | | 1,141,762,346 | | | | 1,141,762,346 | |
Premier Money Market Shares**** | | | — | | | | — | | | | 265,266,569 | | | | 265,266,569 | |
| Service Shares | | | 269,340,585 | | | | 269,340,585 | | | | 228,691,596 | | | | 228,691,596 | |
| | | | | | | $ | 38,138,317,757 | | | | | | | $ | 89,328,240,895 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 29,657 | | | $ | 29,657 | | | | 65,880 | | | $ | 65,880 | |
| Davidson Cash Equivalent Shares | | | 2,127 | | | | 2,127 | | | | 5,141 | | | | 5,141 | |
| Davidson Cash Equivalent Plus Shares | | | 5,509 | | | | 5,509 | | | | 5,913 | | | | 5,913 | |
| DWS Government & Agency Money Fund | | | 27,796 | | | | 27,796 | | | | 195,740 | | | | 195,740 | |
| DWS Government Cash Institutional Shares | | | 1,118,270 | | | | 1,118,270 | | | | 8,526,918 | | | | 8,526,918 | |
| Government Cash Managed Shares | | | 5,696 | | | | 5,696 | | | | 8,301 | | | | 8,301 | |
Premier Money Market Shares**** | | | — | | | | — | | | | 338,346 | | | | 338,346 | |
| Service Shares | | | 12,119 | | | | 12,119 | | | | 27,501 | | | | 27,501 | |
| | | | | | | $ | 1,201,174 | | | | | | | $ | 9,173,740 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (648,126,914 | ) | | $ | (648,126,914 | ) | | | (625,330,611 | ) | | $ | (625,330,611 | ) |
| Davidson Cash Equivalent Shares | | | (25,307,057 | ) | | | (25,307,057 | ) | | | (23,739,455 | ) | | | (23,739,455 | ) |
| Davidson Cash Equivalent Plus Shares | | | (292,761,983 | ) | | | (292,761,983 | ) | | | (158,769,431 | ) | | | (158,769,431 | ) |
| DWS Government & Agency Money Fund | | | (134,495,012 | ) | | | (134,495,012 | ) | | | (198,527,517 | ) | | | (198,527,517 | ) |
| DWS Government Cash Institutional Shares | | | (36,963,523,481 | ) | | | (36,963,523,481 | ) | | | (94,492,111,010 | ) | | | (94,492,111,010 | ) |
| Government Cash Managed Shares | | | (2,132,755,829 | ) | | | (2,132,755,829 | ) | | | (1,338,740,329 | ) | | | (1,338,740,329 | ) |
Premier Money Market Shares**** | | | — | | | | — | | | | (4,366,260,819 | ) | | | (4,366,260,819 | ) |
| Service Shares | | | (272,492,118 | ) | | | (272,492,118 | ) | | | (264,171,028 | ) | | | (264,171,028 | ) |
| | | | | | | $ | (40,469,462,394 | ) | | | | | | $ | (101,467,650,200 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (19,616,143 | ) | | $ | (19,616,143 | ) | | | 24,362,562 | | | $ | 24,362,562 | |
| Davidson Cash Equivalent Shares | | | (841,172 | ) | | | (841,172 | ) | | | (9,336,949 | ) | | | (9,336,949 | ) |
| Davidson Cash Equivalent Plus Shares | | | (16,969,612 | ) | | | (16,969,612 | ) | | | 26,722,472 | | | | 26,722,472 | |
| DWS Government & Agency Money Fund | | | (62,363,894 | ) | | | (62,363,894 | ) | | | (92,573,426 | ) | | | (92,573,426 | ) |
| DWS Government Cash Institutional Shares | | | (2,127,117,069 | ) | | | (2,127,117,069 | ) | | | (7,746,332,707 | ) | | | (7,746,332,707 | ) |
| Government Cash Managed Shares | | | (99,896,159 | ) | | | (99,896,159 | ) | | | (196,969,682 | ) | | | (196,969,682 | ) |
Premier Money Market Shares**** | | | — | | | | — | | | | (4,100,655,904 | ) | | | (4,100,655,904 | ) |
| Service Shares | | | (3,139,414 | ) | | | (3,139,414 | ) | | | (35,451,931 | ) | | | (35,451,931 | ) |
| | | | | | | $ | (2,329,943,463 | ) | | | | | | $ | (12,130,235,565 | ) |
**** The Premier Money Market Shares Class was liquidated on February 16, 2010 and is no longer offered.
Tax-Exempt Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 37,505,008 | | | $ | 37,505,008 | | | | 49,394,797 | | | $ | 49,394,797 | |
| Davidson Cash Equivalent Shares | | | 108,372,167 | | | | 108,372,167 | | | | 140,991,927 | | | | 140,991,927 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 8,705,410,264 | | | | 8,705,410,264 | | | | 9,545,076,388 | | | | 9,545,076,388 | |
| DWS Tax-Exempt Money Fund | | | 234,765,709 | | | | 234,765,709 | | | | 183,055,619 | | | | 183,055,619 | |
| DWS Tax-Free Money Fund Class S | | | 40,065,751 | | | | 40,065,751 | | | | 39,784,180 | | | | 39,784,180 | |
Premier Money Market Shares***** | | | 17,963,464 | | | | 17,963,464 | | | | 109,396,548 | | | | 109,396,548 | |
| Service Shares | | | 171,592,837 | | | | 171,592,837 | | | | 277,971,196 | | | | 277,971,196 | |
| Tax-Exempt Cash Managed Shares | | | 270,920,971 | | | | 270,920,971 | | | | 471,983,176 | | | | 471,983,176 | |
| Tax-Free Investment Class | | | 408,957,323 | | | | 408,957,323 | | | | 393,979,063 | | | | 393,979,063 | |
| | | | | | | $ | 9,995,553,494 | | | | | | | $ | 11,211,632,894 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 1,433 | | | $ | 1,433 | | | | 2,653 | | | $ | 2,653 | |
| Davidson Cash Equivalent Shares | | | 8,078 | | | | 8,078 | | | | 11,387 | | | | 11,387 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 2,103,424 | | | | 2,103,424 | | | | 3,842,512 | | | | 3,842,512 | |
| DWS Tax-Exempt Money Fund | | | 541,218 | | | | 541,218 | | | | 1,065,790 | | | | 1,065,790 | |
| DWS Tax-Free Money Fund Class S | | | 147,957 | | | | 147,957 | | | | 270,634 | | | | 270,634 | |
Premier Money Market Shares***** | | | 1,023 | | | | 1,023 | | | | 23,773 | | | | 23,773 | |
| Service Shares | | | 7,238 | | | | 7,238 | | | | 7,673 | | | | 7,673 | |
| Tax-Exempt Cash Managed Shares | | | 84 | | | | 84 | | | | 886 | | | | 886 | |
| Tax-Free Investment Class | | | 40,669 | | | | 40,669 | | | | 208,697 | | | | 208,697 | |
| | | | | | | $ | 2,851,124 | | | | | | | $ | 5,434,005 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (44,799,949 | ) | | | | $ (44,799,949) | | | (57,387,875 | ) | | $ | (57,387,875 | ) |
| Davidson Cash Equivalent Shares | | | (113,236,507 | ) | | | (113,236,507 | ) | | | (128,403,019 | ) | | | (128,403,019 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (8,940,648,532 | ) | | | (8,940,648,532 | ) | | | (9,593,718,982 | ) | | | (9,593,718,982 | ) |
| DWS Tax-Exempt Money Fund | | | (297,512,567 | ) | | | (297,512,567 | ) | | | (258,965,066 | ) | | | (258,965,066 | ) |
| DWS Tax-Free Money Fund Class S | | | (55,821,788 | ) | | | (55,821,788 | ) | | | (63,795,223 | ) | | | (63,795,223 | ) |
Premier Money Market Shares***** | | | (47,338,154 | ) | | | (47,338,154 | ) | | | (571,302,157 | ) | | | (571,302,157 | ) |
| Service Shares | | | (126,254,371 | ) | | | (126,254,371 | ) | | | (303,098,913 | ) | | | (303,098,913 | ) |
| Tax-Exempt Cash Managed Shares | | | (352,406,232 | ) | | | (352,406,232 | ) | | | (455,851,093 | ) | | | (455,851,093 | ) |
| Tax-Free Investment Class | | | (433,534,090 | ) | | | (433,534,090 | ) | | | (556,561,251 | ) | | | (556,561,251 | ) |
| | | | | | | $ | (10,411,552,190 | ) | | | | | | $ | (11,989,083,579 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (7,293,508 | ) | | | (7,293,508 | ) | | | (7,990,425 | ) | | $ | (7,990,425 | ) |
| Davidson Cash Equivalent Shares | | | (4,856,262 | ) | | | (4,856,262 | ) | | | 12,600,295 | | | | 12,600,295 | |
| DWS Tax-Exempt Cash Institutional Shares | | | (233,134,844 | ) | | | (233,134,844 | ) | | | (44,800,082 | ) | | | (44,800,082 | ) |
| DWS Tax-Exempt Money Fund | | | (62,205,640 | ) | | | (62,205,640 | ) | | | (74,843,657 | ) | | | (74,843,657 | ) |
| DWS Tax-Free Money Fund Class S | | | (15,608,080 | ) | | | (15,608,080 | ) | | | (23,740,409 | ) | | | (23,740,409 | ) |
Premier Money Market Shares***** | | | (29,373,667 | ) | | | (29,373,667 | ) | | | (461,881,836 | ) | | | (461,881,836 | ) |
| Service Shares | | | 45,345,704 | | | | 45,345,704 | | | | (25,120,044 | ) | | | (25,120,044 | ) |
| Tax-Exempt Cash Managed Shares | | | (81,485,177 | ) | | | (81,485,177 | ) | | | 16,132,969 | | | | 16,132,969 | |
| Tax-Free Investment Class | | | (24,536,098 | ) | | | (24,536,098 | ) | | | (162,373,491 | ) | | | (162,373,491 | ) |
| | | | | | | $ | (413,147,572 | ) | | | | | | $ | (772,016,680 | ) |
***** The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Cash Account Trust:
We have audited the accompanying statements of assets and liabilities of Cash Account Trust (the "Trust") (comprising the Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio) (collectively, the "Portfolios"), including the investment portfolios, as of April 30, 2011, 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 Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Portfolios of Cash Account Trust at April 30, 2011, 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.
| | | |
Boston, Massachusetts June 20, 2011 | | |
Tax Information (Unaudited)
For the Money Market Portfolio, a total of 6% of the dividends distributed during the fiscal year was derived from interest on US government securities, which is generally exempt from state income tax.
For the Government & Agency Securities Portfolio, a total of 44% of the dividends distributed during the fiscal year was derived from interest on US government securities, which is generally exempt from state income tax.
For the Tax-Exempt Portfolio, of the dividends paid from net investment income for the taxable year ended April 30, 2011, 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.
Summary of Management Fee Evaluation by Independent Fee Consultant
October 3, 2010
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.
Qualifications
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
Summary of Administrative Fee Evaluation by Independent Fee Consultant
October 4, 2010
Government & Agency Securities Portfolio
Tax-Exempt Portfolio
Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of a proposed pass-through to the funds of certain reporting costs associated with new regulations for money funds. My evaluation considered the following:
• My recently completed annual evaluation (please see my summary report of October 3, 2010), concluding that the prospective fees and expenses of all the DWS-sponsored money funds are reasonable.
• The fact that in my opinion the services DWS would provide under the combination of the Advisory and proposed Administration Agreements continues to be comparable with those typically provided to competitive funds under their management agreements.
• Management's analysis showing that the maximum total expense ratio impact of this change on any fund share class would be 1.3 basis points, which in my opinion is not material to my conclusions about the reasonableness of expenses.
Based on the foregoing considerations, in my opinion the proposed fees and expenses for the affected DWS-sponsored money funds are reasonable.
Thomas H. Mack
Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the fund as of April 30, 2011. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
| Independent Board Members |
Name, Year of Birth, Position with the Fund and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen |
Other Directorships Held by Board Member |
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993 | Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (education committees); formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 118 | — |
John W. Ballantine (1946) Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Chairman of the Board, Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity); former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International | 118 | — |
Henry P. Becton, Jr. (1943) Board Member since 1990 | Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Public Radio International; Public Radio Exchange (PRX); The PBS Foundation; former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service | 118 | Lead Director, Becton Dickinson and Company2 (medical technology company); Lead Director, Belo Corporation2 (media company) |
Dawn-Marie Driscoll (1946) Board Member since 1987 | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization); former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2007) |
Keith R. Fox (1954) Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies | 118 | — |
Kenneth C. Froewiss (1945) Board Member since 2001 | Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996) | 118 | — |
Richard J. Herring (1946) Board Member since 1990 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; Independent Director of Barclays Bank Delaware (since September 2010); formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006) | 118 | Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007) |
William McClayton (1944) Board Member since 2004 | Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival | 118 | — |
Rebecca W. Rimel (1951) Board Member since 1995 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Trustee, Pro Publica (charitable organization) (2007-2010) | 118 | Director, CardioNet, Inc. (health care) (2009- present); Director, Viasys Health Care2 (January 2007- June 2007); |
William N. Searcy, Jr. (1946) Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 1998) |
Jean Gleason Stromberg (1943) Board Member since 1997 | Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996) | 118 | — |
Robert H. Wadsworth (1940) Board Member since 1999 | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association | 121 | — |
Officers4 |
Name, Year of Birth, Position with the Fund and Length of Time Served5 | Principal Occupation(s) During Past 5 Years and Other Directorships Held |
W. Douglas Beck, CFA9,10 (1967) President and CEO, 2011-present | Managing Director3, Deutsche Asset Management (2006-present); President and CEO of DWS family of funds and Head of Product Management, US for DWS Investments; formerly, Executive Director, Head of Product Management (2002-2006) and President (2005-2006) of the UBS Funds at UBS Global Asset Management; Co-Head of Manager Research/Managed Solutions Group, Merrill Lynch (1998-2002) |
John Millette7 (1962) Vice President and Secretary, 1999-present | Director3, Deutsche Asset Management |
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present | Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998) |
Caroline Pearson7 (1962) Chief Legal Officer, April 2010-present | Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010) |
Rita Rubin8 (1970) Assistant Secretary, 2009-present | Director3 and Senior Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007) |
Paul Antosca7 (1957) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006) |
Jack Clark7 (1967) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007) |
Diane Kenneally7 (1966) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
John Caruso8 (1965) Anti-Money Laundering Compliance Officer, 2010-present | Managing Director3, Deutsche Asset Management |
Robert Kloby8 (1962) Chief Compliance Officer, 2006-present | Managing Director3, Deutsche Asset Management |
1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.
2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3 Executive title, not a board directorship.
4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.
5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.
6 Address: 100 Plaza One, Jersey City, NJ 07311.
7 Address: One Beacon Street, Boston, MA 02108.
8 Address: 60 Wall Street, New York, NY 10005.
9 Address: 345 Park Avenue, New York, NY 10154.
10 Appointed May 17, 2011, effective June 1, 2011.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
Notes
Notes
Notes
Notes
ANNUAL REPORT TO SHAREHOLDERS
Premium Reserve Money Market Shares
Fund #97
Money Market Portfolio
April 30, 2011
Contents
3 Portfolio Management Review 6 Information About Your Fund's Expenses 17 Statement of Assets and Liabilities 19 Statement of Operations 20 Statement of Changes in Net Assets 23 Notes to Financial Statements 31 Report of Independent Registered Public Accounting Firm 33 Summary of Management Fee Evaluation by Independent Fee Consultant 37 Board Members and Officers |
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, visit www.dws-investments.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.
An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of the fund may have a significant adverse effect on the share prices of all classes of shares of the fund. See the prospectus for specific details regarding the fund's risk profile.
The fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Portfolio Management Review
Market Overview
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
In September 2010, investors responded positively to US Federal Reserve Board (the Fed) Chairman Ben Bernanke's statement that the Fed would take additional steps in the form of "quantitative easing" to prop up the US economy as needed.1 Over the fund's most recent 12-month period, the money market yield curve has gradually steepened as longer-term rates rose in response to improved economic data and shorter maturities declined significantly based on a number of market influences.2 These included continuing strong demand and shrinking supply in the money market area; the removal (or unwind) of $200 billion in two-month Treasury bills from the market until Congress once again raises the US debt ceiling; a new FDIC fee assessment that has, in effect, removed some of the incentive for certain large banks to create supply in the money market area; and; lastly, the fact that the federal funds rate remains "on hold," keeping short-term rates lower overall.3
Positive Contributors to Fund Performance
We were able to maintain a competitive yield for the fund during the period ended April 30, 2011. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
With yields trending lower through most of the period, we continued to hold a large percentage of portfolio assets in short-maturity instruments for yield, high-quality and liquidity purposes. We also maintained a conservative average maturity, with portfolio assets broadly diversified among a number of sectors, including banks, asset-backed securities, commercial paper and sovereign debt.4,5 Toward the end of the period, we permitted the fund's average maturity to shorten, as we believed that money market yields could move up if Congress again raised the debt ceiling.
Our main focus, as always, is on preservation of capital, and during the period ending April 30, 2011, we maintained a short maturity and attempted to ensure ample liquidity for the fund.
Negative Contributors to Fund Performance
The types of securities that we were investing in the fund tended to have lower yields than issues carrying more risk. We preferred to be cautious during a time of market uncertainty. In the end this cost the fund some yield, but we believe that this represented a prudent approach to preserving principal in light of the circumstances during the period.
Outlook and Positioning
Assuming that Congress can agree to raise the US debt ceiling in the near future, significant short-term Treasury supply should return to the market in the coming months and remove some downward pressure on money market rates that carry the shortest maturities. In general, however, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested and continued strong demand from investors seeking principal stability and safety.
We continue our insistence on the highest credit quality within the fund.6 We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the fund and to seek competitive yield for our shareholders.
Fund Performance (as of April 30, 2011)
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of a fund may have a significant adverse effect on the share prices of all classes of shares of that fund. See the prospectus for specific details regarding the fund's risk profile.
| | |
| | | 7-Day Current Yield | |
| Premium Reserve Money Market Shares | | | 0.01 | %* |
Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the fund over a 7-day period expressed as an annual percentage rate of the fund's shares outstanding. For the most current yield information, visit our Web site at www.dws-investments.com. * The investment advisor has agreed to voluntarily waive fees/reimburse expenses. This waiver may be changed or terminated at any time without notice. Otherwise, the 7-day current yield would have been -0.42% as of April 30, 2011. | |
1 Quantitative easing — a monetary policy used by the government to increase the money supply. With this policy, the government purchases government and other securities from the market to create additional capital which financial institutions can use to promote lending and liquidity.
2 The yield curve — a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.
3 Treasury bill — a short-term (maturity up to 1 year) discounted government security sold through competitive bidding at weekly and monthly auctions in denominations of $10,000 to $1 million. Debt ceiling is the maximum borrowing power of a government entity. FDIC (Federal Deposit Insurance Corporation) is a federal agency that insures deposits in member banks and thrifts up to a specific dollar amount. Federal funds rate is the overnight bank lending rate.
4 Average maturity — the average length of time until the principal amount of a bond must be repaid.
5 Asset-backed securities are securities backed by a loan, lease or receivables against assets other than real estate and mortgage-backed securities. Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates. Sovereign debt is bonds issued by a national government in a foreign currency, in order to finance the issuing country's growth.
6 Credit quality — a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default. The fund's credit quality does not remove market risk and is subject to change.
Information About Your Fund's Expenses
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher for the Premium Reserve Money Market 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, 2010 to April 30, 2011).
The tables illustrate your Fund's expenses in two ways:
•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in each Fund using each Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
• Hypothetical 5% Fund Return. This helps you to compare each Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using each Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | Premium Reserve Money Market Shares | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.08 | |
| Expenses Paid per $1,000* | | $ | 1.64 | |
| Hypothetical 5% Fund Return | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,023.16 | |
| Expenses Paid per $1,000* | | $ | 1.66 | |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratios | |
| Premium Reserve Money Market Shares | .33% |
For more information, please refer to the Fund's prospectus.
Money Market Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
| Commercial Paper | 34% | 38% |
| Short-Term Notes | 17% | 26% |
| Repurchase Agreements | 16% | 12% |
| Certificates of Deposit and Bank Notes | 16% | 13% |
| Government & Agency Obligations | 14% | 10% |
| Time Deposits | 3% | — |
| Supranational | — | 1% |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Money Market Portfolio | 48 days | 41 days |
| iMoneyNet First Tier Retail Money Fund Average* | 40 days | 46 days |
* The Fund is compared to its respective iMoneyNet Category: First Tier Retail Money Fund Average — Category includes a widely recognized composite of money market funds that invest in only first tier (highest rating) securities. Portfolio holdings of First Tier funds include US Treasury, US Other, Repos, Time Deposits, Domestic Bank Obligations, Foreign Bank Obligations, First Tier Commercial Paper, Floating Rate Notes and Asset Backed Commercial Paper.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 9-16. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Money Market Portfolio
| | Principal Amount ($) | Value ($) | |
| | | |
| Certificates of Deposit and Bank Notes 15.8% | |
| Bank Nederlandse Gemeenten NV, 6.0%, 3/26/2012 | 6,500,000 | 6,828,336 | |
| Bank of Tokyo-Mitsubishi UFJ Ltd., 0.38%, 5/16/2011 | 25,000,000 | 25,000,000 | |
| BNP Paribas: | |
| | 0.35%, 8/8/2011 | | 20,000,000 | 20,000,000 | |
| | 0.45%, 7/25/2011 | | 7,000,000 | 6,999,834 | |
| | 0.55%, 5/13/2011 | | 7,000,000 | 7,000,093 | |
| Credit Agricole SA, 0.3%, 8/4/2011 | 12,000,000 | 12,000,000 | |
| Dexia Credit Local: | |
| | 0.24%, 5/3/2011 | | 23,437,000 | 23,437,000 | |
| | 144A, 2.375%, 9/23/2011 | | 8,000,000 | 8,055,854 | |
| International Finance Corp., 3.0%, 11/15/2011 | 6,000,000 | 6,084,144 | |
| KBC Bank NV, 0.3%, 5/6/2011 | 6,500,000 | 6,500,000 | |
| Landesbank Hessen-Thueringen Girozentrale: | |
| | 0.2%, 5/12/2011 | | 3,000,000 | 3,000,000 | |
| | 0.2%, 5/20/2011 | | 6,000,000 | 6,000,000 | |
| Mitsubishi UFJ Trust & Banking Corp., 0.33%, 5/20/2011 | 8,500,000 | 8,500,000 | |
| Mizuho Corporate Bank Ltd., 0.31%, 5/3/2011 | 12,000,000 | 12,000,000 | |
| Natixis, 0.22%, 6/24/2011 | 20,000,000 | 20,000,000 | |
| Nederlandse Waterschapsbank NV, 1.375%, 2/17/2012 | 10,000,000 | 10,078,955 | |
| Nordea Bank Finland PLC: | |
| | 0.27%, 6/28/2011 | | 12,000,000 | 12,000,000 | |
| | 0.28%, 7/5/2011 | | 25,000,000 | 25,000,226 | |
| | 0.44%, 6/30/2011 | | 10,000,000 | 10,000,498 | |
| | 0.67%, 7/20/2011 | | 15,000,000 | 15,008,950 | |
| Skandinaviska Enskilda Banken AB: | |
| | 0.24%, 6/20/2011 | | 25,000,000 | 25,000,000 | |
| | 0.25%, 6/10/2011 | | 6,000,000 | 6,000,000 | |
| | 0.26%, 6/3/2011 | | 15,000,000 | 15,000,000 | |
| | 0.26%, 6/6/2011 | | 15,000,000 | 15,000,000 | |
| | 0.31%, 5/27/2011 | | 18,000,000 | 18,000,000 | |
| Societe Generale: | |
| | 0.2%, 7/5/2011 | | 6,000,000 | 6,000,000 | |
| | 0.35%, 5/16/2011 | | 12,000,000 | 12,000,000 | |
| Sumitomo Mitsui Banking Corp.: | |
| | 0.28%, 6/1/2011 | | 28,000,000 | 28,000,000 | |
| | 0.3%, 5/3/2011 | | 6,000,000 | 6,000,000 | |
| Svenska Handelsbanken AB: | |
| | 0.24%, 7/6/2011 | | 20,500,000 | 20,500,000 | |
| | 0.275%, 6/23/2011 | | 15,000,000 | 15,000,055 | |
Total Certificates of Deposit and Bank Notes (Cost $409,993,945) | 409,993,945 | |
| | |
| Commercial Paper 34.6% | |
| Issued at Discount** | |
| Abbey National North America LLC, 0.3%, 6/27/2011 | 6,500,000 | 6,496,912 | |
| Alpine Securitization, 144A, 0.16%, 6/2/2011 | 40,000,000 | 39,994,311 | |
| Argento Variable Funding: | |
| | 144A, 0.31%, 6/20/2011 | | 15,000,000 | 14,993,542 | |
| | 144A, 0.319%, 5/3/2011 | | 6,500,000 | 6,499,884 | |
| Atlantis One Funding Corp., 144A, 0.19%, 5/5/2011 | 25,000,000 | 24,999,472 | |
| Barclays Bank PLC, 0.31%, 5/26/2011 | 12,500,000 | 12,497,309 | |
| BPCE SA, 0.27%, 7/26/2011 | 9,000,000 | 8,994,195 | |
| Caisse d'Amortissement de la Dette Sociale: | |
| | 0.22%, 8/5/2011 | | 12,000,000 | 11,992,960 | |
| | 0.25%, 7/25/2011 | | 18,000,000 | 17,989,375 | |
| | 0.27%, 5/31/2011 | | 16,620,000 | 16,616,261 | |
| | 0.28%, 6/1/2011 | | 12,800,000 | 12,796,914 | |
| | 0.29%, 5/31/2011 | | 15,000,000 | 14,996,375 | |
| Chariot Funding LLC, 144A, 0.16%, 5/20/2011 | 20,000,000 | 19,998,311 | |
| Comcast Corp., 0.31%, 5/6/2011 | 10,000,000 | 9,999,569 | |
| Eksportfinans ASA, 0.15%, 5/5/2011 | 37,500,000 | 37,499,375 | |
| ENI Coordination Center SA, 0.3%, 5/26/2011 | 12,500,000 | 12,497,396 | |
| Google, Inc., 0.4%, 9/16/2011 | 8,000,000 | 7,987,733 | |
| Grampian Funding LLC: | |
| | 144A, 0.26%, 7/14/2011 | | 10,000,000 | 9,994,656 | |
| | 144A, 0.26%, 7/19/2011 | | 3,000,000 | 2,998,288 | |
| | 144A, 0.27%, 7/8/2011 | | 12,000,000 | 11,993,880 | |
| | 144A, 0.27%, 7/11/2011 | | 25,000,000 | 24,986,688 | |
| | 144A, 0.28%, 7/7/2011 | | 10,000,000 | 9,994,789 | |
| | 144A, 0.28%, 7/8/2011 | | 13,000,000 | 12,993,124 | |
| Johnson & Johnson: | |
| | 144A, 0.18%, 6/3/2011 | | 12,850,000 | 12,847,880 | |
| | 144A, 0.19%, 8/22/2011 | | 15,000,000 | 14,991,054 | |
| Kells Funding LLC: | |
| | 144A, 0.33%, 5/9/2011 | | 6,000,000 | 5,999,560 | |
| | 144A, 0.35%, 5/18/2011 | | 3,000,000 | 2,999,504 | |
| | 144A, 0.35%, 6/6/2011 | | 6,000,000 | 5,997,900 | |
| | 144A, 0.36%, 5/17/2011 | | 18,000,000 | 17,997,120 | |
| | 144A, 0.37%, 6/17/2011 | | 15,000,000 | 14,992,754 | |
| | 144A, 0.38%, 6/17/2011 | | 12,000,000 | 11,994,047 | |
| | 144A, 0.39%, 7/5/2011 | | 10,000,000 | 9,992,958 | |
| | 144A, 0.39%, 9/6/2011 | | 13,750,000 | 13,730,933 | |
| | 144A, 0.4%, 7/1/2011 | | 8,000,000 | 7,994,578 | |
| LMA Americas LLC, 144A, 0.17%, 5/9/2011 | 6,000,000 | 5,999,773 | |
| Market Street Funding LLC, 144A, 0.27%, 5/16/2011 | 12,419,000 | 12,417,603 | |
| Natixis Commercial Paper Corp., 0.3%, 7/12/2011 | 12,500,000 | 12,492,500 | |
| Nieuw Amsterdam Receivables Corp.: | |
| | 144A, 0.24%, 6/2/2011 | | 13,500,000 | 13,497,120 | |
| | 144A, 0.25%, 5/6/2011 | | 12,000,000 | 11,999,583 | |
| NRW.Bank: | |
| | 0.19%, 6/28/2011 | | 13,500,000 | 13,495,868 | |
| | 0.22%, 7/14/2011 | | 6,000,000 | 5,997,287 | |
| | 0.275%, 6/10/2011 | | 8,000,000 | 7,997,556 | |
| | 0.3%, 5/2/2011 | | 12,000,000 | 11,999,900 | |
| | 0.3%, 5/3/2011 | | 30,000,000 | 29,999,500 | |
| | 0.3%, 5/23/2011 | | 12,500,000 | 12,497,708 | |
| Procter & Gamble Co., 0.19%, 6/3/2011 | 16,513,000 | 16,510,124 | |
| Regency Markets No. 1 LLC, 144A, 0.19%, 5/25/2011 | 26,000,000 | 25,996,707 | |
| Romulus Funding Corp., 144A, 0.3%, 5/24/2011 | 3,000,000 | 2,999,425 | |
| Sanofi-Aventis SA, 0.3%, 8/15/2011 | 12,500,000 | 12,488,958 | |
| SBAB Bank AB: | |
| | 144A, 0.35%, 7/19/2011 | | 6,000,000 | 5,995,392 | |
| | 144A, 0.37%, 7/13/2011 | | 12,500,000 | 12,490,622 | |
| | 144A, 0.39%, 6/9/2011 | | 12,000,000 | 11,994,930 | |
| | 144A, 0.39%, 7/5/2011 | | 12,500,000 | 12,491,198 | |
| | 144A, 0.4%, 6/23/2011 | | 6,000,000 | 5,996,467 | |
| Scaldis Capital LLC: | |
| | 0.32%, 5/20/2011 | | 5,000,000 | 4,999,156 | |
| | 0.32%, 6/2/2011 | | 9,000,000 | 8,997,440 | |
| Shell International Finance BV, 0.4%, 5/2/2011 | 5,000,000 | 4,999,944 | |
| Skandinaviska Enskilda Banken AB, 0.3%, 5/6/2011 | 15,000,000 | 14,999,375 | |
| Standard Chartered Bank, 0.29%, 5/24/2011 | 20,000,000 | 19,996,294 | |
| Straight-A Funding LLC, 144A, 0.25%, 5/2/2011 | 15,000,000 | 14,999,896 | |
| Svenska Handelsbanken AB, 0.28%, 5/18/2011 | 6,000,000 | 5,999,207 | |
| Swedbank AB: | |
| | 0.26%, 7/27/2011 | | 12,000,000 | 11,992,460 | |
| | 0.27%, 7/11/2011 | | 10,000,000 | 9,994,675 | |
| | 0.27%, 7/26/2011 | | 10,000,000 | 9,993,550 | |
| | 0.285%, 5/23/2011 | | 12,000,000 | 11,997,910 | |
| | 0.3%, 5/13/2011 | | 28,000,000 | 27,997,200 | |
| | 0.34%, 7/5/2011 | | 20,000,000 | 19,987,722 | |
| Total Capital Canada Ltd., 144A, 0.31%, 9/15/2011 | 12,500,000 | 12,485,253 | |
Total Commercial Paper (Cost $894,147,910) | 894,147,910 | |
| | |
| Short-Term Notes* 17.7% | |
| Abbey National Treasury Services PLC: | |
| | 0.38%, 4/16/2012 | | 18,000,000 | 18,000,000 | |
| | 0.49%, 11/2/2011 | | 12,500,000 | 12,500,000 | |
| Australia & New Zealand Banking Group Ltd., 144A, 0.33%, 1/20/2012 | 12,500,000 | 12,500,000 | |
| Bank of Nova Scotia: | |
| | 0.22%, 8/25/2011 | | 16,500,000 | 16,500,000 | |
| | 0.27%, 9/12/2011 | | 7,000,000 | 7,000,000 | |
| | 0.35%, 12/8/2011 | | 8,000,000 | 8,000,000 | |
| Barclays Bank PLC, 0.533%, 7/19/2011 | 15,000,000 | 15,000,000 | |
| BNP Paribas, 0.492%, 8/22/2011 | 25,000,000 | 25,000,000 | |
| Caisse d'Amortissement de la Dette Sociale, 144A, 0.273%, 5/25/2012 | 26,000,000 | 25,996,945 | |
| Canadian Imperial Bank of Commerce: | |
| | 0.18%, 5/12/2011 | | 20,000,000 | 20,000,000 | |
| | 0.292%, 4/26/2012 | | 21,600,000 | 21,600,000 | |
| Commonwealth Bank of Australia, 144A, 0.331%, 2/3/2012 | 12,000,000 | 12,000,000 | |
| Credit Suisse, 0.19%, 6/3/2011 | 12,000,000 | 12,000,000 | |
| JPMorgan Chase Bank NA, 0.211%, 5/31/2011 | 11,500,000 | 11,500,000 | |
| Kells Funding LLC: | |
| | 144A, 0.318%, 8/15/2011 | | 12,500,000 | 12,500,000 | |
| | 144A, 0.342%, 2/24/2012 | | 13,750,000 | 13,750,000 | |
| | 144A, 0.383%, 12/1/2011 | | 10,000,000 | 10,000,000 | |
| National Australia Bank Ltd.: | |
| | 0.261%, 10/5/2011 | | 12,500,000 | 12,500,000 | |
| | 0.291%, 6/10/2011 | | 15,000,000 | 15,000,000 | |
| Nordea Bank Finland PLC: | |
| | 0.56%, 2/3/2012 | | 3,000,000 | 3,004,662 | |
| | 0.574%, 10/20/2011 | | 12,500,000 | 12,517,260 | |
| | 0.58%, 10/14/2011 | | 10,000,000 | 10,013,284 | |
| Rabobank Nederland NV: | |
| | 0.263%, 5/13/2011 | | 14,000,000 | 14,000,001 | |
| | 0.307%, 4/24/2012 | | 7,750,000 | 7,749,616 | |
| | 0.311%, 1/10/2012 | | 8,000,000 | 8,000,000 | |
| | 144A, 0.384%, 3/16/2012 | | 12,000,000 | 12,000,000 | |
| | 144A, 0.458%, 9/28/2011 | | 6,000,000 | 6,003,687 | |
| Royal Bank of Canada, 0.31%, 8/12/2011 | 11,300,000 | 11,300,000 | |
| Societe Generale, 0.32%, 5/19/2011 | 24,000,000 | 24,000,000 | |
| Westpac Banking Corp.: | |
| | 0.27%, 10/12/2011 | | 16,000,000 | 16,000,000 | |
| | 0.293%, 6/1/2011 | | 8,000,000 | 8,000,000 | |
| | 0.321%, 5/9/2012 | | 17,000,000 | 17,000,000 | |
| | 144A, 0.323%, 10/28/2011 | | 12,000,000 | 12,001,367 | |
| | 0.36%, 1/10/2012 | | 14,000,000 | 14,000,000 | |
Total Short-Term Notes (Cost $456,936,822) | 456,936,822 | |
| | |
| Government & Agency Obligations 13.9% | |
| Foreign Government Obligations 0.5% | |
| Kingdom of Denmark, 2.75%, 11/15/2011 | 11,500,000 | 11,643,626 | |
| Other Government Related (a) 1.6% | |
| European Investment Bank: | |
| | 0.24%, 6/28/2011 | | 13,000,000 | 12,994,973 | |
| | 2.625%, 5/16/2011 | | 7,000,000 | 7,006,628 | |
| | 2.625%, 11/15/2011 | | 22,000,000 | 22,267,637 | |
| | 42,269,238 | |
| US Government Sponsored Agencies 5.5% | |
| Federal Farm Credit Bank: | |
| | 0.223%*, 11/2/2011 | | 12,250,000 | 12,249,690 | |
| | 0.259%**, 10/20/2011 | | 5,000,000 | 4,993,789 | |
| | 0.259%**, 4/4/2012 | | 5,000,000 | 4,987,758 | |
| | 0.319%**, 12/16/2011 | | 10,200,000 | 10,179,237 | |
| Federal Home Loan Bank: | |
| | 0.24%, 10/28/2011 | | 14,000,000 | 13,995,584 | |
| | 0.25%, 10/28/2011 | | 14,000,000 | 13,999,429 | |
| | 0.268%**, 9/12/2011 | | 10,000,000 | 9,989,950 | |
| | 0.54%, 5/24/2011 | | 4,400,000 | 4,400,022 | |
| | 1.0%, 12/28/2011 | | 10,000,000 | 10,053,762 | |
| Federal National Mortgage Association: | |
| | 0.113%*, 7/27/2011 | | 12,500,000 | 12,498,033 | |
| | 0.159%**, 11/21/2011 | | 15,000,000 | 14,986,400 | |
| | 0.182%**, 6/16/2011 | | 12,500,000 | 12,497,045 | |
| | 4.68%, 6/15/2011 | | 7,000,000 | 7,038,043 | |
| | 5.375%, 11/15/2011 | | 10,000,000 | 10,280,209 | |
| | 142,148,951 | |
| US Treasury Obligations 6.3% | |
| US Treasury Bills: | |
| | 0.155%**, 7/28/2011 | | 996,000 | 995,623 | |
| | 0.16%**, 9/1/2011 | | 12,500,000 | 12,493,167 | |
| US Treasury Notes: | |
| | 0.875%, 5/31/2011 | | 39,500,000 | 39,518,687 | |
| | 0.875%, 1/31/2012 | | 13,500,000 | 13,567,775 | |
| | 1.0%, 9/30/2011 | | 37,000,000 | 37,117,154 | |
| | 4.5%, 11/30/2011 | | 7,000,000 | 7,170,545 | |
| | 4.625%, 8/31/2011 | | 27,500,000 | 27,899,749 | |
| | 4.625%, 10/31/2011 | | 17,000,000 | 17,369,535 | |
| | 5.125%, 6/30/2011 | | 7,500,000 | 7,560,710 | |
| | 163,692,945 | |
Total Government & Agency Obligations (Cost $359,754,760) | 359,754,760 | |
| | |
| Time Deposits 2.6% | |
| Citibank NA, 0.13%, 5/5/2011 | 58,000,000 | 58,000,000 | |
| National Australia Bank Ltd., 0.08%, 5/2/2011 | 9,315,483 | 9,315,483 | |
Total Time Deposits (Cost $67,315,483) | 67,315,483 | |
| | |
| Municipal Bonds and Notes 0.2% | |
| Henrico County, VA, Economic Development Authority, Residential Care Facility Revenue, Westminster Canterbury, 0.32%***, 10/1/2037, LOC: Branch Banking & Trust (Cost $4,085,000) | 4,085,000 | 4,085,000 | |
| | |
| Repurchase Agreements 16.2% | |
| Barclays Capital PLC, 0.03%, dated 4/29/2011, to be repurchased at $5,000,012 on 5/2/2011 (b) | 5,000,000 | 5,000,000 | |
| BNP Paribas, 0.03%, dated 4/29/2011, to be repurchased at $39,285,813 on 5/2/2011 (c) | 39,285,715 | 39,285,715 | |
| BNP Paribas, 0.04%, dated 4/29/2011, to be repurchased at $124,000,413 on 5/2/2011 (d) | 124,000,000 | 124,000,000 | |
| JPMorgan Securities, Inc., 0.01%, dated 4/29/2011, to be repurchased at $64,281,482 on 5/2/2011 (e) | 64,281,428 | 64,281,428 | |
| JPMorgan Securities, Inc., 0.04%, dated 4/29/2011, to be repurchased at $23,000,077 on 5/2/2011 (f) | 23,000,000 | 23,000,000 | |
| Merrill Lynch & Co., Inc., 0.05%, dated 4/29/2011, to be repurchased at $15,000,062 on 5/2/2011 (g) | 15,000,000 | 15,000,000 | |
| Morgan Stanley & Co., Inc., 0.04%, dated 4/29/2011, to be repurchased at $142,000,473 on 5/2/2011 (h) | 142,000,000 | 142,000,000 | |
| The Goldman Sachs & Co., 0.05%, dated 4/29/2011, to be repurchased at $6,000,025 on 5/2/2011 (i) | 6,000,000 | 6,000,000 | |
Total Repurchase Agreements (Cost $418,567,143) | 418,567,143 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $2,610,801,063)+ | | | 101.0 | | | | 2,610,801,063 | |
| Other Assets and Liabilities, Net | | | (1.0 | ) | | | (24,871,551 | ) |
| Net Assets | | | 100.0 | | | | 2,585,929,512 | |
* These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
** Annualized yield at time of purchase; not a coupon rate.
*** Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of April 30, 2011.
+ The cost for federal income tax purposes was $2,610,801,063.
(a) Government-backed debt issued by financial companies or government sponsored enterprises.
(b) Collateralized by $5,100,300 US Treasury Bill, maturing on 7/7/2011 with a value of $5,100,045.
(c) Collateralized by $41,890,600 US Treasury Note, 2.625%, maturing on 11/15/2020 with a value of $40,071,491.
(d) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 29,000,000 | | Federal Home Loan Bank | | | 3.125 | | 3/11/2016 | | | 30,474,263 | |
| | 91,202,000 | | Federal National Mortgage Association | | | 2.625 | | 11/20/2014 | | | 96,010,512 | |
| Total Collateral Value | | | | | | | | 126,484,775 | |
(e) Collateralized by $87,016,788 US Treasury STRIPS, with various maturity dates of 5/15/2019-8/15/2020 with a value of $65,568,029.
(f) Collateralized by $23,827,802 Federal Home Loan Mortgage Corp., with various coupon rates from 2.0-2.75%, with various maturity dates of 11/15/2038-9/15/2040 with a value of $23,464,662.
(g) Collateralized by $14,787,810 Federal Home Loan Mortgage Corp., 3.295%, maturing on 1/1/2041 with a value of $15,300,001.
(h) Collateralized by $138,402,899 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-6.0%, with various maturity dates of 8/1/2038-4/1/2041 with a value of $144,840,000.
(i) Collateralized by $7,977,887 Federal National Mortgage Association — Principal Only, with various maturity dates of 3/25/2036-5/25/2040 with a value of $6,120,000.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
LOC: Letter of Credit
Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying morgages or mortgage-backed securities.
STRIPS: Separate Trading of Registered Interest and Principal Securities
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Investments in Securities (j) | | $ | — | | | $ | 2,192,233,920 | | | $ | — | | | $ | 2,192,233,920 | |
| Repurchase Agreements | | | — | | | | 418,567,143 | | | | — | | | | 418,567,143 | |
| Total | | $ | — | | | $ | 2,610,801,063 | | | $ | — | | | $ | 2,610,801,063 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
(j) See Investment Portfolio for additional categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Money Market Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,192,233,920 | |
| Repurchase agreements, valued at amortized cost | | | 418,567,143 | |
| Total investments, valued at amortized cost | | | 2,610,801,063 | |
| Cash | | | 2,856 | |
| Receivable for Fund shares sold | | | 3,963 | |
| Interest receivable | | | 2,616,479 | |
| Due from Advisor | | | 16,735 | |
| Other assets | | | 93,812 | |
| Total assets | | | 2,613,534,908 | |
| Liabilities | |
| Payable for investments purchased | | | 25,996,945 | |
| Payable for Fund shares redeemed | | | 22,024 | |
| Accrued management fee | | | 322,306 | |
| Other accrued expenses and payables | | | 1,264,121 | |
| Total liabilities | | | 27,605,396 | |
| Net assets, at value | | $ | 2,585,929,512 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 39,083 | |
| Paid-in capital | | | 2,585,890,429 | |
| Net assets, at value | | $ | 2,585,929,512 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Money Market Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($845,877,944 ÷ 845,573,745 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Capital Assets Funds Preferred Shares Net Asset Value, offering and redemption price per share ($4,717,958 ÷ 4,716,261 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($13,123,785 ÷ 13,119,065 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Plus Shares Net Asset Value, offering and redemption price per share ($1,311,279 ÷ 1,310,807 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Premium Reserve Money Market Shares Net Asset Value, offering and redemption price per share ($61,599,618 ÷ 61,577,466 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($1,659,298,928 ÷ 1,658,702,190 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Money Market Portfolio | |
Income: Interest | | $ | 8,798,068 | |
Expenses: Management fee | | | 3,881,269 | |
| Services to shareholders | | | 6,076,379 | |
| Custodian fee | | | 74,890 | |
| Distribution and service fees | | | 14,110,025 | |
| Professional fees | | | 138,516 | |
| Trustees' fees and expenses | | | 77,791 | |
| Reports to shareholders | | | 320,727 | |
| Registration fees | | | 165,621 | |
| Other | | | 109,278 | |
| Total expenses before expense reductions | | | 24,954,496 | |
| Expense reductions | | | (16,494,317 | ) |
| Total expenses after expense reductions | | | 8,460,179 | |
| Net investment income | | | 337,889 | |
| Net realized gain (loss) from investments | | | 46,708 | |
| Net increase (decrease) in net assets resulting from operations | | $ | 384,597 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Money Market Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 337,889 | | | $ | 1,401,172 | |
| Net realized gain (loss) | | | 46,708 | | | | 163,092 | |
| Net increase in net assets resulting from operations | | | 384,597 | | | | 1,564,264 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (187,975 | ) | | | (325,020 | ) |
| Capital Assets Funds Preferred Shares | | | (13,299 | ) | | | (22,211 | ) |
| Davidson Cash Equivalent Shares | | | (1,869 | ) | | | (2,135 | ) |
| Davidson Cash Equivalent Plus Shares | | | (221 | ) | | | (304 | ) |
| Institutional Money Market Shares | | | — | | | | (739,919 | ) |
| Institutional Select Money Market Shares | | | — | | | | (18 | ) |
| Premier Money Market Shares | | | (5,042 | ) | | | (80,727 | ) |
| Premium Reserve Money Market Shares | | | (7,826 | ) | | | (119,850 | ) |
| Service Shares | | | (183,668 | ) | | | (110,887 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (185,696 | ) |
| Capital Assets Funds Preferred Shares | | | — | | | | (11,952 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (4,764 | ) |
| Davidson Cash Equivalent Plus Shares | | | — | | | | (692 | ) |
| Institutional Money Market Shares | | | — | | | | (48,898 | ) |
| Institutional Select Money Market Shares | | | — | | | | (1 | ) |
| Premier Money Market Shares | | | — | | | | (232,203 | ) |
| Premium Reserve Money Market Shares | | | — | | | | (48,826 | ) |
| Service Shares | | | — | | | | (238,491 | ) |
| Total distributions | | | (399,900 | ) | | | (2,172,594 | ) |
Fund share transactions: Proceeds from shares sold | | | 2,807,221,339 | | | | 3,753,564,969 | |
| Reinvestment of distributions | | | 395,534 | | | | 2,086,161 | |
| Cost of shares redeemed | | | (2,616,619,588 | ) | | | (6,446,352,321 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | 190,997,285 | | | | (2,690,701,191 | ) |
| Increase (decrease) in net assets | | | 190,981,982 | | | | (2,691,309,521 | ) |
| Net assets at beginning of period | | | 2,394,947,530 | | | | 5,086,257,051 | |
| Net assets at end of period (including undistributed net investment income of $39,083 and $54,386, respectively) | | $ | 2,585,929,512 | | | $ | 2,394,947,530 | |
The accompanying notes are an integral part of the financial statements.
Money Market Portfolio Premium Reserve Money Market Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .001 | | | | .016 | | | | .043 | | | | .047 | |
| Net realized and unrealized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * |
| Total from investment operations | | | .000 | * | | | .001 | | | | .016 | | | | .043 | | | | .047 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.001 | ) | | | (.016 | ) | | | (.043 | ) | | | (.047 | ) |
| Net realized gains | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.001 | ) | | | (.016 | ) | | | (.043 | ) | | | (.047 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| Total Return (%) | | | .01 | a | | | .06 | a | | | 1.65 | | | | 4.38 | a | | | 4.84 | |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 62 | | | | 70 | | | | 411 | | | | 404 | | | | 282 | |
| Ratio of expenses before expense reductions (%) | | | .58 | | | | .56 | | | | .56 | | | | .57 | | | | .56 | |
| Ratio of expenses after expense reductions (%) | | | .35 | | | | .46 | | | | .56 | | | | .57 | | | | .56 | |
| Ratio of net investment income (%) | | | .01 | | | | .05 | | | | 1.60 | | | | 4.24 | | | | 4.72 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three funds: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio. These financial statements report on Money Market Portfolio (the "Fund").
Money Market Portfolio offers six classes of shares: Capital Assets Funds Shares, Capital Assets Funds Preferred Shares, Davidson Cash Equivalent Shares, Davidson Cash Equivalent Plus Shares, Premium Reserve Money Market Shares and Service Shares. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
The financial highlights for all classes of shares, other than Premium Reserve Money Market Shares, are provided separately and are available upon request.
The Fund's investment income, realized gains and losses, and certain Fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of the Fund, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The Fund values all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Repurchase Agreements. The Fund may enter into repurchase agreements with certain banks and broker/dealers whereby the Fund, through its custodian or a sub-custodian bank, receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is equal to at least the principal amount of the repurchase price plus accrued interest. The custodial bank holds the collateral in a separate account until the agreement matures. If the value of the securities falls below the principal amount of the repurchase agreement plus accrued interest, the financial institution deposits additional collateral by the following business day. If the financial institution either fails to deposit the required additional collateral or fails to repurchase the securities as agreed, the Fund has the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Fund's claims on the collateral may be subject to legal proceedings.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders.
The Fund has reviewed the tax positions for the open tax years as of April 30, 2011 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income. Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. The Fund may take into account capital gains and losses in its daily dividend declarations. The Fund may also make additional distributions for tax purposes if necessary.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Fund.
At April 30, 2011, the Fund's components of distributable earnings on a tax basis are as follows:
| Undistributed ordinary income* | | $ | 39,083 | |
In addition,the tax character of distributions paid to shareholders by the Fund is summarized as follows:
| | | Years Ended April 30, | |
| Portfolio | | 2011 | | | 2010 | |
| Distributions from ordinary income* | | $ | 399,900 | | | $ | 2,172,594 | |
* For tax purposes, short-term capital gains distributions are considered ordinary income distributions.
Expenses. Expenses of the Trust arising in connection with a specific Fund are allocated to that Fund. Other Trust expenses which cannot be directly attributed to a Fund are apportioned pro rata on the basis of relative net assets among the Funds in the Trust.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Other. Investment transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
2. Related Parties
Management Agreement. Under an Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Investment Management Agreement. The Fund pays a monthly management fee based on the combined average daily net assets of the three Funds and allocated to Money Market Portfolio based on its relative net assets, accrued daily and payable monthly, at 1/12 of the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .220 | % |
| Next $500 million of such net assets | | | .200 | % |
| Next $1 billion of such net assets | | | .175 | % |
| Next $1 billion of such net assets | | | .160 | % |
| Over $3 billion of such net assets | | | .150 | % |
Accordingly, for the year ended April 30, 2011, the Fund incurred a management fee equivalent to the following annual effective rate of the Fund's average daily net assets:
| | Annual Effective Rate |
| Money Market Portfolio | .16% |
The Advisor has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
In addition, the Advisor has agreed to voluntarily waive additional expenses. The waiver may be changed or terminated at any time without notice. Under these arrangements, the Advisor waived certain expenses on Premium Reserve Money Market Shares.
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the year ended April 30, 2011, the amounts charged to the Fund by DISC were as follows:
| Money Market Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 2,080,639 | | | $ | 876,994 | | | $ | 307,215 | |
| Capital Assets Funds Preferred Shares | | | 39,377 | | | | 5,147 | | | | 1,069 | |
| Davidson Cash Equivalent Shares | | | 40,021 | | | | 16,669 | | | | 6,168 | |
| Davidson Cash Equivalent Plus Shares | | | 4,140 | | | | 1,364 | | | | 470 | |
| Premier Money Market Shares | | | 126,996 | | | | 39,884 | | | | — | |
| Premium Reserve Money Market Shares | | | 85,973 | | | | — | | | | 30,586 | |
| Service Shares | | | 3,662,660 | | | | 1,457,787 | | | | 594,910 | |
| | | $ | 6,039,806 | | | $ | 2,397,845 | | | $ | 940,418 | |
Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee"), calculated as a percentage of average daily net assets for the shares listed in the following table.
For the year ended April 30, 2011, the Distribution Fee was as follows:
| Money Market Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 2,755,491 | | | $ | 2,755,491 | | | | .00 | % | | | .33 | % |
| Capital Assets Funds Preferred Shares | | | 52,348 | | | | 52,348 | | | | .00 | % | | | .20 | % |
| Davidson Cash Equivalent Shares | | | 45,045 | | | | 45,045 | | | | .00 | % | | | .30 | % |
| Davidson Cash Equivalent Plus Shares | | | 4,430 | | | | 4,430 | | | | .00 | % | | | .25 | % |
| Premier Money Market Shares | | | 126,560 | | | | 126,560 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 8,684,015 | | | | 8,684,015 | | | | .00 | % | | | .60 | % |
| | | $ | 11,667,889 | | | $ | 11,667,889 | | | | | | | | | |
In addition, DIDI 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, 2011, the Service Fee was as follows:
| Money Market Portfolio: | | Service Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 2,087,493 | | | $ | 2,087,493 | | | | .00 | % | | | .25 | % |
| Capital Assets Funds Preferred Shares | | | 26,174 | | | | 26,174 | | | | .00 | % | | | .10 | % |
| Davidson Cash Equivalent Shares | | | 37,537 | | | | 37,537 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Plus Shares | | | 3,544 | | | | 3,544 | | | | .00 | % | | | .20 | % |
| Premier Money Market Shares | | | 126,561 | | | | 126,561 | | | | .00 | % | | | .25 | % |
| Premium Reserve Money Market Shares | | | 160,827 | | | | 147,274 | | | | .02 | % | | | .25 | % |
| | | $ | 2,442,136 | | | $ | 2,428,583 | | | | | | | | | |
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended April 30, 2011, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" was as follows:
| Fund | | Total Aggregated | | | Unpaid at April 30, 2011 | |
| Money Market Portfolio | | $ | 46,559 | | | $ | 16,156 | |
Trustees' Fees and Expenses. The Fund paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.
3. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus, if LIBOR exceeds the Federal Funds Rate, the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
4. Share Transactions
The following table summarizes share and dollar activity in the Fund:
Money Market Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 839,154,629 | | | $ | 839,154,629 | | | | 751,023,837 | | | $ | 751,023,837 | |
| Capital Assets Funds Preferred Shares | | | 16,426,872 | | | | 16,426,872 | | | | 46,317,102 | | | | 46,317,102 | |
| Davidson Cash Equivalent Shares | | | 3,734,002 | | | | 3,734,002 | | | | 4,223,891 | | | | 4,223,891 | |
| Davidson Cash Equivalent Plus Shares | | | 870,248 | | | | 870,248 | | | | 1,119,054 | | | | 1,119,054 | |
Institutional Money Market Shares* | | | — | | | | — | | | | 878,782,978 | | | | 878,782,978 | |
Premier Money Market Shares*** | | | 44,284,933 | | | | 44,284,933 | | | | 564,549,506 | | | | 564,549,506 | |
| Premium Reserve Money Market Shares | | | 111,139,828 | | | | 111,139,828 | | | | 250,797,721 | | | | 250,797,721 | |
| Service Shares | | | 1,791,610,827 | | | | 1,791,610,827 | | | | 1,256,750,880 | | | | 1,256,750,880 | |
| | | | | | | $ | 2,807,221,339 | | | | | | | $ | 3,753,564,969 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 187,455 | | | $ | 187,455 | | | | 511,699 | | | $ | 511,699 | |
| Capital Assets Funds Preferred Shares | | | 13,160 | | | | 13,160 | | | | 34,310 | | | | 34,310 | |
| Davidson Cash Equivalent Shares | | | 1,863 | | | | 1,863 | | | | 6,909 | | | | 6,909 | |
| Davidson Cash Equivalent Plus Shares | | | 220 | | | | 220 | | | | 997 | | | | 997 | |
Institutional Money Market Shares* | | | — | | | | — | | | | 781,281 | | | | 781,281 | |
Institutional Select Money Market Shares** | | | — | | | | — | | | | 17 | | | | 17 | |
Premier Money Market Shares*** | | | 4,160 | | | | 4,160 | | | | 259,732 | | | | 259,732 | |
| Premium Reserve Money Market Shares | | | 5,371 | | | | 5,371 | | | | 141,496 | | | | 141,496 | |
| Service Shares | | | 183,305 | | | | 183,305 | | | | 349,720 | | | | 349,720 | |
| | | | | | | $ | 395,534 | | | | | | | $ | 2,086,161 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (890,506,653 | ) | | $ | (890,506,653 | ) | | | (773,833,097 | ) | | $ | (773,833,097 | ) |
| Capital Assets Funds Preferred Shares | | | (64,951,835 | ) | | | (64,951,835 | ) | | | (42,319,981 | ) | | | (42,319,981 | ) |
| Davidson Cash Equivalent Shares | | | (8,417,805 | ) | | | (8,417,805 | ) | | | (15,960,223 | ) | | | (15,960,223 | ) |
| Davidson Cash Equivalent Plus Shares | | | (1,850,907 | ) | | | (1,850,907 | ) | | | (3,704,435 | ) | | | (3,704,435 | ) |
Institutional Money Market Shares* | | | — | | | | — | | | | (1,394,027,289 | ) | | | (1,394,027,289 | ) |
Institutional Select Money Market Shares** | | | — | | | | — | | | | (10,576 | ) | | | (10,576 | ) |
Premier Money Market Shares*** | | | (163,286,900 | ) | | | (163,286,900 | ) | | | (2,466,530,608 | ) | | | (2,466,530,608 | ) |
| Premium Reserve Money Market Shares | | | (119,115,201 | ) | | | (119,115,201 | ) | | | (592,438,461 | ) | | | (592,438,461 | ) |
| Service Shares | | | (1,368,490,287 | ) | | | (1,368,490,287 | ) | | | (1,157,527,651 | ) | | | (1,157,527,651 | ) |
| | | | | | | $ | (2,616,619,588 | ) | | | | | | $ | (6,446,352,321 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (51,164,569 | ) | | $ | (51,164,569 | ) | | | (22,297,561 | ) | | $ | (22,297,561 | ) |
| Capital Assets Funds Preferred Shares | | | (48,511,803 | ) | | | (48,511,803 | ) | | | 4,031,431 | | | | 4,031,431 | |
| Davidson Cash Equivalent Shares | | | (4,681,940 | ) | | | (4,681,940 | ) | | | (11,729,423 | ) | | | (11,729,423 | ) |
| Davidson Cash Equivalent Plus Shares | | | (980,439 | ) | | | (980,439 | ) | | | (2,584,384 | ) | | | (2,584,384 | ) |
Institutional Money Market Shares* | | | — | | | | — | | | | (514,463,030 | ) | | | (514,463,030 | ) |
Institutional Select Money Market Shares** | | | — | | | | — | | | | (10,559 | ) | | | (10,559 | ) |
Premier Money Market Shares*** | | | (118,997,807 | ) | | | (118,997,807 | ) | | | (1,901,721,370 | ) | | | (1,901,721,370 | ) |
| Premium Reserve Money Market Shares | | | (7,970,002 | ) | | | (7,970,002 | ) | | | (341,499,244 | ) | | | (341,499,244 | ) |
| Service Shares | | | 423,303,845 | | | | 423,303,845 | | | | 99,572,949 | | | | 99,572,949 | |
| | | | | | | $ | 190,997,285 | | | | | | | $ | (2,690,701,191 | ) |
* The Institutional Money Market Shares class was liquidated on February 16, 2010 and is no longer offered.
** The Institutional Select Money Market Shares class was liquidated on October 27, 2009 and is no longer offered.
*** The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Cash Account Trust:
We have audited the accompanying statement of assets and liabilities of the Money Market Portfolio (the "Portfolio"), one of the portfolios constituting Cash Account Trust (the "Trust"), including the investment portfolio, as of April 30, 2011, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Money Market Portfolio of Cash Account Trust at April 30, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
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Boston, Massachusetts June 20, 2011 | | |
Tax Information (Unaudited)
A total of 6% of the dividends distributed during the fiscal year was derived from interest on US government securities, which is generally exempt from state income tax.
Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 621-1048.
Summary of Management Fee Evaluation by Independent Fee Consultant
October 3, 2010
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.
Qualifications
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the fund as of April 30, 2011. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
| Independent Board Members |
Name, Year of Birth, Position with the Fund and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen | Other Directorships Held by Board Member |
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993 | Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (education committees); formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 118 | — |
John W. Ballantine (1946) Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Chairman of the Board, Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity); former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International | 118 | — |
Henry P. Becton, Jr. (1943) Board Member since 1990 | Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Public Radio International; Public Radio Exchange (PRX); The PBS Foundation; former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service | 118 | Lead Director, Becton Dickinson and Company2 (medical technology company); Lead Director, Belo Corporation2 (media company) |
Dawn-Marie Driscoll (1946) Board Member since 1987 | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization); former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2007) |
Keith R. Fox (1954) Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies | 118 | — |
Kenneth C. Froewiss (1945) Board Member since 2001 | Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996) | 118 | — |
Richard J. Herring (1946) Board Member since 1990 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; Independent Director of Barclays Bank Delaware (since September 2010); formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006) | 118 | Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007) |
William McClayton (1944) Board Member since 2004 | Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival | 118 | — |
Rebecca W. Rimel (1951) Board Member since 1995 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Trustee, Pro Publica (charitable organization) (2007-2010) | 118 | Director, CardioNet, Inc. (health care) (2009- present); Director, Viasys Health Care2 (January 2007- June 2007); |
William N. Searcy, Jr. (1946) Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 1998) |
Jean Gleason Stromberg (1943) Board Member since 1997 | Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996) | 118 | — |
Robert H. Wadsworth (1940) Board Member since 1999 | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association | 121 | — |
Officers4 |
Name, Year of Birth, Position with the Fund and Length of Time Served5 | Principal Occupation(s) During Past 5 Years and Other Directorships Held |
W. Douglas Beck, CFA9,10 (1967) President and CEO, 2011-present | Managing Director3, Deutsche Asset Management (2006-present); President and CEO of DWS family of funds and Head of Product Management, US for DWS Investments; formerly, Executive Director, Head of Product Management (2002-2006) and President (2005-2006) of the UBS Funds at UBS Global Asset Management; Co-Head of Manager Research/Managed Solutions Group, Merrill Lynch (1998-2002) |
John Millette7 (1962) Vice President and Secretary, 1999-present | Director3, Deutsche Asset Management |
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present | Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998) |
Caroline Pearson7 (1962) Chief Legal Officer, April 2010-present | Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010) |
Rita Rubin8 (1970) Assistant Secretary, 2009-present | Director3 and Senior Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007) |
Paul Antosca7 (1957) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006) |
Jack Clark7 (1967) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007) |
Diane Kenneally7 (1966) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
John Caruso8 (1965) Anti-Money Laundering Compliance Officer, 2010-present | Managing Director3, Deutsche Asset Management |
Robert Kloby8 (1962) Chief Compliance Officer, 2006-present | Managing Director3, Deutsche Asset Management |
1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.
2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3 Executive title, not a board directorship.
4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.
5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.
6 Address: 100 Plaza One, Jersey City, NJ 07311.
7 Address: One Beacon Street, Boston, MA 02108.
8 Address: 60 Wall Street, New York, NY 10005.
9 Address: 345 Park Avenue, New York, NY 10154.
10 Appointed May 17, 2011, effective June 1, 2011.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
Notes
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APRIL 30, 2011 Annual Report to Shareholders |
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Government & Agency Securities Portfolio DWS Government Cash Institutional Shares Fund #250 Government Cash Managed Shares Fund #254 |
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Contents
3 Portfolio Management Review 6 Information About Your Fund's Expenses 13 Statement of Assets and Liabilities 15 Statement of Operations 16 Statement of Changes in Net Assets 19 Notes to Financial Statements 27 Report of Independent Registered Public Accounting Firm 29 Summary of Management Fee Evaluation by Independent Fee Consultant 33 Summary of Administrative Fee Evaluation by Independent Fee Consultant 34 Board Members and Officers |
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, visit www.dws-investments.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.
An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of the fund may have a significant adverse effect on the share prices of all classes of shares of the fund. See the prospectus for specific details regarding the fund's risk profile.
The fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Portfolio Management Review
Market Overview
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
In September 2010, investors responded positively to US Federal Reserve Board (the Fed) Chairman Ben Bernanke's statement that the Fed would take additional steps in the form of "quantitative easing" to prop up the US economy as needed.1 Over the fund's most recent 12-month period, the money market yield curve has gradually steepened as longer-term rates rose in response to improved economic data and shorter maturities declined significantly based on a number of market influences.2 These included continuing strong demand and shrinking supply in the money market area; the removal (or unwind) of $200 billion in two-month Treasury bills from the market until Congress once again raises the US debt ceiling; a new FDIC fee assessment that has, in effect, removed some of the incentive for certain large banks to create supply in the money market area; and; lastly, the fact that the federal funds rate remains "on hold," keeping short-term rates lower overall.3
Positive Contributors to Fund Performance
We were able to maintain a competitive yield for the fund during the period ended April 30, 2011. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
We maintained an increased focus on overnight repurchase agreements and one- to three-month government and agency securities, as we believe that there was not a great deal of value in longer-maturity issues during the period ending April 30, 2011.4
Our main focus, as always, is on preservation of capital, and during the period ending April 30, 2011, we maintained a short maturity and attempted to ensure ample liquidity for the fund.
Negative Contributors to Fund Performance
During the period, our decision to keep a significant percentage of portfolio assets in overnight repurchase agreements cost the fund some yield, but we believe that this represented a prudent approach to maintaining a high level of portfolio quality and liquidity.
Outlook and Positioning
Assuming that Congress can agree to raise the US debt ceiling in the near future, significant short-term Treasury supply should return to the market in the coming months and remove some downward pressure on money market rates that carry the shortest maturities. In general, however, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested and continued strong demand from investors seeking principal stability and safety.
We continue our insistence on the highest credit quality within the fund.5 We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the fund and to seek competitive yield for our shareholders.
Fund Performance (as of April 30, 2011)
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, this share price isn't guaranteed and you could lose money by investing in money market funds. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of a fund may have a significant adverse effect on the share prices of all classes of shares of that fund. See the prospectus for the specific details regarding the fund's risk profile.
| | |
| | | 7-Day Current Yield | |
| DWS Government Cash Institutional Shares | | | 0.07 | %* |
| Government Cash Managed Shares | | | 0.01 | %* |
Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the fund over a 7-day period expressed as an annual percentage rate of the fund's shares outstanding. For the most current yield information, visit our Web site at www.dws-investments.com. * The investment advisor has agreed to voluntarily waive fees/reimburse expenses. This waiver may be changed or terminated at any time without notice. Otherwise, the 7-day current yield would have been 0.01% and -0.17% for DWS Government Cash Institutional Shares and Government Cash Managed Shares, respectively, as of April 30, 2011. | |
1 Quantitative easing — a monetary policy used by the government to increase the money supply. With this policy, the government purchases government and other securities from the market to create additional capital which financial institutions can use to promote lending and liquidity.
2 The yield curve — a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.
3 Treasury bill — a short-term (maturity up to 1 year) discounted government security sold through competitive bidding at weekly and monthly auctions in denominations of $10,000 to $1 million. Debt ceiling is the maximum borrowing power of a government entity. FDIC (Federal Deposit Insurance Corporation) is a federal agency that insures deposits in member banks and thrifts up to a specific dollar amount. Federal funds rate is the overnight bank lending rate.
4 Maturity — the amount of time until the principal amount of a bond must be repaid. Short-maturity is typically up to one year.
Overnight repurchase agreements — a form of short-term borrowing whereby a government security is sold on an overnight basis and purchased back the next day.
5 Credit quality — a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default. The fund's credit quality does not remove market risk and is subject to change.
Information About Your Fund's Expenses
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher for the DWS Government Cash Institutional Shares and the Government Cash Managed 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, 2010 to April 30, 2011).
The tables illustrate your Fund's expenses in two ways:
•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in each Fund using each Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
• Hypothetical 5% Fund Return. This helps you to compare each Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using each Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | DWS Government Cash Institutional Shares | | | Government Cash Managed Shares | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.28 | | | $ | 1,000.05 | |
Expenses Paid per $1,000* | | $ | .55 | | | $ | .89 | |
| Hypothetical 5% Fund Return | | | | | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,024.25 | | | $ | 1,023.90 | |
Expenses Paid per $1,000* | | $ | .55 | | | $ | .90 | |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratios | |
| DWS Government Cash Institutional Shares | .11% |
| Government Cash Managed Shares | .18% |
For more information, please refer to the Fund's prospectus.
Government & Agency Securities Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
| Government & Agency Obligations | 50% | 85% |
| Repurchase Agreements | 48% | 15% |
| Commercial Paper | 2% | — |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Government & Agency Securities Portfolio | 49 days | 52 days |
| iMoneyNet Government & Agencies Retail Money Fund Average* | 38 days | 45 days |
* The Fund is compared to its respective iMoney Net Category: Government & Agencies Retail Money Fund Average consists of all non-institutional government money market funds. Category includes the most broadly based of the government retail funds. These funds can invest in US Treasuries, US Other, Repos, whether or not they are backed by US Treasuries and government-backed Floating Rate Notes.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 9-12. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Government & Agency Securities Portfolio
| | Principal Amount ($) | Value ($) | |
| | | |
| Commercial Paper 1.8% | |
| Issued at Discount | |
| Straight-A Funding LLC: | |
| | 144A, 0.15%, 5/11/2011 | | 20,000,000 | 19,999,167 | |
| | 144A, 0.2%, 7/5/2011 | | 80,000,000 | 79,971,111 | |
Total Commercial Paper (Cost $99,970,278) | 99,970,278 | |
| | |
| Government & Agency Obligations 51.6% | |
| US Government Sponsored Agencies 45.9% | |
| Federal Farm Credit Bank: | |
| | 0.119%**, 5/18/2012 | | 165,000,000 | 164,991,321 | |
| | 0.12%**, 1/12/2012 | | 100,000,000 | 100,001,775 | |
| | 0.129%*, 9/9/2011 | | 25,000,000 | 24,988,174 | |
| | 0.134%**, 7/15/2011 | | 85,000,000 | 84,999,308 | |
| | 0.164%*, 5/24/2011 | | 50,000,000 | 49,994,569 | |
| | 0.208%*, 8/3/2011 | | 43,500,000 | 43,476,148 | |
| | 0.259%*, 10/20/2011 | | 34,500,000 | 34,457,143 | |
| | 0.259%*, 4/4/2012 | | 12,500,000 | 12,469,396 | |
| | 0.269%*, 3/23/2012 | | 25,000,000 | 24,938,688 | |
| | 0.319%*, 12/16/2011 | | 28,000,000 | 27,943,004 | |
| | 0.319%*, 1/12/2012 | | 33,000,000 | 32,924,907 | |
| Federal Home Loan Bank: | |
| | 0.018%*, 5/2/2011 | | 12,737,000 | 12,737,000 | |
| | 0.064%*, 7/20/2011 | | 100,000,000 | 99,985,556 | |
| | 0.068%*, 5/27/2011 | | 50,000,000 | 49,997,472 | |
| | 0.076%*, 5/18/2011 | | 55,000,000 | 54,997,922 | |
| | 0.089%*, 9/6/2011 | | 50,000,000 | 49,984,000 | |
| | 0.149%*, 8/12/2011 | | 7,500,000 | 7,496,781 | |
| | 0.149%*, 8/17/2011 | | 12,207,000 | 12,201,507 | |
| | 0.17%**, 1/18/2012 | | 22,000,000 | 22,006,379 | |
| | 0.183%**, 9/26/2011 | | 12,500,000 | 12,499,749 | |
| | 0.24%, 10/28/2011 | | 36,275,000 | 36,266,384 | |
| | 0.248%*, 8/22/2011 | | 5,000,000 | 4,996,076 | |
| | 0.268%*, 9/12/2011 | | 15,900,000 | 15,884,021 | |
| | 0.3%, 12/27/2011 | | 75,000,000 | 75,022,455 | |
| | 0.76%, 7/19/2011 | | 15,000,000 | 15,017,910 | |
| | 1.0%, 12/28/2011 | | 13,460,000 | 13,532,363 | |
| | 5.375%, 8/19/2011 | | 14,900,000 | 15,129,895 | |
| Federal Home Loan Mortgage Corp.: | |
| | 0.028%*, 5/19/2011 | | 15,000,000 | 14,999,775 | |
| | 0.08%**, 11/9/2011 | | 75,000,000 | 74,967,946 | |
| | 0.14%**, 11/10/2011 | | 200,000,000 | 200,000,000 | |
| | 0.149%*, 7/27/2011 | | 85,000,000 | 84,969,188 | |
| | 0.164%*, 9/1/2011 | | 8,935,000 | 8,929,963 | |
| | 0.167%*, 6/13/2011 | | 27,061,000 | 27,055,505 | |
| | 0.193%*, 7/25/2011 | | 34,494,000 | 34,478,118 | |
| | 0.198%*, 7/12/2011 | | 100,000,000 | 99,960,000 | |
| Federal National Mortgage Association: | |
| | 0.059%*, 6/13/2011 | | 75,000,000 | 74,994,625 | |
| | 0.079%*, 7/21/2011 | | 100,000,000 | 99,982,000 | |
| | 0.099%*, 8/8/2011 | | 32,500,000 | 32,491,063 | |
| | 0.113%**, 7/27/2011 | | 190,000,000 | 189,983,791 | |
| | 0.119%*, 8/22/2011 | | 25,000,000 | 24,990,583 | |
| | 0.119%*, 9/13/2011 | | 100,000,000 | 99,955,000 | |
| | 0.129%*, 9/26/2011 | | 65,000,000 | 64,965,261 | |
| | 0.159%*, 11/21/2011 | | 100,000,000 | 99,909,333 | |
| | 0.174%**, 9/19/2011 | | 30,000,000 | 29,999,404 | |
| | 0.178%*, 7/20/2011 | | 44,000,000 | 43,982,400 | |
| | 0.178%*, 7/27/2011 | | 51,659,000 | 51,636,528 | |
| | 0.182%*, 6/16/2011 | | 35,000,000 | 34,991,726 | |
| | 5.0%, 10/15/2011 | | 50,000,000 | 51,082,031 | |
| | 5.375%, 11/15/2011 | | 16,040,000 | 16,489,455 | |
| | 2,559,753,598 | |
| US Treasury Obligations 5.7% | |
| US Treasury Bill, 0.16%*, 9/1/2011 | | 17,500,000 | 17,490,433 | |
| US Treasury Notes: | |
| | 0.875%, 5/31/2011 | | 25,000,000 | 25,014,282 | |
| | 1.0%, 9/30/2011 | | 84,500,000 | 84,768,848 | |
| | 1.75%, 11/15/2011 | | 50,000,000 | 50,394,064 | |
| | 4.625%, 8/31/2011 | | 43,500,000 | 44,134,573 | |
| | 4.625%, 10/31/2011 | | 45,000,000 | 45,986,196 | |
| | 5.125%, 6/30/2011 | | 50,000,000 | 50,404,731 | |
| | 318,193,127 | |
Total Government & Agency Obligations (Cost $2,877,946,725) | 2,877,946,725 | |
| | |
| Repurchase Agreements 49.5% | |
| Barclays Capital PLC, 0.03%, dated 4/29/2011, to be repurchased at $215,000,538 on 5/2/2011 (a) | 215,000,000 | 215,000,000 | |
| BNP Paribas, 0.03%, dated 4/29/2011, to be repurchased at $42,428,677 on 5/2/2011 (b) | 42,428,571 | 42,428,571 | |
| BNP Paribas, 0.04%, dated 4/29/2011, to be repurchased at $704,002,347 on 5/2/2011 (c) | 704,000,000 | 704,000,000 | |
| Citigroup, Inc., 0.03%, dated 4/29/2011, to be repurchased at $22,000,055 on 5/2/2011 (d) | 22,000,000 | 22,000,000 | |
| JPMorgan Securities, Inc., 0.01%, dated 4/29/2011, to be repurchased at $432,619,312 on 5/2/2011 (e) | 432,618,951 | 432,618,951 | |
| JPMorgan Securities, Inc., 0.04%, dated 4/29/2011, to be repurchased at $233,000,743 on 5/2/2011 (f) | 223,000,000 | 223,000,000 | |
| Merrill Lynch & Co., Inc., 0.05%, dated 4/29/2011, to be repurchased at $123,927,019 on 5/2/2011 (g) | 123,926,503 | 123,926,503 | |
| Morgan Stanley & Co., Inc., 0.04%, dated 4/29/2011, to be repurchased at $252,000,840 on 5/2/2011 (h) | 252,000,000 | 252,000,000 | |
| The Goldman Sachs & Co., 0.05%, dated 4/29/2011, to be repurchased at $441,001,838 on 5/2/2011 (i) | 441,000,000 | 441,000,000 | |
| The Goldman Sachs & Co., 0.06%, dated 4/28/2011, to be repurchased at $300,003,500 on 5/5/2011 (j) | 300,000,000 | 300,000,000 | |
Total Repurchase Agreements (Cost $2,755,974,025) | 2,755,974,025 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $5,733,891,028)+ | | | 102.9 | | | | 5,733,891,028 | |
| Other Assets and Liabilities, Net | | | (2.9 | ) | | | (162,027,136 | ) |
| Net Assets | | | 100.0 | | | | 5,571,863,892 | |
* Annualized yield at time of purchase; not a coupon rate.
** These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
+ The cost for federal income tax purposes was $5,733,891,028.
(a) Collateralized by $207,105,300 US Treasury Note, 3.125%, maturing on 9/30/2013 with a value of $219,300,094.
(b) Collateralized by $45,241,800 US Treasury Note, 2.625%, maturing on 11/15/2020 with a value of $43,277,165.
(c) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 522,522,000 | | Federal Home Loan Mortgage Corp. | | | 1.65-5.5 | | 4/28/2014- 4/8/2030 | | | 546,732,677 | |
| | 161,294,000 | | Federal National Mortgage Association | | | 3.25-4.75 | | 2/21/2013- 4/9/2013 | | | 171,348,112 | |
| Total Collateral Value | | | 718,080,789 | |
(d) Collateralized by $22,443,000 Federal Home Loan Bank, maturing on 7/29/2011 with a value of $22,440,082.
(e) Collateralized by $531,439,126 US Treasury STRIPS, maturing on 11/15/2013-2/15/2020 with a value of $441,272,531.
(f) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 185,181,947 | | Federal Home Loan Mortgage Corp. | | Zero Coupon-6.5 | | 7/15/2015- 8/15/2039 | | | 192,999,725 | |
| | 54,470,688 | | Federal Home Loan Mortgage Corp. —
Interest only | | | 5.281 | | 1/15/2039 | | | 5,749,091 | |
| | 7,680,197 | | Federal Home Loan Mortgage Corp. — Principal only | | Zero Coupon | | 11/15/2036- 5/15/2037 | | | 6,713,414 | |
| | 23,268,926 | | Federal National Mortgage Association | | | 0.513-6.47 | | 2/25/2029- 6/25/2037 | | | 22,905,889 | |
| Total Collateral Value | | | 228,368,119 | |
(g) Collateralized by $124,768,369 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-4.5%, with various maturity dates of 3/1/2039-12/1/2040 with a value of $126,405,034.
(h) Collateralized by $242,597,416 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-6.0%, with various maturity dates of 3/1/2038-4/1/2041 with a value of $257,040,001.
(i) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 22,370,889 | | Federal Home Loan Mortgage Corp. | | | 4.0-5.5 | | 4/15/2040- 4/15/2041 | | | 21,981,083 | |
| | 491,792,871 | | Federal Home Loan Mortgage Corp. —
Interest only | | | 5.781-6.431 | | 9/15/2033- 11/15/2038 | | | 77,032,731 | |
| | 210,576,230 | | Federal National Mortgage Association | | Zero Coupon — 5.5 | | 6/25/2021- 3/25/2041 | | | 213,820,002 | |
| | 914,052,013 | | Federal National Mortgage Association — Interest only | | | 5.787-6.266 | | 6/25/2038- 1/25/2041 | | | 136,986,185 | |
| Total Collateral Value | | | 449,820,001 | |
(j) Collateralized by $295,084,262 Federal National Mortgage Association, with various coupon rates from 3.5-4.5%, with various maturity dates of 10/25/2039-2/25/2041 with a value of $306,000,000.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
Interest Only: Interest Only (IO) bonds represent the "interest only" portion of payments on a pool of underlying mortgages or mortgage-backed securities. IO securities are subject to prepayment risk of the pool of underlying mortgages.
Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying mortgages or mortgage-backed securities.
STRIPS: Separate Trading of Registered Interest and Principal Securities
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Investments in Securities (k) | | $ | — | | | $ | 2,977,917,003 | | | $ | — | | | $ | 2,977,917,003 | |
| Repurchase Agreements | | | — | | | | 2,755,974,025 | | | | — | | | | 2,755,974,025 | |
| Total | | $ | — | | | $ | 5,733,891,028 | | | $ | — | | | $ | 5,733,891,028 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the period ended April 30, 2011.
(k) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Government & Agency Securities Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,977,917,003 | |
| Repurchase agreements, valued at amortized cost | | | 2,755,974,025 | |
| Total investments, valued at amortized cost | | | 5,733,891,028 | |
| Receivable for Fund shares sold | | | 142,451 | |
| Interest receivable | | | 3,670,502 | |
| Due from Advisor | | | 136,428 | |
| Other assets | | | 95,442 | |
| Total assets | | | 5,737,935,851 | |
| Liabilities | |
| Payable for investments purchased | | | 164,991,321 | |
| Payable for Fund shares redeemed | | | 126,472 | |
| Distributions payable | | | 106,265 | |
| Accrued management fee | | | 99,239 | |
| Other accrued expenses and payables | | | 748,662 | |
| Total liabilities | | | 166,071,959 | |
| Net assets, at value | | $ | 5,571,863,892 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 201,484 | |
| Accumulated net realized gain (loss) | | | (602,497 | ) |
| Paid-in capital | | | 5,572,264,905 | |
| Net assets, at value | | $ | 5,571,863,892 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Government & Agency Securities Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($284,348,907 ÷ 284,368,469 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($19,057,230 ÷ 19,058,540 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Plus Shares Net Asset Value, offering and redemption price per share ($33,261,953 ÷ 33,264,241 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Government & Agency Money Fund Net Asset Value, offering and redemption price per share ($170,093,183 ÷ 170,104,883 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Government Cash Institutional Shares Net Asset Value, offering and redemption price per share ($4,771,880,106 ÷ 4,772,208,337 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Government Cash Managed Shares Net Asset Value, offering and redemption price per share ($179,819,975 ÷ 179,832,348 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($113,402,538 ÷ 113,410,339 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Government & Agency Securities Portfolio | |
Income: Interest | | $ | 9,770,345 | |
Expenses: Management fee | | | 2,506,115 | |
| Administration fee | | | 4,222,727 | |
| Services to shareholders | | | 1,845,325 | |
| Custodian fee | | | 76,975 | |
| Distribution and service fees | | | 3,146,324 | |
| Professional fees | | | 150,210 | |
| Trustees' fees and expenses | | | 127,065 | |
| Reports to shareholders | | | 10,937 | |
| Registration fees | | | 141,522 | |
| Other | | | 393,329 | |
| Total expenses before expense reductions | | | 12,620,529 | |
| Expense reductions | | | (5,190,147 | ) |
| Total expenses after expense reductions | | | 7,430,382 | |
| Net investment income | | | 2,339,963 | |
| Net realized gain (loss) from investments | | | (602,497 | ) |
| Net increase (decrease) in net assets resulting from operations | | $ | 1,737,466 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Government & Agency Securities Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 2,339,963 | | | $ | 18,279,158 | |
| Net realized gain (loss) | | | (602,497 | ) | | | 683,254 | |
| Net increase in net assets resulting from operations | | | 1,737,466 | | | | 18,962,412 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (29,745 | ) | | | (30,842 | ) |
| Davidson Cash Equivalent Shares | | | (2,133 | ) | | | (2,419 | ) |
| Davidson Cash Equivalent Plus Shares | | | (5,528 | ) | | | (3,042 | ) |
| DWS Government & Agency Money Fund | | | (28,169 | ) | | | (168,152 | ) |
| DWS Government Cash Institutional Shares | | | (2,230,405 | ) | | | (17,853,361 | ) |
| Government Cash Managed Shares | | | (21,680 | ) | | | (46,318 | ) |
| Premier Money Market Shares | | | — | | | | (176,438 | ) |
| Service Shares | | | (12,160 | ) | | | (13,091 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (34,871 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (2,710 | ) |
| Davidson Cash Equivalent Plus Shares | | | — | | | | (2,843 | ) |
| DWS Government & Agency Money Fund | | | — | | | | (32,168 | ) |
| DWS Government Cash Institutional Shares | | | — | | | | (1,560,440 | ) |
| Government Cash Managed Shares | | | — | | | | (38,058 | ) |
| Premier Money Market Shares | | | — | | | | (242,870 | ) |
| Service Shares | | | — | | | | (14,378 | ) |
| Total distributions | | | (2,329,820 | ) | | | (20,222,001 | ) |
Fund share transactions: Proceeds from shares sold | | | 38,138,317,757 | | | | 89,328,240,895 | |
| Reinvestment of distributions | | | 1,201,174 | | | | 9,173,740 | |
| Cost of shares redeemed | | | (40,469,462,394 | ) | | | (101,467,650,200 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (2,329,943,463 | ) | | | (12,130,235,565 | ) |
| Increase (decrease) in net assets | | | (2,330,535,817 | ) | | | (12,131,495,154 | ) |
| Net assets at beginning of period | | | 7,902,399,709 | | | | 20,033,894,863 | |
| Net assets at end of period (including undistributed net investment income of $201,484 and $191,341, respectively) | | $ | 5,571,863,892 | | | $ | 7,902,399,709 | |
The accompanying notes are an integral part of the financial statements.
Government & Agency Securities Portfolio DWS Government Cash Institutional Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | | 2007 | a |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .001 | | | | .001 | | | | .015 | | | | .044 | | | | .010 | |
| Net realized and unrealized gain (loss) | | | (.000 | )*** | | | .000 | *** | | | .000 | *** | | | .000 | *** | | | .000 | *** |
| Total from investment operations | | | .001 | | | | .001 | | | | .015 | | | | .044 | | | | .010 | |
Less distributions from: Net investment income | | | (.001 | ) | | | (.001 | ) | | | (.015 | ) | | | (.015 | ) | | | (.010 | ) |
| Net realized gains | | | — | | | | (.000 | )*** | | | — | | | | — | | | | — | |
| Total distributions | | | (.001 | ) | | | (.001 | ) | | | (.015 | ) | | | (.015 | ) | | | (.010 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)b | | | .06 | | | | .14 | | | | 1.49 | | | | 4.51 | | | | 1.04 | ** |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 4,772 | | | | 6,899 | | | | 14,646 | | | | 1,156 | | | | 325 | |
| Ratio of expenses before expense reductions (%) | | | .19 | | | | .19 | | | | .21 | | | | .23 | | | | .24 | * |
| Ratio of expenses after expense reductions (%) | | | .16 | | | | .18 | | | | .20 | | | | .21 | | | | .23 | * |
| Ratio of net investment income (%) | | | .07 | | | | .14 | | | | .94 | c | | | 4.24 | | | | 5.12 | * |
a For the period from February 16, 2007 (commencement of operations) to April 30, 2007. b Total return would have been lower had certain expenses not been reduced. c Due to the timing of the subscriptions and redemptions, the amount shown does not correspond to the total return during the period. * Annualized ** Not annualized *** Amount is less than $.0005. | |
Government & Agency Securities Portfolio Government Cash Managed Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | | 2007 | a |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | *** | | | .000 | *** | | | .013 | | | | .042 | | | | .010 | |
| Net realized and unrealized gain (loss) | | | (.000 | )*** | | | .000 | *** | | | .000 | *** | | | .000 | *** | | | .000 | *** |
| Total from investment operations | | | .000 | *** | | | .000 | *** | | | .013 | | | | .042 | | | | .010 | |
Less distributions from: Net investment income | | | (.000 | )*** | | | (.000 | )*** | | | (.013 | ) | | | (.042 | ) | | | (.010 | ) |
| Net realized gains | | | — | | | | (.000 | )*** | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )*** | | | (.000 | )*** | | | (.013 | ) | | | (.042 | ) | | | (.010 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)b | | | .01 | | | | .02 | | | | 1.27 | | | | 4.27 | | | | .99 | ** |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 180 | | | | 280 | | | | 477 | | | | 379 | | | | 137 | |
| Ratio of expenses before expense reductions (%) | | | .41 | | | | .42 | | | | .44 | | | | .44 | | | | .47 | * |
| Ratio of expenses after expense reductions (%) | | | .22 | | | | .31 | | | | .43 | | | | .42 | | | | .46 | * |
| Ratio of net investment income (%) | | | .01 | | | | .02 | | | | 1.05 | c | | | 4.03 | | | | 4.89 | * |
a For the period from February 16, 2007 (commencement of operations) to April 30, 2007. b Total return would have been lower had certain expenses not been reduced. c Due to the timing of the subscriptions and redemptions, the amount shown does not correspond to the total return during the period. * Annualized ** Not annualized *** Amount is less than $.0005. | |
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three funds: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio. These financial statements report on Government & Agency Securities Portfolio (the "Fund").
Government & Agency Securities Portfolio offers seven 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 and Service Shares.
The financial highlights for all classes of shares, other than DWS Government Cash Institutional Shares and Government Cash Managed Shares, are provided separately and are available upon request.
The Fund's investment income, realized gains and losses, and certain Fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of the Fund, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The Fund values all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Repurchase Agreements. The Fund may enter into repurchase agreements with certain banks and broker/dealers whereby the Fund, through its custodian or a sub-custodian bank, receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is equal to at least the principal amount of the repurchase price plus accrued interest. The custodial bank holds the collateral in a separate account until the agreement matures. If the value of the securities falls below the principal amount of the repurchase agreement plus accrued interest, the financial institution deposits additional collateral by the following business day. If the financial institution either fails to deposit the required additional collateral or fails to repurchase the securities as agreed, the Fund has the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Fund's claims on the collateral may be subject to legal proceedings.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders.
At April 30, 2011, the Fund had a net tax basis capital loss carryforward of approximately $602,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until April 30, 2019 (the expiration date), whichever occurs first.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the "Act") was enacted. Under the Act, net capital losses may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses. As a result of this ordering rule, pre-enactment capital loss carryforwards may expire unused, whereas under the previous rules these losses may have been utilized. This change is effective for fiscal years beginning after the date of enactment.
The Fund has reviewed the tax positions for the open tax years as of April 30, 2011 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income. Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. The Fund may take into account capital gains and losses in its daily dividend declarations. The Fund may also make additional distributions for tax purposes if necessary.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Fund.
At April 30, 2011, the Fund's components of distributable earnings on a tax basis are as follows:
| Undistributed ordinary income* | | $ | 307,749 | |
| Capital loss carryforwards | | $ | (602,000 | ) |
In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:
| | | Years Ended April 30, | |
| | | 2011 | | | 2010 | |
| Distributions from ordinary income* | | $ | 2,329,820 | | | $ | 20,222,001 | |
* For tax purposes, short-term capital gains distributions are considered ordinary income distributions.
Expenses. Expenses of the Trust arising in connection with a specific Fund are allocated to that Fund. Other Trust expenses which cannot be directly attributed to a Fund are apportioned pro rata on the basis of relative net assets among the Funds in the Trust.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Other. Investment transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
2. Related Parties
Management Agreement. Under an Amended and Restated Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
The Fund pays a monthly management fee based on the combined average daily net assets of the three Funds and allocated to the Fund based on its relative net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .120 | % |
| Next $500 million of such net assets | | | .100 | % |
| Next $1 billion of such net assets | | | .075 | % |
| Next $1 billion of such net assets | | | .060 | % |
| Over $3 billion of such net assets | | | .050 | % |
The Advisor has agreed to contractually reduce its management fee for the Fund such that the annual effective rate is limited to 0.05% of the Fund's average daily net assets.
For the period from May 1, 2010 through September 30, 2011, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the DWS Government Cash Institutional Shares and Government Cash Managed Shares to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 0.23% and 0.46%, respectively.
The Advisor also has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
In addition, the Advisor has agreed to voluntarily waive additional expenses. The waiver may be changed or terminated at any time without notice. Under these arrangements, the Advisor waived certain expenses on DWS Government Cash Institutional Shares and Government Cash Managed Shares.
Accordingly, for the year ended April 30, 2011, the Advisor waived a portion of its management fee on the Fund aggregating $713,093 and the amount charged aggregated $1,793,022.
For the year ended April 30, 2011, the Fund incurred a management fee equivalent to the following annual effective rate of the Fund's average daily net assets:
| | Annual Effective Rate |
| Government & Agency Securities Portfolio | .04% |
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended April 30, 2011, the Administration Fee was as follows:
| | | Administration Fee | | | Unpaid at April 30, 2011 | |
| Government & Agency Securities Portfolio | | $ | 4,222,727 | | | $ | 388,698 | |
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the year ended April 30, 2011, the amounts charged to the Fund by DISC were as follows:
| Government & Agency Securities Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 719,797 | | | $ | 567,755 | | | $ | 74,011 | |
| Davidson Cash Equivalent Shares | | | 53,615 | | | | 42,434 | | | | 4,461 | |
| Davidson Cash Equivalent Plus Shares | | | 107,807 | | | | 80,013 | | | | 10,625 | |
| DWS Government & Agency Money Fund | | | 183,413 | | | | 87,726 | | | | 38,977 | |
| DWS Government Cash Institutional Shares | | | 268,801 | | | | 268,801 | | | | — | |
| Government Cash Managed Shares | | | 153,563 | | | | 42,737 | | | | 35,695 | |
| Service Shares | | | 303,676 | | | | 241,264 | | | | 21,188 | |
| | | $ | 1,790,672 | | | $ | 1,330,730 | | | $ | 184,957 | |
Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee"), calculated as a percentage of average daily net assets for the shares listed in the following table.
For the year ended April 30, 2011, the Distribution Fee was as follows:
| Government & Agency Securities Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 981,550 | | | $ | 981,550 | | | | .00 | % | | | .33 | % |
| Davidson Cash Equivalent Shares | | | 63,985 | | | | 63,985 | | | | .00 | % | | | .30 | % |
| Davidson Cash Equivalent Plus Shares | | | 138,178 | | | | 138,178 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 729,893 | | | | 729,893 | | | | .00 | % | | | .60 | % |
| | | $ | 1,913,606 | | | $ | 1,913,606 | | | | | | | | | |
In addition, DIDI 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, 2011, the Service Fee was as follows:
| Government & Agency Securities Portfolio: | | Service Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 743,598 | | | $ | 743,598 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Shares | | | 53,321 | | | | 53,321 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Plus Shares | | | 110,542 | | | | 110,542 | | | | .00 | % | | | .20 | % |
| Government Cash Managed Shares | | | 325,257 | | | | 325,257 | | | | .00 | % | | | .15 | % |
| | | $ | 1,232,718 | | | $ | 1,232,718 | | | | | | | | | |
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended April 30, 2011, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" expenses was as follows:
| | | Total Aggregated | | | Unpaid at April 30, 2011 | |
| Government & Agency Securities Portfolio | | $ | 10,937 | | | $ | 10,937 | |
Trustees' Fees and Expenses. The Fund paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.
3. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus, if LIBOR exceeds the Federal Funds Rate, the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
4. Share Transactions
The following table summarizes share and dollar activity in the Fund:
Government & Agency Securities Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 628,481,114 | | | $ | 628,481,114 | | | | 649,627,293 | | | $ | 649,627,293 | |
| Davidson Cash Equivalent Shares | | | 24,463,758 | | | | 24,463,758 | | | | 14,397,365 | | | | 14,397,365 | |
| Davidson Cash Equivalent Plus Shares | | | 275,786,862 | | | | 275,786,862 | | | | 185,485,990 | | | | 185,485,990 | |
| DWS Government & Agency Money Fund | | | 72,103,322 | | | | 72,103,322 | | | | 105,758,351 | | | | 105,758,351 | |
| DWS Government Cash Institutional Shares | | | 34,835,288,142 | | | | 34,835,288,142 | | | | 86,737,251,385 | | | | 86,737,251,385 | |
| Government Cash Managed Shares | | | 2,032,853,974 | | | | 2,032,853,974 | | | | 1,141,762,346 | | | | 1,141,762,346 | |
| Premier Money Market Shares* | | | — | | | | — | | | | 265,266,569 | | | | 265,266,569 | |
| Service Shares | | | 269,340,585 | | | | 269,340,585 | | | | 228,691,596 | | | | 228,691,596 | |
| | | | | | | $ | 38,138,317,757 | | | | | | | $ | 89,328,240,895 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 29,657 | | | $ | 29,657 | | | | 65,880 | | | $ | 65,880 | |
| Davidson Cash Equivalent Shares | | | 2,127 | | | | 2,127 | | | | 5,141 | | | | 5,141 | |
| Davidson Cash Equivalent Plus Shares | | | 5,509 | | | | 5,509 | | | | 5,913 | | | | 5,913 | |
| DWS Government & Agency Money Fund | | | 27,796 | | | | 27,796 | | | | 195,740 | | | | 195,740 | |
| DWS Government Cash Institutional Shares | | | 1,118,270 | | | | 1,118,270 | | | | 8,526,918 | | | | 8,526,918 | |
| Government Cash Managed Shares | | | 5,696 | | | | 5,696 | | | | 8,301 | | | | 8,301 | |
| Premier Money Market Shares* | | | — | | | | — | | | | 338,346 | | | | 338,346 | |
| Service Shares | | | 12,119 | | | | 12,119 | | | | 27,501 | | | | 27,501 | |
| | | | | | | $ | 1,201,174 | | | | | | | $ | 9,173,740 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (648,126,914 | ) | | $ | (648,126,914 | ) | | | (625,330,611 | ) | | $ | (625,330,611 | ) |
| Davidson Cash Equivalent Shares | | | (25,307,057 | ) | | | (25,307,057 | ) | | | (23,739,455 | ) | | | (23,739,455 | ) |
| Davidson Cash Equivalent Plus Shares | | | (292,761,983 | ) | | | (292,761,983 | ) | | | (158,769,431 | ) | | | (158,769,431 | ) |
| DWS Government & Agency Money Fund | | | (134,495,012 | ) | | | (134,495,012 | ) | | | (198,527,517 | ) | | | (198,527,517 | ) |
| DWS Government Cash Institutional Shares | | | (36,963,523,481 | ) | | | (36,963,523,481 | ) | | | (94,492,111,010 | ) | | | (94,492,111,010 | ) |
| Government Cash Managed Shares | | | (2,132,755,829 | ) | | | (2,132,755,829 | ) | | | (1,338,740,329 | ) | | | (1,338,740,329 | ) |
| Premier Money Market Shares* | | | — | | | | — | | | | (4,366,260,819 | ) | | | (4,366,260,819 | ) |
| Service Shares | | | (272,492,118 | ) | | | (272,492,118 | ) | | | (264,171,028 | ) | | | (264,171,028 | ) |
| | | | | | | $ | (40,469,462,394 | ) | | | | | | $ | (101,467,650,200 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (19,616,143 | ) | | $ | (19,616,143 | ) | | | 24,362,562 | | | $ | 24,362,562 | |
| Davidson Cash Equivalent Shares | | | (841,172 | ) | | | (841,172 | ) | | | (9,336,949 | ) | | | (9,336,949 | ) |
| Davidson Cash Equivalent Plus Shares | | | (16,969,612 | ) | | | (16,969,612 | ) | | | 26,722,472 | | | | 26,722,472 | |
| DWS Government & Agency Money Fund | | | (62,363,894 | ) | | | (62,363,894 | ) | | | (92,573,426 | ) | | | (92,573,426 | ) |
| DWS Government Cash Institutional Shares | | | (2,127,117,069 | ) | | | (2,127,117,069 | ) | | | (7,746,332,707 | ) | | | (7,746,332,707 | ) |
| Government Cash Managed Shares | | | (99,896,159 | ) | | | (99,896,159 | ) | | | (196,969,682 | ) | | | (196,969,682 | ) |
| Premier Money Market Shares* | | | — | | | | — | | | | (4,100,655,904 | ) | | | (4,100,655,904 | ) |
| Service Shares | | | (3,139,414 | ) | | | (3,139,414 | ) | | | (35,451,931 | ) | | | (35,451,931 | ) |
| | | | | | | $ | (2,329,943,463 | ) | | | | | | $ | (12,130,235,565 | ) |
* The Premier Money Market Shares class was liquidated on February 16, 2010 and is no longer offered.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Cash Account Trust:
We have audited the accompanying statement of assets and liabilities of the Government & Agency Securities Portfolio (the "Portfolio"), one of the portfolios constituting Cash Account Trust (the "Trust"), including the investment portfolio, as of April 30, 2011, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Government & Agency Securities Portfolio of Cash Account Trust at April 30, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
| | | |
Boston, Massachusetts June 20, 2011 | | |
Tax Information (Unaudited)
A total of 44% of the dividends distributed during the fiscal year was derived from interest on US government securities, which is generally exempt from state income tax.
Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 621-1048.
Summary of Management Fee Evaluation by Independent Fee Consultant
October 3, 2010
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.
Qualifications
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
Summary of Administrative Fee Evaluation by Independent Fee Consultant
October 4, 2010
Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of a proposed pass-through to the funds of certain reporting costs associated with new regulations for money funds. My evaluation considered the following:
• My recently completed annual evaluation (please see my summary report of October 3, 2010), concluding that the prospective fees and expenses of all the DWS-sponsored money funds are reasonable.
• The fact that in my opinion the services DWS would provide under the combination of the Advisory and proposed Administration Agreements continues to be comparable with those typically provided to competitive funds under their management agreements.
• Management's analysis showing that the maximum total expense ratio impact of this change on any fund share class would be 1.3 basis points, which in my opinion is not material to my conclusions about the reasonableness of expenses.
Based on the foregoing considerations, in my opinion the proposed fees and expenses for the affected DWS-sponsored money funds are reasonable.
Thomas H. Mack
Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the fund as of April 30, 2011. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
| Independent Board Members |
Name, Year of Birth, Position with the Fund and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen | Other Directorships Held by Board Member |
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993 | Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (education committees); formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 118 | — |
John W. Ballantine (1946) Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Chairman of the Board, Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity); former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International | 118 | — |
Henry P. Becton, Jr. (1943) Board Member since 1990 | Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Public Radio International; Public Radio Exchange (PRX); The PBS Foundation; former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service | 118 | Lead Director, Becton Dickinson and Company2 (medical technology company); Lead Director, Belo Corporation2 (media company) |
Dawn-Marie Driscoll (1946) Board Member since 1987 | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization); former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2007) |
Keith R. Fox (1954) Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies | 118 | — |
Kenneth C. Froewiss (1945) Board Member since 2001 | Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996) | 118 | — |
Richard J. Herring (1946) Board Member since 1990 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; Independent Director of Barclays Bank Delaware (since September 2010); formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006) | 118 | Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007) |
William McClayton (1944) Board Member since 2004 | Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival | 118 | — |
Rebecca W. Rimel (1951) Board Member since 1995 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Trustee, Pro Publica (charitable organization) (2007-2010) | 118 | Director, CardioNet, Inc. (health care) (2009- present); Director, Viasys Health Care2 (January 2007- June 2007); |
William N. Searcy, Jr. (1946) Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 1998) |
Jean Gleason Stromberg (1943) Board Member since 1997 | Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996) | 118 | — |
Robert H. Wadsworth (1940) Board Member since 1999 | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association | 121 | — |
Officers4 |
Name, Year of Birth, Position with the Fund and Length of Time Served5 | Principal Occupation(s) During Past 5 Years and Other Directorships Held |
W. Douglas Beck, CFA9,10 (1967) President and CEO, 2011-present | Managing Director3, Deutsche Asset Management (2006-present); President and CEO of DWS family of funds and Head of Product Management, US for DWS Investments; formerly, Executive Director, Head of Product Management (2002-2006) and President (2005-2006) of the UBS Funds at UBS Global Asset Management; Co-Head of Manager Research/Managed Solutions Group, Merrill Lynch (1998-2002) |
John Millette7 (1962) Vice President and Secretary, 1999-present | Director3, Deutsche Asset Management |
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present | Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998) |
Caroline Pearson7 (1962) Chief Legal Officer, April 2010-present | Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010) |
Rita Rubin8 (1970) Assistant Secretary, 2009-present | Director3 and Senior Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007) |
Paul Antosca7 (1957) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006) |
Jack Clark7 (1967) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007) |
Diane Kenneally7 (1966) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
John Caruso8 (1965) Anti-Money Laundering Compliance Officer, 2010-present | Managing Director3, Deutsche Asset Management |
Robert Kloby8 (1962) Chief Compliance Officer, 2006-present | Managing Director3, Deutsche Asset Management |
1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.
2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3 Executive title, not a board directorship.
4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.
5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.
6 Address: 100 Plaza One, Jersey City, NJ 07311.
7 Address: One Beacon Street, Boston, MA 02108.
8 Address: 60 Wall Street, New York, NY 10005.
9 Address: 345 Park Avenue, New York, NY 10154.
10 Appointed May 17, 2011, effective June 1, 2011.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
APRIL 30, 2011 Annual Report to Shareholders |
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Government & Agency Securities Portfolio DWS Government & Agency Money Fund |
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Contents
3 Portfolio Management Review 6 Information About Your Fund's Expenses 13 Statement of Assets and Liabilities 15 Statement of Operations 16 Statement of Changes in Net Assets 18 Notes to Financial Statements 26 Report of Independent Registered Public Accounting Firm 28 Summary of Management Fee Evaluation by Independent Fee Consultant 32 Summary of Administrative Fee Evaluation by Independent Fee Consultant 33 Board Members and Officers |
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, visit www.dws-investments.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.
An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of the fund may have a significant adverse effect on the share prices of all classes of shares of the fund. See the prospectus for specific details regarding the fund's risk profile.
The fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Portfolio Management Review
Market Overview
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
In September 2010, investors responded positively to US Federal Reserve Board (the Fed) Chairman Ben Bernanke's statement that the Fed would take additional steps in the form of "quantitative easing" to prop up the US economy as needed.1 Over the fund's most recent 12-month period, the money market yield curve has gradually steepened as longer-term rates rose in response to improved economic data and shorter maturities declined significantly based on a number of market influences.2 These included continuing strong demand and shrinking supply in the money market area; the removal (or unwind) of $200 billion in two-month Treasury bills from the market until Congress once again raises the US debt ceiling; a new FDIC fee assessment that has, in effect, removed some of the incentive for certain large banks to create supply in the money market area; and; lastly, the fact that the federal funds rate remains "on hold," keeping short-term rates lower overall.3
Positive Contributors to Fund Performance
We were able to maintain a competitive yield for the fund during the period ended April 30, 2011. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
We maintained an increased focus on overnight repurchase agreements and one- to three-month government and agency securities, as we believe that there was not a great deal of value in longer-maturity issues during the period ending April 30, 2011.4
Our main focus, as always, is on preservation of capital, and during the period ending April 30, 2011, we maintained a short maturity and attempted to ensure ample liquidity for the fund.
Negative Contributors to Fund Performance
During the period, our decision to keep a significant percentage of portfolio assets in overnight repurchase agreements cost the fund some yield, but we believe that this represented a prudent approach to maintaining a high level of portfolio quality and liquidity.
Outlook and Positioning
Assuming that Congress can agree to raise the US debt ceiling in the near future, significant short-term Treasury supply should return to the market in the coming months and remove some downward pressure on money market rates that carry the shortest maturities. In general, however, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested and continued strong demand from investors seeking principal stability and safety.
We continue our insistence on the highest credit quality within the fund.5 We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the fund and to seek competitive yield for our shareholders.
Fund Performance (as of April 30, 2011)
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, this share price isn't guaranteed and you could lose money by investing in money market funds. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of a fund may have a significant adverse effect on the share prices of all classes of shares of that fund. See the prospectus for the specific details regarding the fund's risk profile.
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| | | 7-Day Current Yield | |
| DWS Government & Agency Money Fund | | | 0.08 | %* |
Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the fund over a 7-day period expressed as an annual percentage rate of the fund's shares outstanding. For the most current yield information, visit our Web site at www.dws-investments.com. * The investment advisor has agreed to voluntarily waive fees/reimburse expenses. This waiver may be changed or terminated at any time without notice. Otherwise, the 7-day current yield would have been 0.07% as of April 30, 2011. | |
1 Quantitative easing — a monetary policy used by the government to increase the money supply. With this policy, the government purchases government and other securities from the market to create additional capital which financial institutions can use to promote lending and liquidity.
2 The yield curve — a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.
3 Treasury bill — a short-term (maturity up to 1 year) discounted government security sold through competitive bidding at weekly and monthly auctions in denominations of $10,000 to $1 million. Debt ceiling is the maximum borrowing power of a government entity. FDIC (Federal Deposit Insurance Corporation) is a federal agency that insures deposits in member banks and thrifts up to a specific dollar amount. Federal funds rate is the overnight bank lending rate.
4 Maturity — the amount of time until the principal amount of a bond must be repaid. Short-maturity is typically up to one year.
Overnight repurchase agreements — a form of short-term borrowing whereby a government security is sold on an overnight basis and purchased back the next day.
5 Credit quality — a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default. The fund's credit quality does not remove market risk and is subject to change.
Information About Your Fund's Expenses
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher for the DWS Government & Agency Money Fund. 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, 2010 to April 30, 2011).
The tables illustrate your Fund's expenses in two ways:
•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in each Fund using each Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
• Hypothetical 5% Fund Return. This helps you to compare each Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using each Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | DWS Government & Agency Money Fund | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.10 | |
| Expenses Paid per $1,000* | | $ | .84 | |
| Hypothetical 5% Fund Return | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,023.95 | |
| Expenses Paid per $1,000* | | $ | .85 | |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratio | |
| DWS Government & Agency Money Fund | .17% |
For more information, please refer to the Fund's prospectus.
Government & Agency Securities Portfolio
Asset Allocation (As a % of Investment Portfolio) | | 4/30/11 | | | 4/30/10 | |
| | | | | | | |
| Government & Agency Obligations | | | 50 | % | | | 85 | % |
| Repurchase Agreements | | | 48 | % | | | 15 | % |
| Commercial Paper | | | 2 | % | | | — | |
| | | | 100 | % | | | 100 | % |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Government & Agency Securities Portfolio | 49 days | 52 days |
| iMoneyNet Government & Agencies Retail Money Fund Average* | 38 days | 45 days |
* The Fund is compared to its respective iMoney Net Category: Government & Agencies Retail Money Fund Average consists of all non-institutional government money market funds. Category includes the most broadly based of the government retail funds. These funds can invest in US Treasuries, US Other, Repos, whether or not they are backed by US Treasuries and government-backed Floating Rate Notes.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 9-12. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Government & Agency Securities Portfolio
| | Principal Amount ($) | Value ($) | |
| | | |
| Commercial Paper 1.8% | |
| Issued at Discount | |
| Straight-A Funding LLC: | |
| | 144A, 0.15%, 5/11/2011 | | 20,000,000 | 19,999,167 | |
| | 144A, 0.2%, 7/5/2011 | | 80,000,000 | 79,971,111 | |
Total Commercial Paper (Cost $99,970,278) | 99,970,278 | |
| | |
| Government & Agency Obligations 51.6% | |
| US Government Sponsored Agencies 45.9% | |
| Federal Farm Credit Bank: | |
| | 0.119%**, 5/18/2012 | | 165,000,000 | 164,991,321 | |
| | 0.12%**, 1/12/2012 | | 100,000,000 | 100,001,775 | |
| | 0.129%*, 9/9/2011 | | 25,000,000 | 24,988,174 | |
| | 0.134%**, 7/15/2011 | | 85,000,000 | 84,999,308 | |
| | 0.164%*, 5/24/2011 | | 50,000,000 | 49,994,569 | |
| | 0.208%*, 8/3/2011 | | 43,500,000 | 43,476,148 | |
| | 0.259%*, 10/20/2011 | | 34,500,000 | 34,457,143 | |
| | 0.259%*, 4/4/2012 | | 12,500,000 | 12,469,396 | |
| | 0.269%*, 3/23/2012 | | 25,000,000 | 24,938,688 | |
| | 0.319%*, 12/16/2011 | | 28,000,000 | 27,943,004 | |
| | 0.319%*, 1/12/2012 | | 33,000,000 | 32,924,907 | |
| Federal Home Loan Bank: | |
| | 0.018%*, 5/2/2011 | | 12,737,000 | 12,737,000 | |
| | 0.064%*, 7/20/2011 | | 100,000,000 | 99,985,556 | |
| | 0.068%*, 5/27/2011 | | 50,000,000 | 49,997,472 | |
| | 0.076%*, 5/18/2011 | | 55,000,000 | 54,997,922 | |
| | 0.089%*, 9/6/2011 | | 50,000,000 | 49,984,000 | |
| | 0.149%*, 8/12/2011 | | 7,500,000 | 7,496,781 | |
| | 0.149%*, 8/17/2011 | | 12,207,000 | 12,201,507 | |
| | 0.17%**, 1/18/2012 | | 22,000,000 | 22,006,379 | |
| | 0.183%**, 9/26/2011 | | 12,500,000 | 12,499,749 | |
| | 0.24%, 10/28/2011 | | 36,275,000 | 36,266,384 | |
| | 0.248%*, 8/22/2011 | | 5,000,000 | 4,996,076 | |
| | 0.268%*, 9/12/2011 | | 15,900,000 | 15,884,021 | |
| | 0.3%, 12/27/2011 | | 75,000,000 | 75,022,455 | |
| | 0.76%, 7/19/2011 | | 15,000,000 | 15,017,910 | |
| | 1.0%, 12/28/2011 | | 13,460,000 | 13,532,363 | |
| | 5.375%, 8/19/2011 | | 14,900,000 | 15,129,895 | |
| Federal Home Loan Mortgage Corp.: | |
| | 0.028%*, 5/19/2011 | | 15,000,000 | 14,999,775 | |
| | 0.08%**, 11/9/2011 | | 75,000,000 | 74,967,946 | |
| | 0.14%**, 11/10/2011 | | 200,000,000 | 200,000,000 | |
| | 0.149%*, 7/27/2011 | | 85,000,000 | 84,969,188 | |
| | 0.164%*, 9/1/2011 | | 8,935,000 | 8,929,963 | |
| | 0.167%*, 6/13/2011 | | 27,061,000 | 27,055,505 | |
| | 0.193%*, 7/25/2011 | | 34,494,000 | 34,478,118 | |
| | 0.198%*, 7/12/2011 | | 100,000,000 | 99,960,000 | |
| Federal National Mortgage Association: | |
| | 0.059%*, 6/13/2011 | | 75,000,000 | 74,994,625 | |
| | 0.079%*, 7/21/2011 | | 100,000,000 | 99,982,000 | |
| | 0.099%*, 8/8/2011 | | 32,500,000 | 32,491,063 | |
| | 0.113%**, 7/27/2011 | | 190,000,000 | 189,983,791 | |
| | 0.119%*, 8/22/2011 | | 25,000,000 | 24,990,583 | |
| | 0.119%*, 9/13/2011 | | 100,000,000 | 99,955,000 | |
| | 0.129%*, 9/26/2011 | | 65,000,000 | 64,965,261 | |
| | 0.159%*, 11/21/2011 | | 100,000,000 | 99,909,333 | |
| | 0.174%**, 9/19/2011 | | 30,000,000 | 29,999,404 | |
| | 0.178%*, 7/20/2011 | | 44,000,000 | 43,982,400 | |
| | 0.178%*, 7/27/2011 | | 51,659,000 | 51,636,528 | |
| | 0.182%*, 6/16/2011 | | 35,000,000 | 34,991,726 | |
| | 5.0%, 10/15/2011 | | 50,000,000 | 51,082,031 | |
| | 5.375%, 11/15/2011 | | 16,040,000 | 16,489,455 | |
| | 2,559,753,598 | |
| US Treasury Obligations 5.7% | |
| US Treasury Bill, 0.16%*, 9/1/2011 | | 17,500,000 | 17,490,433 | |
| US Treasury Notes: | |
| | 0.875%, 5/31/2011 | | 25,000,000 | 25,014,282 | |
| | 1.0%, 9/30/2011 | | 84,500,000 | 84,768,848 | |
| | 1.75%, 11/15/2011 | | 50,000,000 | 50,394,064 | |
| | 4.625%, 8/31/2011 | | 43,500,000 | 44,134,573 | |
| | 4.625%, 10/31/2011 | | 45,000,000 | 45,986,196 | |
| | 5.125%, 6/30/2011 | | 50,000,000 | 50,404,731 | |
| | 318,193,127 | |
Total Government & Agency Obligations (Cost $2,877,946,725) | 2,877,946,725 | |
| | |
| Repurchase Agreements 49.5% | |
| Barclays Capital PLC, 0.03%, dated 4/29/2011, to be repurchased at $215,000,538 on 5/2/2011 (a) | 215,000,000 | 215,000,000 | |
| BNP Paribas, 0.03%, dated 4/29/2011, to be repurchased at $42,428,677 on 5/2/2011 (b) | 42,428,571 | 42,428,571 | |
| BNP Paribas, 0.04%, dated 4/29/2011, to be repurchased at $704,002,347 on 5/2/2011 (c) | 704,000,000 | 704,000,000 | |
| Citigroup, Inc., 0.03%, dated 4/29/2011, to be repurchased at $22,000,055 on 5/2/2011 (d) | 22,000,000 | 22,000,000 | |
| JPMorgan Securities, Inc., 0.01%, dated 4/29/2011, to be repurchased at $432,619,312 on 5/2/2011 (e) | 432,618,951 | 432,618,951 | |
| JPMorgan Securities, Inc., 0.04%, dated 4/29/2011, to be repurchased at $233,000,743 on 5/2/2011 (f) | 223,000,000 | 223,000,000 | |
| Merrill Lynch & Co., Inc., 0.05%, dated 4/29/2011, to be repurchased at $123,927,019 on 5/2/2011 (g) | 123,926,503 | 123,926,503 | |
| Morgan Stanley & Co., Inc., 0.04%, dated 4/29/2011, to be repurchased at $252,000,840 on 5/2/2011 (h) | 252,000,000 | 252,000,000 | |
| The Goldman Sachs & Co., 0.05%, dated 4/29/2011, to be repurchased at $441,001,838 on 5/2/2011 (i) | 441,000,000 | 441,000,000 | |
| The Goldman Sachs & Co., 0.06%, dated 4/28/2011, to be repurchased at $300,003,500 on 5/5/2011 (j) | 300,000,000 | 300,000,000 | |
Total Repurchase Agreements (Cost $2,755,974,025) | 2,755,974,025 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $5,733,891,028)+ | | | 102.9 | | | | 5,733,891,028 | |
| Other Assets and Liabilities, Net | | | (2.9 | ) | | | (162,027,136 | ) |
| Net Assets | | | 100.0 | | | | 5,571,863,892 | |
* Annualized yield at time of purchase; not a coupon rate.
** These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
+ The cost for federal income tax purposes was $5,733,891,028.
(a) Collateralized by $207,105,300 US Treasury Note, 3.125%, maturing on 9/30/2013 with a value of $219,300,094.
(b) Collateralized by $45,241,800 US Treasury Note, 2.625%, maturing on 11/15/2020 with a value of $43,277,165.
(c) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 522,522,000 | | Federal Home Loan Mortgage Corp. | | | 1.65-5.5 | | 4/28/2014- 4/8/2030 | | | 546,732,677 | |
| | 161,294,000 | | Federal National Mortgage Association | | | 3.25-4.75 | | 2/21/2013- 4/9/2013 | | | 171,348,112 | |
| Total Collateral Value | | | 718,080,789 | |
(d) Collateralized by $22,443,000 Federal Home Loan Bank, maturing on 7/29/2011 with a value of $22,440,082.
(e) Collateralized by $531,439,126 US Treasury STRIPS, maturing on 11/15/2013-2/15/2020 with a value of $441,272,531.
(f) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 185,181,947 | | Federal Home Loan Mortgage Corp. | | Zero Coupon-6.5 | | 7/15/2015- 8/15/2039 | | | 192,999,725 | |
| | 54,470,688 | | Federal Home Loan Mortgage Corp. —
Interest only | | | 5.281 | | 1/15/2039 | | | 5,749,091 | |
| | 7,680,197 | | Federal Home Loan Mortgage Corp. — Principal only | | Zero Coupon | | 11/15/2036- 5/15/2037 | | | 6,713,414 | |
| | 23,268,926 | | Federal National Mortgage Association | | | 0.513-6.47 | | 2/25/2029- 6/25/2037 | | | 22,905,889 | |
| Total Collateral Value | | | 228,368,119 | |
(g) Collateralized by $124,768,369 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-4.5%, with various maturity dates of 3/1/2039-12/1/2040 with a value of $126,405,034.
(h) Collateralized by $242,597,416 Federal Home Loan Mortgage Corp., with various coupon rates from 4.0-6.0%, with various maturity dates of 3/1/2038-4/1/2041 with a value of $257,040,001.
(i) Collateralized by:
| Principal Amount ($) | | Security | | Rate (%) | | Maturity Date | | Collateral Value ($) | |
| | 22,370,889 | | Federal Home Loan Mortgage Corp. | | | 4.0-5.5 | | 4/15/2040- 4/15/2041 | | | 21,981,083 | |
| | 491,792,871 | | Federal Home Loan Mortgage Corp. —
Interest only | | | 5.781-6.431 | | 9/15/2033- 11/15/2038 | | | 77,032,731 | |
| | 210,576,230 | | Federal National Mortgage Association | | Zero Coupon — 5.5 | | 6/25/2021- 3/25/2041 | | | 213,820,002 | |
| | 914,052,013 | | Federal National Mortgage Association — Interest only | | | 5.787-6.266 | | 6/25/2038- 1/25/2041 | | | 136,986,185 | |
| Total Collateral Value | | | 449,820,001 | |
(j) Collateralized by $295,084,262 Federal National Mortgage Association, with various coupon rates from 3.5-4.5%, with various maturity dates of 10/25/2039-2/25/2041 with a value of $306,000,000.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
Interest Only: Interest Only (IO) bonds represent the "interest only" portion of payments on a pool of underlying mortgages or mortgage-backed securities. IO securities are subject to prepayment risk of the pool of underlying mortgages.
Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying mortgages or mortgage-backed securities.
STRIPS: Separate Trading of Registered Interest and Principal Securities
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Investments in Securities (k) | | $ | — | | | $ | 2,977,917,003 | | | $ | — | | | $ | 2,977,917,003 | |
| Repurchase Agreements | | | — | | | | 2,755,974,025 | | | | — | | | | 2,755,974,025 | |
| Total | | $ | — | | | $ | 5,733,891,028 | | | $ | — | | | $ | 5,733,891,028 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the period ended April 30, 2011.
(k) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Government & Agency Securities Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,977,917,003 | |
| Repurchase agreements, valued at amortized cost | | | 2,755,974,025 | |
| Total investments, valued at amortized cost | | | 5,733,891,028 | |
| Receivable for Fund shares sold | | | 142,451 | |
| Interest receivable | | | 3,670,502 | |
| Due from Advisor | | | 136,428 | |
| Other assets | | | 95,442 | |
| Total assets | | | 5,737,935,851 | |
| Liabilities | |
| Payable for investments purchased | | | 164,991,321 | |
| Payable for Fund shares redeemed | | | 126,472 | |
| Distributions payable | | | 106,265 | |
| Accrued management fee | | | 99,239 | |
| Other accrued expenses and payables | | | 748,662 | |
| Total liabilities | | | 166,071,959 | |
| Net assets, at value | | $ | 5,571,863,892 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 201,484 | |
| Accumulated net realized gain (loss) | | | (602,497 | ) |
| Paid-in capital | | | 5,572,264,905 | |
| Net assets, at value | | $ | 5,571,863,892 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Government & Agency Securities Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($284,348,907 ÷ 284,368,469 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($19,057,230 ÷ 19,058,540 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Plus Shares Net Asset Value, offering and redemption price per share ($33,261,953 ÷ 33,264,241 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Government & Agency Money Fund Net Asset Value, offering and redemption price per share ($170,093,183 ÷ 170,104,883 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Government Cash Institutional Shares Net Asset Value, offering and redemption price per share ($4,771,880,106 ÷ 4,772,208,337 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Government Cash Managed Shares Net Asset Value, offering and redemption price per share ($179,819,975 ÷ 179,832,348 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($113,402,538 ÷ 113,410,339 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Government & Agency Securities Portfolio | |
Income: Interest | | $ | 9,770,345 | |
Expenses: Management fee | | | 2,506,115 | |
| Administration fee | | | 4,222,727 | |
| Services to shareholders | | | 1,845,325 | |
| Custodian fee | | | 76,975 | |
| Distribution and service fees | | | 3,146,324 | |
| Professional fees | | | 150,210 | |
| Trustees' fees and expenses | | | 127,065 | |
| Reports to shareholders | | | 10,937 | |
| Registration fees | | | 141,522 | |
| Other | | | 393,329 | |
| Total expenses before expense reductions | | | 12,620,529 | |
| Expense reductions | | | (5,190,147 | ) |
| Total expenses after expense reductions | | | 7,430,382 | |
| Net investment income | | | 2,339,963 | |
| Net realized gain (loss) from investments | | | (602,497 | ) |
| Net increase (decrease) in net assets resulting from operations | | $ | 1,737,466 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Government & Agency Securities Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 2,339,963 | | | $ | 18,279,158 | |
| Net realized gain (loss) | | | (602,497 | ) | | | 683,254 | |
| Net increase in net assets resulting from operations | | | 1,737,466 | | | | 18,962,412 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (29,745 | ) | | | (30,842 | ) |
| Davidson Cash Equivalent Shares | | | (2,133 | ) | | | (2,419 | ) |
| Davidson Cash Equivalent Plus Shares | | | (5,528 | ) | | | (3,042 | ) |
| DWS Government & Agency Money Fund | | | (28,169 | ) | | | (168,152 | ) |
| DWS Government Cash Institutional Shares | | | (2,230,405 | ) | | | (17,853,361 | ) |
| Government Cash Managed Shares | | | (21,680 | ) | | | (46,318 | ) |
| Premier Money Market Shares | | | — | | | | (176,438 | ) |
| Service Shares | | | (12,160 | ) | | | (13,091 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (34,871 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (2,710 | ) |
| Davidson Cash Equivalent Plus Shares | | | — | | | | (2,843 | ) |
| DWS Government & Agency Money Fund | | | — | | | | (32,168 | ) |
| DWS Government Cash Institutional Shares | | | — | | | | (1,560,440 | ) |
| Government Cash Managed Shares | | | — | | | | (38,058 | ) |
| Premier Money Market Shares | | | — | | | | (242,870 | ) |
| Service Shares | | | — | | | | (14,378 | ) |
| Total distributions | | | (2,329,820 | ) | | | (20,222,001 | ) |
Fund share transactions: Proceeds from shares sold | | | 38,138,317,757 | | | | 89,328,240,895 | |
| Reinvestment of distributions | | | 1,201,174 | | | | 9,173,740 | |
| Cost of shares redeemed | | | (40,469,462,394 | ) | | | (101,467,650,200 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (2,329,943,463 | ) | | | (12,130,235,565 | ) |
| Increase (decrease) in net assets | | | (2,330,535,817 | ) | | | (12,131,495,154 | ) |
| Net assets at beginning of period | | | 7,902,399,709 | | | | 20,033,894,863 | |
| Net assets at end of period (including undistributed net investment income of $201,484 and $191,341, respectively) | | $ | 5,571,863,892 | | | $ | 7,902,399,709 | |
The accompanying notes are an integral part of the financial statements.
Government & Agency Securities Portfolio DWS Government & Agency Money Fund | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | | 2007 | a |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | *** | | | .001 | | | | .014 | | | | .043 | | | | .006 | |
| Net realized and unrealized gain (loss) | | | (.000 | )*** | | | .000 | *** | | | .000 | *** | | | .000 | *** | | | .000 | *** |
| Total from investment operations | | | .000 | *** | | | .001 | | | | .014 | | | | .043 | | | | .006 | |
Less distributions from: Net investment income | | | (.000 | )*** | | | (.001 | ) | | | (.014 | ) | | | (.043 | ) | | | (.006 | ) |
| Net realized gains | | | — | | | | (.000 | )*** | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )*** | | | (.001 | ) | | | (.014 | ) | | | (.043 | ) | | | (.006 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total Return (%)b | | | .02 | | | | .07 | | | | 1.41 | | | | 4.42 | | | | .60 | ** |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 170 | | | | 233 | | | | 325 | | | | 438 | | | | 436 | |
| Ratio of expenses before expense reductions (%) | | | .28 | | | | .27 | | | | .26 | | | | .30 | | | | .30 | * |
| Ratio of expenses after expense reductions (%) | | | .22 | | | | .26 | | | | .26 | | | | .28 | | | | .28 | * |
| Ratio of net investment income (%) | | | .01 | | | | .06 | | | | 1.46 | c | | | 4.17 | | | | 5.06 | * |
a For the period from March 19, 2007 (commencement of operations) to April 30, 2007. b Total return would have been lower had certain expenses not been reduced. c Due to the timing of the subscriptions and redemptions, the amount shown does not correspond to the total return during the period. * Annualized ** Not annualized *** Amount is less than $.0005. | |
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three funds: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio. These financial statements report on Government & Agency Securities Portfolio (the "Fund").
Government & Agency Securities Portfolio offers seven 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 and Service Shares.
The financial highlights for all classes of shares, other than DWS Government & Agency Money Fund, are provided separately and are available upon request.
The Fund's investment income, realized gains and losses, and certain Fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of the Fund, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The Fund values all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Repurchase Agreements. The Fund may enter into repurchase agreements with certain banks and broker/dealers whereby the Fund, through its custodian or a sub-custodian bank, receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is equal to at least the principal amount of the repurchase price plus accrued interest. The custodial bank holds the collateral in a separate account until the agreement matures. If the value of the securities falls below the principal amount of the repurchase agreement plus accrued interest, the financial institution deposits additional collateral by the following business day. If the financial institution either fails to deposit the required additional collateral or fails to repurchase the securities as agreed, the Fund has the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Fund's claims on the collateral may be subject to legal proceedings.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders.
At April 30, 2011, the Fund had a net tax basis capital loss carryforward of approximately $602,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until April 30, 2019 (the expiration date), whichever occurs first.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the "Act") was enacted. Under the Act, net capital losses may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses. As a result of this ordering rule, pre-enactment capital loss carryforwards may expire unused, whereas under the previous rules these losses may have been utilized. This change is effective for fiscal years beginning after the date of enactment.
The Fund has reviewed the tax positions for the open tax years as of April 30, 2011 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income. Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. The Fund may take into account capital gains and losses in its daily dividend declarations. The Fund may also make additional distributions for tax purposes if necessary.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Fund.
At April 30, 2011, the Fund's components of distributable earnings on a tax basis are as follows:
| Undistributed ordinary income* | | $ | 307,749 | |
| Capital loss carryforwards | | $ | (602,000 | ) |
In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:
| | | Years Ended April 30, | |
| | | 2011 | | | 2010 | |
| Distributions from ordinary income* | | $ | 2,329,820 | | | $ | 20,222,001 | |
* For tax purposes, short-term capital gains distributions are considered ordinary income distributions.
Expenses. Expenses of the Trust arising in connection with a specific Fund are allocated to that Fund. Other Trust expenses which cannot be directly attributed to a Fund are apportioned pro rata on the basis of relative net assets among the Funds in the Trust.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Other. Investment transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
2. Related Parties
Management Agreement. Under an Amended and Restated Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
The Fund pays a monthly management fee based on the combined average daily net assets of the three Funds and allocated to the Fund based on its relative net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .120 | % |
| Next $500 million of such net assets | | | .100 | % |
| Next $1 billion of such net assets | | | .075 | % |
| Next $1 billion of such net assets | | | .060 | % |
| Over $3 billion of such net assets | | | .050 | % |
The Advisor has agreed to contractually reduce its management fee for the Fund such that the annual effective rate is limited to 0.05% of the Fund's average daily net assets.
For the period from May 1, 2010 through September 30, 2011, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the DWS Government & Agency Money Fund to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 0.45%.
The Advisor also has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
In addition, the Advisor has agreed to voluntarily waive additional expenses. The waiver may be changed or terminated at any time without notice. Under these arrangements, the Advisor waived certain expenses on DWS Government & Agency Money Fund shares.
Accordingly, for the year ended April 30, 2011, the Advisor waived a portion of its management fee on the Fund aggregating $713,093 and the amount charged aggregated $1,793,022.
For the year ended April 30, 2011, the Fund incurred a management fee equivalent to the following annual effective rate of the Fund's average daily net assets:
| | Annual Effective Rate |
| Government & Agency Securities Portfolio | .04% |
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended April 30, 2011, the Administration Fee was as follows:
| | | Administration Fee | | | Unpaid at April 30, 2011 | |
| Government & Agency Securities Portfolio | | $ | 4,222,727 | | | $ | 388,698 | |
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the year ended April 30, 2011, the amounts charged to the Fund by DISC were as follows:
| Government & Agency Securities Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 719,797 | | | $ | 567,755 | | | $ | 74,011 | |
| Davidson Cash Equivalent Shares | | | 53,615 | | | | 42,434 | | | | 4,461 | |
| Davidson Cash Equivalent Plus Shares | | | 107,807 | | | | 80,013 | | | | 10,625 | |
| DWS Government & Agency Money Fund | | | 183,413 | | | | 87,726 | | | | 38,977 | |
| DWS Government Cash Institutional Shares | | | 268,801 | | | | 268,801 | | | | — | |
| Government Cash Managed Shares | | | 153,563 | | | | 42,737 | | | | 35,695 | |
| Service Shares | | | 303,676 | | | | 241,264 | | | | 21,188 | |
| | | $ | 1,790,672 | | | $ | 1,330,730 | | | $ | 184,957 | |
Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee"), calculated as a percentage of average daily net assets for the shares listed in the following table.
For the year ended April 30, 2011, the Distribution Fee was as follows:
| Government & Agency Securities Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 981,550 | | | $ | 981,550 | | | | .00 | % | | | .33 | % |
| Davidson Cash Equivalent Shares | | | 63,985 | | | | 63,985 | | | | .00 | % | | | .30 | % |
| Davidson Cash Equivalent Plus Shares | | | 138,178 | | | | 138,178 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 729,893 | | | | 729,893 | | | | .00 | % | | | .60 | % |
| | | $ | 1,913,606 | | | $ | 1,913,606 | | | | | | | | | |
In addition, DIDI 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, 2011, the Service Fee was as follows:
| Government & Agency Securities Portfolio: | | Service Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 743,598 | | | $ | 743,598 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Shares | | | 53,321 | | | | 53,321 | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Plus Shares | | | 110,542 | | | | 110,542 | | | | .00 | % | | | .20 | % |
| Government Cash Managed Shares | | | 325,257 | | | | 325,257 | | | | .00 | % | | | .15 | % |
| | | $ | 1,232,718 | | | $ | 1,232,718 | | | | | | | | | |
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended April 30, 2011, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" expenses was as follows:
| | | Total Aggregated | | | Unpaid at April 30, 2011 | |
| Government & Agency Securities Portfolio | | $ | 10,937 | | | $ | 10,937 | |
Trustees' Fees and Expenses. The Fund paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.
3. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus, if LIBOR exceeds the Federal Funds Rate, the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
4. Share Transactions
The following table summarizes share and dollar activity in the Fund:
Government & Agency Securities Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 628,481,114 | | | $ | 628,481,114 | | | | 649,627,293 | | | $ | 649,627,293 | |
| Davidson Cash Equivalent Shares | | | 24,463,758 | | | | 24,463,758 | | | | 14,397,365 | | | | 14,397,365 | |
| Davidson Cash Equivalent Plus Shares | | | 275,786,862 | | | | 275,786,862 | | | | 185,485,990 | | | | 185,485,990 | |
| DWS Government & Agency Money Fund | | | 72,103,322 | | | | 72,103,322 | | | | 105,758,351 | | | | 105,758,351 | |
| DWS Government Cash Institutional Shares | | | 34,835,288,142 | | | | 34,835,288,142 | | | | 86,737,251,385 | | | | 86,737,251,385 | |
| Government Cash Managed Shares | | | 2,032,853,974 | | | | 2,032,853,974 | | | | 1,141,762,346 | | | | 1,141,762,346 | |
| Premier Money Market Shares* | | | — | | | | — | | | | 265,266,569 | | | | 265,266,569 | |
| Service Shares | | | 269,340,585 | | | | 269,340,585 | | | | 228,691,596 | | | | 228,691,596 | |
| | | | | | | $ | 38,138,317,757 | | | | | | | $ | 89,328,240,895 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 29,657 | | | $ | 29,657 | | | | 65,880 | | | $ | 65,880 | |
| Davidson Cash Equivalent Shares | | | 2,127 | | | | 2,127 | | | | 5,141 | | | | 5,141 | |
| Davidson Cash Equivalent Plus Shares | | | 5,509 | | | | 5,509 | | | | 5,913 | | | | 5,913 | |
| DWS Government & Agency Money Fund | | | 27,796 | | | | 27,796 | | | | 195,740 | | | | 195,740 | |
| DWS Government Cash Institutional Shares | | | 1,118,270 | | | | 1,118,270 | | | | 8,526,918 | | | | 8,526,918 | |
| Government Cash Managed Shares | | | 5,696 | | | | 5,696 | | | | 8,301 | | | | 8,301 | |
| Premier Money Market Shares* | | | — | | | | — | | | | 338,346 | | | | 338,346 | |
| Service Shares | | | 12,119 | | | | 12,119 | | | | 27,501 | | | | 27,501 | |
| | | | | | | $ | 1,201,174 | | | | | | | $ | 9,173,740 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (648,126,914 | ) | | $ | (648,126,914 | ) | | | (625,330,611 | ) | | $ | (625,330,611 | ) |
| Davidson Cash Equivalent Shares | | | (25,307,057 | ) | | | (25,307,057 | ) | | | (23,739,455 | ) | | | (23,739,455 | ) |
| Davidson Cash Equivalent Plus Shares | | | (292,761,983 | ) | | | (292,761,983 | ) | | | (158,769,431 | ) | | | (158,769,431 | ) |
| DWS Government & Agency Money Fund | | | (134,495,012 | ) | | | (134,495,012 | ) | | | (198,527,517 | ) | | | (198,527,517 | ) |
| DWS Government Cash Institutional Shares | | | (36,963,523,481 | ) | | | (36,963,523,481 | ) | | | (94,492,111,010 | ) | | | (94,492,111,010 | ) |
| Government Cash Managed Shares | | | (2,132,755,829 | ) | | | (2,132,755,829 | ) | | | (1,338,740,329 | ) | | | (1,338,740,329 | ) |
| Premier Money Market Shares* | | | — | | | | — | | | | (4,366,260,819 | ) | | | (4,366,260,819 | ) |
| Service Shares | | | (272,492,118 | ) | | | (272,492,118 | ) | | | (264,171,028 | ) | | | (264,171,028 | ) |
| | | | | | | $ | (40,469,462,394 | ) | | | | | | $ | (101,467,650,200 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (19,616,143 | ) | | $ | (19,616,143 | ) | | | 24,362,562 | | | $ | 24,362,562 | |
| Davidson Cash Equivalent Shares | | | (841,172 | ) | | | (841,172 | ) | | | (9,336,949 | ) | | | (9,336,949 | ) |
| Davidson Cash Equivalent Plus Shares | | | (16,969,612 | ) | | | (16,969,612 | ) | | | 26,722,472 | | | | 26,722,472 | |
| DWS Government & Agency Money Fund | | | (62,363,894 | ) | | | (62,363,894 | ) | | | (92,573,426 | ) | | | (92,573,426 | ) |
| DWS Government Cash Institutional Shares | | | (2,127,117,069 | ) | | | (2,127,117,069 | ) | | | (7,746,332,707 | ) | | | (7,746,332,707 | ) |
| Government Cash Managed Shares | | | (99,896,159 | ) | | | (99,896,159 | ) | | | (196,969,682 | ) | | | (196,969,682 | ) |
| Premier Money Market Shares* | | | — | | | | — | | | | (4,100,655,904 | ) | | | (4,100,655,904 | ) |
| Service Shares | | | (3,139,414 | ) | | | (3,139,414 | ) | | | (35,451,931 | ) | | | (35,451,931 | ) |
| | | | | | | $ | (2,329,943,463 | ) | | | | | | $ | (12,130,235,565 | ) |
* The Premier Money Market Shares class was liquidated on February 16, 2010 and is no longer offered.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Cash Account Trust:
We have audited the accompanying statement of assets and liabilities of the Government & Agency Securities Portfolio (the "Portfolio"), one of the portfolios constituting Cash Account Trust (the "Trust"), including the investment portfolio, as of April 30, 2011, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Government & Agency Securities Portfolio of Cash Account Trust at April 30, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
| | | |
Boston, Massachusetts June 20, 2011 | | |
Tax Information (Unaudited)
A total of 44% of the dividends distributed during the fiscal year was derived from interest on US government securities, which is generally exempt from state income tax.
Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 621-1048.
Summary of Management Fee Evaluation by Independent Fee Consultant
October 3, 2010
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.
Qualifications
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
Summary of Administrative Fee Evaluation by Independent Fee Consultant
October 4, 2010
Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of a proposed pass-through to the funds of certain reporting costs associated with new regulations for money funds. My evaluation considered the following:
• My recently completed annual evaluation (please see my summary report of October 3, 2010), concluding that the prospective fees and expenses of all the DWS-sponsored money funds are reasonable.
• The fact that in my opinion the services DWS would provide under the combination of the Advisory and proposed Administration Agreements continues to be comparable with those typically provided to competitive funds under their management agreements.
• Management's analysis showing that the maximum total expense ratio impact of this change on any fund share class would be 1.3 basis points, which in my opinion is not material to my conclusions about the reasonableness of expenses.
Based on the foregoing considerations, in my opinion the proposed fees and expenses for the affected DWS-sponsored money funds are reasonable.
Thomas H. Mack
Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the fund as of April 30, 2011. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
| Independent Board Members |
Name, Year of Birth, Position with the Fund and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen | Other Directorships Held by Board Member |
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993 | Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (education committees); formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 118 | — |
John W. Ballantine (1946) Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Chairman of the Board, Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity); former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International | 118 | — |
Henry P. Becton, Jr. (1943) Board Member since 1990 | Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Public Radio International; Public Radio Exchange (PRX); The PBS Foundation; former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service | 118 | Lead Director, Becton Dickinson and Company2 (medical technology company); Lead Director, Belo Corporation2 (media company) |
Dawn-Marie Driscoll (1946) Board Member since 1987 | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization); former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2007) |
Keith R. Fox (1954) Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies | 118 | — |
Kenneth C. Froewiss (1945) Board Member since 2001 | Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996) | 118 | — |
Richard J. Herring (1946) Board Member since 1990 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; Independent Director of Barclays Bank Delaware (since September 2010); formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006) | 118 | Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007) |
William McClayton (1944) Board Member since 2004 | Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival | 118 | — |
Rebecca W. Rimel (1951) Board Member since 1995 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Trustee, Pro Publica (charitable organization) (2007-2010) | 118 | Director, CardioNet, Inc. (health care) (2009- present); Director, Viasys Health Care2 (January 2007- June 2007); |
William N. Searcy, Jr. (1946) Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 1998) |
Jean Gleason Stromberg (1943) Board Member since 1997 | Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996) | 118 | — |
Robert H. Wadsworth (1940) Board Member since 1999 | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association | 121 | — |
Officers4 |
Name, Year of Birth, Position with the Fund and Length of Time Served5 | Principal Occupation(s) During Past 5 Years and Other Directorships Held |
W. Douglas Beck, CFA9,10 (1967) President and CEO, 2011-present | Managing Director3, Deutsche Asset Management (2006-present); President and CEO of DWS family of funds and Head of Product Management, US for DWS Investments; formerly, Executive Director, Head of Product Management (2002-2006) and President (2005-2006) of the UBS Funds at UBS Global Asset Management; Co-Head of Manager Research/Managed Solutions Group, Merrill Lynch (1998-2002) |
John Millette7 (1962) Vice President and Secretary, 1999-present | Director3, Deutsche Asset Management |
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present | Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998) |
Caroline Pearson7 (1962) Chief Legal Officer, April 2010-present | Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010) |
Rita Rubin8 (1970) Assistant Secretary, 2009-present | Director3 and Senior Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007) |
Paul Antosca7 (1957) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006) |
Jack Clark7 (1967) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007) |
Diane Kenneally7 (1966) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
John Caruso8 (1965) Anti-Money Laundering Compliance Officer, 2010-present | Managing Director3, Deutsche Asset Management |
Robert Kloby8 (1962) Chief Compliance Officer, 2006-present | Managing Director3, Deutsche Asset Management |
1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.
2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3 Executive title, not a board directorship.
4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.
5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.
6 Address: 100 Plaza One, Jersey City, NJ 07311.
7 Address: One Beacon Street, Boston, MA 02108.
8 Address: 60 Wall Street, New York, NY 10005.
9 Address: 345 Park Avenue, New York, NY 10154.
10 Appointed May 17, 2011, effective June 1, 2011.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
Notes
APRIL 30, 2011 Annual Report to Shareholders |
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Tax-Exempt Portfolio DWS Tax-Exempt Cash Institutional Shares Fund #148 Tax-Exempt Cash Managed Shares Fund #248 |
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Contents
3 Portfolio Management Review 7 Information About Your Fund's Expenses 21 Statement of Assets and Liabilities 23 Statement of Operations 24 Statement of Changes in Net Assets 27 Notes to Financial Statements 34 Report of Independent Registered Public Accounting Firm 36 Summary of Management Fee Evaluation by Independent Fee Consultant 40 Summary of Administrative Fee Evaluation by Independent Fee Consultant 41 Board Members and Officers |
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, visit www.dws-investments.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.
An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of the fund may have a significant adverse effect on the share prices of all classes of shares of the fund. See the prospectus for specific details regarding the fund's risk profile.
The fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Portfolio Management Review
Market Overview
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
In September 2010, investors responded positively to US Federal Reserve Board (the Fed) Chairman Ben Bernanke's statement that the Fed would take additional steps in the form of "quantitative easing" to prop up the US economy as needed.1 Over the fund's most recent 12-month period, the money market yield curve has gradually steepened as longer-term rates rose in response to improved economic data and shorter maturities declined significantly based on a number of market influences.2 These included continuing strong demand and shrinking supply in the money market area; the removal (or unwind) of $200 billion in two-month Treasury bills from the market until Congress once again raises the US debt ceiling; a new FDIC fee assessment that has, in effect, removed some of the incentive for certain large banks to create supply in the money market area; and; lastly, the fact that the federal funds rate remains "on hold," keeping short-term rates lower overall.3
Positive Contributors to Fund Performance
We were able to maintain a competitive yield for the fund during the period ended April 30, 2011. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
In light of the continued fiscal stress on state and local governments, and with dynamic rule changes regarding money market funds coming from the SEC, we believed it was prudent to maintain a short average maturity. Toward the end of the period, the fund was invested mainly in short-term commercial paper and floating-rate securities. (The interest rate of floating-rate securities adjusts periodically based on indices such as the Securities Industry and Financial Market Association Index of Variable Rate Demand Notes.)4,5 Because the interest rates of these instruments adjust as market conditions change, they provide flexibility in an uncertain interest rate environment.
Our main focus, as always, is on preservation of capital, and during the period ending April 30, 2011, we maintained a short maturity and attempted to ensure ample liquidity for the fund.
Negative Contributors to Fund Performance
The types of securities that we were investing in the fund tended to have lower yields than issues carrying more risk. We preferred to be cautious during a time of market uncertainty. In the end this cost the fund some yield, but we believe that this represented a prudent approach to preserving principal in light of the circumstances during the period.
Outlook and Positioning
Assuming that Congress can agree to raise the US debt ceiling in the near future, significant short-term Treasury supply should return to the market in the coming months and remove some downward pressure on money market rates that carry the shortest maturities. In general, however, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested and continued strong demand from investors seeking principal stability and safety.
We continue our insistence on the highest credit quality within the fund.6 We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the fund and to seek competitive yield for our shareholders.
Fund Performance (as of April 30, 2011)
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, this share price isn't guaranteed and you could lose money by investing in money market funds. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of a fund may have a significant adverse effect on the share prices of all classes of shares of that fund. See the prospectus for specific details regarding the fund's risk profile.
| | |
| | | 7-Day Current Yield | |
| DWS Tax-Exempt Cash Institutional Shares | | | 0.14 | % |
| (Equivalent Taxable Yield) | | | 0.22 | %* |
| Tax-Exempt Cash Managed Shares | | | 0.01 | %** |
| (Equivalent Taxable Yield) | | | 0.02 | %* |
Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the fund over a 7-day period expressed as an annual percentage rate of the fund's shares outstanding. For the most current yield information, visit our Web site at www.dws-investments.com. * The equivalent taxable yield allows you to compare with the performance of taxable money market funds. For the Tax-Exempt Portfolio, the equivalent taxable yield is based upon the marginal income tax rate of 35%. Income may be subject to local taxes and, for some investors, the alternative minimum tax. ** The investment advisor has agreed to voluntarily waive fees/reimburse expenses. This waiver may be changed or terminated at any time without notice. Otherwise, the 7-day current yield would have been -0.02% for DWS Tax-Exempt Cash Managed Shares as of April 30, 2011. | |
1 Quantitative easing — a monetary policy used by the government to increase the money supply. With this policy, the government purchases government and other securities from the market to create additional capital which financial institutions can use to promote lending and liquidity.
2 The yield curve — a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.
3 Treasury bill — a short-term (maturity up to 1 year) discounted government security sold through competitive bidding at weekly and monthly auctions in denominations of $10,000 to $1 million. Debt ceiling is the maximum borrowing power of a government entity. FDIC (Federal Deposit Insurance Corporation) is a federal agency that insures deposits in member banks and thrifts up to a specific dollar amount. Federal funds rate is the overnight bank lending rate.
4 Average maturity — the average length of time until the principal amount of a bond must be repaid.
5 The Securities Industry and Financial Market Association Index of Variable Rate Demand Notes is a weekly high-grade market index consisting of seven-day, tax-exempt, variable-rate demand notes produced by Municipal Market Data Group. Actual issues are selected from Municipal Market Data's database of more than 10,000 active issues.
Index returns, unlike fund returns, do not reflect any fees of expenses. It is not possible to invest directly into an index.
6 Credit quality — a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default. The fund's credit quality does not remove market risk and is subject to change.
Information About Your Fund's Expenses
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher for the Tax-Exempt Cash Managed 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, 2010 to April 30, 2011).
The tables illustrate your Fund's expenses in two ways:
•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in each Fund using each Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
• Hypothetical 5% Fund Return. This helps you to compare each Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using each Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | DWS Tax-Exempt Cash Institutional Shares | | | Tax-Exempt Cash Managed Shares | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.67 | | | $ | 1,000.05 | |
| Expenses Paid per $1,000* | | $ | .99 | | | $ | 1.64 | |
| Hypothetical 5% Fund Return | | | | | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,023.80 | | | $ | 1,023.16 | |
| Expenses Paid per $1,000* | | $ | 1.00 | | | $ | 1.66 | |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratios | |
| DWS Tax-Exempt Cash Institutional Shares | .20% |
| Tax-Exempt Cash Managed Shares | .33% |
For more information, please refer to the Fund's prospectus.
Tax-Exempt Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
Municipal Investments Municipal Variable Rate Demand Notes | 70% | 72% |
| Municipal Bonds and Notes | 27% | 28% |
| Municipal Floating Rate Notes | 3% | — |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Tax-Exempt Portfolio | 33 days | 44 days |
| National Tax-Free Retail Money Fund Average* | 28 days | 31 days |
* The Fund is compared to its respective iMoneyNet Category: National Tax-Free Retail Money Fund Average — Category consists of all national tax-free and municipal retail funds. Portfolio holdings of tax-free funds include Rated and Unrated Demand Notes, Rated and Unrated General Market Notes; Commercial Paper; Put Bonds — 6 months and less; Put Bonds — over 6 months; AMT Paper and Other Tax-Free Holdings.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 10-20. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Tax-Exempt Portfolio
| | | Principal Amount ($) | | | Value ($) | |
| | | | |
| Municipal Investments 99.8% | |
| Alabama 0.4% | |
| Tuscaloosa County, AL, Industrial Development Gulf Opportunity Zone, Hunt Refining Project, Series C, 0.3%*, 12/1/2027 | | | 10,000,000 | | | | 10,000,000 | |
| Alaska 1.1% | |
| Anchorage, AK, Tax Anticipation Notes, 1.5%, 12/29/2011 | | | 30,000,000 | | | | 30,237,724 | |
| Arkansas 0.3% | |
| Fort Smith, AR, Mitsubishi Power Systems Revenue, Recovery Zone Facility Bonds, 0.31%*, 10/1/2040, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 8,000,000 | | | | 8,000,000 | |
| California 7.4% | |
| California, Beaumont Utility Authority Revenue, Wastewater Enterprise Project, Series A, 0.31%*, 9/1/2041, LOC: Union Bank of CA | | | 4,450,000 | | | | 4,450,000 | |
| California, Clipper Tax-Exempt Certificate Trust, Series 2009-66, 144A, 0.29%*, 5/15/2030, LIQ: State Street Bank & Trust Co. | | | 13,100,000 | | | | 13,100,000 | |
| California, Educational Facilities Authority Revenue, Series R-11734, 144A, 0.25%*, 6/1/2011, LIQ: Citibank NA | | | 8,910,000 | | | | 8,910,000 | |
| California, Inland Valley Development Agency, Tax Allocation, 0.3%*, 3/1/2027, LOC: Union Bank of CA | | | 32,695,000 | | | | 32,695,000 | |
| California, Statewide Communities Development Authority Revenue, Retirement Housing Foundation, 0.3%*, 9/1/2030, LOC: KBC Bank NV | | | 26,200,000 | | | | 26,200,000 | |
| California, Statewide Communities Development Authority, Multi-Family Housing Revenue: | | | | | | | | |
| Series 2680, 144A, 0.36%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 15,110,000 | | | | 15,110,000 | |
| Series 29G, 144A, AMT, 0.4%*, 5/1/2039, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 61,000,000 | | | | 61,000,000 | |
| Series 2681, 144A, AMT, 0.46%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 11,190,000 | | | | 11,190,000 | |
| California, Wells Fargo Stage Trust, Series 72C, 144A, 0.28%*, 8/15/2039, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 21,500,000 | | | | 21,500,000 | |
| Palo Alto, CA, General Obligation, Series R-11859, 144A, 0.26%*, 2/1/2018, LIQ: Citibank NA | | | 3,120,000 | | | | 3,120,000 | |
| | | | | 197,275,000 | |
| Colorado 3.5% | |
| Colorado, Cornerstar Metropolitan District, Special Revenue, 0.66%*, 12/1/2037, LOC: Compass Bank | | | 15,500,000 | | | | 15,500,000 | |
| Colorado, Housing & Finance Authority, Single Family, "I", Series B-2, 144A, AMT, 0.8%*, 11/1/2026, SPA: Dexia Credit Local | | | 18,350,000 | | | | 18,350,000 | |
| Colorado, Lowry Economic Redevelopment Authority Revenue, Series A, 1.0%*, 12/1/2020, LOC: Compass Bank | | | 5,000,000 | | | | 5,000,000 | |
| Colorado Springs, CO, Utilities Revenue, Series A, 0.8%*, 11/1/2023, SPA: Dexia Credit Local | | | 55,500,000 | | | | 55,500,000 | |
| | | | | 94,350,000 | |
| Delaware 0.5% | |
| Delaware, BB&T Municipal Trust, Series 5000, 144A, 0.34%*, 10/1/2028, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 13,020,062 | | | | 13,020,062 | |
| Florida 7.2% | |
| Alachua County, FL, Housing Finance Authority, Multi-Family Revenue, Santa Fe I Apartments, AMT, 0.31%*, 12/15/2038, LOC: Citibank NA | | | 3,440,000 | | | | 3,440,000 | |
| Broward County, FL, Housing Finance Authority, Multi-Family Housing Revenue, Series 51G, 144A, AMT, 0.29%*, 6/1/2046, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 28,520,000 | | | | 28,520,000 | |
| Florida, BB&T Municipal Trust: | |
| Series 1010, 144A, 0.29%*, 1/15/2019, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 6,670,000 | | | | 6,670,000 | |
| Series 1029, 0.34%*, 7/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,510,000 | | | | 10,510,000 | |
| Series 1012, 144A, 0.34%*, 11/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 9,825,000 | | | | 9,825,000 | |
| Florida, Capital Trust Agency Housing Revenue, Atlantic Housing Foundation, Series A, 0.26%*, 7/15/2024, INS: Fannie Mae, LIQ: Fannie Mae | | | 19,000,000 | | | | 19,000,000 | |
| Florida, State Board of Public Education: | |
| "A", 0.25%*, 6/1/2027, SPA: Citibank NA | | | 5,840,000 | | | | 5,840,000 | |
| Series 3834Z, 144A, 0.26%*, 12/1/2015, LIQ: JPMorgan Chase Bank | | | 9,000,000 | | | | 9,000,000 | |
| Highlands County, FL, Health Facilities Authority Revenue, Series II R-11564, 144A, 0.27%*, 11/15/2014, LIQ: Citibank NA | | | 9,365,000 | | | | 9,365,000 | |
| Hillsborough County, FL, Aviation Revenue, 0.27%, 5/12/2011 | | | 3,625,000 | | | | 3,625,000 | |
| Hillsborough County, FL, Housing Finance Authority, Multi-Family Revenue, Hunt Club Apartments, 0.3%*, 8/15/2041, LOC: SunTrust Bank | | | 5,445,000 | | | | 5,445,000 | |
| Hillsborough County, FL, School Board, Certificates of Participation, Master Lease, Series C, 0.23%*, 7/1/2030, INS: NATL, LOC: Wells Fargo Bank NA | | | 33,040,000 | | | | 33,040,000 | |
| Jacksonville, FL, Health Facilities Authority Hospital Revenue, Series A, 0.25%*, 8/15/2033, LOC: Bank of America NA | | | 8,200,000 | | | | 8,200,000 | |
| Lee County, FL, Industrial Development Authority, Health Care Facilities Revenue, Hope Hospice Project, 0.27%*, 10/1/2027, LOC: Northern Trust Co. | | | 21,000,000 | | | | 21,000,000 | |
| Palm Beach County, FL, Community Foundation, Palm Beach Project Revenue, 0.29%*, 3/1/2034, LOC: Northern Trust Co. | | | 4,750,000 | | | | 4,750,000 | |
| Pinellas County, FL, Educational Facilities Authority Revenue, Barry University Project, 0.31%*, 10/1/2037, LOC: Bank of America NA | | | 9,005,000 | | | | 9,005,000 | |
| Sarasota County, FL, Health Care Facilities Authority Revenue, Bay Village Project, 0.4%*, 12/1/2023, LOC: Bank of America NA | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 191,935,000 | |
| Georgia 2.8% | |
| Georgia, Main Street Natural Gas, Inc., Gas Project Revenue, Series A, 0.26%*, 8/1/2040, SPA: Royal Bank of Canada | | | 65,200,000 | | | | 65,200,000 | |
| Georgia, Private Colleges & Universities Authority Revenue, Mercer University Project, Series C, 0.27%*, 10/1/2031, LOC: Branch Banking & Trust | | | 8,580,000 | | | | 8,580,000 | |
| | | | | 73,780,000 | |
| Hawaii 0.3% | |
| Hawaii, Pacific Health Special Purpose Revenue, Series 6C, 144A, 0.29%*, 7/1/2040, LIQ: Wells Fargo Bank NA | | | 8,820,000 | | | | 8,820,000 | |
| Idaho 2.0% | |
| Idaho, State Tax Anticipation Notes, 144A, 2.0%, 6/30/2011 | | | 52,000,000 | | | | 52,135,343 | |
| Illinois 11.6% | |
| Chicago, IL, Board of Education, Dedicated Revenues, Series A-2, 0.26%*, 3/1/2026, LOC: Northern Trust Co. | | | 5,900,000 | | | | 5,900,000 | |
| Chicago, IL, General Obligation, Series 2008-068, 144A, 1.01%*, 1/1/2022, INS: AGMC, AMBAC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 11,480,000 | | | | 11,480,000 | |
| Chicago, IL, Metropolitan Water Reclamation District, Greater Chicago: | | | | | | | | |
| Series 2008-051, 144A, 0.86%*, 12/1/2028, LIQ: Dexia Credit Local | | | 5,360,000 | | | | 5,360,000 | |
| Series 2008-052, 144A, 0.86%*, 12/1/2035, LIQ: Dexia Credit Local | | | 25,110,000 | | | | 25,110,000 | |
| Cook County, IL, Catholic Theological Union Project Revenue, 0.31%*, 2/1/2035, LOC: Harris Trust & Savings Bank | | | 6,000,000 | | | | 6,000,000 | |
| Illinois, BB&T Municipal Trust, Series 5001, 144A, 0.34%*, 6/1/2020, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 17,314,484 | | | | 17,314,484 | |
| Illinois, Development Finance Authority, Industrial Project Revenue, Grecian Delight Foods Project, AMT, 0.49%*, 8/1/2019, LOC: LaSalle Bank NA | | | 1,765,000 | | | | 1,765,000 | |
| Illinois, Education Facility Authority Revenue, Series N, 0.3%, 6/1/2011 | | | 74,465,000 | | | | 74,465,000 | |
| Illinois, Finance Authority Industrial Development Revenue, Fitzpatrick Brothers, 0.27%*, 4/1/2033, LOC: Northern Trust Co. | | | 4,600,000 | | | | 4,600,000 | |
| Illinois, Finance Authority Revenue, "A", 144A, 0.25%*, 12/1/2042, LIQ: Citibank NA | | | 5,445,000 | | | | 5,445,000 | |
| Illinois, Finance Authority Revenue, Clare Oaks, Series C, 0.36%*, 11/1/2040, LOC: Sovereign Bank FSB | | | 27,680,000 | | | | 27,680,000 | |
| Illinois, Finance Authority Revenue, Northwestern University: | |
| Series A, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 14,000,000 | | | | 14,000,000 | |
| Series C, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 10,000,000 | | | | 10,000,000 | |
| Illinois, Finance Authority, Pollution Control Revenue, Commonwealth Edison Co., Series F, 144A, 0.25%*, 3/1/2017, LOC: JPMorgan Chase Bank | | | 3,700,000 | | | | 3,700,000 | |
| Illinois, State Toll Highway Authority Revenue, Senior Priority, Series A-2A, 0.29%*, 7/1/2030, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 15,000,000 | | | | 15,000,000 | |
| Illinois, State Wells Fargo Stage Trust, Series 47C, 144A, 0.29%*, 12/1/2024, INS: AGMC, LIQ: Wells Fargo Bank NA | | | 33,190,000 | | | | 33,190,000 | |
| Illinois, University of Illinois Revenue, "A", 144A, 0.27%*, 4/1/2035, INS: NATL, LIQ: Citibank NA | | | 14,300,000 | | | | 14,300,000 | |
| Mundelein, IL, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 0.54%*, 1/1/2015, LOC: Northern Trust Co. | | | 6,500,000 | | | | 6,500,000 | |
| Woodstock, IL, Multi-Family Housing Revenue, Willow Brooke Apartments, AMT, 0.29%*, 4/1/2042, LOC: Wells Fargo Bank NA | | | 25,905,000 | | | | 25,905,000 | |
| | | | | 307,714,484 | |
| Indiana 0.6% | |
| Indiana, Health & Educational Facility, Financing Authority Revenue, Greenwood Village South Project, Series A, 0.36%*, 5/1/2036, LOC: Sovereign Bank FSB | | | 6,155,000 | | | | 6,155,000 | |
| Terre Haute, IN, Westminster Village Revenue, Series A, 0.36%*, 8/1/2036, LOC: Sovereign Bank FSB | | | 9,245,000 | | | | 9,245,000 | |
| | | | | 15,400,000 | |
| Iowa 0.6% | |
| Iowa, Finance Authority, Multi-Family Revenue, Housing Windsor on River, Series A, AMT, 0.29%*, 5/1/2042, LOC: Wells Fargo Bank NA | | | 17,000,000 | | | | 17,000,000 | |
| Kansas 1.7% | |
| Kansas, State Department of Transportation Highway Revenue, Series D, 0.37%*, 3/1/2012, LIQ: Dexia Credit Local | | | 5,040,000 | | | | 5,040,000 | |
| Kansas, State Development Finance Authority, Multi-Family Revenue, Oak Ridge Park II Project, Series X, AMT, 0.34%*, 12/1/2036, LOC: US Bank NA | | | 3,650,000 | | | | 3,650,000 | |
| Lenexa, KS, Revenue Bond, Series 2007-302, 144A, 0.38%*, 2/1/2012, LIQ: Bank of America NA | | | 11,565,000 | | | | 11,565,000 | |
| Wichita, KS, General Obligation, Series 240, 0.45%, 9/15/2011 | | | 23,800,000 | | | | 23,800,000 | |
| | | | | 44,055,000 | |
| Kentucky 0.2% | |
| Mason County, KY, Pollution Control Revenue, East Kentucky Power Corp., Inc., Series B-2, 0.85%*, 10/15/2014, SPA: National Rural Utilities Cooperative Finance Corp. | | | 4,500,000 | | | | 4,500,000 | |
| Louisiana 0.9% | |
| Lake Charles, LA, Harbor & Terminal District Revenue, Lake Charles Cogeneration, 0.37%, Mandatory Put 5/31/2011 @ 100, 11/1/2040 | | | 20,000,000 | | | | 20,000,000 | |
| Louisiana, Public Facilities Authority Revenue, C-Port LLC Project, Series C, 0.29%*, 10/1/2028, LOC: Bank of America NA | | | 4,950,000 | | | | 4,950,000 | |
| | | | | 24,950,000 | |
| Maine 0.4% | |
| Maine, State Housing Authority Mortgage Purchase, Series B, AMT, 0.31%*, 11/15/2041, SPA: KBC Bank NV | | | 10,000,000 | | | | 10,000,000 | |
| Maryland 0.8% | |
| Baltimore, MD, Municipal Securities Trust Receipts, SGA 152, "A", 144A, 0.3%*, 7/1/2020, INS: NATL, LOC: Societe Generale | | | 10,000,000 | | | | 10,000,000 | |
| Montgomery County, MD, 0.26%, 5/12/2011 | | | 11,400,000 | | | | 11,400,000 | |
| | | | | 21,400,000 | |
| Massachusetts 3.2% | |
| Massachusetts, Bay Transportation Authority, General Transportation Systems, 0.6%*, 3/1/2030, SPA: Dexia Credit Local | | | 11,000,000 | | | | 11,000,000 | |
| Massachusetts, Health & Education University Revenue, 0.26%, 7/8/2011 | | | 8,500,000 | | | | 8,500,000 | |
| Massachusetts, Macon Trust, Series 2007-310, 144A, 0.38%*, 6/15/2012, LIQ: Bank of America NA, LOC: Bank of America NA | | | 7,620,000 | | | | 7,620,000 | |
| Massachusetts, State Development Finance Agency Revenue, New Bedford Waste Services LLC, AMT, 0.32%*, 6/1/2021, LOC: Comerica Bank | | | 3,280,000 | | | | 3,280,000 | |
| Massachusetts, State Development Finance Agency Revenue, Northfield Mount Hermon, 0.28%*, 10/1/2042, LOC: JPMorgan Chase Bank | | | 4,700,000 | | | | 4,700,000 | |
| Massachusetts, State Revenue Anticipation Notes, Series C, 2.0%, 6/23/2011 | | | 50,000,000 | | | | 50,121,935 | |
| | | | | 85,221,935 | |
| Michigan 6.7% | |
| BlackRock MuniYield Michigan Quality Fund, Inc., Series W-7-1446, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,000,000 | | | | 15,000,000 | |
| Michigan, Finance Authority Revenue, State Aid Notes, Series D-3, 144A, 2.0%, 8/22/2011, LOC: Scotiabank | | | 43,000,000 | | | | 43,215,907 | |
| Michigan, RBC Municipal Products, Inc. Trust, Series L-25, 144A, AMT, 0.29%*, 9/1/2033, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 50,000,000 | | | | 50,000,000 | |
| Michigan, State Hospital Finance Authority Revenue, Ascension Health Senior Credit Group: | | | | | | | | |
| Series F-7, 0.35%*, 11/15/2047 | | | 11,200,000 | | | | 11,200,000 | |
| Series F-6, 0.35%**, 11/15/2049 | | | 10,000,000 | | | | 10,000,000 | |
| Series F-8, 0.35%**, 11/15/2049 | | | 5,000,000 | | | | 5,000,000 | |
| Series F-2, 0.45%, Mandatory Put 3/1/2012 @ 100, 11/15/2047 | | | 35,000,000 | | | | 35,000,000 | |
| Michigan, State Strategic Fund Ltd. Obligation Revenue, Kroger Co. Recovery Zone Facility, 0.32%*, 1/1/2026, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 178,915,907 | |
| Minnesota 0.3% | |
| Coon Rapids, MN, Industrial Development Revenue, Kurt Manufacturing Project: | | | | | | | | |
| AMT, 0.29%*, 11/1/2027, LOC: US Bank NA | | | 5,000,000 | | | | 5,000,000 | |
| AMT, 0.44%*, 11/1/2017, LOC: US Bank NA | | | 1,635,000 | | | | 1,635,000 | |
| | | | | 6,635,000 | |
| Mississippi 0.9% | |
| Mississippi, Redstone Partners Floaters/Residuals Trust: | |
| Series C, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 9,350,000 | | | | 9,350,000 | |
| Series B, AMT, 0.6%*, 12/1/2047, LIQ: Wells Fargo Bank NA, LOC: Wells Fargo Bank NA | | | 5,696,368 | | | | 5,696,368 | |
| Series A, AMT, 0.6%*, 4/1/2048, LOC: Wells Fargo Bank NA | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 24,546,368 | |
| Missouri 0.9% | |
| Missouri, State Development Finance Board, 0.3%, 5/24/2011 | | | 12,114,000 | | | | 12,114,000 | |
| Missouri, State Health & Educational Facilities Authority Revenue, St. Louis University, Series B-2, 0.2%*, 10/1/2035, LOC: Bank of America NA | | | 5,765,000 | | | | 5,765,000 | |
| Platte County, MO, Industrial Development Authority Revenue, Complete Home Concepts, Series A, AMT, 0.29%*, 1/1/2039, LOC: Columbian Bank | | | 6,800,000 | | | | 6,800,000 | |
| | | | | 24,679,000 | |
| Nebraska 0.4% | |
| Washington County, NE, Wastewater & Solid Waste Disposal Facilities Revenue, Series 24C, 144A, AMT, 0.36%*, 4/1/2035, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 9,670,000 | | | | 9,670,000 | |
| Nevada 0.5% | |
| Nevada, Housing Division, Single Family Mortgage Revenue: | |
| Series B, AMT, 0.32%*, 4/1/2042, INS: Fannie Mae, Freddie Mac & Ginnie Mae, SPA: JPMorgan Chase Bank | | | 8,000,000 | | | | 8,000,000 | |
| Series A, AMT, 0.42%*, 10/1/2039, INS: Fannie Mae, Freddie Mac & Ginnie Mae | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 12,700,000 | |
| New Hampshire 0.2% | |
| New Hampshire, Health & Education Facilities Authority Revenue, Easter Seals Rehabilitation Center, Series A, 0.27%*, 12/1/2034, LOC: Citizens Bank of NH | | | 4,600,000 | | | | 4,600,000 | |
| New Jersey 0.7% | |
| BlackRock MuniYield New Jersey Quality Fund, Inc., Series W-7-1022, AMT, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,200,000 | | | | 15,200,000 | |
| New Jersey, Economic Development Authority, Industrial Development Revenue, CST-Products LLC Project, AMT, 0.43%*, 4/1/2026, LOC: National Bank of Canada | | | 2,600,000 | | | | 2,600,000 | |
| | | | | 17,800,000 | |
| New Mexico 2.7% | |
| New Mexico, State Tax & Revenue Anticipation Notes: | |
| 1.5%, 6/30/2011 | | | 25,000,000 | | | | 25,049,099 | |
| 2.0%, 6/30/2011 | | | 25,000,000 | | | | 25,069,593 | |
| Santa Fe, NM, Gross Receipts Tax Revenue, Wastewater Systems, Series B, 0.28%*, 6/1/2022, LOC: BNP Paribas | | | 15,900,000 | | | | 15,900,000 | |
| University of New Mexico, Systems Improvement Revenues, 0.27%*, 6/1/2026, SPA: JPMorgan Chase Bank | | | 5,820,000 | | | | 5,820,000 | |
| | | | | 71,838,692 | |
| New York 7.9% | |
| Albany, NY, Industrial Development Agency, Civic Facility Revenue, The College of Saint Rose, Series A, 0.35%*, 7/1/2037, INS: NATL, LOC: Bank of America NA | | | 9,820,000 | | | | 9,820,000 | |
| Hempstead, NY, Industrial Development Agency Revenue, Series 92G, 144A, AMT, 0.4%*, 10/1/2045, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 23,775,000 | | | | 23,775,000 | |
| Monroe County, NY, Industrial Development Corp. Revenue, St. Ann's Home Aged Project, 0.26%*, 12/1/2040, LOC: HSBC Bank USA NA | | | 6,105,000 | | | | 6,105,000 | |
| Nassau County, NY, Industrial Development Agency Revenue, Series 75G, 144A, AMT, 0.28%*, 12/1/2033, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 29,995,000 | | | | 29,995,000 | |
| New York, Liberty Development Corp., World Trade Center, Series A-2, 144A, 0.35%, Mandatory Put 2/1/2012 @ 100, 12/1/2049 | | | 11,000,000 | | | | 11,000,000 | |
| New York, State Energy Research & Development Authority Facilities Revenue, Consolidated Edison Co. of New York, Inc., Series A-3, 144A, 0.27%*, 5/1/2039, LOC: Mizuho Corporate Bank | | | 15,000,000 | | | | 15,000,000 | |
| New York, State Mortgage Agency, Homeowner Mortgage Revenue: | | | | | | | | |
| Series 135, AMT, 0.5%*, 4/1/2037, SPA: Dexia Credit Local | | | 5,500,000 | | | | 5,500,000 | |
| Series 157, 0.75%*, 4/1/2047, SPA: Dexia Credit Local | | | 11,200,000 | | | | 11,200,000 | |
| New York, Wells Fargo Stage Trust, Series 4C, 144A, 0.29%*, 9/1/2040, LIQ: Wells Fargo Bank NA | | | 11,540,000 | | | | 11,540,000 | |
| New York City, NY, Municipal Water Finance Authority, Water & Sewer Revenue, Series F-2, 0.26%*, 6/15/2033, SPA: JPMorgan Chase Bank | | | 5,000,000 | | | | 5,000,000 | |
| New York City, NY, Transitional Finance Authority Revenue, Series 3866, 144A, 0.27%*, 8/1/2011, LIQ: JPMorgan Chase & Co. | | | 60,000,000 | | | | 60,000,000 | |
| Oyster Bay, NY, Bond Anticipation Notes, 2.0%, 3/9/2012 | | | 21,800,000 | | | | 22,089,387 | |
| | | | | 211,024,387 | |
| North Carolina 4.6% | |
| Cleveland County, NC, Industrial Facilities & Pollution Control Financing Authority, Curtiss-Wright Flight Systems, AMT, 0.35%*, 11/1/2023, LOC: Bank of America NA | | | 8,400,000 | | | | 8,400,000 | |
| North Carolina, BB&T Municipal Trust: | |
| Series 1027, 144A, 0.34%*, 3/1/2016, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,725,000 | | | | 10,725,000 | |
| Series 1032, 0.34%*, 1/7/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 11,625,000 | | | | 11,625,000 | |
| Series 1008, 144A, 0.34%*, 3/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,865,000 | | | | 5,865,000 | |
| Series 1011, 144A, 0.34%*, 4/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 7,520,000 | | | | 7,520,000 | |
| Series 1024, 144A, 0.34%*, 5/31/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 4,860,000 | | | | 4,860,000 | |
| Series 1009, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 17,075,000 | | | | 17,075,000 | |
| Series 1025, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,800,000 | | | | 10,800,000 | |
| North Carolina, Capital Educational Facilities Finance Agency Revenue, High Point University Project, 0.29%*, 12/1/2028, LOC: Branch Banking & Trust | | | 5,555,000 | | | | 5,555,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Campbell University, 0.29%*, 10/1/2034, LOC: Branch Banking & Trust | | | 5,845,000 | | | | 5,845,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Salem Academy & College Project, 0.29%*, 8/1/2030, LOC: Branch Banking & Trust | | | 7,200,000 | | | | 7,200,000 | |
| North Carolina, Medical Care Commission, Health Care Facilities Revenue, First Mortgage Deerfield, Series B, 0.29%*, 11/1/2038, LOC: Branch Banking & Trust | | | 10,035,000 | | | | 10,035,000 | |
| Person County, NC, Industrial Facilities & Pollution Control Financing Authority, Certainteed Gypsum, Inc., 0.24%*, 11/1/2035, LOC: Credit Industrial et Commercial | | | 16,625,000 | | | | 16,625,000 | |
| | | | | 122,130,000 | |
| Ohio 0.6% | |
| Ohio, Clipper Tax-Exempt Certificate Trust, Certificate of Participation, Series 2009-28, 144A, AMT, 0.38%*, 3/1/2035, LIQ: State Street Bank & Trust Co. | | | 2,460,000 | | | | 2,460,000 | |
| Ohio, Redstone Partners Floaters/Residuals Trust, Housing Finance Authority: | | | | | | | | |
| Series C, 144A, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 9,780,000 | | | | 9,780,000 | |
| Series D, 144A, AMT, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 4,340,000 | | | | 4,340,000 | |
| | | | | 16,580,000 | |
| Oregon 6.2% | |
| Oregon, State Tax Anticipation Notes, Series A, 144A, 2.0%, 6/30/2011 | | | 152,000,000 | | | | 152,400,629 | |
| Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project: | | | | | | | | |
| 0.29%*, 5/1/2034, LOC: Bank of America NA | | | 8,515,000 | | | | 8,515,000 | |
| 0.29%*, 5/1/2037, LOC: Bank of America NA | | | 5,385,000 | | | | 5,385,000 | |
| | | | | 166,300,629 | |
| Other 1.3% | |
| BlackRock Municipal Intermediate Duration Fund, Inc., Series W-7-2871, 144A, AMT, 0.51%**, 3/1/2041, LIQ: JPMorgan Chase Bank | | | 35,600,000 | | | | 35,600,000 | |
| Pennsylvania 1.3% | |
| Adams County, PA, Industrial Development Authority Revenue, Brethren Home Community Project, 0.3%*, 6/1/2032, LOC: PNC Bank NA | | | 7,180,000 | | | | 7,180,000 | |
| Allegheny County, PA, RBC Municipal Products, Inc. Trust Certificates, Series E-16, 144A, 0.27%*, 4/15/2039, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 22,490,000 | | | | 22,490,000 | |
| Beaver County, PA, Industrial Development Authority, Pollution Control Revenue, FirstEnergy Generation Corp., 0.22%*, 4/1/2041, LOC: UBS AG | | | 5,700,000 | | | | 5,700,000 | |
| | | | | 35,370,000 | |
| Puerto Rico 0.2% | |
| Puerto Rico, Commonwealth Highway & Transportation Authority Revenue, Series DCL 019, 144A, 0.9%*, 1/1/2029, INS: AGMC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 6,000,000 | | | | 6,000,000 | |
| South Carolina 0.4% | |
| South Carolina, BB&T Municipal Trust, Series 1013, 144A, 0.34%*, 1/1/2020, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,755,000 | | | | 5,755,000 | |
| South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Upper South Carolina, Inc. Project, 0.29%*, 9/1/2028, LOC: Branch Banking & Trust | | | 6,105,000 | | | | 6,105,000 | |
| | | | | 11,860,000 | |
| Tennessee 0.4% | |
| Blount County, TN, Public Building Authority, Local Government Public Improvement, Series E-5-B, 0.29%*, 6/1/2042, LOC: Branch Banking & Trust | | | 9,300,000 | | | | 9,300,000 | |
| Texas 11.0% | |
| Atascosa County, TX, Industrial Development Corp., Pollution Control Revenue, San Miguel Electric Cooperative, Inc., 0.4%*, 6/30/2020, GTY: National Rural Utilities Cooperative Finance Corp., SPA: National Rural Utilities Cooperative Finance Corp. | | | 44,200,000 | | | | 44,200,000 | |
| East Texas, Housing Finance, Redstone Partners Floaters/Residuals Trust, Series D, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 7,930,000 | | | | 7,930,000 | |
| Harris County, TX, Cultural Education Facilities Finance Corp. Revenue, Memorial Hermann Hospital Systems, Series D-3, 0.27%*, 6/1/2029, LOC: Bank of America NA | | | 14,900,000 | | | | 14,900,000 | |
| Harris County, TX, Health Facilities Development Corp., Hospital Revenue, Baylor College of Medicine, Series B, 0.24%*, 11/15/2047, LOC: Northern Trust Co. | | | 8,100,000 | | | | 8,100,000 | |
| Katy, TX, Independent School Building District, 0.27%*, 8/15/2033, SPA: Bank of America NA | | | 8,300,000 | | | | 8,300,000 | |
| North East, TX, Independent School District, Series 002, 144A, 0.65%*, 2/1/2029, LIQ: Dexia Credit Local | | | 11,325,000 | | | | 11,325,000 | |
| Tarrant County, TX, Redstone Partners Floaters/Residuals Trust, Series A, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 12,190,000 | | | | 12,190,000 | |
| Texas, Department of Housing, Series 2008-3022X, 144A, AMT, 0.4%*, 9/1/2032, INS: Fannie Mae, Freddie Mac & Ginnie Mae, LIQ: Bank of America NA | | | 4,980,000 | | | | 4,980,000 | |
| Texas, North East Independent School District, "A", 144A, 0.26%*, 8/1/2037, LIQ: Citibank NA | | | 8,935,000 | | | | 8,935,000 | |
| Texas, RBC Municipal Products, Inc. Trust, Series L-46, 144A, AMT, 0.29%*, 12/1/2034, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 52,995,000 | | | | 52,995,000 | |
| Texas, State General Obligation, "A", 144A, 0.26%*, 4/1/2029, LIQ: Citibank NA | | | 8,685,000 | | | | 8,685,000 | |
| Texas, State Tax & Revenue Anticipation Notes: | |
| Series 3812, 144A, 0.27%*, 8/31/2011, LIQ: JPMorgan Chase & Co. | | | 29,500,000 | | | | 29,500,000 | |
| Series 3813, 144A, 0.3%*, 8/31/2011, LIQ: JPMorgan Chase Bank | | | 38,000,000 | | | | 38,000,000 | |
| 2.0%, 8/31/2011 | | | 25,000,000 | | | | 25,135,681 | |
| Texas A&M University Revenue, 144A, 0.26%*, 5/15/2018, LIQ: Citibank NA | | | 2,800,000 | | | | 2,800,000 | |
| Texas City, TX, Industrial Development Corp. Revenue, Del Papa Realty Holdings, 0.28%*, 1/1/2051, LOC: Bank of America NA | | | 10,300,000 | | | | 10,300,000 | |
| Weslaco, TX, Health Facilities Development, Knapp Medical Center, Series A, 0.91%*, 6/1/2038, LOC: Compass Bank | | | 4,625,000 | | | | 4,625,000 | |
| | | | | 292,900,681 | |
| Vermont 0.2% | |
| Vermont, Educational & Health Buildings Financing Agency Revenue, Fletcher Allen Health Care, Series A, 0.24%*, 12/1/2030, LOC: TD Bank NA | | | 4,070,000 | | | | 4,070,000 | |
| Virginia 1.2% | |
| Arlington County, VA, Industrial Development Authority, Multi-Family Revenue, Series A, AMT, 0.31%*, 8/1/2047, INS: Freddie Mac, LIQ: Freddie Mac | | | 3,000,000 | | | | 3,000,000 | |
| Virginia, Federal Home Loan Mortgage Corp., Multi-Family Variable Rate Certificates, AMT, 0.31%*, 7/15/2050, LIQ: Freddie Mac | | | 19,085,000 | | | | 19,085,000 | |
| Virginia, RBC Municipal Products, Inc. Trust, Series C-2, 144A, AMT, 0.38%*, 1/1/2014, LOC: Royal Bank of Canada, SPA: Royal Bank of Canada | | | 9,050,000 | | | | 9,050,000 | |
| | | | | 31,135,000 | |
| Washington 1.3% | |
| University of Washington, 0.28%, 5/10/2011 | | | 23,000,000 | | | | 23,000,000 | |
| Washington, State Health Care Facilities Authority, Swedish Health Services, Series C, 0.25%*, 11/15/2046, LOC: Citibank NA | | | 3,900,000 | | | | 3,900,000 | |
| Washington, State Higher Education Facilities Authority Revenue, Seattle University Project, Series A, 0.27%*, 5/1/2028, LOC: US Bank NA | | | 8,545,000 | | | | 8,545,000 | |
| | | | | 35,445,000 | |
| West Virginia 3.2% | |
| Cabell County, WV, University Facilities Revenue, Provident Group Marshall Properties, Series A, 0.27%*, 7/1/2039, LOC: Bank of America NA | | | 20,000,000 | | | | 20,000,000 | |
| West Virginia, Public Energy Authority Revenue, Morgantown Association Project, AMT, 0.4%*, 7/1/2017, LOC: Dexia Credit Local | | | 65,000,000 | | | | 65,000,000 | |
| | | | | 85,000,000 | |
| Wisconsin 0.6% | |
| Plymouth, WI, Industrial Development Revenue, Masters Gallery Foods, Series A, AMT, 0.45%*, 5/1/2038, LOC: Wells Fargo Bank NA | | | 5,300,000 | | | | 5,300,000 | |
| Wisconsin, State Health & Educational Facilities Authority Revenue, Prohealth Care, Inc., Series B, 0.3%*, 2/1/2034, LOC: Chase Manhattan Bank | | | 11,225,000 | | | | 11,225,000 | |
| | | | | 16,525,000 | |
| Wyoming 0.6% | |
| Sweetwater County, WY, 0.3%, 6/10/2011 | | | 14,775,000 | | | | 14,775,000 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $2,655,195,212)+ | | | 99.8 | | | | 2,655,195,212 | |
| Other Assets and Liabilities, Net | | | 0.2 | | | | 6,012,980 | |
| Net Assets | | | 100.0 | | | | 2,661,208,192 | |
* Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of April 30, 2011.
** These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
+ The cost for federal income tax purposes was $2,655,195,212.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
AGMC: Assured Guaranty Municipal Corp.
AMBAC: Ambac Financial Group, Inc.
AMT: Subject to alternative minimum tax.
FSB: Federal Savings Bank
GTY: Guaranty Agreement
INS: Insured
LIQ: Liquidity Facility
LOC: Letter of Credit
NATL: National Public Finance Guarantee Corp.
SPA: Standby Bond Purchase Agreement
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Municipal Investments (a) | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
| Total | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
(a) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Tax-Exempt Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,655,195,212 | |
| Receivable for investments sold | | | 4,620,000 | |
| Receivable for Fund shares sold | | | 934,515 | |
| Interest receivable | | | 7,077,878 | |
| Due from Advisor | | | 4,095 | |
| Other assets | | | 105,818 | |
| Total assets | | | 2,667,937,518 | |
| Liabilities | |
| Cash overdraft | | | 4,581,713 | |
| Payable for Fund shares redeemed | | | 918,070 | |
| Distributions payable | | | 62,767 | |
| Accrued management fee | | | 133,641 | |
| Other accrued expenses and payables | | | 1,033,135 | |
| Total liabilities | | | 6,729,326 | |
| Net assets, at value | | $ | 2,661,208,192 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 676,116 | |
| Paid-in capital | | | 2,660,532,076 | |
| Net assets, at value | | $ | 2,661,208,192 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Tax-Exempt Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($10,598,969 ÷ 10,595,483 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($75,044,850 ÷ 75,020,161 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Cash Institutional Shares Net Asset Value, offering and redemption price per share ($1,492,310,747 ÷ 1,491,819,969 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Money Fund Net Asset Value, offering and redemption price per share ($366,030,472 ÷ 365,909,997 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Free Money Fund Class S Net Asset Value, offering and redemption price per share ($124,763,547 ÷ 124,722,636 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($81,988,417 ÷ 81,961,452 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Exempt Cash Managed Shares Net Asset Value, offering and redemption price per share ($127,448,310 ÷ 127,406,394 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Free Investment Class Net Asset Value, offering and redemption price per share ($383,022,880 ÷ 382,896,908 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Tax-Exempt Portfolio | |
Income: Interest | | $ | 12,045,887 | |
Expenses: Management fee | | | 1,955,813 | |
| Administration fee | | | 3,350,131 | |
| Services to shareholders | | | 1,364,156 | |
| Custodian fee | | | 68,016 | |
| Distribution and service fees | | | 2,569,390 | |
| Professional fees | | | 150,070 | |
| Trustees' fees and expenses | | | 102,796 | |
| Reports to shareholders | | | 197,069 | |
| Registration fees | | | 179,038 | |
| Other | | | 177,139 | |
| Total expenses before expense reductions | | | 10,113,618 | |
| Expense reductions | | | (2,277,709 | ) |
| Total expenses after expense reductions | | | 7,835,909 | |
| Net investment income | | | 4,209,978 | |
| Net realized gain (loss) from investments | | | 26,953 | |
| Net increase (decrease) in net assets resulting from operations | | $ | 4,236,931 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Tax-Exempt Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 4,209,978 | | | $ | 6,786,569 | |
| Net realized gain (loss) | | | 26,953 | | | | 42,867 | |
| Net increase in net assets resulting from operations | | | 4,236,931 | | | | 6,829,436 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (1,440 | ) | | | (2,046 | ) |
| Davidson Cash Equivalent Shares | | | (8,101 | ) | | | (9,092 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (3,424,889 | ) | | | (5,359,767 | ) |
| DWS Tax-Exempt Money Fund | | | (551,022 | ) | | | (1,068,021 | ) |
| DWS Tax-Free Money Fund Class S | | | (156,176 | ) | | | (283,931 | ) |
| Premier Money Market Shares | | | (1,265 | ) | | | (24,737 | ) |
| Service Shares | | | (7,236 | ) | | | (5,804 | ) |
| Tax-Exempt Cash Managed Shares | | | (18,703 | ) | | | (160,260 | ) |
| Tax-Free Investment Class | | | (41,260 | ) | | | (198,503 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (597 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (2,251 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | — | | | | (74,322 | ) |
| DWS Tax-Exempt Money Fund | | | — | | | | (13,853 | ) |
| DWS Tax-Free Money Fund Class S | | | — | | | | (4,326 | ) |
| Premier Money Market Shares | | | — | | | | (782 | ) |
| Service Shares | | | — | | | | (1,849 | ) |
| Tax-Exempt Cash Managed Shares | | | — | | | | (7,679 | ) |
| Tax-Free Investment Class | | | — | | | | (14,341 | ) |
| Total distributions | | | (4,210,092 | ) | | | (7,232,161 | ) |
Fund share transactions: Proceeds from shares sold | | | 9,995,553,494 | | | | 11,211,632,894 | |
| Reinvestment of distributions | | | 2,851,124 | | | | 5,434,005 | |
| Cost of shares redeemed | | | (10,411,552,190 | ) | | | (11,989,083,579 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (413,147,572 | ) | | | (772,016,680 | ) |
| Increase (decrease) in net assets | | | (413,120,733 | ) | | | (772,419,405 | ) |
| Net assets at beginning of period | | | 3,074,328,925 | | | | 3,846,748,330 | |
| Net assets at end of period (including undistributed net investment income of $676,116 and $649,277, respectively) | | $ | 2,661,208,192 | | | $ | 3,074,328,925 | |
The accompanying notes are an integral part of the financial statements.
Tax-Exempt Portfolio DWS Tax-Exempt Cash Institutional Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .002 | | | | .002 | | | | .016 | | | | .032 | | | | .034 | |
| Net realized and unrealized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | (.000 | )* |
| Total from investment operations | | | .002 | | | | .002 | | | | .016 | | | | .032 | | | | .034 | |
Less distributions from: Net investment income | | | (.002 | ) | | | (.002 | ) | | | (.016 | ) | | | (.032 | ) | | | (.034 | ) |
| Net realized gains | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.002 | ) | | | (.002 | ) | | | (.016 | ) | | | (.032 | ) | | | (.034 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| Total Return (%) | | | .16 | | | | .25 | | | | 1.58 | a | | | 3.20 | a | | | 3.46 | a |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 1,492 | | | | 1,725 | | | | 1,770 | | | | 1,751 | | | | 1,064 | |
| Ratio of expenses before expense reductions (%) | | | .20 | | | | .21 | | | | .23 | | | | .21 | | | | .21 | |
| Ratio of expenses after expense reductions (%) | | | .20 | | | | .21 | | | | .22 | | | | .21 | | | | .20 | |
| Ratio of net investment income (%) | | | .17 | | | | .24 | | | | 1.56 | | | | 3.12 | | | | 3.42 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
Tax-Exempt Portfolio Tax-Exempt Cash Managed Shares | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | * | | | .001 | | | | .013 | | | | .030 | | | | .032 | |
| Net realized and unrealized gain (loss) | | | .000 | * | | | .000 | * | | | .000 | * | | | .000 | * | | | (.000 | )* |
| Total from investment operations | | | .000 | * | | | .001 | | | | .013 | | | | .030 | | | | .032 | |
Less distributions from: Net investment income | | | (.000 | )* | | | (.001 | ) | | | (.013 | ) | | | (.030 | ) | | | (.032 | ) |
| Net realized gains | | | — | | | | (.000 | )* | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )* | | | (.001 | ) | | | (.013 | ) | | | (.030 | ) | | | (.032 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| Total Return (%) | | | .01 | a | | | .07 | a | | | 1.36 | | | | 2.99 | a | | | 3.24 | a |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 127 | | | | 209 | | | | 193 | | | | 250 | | | | 225 | |
| Ratio of expenses before expense reductions (%) | | | .39 | | | | .44 | | | | .45 | | | | .42 | | | | .43 | |
| Ratio of expenses after expense reductions (%) | | | .35 | | | | .39 | | | | .45 | | | | .41 | | | | .42 | |
| Ratio of net investment income (%) | | | .01 | | | | .06 | | | | 1.34 | | | | 2.91 | | | | 3.19 | |
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005. | |
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three funds: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio. These financial statements report on Tax-Exempt Portfolio (the "Fund").
Tax-Exempt Portfolio offers eight 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, Service Shares, Tax-Exempt Cash Managed Shares and Tax-Free Investment Class. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
The financial highlights for all classes of shares, other than DWS Tax-Exempt Cash Institutional Shares and Tax-Exempt Cash Managed Shares, are provided separately and are available upon request.
The Fund's investment income, realized gains and losses, and certain Fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of the Fund, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The Fund values all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders.
The Fund has reviewed the tax positions for the open tax years as of April 30, 2011 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income. Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. The Fund may take into account capital gains and losses in its daily dividend declarations. The Fund may also make additional distributions for tax purposes if necessary.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Fund.
At April 30, 2011, the Fund's components of distributable earnings on a tax basis are as follows:
| Undistributed tax-exempt income* | | $ | 738,883 | |
In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:
| | | Years Ended April 30, | |
| | | 2011 | | | 2010 | |
| Distributions from tax-exempt income | | $ | 4,210,092 | | | $ | 7,201,436 | |
| Distributions from long-term capital gains | | $ | — | | | $ | 30,725 | |
* For tax purposes, short-term capital gains distributions are considered ordinary income distributions.
Expenses. Expenses of the Trust arising in connection with a specific Fund are allocated to that Fund. Other Trust expenses which cannot be directly attributed to a Fund are apportioned pro rata on the basis of relative net assets among the Funds in the Trust.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Other. Investment transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
2. Related Parties
Management Agreement. Under an Amended and Restated Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
In addition, the Fund pays a monthly management fee based on the combined average daily net assets of the three Funds and allocated to the Fund based on its relative net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .120 | % |
| Next $500 million of such net assets | | | .100 | % |
| Next $1 billion of such net assets | | | .075 | % |
| Next $1 billion of such net assets | | | .060 | % |
| Over $3 billion of such net assets | | | .050 | % |
For the period from May 1, 2010 through September 30, 2011, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the DWS Tax-Exempt Cash Institutional Shares to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 0.20%.
The Advisor also has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
In addition, the Advisor has agreed to voluntarily waive additional expenses. The waiver may be changed or terminated at any time without notice. Under these arrangements, the Advisor waived certain expenses on Tax-Exempt Cash Managed Shares.
Accordingly, for the year ended April 30, 2011, the Fund incurred a management fee equivalent to the following annual effective rate of the Fund's average daily net assets:
| | Annual Effective Rate |
| Tax-Exempt Portfolio | .06% |
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended April 30, 2011, the Administration Fee was as follows:
| | | Administration Fee | | | Unpaid at April 30, 2011 | |
| Tax-Exempt Portfolio | | $ | 3,350,131 | | | $ | 226,253 | |
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the year ended April 30, 2011, the amounts charged to the Fund by DISC were as follows:
| Tax-Exempt Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 12,532 | | | $ | 5,364 | |
| Davidson Cash Equivalent Shares | | | 121,647 | | | | — | | | | 41,015 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 196,624 | | | | — | | | | 61,668 | |
| DWS Tax-Exempt Money Fund | | | 134,008 | �� | | | — | | | | 39,976 | |
| DWS Tax-Free Money Fund Class S | | | 68,702 | | | | — | | | | 25,134 | |
| Premier Money Market Shares | | | 31,484 | | | | 6,558 | | | | — | |
| Service Shares | | | 182,607 | | | | 72,945 | | | | 41,130 | |
| Tax-Exempt Cash Managed Shares | | | 77,147 | | | | — | | | | 33,219 | |
| Tax-Free Investment Class | | | 444,553 | | | | — | | | | 153,350 | |
| | | $ | 1,292,741 | | | $ | 92,035 | | | $ | 400,856 | |
Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee"), calculated as a percentage of average daily net assets for the shares listed in the following table.
For the year ended April 30, 2011, the Distribution Fee was as follows:
| Tax-Exempt Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 47,479 | | | $ | 47,479 | | | | .00 | % | | | .33 | % |
| Davidson Cash Equivalent Shares | | | 243,294 | | | | 243,294 | | | | .00 | % | | | .30 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 434,433 | | | | 434,433 | | | | .00 | % | | | .60 | % |
| Tax-Free Investment Class | | | 1,032,179 | | | | 1,032,179 | | | | .00 | % | | | .25 | % |
| | | $ | 1,789,098 | | | $ | 1,789,098 | | | | | | | | | |
In addition, DIDI 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, 2011, the Service Fee was as follows:
| Tax-Exempt Portfolio: | | Service Fee | | | Waived | | | Unpaid at April 30, 2011 | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 35,969 | | | $ | — | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Shares | | | 202,745 | | | | 194,185 | | | | — | | | | .01 | % | | | .25 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | — | | | | .00 | % | | | .25 | % |
| Tax-Exempt Cash Managed Shares | | | 220,855 | | | | 61,372 | | | | 10,827 | | | | .11 | % | | | .15 | % |
| Tax-Free Investment Class | | | 289,010 | | | | 73,337 | | | | 22,721 | | | | .05 | % | | | .07 | % |
| | | $ | 780,292 | | | $ | 396,576 | | | $ | 33,548 | | | | | | | | | |
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended April 30, 2011, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" was as follows:
| Fund | | Total Aggregated | | | Unpaid at April 30, 2011 | |
| Tax-Exempt Portfolio | | $ | 105,603 | | | $ | 41,114 | |
Trustees' Fees and Expenses. The Fund paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.
3. Concentration of Ownership
From time to time, the Fund may have a concentration of several shareholder accounts holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Fund.
At April 30, 2011, there were two shareholder accounts that held approximately 13% and 11%, respectively, of the outstanding shares of the Tax-Exempt Portfolio.
4. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus, if LIBOR exceeds the Federal Funds Rate, the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
5. Share Transactions
The following table summarizes share and dollar activity in the Fund:
Tax-Exempt Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 37,505,008 | | | $ | 37,505,008 | | | | 49,394,797 | | | $ | 49,394,797 | |
| Davidson Cash Equivalent Shares | | | 108,372,167 | | | | 108,372,167 | | | | 140,991,927 | | | | 140,991,927 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 8,705,410,264 | | | | 8,705,410,264 | | | | 9,545,076,388 | | | | 9,545,076,388 | |
| DWS Tax-Exempt Money Fund | | | 234,765,709 | | | | 234,765,709 | | | | 183,055,619 | | | | 183,055,619 | |
| DWS Tax-Free Money Fund Class S | | | 40,065,751 | | | | 40,065,751 | | | | 39,784,180 | | | | 39,784,180 | |
Premier Money Market Shares* | | | 17,963,464 | | | | 17,963,464 | | | | 109,396,548 | | | | 109,396,548 | |
| Service Shares | | | 171,592,837 | | | | 171,592,837 | | | | 277,971,196 | | | | 277,971,196 | |
| Tax-Exempt Cash Managed Shares | | | 270,920,971 | | | | 270,920,971 | | | | 471,983,176 | | | | 471,983,176 | |
| Tax-Free Investment Class | | | 408,957,323 | | | | 408,957,323 | | | | 393,979,063 | | | | 393,979,063 | |
| | | | | | | $ | 9,995,553,494 | | | | | | | $ | 11,211,632,894 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 1,433 | | | $ | 1,433 | | | | 2,653 | | | $ | 2,653 | |
| Davidson Cash Equivalent Shares | | | 8,078 | | | | 8,078 | | | | 11,387 | | | | 11,387 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 2,103,424 | | | | 2,103,424 | | | | 3,842,512 | | | | 3,842,512 | |
| DWS Tax-Exempt Money Fund | | | 541,218 | | | | 541,218 | | | | 1,065,790 | | | | 1,065,790 | |
| DWS Tax-Free Money Fund Class S | | | 147,957 | | | | 147,957 | | | | 270,634 | | | | 270,634 | |
Premier Money Market Shares* | | | 1,023 | | | | 1,023 | | | | 23,773 | | | | 23,773 | |
| Service Shares | | | 7,238 | | | | 7,238 | | | | 7,673 | | | | 7,673 | |
| Tax-Exempt Cash Managed Shares | | | 84 | | | | 84 | | | | 886 | | | | 886 | |
| Tax-Free Investment Class | | | 40,669 | | | | 40,669 | | | | 208,697 | | | | 208,697 | |
| | | | | | | $ | 2,851,124 | | | | | | | $ | 5,434,005 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (44,799,949 | ) | | | | $ (44,799,949) | | | (57,387,875 | ) | | $ | (57,387,875 | ) |
| Davidson Cash Equivalent Shares | | | (113,236,507 | ) | | | (113,236,507 | ) | | | (128,403,019 | ) | | | (128,403,019 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (8,940,648,532 | ) | | | (8,940,648,532 | ) | | | (9,593,718,982 | ) | | | (9,593,718,982 | ) |
| DWS Tax-Exempt Money Fund | | | (297,512,567 | ) | | | (297,512,567 | ) | | | (258,965,066 | ) | | | (258,965,066 | ) |
| DWS Tax-Free Money Fund Class S | | | (55,821,788 | ) | | | (55,821,788 | ) | | | (63,795,223 | ) | | | (63,795,223 | ) |
Premier Money Market Shares* | | | (47,338,154 | ) | | | (47,338,154 | ) | | | (571,302,157 | ) | | | (571,302,157 | ) |
| Service Shares | | | (126,254,371 | ) | | | (126,254,371 | ) | | | (303,098,913 | ) | | | (303,098,913 | ) |
| Tax-Exempt Cash Managed Shares | | | (352,406,232 | ) | | | (352,406,232 | ) | | | (455,851,093 | ) | | | (455,851,093 | ) |
| Tax-Free Investment Class | | | (433,534,090 | ) | | | (433,534,090 | ) | | | (556,561,251 | ) | | | (556,561,251 | ) |
| | | | | | | $ | (10,411,552,190 | ) | | | | | | $ | (11,989,083,579 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (7,293,508 | ) | | | (7,293,508 | ) | | | (7,990,425 | ) | | $ | (7,990,425 | ) |
| Davidson Cash Equivalent Shares | | | (4,856,262 | ) | | | (4,856,262 | ) | | | 12,600,295 | | | | 12,600,295 | |
| DWS Tax-Exempt Cash Institutional Shares | | | (233,134,844 | ) | | | (233,134,844 | ) | | | (44,800,082 | ) | | | (44,800,082 | ) |
| DWS Tax-Exempt Money Fund | | | (62,205,640 | ) | | | (62,205,640 | ) | | | (74,843,657 | ) | | | (74,843,657 | ) |
| DWS Tax-Free Money Fund Class S | | | (15,608,080 | ) | | | (15,608,080 | ) | | | (23,740,409 | ) | | | (23,740,409 | ) |
Premier Money Market Shares* | | | (29,373,667 | ) | | | (29,373,667 | ) | | | (461,881,836 | ) | | | (461,881,836 | ) |
| Service Shares | | | 45,345,704 | | | | 45,345,704 | | | | (25,120,044 | ) | | | (25,120,044 | ) |
| Tax-Exempt Cash Managed Shares | | | (81,485,177 | ) | | | (81,485,177 | ) | | | 16,132,969 | | | | 16,132,969 | |
| Tax-Free Investment Class | | | (24,536,098 | ) | | | (24,536,098 | ) | | | (162,373,491 | ) | | | (162,373,491 | ) |
| | | | | | | $ | (413,147,572 | ) | | | | | | $ | (772,016,680 | ) |
* The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Cash Account Trust:
We have audited the accompanying statement of assets and liabilities of the Tax-Exempt Portfolio (the "Portfolio"), one of the portfolios constituting Cash Account Trust (the "Trust"), including the investment portfolio, as of April 30, 2011, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Tax-Exempt Portfolio of Cash Account Trust at April 30, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
| | | |
Boston, Massachusetts June 20, 2011 | | |
Tax Information (Unaudited)
Of the dividends paid from net investment income for the taxable year ended April 30, 2011, 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.
Summary of Management Fee Evaluation by Independent Fee Consultant
October 3, 2010
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.
Qualifications
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
Summary of Administrative Fee Evaluation by Independent Fee Consultant
October 4, 2010
Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of a proposed pass-through to the funds of certain reporting costs associated with new regulations for money funds. My evaluation considered the following:
• My recently completed annual evaluation (please see my summary report of October 3, 2010), concluding that the prospective fees and expenses of all the DWS-sponsored money funds are reasonable.
• The fact that in my opinion the services DWS would provide under the combination of the Advisory and proposed Administration Agreements continues to be comparable with those typically provided to competitive funds under their management agreements.
• Management's analysis showing that the maximum total expense ratio impact of this change on any fund share class would be 1.3 basis points, which in my opinion is not material to my conclusions about the reasonableness of expenses.
Based on the foregoing considerations, in my opinion the proposed fees and expenses for the affected DWS-sponsored money funds are reasonable.
Thomas H. Mack
Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the fund as of April 30, 2011. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
| Independent Board Members |
Name, Year of Birth, Position with the Fund and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen | Other Directorships Held by Board Member |
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993 | Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (education committees); formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 118 | — |
John W. Ballantine (1946) Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Chairman of the Board, Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity); former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International | 118 | — |
Henry P. Becton, Jr. (1943) Board Member since 1990 | Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Public Radio International; Public Radio Exchange (PRX); The PBS Foundation; former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service | 118 | Lead Director, Becton Dickinson and Company2 (medical technology company); Lead Director, Belo Corporation2 (media company) |
Dawn-Marie Driscoll (1946) Board Member since 1987 | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization); former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2007) |
Keith R. Fox (1954) Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies | 118 | — |
Kenneth C. Froewiss (1945) Board Member since 2001 | Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996) | 118 | — |
Richard J. Herring (1946) Board Member since 1990 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; Independent Director of Barclays Bank Delaware (since September 2010); formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006) | 118 | Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007) |
William McClayton (1944) Board Member since 2004 | Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival | 118 | — |
Rebecca W. Rimel (1951) Board Member since 1995 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Trustee, Pro Publica (charitable organization) (2007-2010) | 118 | Director, CardioNet, Inc. (health care) (2009- present); Director, Viasys Health Care2 (January 2007- June 2007); |
William N. Searcy, Jr. (1946) Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 1998) |
Jean Gleason Stromberg (1943) Board Member since 1997 | Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996) | 118 | — |
Robert H. Wadsworth (1940) Board Member since 1999 | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association | 121 | — |
Officers4 |
Name, Year of Birth, Position with the Fund and Length of Time Served5 | Principal Occupation(s) During Past 5 Years and Other Directorships Held |
W. Douglas Beck, CFA9,10 (1967) President and CEO, 2011-present | Managing Director3, Deutsche Asset Management (2006-present); President and CEO of DWS family of funds and Head of Product Management, US for DWS Investments; formerly, Executive Director, Head of Product Management (2002-2006) and President (2005-2006) of the UBS Funds at UBS Global Asset Management; Co-Head of Manager Research/Managed Solutions Group, Merrill Lynch (1998-2002) |
John Millette7 (1962) Vice President and Secretary, 1999-present | Director3, Deutsche Asset Management |
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present | Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998) |
Caroline Pearson7 (1962) Chief Legal Officer, April 2010-present | Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010) |
Rita Rubin8 (1970) Assistant Secretary, 2009-present | Director3 and Senior Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007) |
Paul Antosca7 (1957) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006) |
Jack Clark7 (1967) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007) |
Diane Kenneally7 (1966) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
John Caruso8 (1965) Anti-Money Laundering Compliance Officer, 2010-present | Managing Director3, Deutsche Asset Management |
Robert Kloby8 (1962) Chief Compliance Officer, 2006-present | Managing Director3, Deutsche Asset Management |
1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.
2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3 Executive title, not a board directorship.
4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.
5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.
6 Address: 100 Plaza One, Jersey City, NJ 07311.
7 Address: One Beacon Street, Boston, MA 02108.
8 Address: 60 Wall Street, New York, NY 10005.
9 Address: 345 Park Avenue, New York, NY 10154.
10 Appointed May 17, 2011, effective June 1, 2011.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
APRIL 30, 2011 Annual Report to Shareholders |
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Tax-Exempt Portfolio DWS Tax-Exempt Money Fund |
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Contents
3 Portfolio Management Review 6 Information About Your Fund's Expenses 20 Statement of Assets and Liabilities 22 Statement of Operations 23 Statement of Changes in Net Assets 25 Notes to Financial Statements 32 Report of Independent Registered Public Accounting Firm 34 Summary of Management Fee Evaluation by Independent Fee Consultant 38 Summary of Administrative Fee Evaluation by Independent Fee Consultant 39 Board Members and Officers |
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, visit www.dws-investments.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.
An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of the fund may have a significant adverse effect on the share prices of all classes of shares of the fund. See the prospectus for specific details regarding the fund's risk profile.
The fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Portfolio Management Review
Market Overview
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
In September 2010, investors responded positively to US Federal Reserve Board (the Fed) Chairman Ben Bernanke's statement that the Fed would take additional steps in the form of "quantitative easing" to prop up the US economy as needed.1 Over the fund's most recent 12-month period, the money market yield curve has gradually steepened as longer-term rates rose in response to improved economic data and shorter maturities declined significantly based on a number of market influences.2 These included continuing strong demand and shrinking supply in the money market area; the removal (or unwind) of $200 billion in two-month Treasury bills from the market until Congress once again raises the US debt ceiling; a new FDIC fee assessment that has, in effect, removed some of the incentive for certain large banks to create supply in the money market area; and; lastly, the fact that the federal funds rate remains "on hold," keeping short-term rates lower overall.3
Positive Contributors to Fund Performance
We were able to maintain a competitive yield for the fund during the period ended April 30, 2011. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
In light of the continued fiscal stress on state and local governments, and with dynamic rule changes regarding money market funds coming from the SEC, we believed it was prudent to maintain a short average maturity. Toward the end of the period, the fund was invested mainly in short-term commercial paper and floating-rate securities. (The interest rate of floating-rate securities adjusts periodically based on indices such as the Securities Industry and Financial Market Association Index of Variable Rate Demand Notes.)4,5 Because the interest rates of these instruments adjust as market conditions change, they provide flexibility in an uncertain interest rate environment.
Our main focus, as always, is on preservation of capital, and during the period ending April 30, 2011, we maintained a short maturity and attempted to ensure ample liquidity for the fund.
Negative Contributors to Fund Performance
The types of securities that we were investing in the fund tended to have lower yields than issues carrying more risk. We preferred to be cautious during a time of market uncertainty. In the end this cost the fund some yield, but we believe that this represented a prudent approach to preserving principal in light of the circumstances during the period.
Outlook and Positioning
Assuming that Congress can agree to raise the US debt ceiling in the near future, significant short-term Treasury supply should return to the market in the coming months and remove some downward pressure on money market rates that carry the shortest maturities. In general, however, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested and continued strong demand from investors seeking principal stability and safety.
We continue our insistence on the highest credit quality within the fund.6 We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the fund and to seek competitive yield for our shareholders.
Fund Performance (as of April 30, 2011)
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, this share price isn't guaranteed and you could lose money by investing in money market funds. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of a fund may have a significant adverse effect on the share prices of all classes of shares of that fund. See the prospectus for specific details regarding the fund's risk profile.
| | |
| | | 7-Day Current Yield | |
| DWS Tax-Exempt Money Fund | | | 0.13 | % |
| (Equivalent Taxable Yield) | | | 0.20 | %* |
Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the fund over a 7-day period expressed as an annual percentage rate of the fund's shares outstanding. For the most current yield information, visit our Web site at www.dws-investments.com. * The equivalent taxable yield allows you to compare with the performance of taxable money market funds. For the Tax-Exempt Portfolio, the equivalent taxable yield is based upon the marginal income tax rate of 35%. Income may be subject to local taxes and, for some investors, the alternative minimum tax. | |
1 Quantitative easing — a monetary policy used by the government to increase the money supply. With this policy, the government purchases government and other securities from the market to create additional capital which financial institutions can use to promote lending and liquidity.
2 The yield curve — a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.
3 Treasury bill — a short-term (maturity up to 1 year) discounted government security sold through competitive bidding at weekly and monthly auctions in denominations of $10,000 to $1 million. Debt ceiling is the maximum borrowing power of a government entity. FDIC (Federal Deposit Insurance Corporation) is a federal agency that insures deposits in member banks and thrifts up to a specific dollar amount. Federal funds rate is the overnight bank lending rate.
4 Average maturity — the average length of time until the principal amount of a bond must be repaid.
5 The Securities Industry and Financial Market Association Index of Variable Rate Demand Notes is a weekly high-grade market index consisting of seven-day, tax-exempt, variable-rate demand notes produced by Municipal Market Data Group. Actual issues are selected from Municipal Market Data's database of more than 10,000 active issues.
Index returns, unlike fund returns, do not reflect any fees of expenses. It is not possible to invest directly into an index.
6 Credit quality — a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default. The fund's credit quality does not remove market risk and is subject to change.
Information About Your Fund's Expenses
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. 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, 2010 to April 30, 2011).
The tables illustrate your Fund's expenses in two ways:
•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in each Fund using each Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
• Hypothetical 5% Fund Return. This helps you to compare each Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using each Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | DWS Tax-Exempt Money Fund | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.57 | |
Expenses Paid per $1,000* | | $ | 1.09 | |
| Hypothetical 5% Fund Return | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,023.70 | |
Expenses Paid per $1,000* | | $ | 1.10 | |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratio | |
| DWS Tax-Exempt Money Fund | .22% |
For more information, please refer to the Fund's prospectus.
Tax-Exempt Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
Municipal Investments Municipal Variable Rate Demand Notes | 70% | 72% |
| Municipal Bonds and Notes | 27% | 28% |
| Municipal Floating Rate Notes | 3% | — |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Tax-Exempt Portfolio | 33 days | 44 days |
| National Tax-Free Retail Money Fund Average* | 28 days | 31 days |
* The Fund is compared to its respective iMoneyNet Category: National Tax-Free Retail Money Fund Average — Category consists of all national tax-free and municipal retail funds. Portfolio holdings of tax-free funds include Rated and Unrated Demand Notes, Rated and Unrated General Market Notes; Commercial Paper; Put Bonds — 6 months and less; Put Bonds — over 6 months; AMT Paper and Other Tax-Free Holdings.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 9-19. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Tax-Exempt Portfolio
| | | Principal Amount ($) | | | Value ($) | |
| | | | |
| Municipal Investments 99.8% | |
| Alabama 0.4% | |
| Tuscaloosa County, AL, Industrial Development Gulf Opportunity Zone, Hunt Refining Project, Series C, 0.3%*, 12/1/2027 | | | 10,000,000 | | | | 10,000,000 | |
| Alaska 1.1% | |
| Anchorage, AK, Tax Anticipation Notes, 1.5%, 12/29/2011 | | | 30,000,000 | | | | 30,237,724 | |
| Arkansas 0.3% | |
| Fort Smith, AR, Mitsubishi Power Systems Revenue, Recovery Zone Facility Bonds, 0.31%*, 10/1/2040, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 8,000,000 | | | | 8,000,000 | |
| California 7.4% | |
| California, Beaumont Utility Authority Revenue, Wastewater Enterprise Project, Series A, 0.31%*, 9/1/2041, LOC: Union Bank of CA | | | 4,450,000 | | | | 4,450,000 | |
| California, Clipper Tax-Exempt Certificate Trust, Series 2009-66, 144A, 0.29%*, 5/15/2030, LIQ: State Street Bank & Trust Co. | | | 13,100,000 | | | | 13,100,000 | |
| California, Educational Facilities Authority Revenue, Series R-11734, 144A, 0.25%*, 6/1/2011, LIQ: Citibank NA | | | 8,910,000 | | | | 8,910,000 | |
| California, Inland Valley Development Agency, Tax Allocation, 0.3%*, 3/1/2027, LOC: Union Bank of CA | | | 32,695,000 | | | | 32,695,000 | |
| California, Statewide Communities Development Authority Revenue, Retirement Housing Foundation, 0.3%*, 9/1/2030, LOC: KBC Bank NV | | | 26,200,000 | | | | 26,200,000 | |
| California, Statewide Communities Development Authority, Multi-Family Housing Revenue: | | | | | | | | |
| Series 2680, 144A, 0.36%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 15,110,000 | | | | 15,110,000 | |
| Series 29G, 144A, AMT, 0.4%*, 5/1/2039, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 61,000,000 | | | | 61,000,000 | |
| Series 2681, 144A, AMT, 0.46%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 11,190,000 | | | | 11,190,000 | |
| California, Wells Fargo Stage Trust, Series 72C, 144A, 0.28%*, 8/15/2039, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 21,500,000 | | | | 21,500,000 | |
| Palo Alto, CA, General Obligation, Series R-11859, 144A, 0.26%*, 2/1/2018, LIQ: Citibank NA | | | 3,120,000 | | | | 3,120,000 | |
| | | | | 197,275,000 | |
| Colorado 3.5% | |
| Colorado, Cornerstar Metropolitan District, Special Revenue, 0.66%*, 12/1/2037, LOC: Compass Bank | | | 15,500,000 | | | | 15,500,000 | |
| Colorado, Housing & Finance Authority, Single Family, "I", Series B-2, 144A, AMT, 0.8%*, 11/1/2026, SPA: Dexia Credit Local | | | 18,350,000 | | | | 18,350,000 | |
| Colorado, Lowry Economic Redevelopment Authority Revenue, Series A, 1.0%*, 12/1/2020, LOC: Compass Bank | | | 5,000,000 | | | | 5,000,000 | |
| Colorado Springs, CO, Utilities Revenue, Series A, 0.8%*, 11/1/2023, SPA: Dexia Credit Local | | | 55,500,000 | | | | 55,500,000 | |
| | | | | 94,350,000 | |
| Delaware 0.5% | |
| Delaware, BB&T Municipal Trust, Series 5000, 144A, 0.34%*, 10/1/2028, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 13,020,062 | | | | 13,020,062 | |
| Florida 7.2% | |
| Alachua County, FL, Housing Finance Authority, Multi-Family Revenue, Santa Fe I Apartments, AMT, 0.31%*, 12/15/2038, LOC: Citibank NA | | | 3,440,000 | | | | 3,440,000 | |
| Broward County, FL, Housing Finance Authority, Multi-Family Housing Revenue, Series 51G, 144A, AMT, 0.29%*, 6/1/2046, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 28,520,000 | | | | 28,520,000 | |
| Florida, BB&T Municipal Trust: | |
| Series 1010, 144A, 0.29%*, 1/15/2019, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 6,670,000 | | | | 6,670,000 | |
| Series 1029, 0.34%*, 7/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,510,000 | | | | 10,510,000 | |
| Series 1012, 144A, 0.34%*, 11/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 9,825,000 | | | | 9,825,000 | |
| Florida, Capital Trust Agency Housing Revenue, Atlantic Housing Foundation, Series A, 0.26%*, 7/15/2024, INS: Fannie Mae, LIQ: Fannie Mae | | | 19,000,000 | | | | 19,000,000 | |
| Florida, State Board of Public Education: | |
| "A", 0.25%*, 6/1/2027, SPA: Citibank NA | | | 5,840,000 | | | | 5,840,000 | |
| Series 3834Z, 144A, 0.26%*, 12/1/2015, LIQ: JPMorgan Chase Bank | | | 9,000,000 | | | | 9,000,000 | |
| Highlands County, FL, Health Facilities Authority Revenue, Series II R-11564, 144A, 0.27%*, 11/15/2014, LIQ: Citibank NA | | | 9,365,000 | | | | 9,365,000 | |
| Hillsborough County, FL, Aviation Revenue, 0.27%, 5/12/2011 | | | 3,625,000 | | | | 3,625,000 | |
| Hillsborough County, FL, Housing Finance Authority, Multi-Family Revenue, Hunt Club Apartments, 0.3%*, 8/15/2041, LOC: SunTrust Bank | | | 5,445,000 | | | | 5,445,000 | |
| Hillsborough County, FL, School Board, Certificates of Participation, Master Lease, Series C, 0.23%*, 7/1/2030, INS: NATL, LOC: Wells Fargo Bank NA | | | 33,040,000 | | | | 33,040,000 | |
| Jacksonville, FL, Health Facilities Authority Hospital Revenue, Series A, 0.25%*, 8/15/2033, LOC: Bank of America NA | | | 8,200,000 | | | | 8,200,000 | |
| Lee County, FL, Industrial Development Authority, Health Care Facilities Revenue, Hope Hospice Project, 0.27%*, 10/1/2027, LOC: Northern Trust Co. | | | 21,000,000 | | | | 21,000,000 | |
| Palm Beach County, FL, Community Foundation, Palm Beach Project Revenue, 0.29%*, 3/1/2034, LOC: Northern Trust Co. | | | 4,750,000 | | | | 4,750,000 | |
| Pinellas County, FL, Educational Facilities Authority Revenue, Barry University Project, 0.31%*, 10/1/2037, LOC: Bank of America NA | | | 9,005,000 | | | | 9,005,000 | |
| Sarasota County, FL, Health Care Facilities Authority Revenue, Bay Village Project, 0.4%*, 12/1/2023, LOC: Bank of America NA | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 191,935,000 | |
| Georgia 2.8% | |
| Georgia, Main Street Natural Gas, Inc., Gas Project Revenue, Series A, 0.26%*, 8/1/2040, SPA: Royal Bank of Canada | | | 65,200,000 | | | | 65,200,000 | |
| Georgia, Private Colleges & Universities Authority Revenue, Mercer University Project, Series C, 0.27%*, 10/1/2031, LOC: Branch Banking & Trust | | | 8,580,000 | | | | 8,580,000 | |
| | | | | 73,780,000 | |
| Hawaii 0.3% | |
| Hawaii, Pacific Health Special Purpose Revenue, Series 6C, 144A, 0.29%*, 7/1/2040, LIQ: Wells Fargo Bank NA | | | 8,820,000 | | | | 8,820,000 | |
| Idaho 2.0% | |
| Idaho, State Tax Anticipation Notes, 144A, 2.0%, 6/30/2011 | | | 52,000,000 | | | | 52,135,343 | |
| Illinois 11.6% | |
| Chicago, IL, Board of Education, Dedicated Revenues, Series A-2, 0.26%*, 3/1/2026, LOC: Northern Trust Co. | | | 5,900,000 | | | | 5,900,000 | |
| Chicago, IL, General Obligation, Series 2008-068, 144A, 1.01%*, 1/1/2022, INS: AGMC, AMBAC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 11,480,000 | | | | 11,480,000 | |
| Chicago, IL, Metropolitan Water Reclamation District, Greater Chicago: | | | | | | | | |
| Series 2008-051, 144A, 0.86%*, 12/1/2028, LIQ: Dexia Credit Local | | | 5,360,000 | | | | 5,360,000 | |
| Series 2008-052, 144A, 0.86%*, 12/1/2035, LIQ: Dexia Credit Local | | | 25,110,000 | | | | 25,110,000 | |
| Cook County, IL, Catholic Theological Union Project Revenue, 0.31%*, 2/1/2035, LOC: Harris Trust & Savings Bank | | | 6,000,000 | | | | 6,000,000 | |
| Illinois, BB&T Municipal Trust, Series 5001, 144A, 0.34%*, 6/1/2020, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 17,314,484 | | | | 17,314,484 | |
| Illinois, Development Finance Authority, Industrial Project Revenue, Grecian Delight Foods Project, AMT, 0.49%*, 8/1/2019, LOC: LaSalle Bank NA | | | 1,765,000 | | | | 1,765,000 | |
| Illinois, Education Facility Authority Revenue, Series N, 0.3%, 6/1/2011 | | | 74,465,000 | | | | 74,465,000 | |
| Illinois, Finance Authority Industrial Development Revenue, Fitzpatrick Brothers, 0.27%*, 4/1/2033, LOC: Northern Trust Co. | | | 4,600,000 | | | | 4,600,000 | |
| Illinois, Finance Authority Revenue, "A", 144A, 0.25%*, 12/1/2042, LIQ: Citibank NA | | | 5,445,000 | | | | 5,445,000 | |
| Illinois, Finance Authority Revenue, Clare Oaks, Series C, 0.36%*, 11/1/2040, LOC: Sovereign Bank FSB | | | 27,680,000 | | | | 27,680,000 | |
| Illinois, Finance Authority Revenue, Northwestern University: | |
| Series A, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 14,000,000 | | | | 14,000,000 | |
| Series C, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 10,000,000 | | | | 10,000,000 | |
| Illinois, Finance Authority, Pollution Control Revenue, Commonwealth Edison Co., Series F, 144A, 0.25%*, 3/1/2017, LOC: JPMorgan Chase Bank | | | 3,700,000 | | | | 3,700,000 | |
| Illinois, State Toll Highway Authority Revenue, Senior Priority, Series A-2A, 0.29%*, 7/1/2030, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 15,000,000 | | | | 15,000,000 | |
| Illinois, State Wells Fargo Stage Trust, Series 47C, 144A, 0.29%*, 12/1/2024, INS: AGMC, LIQ: Wells Fargo Bank NA | | | 33,190,000 | | | | 33,190,000 | |
| Illinois, University of Illinois Revenue, "A", 144A, 0.27%*, 4/1/2035, INS: NATL, LIQ: Citibank NA | | | 14,300,000 | | | | 14,300,000 | |
| Mundelein, IL, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 0.54%*, 1/1/2015, LOC: Northern Trust Co. | | | 6,500,000 | | | | 6,500,000 | |
| Woodstock, IL, Multi-Family Housing Revenue, Willow Brooke Apartments, AMT, 0.29%*, 4/1/2042, LOC: Wells Fargo Bank NA | | | 25,905,000 | | | | 25,905,000 | |
| | | | | 307,714,484 | |
| Indiana 0.6% | |
| Indiana, Health & Educational Facility, Financing Authority Revenue, Greenwood Village South Project, Series A, 0.36%*, 5/1/2036, LOC: Sovereign Bank FSB | | | 6,155,000 | | | | 6,155,000 | |
| Terre Haute, IN, Westminster Village Revenue, Series A, 0.36%*, 8/1/2036, LOC: Sovereign Bank FSB | | | 9,245,000 | | | | 9,245,000 | |
| | | | | 15,400,000 | |
| Iowa 0.6% | |
| Iowa, Finance Authority, Multi-Family Revenue, Housing Windsor on River, Series A, AMT, 0.29%*, 5/1/2042, LOC: Wells Fargo Bank NA | | | 17,000,000 | | | | 17,000,000 | |
| Kansas 1.7% | |
| Kansas, State Department of Transportation Highway Revenue, Series D, 0.37%*, 3/1/2012, LIQ: Dexia Credit Local | | | 5,040,000 | | | | 5,040,000 | |
| Kansas, State Development Finance Authority, Multi-Family Revenue, Oak Ridge Park II Project, Series X, AMT, 0.34%*, 12/1/2036, LOC: US Bank NA | | | 3,650,000 | | | | 3,650,000 | |
| Lenexa, KS, Revenue Bond, Series 2007-302, 144A, 0.38%*, 2/1/2012, LIQ: Bank of America NA | | | 11,565,000 | | | | 11,565,000 | |
| Wichita, KS, General Obligation, Series 240, 0.45%, 9/15/2011 | | | 23,800,000 | | | | 23,800,000 | |
| | | | | 44,055,000 | |
| Kentucky 0.2% | |
| Mason County, KY, Pollution Control Revenue, East Kentucky Power Corp., Inc., Series B-2, 0.85%*, 10/15/2014, SPA: National Rural Utilities Cooperative Finance Corp. | | | 4,500,000 | | | | 4,500,000 | |
| Louisiana 0.9% | |
| Lake Charles, LA, Harbor & Terminal District Revenue, Lake Charles Cogeneration, 0.37%, Mandatory Put 5/31/2011 @ 100, 11/1/2040 | | | 20,000,000 | | | | 20,000,000 | |
| Louisiana, Public Facilities Authority Revenue, C-Port LLC Project, Series C, 0.29%*, 10/1/2028, LOC: Bank of America NA | | | 4,950,000 | | | | 4,950,000 | |
| | | | | 24,950,000 | |
| Maine 0.4% | |
| Maine, State Housing Authority Mortgage Purchase, Series B, AMT, 0.31%*, 11/15/2041, SPA: KBC Bank NV | | | 10,000,000 | | | | 10,000,000 | |
| Maryland 0.8% | |
| Baltimore, MD, Municipal Securities Trust Receipts, SGA 152, "A", 144A, 0.3%*, 7/1/2020, INS: NATL, LOC: Societe Generale | | | 10,000,000 | | | | 10,000,000 | |
| Montgomery County, MD, 0.26%, 5/12/2011 | | | 11,400,000 | | | | 11,400,000 | |
| | | | | 21,400,000 | |
| Massachusetts 3.2% | |
| Massachusetts, Bay Transportation Authority, General Transportation Systems, 0.6%*, 3/1/2030, SPA: Dexia Credit Local | | | 11,000,000 | | | | 11,000,000 | |
| Massachusetts, Health & Education University Revenue, 0.26%, 7/8/2011 | | | 8,500,000 | | | | 8,500,000 | |
| Massachusetts, Macon Trust, Series 2007-310, 144A, 0.38%*, 6/15/2012, LIQ: Bank of America NA, LOC: Bank of America NA | | | 7,620,000 | | | | 7,620,000 | |
| Massachusetts, State Development Finance Agency Revenue, New Bedford Waste Services LLC, AMT, 0.32%*, 6/1/2021, LOC: Comerica Bank | | | 3,280,000 | | | | 3,280,000 | |
| Massachusetts, State Development Finance Agency Revenue, Northfield Mount Hermon, 0.28%*, 10/1/2042, LOC: JPMorgan Chase Bank | | | 4,700,000 | | | | 4,700,000 | |
| Massachusetts, State Revenue Anticipation Notes, Series C, 2.0%, 6/23/2011 | | | 50,000,000 | | | | 50,121,935 | |
| | | | | 85,221,935 | |
| Michigan 6.7% | |
| BlackRock MuniYield Michigan Quality Fund, Inc., Series W-7-1446, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,000,000 | | | | 15,000,000 | |
| Michigan, Finance Authority Revenue, State Aid Notes, Series D-3, 144A, 2.0%, 8/22/2011, LOC: Scotiabank | | | 43,000,000 | | | | 43,215,907 | |
| Michigan, RBC Municipal Products, Inc. Trust, Series L-25, 144A, AMT, 0.29%*, 9/1/2033, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 50,000,000 | | | | 50,000,000 | |
| Michigan, State Hospital Finance Authority Revenue, Ascension Health Senior Credit Group: | | | | | | | | |
| Series F-7, 0.35%*, 11/15/2047 | | | 11,200,000 | | | | 11,200,000 | |
| Series F-6, 0.35%**, 11/15/2049 | | | 10,000,000 | | | | 10,000,000 | |
| Series F-8, 0.35%**, 11/15/2049 | | | 5,000,000 | | | | 5,000,000 | |
| Series F-2, 0.45%, Mandatory Put 3/1/2012 @ 100, 11/15/2047 | | | 35,000,000 | | | | 35,000,000 | |
| Michigan, State Strategic Fund Ltd. Obligation Revenue, Kroger Co. Recovery Zone Facility, 0.32%*, 1/1/2026, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 178,915,907 | |
| Minnesota 0.3% | |
| Coon Rapids, MN, Industrial Development Revenue, Kurt Manufacturing Project: | | | | | | | | |
| AMT, 0.29%*, 11/1/2027, LOC: US Bank NA | | | 5,000,000 | | | | 5,000,000 | |
| AMT, 0.44%*, 11/1/2017, LOC: US Bank NA | | | 1,635,000 | | | | 1,635,000 | |
| | | | | 6,635,000 | |
| Mississippi 0.9% | |
| Mississippi, Redstone Partners Floaters/Residuals Trust: | |
| Series C, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 9,350,000 | | | | 9,350,000 | |
| Series B, AMT, 0.6%*, 12/1/2047, LIQ: Wells Fargo Bank NA, LOC: Wells Fargo Bank NA | | | 5,696,368 | | | | 5,696,368 | |
| Series A, AMT, 0.6%*, 4/1/2048, LOC: Wells Fargo Bank NA | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 24,546,368 | |
| Missouri 0.9% | |
| Missouri, State Development Finance Board, 0.3%, 5/24/2011 | | | 12,114,000 | | | | 12,114,000 | |
| Missouri, State Health & Educational Facilities Authority Revenue, St. Louis University, Series B-2, 0.2%*, 10/1/2035, LOC: Bank of America NA | | | 5,765,000 | | | | 5,765,000 | |
| Platte County, MO, Industrial Development Authority Revenue, Complete Home Concepts, Series A, AMT, 0.29%*, 1/1/2039, LOC: Columbian Bank | | | 6,800,000 | | | | 6,800,000 | |
| | | | | 24,679,000 | |
| Nebraska 0.4% | |
| Washington County, NE, Wastewater & Solid Waste Disposal Facilities Revenue, Series 24C, 144A, AMT, 0.36%*, 4/1/2035, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 9,670,000 | | | | 9,670,000 | |
| Nevada 0.5% | |
| Nevada, Housing Division, Single Family Mortgage Revenue: | |
| Series B, AMT, 0.32%*, 4/1/2042, INS: Fannie Mae, Freddie Mac & Ginnie Mae, SPA: JPMorgan Chase Bank | | | 8,000,000 | | | | 8,000,000 | |
| Series A, AMT, 0.42%*, 10/1/2039, INS: Fannie Mae, Freddie Mac & Ginnie Mae | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 12,700,000 | |
| New Hampshire 0.2% | |
| New Hampshire, Health & Education Facilities Authority Revenue, Easter Seals Rehabilitation Center, Series A, 0.27%*, 12/1/2034, LOC: Citizens Bank of NH | | | 4,600,000 | | | | 4,600,000 | |
| New Jersey 0.7% | |
| BlackRock MuniYield New Jersey Quality Fund, Inc., Series W-7-1022, AMT, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,200,000 | | | | 15,200,000 | |
| New Jersey, Economic Development Authority, Industrial Development Revenue, CST-Products LLC Project, AMT, 0.43%*, 4/1/2026, LOC: National Bank of Canada | | | 2,600,000 | | | | 2,600,000 | |
| | | | | 17,800,000 | |
| New Mexico 2.7% | |
| New Mexico, State Tax & Revenue Anticipation Notes: | |
| 1.5%, 6/30/2011 | | | 25,000,000 | | | | 25,049,099 | |
| 2.0%, 6/30/2011 | | | 25,000,000 | | | | 25,069,593 | |
| Santa Fe, NM, Gross Receipts Tax Revenue, Wastewater Systems, Series B, 0.28%*, 6/1/2022, LOC: BNP Paribas | | | 15,900,000 | | | | 15,900,000 | |
| University of New Mexico, Systems Improvement Revenues, 0.27%*, 6/1/2026, SPA: JPMorgan Chase Bank | | | 5,820,000 | | | | 5,820,000 | |
| | | | | 71,838,692 | |
| New York 7.9% | |
| Albany, NY, Industrial Development Agency, Civic Facility Revenue, The College of Saint Rose, Series A, 0.35%*, 7/1/2037, INS: NATL, LOC: Bank of America NA | | | 9,820,000 | | | | 9,820,000 | |
| Hempstead, NY, Industrial Development Agency Revenue, Series 92G, 144A, AMT, 0.4%*, 10/1/2045, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 23,775,000 | | | | 23,775,000 | |
| Monroe County, NY, Industrial Development Corp. Revenue, St. Ann's Home Aged Project, 0.26%*, 12/1/2040, LOC: HSBC Bank USA NA | | | 6,105,000 | | | | 6,105,000 | |
| Nassau County, NY, Industrial Development Agency Revenue, Series 75G, 144A, AMT, 0.28%*, 12/1/2033, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 29,995,000 | | | | 29,995,000 | |
| New York, Liberty Development Corp., World Trade Center, Series A-2, 144A, 0.35%, Mandatory Put 2/1/2012 @ 100, 12/1/2049 | | | 11,000,000 | | | | 11,000,000 | |
| New York, State Energy Research & Development Authority Facilities Revenue, Consolidated Edison Co. of New York, Inc., Series A-3, 144A, 0.27%*, 5/1/2039, LOC: Mizuho Corporate Bank | | | 15,000,000 | | | | 15,000,000 | |
| New York, State Mortgage Agency, Homeowner Mortgage Revenue: | | | | | | | | |
| Series 135, AMT, 0.5%*, 4/1/2037, SPA: Dexia Credit Local | | | 5,500,000 | | | | 5,500,000 | |
| Series 157, 0.75%*, 4/1/2047, SPA: Dexia Credit Local | | | 11,200,000 | | | | 11,200,000 | |
| New York, Wells Fargo Stage Trust, Series 4C, 144A, 0.29%*, 9/1/2040, LIQ: Wells Fargo Bank NA | | | 11,540,000 | | | | 11,540,000 | |
| New York City, NY, Municipal Water Finance Authority, Water & Sewer Revenue, Series F-2, 0.26%*, 6/15/2033, SPA: JPMorgan Chase Bank | | | 5,000,000 | | | | 5,000,000 | |
| New York City, NY, Transitional Finance Authority Revenue, Series 3866, 144A, 0.27%*, 8/1/2011, LIQ: JPMorgan Chase & Co. | | | 60,000,000 | | | | 60,000,000 | |
| Oyster Bay, NY, Bond Anticipation Notes, 2.0%, 3/9/2012 | | | 21,800,000 | | | | 22,089,387 | |
| | | | | 211,024,387 | |
| North Carolina 4.6% | |
| Cleveland County, NC, Industrial Facilities & Pollution Control Financing Authority, Curtiss-Wright Flight Systems, AMT, 0.35%*, 11/1/2023, LOC: Bank of America NA | | | 8,400,000 | | | | 8,400,000 | |
| North Carolina, BB&T Municipal Trust: | |
| Series 1027, 144A, 0.34%*, 3/1/2016, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,725,000 | | | | 10,725,000 | |
| Series 1032, 0.34%*, 1/7/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 11,625,000 | | | | 11,625,000 | |
| Series 1008, 144A, 0.34%*, 3/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,865,000 | | | | 5,865,000 | |
| Series 1011, 144A, 0.34%*, 4/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 7,520,000 | | | | 7,520,000 | |
| Series 1024, 144A, 0.34%*, 5/31/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 4,860,000 | | | | 4,860,000 | |
| Series 1009, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 17,075,000 | | | | 17,075,000 | |
| Series 1025, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,800,000 | | | | 10,800,000 | |
| North Carolina, Capital Educational Facilities Finance Agency Revenue, High Point University Project, 0.29%*, 12/1/2028, LOC: Branch Banking & Trust | | | 5,555,000 | | | | 5,555,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Campbell University, 0.29%*, 10/1/2034, LOC: Branch Banking & Trust | | | 5,845,000 | | | | 5,845,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Salem Academy & College Project, 0.29%*, 8/1/2030, LOC: Branch Banking & Trust | | | 7,200,000 | | | | 7,200,000 | |
| North Carolina, Medical Care Commission, Health Care Facilities Revenue, First Mortgage Deerfield, Series B, 0.29%*, 11/1/2038, LOC: Branch Banking & Trust | | | 10,035,000 | | | | 10,035,000 | |
| Person County, NC, Industrial Facilities & Pollution Control Financing Authority, Certainteed Gypsum, Inc., 0.24%*, 11/1/2035, LOC: Credit Industrial et Commercial | | | 16,625,000 | | | | 16,625,000 | |
| | | | | 122,130,000 | |
| Ohio 0.6% | |
| Ohio, Clipper Tax-Exempt Certificate Trust, Certificate of Participation, Series 2009-28, 144A, AMT, 0.38%*, 3/1/2035, LIQ: State Street Bank & Trust Co. | | | 2,460,000 | | | | 2,460,000 | |
| Ohio, Redstone Partners Floaters/Residuals Trust, Housing Finance Authority: | | | | | | | | |
| Series C, 144A, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 9,780,000 | | | | 9,780,000 | |
| Series D, 144A, AMT, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 4,340,000 | | | | 4,340,000 | |
| | | | | 16,580,000 | |
| Oregon 6.2% | |
| Oregon, State Tax Anticipation Notes, Series A, 144A, 2.0%, 6/30/2011 | | | 152,000,000 | | | | 152,400,629 | |
| Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project: | | | | | | | | |
| 0.29%*, 5/1/2034, LOC: Bank of America NA | | | 8,515,000 | | | | 8,515,000 | |
| 0.29%*, 5/1/2037, LOC: Bank of America NA | | | 5,385,000 | | | | 5,385,000 | |
| | | | | 166,300,629 | |
| Other 1.3% | |
| BlackRock Municipal Intermediate Duration Fund, Inc., Series W-7-2871, 144A, AMT, 0.51%**, 3/1/2041, LIQ: JPMorgan Chase Bank | | | 35,600,000 | | | | 35,600,000 | |
| Pennsylvania 1.3% | |
| Adams County, PA, Industrial Development Authority Revenue, Brethren Home Community Project, 0.3%*, 6/1/2032, LOC: PNC Bank NA | | | 7,180,000 | | | | 7,180,000 | |
| Allegheny County, PA, RBC Municipal Products, Inc. Trust Certificates, Series E-16, 144A, 0.27%*, 4/15/2039, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 22,490,000 | | | | 22,490,000 | |
| Beaver County, PA, Industrial Development Authority, Pollution Control Revenue, FirstEnergy Generation Corp., 0.22%*, 4/1/2041, LOC: UBS AG | | | 5,700,000 | | | | 5,700,000 | |
| | | | | 35,370,000 | |
| Puerto Rico 0.2% | |
| Puerto Rico, Commonwealth Highway & Transportation Authority Revenue, Series DCL 019, 144A, 0.9%*, 1/1/2029, INS: AGMC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 6,000,000 | | | | 6,000,000 | |
| South Carolina 0.4% | |
| South Carolina, BB&T Municipal Trust, Series 1013, 144A, 0.34%*, 1/1/2020, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,755,000 | | | | 5,755,000 | |
| South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Upper South Carolina, Inc. Project, 0.29%*, 9/1/2028, LOC: Branch Banking & Trust | | | 6,105,000 | | | | 6,105,000 | |
| | | | | 11,860,000 | |
| Tennessee 0.4% | |
| Blount County, TN, Public Building Authority, Local Government Public Improvement, Series E-5-B, 0.29%*, 6/1/2042, LOC: Branch Banking & Trust | | | 9,300,000 | | | | 9,300,000 | |
| Texas 11.0% | |
| Atascosa County, TX, Industrial Development Corp., Pollution Control Revenue, San Miguel Electric Cooperative, Inc., 0.4%*, 6/30/2020, GTY: National Rural Utilities Cooperative Finance Corp., SPA: National Rural Utilities Cooperative Finance Corp. | | | 44,200,000 | | | | 44,200,000 | |
| East Texas, Housing Finance, Redstone Partners Floaters/Residuals Trust, Series D, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 7,930,000 | | | | 7,930,000 | |
| Harris County, TX, Cultural Education Facilities Finance Corp. Revenue, Memorial Hermann Hospital Systems, Series D-3, 0.27%*, 6/1/2029, LOC: Bank of America NA | | | 14,900,000 | | | | 14,900,000 | |
| Harris County, TX, Health Facilities Development Corp., Hospital Revenue, Baylor College of Medicine, Series B, 0.24%*, 11/15/2047, LOC: Northern Trust Co. | | | 8,100,000 | | | | 8,100,000 | |
| Katy, TX, Independent School Building District, 0.27%*, 8/15/2033, SPA: Bank of America NA | | | 8,300,000 | | | | 8,300,000 | |
| North East, TX, Independent School District, Series 002, 144A, 0.65%*, 2/1/2029, LIQ: Dexia Credit Local | | | 11,325,000 | | | | 11,325,000 | |
| Tarrant County, TX, Redstone Partners Floaters/Residuals Trust, Series A, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 12,190,000 | | | | 12,190,000 | |
| Texas, Department of Housing, Series 2008-3022X, 144A, AMT, 0.4%*, 9/1/2032, INS: Fannie Mae, Freddie Mac & Ginnie Mae, LIQ: Bank of America NA | | | 4,980,000 | | | | 4,980,000 | |
| Texas, North East Independent School District, "A", 144A, 0.26%*, 8/1/2037, LIQ: Citibank NA | | | 8,935,000 | | | | 8,935,000 | |
| Texas, RBC Municipal Products, Inc. Trust, Series L-46, 144A, AMT, 0.29%*, 12/1/2034, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 52,995,000 | | | | 52,995,000 | |
| Texas, State General Obligation, "A", 144A, 0.26%*, 4/1/2029, LIQ: Citibank NA | | | 8,685,000 | | | | 8,685,000 | |
| Texas, State Tax & Revenue Anticipation Notes: | |
| Series 3812, 144A, 0.27%*, 8/31/2011, LIQ: JPMorgan Chase & Co. | | | 29,500,000 | | | | 29,500,000 | |
| Series 3813, 144A, 0.3%*, 8/31/2011, LIQ: JPMorgan Chase Bank | | | 38,000,000 | | | | 38,000,000 | |
| 2.0%, 8/31/2011 | | | 25,000,000 | | | | 25,135,681 | |
| Texas A&M University Revenue, 144A, 0.26%*, 5/15/2018, LIQ: Citibank NA | | | 2,800,000 | | | | 2,800,000 | |
| Texas City, TX, Industrial Development Corp. Revenue, Del Papa Realty Holdings, 0.28%*, 1/1/2051, LOC: Bank of America NA | | | 10,300,000 | | | | 10,300,000 | |
| Weslaco, TX, Health Facilities Development, Knapp Medical Center, Series A, 0.91%*, 6/1/2038, LOC: Compass Bank | | | 4,625,000 | | | | 4,625,000 | |
| | | | | 292,900,681 | |
| Vermont 0.2% | |
| Vermont, Educational & Health Buildings Financing Agency Revenue, Fletcher Allen Health Care, Series A, 0.24%*, 12/1/2030, LOC: TD Bank NA | | | 4,070,000 | | | | 4,070,000 | |
| Virginia 1.2% | |
| Arlington County, VA, Industrial Development Authority, Multi-Family Revenue, Series A, AMT, 0.31%*, 8/1/2047, INS: Freddie Mac, LIQ: Freddie Mac | | | 3,000,000 | | | | 3,000,000 | |
| Virginia, Federal Home Loan Mortgage Corp., Multi-Family Variable Rate Certificates, AMT, 0.31%*, 7/15/2050, LIQ: Freddie Mac | | | 19,085,000 | | | | 19,085,000 | |
| Virginia, RBC Municipal Products, Inc. Trust, Series C-2, 144A, AMT, 0.38%*, 1/1/2014, LOC: Royal Bank of Canada, SPA: Royal Bank of Canada | | | 9,050,000 | | | | 9,050,000 | |
| | | | | 31,135,000 | |
| Washington 1.3% | |
| University of Washington, 0.28%, 5/10/2011 | | | 23,000,000 | | | | 23,000,000 | |
| Washington, State Health Care Facilities Authority, Swedish Health Services, Series C, 0.25%*, 11/15/2046, LOC: Citibank NA | | | 3,900,000 | | | | 3,900,000 | |
| Washington, State Higher Education Facilities Authority Revenue, Seattle University Project, Series A, 0.27%*, 5/1/2028, LOC: US Bank NA | | | 8,545,000 | | | | 8,545,000 | |
| | | | | 35,445,000 | |
| West Virginia 3.2% | |
| Cabell County, WV, University Facilities Revenue, Provident Group Marshall Properties, Series A, 0.27%*, 7/1/2039, LOC: Bank of America NA | | | 20,000,000 | | | | 20,000,000 | |
| West Virginia, Public Energy Authority Revenue, Morgantown Association Project, AMT, 0.4%*, 7/1/2017, LOC: Dexia Credit Local | | | 65,000,000 | | | | 65,000,000 | |
| | | | | 85,000,000 | |
| Wisconsin 0.6% | |
| Plymouth, WI, Industrial Development Revenue, Masters Gallery Foods, Series A, AMT, 0.45%*, 5/1/2038, LOC: Wells Fargo Bank NA | | | 5,300,000 | | | | 5,300,000 | |
| Wisconsin, State Health & Educational Facilities Authority Revenue, Prohealth Care, Inc., Series B, 0.3%*, 2/1/2034, LOC: Chase Manhattan Bank | | | 11,225,000 | | | | 11,225,000 | |
| | | | | 16,525,000 | |
| Wyoming 0.6% | |
| Sweetwater County, WY, 0.3%, 6/10/2011 | | | 14,775,000 | | | | 14,775,000 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $2,655,195,212)+ | | | 99.8 | | | | 2,655,195,212 | |
| Other Assets and Liabilities, Net | | | 0.2 | | | | 6,012,980 | |
| Net Assets | | | 100.0 | | | | 2,661,208,192 | |
* Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of April 30, 2011.
** These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
+ The cost for federal income tax purposes was $2,655,195,212.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
AGMC: Assured Guaranty Municipal Corp.
AMBAC: Ambac Financial Group, Inc.
AMT: Subject to alternative minimum tax.
FSB: Federal Savings Bank
GTY: Guaranty Agreement
INS: Insured
LIQ: Liquidity Facility
LOC: Letter of Credit
NATL: National Public Finance Guarantee Corp.
SPA: Standby Bond Purchase Agreement
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Municipal Investments (a) | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
| Total | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
(a) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Tax-Exempt Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,655,195,212 | |
| Receivable for investments sold | | | 4,620,000 | |
| Receivable for Fund shares sold | | | 934,515 | |
| Interest receivable | | | 7,077,878 | |
| Due from Advisor | | | 4,095 | |
| Other assets | | | 105,818 | |
| Total assets | | | 2,667,937,518 | |
| Liabilities | |
| Cash overdraft | | | 4,581,713 | |
| Payable for Fund shares redeemed | | | 918,070 | |
| Distributions payable | | | 62,767 | |
| Accrued management fee | | | 133,641 | |
| Other accrued expenses and payables | | | 1,033,135 | |
| Total liabilities | | | 6,729,326 | |
| Net assets, at value | | $ | 2,661,208,192 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 676,116 | |
| Paid-in capital | | | 2,660,532,076 | |
| Net assets, at value | | $ | 2,661,208,192 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Tax-Exempt Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($10,598,969 ÷ 10,595,483 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($75,044,850 ÷ 75,020,161 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Cash Institutional Shares Net Asset Value, offering and redemption price per share ($1,492,310,747 ÷ 1,491,819,969 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Money Fund Net Asset Value, offering and redemption price per share ($366,030,472 ÷ 365,909,997 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Free Money Fund Class S Net Asset Value, offering and redemption price per share ($124,763,547 ÷ 124,722,636 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($81,988,417 ÷ 81,961,452 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Exempt Cash Managed Shares Net Asset Value, offering and redemption price per share ($127,448,310 ÷ 127,406,394 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Free Investment Class Net Asset Value, offering and redemption price per share ($383,022,880 ÷ 382,896,908 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Tax-Exempt Portfolio | |
Income: Interest | | $ | 12,045,887 | |
Expenses: Management fee | | | 1,955,813 | |
| Administration fee | | | 3,350,131 | |
| Services to shareholders | | | 1,364,156 | |
| Custodian fee | | | 68,016 | |
| Distribution and service fees | | | 2,569,390 | |
| Professional fees | | | 150,070 | |
| Trustees' fees and expenses | | | 102,796 | |
| Reports to shareholders | | | 197,069 | |
| Registration fees | | | 179,038 | |
| Other | | | 177,139 | |
| Total expenses before expense reductions | | | 10,113,618 | |
| Expense reductions | | | (2,277,709 | ) |
| Total expenses after expense reductions | | | 7,835,909 | |
| Net investment income | | | 4,209,978 | |
| Net realized gain (loss) from investments | | | 26,953 | |
| Net increase (decrease) in net assets resulting from operations | | $ | 4,236,931 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Tax-Exempt Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 4,209,978 | | | $ | 6,786,569 | |
| Net realized gain (loss) | | | 26,953 | | | | 42,867 | |
| Net increase in net assets resulting from operations | | | 4,236,931 | | | | 6,829,436 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (1,440 | ) | | | (2,046 | ) |
| Davidson Cash Equivalent Shares | | | (8,101 | ) | | | (9,092 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (3,424,889 | ) | | | (5,359,767 | ) |
| DWS Tax-Exempt Money Fund | | | (551,022 | ) | | | (1,068,021 | ) |
| DWS Tax-Free Money Fund Class S | | | (156,176 | ) | | | (283,931 | ) |
| Premier Money Market Shares | | | (1,265 | ) | | | (24,737 | ) |
| Service Shares | | | (7,236 | ) | | | (5,804 | ) |
| Tax-Exempt Cash Managed Shares | | | (18,703 | ) | | | (160,260 | ) |
| Tax-Free Investment Class | | | (41,260 | ) | | | (198,503 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (597 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (2,251 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | — | | | | (74,322 | ) |
| DWS Tax-Exempt Money Fund | | | — | | | | (13,853 | ) |
| DWS Tax-Free Money Fund Class S | | | — | | | | (4,326 | ) |
| Premier Money Market Shares | | | — | | | | (782 | ) |
| Service Shares | | | — | | | | (1,849 | ) |
| Tax-Exempt Cash Managed Shares | | | — | | | | (7,679 | ) |
| Tax-Free Investment Class | | | — | | | | (14,341 | ) |
| Total distributions | | | (4,210,092 | ) | | | (7,232,161 | ) |
Fund share transactions: Proceeds from shares sold | | | 9,995,553,494 | | | | 11,211,632,894 | |
| Reinvestment of distributions | | | 2,851,124 | | | | 5,434,005 | |
| Cost of shares redeemed | | | (10,411,552,190 | ) | | | (11,989,083,579 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (413,147,572 | ) | | | (772,016,680 | ) |
| Increase (decrease) in net assets | | | (413,120,733 | ) | | | (772,419,405 | ) |
| Net assets at beginning of period | | | 3,074,328,925 | | | | 3,846,748,330 | |
| Net assets at end of period (including undistributed net investment income of $676,116 and $649,277, respectively) | | $ | 2,661,208,192 | | | $ | 3,074,328,925 | |
The accompanying notes are an integral part of the financial statements.
Tax-Exempt Portfolio DWS Tax-Exempt Money Fund | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | | 2007 | a |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .001 | | | | .002 | | | | .016 | | | | .031 | | | | .004 | |
| Net realized and unrealized gain (loss) | | | .000 | *** | | | .000 | *** | | | .000 | *** | | | .000 | *** | | | (.000 | )*** |
| Total from investment operations | | | .001 | | | | .002 | | | | .016 | | | | .031 | | | | .004 | |
Less distributions from: Net investment income | | | (.001 | ) | | | (.002 | ) | | | (.016 | ) | | | (.031 | ) | | | (.004 | ) |
| Net realized gains | | | — | | | | (.000 | )*** | | | — | | | | — | | | | — | |
| Total distributions | | | (.001 | ) | | | (.002 | ) | | | (.016 | ) | | | (.031 | ) | | | (.004 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| Total Return (%) | | | .14 | | | | .22 | | | | 1.57 | | | | 3.17 | b | | | .41 | ** |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 366 | | | | 428 | | | | 503 | | | | 586 | | | | 627 | |
| Ratio of expenses before expense reductions (%) | | | .22 | | | | .24 | | | | .24 | | | | .24 | | | | .24 | * |
| Ratio of expenses after expense reductions (%) | | | .22 | | | | .24 | | | | .24 | | | | .23 | | | | .24 | * |
| Ratio of net investment income (%) | | | .14 | | | | .22 | | | | 1.55 | | | | 3.09 | | | | 3.49 | * |
a For the period from March 19, 2007 (commencement of operations) to April 30, 2007. b Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized *** Amount is less than $.0005. | |
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three funds: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio. These financial statements report on Tax-Exempt Portfolio (the "Fund").
Tax-Exempt Portfolio offers eight 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, Service Shares, Tax-Exempt Cash Managed Shares and Tax-Free Investment Class. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
The financial highlights for all classes of shares, other than DWS Tax-Exempt Money Fund, are provided separately and are available upon request.
The Fund's investment income, realized gains and losses, and certain Fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of the Fund, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The Fund values all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders.
The Fund has reviewed the tax positions for the open tax years as of April 30, 2011 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income. Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. The Fund may take into account capital gains and losses in its daily dividend declarations. The Fund may also make additional distributions for tax purposes if necessary.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Fund.
At April 30, 2011, the Fund's components of distributable earnings on a tax basis are as follows:
| Undistributed tax-exempt income* | | $ | 738,883 | |
In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:
| | | Years Ended April 30, | |
| | | 2011 | | | 2010 | |
| Distributions from tax-exempt income | | $ | 4,210,092 | | | $ | 7,201,436 | |
| Distributions from long-term capital gains | | $ | — | | | $ | 30,725 | |
* For tax purposes, short-term capital gains distributions are considered ordinary income distributions.
Expenses. Expenses of the Trust arising in connection with a specific Fund are allocated to that Fund. Other Trust expenses which cannot be directly attributed to a Fund are apportioned pro rata on the basis of relative net assets among the Funds in the Trust.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Other. Investment transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
2. Related Parties
Management Agreement. Under an Amended and Restated Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
In addition, the Fund pays a monthly management fee based on the combined average daily net assets of the three Funds and allocated to the Fund based on its relative net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .120 | % |
| Next $500 million of such net assets | | | .100 | % |
| Next $1 billion of such net assets | | | .075 | % |
| Next $1 billion of such net assets | | | .060 | % |
| Over $3 billion of such net assets | | | .050 | % |
For the period from May 1, 2010 through September 30, 2011, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the DWS Tax-Exempt Money Fund to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 0.40%.
The Advisor also has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
Accordingly, for the year ended April 30, 2011, the Fund incurred a management fee equivalent to the following annual effective rate of the Fund's average daily net assets:
| | Annual Effective Rate |
| Tax-Exempt Portfolio | .06% |
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended April 30, 2011, the Administration Fee was as follows:
| | | Administration Fee | | | Unpaid at April 30, 2011 | |
| Tax-Exempt Portfolio | | $ | 3,350,131 | | | $ | 226,253 | |
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the year ended April 30, 2011, the amounts charged to the Fund by DISC were as follows:
| Tax-Exempt Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 12,532 | | | $ | 5,364 | |
| Davidson Cash Equivalent Shares | | | 121,647 | | | | — | | | | 41,015 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 196,624 | | | | — | | | | 61,668 | |
| DWS Tax-Exempt Money Fund | | | 134,008 | | | | — | | | | 39,976 | |
| DWS Tax-Free Money Fund Class S | | | 68,702 | | | | — | | | | 25,134 | |
| Premier Money Market Shares | | | 31,484 | | | | 6,558 | | | | — | |
| Service Shares | | | 182,607 | | | | 72,945 | | | | 41,130 | |
| Tax-Exempt Cash Managed Shares | | | 77,147 | | | | — | | | | 33,219 | |
| Tax-Free Investment Class | | | 444,553 | | | | — | | | | 153,350 | |
| | | $ | 1,292,741 | | | $ | 92,035 | | | $ | 400,856 | |
Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee"), calculated as a percentage of average daily net assets for the shares listed in the following table.
For the year ended April 30, 2011, the Distribution Fee was as follows:
| Tax-Exempt Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 47,479 | | | $ | 47,479 | | | | .00 | % | | | .33 | % |
| Davidson Cash Equivalent Shares | | | 243,294 | | | | 243,294 | | | | .00 | % | | | .30 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 434,433 | | | | 434,433 | | | | .00 | % | | | .60 | % |
| Tax-Free Investment Class | | | 1,032,179 | | | | 1,032,179 | | | | .00 | % | | | .25 | % |
| | | $ | 1,789,098 | | | $ | 1,789,098 | | | | | | | | | |
In addition, DIDI 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, 2011, the Service Fee was as follows:
| Tax-Exempt Portfolio: | | Service Fee | | | Waived | | | Unpaid at April 30, 2011 | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 35,969 | | | $ | — | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Shares | | | 202,745 | | | | 194,185 | | | | — | | | | .01 | % | | | .25 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | — | | | | .00 | % | | | .25 | % |
| Tax-Exempt Cash Managed Shares | | | 220,855 | | | | 61,372 | | | | 10,827 | | | | .11 | % | | | .15 | % |
| Tax-Free Investment Class | | | 289,010 | | | | 73,337 | | | | 22,721 | | | | .05 | % | | | .07 | % |
| | | $ | 780,292 | | | $ | 396,576 | | | $ | 33,548 | | | | | | | | | |
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended April 30, 2011, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" was as follows:
| Fund | | Total Aggregated | | | Unpaid at April 30, 2011 | |
| Tax-Exempt Portfolio | | $ | 105,603 | | | $ | 41,114 | |
Trustees' Fees and Expenses. The Fund paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.
3. Concentration of Ownership
From time to time, the Fund may have a concentration of several shareholder accounts holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Fund.
At April 30, 2011, there were two shareholder accounts that held approximately 13% and 11%, respectively, of the outstanding shares of the Tax-Exempt Portfolio.
4. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus, if LIBOR exceeds the Federal Funds Rate, the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
5. Share Transactions
The following table summarizes share and dollar activity in the Fund:
Tax-Exempt Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 37,505,008 | | | $ | 37,505,008 | | | | 49,394,797 | | | $ | 49,394,797 | |
| Davidson Cash Equivalent Shares | | | 108,372,167 | | | | 108,372,167 | | | | 140,991,927 | | | | 140,991,927 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 8,705,410,264 | | | | 8,705,410,264 | | | | 9,545,076,388 | | | | 9,545,076,388 | |
| DWS Tax-Exempt Money Fund | | | 234,765,709 | | | | 234,765,709 | | | | 183,055,619 | | | | 183,055,619 | |
| DWS Tax-Free Money Fund Class S | | | 40,065,751 | | | | 40,065,751 | | | | 39,784,180 | | | | 39,784,180 | |
Premier Money Market Shares* | | | 17,963,464 | | | | 17,963,464 | | | | 109,396,548 | | | | 109,396,548 | |
| Service Shares | | | 171,592,837 | | | | 171,592,837 | | | | 277,971,196 | | | | 277,971,196 | |
| Tax-Exempt Cash Managed Shares | | | 270,920,971 | | | | 270,920,971 | | | | 471,983,176 | | | | 471,983,176 | |
| Tax-Free Investment Class | | | 408,957,323 | | | | 408,957,323 | | | | 393,979,063 | | | | 393,979,063 | |
| | | | | | | $ | 9,995,553,494 | | | | | | | $ | 11,211,632,894 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 1,433 | | | $ | 1,433 | | | | 2,653 | | | $ | 2,653 | |
| Davidson Cash Equivalent Shares | | | 8,078 | | | | 8,078 | | | | 11,387 | | | | 11,387 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 2,103,424 | | | | 2,103,424 | | | | 3,842,512 | | | | 3,842,512 | |
| DWS Tax-Exempt Money Fund | | | 541,218 | | | | 541,218 | | | | 1,065,790 | | | | 1,065,790 | |
| DWS Tax-Free Money Fund Class S | | | 147,957 | | | | 147,957 | | | | 270,634 | | | | 270,634 | |
Premier Money Market Shares* | | | 1,023 | | | | 1,023 | | | | 23,773 | | | | 23,773 | |
| Service Shares | | | 7,238 | | | | 7,238 | | | | 7,673 | | | | 7,673 | |
| Tax-Exempt Cash Managed Shares | | | 84 | | | | 84 | | | | 886 | | | | 886 | |
| Tax-Free Investment Class | | | 40,669 | | | | 40,669 | | | | 208,697 | | | | 208,697 | |
| | | | | | | $ | 2,851,124 | | | | | | | $ | 5,434,005 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (44,799,949 | ) | | | | $ (44,799,949) | | | (57,387,875 | ) | | $ | (57,387,875 | ) |
| Davidson Cash Equivalent Shares | | | (113,236,507 | ) | | | (113,236,507 | ) | | | (128,403,019 | ) | | | (128,403,019 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (8,940,648,532 | ) | | | (8,940,648,532 | ) | | | (9,593,718,982 | ) | | | (9,593,718,982 | ) |
| DWS Tax-Exempt Money Fund | | | (297,512,567 | ) | | | (297,512,567 | ) | | | (258,965,066 | ) | | | (258,965,066 | ) |
| DWS Tax-Free Money Fund Class S | | | (55,821,788 | ) | | | (55,821,788 | ) | | | (63,795,223 | ) | | | (63,795,223 | ) |
Premier Money Market Shares* | | | (47,338,154 | ) | | | (47,338,154 | ) | | | (571,302,157 | ) | | | (571,302,157 | ) |
| Service Shares | | | (126,254,371 | ) | | | (126,254,371 | ) | | | (303,098,913 | ) | | | (303,098,913 | ) |
| Tax-Exempt Cash Managed Shares | | | (352,406,232 | ) | | | (352,406,232 | ) | | | (455,851,093 | ) | | | (455,851,093 | ) |
| Tax-Free Investment Class | | | (433,534,090 | ) | | | (433,534,090 | ) | | | (556,561,251 | ) | | | (556,561,251 | ) |
| | | | | | | $ | (10,411,552,190 | ) | | | | | | $ | (11,989,083,579 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (7,293,508 | ) | | | (7,293,508 | ) | | | (7,990,425 | ) | | $ | (7,990,425 | ) |
| Davidson Cash Equivalent Shares | | | (4,856,262 | ) | | | (4,856,262 | ) | | | 12,600,295 | | | | 12,600,295 | |
| DWS Tax-Exempt Cash Institutional Shares | | | (233,134,844 | ) | | | (233,134,844 | ) | | | (44,800,082 | ) | | | (44,800,082 | ) |
| DWS Tax-Exempt Money Fund | | | (62,205,640 | ) | | | (62,205,640 | ) | | | (74,843,657 | ) | | | (74,843,657 | ) |
| DWS Tax-Free Money Fund Class S | | | (15,608,080 | ) | | | (15,608,080 | ) | | | (23,740,409 | ) | | | (23,740,409 | ) |
Premier Money Market Shares* | | | (29,373,667 | ) | | | (29,373,667 | ) | | | (461,881,836 | ) | | | (461,881,836 | ) |
| Service Shares | | | 45,345,704 | | | | 45,345,704 | | | | (25,120,044 | ) | | | (25,120,044 | ) |
| Tax-Exempt Cash Managed Shares | | | (81,485,177 | ) | | | (81,485,177 | ) | | | 16,132,969 | | | | 16,132,969 | |
| Tax-Free Investment Class | | | (24,536,098 | ) | | | (24,536,098 | ) | | | (162,373,491 | ) | | | (162,373,491 | ) |
| | | | | | | $ | (413,147,572 | ) | | | | | | $ | (772,016,680 | ) |
* The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Cash Account Trust:
We have audited the accompanying statement of assets and liabilities of the Tax-Exempt Portfolio (the "Portfolio"), one of the portfolios constituting Cash Account Trust (the "Trust"), including the investment portfolio, as of April 30, 2011, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Tax-Exempt Portfolio of Cash Account Trust at April 30, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
| | | |
Boston, Massachusetts June 20, 2011 | | |
Tax Information (Unaudited)
Of the dividends paid from net investment income for the taxable year ended April 30, 2011, 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.
Summary of Management Fee Evaluation by Independent Fee Consultant
October 3, 2010
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.
Qualifications
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
Summary of Administrative Fee Evaluation by Independent Fee Consultant
October 4, 2010
Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of a proposed pass-through to the funds of certain reporting costs associated with new regulations for money funds. My evaluation considered the following:
• My recently completed annual evaluation (please see my summary report of October 3, 2010), concluding that the prospective fees and expenses of all the DWS-sponsored money funds are reasonable.
• The fact that in my opinion the services DWS would provide under the combination of the Advisory and proposed Administration Agreements continues to be comparable with those typically provided to competitive funds under their management agreements.
• Management's analysis showing that the maximum total expense ratio impact of this change on any fund share class would be 1.3 basis points, which in my opinion is not material to my conclusions about the reasonableness of expenses.
Based on the foregoing considerations, in my opinion the proposed fees and expenses for the affected DWS-sponsored money funds are reasonable.
Thomas H. Mack
Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the fund as of April 30, 2011. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
| Independent Board Members |
Name, Year of Birth, Position with the Fund and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen | Other Directorships Held by Board Member |
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993 | Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (education committees); formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 118 | — |
John W. Ballantine (1946) Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Chairman of the Board, Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity); former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International | 118 | — |
Henry P. Becton, Jr. (1943) Board Member since 1990 | Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Public Radio International; Public Radio Exchange (PRX); The PBS Foundation; former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service | 118 | Lead Director, Becton Dickinson and Company2 (medical technology company); Lead Director, Belo Corporation2 (media company) |
Dawn-Marie Driscoll (1946) Board Member since 1987 | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization); former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2007) |
Keith R. Fox (1954) Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies | 118 | — |
Kenneth C. Froewiss (1945) Board Member since 2001 | Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996) | 118 | — |
Richard J. Herring (1946) Board Member since 1990 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; Independent Director of Barclays Bank Delaware (since September 2010); formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006) | 118 | Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007) |
William McClayton (1944) Board Member since 2004 | Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival | 118 | — |
Rebecca W. Rimel (1951) Board Member since 1995 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Trustee, Pro Publica (charitable organization) (2007-2010) | 118 | Director, CardioNet, Inc. (health care) (2009- present); Director, Viasys Health Care2 (January 2007- June 2007); |
William N. Searcy, Jr. (1946) Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 1998) |
Jean Gleason Stromberg (1943) Board Member since 1997 | Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996) | 118 | — |
Robert H. Wadsworth (1940) Board Member since 1999 | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association | 121 | — |
Officers4 |
Name, Year of Birth, Position with the Fund and Length of Time Served5 | Principal Occupation(s) During Past 5 Years and Other Directorships Held |
W. Douglas Beck, CFA9,10 (1967) President and CEO, 2011-present | Managing Director3, Deutsche Asset Management (2006-present); President and CEO of DWS family of funds and Head of Product Management, US for DWS Investments; formerly, Executive Director, Head of Product Management (2002-2006) and President (2005-2006) of the UBS Funds at UBS Global Asset Management; Co-Head of Manager Research/Managed Solutions Group, Merrill Lynch (1998-2002) |
John Millette7 (1962) Vice President and Secretary, 1999-present | Director3, Deutsche Asset Management |
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present | Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998) |
Caroline Pearson7 (1962) Chief Legal Officer, April 2010-present | Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010) |
Rita Rubin8 (1970) Assistant Secretary, 2009-present | Director3 and Senior Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007) |
Paul Antosca7 (1957) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006) |
Jack Clark7 (1967) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007) |
Diane Kenneally7 (1966) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
John Caruso8 (1965) Anti-Money Laundering Compliance Officer, 2010-present | Managing Director3, Deutsche Asset Management |
Robert Kloby8 (1962) Chief Compliance Officer, 2006-present | Managing Director3, Deutsche Asset Management |
1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.
2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3 Executive title, not a board directorship.
4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.
5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.
6 Address: 100 Plaza One, Jersey City, NJ 07311.
7 Address: One Beacon Street, Boston, MA 02108.
8 Address: 60 Wall Street, New York, NY 10005.
9 Address: 345 Park Avenue, New York, NY 10154.
10 Appointed May 17, 2011, effective June 1, 2011.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
Notes
Notes
APRIL 30, 2011 Annual Report to Shareholders |
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Tax-Exempt Portfolio DWS Tax-Free Money Fund Class S |
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Contents
3 Portfolio Management Review 6 Information About Your Fund's Expenses 20 Statement of Assets and Liabilities 22 Statement of Operations 23 Statement of Changes in Net Assets 25 Notes to Financial Statements 32 Report of Independent Registered Public Accounting Firm 34 Summary of Management Fee Evaluation by Independent Fee Consultant 38 Summary of Administrative Fee Evaluation by Independent Fee Consultant 39 Board Members and Officers |
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, visit www.dws-investments.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.
An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of the fund may have a significant adverse effect on the share prices of all classes of shares of the fund. See the prospectus for specific details regarding the fund's risk profile.
The fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Portfolio Management Review
Market Overview
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
In September 2010, investors responded positively to US Federal Reserve Board (the Fed) Chairman Ben Bernanke's statement that the Fed would take additional steps in the form of "quantitative easing" to prop up the US economy as needed.1 Over the fund's most recent 12-month period, the money market yield curve has gradually steepened as longer-term rates rose in response to improved economic data and shorter maturities declined significantly based on a number of market influences.2 These included continuing strong demand and shrinking supply in the money market area; the removal (or unwind) of $200 billion in two-month Treasury bills from the market until Congress once again raises the US debt ceiling; a new FDIC fee assessment that has, in effect, removed some of the incentive for certain large banks to create supply in the money market area; and; lastly, the fact that the federal funds rate remains "on hold," keeping short-term rates lower overall.3
Positive Contributors to Fund Performance
We were able to maintain a competitive yield for the fund during the period ended April 30, 2011. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
In light of the continued fiscal stress on state and local governments, and with dynamic rule changes regarding money market funds coming from the SEC, we believed it was prudent to maintain a short average maturity. Toward the end of the period, the fund was invested mainly in short-term commercial paper and floating-rate securities. (The interest rate of floating-rate securities adjusts periodically based on indices such as the Securities Industry and Financial Market Association Index of Variable Rate Demand Notes.)4,5 Because the interest rates of these instruments adjust as market conditions change, they provide flexibility in an uncertain interest rate environment.
Our main focus, as always, is on preservation of capital, and during the period ending April 30, 2011, we maintained a short maturity and attempted to ensure ample liquidity for the fund.
Negative Contributors to Fund Performance
The types of securities that we were investing in the fund tended to have lower yields than issues carrying more risk. We preferred to be cautious during a time of market uncertainty. In the end this cost the fund some yield, but we believe that this represented a prudent approach to preserving principal in light of the circumstances during the period.
Outlook and Positioning
Assuming that Congress can agree to raise the US debt ceiling in the near future, significant short-term Treasury supply should return to the market in the coming months and remove some downward pressure on money market rates that carry the shortest maturities. In general, however, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested and continued strong demand from investors seeking principal stability and safety.
We continue our insistence on the highest credit quality within the fund.6 We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the fund and to seek competitive yield for our shareholders.
Fund Performance (as of April 30, 2011)
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, this share price isn't guaranteed and you could lose money by investing in money market funds. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of a fund may have a significant adverse effect on the share prices of all classes of shares of that fund. See the prospectus for specific details regarding the fund's risk profile.
| | |
| | | 7-Day Current Yield | |
| DWS Tax-Free Money Fund Class S | | | 0.20 | % |
| (Equivalent Taxable Yield) | | | 0.31 | %* |
Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the fund over a 7-day period expressed as an annual percentage rate of the fund's shares outstanding. For the most current yield information, visit our Web site at www.dws-investments.com. * The equivalent taxable yield allows you to compare with the performance of taxable money market funds. For the Tax-Exempt Portfolio, the equivalent taxable yield is based upon the marginal income tax rate of 35%. Income may be subject to local taxes and, for some investors, the alternative minimum tax. | |
1 Quantitative easing — a monetary policy used by the government to increase the money supply. With this policy, the government purchases government and other securities from the market to create additional capital which financial institutions can use to promote lending and liquidity.
2 The yield curve — a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.
3 Treasury bill — a short-term (maturity up to 1 year) discounted government security sold through competitive bidding at weekly and monthly auctions in denominations of $10,000 to $1 million. Debt ceiling is the maximum borrowing power of a government entity. FDIC (Federal Deposit Insurance Corporation) is a federal agency that insures deposits in member banks and thrifts up to a specific dollar amount. Federal funds rate is the overnight bank lending rate.
4 Average maturity — the average length of time until the principal amount of a bond must be repaid.
5 The Securities Industry and Financial Market Association Index of Variable Rate Demand Notes is a weekly high-grade market index consisting of seven-day, tax-exempt, variable-rate demand notes produced by Municipal Market Data Group. Actual issues are selected from Municipal Market Data's database of more than 10,000 active issues.
Index returns, unlike fund returns, do not reflect any fees of expenses. It is not possible to invest directly into an index.
6 Credit quality — a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default. The fund's credit quality does not remove market risk and is subject to change.
Information About Your Fund's Expenses
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. 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, 2010 to April 30, 2011).
The tables illustrate your Fund's expenses in two ways:
•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in each Fund using each Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
• Hypothetical 5% Fund Return. This helps you to compare each Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using each Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. An account maintenance fee of $6.25 per quarter for DWS Tax-Free Money Fund Class S shares may apply for certain accounts whose balances do not meet the applicable minimum initial investment. This fee is not included in these tables. If it was, the estimate of expenses paid for DWS Tax-Free Money Fund Class S shares during the period would be higher, and account value during the period would be lower, by this amount.
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | DWS Tax-Free Money Fund Class S | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.55 | |
Expenses Paid per $1,000* | | $ | 1.14 | |
| Hypothetical 5% Fund Return | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,023.65 | |
Expenses Paid per $1,000* | | $ | 1.15 | |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratio | |
| DWS Tax-Free Money Fund Class S | .23% |
For more information, please refer to the Fund's prospectus.
Tax-Exempt Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
Municipal Investments Municipal Variable Rate Demand Notes | 70% | 72% |
| Municipal Bonds and Notes | 27% | 28% |
| Municipal Floating Rate Notes | 3% | — |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Tax-Exempt Portfolio | 33 days | 44 days |
| National Tax-Free Retail Money Fund Average* | 28 days | 31 days |
* The Fund is compared to its respective iMoneyNet Category: National Tax-Free Retail Money Fund Average — Category consists of all national tax-free and municipal retail funds. Portfolio holdings of tax-free funds include Rated and Unrated Demand Notes, Rated and Unrated General Market Notes; Commercial Paper; Put Bonds — 6 months and less; Put Bonds — over 6 months; AMT Paper and Other Tax-Free Holdings.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 9-19. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Tax-Exempt Portfolio
| | | Principal Amount ($) | | | Value ($) | |
| | | | |
| Municipal Investments 99.8% | |
| Alabama 0.4% | |
| Tuscaloosa County, AL, Industrial Development Gulf Opportunity Zone, Hunt Refining Project, Series C, 0.3%*, 12/1/2027 | | | 10,000,000 | | | | 10,000,000 | |
| Alaska 1.1% | |
| Anchorage, AK, Tax Anticipation Notes, 1.5%, 12/29/2011 | | | 30,000,000 | | | | 30,237,724 | |
| Arkansas 0.3% | |
| Fort Smith, AR, Mitsubishi Power Systems Revenue, Recovery Zone Facility Bonds, 0.31%*, 10/1/2040, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 8,000,000 | | | | 8,000,000 | |
| California 7.4% | |
| California, Beaumont Utility Authority Revenue, Wastewater Enterprise Project, Series A, 0.31%*, 9/1/2041, LOC: Union Bank of CA | | | 4,450,000 | | | | 4,450,000 | |
| California, Clipper Tax-Exempt Certificate Trust, Series 2009-66, 144A, 0.29%*, 5/15/2030, LIQ: State Street Bank & Trust Co. | | | 13,100,000 | | | | 13,100,000 | |
| California, Educational Facilities Authority Revenue, Series R-11734, 144A, 0.25%*, 6/1/2011, LIQ: Citibank NA | | | 8,910,000 | | | | 8,910,000 | |
| California, Inland Valley Development Agency, Tax Allocation, 0.3%*, 3/1/2027, LOC: Union Bank of CA | | | 32,695,000 | | | | 32,695,000 | |
| California, Statewide Communities Development Authority Revenue, Retirement Housing Foundation, 0.3%*, 9/1/2030, LOC: KBC Bank NV | | | 26,200,000 | | | | 26,200,000 | |
| California, Statewide Communities Development Authority, Multi-Family Housing Revenue: | | | | | | | | |
| Series 2680, 144A, 0.36%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 15,110,000 | | | | 15,110,000 | |
| Series 29G, 144A, AMT, 0.4%*, 5/1/2039, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 61,000,000 | | | | 61,000,000 | |
| Series 2681, 144A, AMT, 0.46%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 11,190,000 | | | | 11,190,000 | |
| California, Wells Fargo Stage Trust, Series 72C, 144A, 0.28%*, 8/15/2039, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 21,500,000 | | | | 21,500,000 | |
| Palo Alto, CA, General Obligation, Series R-11859, 144A, 0.26%*, 2/1/2018, LIQ: Citibank NA | | | 3,120,000 | | | | 3,120,000 | |
| | | | | 197,275,000 | |
| Colorado 3.5% | |
| Colorado, Cornerstar Metropolitan District, Special Revenue, 0.66%*, 12/1/2037, LOC: Compass Bank | | | 15,500,000 | | | | 15,500,000 | |
| Colorado, Housing & Finance Authority, Single Family, "I", Series B-2, 144A, AMT, 0.8%*, 11/1/2026, SPA: Dexia Credit Local | | | 18,350,000 | | | | 18,350,000 | |
| Colorado, Lowry Economic Redevelopment Authority Revenue, Series A, 1.0%*, 12/1/2020, LOC: Compass Bank | | | 5,000,000 | | | | 5,000,000 | |
| Colorado Springs, CO, Utilities Revenue, Series A, 0.8%*, 11/1/2023, SPA: Dexia Credit Local | | | 55,500,000 | | | | 55,500,000 | |
| | | | | 94,350,000 | |
| Delaware 0.5% | |
| Delaware, BB&T Municipal Trust, Series 5000, 144A, 0.34%*, 10/1/2028, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 13,020,062 | | | | 13,020,062 | |
| Florida 7.2% | |
| Alachua County, FL, Housing Finance Authority, Multi-Family Revenue, Santa Fe I Apartments, AMT, 0.31%*, 12/15/2038, LOC: Citibank NA | | | 3,440,000 | | | | 3,440,000 | |
| Broward County, FL, Housing Finance Authority, Multi-Family Housing Revenue, Series 51G, 144A, AMT, 0.29%*, 6/1/2046, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 28,520,000 | | | | 28,520,000 | |
| Florida, BB&T Municipal Trust: | |
| Series 1010, 144A, 0.29%*, 1/15/2019, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 6,670,000 | | | | 6,670,000 | |
| Series 1029, 0.34%*, 7/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,510,000 | | | | 10,510,000 | |
| Series 1012, 144A, 0.34%*, 11/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 9,825,000 | | | | 9,825,000 | |
| Florida, Capital Trust Agency Housing Revenue, Atlantic Housing Foundation, Series A, 0.26%*, 7/15/2024, INS: Fannie Mae, LIQ: Fannie Mae | | | 19,000,000 | | | | 19,000,000 | |
| Florida, State Board of Public Education: | |
| "A", 0.25%*, 6/1/2027, SPA: Citibank NA | | | 5,840,000 | | | | 5,840,000 | |
| Series 3834Z, 144A, 0.26%*, 12/1/2015, LIQ: JPMorgan Chase Bank | | | 9,000,000 | | | | 9,000,000 | |
| Highlands County, FL, Health Facilities Authority Revenue, Series II R-11564, 144A, 0.27%*, 11/15/2014, LIQ: Citibank NA | | | 9,365,000 | | | | 9,365,000 | |
| Hillsborough County, FL, Aviation Revenue, 0.27%, 5/12/2011 | | | 3,625,000 | | | | 3,625,000 | |
| Hillsborough County, FL, Housing Finance Authority, Multi-Family Revenue, Hunt Club Apartments, 0.3%*, 8/15/2041, LOC: SunTrust Bank | | | 5,445,000 | | | | 5,445,000 | |
| Hillsborough County, FL, School Board, Certificates of Participation, Master Lease, Series C, 0.23%*, 7/1/2030, INS: NATL, LOC: Wells Fargo Bank NA | | | 33,040,000 | | | | 33,040,000 | |
| Jacksonville, FL, Health Facilities Authority Hospital Revenue, Series A, 0.25%*, 8/15/2033, LOC: Bank of America NA | | | 8,200,000 | | | | 8,200,000 | |
| Lee County, FL, Industrial Development Authority, Health Care Facilities Revenue, Hope Hospice Project, 0.27%*, 10/1/2027, LOC: Northern Trust Co. | | | 21,000,000 | | | | 21,000,000 | |
| Palm Beach County, FL, Community Foundation, Palm Beach Project Revenue, 0.29%*, 3/1/2034, LOC: Northern Trust Co. | | | 4,750,000 | | | | 4,750,000 | |
| Pinellas County, FL, Educational Facilities Authority Revenue, Barry University Project, 0.31%*, 10/1/2037, LOC: Bank of America NA | | | 9,005,000 | | | | 9,005,000 | |
| Sarasota County, FL, Health Care Facilities Authority Revenue, Bay Village Project, 0.4%*, 12/1/2023, LOC: Bank of America NA | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 191,935,000 | |
| Georgia 2.8% | |
| Georgia, Main Street Natural Gas, Inc., Gas Project Revenue, Series A, 0.26%*, 8/1/2040, SPA: Royal Bank of Canada | | | 65,200,000 | | | | 65,200,000 | |
| Georgia, Private Colleges & Universities Authority Revenue, Mercer University Project, Series C, 0.27%*, 10/1/2031, LOC: Branch Banking & Trust | | | 8,580,000 | | | | 8,580,000 | |
| | | | | 73,780,000 | |
| Hawaii 0.3% | |
| Hawaii, Pacific Health Special Purpose Revenue, Series 6C, 144A, 0.29%*, 7/1/2040, LIQ: Wells Fargo Bank NA | | | 8,820,000 | | | | 8,820,000 | |
| Idaho 2.0% | |
| Idaho, State Tax Anticipation Notes, 144A, 2.0%, 6/30/2011 | | | 52,000,000 | | | | 52,135,343 | |
| Illinois 11.6% | |
| Chicago, IL, Board of Education, Dedicated Revenues, Series A-2, 0.26%*, 3/1/2026, LOC: Northern Trust Co. | | | 5,900,000 | | | | 5,900,000 | |
| Chicago, IL, General Obligation, Series 2008-068, 144A, 1.01%*, 1/1/2022, INS: AGMC, AMBAC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 11,480,000 | | | | 11,480,000 | |
| Chicago, IL, Metropolitan Water Reclamation District, Greater Chicago: | | | | | | | | |
| Series 2008-051, 144A, 0.86%*, 12/1/2028, LIQ: Dexia Credit Local | | | 5,360,000 | | | | 5,360,000 | |
| Series 2008-052, 144A, 0.86%*, 12/1/2035, LIQ: Dexia Credit Local | | | 25,110,000 | | | | 25,110,000 | |
| Cook County, IL, Catholic Theological Union Project Revenue, 0.31%*, 2/1/2035, LOC: Harris Trust & Savings Bank | | | 6,000,000 | | | | 6,000,000 | |
| Illinois, BB&T Municipal Trust, Series 5001, 144A, 0.34%*, 6/1/2020, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 17,314,484 | | | | 17,314,484 | |
| Illinois, Development Finance Authority, Industrial Project Revenue, Grecian Delight Foods Project, AMT, 0.49%*, 8/1/2019, LOC: LaSalle Bank NA | | | 1,765,000 | | | | 1,765,000 | |
| Illinois, Education Facility Authority Revenue, Series N, 0.3%, 6/1/2011 | | | 74,465,000 | | | | 74,465,000 | |
| Illinois, Finance Authority Industrial Development Revenue, Fitzpatrick Brothers, 0.27%*, 4/1/2033, LOC: Northern Trust Co. | | | 4,600,000 | | | | 4,600,000 | |
| Illinois, Finance Authority Revenue, "A", 144A, 0.25%*, 12/1/2042, LIQ: Citibank NA | | | 5,445,000 | | | | 5,445,000 | |
| Illinois, Finance Authority Revenue, Clare Oaks, Series C, 0.36%*, 11/1/2040, LOC: Sovereign Bank FSB | | | 27,680,000 | | | | 27,680,000 | |
| Illinois, Finance Authority Revenue, Northwestern University: | |
| Series A, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 14,000,000 | | | | 14,000,000 | |
| Series C, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 10,000,000 | | | | 10,000,000 | |
| Illinois, Finance Authority, Pollution Control Revenue, Commonwealth Edison Co., Series F, 144A, 0.25%*, 3/1/2017, LOC: JPMorgan Chase Bank | | | 3,700,000 | | | | 3,700,000 | |
| Illinois, State Toll Highway Authority Revenue, Senior Priority, Series A-2A, 0.29%*, 7/1/2030, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 15,000,000 | | | | 15,000,000 | |
| Illinois, State Wells Fargo Stage Trust, Series 47C, 144A, 0.29%*, 12/1/2024, INS: AGMC, LIQ: Wells Fargo Bank NA | | | 33,190,000 | | | | 33,190,000 | |
| Illinois, University of Illinois Revenue, "A", 144A, 0.27%*, 4/1/2035, INS: NATL, LIQ: Citibank NA | | | 14,300,000 | | | | 14,300,000 | |
| Mundelein, IL, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 0.54%*, 1/1/2015, LOC: Northern Trust Co. | | | 6,500,000 | | | | 6,500,000 | |
| Woodstock, IL, Multi-Family Housing Revenue, Willow Brooke Apartments, AMT, 0.29%*, 4/1/2042, LOC: Wells Fargo Bank NA | | | 25,905,000 | | | | 25,905,000 | |
| | | | | 307,714,484 | |
| Indiana 0.6% | |
| Indiana, Health & Educational Facility, Financing Authority Revenue, Greenwood Village South Project, Series A, 0.36%*, 5/1/2036, LOC: Sovereign Bank FSB | | | 6,155,000 | | | | 6,155,000 | |
| Terre Haute, IN, Westminster Village Revenue, Series A, 0.36%*, 8/1/2036, LOC: Sovereign Bank FSB | | | 9,245,000 | | | | 9,245,000 | |
| | | | | 15,400,000 | |
| Iowa 0.6% | |
| Iowa, Finance Authority, Multi-Family Revenue, Housing Windsor on River, Series A, AMT, 0.29%*, 5/1/2042, LOC: Wells Fargo Bank NA | | | 17,000,000 | | | | 17,000,000 | |
| Kansas 1.7% | |
| Kansas, State Department of Transportation Highway Revenue, Series D, 0.37%*, 3/1/2012, LIQ: Dexia Credit Local | | | 5,040,000 | | | | 5,040,000 | |
| Kansas, State Development Finance Authority, Multi-Family Revenue, Oak Ridge Park II Project, Series X, AMT, 0.34%*, 12/1/2036, LOC: US Bank NA | | | 3,650,000 | | | | 3,650,000 | |
| Lenexa, KS, Revenue Bond, Series 2007-302, 144A, 0.38%*, 2/1/2012, LIQ: Bank of America NA | | | 11,565,000 | | | | 11,565,000 | |
| Wichita, KS, General Obligation, Series 240, 0.45%, 9/15/2011 | | | 23,800,000 | | | | 23,800,000 | |
| | | | | 44,055,000 | |
| Kentucky 0.2% | |
| Mason County, KY, Pollution Control Revenue, East Kentucky Power Corp., Inc., Series B-2, 0.85%*, 10/15/2014, SPA: National Rural Utilities Cooperative Finance Corp. | | | 4,500,000 | | | | 4,500,000 | |
| Louisiana 0.9% | |
| Lake Charles, LA, Harbor & Terminal District Revenue, Lake Charles Cogeneration, 0.37%, Mandatory Put 5/31/2011 @ 100, 11/1/2040 | | | 20,000,000 | | | | 20,000,000 | |
| Louisiana, Public Facilities Authority Revenue, C-Port LLC Project, Series C, 0.29%*, 10/1/2028, LOC: Bank of America NA | | | 4,950,000 | | | | 4,950,000 | |
| | | | | 24,950,000 | |
| Maine 0.4% | |
| Maine, State Housing Authority Mortgage Purchase, Series B, AMT, 0.31%*, 11/15/2041, SPA: KBC Bank NV | | | 10,000,000 | | | | 10,000,000 | |
| Maryland 0.8% | |
| Baltimore, MD, Municipal Securities Trust Receipts, SGA 152, "A", 144A, 0.3%*, 7/1/2020, INS: NATL, LOC: Societe Generale | | | 10,000,000 | | | | 10,000,000 | |
| Montgomery County, MD, 0.26%, 5/12/2011 | | | 11,400,000 | | | | 11,400,000 | |
| | | | | 21,400,000 | |
| Massachusetts 3.2% | |
| Massachusetts, Bay Transportation Authority, General Transportation Systems, 0.6%*, 3/1/2030, SPA: Dexia Credit Local | | | 11,000,000 | | | | 11,000,000 | |
| Massachusetts, Health & Education University Revenue, 0.26%, 7/8/2011 | | | 8,500,000 | | | | 8,500,000 | |
| Massachusetts, Macon Trust, Series 2007-310, 144A, 0.38%*, 6/15/2012, LIQ: Bank of America NA, LOC: Bank of America NA | | | 7,620,000 | | | | 7,620,000 | |
| Massachusetts, State Development Finance Agency Revenue, New Bedford Waste Services LLC, AMT, 0.32%*, 6/1/2021, LOC: Comerica Bank | | | 3,280,000 | | | | 3,280,000 | |
| Massachusetts, State Development Finance Agency Revenue, Northfield Mount Hermon, 0.28%*, 10/1/2042, LOC: JPMorgan Chase Bank | | | 4,700,000 | | | | 4,700,000 | |
| Massachusetts, State Revenue Anticipation Notes, Series C, 2.0%, 6/23/2011 | | | 50,000,000 | | | | 50,121,935 | |
| | | | | 85,221,935 | |
| Michigan 6.7% | |
| BlackRock MuniYield Michigan Quality Fund, Inc., Series W-7-1446, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,000,000 | | | | 15,000,000 | |
| Michigan, Finance Authority Revenue, State Aid Notes, Series D-3, 144A, 2.0%, 8/22/2011, LOC: Scotiabank | | | 43,000,000 | | | | 43,215,907 | |
| Michigan, RBC Municipal Products, Inc. Trust, Series L-25, 144A, AMT, 0.29%*, 9/1/2033, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 50,000,000 | | | | 50,000,000 | |
| Michigan, State Hospital Finance Authority Revenue, Ascension Health Senior Credit Group: | | | | | | | | |
| Series F-7, 0.35%*, 11/15/2047 | | | 11,200,000 | | | | 11,200,000 | |
| Series F-6, 0.35%**, 11/15/2049 | | | 10,000,000 | | | | 10,000,000 | |
| Series F-8, 0.35%**, 11/15/2049 | | | 5,000,000 | | | | 5,000,000 | |
| Series F-2, 0.45%, Mandatory Put 3/1/2012 @ 100, 11/15/2047 | | | 35,000,000 | | | | 35,000,000 | |
| Michigan, State Strategic Fund Ltd. Obligation Revenue, Kroger Co. Recovery Zone Facility, 0.32%*, 1/1/2026, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 178,915,907 | |
| Minnesota 0.3% | |
| Coon Rapids, MN, Industrial Development Revenue, Kurt Manufacturing Project: | | | | | | | | |
| AMT, 0.29%*, 11/1/2027, LOC: US Bank NA | | | 5,000,000 | | | | 5,000,000 | |
| AMT, 0.44%*, 11/1/2017, LOC: US Bank NA | | | 1,635,000 | | | | 1,635,000 | |
| | | | | 6,635,000 | |
| Mississippi 0.9% | |
| Mississippi, Redstone Partners Floaters/Residuals Trust: | |
| Series C, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 9,350,000 | | | | 9,350,000 | |
| Series B, AMT, 0.6%*, 12/1/2047, LIQ: Wells Fargo Bank NA, LOC: Wells Fargo Bank NA | | | 5,696,368 | | | | 5,696,368 | |
| Series A, AMT, 0.6%*, 4/1/2048, LOC: Wells Fargo Bank NA | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 24,546,368 | |
| Missouri 0.9% | |
| Missouri, State Development Finance Board, 0.3%, 5/24/2011 | | | 12,114,000 | | | | 12,114,000 | |
| Missouri, State Health & Educational Facilities Authority Revenue, St. Louis University, Series B-2, 0.2%*, 10/1/2035, LOC: Bank of America NA | | | 5,765,000 | | | | 5,765,000 | |
| Platte County, MO, Industrial Development Authority Revenue, Complete Home Concepts, Series A, AMT, 0.29%*, 1/1/2039, LOC: Columbian Bank | | | 6,800,000 | | | | 6,800,000 | |
| | | | | 24,679,000 | |
| Nebraska 0.4% | |
| Washington County, NE, Wastewater & Solid Waste Disposal Facilities Revenue, Series 24C, 144A, AMT, 0.36%*, 4/1/2035, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 9,670,000 | | | | 9,670,000 | |
| Nevada 0.5% | |
| Nevada, Housing Division, Single Family Mortgage Revenue: | |
| Series B, AMT, 0.32%*, 4/1/2042, INS: Fannie Mae, Freddie Mac & Ginnie Mae, SPA: JPMorgan Chase Bank | | | 8,000,000 | | | | 8,000,000 | |
| Series A, AMT, 0.42%*, 10/1/2039, INS: Fannie Mae, Freddie Mac & Ginnie Mae | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 12,700,000 | |
| New Hampshire 0.2% | |
| New Hampshire, Health & Education Facilities Authority Revenue, Easter Seals Rehabilitation Center, Series A, 0.27%*, 12/1/2034, LOC: Citizens Bank of NH | | | 4,600,000 | | | | 4,600,000 | |
| New Jersey 0.7% | |
| BlackRock MuniYield New Jersey Quality Fund, Inc., Series W-7-1022, AMT, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,200,000 | | | | 15,200,000 | |
| New Jersey, Economic Development Authority, Industrial Development Revenue, CST-Products LLC Project, AMT, 0.43%*, 4/1/2026, LOC: National Bank of Canada | | | 2,600,000 | | | | 2,600,000 | |
| | | | | 17,800,000 | |
| New Mexico 2.7% | |
| New Mexico, State Tax & Revenue Anticipation Notes: | |
| 1.5%, 6/30/2011 | | | 25,000,000 | | | | 25,049,099 | |
| 2.0%, 6/30/2011 | | | 25,000,000 | | | | 25,069,593 | |
| Santa Fe, NM, Gross Receipts Tax Revenue, Wastewater Systems, Series B, 0.28%*, 6/1/2022, LOC: BNP Paribas | | | 15,900,000 | | | | 15,900,000 | |
| University of New Mexico, Systems Improvement Revenues, 0.27%*, 6/1/2026, SPA: JPMorgan Chase Bank | | | 5,820,000 | | | | 5,820,000 | |
| | | | | 71,838,692 | |
| New York 7.9% | |
| Albany, NY, Industrial Development Agency, Civic Facility Revenue, The College of Saint Rose, Series A, 0.35%*, 7/1/2037, INS: NATL, LOC: Bank of America NA | | | 9,820,000 | | | | 9,820,000 | |
| Hempstead, NY, Industrial Development Agency Revenue, Series 92G, 144A, AMT, 0.4%*, 10/1/2045, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 23,775,000 | | | | 23,775,000 | |
| Monroe County, NY, Industrial Development Corp. Revenue, St. Ann's Home Aged Project, 0.26%*, 12/1/2040, LOC: HSBC Bank USA NA | | | 6,105,000 | | | | 6,105,000 | |
| Nassau County, NY, Industrial Development Agency Revenue, Series 75G, 144A, AMT, 0.28%*, 12/1/2033, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 29,995,000 | | | | 29,995,000 | |
| New York, Liberty Development Corp., World Trade Center, Series A-2, 144A, 0.35%, Mandatory Put 2/1/2012 @ 100, 12/1/2049 | | | 11,000,000 | | | | 11,000,000 | |
| New York, State Energy Research & Development Authority Facilities Revenue, Consolidated Edison Co. of New York, Inc., Series A-3, 144A, 0.27%*, 5/1/2039, LOC: Mizuho Corporate Bank | | | 15,000,000 | | | | 15,000,000 | |
| New York, State Mortgage Agency, Homeowner Mortgage Revenue: | | | | | | | | |
| Series 135, AMT, 0.5%*, 4/1/2037, SPA: Dexia Credit Local | | | 5,500,000 | | | | 5,500,000 | |
| Series 157, 0.75%*, 4/1/2047, SPA: Dexia Credit Local | | | 11,200,000 | | | | 11,200,000 | |
| New York, Wells Fargo Stage Trust, Series 4C, 144A, 0.29%*, 9/1/2040, LIQ: Wells Fargo Bank NA | | | 11,540,000 | | | | 11,540,000 | |
| New York City, NY, Municipal Water Finance Authority, Water & Sewer Revenue, Series F-2, 0.26%*, 6/15/2033, SPA: JPMorgan Chase Bank | | | 5,000,000 | | | | 5,000,000 | |
| New York City, NY, Transitional Finance Authority Revenue, Series 3866, 144A, 0.27%*, 8/1/2011, LIQ: JPMorgan Chase & Co. | | | 60,000,000 | | | | 60,000,000 | |
| Oyster Bay, NY, Bond Anticipation Notes, 2.0%, 3/9/2012 | | | 21,800,000 | | | | 22,089,387 | |
| | | | | 211,024,387 | |
| North Carolina 4.6% | |
| Cleveland County, NC, Industrial Facilities & Pollution Control Financing Authority, Curtiss-Wright Flight Systems, AMT, 0.35%*, 11/1/2023, LOC: Bank of America NA | | | 8,400,000 | | | | 8,400,000 | |
| North Carolina, BB&T Municipal Trust: | |
| Series 1027, 144A, 0.34%*, 3/1/2016, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,725,000 | | | | 10,725,000 | |
| Series 1032, 0.34%*, 1/7/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 11,625,000 | | | | 11,625,000 | |
| Series 1008, 144A, 0.34%*, 3/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,865,000 | | | | 5,865,000 | |
| Series 1011, 144A, 0.34%*, 4/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 7,520,000 | | | | 7,520,000 | |
| Series 1024, 144A, 0.34%*, 5/31/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 4,860,000 | | | | 4,860,000 | |
| Series 1009, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 17,075,000 | | | | 17,075,000 | |
| Series 1025, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,800,000 | | | | 10,800,000 | |
| North Carolina, Capital Educational Facilities Finance Agency Revenue, High Point University Project, 0.29%*, 12/1/2028, LOC: Branch Banking & Trust | | | 5,555,000 | | | | 5,555,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Campbell University, 0.29%*, 10/1/2034, LOC: Branch Banking & Trust | | | 5,845,000 | | | | 5,845,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Salem Academy & College Project, 0.29%*, 8/1/2030, LOC: Branch Banking & Trust | | | 7,200,000 | | | | 7,200,000 | |
| North Carolina, Medical Care Commission, Health Care Facilities Revenue, First Mortgage Deerfield, Series B, 0.29%*, 11/1/2038, LOC: Branch Banking & Trust | | | 10,035,000 | | | | 10,035,000 | |
| Person County, NC, Industrial Facilities & Pollution Control Financing Authority, Certainteed Gypsum, Inc., 0.24%*, 11/1/2035, LOC: Credit Industrial et Commercial | | | 16,625,000 | | | | 16,625,000 | |
| | | | | 122,130,000 | |
| Ohio 0.6% | |
| Ohio, Clipper Tax-Exempt Certificate Trust, Certificate of Participation, Series 2009-28, 144A, AMT, 0.38%*, 3/1/2035, LIQ: State Street Bank & Trust Co. | | | 2,460,000 | | | | 2,460,000 | |
| Ohio, Redstone Partners Floaters/Residuals Trust, Housing Finance Authority: | | | | | | | | |
| Series C, 144A, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 9,780,000 | | | | 9,780,000 | |
| Series D, 144A, AMT, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 4,340,000 | | | | 4,340,000 | |
| | | | | 16,580,000 | |
| Oregon 6.2% | |
| Oregon, State Tax Anticipation Notes, Series A, 144A, 2.0%, 6/30/2011 | | | 152,000,000 | | | | 152,400,629 | |
| Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project: | | | | | | | | |
| 0.29%*, 5/1/2034, LOC: Bank of America NA | | | 8,515,000 | | | | 8,515,000 | |
| 0.29%*, 5/1/2037, LOC: Bank of America NA | | | 5,385,000 | | | | 5,385,000 | |
| | | | | 166,300,629 | |
| Other 1.3% | |
| BlackRock Municipal Intermediate Duration Fund, Inc., Series W-7-2871, 144A, AMT, 0.51%**, 3/1/2041, LIQ: JPMorgan Chase Bank | | | 35,600,000 | | | | 35,600,000 | |
| Pennsylvania 1.3% | |
| Adams County, PA, Industrial Development Authority Revenue, Brethren Home Community Project, 0.3%*, 6/1/2032, LOC: PNC Bank NA | | | 7,180,000 | | | | 7,180,000 | |
| Allegheny County, PA, RBC Municipal Products, Inc. Trust Certificates, Series E-16, 144A, 0.27%*, 4/15/2039, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 22,490,000 | | | | 22,490,000 | |
| Beaver County, PA, Industrial Development Authority, Pollution Control Revenue, FirstEnergy Generation Corp., 0.22%*, 4/1/2041, LOC: UBS AG | | | 5,700,000 | | | | 5,700,000 | |
| | | | | 35,370,000 | |
| Puerto Rico 0.2% | |
| Puerto Rico, Commonwealth Highway & Transportation Authority Revenue, Series DCL 019, 144A, 0.9%*, 1/1/2029, INS: AGMC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 6,000,000 | | | | 6,000,000 | |
| South Carolina 0.4% | |
| South Carolina, BB&T Municipal Trust, Series 1013, 144A, 0.34%*, 1/1/2020, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,755,000 | | | | 5,755,000 | |
| South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Upper South Carolina, Inc. Project, 0.29%*, 9/1/2028, LOC: Branch Banking & Trust | | | 6,105,000 | | | | 6,105,000 | |
| | | | | 11,860,000 | |
| Tennessee 0.4% | |
| Blount County, TN, Public Building Authority, Local Government Public Improvement, Series E-5-B, 0.29%*, 6/1/2042, LOC: Branch Banking & Trust | | | 9,300,000 | | | | 9,300,000 | |
| Texas 11.0% | |
| Atascosa County, TX, Industrial Development Corp., Pollution Control Revenue, San Miguel Electric Cooperative, Inc., 0.4%*, 6/30/2020, GTY: National Rural Utilities Cooperative Finance Corp., SPA: National Rural Utilities Cooperative Finance Corp. | | | 44,200,000 | | | | 44,200,000 | |
| East Texas, Housing Finance, Redstone Partners Floaters/Residuals Trust, Series D, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 7,930,000 | | | | 7,930,000 | |
| Harris County, TX, Cultural Education Facilities Finance Corp. Revenue, Memorial Hermann Hospital Systems, Series D-3, 0.27%*, 6/1/2029, LOC: Bank of America NA | | | 14,900,000 | | | | 14,900,000 | |
| Harris County, TX, Health Facilities Development Corp., Hospital Revenue, Baylor College of Medicine, Series B, 0.24%*, 11/15/2047, LOC: Northern Trust Co. | | | 8,100,000 | | | | 8,100,000 | |
| Katy, TX, Independent School Building District, 0.27%*, 8/15/2033, SPA: Bank of America NA | | | 8,300,000 | | | | 8,300,000 | |
| North East, TX, Independent School District, Series 002, 144A, 0.65%*, 2/1/2029, LIQ: Dexia Credit Local | | | 11,325,000 | | | | 11,325,000 | |
| Tarrant County, TX, Redstone Partners Floaters/Residuals Trust, Series A, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 12,190,000 | | | | 12,190,000 | |
| Texas, Department of Housing, Series 2008-3022X, 144A, AMT, 0.4%*, 9/1/2032, INS: Fannie Mae, Freddie Mac & Ginnie Mae, LIQ: Bank of America NA | | | 4,980,000 | | | | 4,980,000 | |
| Texas, North East Independent School District, "A", 144A, 0.26%*, 8/1/2037, LIQ: Citibank NA | | | 8,935,000 | | | | 8,935,000 | |
| Texas, RBC Municipal Products, Inc. Trust, Series L-46, 144A, AMT, 0.29%*, 12/1/2034, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 52,995,000 | | | | 52,995,000 | |
| Texas, State General Obligation, "A", 144A, 0.26%*, 4/1/2029, LIQ: Citibank NA | | | 8,685,000 | | | | 8,685,000 | |
| Texas, State Tax & Revenue Anticipation Notes: | |
| Series 3812, 144A, 0.27%*, 8/31/2011, LIQ: JPMorgan Chase & Co. | | | 29,500,000 | | | | 29,500,000 | |
| Series 3813, 144A, 0.3%*, 8/31/2011, LIQ: JPMorgan Chase Bank | | | 38,000,000 | | | | 38,000,000 | |
| 2.0%, 8/31/2011 | | | 25,000,000 | | | | 25,135,681 | |
| Texas A&M University Revenue, 144A, 0.26%*, 5/15/2018, LIQ: Citibank NA | | | 2,800,000 | | | | 2,800,000 | |
| Texas City, TX, Industrial Development Corp. Revenue, Del Papa Realty Holdings, 0.28%*, 1/1/2051, LOC: Bank of America NA | | | 10,300,000 | | | | 10,300,000 | |
| Weslaco, TX, Health Facilities Development, Knapp Medical Center, Series A, 0.91%*, 6/1/2038, LOC: Compass Bank | | | 4,625,000 | | | | 4,625,000 | |
| | | | | 292,900,681 | |
| Vermont 0.2% | |
| Vermont, Educational & Health Buildings Financing Agency Revenue, Fletcher Allen Health Care, Series A, 0.24%*, 12/1/2030, LOC: TD Bank NA | | | 4,070,000 | | | | 4,070,000 | |
| Virginia 1.2% | |
| Arlington County, VA, Industrial Development Authority, Multi-Family Revenue, Series A, AMT, 0.31%*, 8/1/2047, INS: Freddie Mac, LIQ: Freddie Mac | | | 3,000,000 | | | | 3,000,000 | |
| Virginia, Federal Home Loan Mortgage Corp., Multi-Family Variable Rate Certificates, AMT, 0.31%*, 7/15/2050, LIQ: Freddie Mac | | | 19,085,000 | | | | 19,085,000 | |
| Virginia, RBC Municipal Products, Inc. Trust, Series C-2, 144A, AMT, 0.38%*, 1/1/2014, LOC: Royal Bank of Canada, SPA: Royal Bank of Canada | | | 9,050,000 | | | | 9,050,000 | |
| | | | | 31,135,000 | |
| Washington 1.3% | |
| University of Washington, 0.28%, 5/10/2011 | | | 23,000,000 | | | | 23,000,000 | |
| Washington, State Health Care Facilities Authority, Swedish Health Services, Series C, 0.25%*, 11/15/2046, LOC: Citibank NA | | | 3,900,000 | | | | 3,900,000 | |
| Washington, State Higher Education Facilities Authority Revenue, Seattle University Project, Series A, 0.27%*, 5/1/2028, LOC: US Bank NA | | | 8,545,000 | | | | 8,545,000 | |
| | | | | 35,445,000 | |
| West Virginia 3.2% | |
| Cabell County, WV, University Facilities Revenue, Provident Group Marshall Properties, Series A, 0.27%*, 7/1/2039, LOC: Bank of America NA | | | 20,000,000 | | | | 20,000,000 | |
| West Virginia, Public Energy Authority Revenue, Morgantown Association Project, AMT, 0.4%*, 7/1/2017, LOC: Dexia Credit Local | | | 65,000,000 | | | | 65,000,000 | |
| | | | | 85,000,000 | |
| Wisconsin 0.6% | |
| Plymouth, WI, Industrial Development Revenue, Masters Gallery Foods, Series A, AMT, 0.45%*, 5/1/2038, LOC: Wells Fargo Bank NA | | | 5,300,000 | | | | 5,300,000 | |
| Wisconsin, State Health & Educational Facilities Authority Revenue, Prohealth Care, Inc., Series B, 0.3%*, 2/1/2034, LOC: Chase Manhattan Bank | | | 11,225,000 | | | | 11,225,000 | |
| | | | | 16,525,000 | |
| Wyoming 0.6% | |
| Sweetwater County, WY, 0.3%, 6/10/2011 | | | 14,775,000 | | | | 14,775,000 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $2,655,195,212)+ | | | 99.8 | | | | 2,655,195,212 | |
| Other Assets and Liabilities, Net | | | 0.2 | | | | 6,012,980 | |
| Net Assets | | | 100.0 | | | | 2,661,208,192 | |
* Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of April 30, 2011.
** These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
+ The cost for federal income tax purposes was $2,655,195,212.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
AGMC: Assured Guaranty Municipal Corp.
AMBAC: Ambac Financial Group, Inc.
AMT: Subject to alternative minimum tax.
FSB: Federal Savings Bank
GTY: Guaranty Agreement
INS: Insured
LIQ: Liquidity Facility
LOC: Letter of Credit
NATL: National Public Finance Guarantee Corp.
SPA: Standby Bond Purchase Agreement
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Municipal Investments (a) | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
| Total | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
(a) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Tax-Exempt Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,655,195,212 | |
| Receivable for investments sold | | | 4,620,000 | |
| Receivable for Fund shares sold | | | 934,515 | |
| Interest receivable | | | 7,077,878 | |
| Due from Advisor | | | 4,095 | |
| Other assets | | | 105,818 | |
| Total assets | | | 2,667,937,518 | |
| Liabilities | |
| Cash overdraft | | | 4,581,713 | |
| Payable for Fund shares redeemed | | | 918,070 | |
| Distributions payable | | | 62,767 | |
| Accrued management fee | | | 133,641 | |
| Other accrued expenses and payables | | | 1,033,135 | |
| Total liabilities | | | 6,729,326 | |
| Net assets, at value | | $ | 2,661,208,192 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 676,116 | |
| Paid-in capital | | | 2,660,532,076 | |
| Net assets, at value | | $ | 2,661,208,192 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Tax-Exempt Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($10,598,969 ÷ 10,595,483 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($75,044,850 ÷ 75,020,161 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Cash Institutional Shares Net Asset Value, offering and redemption price per share ($1,492,310,747 ÷ 1,491,819,969 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Money Fund Net Asset Value, offering and redemption price per share ($366,030,472 ÷ 365,909,997 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Free Money Fund Class S Net Asset Value, offering and redemption price per share ($124,763,547 ÷ 124,722,636 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($81,988,417 ÷ 81,961,452 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Exempt Cash Managed Shares Net Asset Value, offering and redemption price per share ($127,448,310 ÷ 127,406,394 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Free Investment Class Net Asset Value, offering and redemption price per share ($383,022,880 ÷ 382,896,908 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Tax-Exempt Portfolio | |
Income: Interest | | $ | 12,045,887 | |
Expenses: Management fee | | | 1,955,813 | |
| Administration fee | | | 3,350,131 | |
| Services to shareholders | | | 1,364,156 | |
| Custodian fee | | | 68,016 | |
| Distribution and service fees | | | 2,569,390 | |
| Professional fees | | | 150,070 | |
| Trustees' fees and expenses | | | 102,796 | |
| Reports to shareholders | | | 197,069 | |
| Registration fees | | | 179,038 | |
| Other | | | 177,139 | |
| Total expenses before expense reductions | | | 10,113,618 | |
| Expense reductions | | | (2,277,709 | ) |
| Total expenses after expense reductions | | | 7,835,909 | |
| Net investment income | | | 4,209,978 | |
| Net realized gain (loss) from investments | | | 26,953 | |
| Net increase (decrease) in net assets resulting from operations | | $ | 4,236,931 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Tax-Exempt Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 4,209,978 | | | $ | 6,786,569 | |
| Net realized gain (loss) | | | 26,953 | | | | 42,867 | |
| Net increase in net assets resulting from operations | | | 4,236,931 | | | | 6,829,436 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (1,440 | ) | | | (2,046 | ) |
| Davidson Cash Equivalent Shares | | | (8,101 | ) | | | (9,092 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (3,424,889 | ) | | | (5,359,767 | ) |
| DWS Tax-Exempt Money Fund | | | (551,022 | ) | | | (1,068,021 | ) |
| DWS Tax-Free Money Fund Class S | | | (156,176 | ) | | | (283,931 | ) |
| Premier Money Market Shares | | | (1,265 | ) | | | (24,737 | ) |
| Service Shares | | | (7,236 | ) | | | (5,804 | ) |
| Tax-Exempt Cash Managed Shares | | | (18,703 | ) | | | (160,260 | ) |
| Tax-Free Investment Class | | | (41,260 | ) | | | (198,503 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (597 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (2,251 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | — | | | | (74,322 | ) |
| DWS Tax-Exempt Money Fund | | | — | | | | (13,853 | ) |
| DWS Tax-Free Money Fund Class S | | | — | | | | (4,326 | ) |
| Premier Money Market Shares | | | — | | | | (782 | ) |
| Service Shares | | | — | | | | (1,849 | ) |
| Tax-Exempt Cash Managed Shares | | | — | | | | (7,679 | ) |
| Tax-Free Investment Class | | | — | | | | (14,341 | ) |
| Total distributions | | | (4,210,092 | ) | | | (7,232,161 | ) |
Fund share transactions: Proceeds from shares sold | | | 9,995,553,494 | | | | 11,211,632,894 | |
| Reinvestment of distributions | | | 2,851,124 | | | | 5,434,005 | |
| Cost of shares redeemed | | | (10,411,552,190 | ) | | | (11,989,083,579 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (413,147,572 | ) | | | (772,016,680 | ) |
| Increase (decrease) in net assets | | | (413,120,733 | ) | | | (772,419,405 | ) |
| Net assets at beginning of period | | | 3,074,328,925 | | | | 3,846,748,330 | |
| Net assets at end of period (including undistributed net investment income of $676,116 and $649,277, respectively) | | $ | 2,661,208,192 | | | $ | 3,074,328,925 | |
The accompanying notes are an integral part of the financial statements.
Tax-Exempt Portfolio DWS Tax-Free Money Fund Class S | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | | 2007 | a |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .001 | | | | .002 | | | | .015 | | | | .031 | | | | .004 | |
| Net realized and unrealized gain (loss) | | | .000 | *** | | | .000 | *** | | | .000 | *** | | | .000 | *** | | | (.000 | )*** |
| Total from investment operations | | | .001 | | | | .002 | | | | .015 | | | | .031 | | | | .004 | |
Less distributions from: Net investment income | | | (.001 | ) | | | (.002 | ) | | | (.015 | ) | | | (.031 | ) | | | (.004 | ) |
| Net realized gains | | | — | | | | (.000 | )*** | | | — | | | | — | | | | — | |
| Total distributions | | | (.001 | ) | | | (.002 | ) | | | (.015 | ) | | | (.031 | ) | | | (.004 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| Total Return (%) | | | .12 | | | | .19 | | | | 1.54 | | | | 3.15 | b | | | .40 | ** |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 125 | | | | 141 | | | | 164 | | | | 167 | | | | 172 | |
| Ratio of expenses before expense reductions (%) | | | .24 | | | | .27 | | | | .26 | | | | .27 | | | | .29 | * |
| Ratio of expenses after expense reductions (%) | | | .24 | | | | .27 | | | | .26 | | | | .26 | | | | .29 | * |
| Ratio of net investment income (%) | | | .12 | | | | .18 | | | | 1.53 | | | | 3.06 | | | | 3.42 | * |
a For the period from March 19, 2007 (commencement of operations) to April 30, 2007. b Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized *** Amount is less than $.0005. | |
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three funds: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio. These financial statements report on Tax-Exempt Portfolio (the "Fund").
Tax-Exempt Portfolio offers eight 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, Service Shares, Tax-Exempt Cash Managed Shares and Tax-Free Investment Class. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
The financial highlights for all classes of shares, other than DWS Tax-Free Money Fund Class S, are provided separately and are available upon request.
The Fund's investment income, realized gains and losses, and certain Fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of the Fund, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The Fund values all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders.
The Fund has reviewed the tax positions for the open tax years as of April 30, 2011 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income. Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. The Fund may take into account capital gains and losses in its daily dividend declarations. The Fund may also make additional distributions for tax purposes if necessary.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Fund.
At April 30, 2011, the Fund's components of distributable earnings on a tax basis are as follows:
| Undistributed tax-exempt income* | | $ | 738,883 | |
In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:
| | | Years Ended April 30, | |
| | | 2011 | | | 2010 | |
| Distributions from tax-exempt income | | $ | 4,210,092 | | | $ | 7,201,436 | |
| Distributions from long-term capital gains | | $ | — | | | $ | 30,725 | |
* For tax purposes, short-term capital gains distributions are considered ordinary income distributions.
Expenses. Expenses of the Trust arising in connection with a specific Fund are allocated to that Fund. Other Trust expenses which cannot be directly attributed to a Fund are apportioned pro rata on the basis of relative net assets among the Funds in the Trust.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Other. Investment transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
2. Related Parties
Management Agreement. Under an Amended and Restated Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
In addition, the Fund pays a monthly management fee based on the combined average daily net assets of the three Funds and allocated to the Fund based on its relative net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .120 | % |
| Next $500 million of such net assets | | | .100 | % |
| Next $1 billion of such net assets | | | .075 | % |
| Next $1 billion of such net assets | | | .060 | % |
| Over $3 billion of such net assets | | | .050 | % |
For the period from May 1, 2010 through September 30, 2011, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the DWS Tax-Free Money Fund Class S to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 0.48%.
The Advisor also has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
Accordingly, for the year ended April 30, 2011, the Fund incurred a management fee equivalent to the following annual effective rate of the Fund's average daily net assets:
| | Annual Effective Rate |
| Tax-Exempt Portfolio | .06% |
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended April 30, 2011, the Administration Fee was as follows:
| | | Administration Fee | | | Unpaid at April 30, 2011 | |
| Tax-Exempt Portfolio | | $ | 3,350,131 | | | $ | 226,253 | |
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the year ended April 30, 2011, the amounts charged to the Fund by DISC were as follows:
| Tax-Exempt Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 12,532 | | | $ | 5,364 | |
| Davidson Cash Equivalent Shares | | | 121,647 | | | | — | | | | 41,015 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 196,624 | | | | — | | | | 61,668 | |
| DWS Tax-Exempt Money Fund | | | 134,008 | | | | — | | | | 39,976 | |
| DWS Tax-Free Money Fund Class S | | | 68,702 | | | | — | | | | 25,134 | |
| Premier Money Market Shares | | | 31,484 | | | | 6,558 | | | | — | |
| Service Shares | | | 182,607 | | | | 72,945 | | | | 41,130 | |
| Tax-Exempt Cash Managed Shares | | | 77,147 | | | | — | | | | 33,219 | |
| Tax-Free Investment Class | | | 444,553 | | | | — | | | | 153,350 | |
| | | $ | 1,292,741 | | | $ | 92,035 | | | $ | 400,856 | |
Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee"), calculated as a percentage of average daily net assets for the shares listed in the following table.
For the year ended April 30, 2011, the Distribution Fee was as follows:
| Tax-Exempt Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 47,479 | | | $ | 47,479 | | | | .00 | % | | | .33 | % |
| Davidson Cash Equivalent Shares | | | 243,294 | | | | 243,294 | | | | .00 | % | | | .30 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 434,433 | | | | 434,433 | | | | .00 | % | | | .60 | % |
| Tax-Free Investment Class | | | 1,032,179 | | | | 1,032,179 | | | | .00 | % | | | .25 | % |
| | | $ | 1,789,098 | | | $ | 1,789,098 | | | | | | | | | |
In addition, DIDI 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, 2011, the Service Fee was as follows:
| Tax-Exempt Portfolio: | | Service Fee | | | Waived | | | Unpaid at April 30, 2011 | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 35,969 | | | $ | — | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Shares | | | 202,745 | | | | 194,185 | | | | — | | | | .01 | % | | | .25 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | — | | | | .00 | % | | | .25 | % |
| Tax-Exempt Cash Managed Shares | | | 220,855 | | | | 61,372 | | | | 10,827 | | | | .11 | % | | | .15 | % |
| Tax-Free Investment Class | | | 289,010 | | | | 73,337 | | | | 22,721 | | | | .05 | % | | | .07 | % |
| | | $ | 780,292 | | | $ | 396,576 | | | $ | 33,548 | | | | | | | | | |
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended April 30, 2011, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" was as follows:
| Fund | | Total Aggregated | | | Unpaid at April 30, 2011 | |
| Tax-Exempt Portfolio | | $ | 105,603 | | | $ | 41,114 | |
Trustees' Fees and Expenses. The Fund paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.
3. Concentration of Ownership
From time to time, the Fund may have a concentration of several shareholder accounts holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Fund.
At April 30, 2011, there were two shareholder accounts that held approximately 13% and 11%, respectively, of the outstanding shares of the Tax-Exempt Portfolio.
4. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus, if LIBOR exceeds the Federal Funds Rate, the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
5. Share Transactions
The following table summarizes share and dollar activity in the Fund:
Tax-Exempt Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 37,505,008 | | | $ | 37,505,008 | | | | 49,394,797 | | | $ | 49,394,797 | |
| Davidson Cash Equivalent Shares | | | 108,372,167 | | | | 108,372,167 | | | | 140,991,927 | | | | 140,991,927 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 8,705,410,264 | | | | 8,705,410,264 | | | | 9,545,076,388 | | | | 9,545,076,388 | |
| DWS Tax-Exempt Money Fund | | | 234,765,709 | | | | 234,765,709 | | | | 183,055,619 | | | | 183,055,619 | |
| DWS Tax-Free Money Fund Class S | | | 40,065,751 | | | | 40,065,751 | | | | 39,784,180 | | | | 39,784,180 | |
Premier Money Market Shares* | | | 17,963,464 | | | | 17,963,464 | | | | 109,396,548 | | | | 109,396,548 | |
| Service Shares | | | 171,592,837 | | | | 171,592,837 | | | | 277,971,196 | | | | 277,971,196 | |
| Tax-Exempt Cash Managed Shares | | | 270,920,971 | | | | 270,920,971 | | | | 471,983,176 | | | | 471,983,176 | |
| Tax-Free Investment Class | | | 408,957,323 | | | | 408,957,323 | | | | 393,979,063 | | | | 393,979,063 | |
| | | | | | | $ | 9,995,553,494 | | | | | | | $ | 11,211,632,894 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 1,433 | | | $ | 1,433 | | | | 2,653 | | | $ | 2,653 | |
| Davidson Cash Equivalent Shares | | | 8,078 | | | | 8,078 | | | | 11,387 | | | | 11,387 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 2,103,424 | | | | 2,103,424 | | | | 3,842,512 | | | | 3,842,512 | |
| DWS Tax-Exempt Money Fund | | | 541,218 | | | | 541,218 | | | | 1,065,790 | | | | 1,065,790 | |
| DWS Tax-Free Money Fund Class S | | | 147,957 | | | | 147,957 | | | | 270,634 | | | | 270,634 | |
Premier Money Market Shares* | | | 1,023 | | | | 1,023 | | | | 23,773 | | | | 23,773 | |
| Service Shares | | | 7,238 | | | | 7,238 | | | | 7,673 | | | | 7,673 | |
| Tax-Exempt Cash Managed Shares | | | 84 | | | | 84 | | | | 886 | | | | 886 | |
| Tax-Free Investment Class | | | 40,669 | | | | 40,669 | | | | 208,697 | | | | 208,697 | |
| | | | | | | $ | 2,851,124 | | | | | | | $ | 5,434,005 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (44,799,949 | ) | | | | $ (44,799,949) | | | (57,387,875 | ) | | $ | (57,387,875 | ) |
| Davidson Cash Equivalent Shares | | | (113,236,507 | ) | | | (113,236,507 | ) | | | (128,403,019 | ) | | | (128,403,019 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (8,940,648,532 | ) | | | (8,940,648,532 | ) | | | (9,593,718,982 | ) | | | (9,593,718,982 | ) |
| DWS Tax-Exempt Money Fund | | | (297,512,567 | ) | | | (297,512,567 | ) | | | (258,965,066 | ) | | | (258,965,066 | ) |
| DWS Tax-Free Money Fund Class S | | | (55,821,788 | ) | | | (55,821,788 | ) | | | (63,795,223 | ) | | | (63,795,223 | ) |
Premier Money Market Shares* | | | (47,338,154 | ) | | | (47,338,154 | ) | | | (571,302,157 | ) | | | (571,302,157 | ) |
| Service Shares | | | (126,254,371 | ) | | | (126,254,371 | ) | | | (303,098,913 | ) | | | (303,098,913 | ) |
| Tax-Exempt Cash Managed Shares | | | (352,406,232 | ) | | | (352,406,232 | ) | | | (455,851,093 | ) | | | (455,851,093 | ) |
| Tax-Free Investment Class | | | (433,534,090 | ) | | | (433,534,090 | ) | | | (556,561,251 | ) | | | (556,561,251 | ) |
| | | | | | | $ | (10,411,552,190 | ) | | | | | | $ | (11,989,083,579 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (7,293,508 | ) | | | (7,293,508 | ) | | | (7,990,425 | ) | | $ | (7,990,425 | ) |
| Davidson Cash Equivalent Shares | | | (4,856,262 | ) | | | (4,856,262 | ) | | | 12,600,295 | | | | 12,600,295 | |
| DWS Tax-Exempt Cash Institutional Shares | | | (233,134,844 | ) | | | (233,134,844 | ) | | | (44,800,082 | ) | | | (44,800,082 | ) |
| DWS Tax-Exempt Money Fund | | | (62,205,640 | ) | | | (62,205,640 | ) | | | (74,843,657 | ) | | | (74,843,657 | ) |
| DWS Tax-Free Money Fund Class S | | | (15,608,080 | ) | | | (15,608,080 | ) | | | (23,740,409 | ) | | | (23,740,409 | ) |
Premier Money Market Shares* | | | (29,373,667 | ) | | | (29,373,667 | ) | | | (461,881,836 | ) | | | (461,881,836 | ) |
| Service Shares | | | 45,345,704 | | | | 45,345,704 | | | | (25,120,044 | ) | | | (25,120,044 | ) |
| Tax-Exempt Cash Managed Shares | | | (81,485,177 | ) | | | (81,485,177 | ) | | | 16,132,969 | | | | 16,132,969 | |
| Tax-Free Investment Class | | | (24,536,098 | ) | | | (24,536,098 | ) | | | (162,373,491 | ) | | | (162,373,491 | ) |
| | | | | | | $ | (413,147,572 | ) | | | | | | $ | (772,016,680 | ) |
* The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Cash Account Trust:
We have audited the accompanying statement of assets and liabilities of the Tax-Exempt Portfolio (the "Portfolio"), one of the portfolios constituting Cash Account Trust (the "Trust"), including the investment portfolio, as of April 30, 2011, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Tax-Exempt Portfolio of Cash Account Trust at April 30, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
| | | |
Boston, Massachusetts June 20, 2011 | | |
Tax Information (Unaudited)
Of the dividends paid from net investment income for the taxable year ended April 30, 2011, 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.
Summary of Management Fee Evaluation by Independent Fee Consultant
October 3, 2010
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.
Qualifications
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
Summary of Administrative Fee Evaluation by Independent Fee Consultant
October 4, 2010
Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of a proposed pass-through to the funds of certain reporting costs associated with new regulations for money funds. My evaluation considered the following:
• My recently completed annual evaluation (please see my summary report of October 3, 2010), concluding that the prospective fees and expenses of all the DWS-sponsored money funds are reasonable.
• The fact that in my opinion the services DWS would provide under the combination of the Advisory and proposed Administration Agreements continues to be comparable with those typically provided to competitive funds under their management agreements.
• Management's analysis showing that the maximum total expense ratio impact of this change on any fund share class would be 1.3 basis points, which in my opinion is not material to my conclusions about the reasonableness of expenses.
Based on the foregoing considerations, in my opinion the proposed fees and expenses for the affected DWS-sponsored money funds are reasonable.
Thomas H. Mack
Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the fund as of April 30, 2011. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
| Independent Board Members |
Name, Year of Birth, Position with the Fund and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen | Other Directorships Held by Board Member |
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993 | Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (education committees); formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 118 | — |
John W. Ballantine (1946) Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Chairman of the Board, Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity); former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International | 118 | — |
Henry P. Becton, Jr. (1943) Board Member since 1990 | Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Public Radio International; Public Radio Exchange (PRX); The PBS Foundation; former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service | 118 | Lead Director, Becton Dickinson and Company2 (medical technology company); Lead Director, Belo Corporation2 (media company) |
Dawn-Marie Driscoll (1946) Board Member since 1987 | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization); former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2007) |
Keith R. Fox (1954) Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies | 118 | — |
Kenneth C. Froewiss (1945) Board Member since 2001 | Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996) | 118 | — |
Richard J. Herring (1946) Board Member since 1990 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; Independent Director of Barclays Bank Delaware (since September 2010); formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006) | 118 | Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007) |
William McClayton (1944) Board Member since 2004 | Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival | 118 | — |
Rebecca W. Rimel (1951) Board Member since 1995 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Trustee, Pro Publica (charitable organization) (2007-2010) | 118 | Director, CardioNet, Inc. (health care) (2009- present); Director, Viasys Health Care2 (January 2007- June 2007); |
William N. Searcy, Jr. (1946) Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 1998) |
Jean Gleason Stromberg (1943) Board Member since 1997 | Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996) | 118 | — |
Robert H. Wadsworth (1940) Board Member since 1999 | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association | 121 | — |
Officers4 |
Name, Year of Birth, Position with the Fund and Length of Time Served5 | Principal Occupation(s) During Past 5 Years and Other Directorships Held |
W. Douglas Beck, CFA9,10 (1967) President and CEO, 2011-present | Managing Director3, Deutsche Asset Management (2006-present); President and CEO of DWS family of funds and Head of Product Management, US for DWS Investments; formerly, Executive Director, Head of Product Management (2002-2006) and President (2005-2006) of the UBS Funds at UBS Global Asset Management; Co-Head of Manager Research/Managed Solutions Group, Merrill Lynch (1998-2002) |
John Millette7 (1962) Vice President and Secretary, 1999-present | Director3, Deutsche Asset Management |
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present | Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998) |
Caroline Pearson7 (1962) Chief Legal Officer, April 2010-present | Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010) |
Rita Rubin8 (1970) Assistant Secretary, 2009-present | Director3 and Senior Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007) |
Paul Antosca7 (1957) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006) |
Jack Clark7 (1967) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007) |
Diane Kenneally7 (1966) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
John Caruso8 (1965) Anti-Money Laundering Compliance Officer, 2010-present | Managing Director3, Deutsche Asset Management |
Robert Kloby8 (1962) Chief Compliance Officer, 2006-present | Managing Director3, Deutsche Asset Management |
1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.
2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3 Executive title, not a board directorship.
4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.
5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.
6 Address: 100 Plaza One, Jersey City, NJ 07311.
7 Address: One Beacon Street, Boston, MA 02108.
8 Address: 60 Wall Street, New York, NY 10005.
9 Address: 345 Park Avenue, New York, NY 10154.
10 Appointed May 17, 2011, effective June 1, 2011.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
Notes
Notes
ANNUAL REPORT TO SHAREHOLDERS
Tax-Free Investment Class
Tax-Exempt Portfolio
April 30, 2011
Contents
3 Portfolio Management Review 7 Information About Your Fund's Expenses 22 Statement of Assets and Liabilities 24 Statement of Operations 25 Statement of Changes in Net Assets 28 Notes to Financial Statements 36 Report of Independent Registered Public Accounting Firm 38 Summary of Management Fee Evaluation by Independent Fee Consultant 42 Summary of Administrative Fee Evaluation by Independent Fee Consultant 43 Board Members and Officers |
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, visit www.dws-investments.com. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.
An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of the fund may have a significant adverse effect on the share prices of all classes of shares of the fund. See the prospectus for specific details regarding the fund's risk profile.
The fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Portfolio Management Review
Market Overview
The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
In September 2010, investors responded positively to US Federal Reserve Board (the Fed) Chairman Ben Bernanke's statement that the Fed would take additional steps in the form of "quantitative easing" to prop up the US economy as needed.1 Over the fund's most recent 12-month period, the money market yield curve has gradually steepened as longer-term rates rose in response to improved economic data and shorter maturities declined significantly based on a number of market influences.2 These included continuing strong demand and shrinking supply in the money market area; the removal (or unwind) of $200 billion in two-month Treasury bills from the market until Congress once again raises the US debt ceiling; a new FDIC fee assessment that has, in effect, removed some of the incentive for certain large banks to create supply in the money market area; and; lastly, the fact that the federal funds rate remains "on hold," keeping short-term rates lower overall.3
Positive Contributors to Fund Performance
We were able to maintain a competitive yield for the fund during the period ended April 30, 2011. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)
In light of the continued fiscal stress on state and local governments, and with dynamic rule changes regarding money market funds coming from the SEC, we believed it was prudent to maintain a short average maturity. Toward the end of the period, the fund was invested mainly in short-term commercial paper and floating-rate securities. (The interest rate of floating-rate securities adjusts periodically based on indices such as the Securities Industry and Financial Market Association Index of Variable Rate Demand Notes.)4,5 Because the interest rates of these instruments adjust as market conditions change, they provide flexibility in an uncertain interest rate environment.
Our main focus, as always, is on preservation of capital, and during the period ending April 30, 2011, we maintained a short maturity and attempted to ensure ample liquidity for the fund.
Negative Contributors to Fund Performance
The types of securities that we were investing in the fund tended to have lower yields than issues carrying more risk. We preferred to be cautious during a time of market uncertainty. In the end this cost the fund some yield, but we believe that this represented a prudent approach to preserving principal in light of the circumstances during the period.
Outlook and Positioning
Assuming that Congress can agree to raise the US debt ceiling in the near future, significant short-term Treasury supply should return to the market in the coming months and remove some downward pressure on money market rates that carry the shortest maturities. In general, however, we continue to foresee an artificially low interest rate environment because of declining money market supply, a large number of money market issues maturing with principal needing to be reinvested and continued strong demand from investors seeking principal stability and safety.
We continue our insistence on the highest credit quality within the fund.6 We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the fund and to seek competitive yield for our shareholders.
Fund Performance (as of April 30, 2011)
Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, this share price isn't guaranteed and you could lose money by investing in money market funds. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the fund's $1.00 share price. The credit quality of the fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the fund's share price. The fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in one class of shares of a fund may have a significant adverse effect on the share prices of all classes of shares of that fund. See the prospectus for specific details regarding the fund's risk profile.
| | |
| | | 7-Day Current Yield | |
| Tax-Free Investment Class | | | 0.01 | %* |
| (Equivalent Taxable Yield) | | | 0.02 | %** |
Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the fund over a 7-day period expressed as an annual percentage rate of the fund's shares outstanding. For the most current yield information, visit our Web site at www.dws-investments.com. * The investment advisor has agreed to voluntarily waive fees/reimburse expenses. This waiver may be changed or terminated at any time without notice. Otherwise, the 7-day current yield would have been -0.22% as of April 30, 2011. ** The equivalent taxable yield allows you to compare with the performance of taxable money market funds. For the Tax-Exempt Portfolio, the equivalent taxable yield is based upon the marginal income tax rate of 35%. Income may be subject to local taxes and, for some investors, the alternative minimum tax. | |
1 Quantitative easing — a monetary policy used by the government to increase the money supply. With this policy, the government purchases government and other securities from the market to create additional capital which financial institutions can use to promote lending and liquidity.
2 The yield curve — a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.
3 Treasury bill — a short-term (maturity up to 1 year) discounted government security sold through competitive bidding at weekly and monthly auctions in denominations of $10,000 to $1 million. Debt ceiling is the maximum borrowing power of a government entity. FDIC (Federal Deposit Insurance Corporation) is a federal agency that insures deposits in member banks and thrifts up to a specific dollar amount. Federal funds rate is the overnight bank lending rate.
4 Average maturity — the average length of time until the principal amount of a bond must be repaid.
5 The Securities Industry and Financial Market Association Index of Variable Rate Demand Notes is a weekly high-grade market index consisting of seven-day, tax-exempt, variable-rate demand notes produced by Municipal Market Data Group. Actual issues are selected from Municipal Market Data's database of more than 10,000 active issues.
Index returns, unlike fund returns, do not reflect any fees of expenses. It is not possible to invest directly into an index.
6 Credit quality — a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default. The fund's credit quality does not remove market risk and is subject to change.
Information About Your Fund's Expenses
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher for the Tax-Free Investment Class. 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, 2010 to April 30, 2011).
The tables illustrate your Fund's expenses in two ways:
•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in each Fund using each Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
• Hypothetical 5% Fund Return. This helps you to compare each Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using each Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Expenses and Value of a $1,000 Investment for the six months ended April 30, 2011 | |
| Actual Fund Return | | Tax-Free Investment Class | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,000.05 | |
Expenses Paid per $1,000* | | $ | 1.64 | |
| Hypothetical 5% Fund Return | | | | |
| Beginning Account Value 11/1/10 | | $ | 1,000.00 | |
| Ending Account Value 4/30/11 | | $ | 1,023.16 | |
Expenses Paid per $1,000* | | $ | 1.66 | |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
| Annualized Expense Ratio | |
| Tax-Free Investment Class | .33% |
For more information, please refer to the Fund's prospectus.
Tax-Exempt Portfolio
Asset Allocation (As a % of Investment Portfolio) | 4/30/11 | 4/30/10 |
| | | |
Municipal Investments Municipal Variable Rate Demand Notes | 70% | 72% |
| Municipal Bonds and Notes | 27% | 28% |
| Municipal Floating Rate Notes | 3% | — |
| | 100% | 100% |
| Weighted Average Maturity | 4/30/11 | 4/30/10 |
| | | |
| Cash Account Trust — Tax-Exempt Portfolio | 33 days | 44 days |
| National Tax-Free Retail Money Fund Average* | 28 days | 31 days |
* The Fund is compared to its respective iMoneyNet Category: National Tax-Free Retail Money Fund Average — Category consists of all national tax-free and municipal retail funds. Portfolio holdings of tax-free funds include Rated and Unrated Demand Notes, Rated and Unrated General Market Notes; Commercial Paper; Put Bonds — 6 months and less; Put Bonds — over 6 months; AMT Paper and Other Tax-Free Holdings.
Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.
Asset allocation and weighted average maturity are subject to change.
For more complete details about the Fund's holdings, see pages 10-21. A quarterly Fact Sheet is available upon request.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month beginning December 2010, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.
Investment Portfolio as of April 30, 2011
Tax-Exempt Portfolio
| | | Principal Amount ($) | | | Value ($) | |
| | | | |
| Municipal Investments 99.8% | |
| Alabama 0.4% | |
| Tuscaloosa County, AL, Industrial Development Gulf Opportunity Zone, Hunt Refining Project, Series C, 0.3%*, 12/1/2027 | | | 10,000,000 | | | | 10,000,000 | |
| Alaska 1.1% | |
| Anchorage, AK, Tax Anticipation Notes, 1.5%, 12/29/2011 | | | 30,000,000 | | | | 30,237,724 | |
| Arkansas 0.3% | |
| Fort Smith, AR, Mitsubishi Power Systems Revenue, Recovery Zone Facility Bonds, 0.31%*, 10/1/2040, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 8,000,000 | | | | 8,000,000 | |
| California 7.4% | |
| California, Beaumont Utility Authority Revenue, Wastewater Enterprise Project, Series A, 0.31%*, 9/1/2041, LOC: Union Bank of CA | | | 4,450,000 | | | | 4,450,000 | |
| California, Clipper Tax-Exempt Certificate Trust, Series 2009-66, 144A, 0.29%*, 5/15/2030, LIQ: State Street Bank & Trust Co. | | | 13,100,000 | | | | 13,100,000 | |
| California, Educational Facilities Authority Revenue, Series R-11734, 144A, 0.25%*, 6/1/2011, LIQ: Citibank NA | | | 8,910,000 | | | | 8,910,000 | |
| California, Inland Valley Development Agency, Tax Allocation, 0.3%*, 3/1/2027, LOC: Union Bank of CA | | | 32,695,000 | | | | 32,695,000 | |
| California, Statewide Communities Development Authority Revenue, Retirement Housing Foundation, 0.3%*, 9/1/2030, LOC: KBC Bank NV | | | 26,200,000 | | | | 26,200,000 | |
| California, Statewide Communities Development Authority, Multi-Family Housing Revenue: | | | | | | | | |
| Series 2680, 144A, 0.36%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 15,110,000 | | | | 15,110,000 | |
| Series 29G, 144A, AMT, 0.4%*, 5/1/2039, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 61,000,000 | | | | 61,000,000 | |
| Series 2681, 144A, AMT, 0.46%*, 5/15/2018, LOC: JPMorgan Chase Bank | | | 11,190,000 | | | | 11,190,000 | |
| California, Wells Fargo Stage Trust, Series 72C, 144A, 0.28%*, 8/15/2039, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 21,500,000 | | | | 21,500,000 | |
| Palo Alto, CA, General Obligation, Series R-11859, 144A, 0.26%*, 2/1/2018, LIQ: Citibank NA | | | 3,120,000 | | | | 3,120,000 | |
| | | | | 197,275,000 | |
| Colorado 3.5% | |
| Colorado, Cornerstar Metropolitan District, Special Revenue, 0.66%*, 12/1/2037, LOC: Compass Bank | | | 15,500,000 | | | | 15,500,000 | |
| Colorado, Housing & Finance Authority, Single Family, "I", Series B-2, 144A, AMT, 0.8%*, 11/1/2026, SPA: Dexia Credit Local | | | 18,350,000 | | | | 18,350,000 | |
| Colorado, Lowry Economic Redevelopment Authority Revenue, Series A, 1.0%*, 12/1/2020, LOC: Compass Bank | | | 5,000,000 | | | | 5,000,000 | |
| Colorado Springs, CO, Utilities Revenue, Series A, 0.8%*, 11/1/2023, SPA: Dexia Credit Local | | | 55,500,000 | | | | 55,500,000 | |
| | | | | 94,350,000 | |
| Delaware 0.5% | |
| Delaware, BB&T Municipal Trust, Series 5000, 144A, 0.34%*, 10/1/2028, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 13,020,062 | | | | 13,020,062 | |
| Florida 7.2% | |
| Alachua County, FL, Housing Finance Authority, Multi-Family Revenue, Santa Fe I Apartments, AMT, 0.31%*, 12/15/2038, LOC: Citibank NA | | | 3,440,000 | | | | 3,440,000 | |
| Broward County, FL, Housing Finance Authority, Multi-Family Housing Revenue, Series 51G, 144A, AMT, 0.29%*, 6/1/2046, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 28,520,000 | | | | 28,520,000 | |
| Florida, BB&T Municipal Trust: | |
| Series 1010, 144A, 0.29%*, 1/15/2019, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 6,670,000 | | | | 6,670,000 | |
| Series 1029, 0.34%*, 7/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,510,000 | | | | 10,510,000 | |
| Series 1012, 144A, 0.34%*, 11/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 9,825,000 | | | | 9,825,000 | |
| Florida, Capital Trust Agency Housing Revenue, Atlantic Housing Foundation, Series A, 0.26%*, 7/15/2024, INS: Fannie Mae, LIQ: Fannie Mae | | | 19,000,000 | | | | 19,000,000 | |
| Florida, State Board of Public Education: | |
| "A", 0.25%*, 6/1/2027, SPA: Citibank NA | | | 5,840,000 | | | | 5,840,000 | |
| Series 3834Z, 144A, 0.26%*, 12/1/2015, LIQ: JPMorgan Chase Bank | | | 9,000,000 | | | | 9,000,000 | |
| Highlands County, FL, Health Facilities Authority Revenue, Series II R-11564, 144A, 0.27%*, 11/15/2014, LIQ: Citibank NA | | | 9,365,000 | | | | 9,365,000 | |
| Hillsborough County, FL, Aviation Revenue, 0.27%, 5/12/2011 | | | 3,625,000 | | | | 3,625,000 | |
| Hillsborough County, FL, Housing Finance Authority, Multi-Family Revenue, Hunt Club Apartments, 0.3%*, 8/15/2041, LOC: SunTrust Bank | | | 5,445,000 | | | | 5,445,000 | |
| Hillsborough County, FL, School Board, Certificates of Participation, Master Lease, Series C, 0.23%*, 7/1/2030, INS: NATL, LOC: Wells Fargo Bank NA | | | 33,040,000 | | | | 33,040,000 | |
| Jacksonville, FL, Health Facilities Authority Hospital Revenue, Series A, 0.25%*, 8/15/2033, LOC: Bank of America NA | | | 8,200,000 | | | | 8,200,000 | |
| Lee County, FL, Industrial Development Authority, Health Care Facilities Revenue, Hope Hospice Project, 0.27%*, 10/1/2027, LOC: Northern Trust Co. | | | 21,000,000 | | | | 21,000,000 | |
| Palm Beach County, FL, Community Foundation, Palm Beach Project Revenue, 0.29%*, 3/1/2034, LOC: Northern Trust Co. | | | 4,750,000 | | | | 4,750,000 | |
| Pinellas County, FL, Educational Facilities Authority Revenue, Barry University Project, 0.31%*, 10/1/2037, LOC: Bank of America NA | | | 9,005,000 | | | | 9,005,000 | |
| Sarasota County, FL, Health Care Facilities Authority Revenue, Bay Village Project, 0.4%*, 12/1/2023, LOC: Bank of America NA | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 191,935,000 | |
| Georgia 2.8% | |
| Georgia, Main Street Natural Gas, Inc., Gas Project Revenue, Series A, 0.26%*, 8/1/2040, SPA: Royal Bank of Canada | | | 65,200,000 | | | | 65,200,000 | |
| Georgia, Private Colleges & Universities Authority Revenue, Mercer University Project, Series C, 0.27%*, 10/1/2031, LOC: Branch Banking & Trust | | | 8,580,000 | | | | 8,580,000 | |
| | | | | 73,780,000 | |
| Hawaii 0.3% | |
| Hawaii, Pacific Health Special Purpose Revenue, Series 6C, 144A, 0.29%*, 7/1/2040, LIQ: Wells Fargo Bank NA | | | 8,820,000 | | | | 8,820,000 | |
| Idaho 2.0% | |
| Idaho, State Tax Anticipation Notes, 144A, 2.0%, 6/30/2011 | | | 52,000,000 | | | | 52,135,343 | |
| Illinois 11.6% | |
| Chicago, IL, Board of Education, Dedicated Revenues, Series A-2, 0.26%*, 3/1/2026, LOC: Northern Trust Co. | | | 5,900,000 | | | | 5,900,000 | |
| Chicago, IL, General Obligation, Series 2008-068, 144A, 1.01%*, 1/1/2022, INS: AGMC, AMBAC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 11,480,000 | | | | 11,480,000 | |
| Chicago, IL, Metropolitan Water Reclamation District, Greater Chicago: | | | | | | | | |
| Series 2008-051, 144A, 0.86%*, 12/1/2028, LIQ: Dexia Credit Local | | | 5,360,000 | | | | 5,360,000 | |
| Series 2008-052, 144A, 0.86%*, 12/1/2035, LIQ: Dexia Credit Local | | | 25,110,000 | | | | 25,110,000 | |
| Cook County, IL, Catholic Theological Union Project Revenue, 0.31%*, 2/1/2035, LOC: Harris Trust & Savings Bank | | | 6,000,000 | | | | 6,000,000 | |
| Illinois, BB&T Municipal Trust, Series 5001, 144A, 0.34%*, 6/1/2020, LIQ: Rabobank Nederland, LOC: Rabobank International | | | 17,314,484 | | | | 17,314,484 | |
| Illinois, Development Finance Authority, Industrial Project Revenue, Grecian Delight Foods Project, AMT, 0.49%*, 8/1/2019, LOC: LaSalle Bank NA | | | 1,765,000 | | | | 1,765,000 | |
| Illinois, Education Facility Authority Revenue, Series N, 0.3%, 6/1/2011 | | | 74,465,000 | | | | 74,465,000 | |
| Illinois, Finance Authority Industrial Development Revenue, Fitzpatrick Brothers, 0.27%*, 4/1/2033, LOC: Northern Trust Co. | | | 4,600,000 | | | | 4,600,000 | |
| Illinois, Finance Authority Revenue, "A", 144A, 0.25%*, 12/1/2042, LIQ: Citibank NA | | | 5,445,000 | | | | 5,445,000 | |
| Illinois, Finance Authority Revenue, Clare Oaks, Series C, 0.36%*, 11/1/2040, LOC: Sovereign Bank FSB | | | 27,680,000 | | | | 27,680,000 | |
| Illinois, Finance Authority Revenue, Northwestern University: | |
| Series A, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 14,000,000 | | | | 14,000,000 | |
| Series C, 0.43%, Mandatory Put 3/1/2012 @ 100, 12/1/2046 | | | 10,000,000 | | | | 10,000,000 | |
| Illinois, Finance Authority, Pollution Control Revenue, Commonwealth Edison Co., Series F, 144A, 0.25%*, 3/1/2017, LOC: JPMorgan Chase Bank | | | 3,700,000 | | | | 3,700,000 | |
| Illinois, State Toll Highway Authority Revenue, Senior Priority, Series A-2A, 0.29%*, 7/1/2030, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 15,000,000 | | | | 15,000,000 | |
| Illinois, State Wells Fargo Stage Trust, Series 47C, 144A, 0.29%*, 12/1/2024, INS: AGMC, LIQ: Wells Fargo Bank NA | | | 33,190,000 | | | | 33,190,000 | |
| Illinois, University of Illinois Revenue, "A", 144A, 0.27%*, 4/1/2035, INS: NATL, LIQ: Citibank NA | | | 14,300,000 | | | | 14,300,000 | |
| Mundelein, IL, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 0.54%*, 1/1/2015, LOC: Northern Trust Co. | | | 6,500,000 | | | | 6,500,000 | |
| Woodstock, IL, Multi-Family Housing Revenue, Willow Brooke Apartments, AMT, 0.29%*, 4/1/2042, LOC: Wells Fargo Bank NA | | | 25,905,000 | | | | 25,905,000 | |
| | | | | 307,714,484 | |
| Indiana 0.6% | |
| Indiana, Health & Educational Facility, Financing Authority Revenue, Greenwood Village South Project, Series A, 0.36%*, 5/1/2036, LOC: Sovereign Bank FSB | | | 6,155,000 | | | | 6,155,000 | |
| Terre Haute, IN, Westminster Village Revenue, Series A, 0.36%*, 8/1/2036, LOC: Sovereign Bank FSB | | | 9,245,000 | | | | 9,245,000 | |
| | | | | 15,400,000 | |
| Iowa 0.6% | |
| Iowa, Finance Authority, Multi-Family Revenue, Housing Windsor on River, Series A, AMT, 0.29%*, 5/1/2042, LOC: Wells Fargo Bank NA | | | 17,000,000 | | | | 17,000,000 | |
| Kansas 1.7% | |
| Kansas, State Department of Transportation Highway Revenue, Series D, 0.37%*, 3/1/2012, LIQ: Dexia Credit Local | | | 5,040,000 | | | | 5,040,000 | |
| Kansas, State Development Finance Authority, Multi-Family Revenue, Oak Ridge Park II Project, Series X, AMT, 0.34%*, 12/1/2036, LOC: US Bank NA | | | 3,650,000 | | | | 3,650,000 | |
| Lenexa, KS, Revenue Bond, Series 2007-302, 144A, 0.38%*, 2/1/2012, LIQ: Bank of America NA | | | 11,565,000 | | | | 11,565,000 | |
| Wichita, KS, General Obligation, Series 240, 0.45%, 9/15/2011 | | | 23,800,000 | | | | 23,800,000 | |
| | | | | 44,055,000 | |
| Kentucky 0.2% | |
| Mason County, KY, Pollution Control Revenue, East Kentucky Power Corp., Inc., Series B-2, 0.85%*, 10/15/2014, SPA: National Rural Utilities Cooperative Finance Corp. | | | 4,500,000 | | | | 4,500,000 | |
| Louisiana 0.9% | |
| Lake Charles, LA, Harbor & Terminal District Revenue, Lake Charles Cogeneration, 0.37%, Mandatory Put 5/31/2011 @ 100, 11/1/2040 | | | 20,000,000 | | | | 20,000,000 | |
| Louisiana, Public Facilities Authority Revenue, C-Port LLC Project, Series C, 0.29%*, 10/1/2028, LOC: Bank of America NA | | | 4,950,000 | | | | 4,950,000 | |
| | | | | 24,950,000 | |
| Maine 0.4% | |
| Maine, State Housing Authority Mortgage Purchase, Series B, AMT, 0.31%*, 11/15/2041, SPA: KBC Bank NV | | | 10,000,000 | | | | 10,000,000 | |
| Maryland 0.8% | |
| Baltimore, MD, Municipal Securities Trust Receipts, SGA 152, "A", 144A, 0.3%*, 7/1/2020, INS: NATL, LOC: Societe Generale | | | 10,000,000 | | | | 10,000,000 | |
| Montgomery County, MD, 0.26%, 5/12/2011 | | | 11,400,000 | | | | 11,400,000 | |
| | | | | 21,400,000 | |
| Massachusetts 3.2% | |
| Massachusetts, Bay Transportation Authority, General Transportation Systems, 0.6%*, 3/1/2030, SPA: Dexia Credit Local | | | 11,000,000 | | | | 11,000,000 | |
| Massachusetts, Health & Education University Revenue, 0.26%, 7/8/2011 | | | 8,500,000 | | | | 8,500,000 | |
| Massachusetts, Macon Trust, Series 2007-310, 144A, 0.38%*, 6/15/2012, LIQ: Bank of America NA, LOC: Bank of America NA | | | 7,620,000 | | | | 7,620,000 | |
| Massachusetts, State Development Finance Agency Revenue, New Bedford Waste Services LLC, AMT, 0.32%*, 6/1/2021, LOC: Comerica Bank | | | 3,280,000 | | | | 3,280,000 | |
| Massachusetts, State Development Finance Agency Revenue, Northfield Mount Hermon, 0.28%*, 10/1/2042, LOC: JPMorgan Chase Bank | | | 4,700,000 | | | | 4,700,000 | |
| Massachusetts, State Revenue Anticipation Notes, Series C, 2.0%, 6/23/2011 | | | 50,000,000 | | | | 50,121,935 | |
| | | | | 85,221,935 | |
| Michigan 6.7% | |
| BlackRock MuniYield Michigan Quality Fund, Inc., Series W-7-1446, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,000,000 | | | | 15,000,000 | |
| Michigan, Finance Authority Revenue, State Aid Notes, Series D-3, 144A, 2.0%, 8/22/2011, LOC: Scotiabank | | | 43,000,000 | | | | 43,215,907 | |
| Michigan, RBC Municipal Products, Inc. Trust, Series L-25, 144A, AMT, 0.29%*, 9/1/2033, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 50,000,000 | | | | 50,000,000 | |
| Michigan, State Hospital Finance Authority Revenue, Ascension Health Senior Credit Group: | | | | | | | | |
| Series F-7, 0.35%*, 11/15/2047 | | | 11,200,000 | | | | 11,200,000 | |
| Series F-6, 0.35%**, 11/15/2049 | | | 10,000,000 | | | | 10,000,000 | |
| Series F-8, 0.35%**, 11/15/2049 | | | 5,000,000 | | | | 5,000,000 | |
| Series F-2, 0.45%, Mandatory Put 3/1/2012 @ 100, 11/15/2047 | | | 35,000,000 | | | | 35,000,000 | |
| Michigan, State Strategic Fund Ltd. Obligation Revenue, Kroger Co. Recovery Zone Facility, 0.32%*, 1/1/2026, LOC: Bank of Tokyo-Mitsubishi UFJ | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 178,915,907 | |
| Minnesota 0.3% | |
| Coon Rapids, MN, Industrial Development Revenue, Kurt Manufacturing Project: | | | | | | | | |
| AMT, 0.29%*, 11/1/2027, LOC: US Bank NA | | | 5,000,000 | | | | 5,000,000 | |
| AMT, 0.44%*, 11/1/2017, LOC: US Bank NA | | | 1,635,000 | | | | 1,635,000 | |
| | | | | 6,635,000 | |
| Mississippi 0.9% | |
| Mississippi, Redstone Partners Floaters/Residuals Trust: | |
| Series C, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 9,350,000 | | | | 9,350,000 | |
| Series B, AMT, 0.6%*, 12/1/2047, LIQ: Wells Fargo Bank NA, LOC: Wells Fargo Bank NA | | | 5,696,368 | | | | 5,696,368 | |
| Series A, AMT, 0.6%*, 4/1/2048, LOC: Wells Fargo Bank NA | | | 9,500,000 | | | | 9,500,000 | |
| | | | | 24,546,368 | |
| Missouri 0.9% | |
| Missouri, State Development Finance Board, 0.3%, 5/24/2011 | | | 12,114,000 | | | | 12,114,000 | |
| Missouri, State Health & Educational Facilities Authority Revenue, St. Louis University, Series B-2, 0.2%*, 10/1/2035, LOC: Bank of America NA | | | 5,765,000 | | | | 5,765,000 | |
| Platte County, MO, Industrial Development Authority Revenue, Complete Home Concepts, Series A, AMT, 0.29%*, 1/1/2039, LOC: Columbian Bank | | | 6,800,000 | | | | 6,800,000 | |
| | | | | 24,679,000 | |
| Nebraska 0.4% | |
| Washington County, NE, Wastewater & Solid Waste Disposal Facilities Revenue, Series 24C, 144A, AMT, 0.36%*, 4/1/2035, GTY: Wells Fargo Bank NA, LIQ: Wells Fargo Bank NA | | | 9,670,000 | | | | 9,670,000 | |
| Nevada 0.5% | |
| Nevada, Housing Division, Single Family Mortgage Revenue: | |
| Series B, AMT, 0.32%*, 4/1/2042, INS: Fannie Mae, Freddie Mac & Ginnie Mae, SPA: JPMorgan Chase Bank | | | 8,000,000 | | | | 8,000,000 | |
| Series A, AMT, 0.42%*, 10/1/2039, INS: Fannie Mae, Freddie Mac & Ginnie Mae | | | 4,700,000 | | | | 4,700,000 | |
| | | | | 12,700,000 | |
| New Hampshire 0.2% | |
| New Hampshire, Health & Education Facilities Authority Revenue, Easter Seals Rehabilitation Center, Series A, 0.27%*, 12/1/2034, LOC: Citizens Bank of NH | | | 4,600,000 | | | | 4,600,000 | |
| New Jersey 0.7% | |
| BlackRock MuniYield New Jersey Quality Fund, Inc., Series W-7-1022, AMT, 0.51%**, 5/1/2041, LIQ: Citibank NA | | | 15,200,000 | | | | 15,200,000 | |
| New Jersey, Economic Development Authority, Industrial Development Revenue, CST-Products LLC Project, AMT, 0.43%*, 4/1/2026, LOC: National Bank of Canada | | | 2,600,000 | | | | 2,600,000 | |
| | | | | 17,800,000 | |
| New Mexico 2.7% | |
| New Mexico, State Tax & Revenue Anticipation Notes: | |
| 1.5%, 6/30/2011 | | | 25,000,000 | | | | 25,049,099 | |
| 2.0%, 6/30/2011 | | | 25,000,000 | | | | 25,069,593 | |
| Santa Fe, NM, Gross Receipts Tax Revenue, Wastewater Systems, Series B, 0.28%*, 6/1/2022, LOC: BNP Paribas | | | 15,900,000 | | | | 15,900,000 | |
| University of New Mexico, Systems Improvement Revenues, 0.27%*, 6/1/2026, SPA: JPMorgan Chase Bank | | | 5,820,000 | | | | 5,820,000 | |
| | | | | 71,838,692 | |
| New York 7.9% | |
| Albany, NY, Industrial Development Agency, Civic Facility Revenue, The College of Saint Rose, Series A, 0.35%*, 7/1/2037, INS: NATL, LOC: Bank of America NA | | | 9,820,000 | | | | 9,820,000 | |
| Hempstead, NY, Industrial Development Agency Revenue, Series 92G, 144A, AMT, 0.4%*, 10/1/2045, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 23,775,000 | | | | 23,775,000 | |
| Monroe County, NY, Industrial Development Corp. Revenue, St. Ann's Home Aged Project, 0.26%*, 12/1/2040, LOC: HSBC Bank USA NA | | | 6,105,000 | | | | 6,105,000 | |
| Nassau County, NY, Industrial Development Agency Revenue, Series 75G, 144A, AMT, 0.28%*, 12/1/2033, LIQ: The Goldman Sachs & Co., LOC: The Goldman Sachs & Co. | | | 29,995,000 | | | | 29,995,000 | |
| New York, Liberty Development Corp., World Trade Center, Series A-2, 144A, 0.35%, Mandatory Put 2/1/2012 @ 100, 12/1/2049 | | | 11,000,000 | | | | 11,000,000 | |
| New York, State Energy Research & Development Authority Facilities Revenue, Consolidated Edison Co. of New York, Inc., Series A-3, 144A, 0.27%*, 5/1/2039, LOC: Mizuho Corporate Bank | | | 15,000,000 | | | | 15,000,000 | |
| New York, State Mortgage Agency, Homeowner Mortgage Revenue: | | | | | | | | |
| Series 135, AMT, 0.5%*, 4/1/2037, SPA: Dexia Credit Local | | | 5,500,000 | | | | 5,500,000 | |
| Series 157, 0.75%*, 4/1/2047, SPA: Dexia Credit Local | | | 11,200,000 | | | | 11,200,000 | |
| New York, Wells Fargo Stage Trust, Series 4C, 144A, 0.29%*, 9/1/2040, LIQ: Wells Fargo Bank NA | | | 11,540,000 | | | | 11,540,000 | |
| New York City, NY, Municipal Water Finance Authority, Water & Sewer Revenue, Series F-2, 0.26%*, 6/15/2033, SPA: JPMorgan Chase Bank | | | 5,000,000 | | | | 5,000,000 | |
| New York City, NY, Transitional Finance Authority Revenue, Series 3866, 144A, 0.27%*, 8/1/2011, LIQ: JPMorgan Chase & Co. | | | 60,000,000 | | | | 60,000,000 | |
| Oyster Bay, NY, Bond Anticipation Notes, 2.0%, 3/9/2012 | | | 21,800,000 | | | | 22,089,387 | |
| | | | | 211,024,387 | |
| North Carolina 4.6% | |
| Cleveland County, NC, Industrial Facilities & Pollution Control Financing Authority, Curtiss-Wright Flight Systems, AMT, 0.35%*, 11/1/2023, LOC: Bank of America NA | | | 8,400,000 | | | | 8,400,000 | |
| North Carolina, BB&T Municipal Trust: | |
| Series 1027, 144A, 0.34%*, 3/1/2016, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,725,000 | | | | 10,725,000 | |
| Series 1032, 0.34%*, 1/7/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 11,625,000 | | | | 11,625,000 | |
| Series 1008, 144A, 0.34%*, 3/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,865,000 | | | | 5,865,000 | |
| Series 1011, 144A, 0.34%*, 4/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 7,520,000 | | | | 7,520,000 | |
| Series 1024, 144A, 0.34%*, 5/31/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 4,860,000 | | | | 4,860,000 | |
| Series 1009, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 17,075,000 | | | | 17,075,000 | |
| Series 1025, 144A, 0.34%*, 6/1/2024, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 10,800,000 | | | | 10,800,000 | |
| North Carolina, Capital Educational Facilities Finance Agency Revenue, High Point University Project, 0.29%*, 12/1/2028, LOC: Branch Banking & Trust | | | 5,555,000 | | | | 5,555,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Campbell University, 0.29%*, 10/1/2034, LOC: Branch Banking & Trust | | | 5,845,000 | | | | 5,845,000 | |
| North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Salem Academy & College Project, 0.29%*, 8/1/2030, LOC: Branch Banking & Trust | | | 7,200,000 | | | | 7,200,000 | |
| North Carolina, Medical Care Commission, Health Care Facilities Revenue, First Mortgage Deerfield, Series B, 0.29%*, 11/1/2038, LOC: Branch Banking & Trust | | | 10,035,000 | | | | 10,035,000 | |
| Person County, NC, Industrial Facilities & Pollution Control Financing Authority, Certainteed Gypsum, Inc., 0.24%*, 11/1/2035, LOC: Credit Industrial et Commercial | | | 16,625,000 | | | | 16,625,000 | |
| | | | | 122,130,000 | |
| Ohio 0.6% | |
| Ohio, Clipper Tax-Exempt Certificate Trust, Certificate of Participation, Series 2009-28, 144A, AMT, 0.38%*, 3/1/2035, LIQ: State Street Bank & Trust Co. | | | 2,460,000 | | | | 2,460,000 | |
| Ohio, Redstone Partners Floaters/Residuals Trust, Housing Finance Authority: | | | | | | | | |
| Series C, 144A, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 9,780,000 | | | | 9,780,000 | |
| Series D, 144A, AMT, 0.44%*, 6/1/2048, LOC: Wachovia Bank NA | | | 4,340,000 | | | | 4,340,000 | |
| | | | | 16,580,000 | |
| Oregon 6.2% | |
| Oregon, State Tax Anticipation Notes, Series A, 144A, 2.0%, 6/30/2011 | | | 152,000,000 | | | | 152,400,629 | |
| Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project: | | | | | | | | |
| 0.29%*, 5/1/2034, LOC: Bank of America NA | | | 8,515,000 | | | | 8,515,000 | |
| 0.29%*, 5/1/2037, LOC: Bank of America NA | | | 5,385,000 | | | | 5,385,000 | |
| | | | | 166,300,629 | |
| Other 1.3% | |
| BlackRock Municipal Intermediate Duration Fund, Inc., Series W-7-2871, 144A, AMT, 0.51%**, 3/1/2041, LIQ: JPMorgan Chase Bank | | | 35,600,000 | | | | 35,600,000 | |
| Pennsylvania 1.3% | |
| Adams County, PA, Industrial Development Authority Revenue, Brethren Home Community Project, 0.3%*, 6/1/2032, LOC: PNC Bank NA | | | 7,180,000 | | | | 7,180,000 | |
| Allegheny County, PA, RBC Municipal Products, Inc. Trust Certificates, Series E-16, 144A, 0.27%*, 4/15/2039, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 22,490,000 | | | | 22,490,000 | |
| Beaver County, PA, Industrial Development Authority, Pollution Control Revenue, FirstEnergy Generation Corp., 0.22%*, 4/1/2041, LOC: UBS AG | | | 5,700,000 | | | | 5,700,000 | |
| | | | | 35,370,000 | |
| Puerto Rico 0.2% | |
| Puerto Rico, Commonwealth Highway & Transportation Authority Revenue, Series DCL 019, 144A, 0.9%*, 1/1/2029, INS: AGMC, LIQ: Dexia Credit Local, LOC: Dexia Credit Local | | | 6,000,000 | | | | 6,000,000 | |
| South Carolina 0.4% | |
| South Carolina, BB&T Municipal Trust, Series 1013, 144A, 0.34%*, 1/1/2020, LIQ: Branch Banking & Trust, LOC: Branch Banking & Trust | | | 5,755,000 | | | | 5,755,000 | |
| South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Upper South Carolina, Inc. Project, 0.29%*, 9/1/2028, LOC: Branch Banking & Trust | | | 6,105,000 | | | | 6,105,000 | |
| | | | | 11,860,000 | |
| Tennessee 0.4% | |
| Blount County, TN, Public Building Authority, Local Government Public Improvement, Series E-5-B, 0.29%*, 6/1/2042, LOC: Branch Banking & Trust | | | 9,300,000 | | | | 9,300,000 | |
| Texas 11.0% | |
| Atascosa County, TX, Industrial Development Corp., Pollution Control Revenue, San Miguel Electric Cooperative, Inc., 0.4%*, 6/30/2020, GTY: National Rural Utilities Cooperative Finance Corp., SPA: National Rural Utilities Cooperative Finance Corp. | | | 44,200,000 | | | | 44,200,000 | |
| East Texas, Housing Finance, Redstone Partners Floaters/Residuals Trust, Series D, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 7,930,000 | | | | 7,930,000 | |
| Harris County, TX, Cultural Education Facilities Finance Corp. Revenue, Memorial Hermann Hospital Systems, Series D-3, 0.27%*, 6/1/2029, LOC: Bank of America NA | | | 14,900,000 | | | | 14,900,000 | |
| Harris County, TX, Health Facilities Development Corp., Hospital Revenue, Baylor College of Medicine, Series B, 0.24%*, 11/15/2047, LOC: Northern Trust Co. | | | 8,100,000 | | | | 8,100,000 | |
| Katy, TX, Independent School Building District, 0.27%*, 8/15/2033, SPA: Bank of America NA | | | 8,300,000 | | | | 8,300,000 | |
| North East, TX, Independent School District, Series 002, 144A, 0.65%*, 2/1/2029, LIQ: Dexia Credit Local | | | 11,325,000 | | | | 11,325,000 | |
| Tarrant County, TX, Redstone Partners Floaters/Residuals Trust, Series A, 144A, AMT, 0.44%*, 12/1/2047, LOC: Wachovia Bank NA | | | 12,190,000 | | | | 12,190,000 | |
| Texas, Department of Housing, Series 2008-3022X, 144A, AMT, 0.4%*, 9/1/2032, INS: Fannie Mae, Freddie Mac & Ginnie Mae, LIQ: Bank of America NA | | | 4,980,000 | | | | 4,980,000 | |
| Texas, North East Independent School District, "A", 144A, 0.26%*, 8/1/2037, LIQ: Citibank NA | | | 8,935,000 | | | | 8,935,000 | |
| Texas, RBC Municipal Products, Inc. Trust, Series L-46, 144A, AMT, 0.29%*, 12/1/2034, LIQ: Royal Bank of Canada, LOC: Royal Bank of Canada | | | 52,995,000 | | | | 52,995,000 | |
| Texas, State General Obligation, "A", 144A, 0.26%*, 4/1/2029, LIQ: Citibank NA | | | 8,685,000 | | | | 8,685,000 | |
| Texas, State Tax & Revenue Anticipation Notes: | |
| Series 3812, 144A, 0.27%*, 8/31/2011, LIQ: JPMorgan Chase & Co. | | | 29,500,000 | | | | 29,500,000 | |
| Series 3813, 144A, 0.3%*, 8/31/2011, LIQ: JPMorgan Chase Bank | | | 38,000,000 | | | | 38,000,000 | |
| 2.0%, 8/31/2011 | | | 25,000,000 | | | | 25,135,681 | |
| Texas A&M University Revenue, 144A, 0.26%*, 5/15/2018, LIQ: Citibank NA | | | 2,800,000 | | | | 2,800,000 | |
| Texas City, TX, Industrial Development Corp. Revenue, Del Papa Realty Holdings, 0.28%*, 1/1/2051, LOC: Bank of America NA | | | 10,300,000 | | | | 10,300,000 | |
| Weslaco, TX, Health Facilities Development, Knapp Medical Center, Series A, 0.91%*, 6/1/2038, LOC: Compass Bank | | | 4,625,000 | | | | 4,625,000 | |
| | | | | 292,900,681 | |
| Vermont 0.2% | |
| Vermont, Educational & Health Buildings Financing Agency Revenue, Fletcher Allen Health Care, Series A, 0.24%*, 12/1/2030, LOC: TD Bank NA | | | 4,070,000 | | | | 4,070,000 | |
| Virginia 1.2% | |
| Arlington County, VA, Industrial Development Authority, Multi-Family Revenue, Series A, AMT, 0.31%*, 8/1/2047, INS: Freddie Mac, LIQ: Freddie Mac | | | 3,000,000 | | | | 3,000,000 | |
| Virginia, Federal Home Loan Mortgage Corp., Multi-Family Variable Rate Certificates, AMT, 0.31%*, 7/15/2050, LIQ: Freddie Mac | | | 19,085,000 | | | | 19,085,000 | |
| Virginia, RBC Municipal Products, Inc. Trust, Series C-2, 144A, AMT, 0.38%*, 1/1/2014, LOC: Royal Bank of Canada, SPA: Royal Bank of Canada | | | 9,050,000 | | | | 9,050,000 | |
| | | | | 31,135,000 | |
| Washington 1.3% | |
| University of Washington, 0.28%, 5/10/2011 | | | 23,000,000 | | | | 23,000,000 | |
| Washington, State Health Care Facilities Authority, Swedish Health Services, Series C, 0.25%*, 11/15/2046, LOC: Citibank NA | | | 3,900,000 | | | | 3,900,000 | |
| Washington, State Higher Education Facilities Authority Revenue, Seattle University Project, Series A, 0.27%*, 5/1/2028, LOC: US Bank NA | | | 8,545,000 | | | | 8,545,000 | |
| | | | | 35,445,000 | |
| West Virginia 3.2% | |
| Cabell County, WV, University Facilities Revenue, Provident Group Marshall Properties, Series A, 0.27%*, 7/1/2039, LOC: Bank of America NA | | | 20,000,000 | | | | 20,000,000 | |
| West Virginia, Public Energy Authority Revenue, Morgantown Association Project, AMT, 0.4%*, 7/1/2017, LOC: Dexia Credit Local | | | 65,000,000 | | | | 65,000,000 | |
| | | | | 85,000,000 | |
| Wisconsin 0.6% | |
| Plymouth, WI, Industrial Development Revenue, Masters Gallery Foods, Series A, AMT, 0.45%*, 5/1/2038, LOC: Wells Fargo Bank NA | | | 5,300,000 | | | | 5,300,000 | |
| Wisconsin, State Health & Educational Facilities Authority Revenue, Prohealth Care, Inc., Series B, 0.3%*, 2/1/2034, LOC: Chase Manhattan Bank | | | 11,225,000 | | | | 11,225,000 | |
| | | | | 16,525,000 | |
| Wyoming 0.6% | |
| Sweetwater County, WY, 0.3%, 6/10/2011 | | | 14,775,000 | | | | 14,775,000 | |
| | | % of Net Assets | | | Value ($) | |
| | | | |
Total Investment Portfolio (Cost $2,655,195,212)+ | | | 99.8 | | | | 2,655,195,212 | |
| Other Assets and Liabilities, Net | | | 0.2 | | | | 6,012,980 | |
| Net Assets | | | 100.0 | | | | 2,661,208,192 | |
* Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of April 30, 2011.
** These securities are shown at their current rate as of April 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
+ The cost for federal income tax purposes was $2,655,195,212.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
AGMC: Assured Guaranty Municipal Corp.
AMBAC: Ambac Financial Group, Inc.
AMT: Subject to alternative minimum tax.
FSB: Federal Savings Bank
GTY: Guaranty Agreement
INS: Insured
LIQ: Liquidity Facility
LOC: Letter of Credit
NATL: National Public Finance Guarantee Corp.
SPA: Standby Bond Purchase Agreement
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Most securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
The following is a summary of the inputs used as of April 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Municipal Investments (a) | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
| Total | | $ | — | | | $ | 2,655,195,212 | | | $ | — | | | $ | 2,655,195,212 | |
There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended April 30, 2011.
(a) See Investment Portfolio for additional detailed categorizations.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities | as of April 30, 2011 | |
| Assets | | Tax-Exempt Portfolio | |
Investments: Investments in securities, valued at amortized cost | | $ | 2,655,195,212 | |
| Receivable for investments sold | | | 4,620,000 | |
| Receivable for Fund shares sold | | | 934,515 | |
| Interest receivable | | | 7,077,878 | |
| Due from Advisor | | | 4,095 | |
| Other assets | | | 105,818 | |
| Total assets | | | 2,667,937,518 | |
| Liabilities | |
| Cash overdraft | | | 4,581,713 | |
| Payable for Fund shares redeemed | | | 918,070 | |
| Distributions payable | | | 62,767 | |
| Accrued management fee | | | 133,641 | |
| Other accrued expenses and payables | | | 1,033,135 | |
| Total liabilities | | | 6,729,326 | |
| Net assets, at value | | $ | 2,661,208,192 | |
| Net Assets Consist of | |
| Undistributed net investment income | | | 676,116 | |
| Paid-in capital | | | 2,660,532,076 | |
| Net assets, at value | | $ | 2,661,208,192 | |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of April 30, 2011 (continued) | |
| Net Asset Value | | Tax-Exempt Portfolio | |
Capital Assets Funds Shares Net Asset Value, offering and redemption price per share ($10,598,969 ÷ 10,595,483 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Davidson Cash Equivalent Shares Net Asset Value, offering and redemption price per share ($75,044,850 ÷ 75,020,161 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Cash Institutional Shares Net Asset Value, offering and redemption price per share ($1,492,310,747 ÷ 1,491,819,969 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Exempt Money Fund Net Asset Value, offering and redemption price per share ($366,030,472 ÷ 365,909,997 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
DWS Tax-Free Money Fund Class S Net Asset Value, offering and redemption price per share ($124,763,547 ÷ 124,722,636 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Service Shares Net Asset Value, offering and redemption price per share ($81,988,417 ÷ 81,961,452 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Exempt Cash Managed Shares Net Asset Value, offering and redemption price per share ($127,448,310 ÷ 127,406,394 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
Tax-Free Investment Class Net Asset Value, offering and redemption price per share ($383,022,880 ÷ 382,896,908 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | | $ | 1.00 | |
The accompanying notes are an integral part of the financial statements.
| for the year ended April 30, 2011 | |
| Investment Income | | Tax-Exempt Portfolio | |
Income: Interest | | $ | 12,045,887 | |
Expenses: Management fee | | | 1,955,813 | |
| Administration fee | | | 3,350,131 | |
| Services to shareholders | | | 1,364,156 | |
| Custodian fee | | | 68,016 | |
| Distribution and service fees | | | 2,569,390 | |
| Professional fees | | | 150,070 | |
| Trustees' fees and expenses | | | 102,796 | |
| Reports to shareholders | | | 197,069 | |
| Registration fees | | | 179,038 | |
| Other | | | 177,139 | |
| Total expenses before expense reductions | | | 10,113,618 | |
| Expense reductions | | | (2,277,709 | ) |
| Total expenses after expense reductions | | | 7,835,909 | |
| Net investment income | | | 4,209,978 | |
| Net realized gain (loss) from investments | | | 26,953 | |
| Net increase (decrease) in net assets resulting from operations | | $ | 4,236,931 | |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | | | Tax-Exempt Portfolio | |
| Increase (Decrease) in Net Assets | | Years Ended April 30, | |
| | 2011 | | | 2010 | |
Operations: Net investment income | | $ | 4,209,978 | | | $ | 6,786,569 | |
| Net realized gain (loss) | | | 26,953 | | | | 42,867 | |
| Net increase in net assets resulting from operations | | | 4,236,931 | | | | 6,829,436 | |
Distributions to shareholders from: Net investment income: Capital Assets Funds Shares | | | (1,440 | ) | | | (2,046 | ) |
| Davidson Cash Equivalent Shares | | | (8,101 | ) | | | (9,092 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (3,424,889 | ) | | | (5,359,767 | ) |
| DWS Tax-Exempt Money Fund | | | (551,022 | ) | | | (1,068,021 | ) |
| DWS Tax-Free Money Fund Class S | | | (156,176 | ) | | | (283,931 | ) |
| Premier Money Market Shares | | | (1,265 | ) | | | (24,737 | ) |
| Service Shares | | | (7,236 | ) | | | (5,804 | ) |
| Tax-Exempt Cash Managed Shares | | | (18,703 | ) | | | (160,260 | ) |
| Tax-Free Investment Class | | | (41,260 | ) | | | (198,503 | ) |
Net realized gains: Capital Assets Funds Shares | | | — | | | | (597 | ) |
| Davidson Cash Equivalent Shares | | | — | | | | (2,251 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | — | | | | (74,322 | ) |
| DWS Tax-Exempt Money Fund | | | — | | | | (13,853 | ) |
| DWS Tax-Free Money Fund Class S | | | — | | | | (4,326 | ) |
| Premier Money Market Shares | | | — | | | | (782 | ) |
| Service Shares | | | — | | | | (1,849 | ) |
| Tax-Exempt Cash Managed Shares | | | — | | | | (7,679 | ) |
| Tax-Free Investment Class | | | — | | | | (14,341 | ) |
| Total distributions | | | (4,210,092 | ) | | | (7,232,161 | ) |
Fund share transactions: Proceeds from shares sold | | | 9,995,553,494 | | | | 11,211,632,894 | |
| Reinvestment of distributions | | | 2,851,124 | | | | 5,434,005 | |
| Cost of shares redeemed | | | (10,411,552,190 | ) | | | (11,989,083,579 | ) |
| Net increase (decrease) in net assets from Fund share transactions | | | (413,147,572 | ) | | | (772,016,680 | ) |
| Increase (decrease) in net assets | | | (413,120,733 | ) | | | (772,419,405 | ) |
| Net assets at beginning of period | | | 3,074,328,925 | | | | 3,846,748,330 | |
| Net assets at end of period (including undistributed net investment income of $676,116 and $649,277, respectively) | | $ | 2,661,208,192 | | | $ | 3,074,328,925 | |
The accompanying notes are an integral part of the financial statements.
Tax-Exempt Portfolio Tax-Free Investment Class | |
| Years Ended April 30, | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | | 2007 | a |
| Selected Per Share Data | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Income (loss) from investment operations: Net investment income | | | .000 | *** | | | .000 | *** | | | .011 | | | | .027 | | | | .004 | |
| Net realized and unrealized gain (loss) | | | .000 | *** | | | .000 | *** | | | .000 | *** | | | .000 | *** | | | (.000 | )*** |
| Total from investment operations | | | .000 | *** | | | .000 | *** | | | .011 | | | | .027 | | | | .004 | |
Less distributions from: Net investment income | | | (.000 | )*** | | | (.000 | )*** | | | (.011 | ) | | | (.027 | ) | | | (.004 | ) |
| Net realized gains | | | — | | | | (.000 | )*** | | | — | | | | — | | | | — | |
| Total distributions | | | (.000 | )*** | | | (.000 | )*** | | | (.011 | ) | | | (.027 | ) | | | (.004 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| Total Return (%) | | | .01 | b | | | .04 | b | | | 1.15 | | | | 2.78 | b | | | .37 | ** |
| Ratios to Average Net Assets and Supplemental Data | |
| Net assets, end of period ($ millions) | | | 383 | | | | 407 | | | | 570 | | | | 572 | | | | 526 | |
| Ratio of expenses before expense reductions (%) | | | .61 | | | | .62 | | | | .63 | | | | .62 | | | | .59 | * |
| Ratio of expenses after expense reductions (%) | | | .35 | | | | .45 | | | | .63 | | | | .61 | | | | .59 | * |
| Ratio of net investment income (%) | | | .01 | | | | .02 | | | | 1.16 | | | | 2.71 | | | | 3.13 | * |
a For the period from March 19, 2007 (commencement of operations) to April 30, 2007. b Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized *** Amount is less than $.0005. | |
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three funds: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio. These financial statements report on Tax-Exempt Portfolio (the "Fund").
Tax-Exempt Portfolio offers eight 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, Service Shares, Tax-Exempt Cash Managed Shares and Tax-Free Investment Class. The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
The financial highlights for all classes of shares, other than Tax-Free Investment Class, are provided separately and are available upon request.
The Fund's investment income, realized gains and losses, and certain Fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of the Fund, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The Fund values all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders.
The Fund has reviewed the tax positions for the open tax years as of April 30, 2011 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income. Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. The Fund may take into account capital gains and losses in its daily dividend declarations. The Fund may also make additional distributions for tax purposes if necessary.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Fund.
At April 30, 2011, the Fund's components of distributable earnings on a tax basis are as follows:
| Undistributed tax-exempt income* | | $ | 738,883 | |
In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:
| | | Years Ended April 30, | |
| | | 2011 | | | 2010 | |
| Distributions from tax-exempt income | | $ | 4,210,092 | | | $ | 7,201,436 | |
| Distributions from long-term capital gains | | $ | — | | | $ | 30,725 | |
* For tax purposes, short-term capital gains distributions are considered ordinary income distributions.
Expenses. Expenses of the Trust arising in connection with a specific Fund are allocated to that Fund. Other Trust expenses which cannot be directly attributed to a Fund are apportioned pro rata on the basis of relative net assets among the Funds in the Trust.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Other. Investment transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
2. Related Parties
Management Agreement. Under an Amended and Restated Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
In addition, the Fund pays a monthly management fee based on the combined average daily net assets of the three Funds and allocated to the Fund based on its relative net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $500 million of the Funds' combined average daily net assets | | | .120 | % |
| Next $500 million of such net assets | | | .100 | % |
| Next $1 billion of such net assets | | | .075 | % |
| Next $1 billion of such net assets | | | .060 | % |
| Over $3 billion of such net assets | | | .050 | % |
For the period from May 1, 2010 through September 30, 2011, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the Tax-Free Investment Class to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 0.72%.
The Advisor also has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' annual reports that are provided separately and are available upon request.
In addition, the Advisor has agreed to voluntarily waive additional expenses. The waiver may be changed or terminated at any time without notice. Under these arrangements, the Advisor waived certain expenses on Tax-Free Investment Class shares.
Accordingly, for the year ended April 30, 2011, the Fund incurred a management fee equivalent to the following annual effective rate of the Fund's average daily net assets:
| | Annual Effective Rate |
| Tax-Exempt Portfolio | .06% |
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended April 30, 2011, the Administration Fee was as follows:
| | | Administration Fee | | | Unpaid at April 30, 2011 | |
| Tax-Exempt Portfolio | | $ | 3,350,131 | | | $ | 226,253 | |
Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the year ended April 30, 2011, the amounts charged to the Fund by DISC were as follows:
| Tax-Exempt Portfolio: | | Total Aggregated | | | Waived | | | Unpaid at April 30, 2011 | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 12,532 | | | $ | 5,364 | |
| Davidson Cash Equivalent Shares | | | 121,647 | | | | — | | | | 41,015 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 196,624 | | | | — | | | | 61,668 | |
| DWS Tax-Exempt Money Fund | | | 134,008 | | | | — | | | | 39,976 | |
| DWS Tax-Free Money Fund Class S | | | 68,702 | | | | — | | | | 25,134 | |
| Premier Money Market Shares | | | 31,484 | | | | 6,558 | | | | — | |
| Service Shares | | | 182,607 | | | | 72,945 | | | | 41,130 | |
| Tax-Exempt Cash Managed Shares | | | 77,147 | | | | — | | | | 33,219 | |
| Tax-Free Investment Class | | | 444,553 | | | | — | | | | 153,350 | |
| | | $ | 1,292,741 | | | $ | 92,035 | | | $ | 400,856 | |
Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee"), calculated as a percentage of average daily net assets for the shares listed in the following table.
For the year ended April 30, 2011, the Distribution Fee was as follows:
| Tax-Exempt Portfolio: | | Distribution Fee | | | Waived | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 47,479 | | | $ | 47,479 | | | | .00 | % | | | .33 | % |
| Davidson Cash Equivalent Shares | | | 243,294 | | | | 243,294 | | | | .00 | % | | | .30 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | .00 | % | | | .25 | % |
| Service Shares | | | 434,433 | | | | 434,433 | | | | .00 | % | | | .60 | % |
| Tax-Free Investment Class | | | 1,032,179 | | | | 1,032,179 | | | | .00 | % | | | .25 | % |
| | | $ | 1,789,098 | | | $ | 1,789,098 | | | | | | | | | |
In addition, DIDI 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, 2011, the Service Fee was as follows:
| Tax-Exempt Portfolio: | | Service Fee | | | Waived | | | Unpaid at April 30, 2011 | | | Annual Effective Rate | | | Contractual Rate (Up To) | |
| Capital Assets Funds Shares | | $ | 35,969 | | | $ | 35,969 | | | $ | — | | | | .00 | % | | | .25 | % |
| Davidson Cash Equivalent Shares | | | 202,745 | | | | 194,185 | | | | — | | | | .01 | % | | | .25 | % |
| Premier Money Market Shares | | | 31,713 | | | | 31,713 | | | | — | | | | .00 | % | | | .25 | % |
| Tax-Exempt Cash Managed Shares | | | 220,855 | | | | 61,372 | | | | 10,827 | | | | .11 | % | | | .15 | % |
| Tax-Free Investment Class | | | 289,010 | | | | 73,337 | | | | 22,721 | | | | .05 | % | | | .07 | % |
| | | $ | 780,292 | | | $ | 396,576 | | | $ | 33,548 | | | | | | | | | |
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended April 30, 2011, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" was as follows:
| Fund | | Total Aggregated | | | Unpaid at April 30, 2011 | |
| Tax-Exempt Portfolio | | $ | 105,603 | | | $ | 41,114 | |
Trustees' Fees and Expenses. The Fund paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.
3. Concentration of Ownership
From time to time, the Fund may have a concentration of several shareholder accounts holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Fund.
At April 30, 2011, there were two shareholder accounts that held approximately 13% and 11%, respectively, of the outstanding shares of the Tax-Exempt Portfolio.
4. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus, if LIBOR exceeds the Federal Funds Rate, the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
5. Share Transactions
The following table summarizes share and dollar activity in the Fund:
Tax-Exempt Portfolio
| | | Year Ended April 30, 2011 | | | Year Ended April 30, 2010 | |
| | | Shares | | | Dollars | | | Shares | | | Dollars | |
| Shares sold | |
| Capital Assets Funds Shares | | | 37,505,008 | | | $ | 37,505,008 | | | | 49,394,797 | | | $ | 49,394,797 | |
| Davidson Cash Equivalent Shares | | | 108,372,167 | | | | 108,372,167 | | | | 140,991,927 | | | | 140,991,927 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 8,705,410,264 | | | | 8,705,410,264 | | | | 9,545,076,388 | | | | 9,545,076,388 | |
| DWS Tax-Exempt Money Fund | | | 234,765,709 | | | | 234,765,709 | | | | 183,055,619 | | | | 183,055,619 | |
| DWS Tax-Free Money Fund Class S | | | 40,065,751 | | | | 40,065,751 | | | | 39,784,180 | | | | 39,784,180 | |
Premier Money Market Shares* | | | 17,963,464 | | | | 17,963,464 | | | | 109,396,548 | | | | 109,396,548 | |
| Service Shares | | | 171,592,837 | | | | 171,592,837 | | | | 277,971,196 | | | | 277,971,196 | |
| Tax-Exempt Cash Managed Shares | | | 270,920,971 | | | | 270,920,971 | | | | 471,983,176 | | | | 471,983,176 | |
| Tax-Free Investment Class | | | 408,957,323 | | | | 408,957,323 | | | | 393,979,063 | | | | 393,979,063 | |
| | | | | | | $ | 9,995,553,494 | | | | | | | $ | 11,211,632,894 | |
| Shares issued to shareholders in reinvestment of distributions | |
| Capital Assets Funds Shares | | | 1,433 | | | $ | 1,433 | | | | 2,653 | | | $ | 2,653 | |
| Davidson Cash Equivalent Shares | | | 8,078 | | | | 8,078 | | | | 11,387 | | | | 11,387 | |
| DWS Tax-Exempt Cash Institutional Shares | | | 2,103,424 | | | | 2,103,424 | | | | 3,842,512 | | | | 3,842,512 | |
| DWS Tax-Exempt Money Fund | | | 541,218 | | | | 541,218 | | | | 1,065,790 | | | | 1,065,790 | |
| DWS Tax-Free Money Fund Class S | | | 147,957 | | | | 147,957 | | | | 270,634 | | | | 270,634 | |
Premier Money Market Shares* | | | 1,023 | | | | 1,023 | | | | 23,773 | | | | 23,773 | |
| Service Shares | | | 7,238 | | | | 7,238 | | | | 7,673 | | | | 7,673 | |
| Tax-Exempt Cash Managed Shares | | | 84 | | | | 84 | | | | 886 | | | | 886 | |
| Tax-Free Investment Class | | | 40,669 | | | | 40,669 | | | | 208,697 | | | | 208,697 | |
| | | | | | | $ | 2,851,124 | | | | | | | $ | 5,434,005 | |
| Shares redeemed | |
| Capital Assets Funds Shares | | | (44,799,949 | ) | | | | $ (44,799,949) | | | (57,387,875 | ) | | $ | (57,387,875 | ) |
| Davidson Cash Equivalent Shares | | | (113,236,507 | ) | | | (113,236,507 | ) | | | (128,403,019 | ) | | | (128,403,019 | ) |
| DWS Tax-Exempt Cash Institutional Shares | | | (8,940,648,532 | ) | | | (8,940,648,532 | ) | | | (9,593,718,982 | ) | | | (9,593,718,982 | ) |
| DWS Tax-Exempt Money Fund | | | (297,512,567 | ) | | | (297,512,567 | ) | | | (258,965,066 | ) | | | (258,965,066 | ) |
| DWS Tax-Free Money Fund Class S | | | (55,821,788 | ) | | | (55,821,788 | ) | | | (63,795,223 | ) | | | (63,795,223 | ) |
Premier Money Market Shares* | | | (47,338,154 | ) | | | (47,338,154 | ) | | | (571,302,157 | ) | | | (571,302,157 | ) |
| Service Shares | | | (126,254,371 | ) | | | (126,254,371 | ) | | | (303,098,913 | ) | | | (303,098,913 | ) |
| Tax-Exempt Cash Managed Shares | | | (352,406,232 | ) | | | (352,406,232 | ) | | | (455,851,093 | ) | | | (455,851,093 | ) |
| Tax-Free Investment Class | | | (433,534,090 | ) | | | (433,534,090 | ) | | | (556,561,251 | ) | | | (556,561,251 | ) |
| | | | | | | $ | (10,411,552,190 | ) | | | | | | $ | (11,989,083,579 | ) |
| Net increase (decrease) | |
| Capital Assets Funds Shares | | | (7,293,508 | ) | | | (7,293,508 | ) | | | (7,990,425 | ) | | $ | (7,990,425 | ) |
| Davidson Cash Equivalent Shares | | | (4,856,262 | ) | | | (4,856,262 | ) | | | 12,600,295 | | | | 12,600,295 | |
| DWS Tax-Exempt Cash Institutional Shares | | | (233,134,844 | ) | | | (233,134,844 | ) | | | (44,800,082 | ) | | | (44,800,082 | ) |
| DWS Tax-Exempt Money Fund | | | (62,205,640 | ) | | | (62,205,640 | ) | | | (74,843,657 | ) | | | (74,843,657 | ) |
| DWS Tax-Free Money Fund Class S | | | (15,608,080 | ) | | | (15,608,080 | ) | | | (23,740,409 | ) | | | (23,740,409 | ) |
Premier Money Market Shares* | | | (29,373,667 | ) | | | (29,373,667 | ) | | | (461,881,836 | ) | | | (461,881,836 | ) |
| Service Shares | | | 45,345,704 | | | | 45,345,704 | | | | (25,120,044 | ) | | | (25,120,044 | ) |
| Tax-Exempt Cash Managed Shares | | | (81,485,177 | ) | | | (81,485,177 | ) | | | 16,132,969 | | | | 16,132,969 | |
| Tax-Free Investment Class | | | (24,536,098 | ) | | | (24,536,098 | ) | | | (162,373,491 | ) | | | (162,373,491 | ) |
| | | | | | | $ | (413,147,572 | ) | | | | | | $ | (772,016,680 | ) |
* The Premier Money Market Shares class was liquidated on September 27, 2010 and is no longer offered.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Cash Account Trust:
We have audited the accompanying statement of assets and liabilities of the Tax-Exempt Portfolio (the "Portfolio"), one of the portfolios constituting Cash Account Trust (the "Trust"), including the investment portfolio, as of April 30, 2011, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Tax-Exempt Portfolio of Cash Account Trust at April 30, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
| | | |
Boston, Massachusetts June 20, 2011 | | |
Tax Information (Unaudited)
Of the dividends paid from net investment income for the taxable year ended April 30, 2011, 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.
Summary of Management Fee Evaluation by Independent Fee Consultant
October 3, 2010
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.
Qualifications
For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.
Thomas H. Mack
Summary of Administrative Fee Evaluation by Independent Fee Consultant
October 4, 2010
Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of a proposed pass-through to the funds of certain reporting costs associated with new regulations for money funds. My evaluation considered the following:
• My recently completed annual evaluation (please see my summary report of October 3, 2010), concluding that the prospective fees and expenses of all the DWS-sponsored money funds are reasonable.
• The fact that in my opinion the services DWS would provide under the combination of the Advisory and proposed Administration Agreements continues to be comparable with those typically provided to competitive funds under their management agreements.
• Management's analysis showing that the maximum total expense ratio impact of this change on any fund share class would be 1.3 basis points, which in my opinion is not material to my conclusions about the reasonableness of expenses.
Based on the foregoing considerations, in my opinion the proposed fees and expenses for the affected DWS-sponsored money funds are reasonable.
Thomas H. Mack
Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the fund as of April 30, 2011. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the Board of one or more DWS funds now overseen by the Board.
| Independent Board Members |
Name, Year of Birth, Position with the Fund and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen | Other Directorships Held by Board Member |
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993 | Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (education committees); formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998) | 118 | — |
John W. Ballantine (1946) Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Chairman of the Board, Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity); former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International | 118 | — |
Henry P. Becton, Jr. (1943) Board Member since 1990 | Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Public Radio International; Public Radio Exchange (PRX); The PBS Foundation; former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service | 118 | Lead Director, Becton Dickinson and Company2 (medical technology company); Lead Director, Belo Corporation2 (media company) |
Dawn-Marie Driscoll (1946) Board Member since 1987 | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization); former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 2007) |
Keith R. Fox (1954) Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies | 118 | — |
Kenneth C. Froewiss (1945) Board Member since 2001 | Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996) | 118 | — |
Richard J. Herring (1946) Board Member since 1990 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; Independent Director of Barclays Bank Delaware (since September 2010); formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006) | 118 | Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007) |
William McClayton (1944) Board Member since 2004 | Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival | 118 | — |
Rebecca W. Rimel (1951) Board Member since 1995 | President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Trustee, Pro Publica (charitable organization) (2007-2010) | 118 | Director, CardioNet, Inc. (health care) (2009- present); Director, Viasys Health Care2 (January 2007- June 2007); |
William N. Searcy, Jr. (1946) Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003) | 118 | Trustee, Sun Capital Advisers, Inc. (22 open-end mutual funds advised by Sun Capital Advisers, Inc.) (since 1998) |
Jean Gleason Stromberg (1943) Board Member since 1997 | Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996) | 118 | — |
Robert H. Wadsworth (1940) Board Member since 1999 | President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association | 121 | — |
Officers4 |
Name, Year of Birth, Position with the Fund and Length of Time Served5 | Principal Occupation(s) During Past 5 Years and Other Directorships Held |
W. Douglas Beck, CFA9,10 (1967) President and CEO, 2011-present | Managing Director3, Deutsche Asset Management (2006-present); President and CEO of DWS family of funds and Head of Product Management, US for DWS Investments; formerly, Executive Director, Head of Product Management (2002-2006) and President (2005-2006) of the UBS Funds at UBS Global Asset Management; Co-Head of Manager Research/Managed Solutions Group, Merrill Lynch (1998-2002) |
John Millette7 (1962) Vice President and Secretary, 1999-present | Director3, Deutsche Asset Management |
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present | Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998) |
Caroline Pearson7 (1962) Chief Legal Officer, April 2010-present | Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010) |
Rita Rubin8 (1970) Assistant Secretary, 2009-present | Director3 and Senior Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007) |
Paul Antosca7 (1957) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006) |
Jack Clark7 (1967) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007) |
Diane Kenneally7 (1966) Assistant Treasurer, 2007-present | Director3, Deutsche Asset Management |
John Caruso8 (1965) Anti-Money Laundering Compliance Officer, 2010-present | Managing Director3, Deutsche Asset Management |
Robert Kloby8 (1962) Chief Compliance Officer, 2006-present | Managing Director3, Deutsche Asset Management |
1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.
2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3 Executive title, not a board directorship.
4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.
5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.
6 Address: 100 Plaza One, Jersey City, NJ 07311.
7 Address: One Beacon Street, Boston, MA 02108.
8 Address: 60 Wall Street, New York, NY 10005.
9 Address: 345 Park Avenue, New York, NY 10154.
10 Appointed May 17, 2011, effective June 1, 2011.
The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.
Notes
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