<PAGE> 1
[ZURICH LOGO]
'98 Zurich YieldWise Money Fund
Annual Report to Shareholders for the Year Ended July 31, 1998
<PAGE> 2
TABLE OF CONTENTS
SUBJECT PAGE
1
Fund Objective
2
Performance Summary
3
Variables Affecting Performance
4
Performance Update
7
Terms To Know
8
Portfolio Composition
9
Portfolio Of Investments
16
Report Of Independent Auditors
18
Financial Statements
22
Financial Highlights
<PAGE> 3
FUND OBJECTIVE
Zurich Yieldwise money fund is an open-end, diversified, management investment
company which seeks maximum current income to the extent consistent with
stability of principal by investing in high-quality, short-term money market
instruments. the fund is designed for investors who are willing to make high
minimum investments and to pay for certain individual transactions in order to
pursue higher yields through lower costs.
An investment in money market funds is neither insured nor guaranteed by the
U.S. Government and there can be no assurance that a fund will be able to
maintain a stable $1.00 share value.
1
<PAGE> 4
PERFORMANCE SUMMARY
<TABLE>
<S><C>
YIELD COMPARISON FUND YIELD VS. FIRST TIER MONEY MARKET FUNDS
Zurich YieldWise Money
Fund* is compared to [WEEKLY 7-DAY AVERAGE YIELD GRAPH]
its IBC Financial Data
category -- The First First Tier Money
Tier Money Market Fund Fund Yield Market Funds
Average which consists
of all non- 8/5/97 5.77% 4.95%
institutional taxable 9/5/97 5.68% 4.95%
money market funds 10/3/97 5.73% 4.95%
investing in only 11/7/97 5.71% 4.95%
first tier (highest 12/5/97 5.79% 5.00%
rating) securities 1/2/98 5.98% 5.07%
tracked by IBC 2/6/98 5.77% 4.99%
Financial Data. 3/6/98 5.68% 4.96%
Returns are historical 4/3/98 5.59% 4.93%
and do not guarantee 5/1/98 5.61% 4.90%
future results. Fund 6/5/98 5.52% 4.92%
yields fluctuate. 7/3/98 5.54% 4.94%
7/28/98 5.46% 4.92%
7-day yield is the
annualized net
investment income per
share for the period
shown. Gains or losses
are not included.
LIPPER RANKING
Lipper Analytical LIPPER RANKING
Services, Inc. ------------------------------------------
rankings are based Top Fund #1 of 302 funds 1 Year
upon changes in net
asset value with all
dividends reinvested
for the year ended
7/31/98. Rankings are
historical and do not
guarantee future
performance. The
Lipper category used
for comparison is the
Lipper Money Market
Instrument Fund
category.
</TABLE>
* Performance reflects a partial fee waiver and expense absorption during the
year which improved results. Otherwise, the 7-day average yield would have been
5.28% on 7/28/98.
2
<PAGE> 5
VARIABLES AFFECTING
PERFORMANCE
The investment manager invests in high-quality, short-term securities that are
consistent with the fund's specific objective.
Our primary goal is to provide competitive yields while maintaining preservation
of principal and a high degree of liquidity. The specific securities portfolio
managers select have a major impact on reaching our goal. However, they must
continuously analyze other variables which affect share price stability and fund
performance. Traditionally, there are three important variables which are
factored into the decision-making process:
MONETARY POLICY
Monetary Policy is managed by the Federal Reserve Board (the "Fed") and has a
direct impact on short-term interest rates. If the Fed determines that inflation
is climbing, it will enact a policy to decrease or "tighten" the money supply.
With less money available, money lenders can command higher interest rates on
the money market securities they sell. On the other hand, if the Fed determines
the economy is heading toward a recession, it will increase or "ease" the money
supply. With more money for borrowers to access, the interest rates for money
market securities decline.
INTEREST RATES
Interest Rates will affect money fund yields because as investments mature, the
cash received will be reinvested at current money market rates which could be
either higher or lower. Reinvesting at higher interest rates generally means
higher yields for money funds and reinvesting at lower rates generally means
lower yields.
AVERAGE LENGTH OF MATURITY
Average Length of Maturity affects the timing of reinvesting cash from maturing
investments. If interest rates are expected to rise, decreasing the portfolio's
average length of maturity would enable the Fund to purchase higher-yielding
money market securities sooner. Conversely, if rates were expected to decrease,
the Fund would invest in money market securities with a longer length of
maturity in order to maintain higher yields longer.
(ALSO SEE "TERMS TO KNOW" SECTION)
3
<PAGE> 6
PERFORMANCE UPDATE
AN INTERVIEW WITH PORTFOLIO MANAGER FRANK RACHWALSKI
[RACHWALSKI PHOTO]
Although the U.S. economy sustained its healthy growth trend throughout the
entire report period (8/1/97 to 7/31/98), the economic crisis in Asia
extinguished many signs of inflation. The Federal Reserve Board held their
position on interest rates as they maintained their "wait and see" policy. Lead
portfolio manager Frank Rachwalski discusses the market and Zurich YieldWise
Money Fund's performance during that time.
FRANK RACHWALSKI IS A MANAGING DIRECTOR OF SCUDDER KEMPER INVESTMENTS, INC. AND
LEAD PORTFOLIO MANAGER OF ZURICH YIELDWISE MONEY FUND. MR. RACHWALSKI HOLDS A
B.B.A. AND AN M.B.A. DEGREE FROM LOYOLA UNIVERSITY.
Q FRANK, IN LOOKING BACK OVER THE LAST 12 MONTHS, WE SAW STEADY ECONOMIC
GROWTH WITH MINIMAL INFLATION. WHAT FACTORS HELPED MAINTAIN THIS HEALTHY
FINANCIAL CLIMATE?
A Employment levels remained high throughout this period giving more
people money to spend. While this fueled the U.S. economy, the economic problems
in Asia that surfaced in October 1997 continued well into 1998, with the
Japanese Yen falling relative to the U.S. Dollar. Consequently, low-priced
exports from Asia minimized demand for American-made products causing increased
inventories. Production slowed as manufacturers sold product from existing
inventories and this, in turn, slowed the economy just enough to keep inflation
in check.
The views expressed in this report reflect those of the portfolio
manager only through the end of the period of the report, as stated on the
cover. The manager's views are subject to change at any time, based on market
and other conditions.
4
<PAGE> 7
Q HOW DID THE FEDERAL RESERVE (THE FED) REACT TO THIS CONTINUED RUN OF
ECONOMIC GROWTH?
A Well, ordinarily the Board of Governors (of the Federal Reserve) would
have increased the Fed Funds rate. But, with the Asian problems and low
inflation they were content to maintain their prevailing policy. In fact, we
haven't seen them raise rates in over a year.
Q WITH ALL THESE FACTORS COMING INTO PLAY, WHAT WAS YOUR STRATEGY FOR
MANAGING THE FUND?
A With no change in monetary policy, we saw a continued flattening in the
yield curve, which meant long-term interest rates fell relative to short-term
interest rates. Since we had no yield incentive to invest in securities with
longer maturities, we kept our average maturity at approximately 30 days.
Q A 30-DAY AVERAGE MATURITY IS SHORTER THAN THE INDUSTRY AVERAGE WHICH IS
APPROXIMATELY 51 DAYS FOR GENERAL PURPOSE MONEY MARKET FUNDS. WHY DID YOU STAY
IN THAT RANGE AND HOW DID THIS STRATEGY AFFECT PERFORMANCE?
A When there's not a big difference in yields among the investments we're
considering for the portfolio, the challenge is trying to maximize returns. With
a very short average maturity, we had the flexibility to react and take
advantage of whatever fluctuations in short-term interest rates occurred during
that time. This strategy worked well for us because we were able to invest in
the best issues possible, as they became available.
Continued
5
<PAGE> 8
Q WHERE DO YOU THINK THE ECONOMY IS GOING FROM HERE AND HOW WILL THAT
INFLUENCE YOUR INVESTMENT MANAGEMENT CHOICES?
A I think the inventory correction we saw during the second quarter of
1998 is ending and production schedules will begin increasing. So, although we
saw a bit of a slow-down during this last quarter, I expect the second half of
1998 to be back on a stronger growth trend. Another concern is that the core CPI
(Consumer Price Index), which includes consumer products except food and energy,
increased over 2% during the last 6 months. This means we've started to see
price increases. If this trend continues, the Fed would certainly have some
concern about inflation taking hold and most likely would raise interest rates.
Based on this trend we will continue to keep the average maturity of securities
held by the Fund short in order to respond quickly to changing rates. We want to
provide the best yield possible for our shareholders, and to maintain the
flexibility to be in a position to take advantage of opportunities.
6
<PAGE> 9
TERMS TO KNOW
7-DAY AVERAGE
YIELD Every money market fund calculates its yield according
to a standardized method prescribed by the Securities
and Exchange Commission. Each day's yield is an average
taken over a 7-day period. This average helps to
minimize the effect of daily fluctuation in fund income.
YIELD CURVE Yields tend to vary directly with a security's length of
time to maturity. When the relationship between yield
and maturity is plotted on a graph it is called the
YIELD CURVE. If yields for long-term investments drop
relative to yields on short-term investments, the YIELD
CURVE will "flatten" since there will be less of a
difference in yield between shorter-term and longer-term
investments. When this happens, it also means
longer-term securities are relatively less attractive.
When long-term yields increase, relative to short-term
yields, and the curve steepens, longer-term securities
become relatively more desirable.
<TABLE>
<S><C>
*The yield curve
shown is [SAMPLE YIELD CURVE* GRAPH]
hypothetical and
does not 1 Mo. 5.00
represent the 3 Mo. 5.50
past or future 6 Mo. 5.85
performance of 1 Yr. 6.05
any security 5 Mo. 6.17
held by Zurich 10 Mo. 6.23
YieldWise 30 Mo. 6.25
Money Fund.
</TABLE>
CONSUMER
PRICE INDEX
(CPI) The CPI is a measure of inflation based on the cost of a
typical "market basket" of goods and services that
reflect the current lifestyle of the typical American
consumer. The Bureau of Labor Statistics compiles the
CPI every month in order to track changes in the total
cost from month to month and year to year.
7
<PAGE> 10
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
ZURICH YIELDWISE MONEY FUND ON 7/31/98*
- ----------------------------------------------------------------------------
<S> <C> <C>
[PIE CHART]
Commercial paper 84%
----------------------------------------------
Domestic CD's 11
----------------------------------------------
Foreign CD's 4
----------------------------------------------
U.S. Government agency notes 1
----------------------------------------------
100%
----------------------------------------------
WEIGHTED AVERAGE MATURITY+
----------------------------------------------
Zurich YieldWise Money Fund 24 days
----------------------------------------------
First Tier Money Fund Average 64 days
</TABLE>
* Portfolio composition and holdings are subject to change.
+ The fund is compared to its IBC Financial Data category: The First Tier Money
Market Fund Average which consists of all non-institutional taxable money market
funds investing in only first tier (highest rating) securities and tracked by
IBC Financial Data.
Weighted average maturity data is as of 7/28/98.
8
<PAGE> 11
ZURICH YIELDWISE MONEY FUND
PORTFOLIO OF INVESTMENTS
July 31, 1998 (value in thousands)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
CORPORATE OBLIGATIONS
- -----------------------------------------------------------------------------
BANKING -- 10.3% RATE MATURITY VALUE
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Banco Real, S.A. 5.60% 10/16/98 $ 9,883
(a)Deutsche Bank
Financial, Inc. 5.55% 8/6/98 14,988
Merita N.A., Inc. 5.58% 9/21/98 29,765
Societe Generale 5.61% 10/27/98 39,465
(a)Wells Fargo & Co. 5.54% 9/16/98 15,999
- -----------------------------------------------------------------------------
110,100
- -----------------------------------------------------------------------------
BUSINESS LOANS -- 18.1%
- -----------------------------------------------------------------------------
Banner Receivables Corp. 5.74% - 5.78% 9/2/98 - 10/19/98 20,856
Broadway Capital Corp. 5.80% 8/26/98 6,972
Corporate Receivables
Corp. 5.60% 8/18/98 29,922
FCAR Owner Trust I 5.55% 8/4/98 9,995
Gotham Capital Corp. 5.77% - 5.79% 10/13/98 - 10/26/98 14,806
Madison Funding Corp. 5.57% - 5.70% 8/10/98 - 8/24/98 39,901
Monte Rosa Capital Corp. 5.65% 8/20/98 4,985
Old Line Funding Corp. 5.57% - 5.70% 8/4/98 - 8/20/98 11,977
Preferred Receivables
Funding Corp. 5.64% 9/2/98 4,975
Quincy Capital Corp. 5.58% 9/21/98 14,882
Receivables Capital
Corp. 5.56% 8/21/98 4,985
Wood Street Funding
Corp. 5.59% - 5.60% 8/11/98 - 10/14/98 29,882
- -----------------------------------------------------------------------------
194,138
- -----------------------------------------------------------------------------
</TABLE>
9
<PAGE> 12
ZURICH YIELDWISE MONEY FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
CAPITAL AND EQUIPMENT
LENDING -- 13.6% RATE MATURITY VALUE
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Ace Overseas Corp. 5.62% - 5.66% 9/28/98 $ 21,804
(a)American Honda
Finance Corp. 5.64% 8/14/98 - 8/26/98 14,499
(a)Caterpillar Financial
Services Corp. 5.63% 8/17/98 10,000
Centric Capital Corp. 5.58% 8/3/98 19,994
(a)Chrysler Financial
Corp. 5.66% 8/19/98 25,010
(a)Ford Motor Credit Co. 5.71% 8/3/98 5,000
(a)IBM Credit Corp. 5.56% 8/28/98 10,000
(a)John Deere Capital
Corp. 5.56% 8/10/98 9,997
Sanwa Business Credit
Corp. 5.78% - 5.89% 8/14/98 - 9/14/98 10,952
(a)Sigma Finance, Inc. 5.63% 8/3/98 18,000
- ---------------------------------------------------------------------------
145,256
- ---------------------------------------------------------------------------
CAPTIVE BUSINESS LENDING -- 5.1%
- ---------------------------------------------------------------------------
CSW Credit, Inc. 5.58% 8/7/98 14,986
(a)FINOVA Capital Corp. 5.74% 9/11/98 15,000
Golden Manager's
Acceptance Corp. 5.57% - 5.58% 8/10/98 - 8/14/98 19,963
(a)Prudential Funding
Corp. 5.65% 8/10/98 5,000
- ---------------------------------------------------------------------------
54,949
- ---------------------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
CONSUMER
LENDING -- 6.7% RATE MATURITY VALUE
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Countrywide Home Loans 5.59% -5.60% 8/20/98 - 8/24/98 $ 24,918
(a)(b)GMAC Mortgage
Corporation of
Pennsylvania 5.82% 8/3/98 11,996
(a)Household Finance
Corp. 5.56% 8/31/98 14,993
J.C. Penney Funding
Corp. 5.58% - 5.62% 8/3/98 - 8/4/98 14,994
Transamerica Finance
Corp. 5.58% 9/10/98 4,969
- -----------------------------------------------------------------------------
71,870
- -----------------------------------------------------------------------------
CONSUMER PRODUCTS
AND SERVICES -- .9%
- -----------------------------------------------------------------------------
Coca-Cola Enterprises,
Inc. 5.61% 8/3/98 9,997
- -----------------------------------------------------------------------------
DIVERSIFIED FINANCE -- 15.2%
- -----------------------------------------------------------------------------
Alpine Securitization
Corp. 5.56% 8/3/98 - 8/4/98 29,990
Barton Capital Corp. 5.59% 9/8/98 9,942
(a)CIT Group Holdings,
Inc. 5.58% 8/3/98 9,998
CXC, Inc. 5.56% 8/20/98 4,985
Commercial Credit Co. 5.55% 8/20/98 9,971
Eksportfinans ASA 5.57% 8/10/98 9,986
Heller Financial, Inc. 5.84% 8/27/98 24,896
Thunder Bay Funding,
Inc. 5.57% - 5.59% 8/12/98 - 8/31/98 24,943
Twin Towers, Inc. 5.61% - 5.64% 9/4/98 - 10/21/98 24,796
Variable Funding Capital
Corp. 5.57% 9/1/98 12,938
- -----------------------------------------------------------------------------
162,445
- -----------------------------------------------------------------------------
</TABLE>
11
<PAGE> 14
ZURICH YIELDWISE MONEY FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
FINANCIAL
SERVICES -- 7.3% RATE MATURITY VALUE
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
(a)Bear Stearns Cos.,
Inc. 5.63% - 5.64% 8/6/98 - 8/18/98 $ 8,000
(a)CS First Boston, Inc. 5.61% 8/3/98 9,999
(a)Goldman, Sachs Group,
L.P. 5.60% 8/7/98 8,000
(a)Lehman Brothers
Holdings, Inc. 5.71% 8/20/98 10,000
Merrill Lynch & Co.,
Inc.
(a)5.61% -
5.62% 8/4/98 - 8/14/98 19,500
5.60% 10/15/98 9,885
(a)Morgan Stanley, Dean
Witter & Co. 5.76% 9/10/98 3,001
Salomon Smith Barney
Holdings, Inc. 5.58% 8/11/98 9,985
- ---------------------------------------------------------------------------
78,370
HEALTH CARE -- .9%
- ---------------------------------------------------------------------------
Baxter International,
Inc. 5.58% 9/1/98 9,952
- ---------------------------------------------------------------------------
MANUFACTURING/INDUSTRIAL -- 1.8%
- ---------------------------------------------------------------------------
Monsanto Co. 5.60% - 5.61% 10/14/98 - 10/27/98 19,753
- ---------------------------------------------------------------------------
MUNICIPAL OBLIGATION -- 1.4%
- ---------------------------------------------------------------------------
California, Pollution
Control Revenue 5.62% 9/11/98 15,000
- ---------------------------------------------------------------------------
UTILITIES -- 2.3%
- ---------------------------------------------------------------------------
Frontier Corp. 5.59% - 5.61% 8/13/98 - 8/26/98 24,933
- ---------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS -- 83.6%
(AVERAGE MATURITY: 29 DAYS) 896,763
- ---------------------------------------------------------------------------
</TABLE>
12
<PAGE> 15
BANK OBLIGATIONS
CERTIFICATES OF DEPOSIT AND BANK NOTES --
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
U.S. BANKS -- 11.1% RATE MATURITY VALUE
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
(a)Amex Centurian Bank 5.62% 8/5/98 $ 5,000
(a)AmSouth Bank of
Alabama 5.54% 8/24/98 5,999
(a)Bank One 5.60% 8/4/98 7,999
(a)Bankers Trust Co. 5.58% 8/3/98 14,993
(a)Comerica Bank 5.55% 9/22/98 5,000
(a)FCC National Bank 5.55% 8/3/98 14,991
(a)First USA Bank 5.99% 9/16/98 - 9/28/98 10,014
(a)Key Bank, N.A. 5.57% 8/3/98 6,999
(a)Mellon Bank Corp. 5.60% 8/7/98 8,000
(a)J.P. Morgan & Co.,
Inc. 5.55% 8/7/98 9,994
Nationsbank, N.A. 5.58% 11/2/98 10,000
(a)Old Kent Bank 5.59% 10/13/98 9,999
(a)PNC Bank, N.A. 5.57% 8/3/98 9,996
- ---------------------------------------------------------------------------
118,984
- ---------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT --
FOREIGN BANKS -- 4.2%
- ---------------------------------------------------------------------------
(a)Banque Nationale de
Paris 5.62% 8/3/98 15,000
(a)National Bank of
Canada 5.60% 8/5/98 9,999
(a)Svenska Handelsbanken 5.54% 8/3/98 19,989
- ---------------------------------------------------------------------------
44,988
- ---------------------------------------------------------------------------
TOTAL BANK OBLIGATIONS -- 15.3%
(AVERAGE MATURITY: 18 DAYS) 163,972
- ---------------------------------------------------------------------------
</TABLE>
13
<PAGE> 16
ZURICH YIELDWISE MONEY FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
U.S. GOVERNMENT
AGENCY NOTES -- 1.2%
RATE MATURITY VALUE
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
(a)Federal National
Mortgage Association 5.22% 8/4/98 $ 12,284
(AVERAGE MATURITY: 4
DAYS)
- ---------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.1%
(AVERAGE MATURITY: 27 DAYS) 1,073,019
- ---------------------------------------------------------------------------
LIABILITIES, LESS CASH AND OTHER ASSETS -- (.1)% (1,291)
- ---------------------------------------------------------------------------
NET ASSETS -- 100% $1,071,728
- ---------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO PORTFOLIO OF INVESTMENTS.
14
<PAGE> 17
NOTES TO
PORTFOLIO OF INVESTMENTS
Interest rates represent annualized yield to date of maturity, except for
variable rate securities described in Note (a). For each security, cost (for
financial reporting and federal income tax purposes) and carrying value are the
same. Likewise, carrying value approximates principal amount.
(a) Variable rate securities. The rates shown are the current rates at July 31,
1998. The dates shown represent the demand date or the next interest rate
change date.
(b) Illiquid securities. At July 31, 1998, the value of illiquid securities
was $11,996,000 which represented 1.1% of net assets.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 18
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF TRUSTEES AND SHAREHOLDERS
ZURICH YIELDWISE MONEY FUND
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Zurich YieldWise Money Fund as of
July 31, 1998, and the related statement of operations for the year then ended
and statement of changes in net assets and the financial highlights for the year
then ended and for the period from April 17, 1997 (commencement of operations)
to July 31, 1997. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audits in accordance with generally accepted auditing
standards. 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of July
31, 1998, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
16
<PAGE> 19
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Zurich
YieldWise Money Fund at July 31, 1998, the results of its operations, the
changes in its net assets and the financial highlights for the periods referred
to above, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
September 17, 1998
17
<PAGE> 20
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1998
(IN THOUSANDS)
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------
Investments, at amortized cost $1,073,019
- ----------------------------------------------------------------------
Cash 106
- ----------------------------------------------------------------------
Receivable for:
Fund shares sold 2,084
- ----------------------------------------------------------------------
Interest 2,630
- ----------------------------------------------------------------------
TOTAL ASSETS 1,077,839
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
LIABILITIES AND NET ASSETS
- ----------------------------------------------------------------------
Payable for:
Dividends 1,116
- ----------------------------------------------------------------------
Management fee 332
- ----------------------------------------------------------------------
Fund shares redeemed 4,478
- ----------------------------------------------------------------------
Other 185
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
TOTAL LIABILITIES 6,111
- ----------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES
OUTSTANDING $1,071,728
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
THE PRICING OF SHARES
- ----------------------------------------------------------------------
Shares outstanding 1,071,728
- ----------------------------------------------------------------------
Net asset value and redemption price per
share $1.00
- ----------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 21
FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1998
(IN THOUSANDS)
<TABLE>
<S> <C>
- -------------------------------------------------------------------------
NET INVESTMENT INCOME
- -------------------------------------------------------------------------
Interest income $48,129
- -------------------------------------------------------------------------
Expenses:
Management fee 3,252
- -------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 235
- -------------------------------------------------------------------------
Reports to shareholders 54
- -------------------------------------------------------------------------
Registration costs 185
- -------------------------------------------------------------------------
Professional fees 17
- -------------------------------------------------------------------------
Trustees' fees and other 8
- -------------------------------------------------------------------------
Total expenses before expense waiver and absorption 3,751
- -------------------------------------------------------------------------
Less expenses waived and absorbed by the investment
manager (3,133)
------------------------------------------------------------------------
Total expenses absorbed by the Fund 618
------------------------------------------------------------------------
NET INVESTMENT INCOME $47,511
------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
APRIL 17,
YEAR 1997(A)
ENDED TO
JULY 31, JULY 31,
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY 1998 1997
-----------------------------------------------------------------------
<S> <C> <C>
Net investment income $ 47,511 1,395
-----------------------------------------------------------------------
Dividends to shareholders from net investment
income (47,511) (1,395)
-----------------------------------------------------------------------
Capital share transactions
(dollar amounts and number of shares are the
same):
Shares sold 2,705,314 267,580
-----------------------------------------------------------------------
Shares issued in reinvestment of
dividends 43,882 1,184
-----------------------------------------------------------------------
2,749,196 268,764
-----------------------------------------------------------------------
Shares redeemed (1,922,532) (23,800)
-----------------------------------------------------------------------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS
AND TOTAL INCREASE IN NET ASSETS 826,664 244,964
- ------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------
Beginning of period 245,064 100
- ------------------------------------------------------------------------
END OF PERIOD $1,071,728 245,064
- ------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations
19
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE
FUND Zurich YieldWise Money Fund (the Fund) is an
open-end, diversified, management investment
company organized as a business trust under the
laws of Massachusetts. The Fund invests in
short-term high-quality obligations of major banks
and corporations.
2. SIGNIFICANT
ACCOUNTING POLICIES INVESTMENT VALUATION. Investments are stated at
amortized cost, which approximates market value. In
the event that a deviation of 1/2 of 1% or more
exists between the Fund's $1.00 per share net asset
value, calculated at amortized cost, and the net
asset value calculated by reference to market-based
values, or if there is any other deviation that the
Board of Trustees believes would result in a
material dilution to shareholders or purchasers,
the Board of Trustees will promptly consider what
action should be initiated.
INVESTMENT TRANSACTIONS AND INTEREST INCOME.
Investment transactions are accounted for on the
trade date (date the order to buy or sell is
executed). Interest income is recorded on the
accrual basis and includes amortization of premium
and discount on investments.
FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS.
Fund shares are sold and redeemed on a continuous
basis at net asset value. On each day the New York
Stock Exchange is open for trading, the Fund
determines its net asset value per share (NAV) by
dividing the total value of the Fund's investments
and other assets, less liabilities, by the number
of Fund shares outstanding. The NAV is determined
at 11:00 a.m., 1:00 p.m. and 3:00 p.m. Central
time. The Fund declares a daily dividend, equal to
its net investment income for that day, payable
monthly. Net investment income consists of all
interest income plus (minus) all realized gains
(losses) on portfolio securities, minus all
expenses of the Fund.
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 income to its shareholders.
Accordingly, the Fund paid no federal income taxes
and no federal income tax provision was required.
20
<PAGE> 23
3. TRANSACTIONS WITH
AFFILIATES MANAGEMENT AGREEMENT. The Fund has a management
agreement with Scudder Kemper Investments, Inc.
(Scudder Kemper) and pays a monthly investment
management fee of 1/12 of the annual rate of .50%
of the first $215 million of average daily net
assets declining to .25% of average daily net
assets in excess of $800 million. During the year
ended July 31, 1998, the Fund incurred a management
fee of $332,000 after an expense waiver by Scudder
Kemper.
SHAREHOLDER SERVICES AGREEMENT. Pursuant to a
services agreement with the Fund's transfer agent,
Kemper Service Company (KSvC) is the shareholder
service agent of the Fund. Under the agreement,
KSvC received shareholder services fees of $117,000
for the year ended July 31, 1998.
OFFICERS AND TRUSTEES. Certain officers or trustees
of the Fund are also officers or directors of
Scudder Kemper. During the year ended July 31,
1998, the Fund made no payments to its officers and
incurred trustees' fees of $2,000 to independent
trustees.
EXPENSE ABSORPTION. Scudder Kemper agreed to
temporarily waive its management fee and reimburse
or pay 100% of the Fund's other operating expenses
through March 1, 1998. In addition, Scudder Kemper
has agreed to gradually reinstate its management
fee and other operating expenses up to a maximum of
.45% until January 1, 1999. For the year ended July
31, 1998, Scudder Kemper absorbed expenses of
$3,133,000.
21
<PAGE> 24
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
APRIL 17 (A)
YEAR ENDED TO
JULY 31, JULY 31,
PER SHARE OPERATING PERFORMANCE 1998 1997
- --------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $1.00 1.00
- --------------------------------------------------------------------
Net investment income .06 .02
- --------------------------------------------------------------------
Less dividends declared .06 .02
- --------------------------------------------------------------------
Net asset value, end of period $1.00 1.00
- --------------------------------------------------------------------
TOTAL RETURN 5.81% 1.69
- --------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- --------------------------------------------------------------------
Expenses after expense waiver .07% --
- --------------------------------------------------------------------
Net investment income 5.63% 5.66
- --------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- --------------------------------------------------------------------
Expenses .44% .60
- --------------------------------------------------------------------
Net investment income 5.26% 5.06
- --------------------------------------------------------------------
- --------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------
Net assets at end of period (IN THOUSANDS) $1,071,728 245,064
</TABLE>
(a) Commencement of operations
Note: Scudder Kemper agreed to temporarily waive its management fee and absorb
all operating expenses of the Fund through March 31, 1998. In addition, Scudder
Kemper has agreed to gradually reinstate its management fee and other operating
expenses up to a maximum of .45% until January 1, 1999. The Other Ratios to
Average Net Assets are computed without these expense waivers.
TAX INFORMATION
All of the dividends are taxable as ordinary income. These dividends, whether
received in cash or reinvested in shares, must be included in your federal
income tax return and must be reported by the Fund to the Internal Revenue
Service in accordance with U.S. Treasury Department Regulations.
Please consult a tax adviser 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 Zurich account please call 1-888-987-4241.
22
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<PAGE> 26
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<PAGE> 27
TRUSTEES AND OFFICERS
TRUSTEES OFFICERS
DANIEL PIERCE MARK S. CASADY
Chairman and Trustee President
DAVID W. BELIN PHILIP J. COLLORA
Trustee Vice President and
Secretary
LEWIS A. BURNHAM
Trustee JERARD K. HARTMAN
Vice President
DONALD L. DUNAWAY
Trustee THOMAS W. LITTAUER
Vice President
ROBERT B. HOFFMAN
Trustee ANN M. MCCREARY
Vice President
DONALD R. JONES
Trustee ROBERT C. PECK, JR.
Vice President
SHIRLEY D. PETERSON
Director KATHRYN L. QUIRK
Vice President
WILLIAM P. SOMMERS
Trustee FRANK J. RACHWALSKI, JR.
Vice President
EDMOND D. VILLANI
Trustee LINDA J. WONDRACK
Vice President
JOHN R. HEBBLE
Treasurer
MAUREEN E. KANE
Assistant Secretary
CAROLINE PEARSON
Assistant Secretary
ELIZABETH C. WERTH
Assistant Secretary
BRENDA LYONS
Assistant Treasurer
- --------------------------------------------------------------------------------
LEGAL COUNSEL VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 North LaSalle Street
Chicago, IL 60601
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICE AGENT KEMPER SERVICE COMPANY
P.O. Box 419066
Kansas City, MO 64141-6066
- --------------------------------------------------------------------------------
CUSTODIAN AND TRANSFER AGENT INVESTORS FIDUCIARY TRUST COMPANY
801 Pennsylvania
Kansas City, MO 64105
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, IL 60606
[RECYCLE LOGO]
Printed on recycled paper.
This report must be preceded
or accompanied by a Zurich YieldWise Money
Fund prospectus.
ZYMF-2 (9/98) 1055270 [ZURICH LOGO]
Printed in the U.S.A.
