As filed with the Securities and Exchange Commission on
November 24, 1998
1933 Act Registration No. 333-21187
1940 Act Registration No. 811-8047
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
-----
Post-Effective Amendment No. 4
-----
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 5
-----
ZURICH YIELDWISE FUNDS
(formerly Zurich YieldWise Money Fund)
--------------------------------------
(Exact name of Registrant as Specified in Charter)
222 South Riverside Plaza, Chicago, Illinois 60606
--------------------------------------------------
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (312) 537-7000
--------------
<TABLE>
<S> <C> <C>
Philip J. Collora, Secretary With a copy to:
Zurich YieldWise Money Fund Cathy G. O'Kelly
222 South Riverside Plaza David A. Sturms
Chicago, Illinois 60606-5808 Vedder, Price, Kaufman & Kammholz
(Name and Address of Agent for Service) 222 North LaSalle Street
Chicago, Illinois 60601
</TABLE>
It is proposed that this filing will become effective
immediately upon filing pursuant to paragraph (b)
--------
on _______________ pursuant to paragraph (b)
--------
60 days after filing pursuant to paragraph (a)(1)
--------
on _______________ pursuant to paragraph (a)(1)
--------
75 days after filing pursuant to paragraph (a)(2)
--------
X on November 30, 1998 pursuant to paragraph (a)(2) of Rule
-------- 485
If appropriate, check the following:
X this post-effective amendment designates a new effective
-------- date for a previously filed post-effective amendment
<PAGE>
ZURICH YIELDWISE FUNDS
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART A
OF FORM N-1A AND PROSPECTUS
<TABLE>
<CAPTION>
Item No. Item Caption Prospectus Caption
-------- ------------ ------------------
<S> <C> <C> <C>
1. Cover Page Cover Page
2. Synopsis Overview; Summary of Expenses
3. Condensed Financial Financial Highlights
Information
4. General Description of Overview; Capital Structure; How the Funds Work; Investment
Registrant Objectives, Policies and Risk Factors
5. Management of the Fund Overview; Investment Manager; How to Make a Purchase
5A. Management's Discussion of Inapplicable
Fund Performance
6. Capital Stock and Other Overview; Capital Structure; Dividends and Taxes; How to Make a
Securities Purchase; Investment Objectives, Policies and Risk Factors
7. Purchase of Securities Being Overview; How to Make a Purchase; Determining Share Price;
Offered Investment Manager; Special Features; Account Services Directory
8. Redemption or Repurchase Overview; How to Make a Redemption; Special Features; Account
Services Directory
9. Pending Legal Proceedings Inapplicable
Cross Reference - Page 1
<PAGE>
ZURICH YIELDWISE FUNDS
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART B
OF FORM N-1A AND STATEMENT OF ADDITIONAL INFORMATION
Caption in Statement
Item No. Item Caption of Additional Information
-------- ------------ -------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Inapplicable
History
13. Investment Objectives and Investment Restrictions; Municipal Securities;
Policies Appendix--Ratings of Investments
14. Management of the Fund Investment Manager; Officers and Trustees
15. Control Persons and Principal Officers and Trustees
Holders of Securities
16. Investment Advisory and Other Investment Manager; Officers and Trustees
Services
17. Brokerage Allocation and Portfolio Transactions
Other Practices
18. Capital Stock and Other Shareholder Rights
Securities
19. Purchase, Redemption and Purchase and Redemption of Shares; Dividends and Net Asset
Pricing of Securities Being Value
Offered
20. Tax Status Inapplicable
21. Underwriters Investment Manager
22. Calculation of Performance Performance
Data
23. Financial Statements Financial Statements
</TABLE>
Cross Reference - Page 2
<PAGE>
[LOGO]
Zurich YieldWise Funds
prospectus
November 30, 1998
ZURICH YIELDWISE FUNDS
222 South Riverside Plaza
Chicago, Illinois 60606-5808
1-800-537-6001
The Zurich YieldWise Money Fund and the Zurich YieldWise Government Money Fund
seek maximum current income to the extent consistent with stability of
principal. The Zurich YieldWise Municipal Money Fund seeks maximum current
income that is exempt from regular federal income taxes to the extent consistent
with stability of principal. These Funds are designed for investors who are
willing to make high minimum investments and to pay for certain individual
transactions in order to pursue potentially higher yields through lower
expenses. Each Fund invests exclusively in high quality money market
instruments.
o Zurich YieldWise Money Fund
o Zurich YieldWise Government Money Fund
o Zurich YieldWise Municipal Money Fund
This prospectus contains information about each Fund that a prospective investor
should know before investing and should be retained for future reference. A
Statement of Additional Information dated November 30, 1998, has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
It is available upon request without charge from the Funds at the address above
or by calling 1-800-537-6001.
Investments in the Funds are neither insured nor guaranteed by the U.S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other agency, and are not deposits or obligations of, or guaranteed or
endorsed by, any bank. There can be no assurance that a Fund will be able to
maintain a stable net asset value of $1.00 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE>
Table of Contents
Summary.................................................................... 1
Summary of Expenses........................................................ 3
Financial Highlights....................................................... 5
How the Funds Work......................................................... 5
Investment Objectives, Policies and Risk Factors........................... 6
Net Asset Value -- Determining Share Price................................ 14
How to Make a Purchase.................................................... 15
How to Make a Redemption.................................................. 18
Moving to Another Fund.................................................... 22
Special Features.......................................................... 24
Dividends and Taxes....................................................... 25
Investment Manager........................................................ 28
Performance............................................................... 30
Capital Structure......................................................... 31
Account Services Directory................................................ 32
<PAGE>
Summary
Investment Objectives
Zurich YieldWise Funds (the "Trust") is an open-end management investment
company offering a choice of three diversified investment funds ("Funds"). Each
Fund is designed to provide you with professional management of your short-term
investment dollars; the dollars that you want to know are in high quality
investments.
Each Fund invests in high quality short-term money market instruments consistent
with its specific objective. The Funds are designed for investors who are
willing to make high minimum investments and to pay for certain individual
transactions in order to pursue potentially higher yields through lower costs.
o Zurich YieldWise Money Fund (the "Money Fund") seeks maximum current income
to the extent consistent with stability of principal from a portfolio
primarily consisting of commercial paper and bank obligations.
o Zurich YieldWise Government Money Fund (the "Government Money Fund") seeks
maximum current income to the extent consistent with stability of principal
from a portfolio primarily consisting of obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities.
o Zurich YieldWise Municipal Money Fund (the "Muni Money Fund") seeks maximum
current income that is exempt from regular federal income taxes to the
extent consistent with stability of principal from a portfolio primarily
consisting of municipal securities.
See "Summary of Expenses" and "How to Make a Redemption" for a description of
the individual account maintenance and transaction fees.
Each Fund may use a variety of investment techniques in seeking its objective
including the entry into repurchase agreements and the purchase of variable rate
securities. Each Fund seeks to maintain a net asset value of $1.00 per share;
however, there is no assurance that the objective of any Fund will be achieved
or that any Fund will be able to maintain a net asset value of $1.00 per share.
See "How the Funds Work" and "Investment Objectives, Policies and Risk Factors."
Investment Manager
Scudder Kemper Investments, Inc. (the "Adviser") is the investment manager for
the Funds and provides the Funds with continuous professional investment
supervision. For the services and facilities furnished, each Fund pays a monthly
investment management fee on a graduated basis of 1/12 of the annual rate of
0.50% of the first $215 million of average daily net assets of the Fund, 0.375%
of the next $335 million, 0.30% of the next $250 million and 0.25% of the
average daily net assets thereafter.
1
<PAGE>
Buying and Selling Shares
You may buy and sell shares of each Fund at net asset value with no sales
charge. The minimum initial investment is $25,000 and the minimum subsequent
investment is $1,000 (or $500 by Automatic Purchase Plan). Accounts may be
opened using the account application available from the Funds or by downloading
the account application from our Web site, www.zurichfunds.com. Shares may be
purchased by mailing a check, by wire transfer or in person in downtown Chicago
and Kansas City. Please see "How To Make a Purchase" for more information on how
easy it is to invest. You may sell or redeem your shares by written request or
by using one of the Funds' expedited redemption procedures. See "How To Make a
Redemption" for specific details.
Dividends
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested in additional shares of the same Fund, unless you elect to be paid by
check. See "Dividends and Taxes."
Special Features
A number of features are available to you, including Electronic Funds Transfer
Programs. See "Special Features" and "Account Services Directory" for a
description of these and other features.
2
<PAGE>
Summary of Expenses
Shareholder Transaction Expenses*
Sales Load on Purchases.............................................. None
Sales Load on Reinvested Dividends................................... None
Deferred Sales Load.................................................. None
Electronic Funds Transfer Fee on Redemption....................... $2 each
Exchange Fee and Transaction Fee on Redemption by
Mail or by Telephone.............................................. $5 each
Wire Transaction Fee on Redemption............................... $10 each
Checkwriting Fee on Redemption.................................... $2 each
Account Closeout Fee................................................. $5**
The fees listed above (other than the account closeout fee) are waived if your
account balance is $100,000 or more at the time of the transaction.
The individual transaction fees paid by shareholders of a Fund will accrue to
the benefit of that Fund. The fees will be used to offset transfer agency and
out-of-pocket expenses of a Fund, which should benefit all Fund shareholders by
helping to reduce the Fund's expenses.
- -----------
* Investment dealers and other firms may independently charge additional fees
for shareholder transactions or for advisory services; please see their
materials for details. The table does not include the $1.00 monthly small
account fee. See "How to Make a Redemption."
** There is a $10 fee for closing an account within one year of opening the
account. For individual retirement accounts, there is a $5 fee for closing an
account within one year of opening the account, but there is no closeout fee
for accounts closed one year or more after opening the account.
Annual Fund Operating Expenses
(as a percentage of average net assets after management fee and expense
reduction)
Government Money Muni
Money Fund Fund Money Fund
---------- ---- ----------
Management Fees............ 0.39% 0.07% 0.00%
12b-1 Fees................. None None None
Other Expenses(1).......... 0.05% 0.09% 0.09%
Total Operating Expenses... 0.44% 0.16% 0.09%
(1) "Other Expenses" for the Government Money Fund and the Muni Money Fund have
been estimated for the current fiscal year.
3
<PAGE>
Example
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption by mail at the end of each time period:
Fund 1 year 3 years 5 years 10 years
- ---- ------ ------- ------- --------
Money Fund $10 $19 $30 $60
Government $7 $17 N/A N/A
Money Fund
Muni Money Fund $6 $16 N/A N/A
The purpose of the preceding table is to assist you in understanding the various
costs and expenses that an investor in a Fund will bear directly or indirectly.
As discussed more fully under "Investment Manager," the Adviser has agreed to
temporarily reduce its management fee and reimburse or pay operating expenses of
each Fund as follows: (i) with respect to the Money Fund, the Adviser has agreed
to waive its management fee and absorb operating expenses to the extent
necessary to maintain the Fund's total operating expenses at no more than 0.45%
until January 1, 2000; (ii) with respect to the Government Money Fund, the
Adviser has agreed to waive its management fee and absorb operating expenses to
the extent necessary to maintain the Fund's total operating expenses at no more
than 0.10% through at least June 1, 1999 and, thereafter, has agreed to waive
its management fee or absorb operating expenses to the extent necessary to
maintain the Fund's total operating expenses at no more than 0.34% until June 1,
2000; and (iii) with respect to the Muni Money Fund, the Adviser has agreed to
waive its management fee and absorb 100% of the Fund's other operating expenses
through at least June 1, 1999 and, thereafter, has agreed to waive its
management fee and absorb operating expenses to the extent necessary to maintain
the Fund's total operating expenses at no more than 0.34% until June 1, 2000.
Without such fee reductions and expense reimbursements, "Management Fees" would
be 0.39%, 0.50% and 0.50%, "Other Expenses" would be 0.05%, 0.09% and 0.09% and
"Total Operating Expenses" would be 0.44%, 0.59% and 0.59% for the Money Fund,
the Government Money Fund and the Muni Money Fund, respectively. "Other
Expenses" for the Government Money Fund and the Muni Money Fund have been
estimated for the current fiscal year. The Example assumes a 5% annual rate of
return pursuant to requirements of the Securities and Exchange Commission. This
hypothetical rate of return is not intended to be representative of past or
future performance of the Fund. The Example should not be considered to be a
representation of past or future expenses. Actual expenses may be greater or
less than those shown.
4
<PAGE>
Financial Highlights
The table below shows financial information for the Money Fund expressed in
terms of one share outstanding throughout the period. The Government Money Fund
and the Muni Money Fund commenced operations on or about November 30, 1998. The
information in the table for the Money Fund is covered by the report of the
Trust's independent auditors. The report for the Trust is contained in its
Registration Statement and is available from the Funds. The audited financial
statements contained in the Trust's 1998 Annual Report to Shareholders are
incorporated herein by reference and may be obtained by writing or calling the
Funds.
July 31, 1998 April 17, 1997
(commencement of
operations) to
July 31, 1997
- --------------------------------------------------------------------------------
Per Share Operating Performance:
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 (not annualized) 5.81% 1.69
- --------------------------------------------------------------------------------
Ratios to Average Net Assets (annualized):
Expenses after expense waiver 0.07% 0.00
- --------------------------------------------------------------------------------
Net investment income 5.63% 5.66
- --------------------------------------------------------------------------------
Other Ratios to Average Net Assets (annualized):
Expenses 0.44% 0.60
- --------------------------------------------------------------------------------
Net investment income 5.26% 5.06
- --------------------------------------------------------------------------------
Supplemental Data:
Net assets at end of period (in thousands) $1,071,728 $245,064
- --------------------------------------------------------------------------------
How the Funds Work
Zurich YieldWise Funds are designed to provide you with professional management
of short-term investment dollars. The Money Fund and the Government Money Fund
seek maximum current income consistent with stability of principal. The Muni
Money Fund seeks maximum current income that is exempt from regular federal
income taxes to the extent consistent with stability of principal. They are
designed for investors who are willing to make high minimum investments and to
pay for certain individual transactions in order to pursue potentially higher
yields through lower expenses. With all other things being equal, the lower a
fund's expenses, the higher the return. To help meet these objectives, you are
provided with a choice of separate YieldWise funds: the Money Fund, the
Government Money Fund and the Muni Money Fund. Because each Fund combines its
shareholders' money, it can buy and sell large blocks of securities, which helps
reduce transaction costs and maximize
5
<PAGE>
yields. Each Fund is managed by investment professionals who analyze market
trends to take advantage of changing conditions and who seek to minimize risk by
diversifying the Fund's investments.
Each Fund seeks to maintain a net asset value of $1.00 per share. Thus, the
Funds are designed for investors who want to avoid the fluctuations of principal
commonly associated with equity and long-term bond investments. The fluctuations
of these other types of investments are often represented by the movement of
various unmanaged market indexes, such as the Dow Jones Industrial Average. In
addition, there can be no guarantee that a Fund will achieve its objective or
that it will maintain a net asset value of $1.00 per share.
Investment Objectives, Policies and Risk Factors
Money Fund
The Money Fund seeks maximum current income to the extent consistent with
stability of principal. The Fund pursues its objective by investing exclusively
in the following types of U.S. Dollar denominated money market instruments that
mature in 397 days or less:
o Obligations of, or guaranteed by, the U.S. or Canadian governments, their
agencies or instrumentalities.
o Bank certificates of deposit, time deposits or bankers' acceptances of U.S.
banks (including their foreign branches) and Canadian chartered banks
having total assets in excess of $1 billion.
o Bank certificates of deposit, time deposits or bankers' acceptances of
foreign banks (including their U.S. and foreign branches) having total
assets in excess of $10 billion.
o Commercial paper, notes, bonds, debentures, participation certificates or
other debt obligations that (i) have received a high-quality short-term
rating by Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P"), Duff & Phelps, Inc. ("Duff"), Fitch Investors
Services, Inc. ("Fitch"), or any other nationally recognized statistical
rating organization as determined by the Securities and Exchange
Commission; or (ii) if unrated, are determined to be at least equal in
quality to one or more of the above ratings in the discretion of the Fund's
investment manager. Currently, only obligations in the top two short-term
rating categories are considered to be rated high quality. The two highest
short-term rating categories of Moody's, S&P, Duff and Fitch for commercial
paper are Prime-1 and Prime-2; A-1 and A-2; Duff-1 and Duff-2; and F-1 and
F-2, respectively. For a description of these ratings, see "Appendix--
Ratings of Investments" in the Statement of Additional Information.
6
<PAGE>
o Repurchase agreements of obligations that are suitable for investment under
the categories set forth above. Repurchase agreements are discussed below.
Investments by the Money Fund in Eurodollar certificates of deposit issued by
London branches of U.S. banks, or obligations issued by foreign entities,
including foreign banks, involve risks that are different from investments in
securities of domestic branches of U.S. banks. These risks may include future
unfavorable political and economic developments, possible withholding taxes on
interest payments, seizure of foreign deposits, currency controls, interest
limitations or other governmental restrictions that might affect payment of
principal or interest. The market for such obligations may be less liquid and,
at times, more volatile than for securities of domestic branches of U.S. banks.
Additionally, there may be less public information available about foreign banks
and their branches. The profitability of the banking industry is dependent
largely upon the availability and cost of funds for the purpose of financing
lending operations under prevailing money market conditions. General economic
conditions as well as exposure to credit losses arising from possible financial
difficulties of borrowers play an important part in banking operations. As a
result of federal and state laws and regulations, domestic banks are, among
other things, required to maintain specified levels of reserves, limited in the
amounts they can loan to a single borrower and subject to other regulations
designed to promote financial soundness. However, not all such laws and
regulations apply to the foreign branches of domestic banks. Foreign branches of
foreign banks are not regulated by U.S. banking authorities, and generally are
not bound by accounting, auditing and financial reporting standards comparable
to U.S. banks. Bank obligations held by the Fund do not benefit materially from
insurance from the Federal Deposit Insurance Corporation.
The Money Fund may invest in commercial paper which is issued by major
corporations without registration under the Securities Act of 1933 in reliance
upon the exemption from registration afforded by Section 3(a)(3) thereof. Such
commercial paper may be issued only to finance current transactions and must
mature in nine months or less. Trading of such commercial paper is conducted
primarily by institutional investors through investment dealers, and individual
investor participation in the commercial paper market is very limited.
The Fund may also invest in commercial paper issued in reliance upon the
so-called "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933 ("Section 4(2) paper"). Section 4(2) paper is
restricted as to disposition under the federal securities laws, and generally is
sold to institutional investors such as the Fund who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors like the Fund through or
with the assistance of the issuer or investment dealers who make a market in the
Section 4(2) paper, thus providing liquidity. The Adviser considers the legally
restricted but readily saleable Section 4(2) paper to be liquid; however,
pursuant to procedures approved by the Board of Trustees of the Trust, if a
particular investment in Section 4(2) paper is not
7
<PAGE>
determined to be liquid, that investment will be included within the 10%
limitation on illiquid securities discussed under "Additional Investment
Information" below. The Adviser monitors the liquidity of the Fund's investments
in Section 4(2) paper on a continuous basis.
The Fund may invest in high quality participation certificates ("certificates")
representing undivided interests in trusts that hold a portfolio of receivables
from consumer and commercial credit transactions, such as transactions involving
consumer revolving credit card accounts or commercial revolving credit loan
facilities. The receivables would include amounts charged for goods and
services, finance charges, late charges and other related fees and charges.
Interest payable on the certificates may be fixed or may be adjusted
periodically or "float" continuously according to a formula based upon an
objective standard such as the 30-day commercial paper rate. See "Additional
Investment Information" below for a discussion of "Variable Rate Securities." A
trust may have the benefit of a letter of credit from a bank at a level
established to satisfy rating agencies as to the credit quality of the assets
supporting the payment of principal and interest on the certificates. Payments
of principal and interest on the certificates would be dependent upon the
underlying receivables in the trust and may be guaranteed under a letter of
credit to the extent of such credit. The quality rating by a rating service of
an issue of certificates is based primarily upon the value of the receivables
held by the trust and the credit rating of the issuer of any letter of credit
and of any other guarantor providing credit support to the trust. The Fund's
investment manager considers these factors as well as others, such as any
quality ratings issued by the rating services identified above, in reviewing the
credit risk presented by a certificate and in determining whether the
certificate is appropriate for investment by the Fund. Collection of receivables
in the trust may be affected by various social, legal and economic factors
affecting the use of credit and repayment patterns, such as changes in consumer
protection laws, the rate of inflation, unemployment levels and relative
interest rates. It is anticipated that for most publicly offered certificates
there will be a liquid secondary market or there may be demand features enabling
the Fund to readily sell its certificates prior to maturity to the issuer or a
third party. While the Fund may invest without limit in certificates, it is
currently anticipated that such investments will not exceed 25% of the Fund's
assets.
The Money Fund may concentrate 25% or more of its assets in bank certificates of
deposit, time deposits or banker's acceptances of U.S. banks and their domestic
branches in accordance with its investment objective and policies. Accordingly,
the Fund may be more adversely affected by changes in market or economic
conditions and other circumstances affecting the banking industry than it would
be if the Fund's assets were not so concentrated.
Government Money Fund
The Government Money Fund seeks maximum current income to the extent consistent
with stability of principal. The Fund pursues its objective by investing
primarily in the following securities that mature within 397 days or less:
8
<PAGE>
o U.S. Treasury bills, notes, bonds and other obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.
o Repurchase agreements of the obligations described above.
Some securities issued by U.S. Government agencies or instrumentalities are
supported only by the credit of the agency or instrumentality, such as those
issued by the Federal Home Loan Bank, and others have an additional line of
credit with the U.S. Treasury, such as those issued by the Federal National
Mortgage Association, Farm Credit System and Student Loan Marketing Association.
Short-term U.S. Government obligations generally are considered to be the safest
short-term investment. The U.S. Government guarantee of the securities owned by
the Fund, however, does not guarantee the net asset value of its shares, which
the Fund seeks to maintain at $1.00 per share. Also, with respect to securities
supported only by the credit of the issuing agency or instrumentality or by an
additional line of credit with the U.S. Treasury, there is no guarantee that the
U.S. Government will provide support to such agencies or instrumentalities and
such securities may involve risk of loss of principal and interest.
Muni Money Fund
The Muni Money Fund seeks maximum current income that is exempt from regular
federal income taxes to the extent consistent with stability of principal. The
Fund pursues its objective primarily through a professionally managed,
diversified portfolio of short-term high quality tax-exempt municipal
obligations.
Under normal market conditions, at least 80% of the Fund's total assets will be
invested in obligations issued by or on behalf of states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, the income from which is
exempt from federal income tax ("Municipal Securities").
Dividends representing net interest income received by the Muni Money Fund on
Municipal Securities will be exempt from regular federal income tax when
distributed to the Fund's shareholders. Such dividend income may be subject to
state and local taxes and the alternative minimum tax. See "Dividends and
Taxes--Muni Money Fund." The Fund's assets will consist of Municipal Securities,
temporary investments as described below and cash. The Fund considers short-term
Municipal Securities to be those that mature in or have remaining maturities of
397 days or less.
The Muni Money Fund will invest in Municipal Securities which at the time of
purchase:
o are rated within the two highest ratings for Municipal Securities (Aaa or
Aa) assigned by Moody's, (AAA or AA) assigned by S&P, (AAA or AA) assigned
by Fitch, or (AAA or AA) assigned by Duff, or any other nationally
recognized statistical rating organization ("NRSRO") as determined by the
Securities and Exchange Commission;
9
<PAGE>
o are guaranteed or insured by the U.S. Government as to the payment of
principal and interest;
o are fully collateralized by an escrow of U.S. Government securities
acceptable to the Adviser;
o have at the time of purchase a Moody's short-term municipal securities
rating of MIG-2 or higher or a municipal commercial paper rating of P-2 or
higher, or S&P's municipal commercial paper rating of A-2 or higher, or
Fitch's municipal commercial paper rating of F-2 or higher, or Duff's
municipal commercial paper rating of Duff-2 or higher, or a rating within
the two highest categories of any other NRSRO as determined by the
Securities and Exchange Commission;
o are unrated, if longer term Municipal Securities of that issuer are rated
within the two highest rating categories by Moody's, S&P, Fitch, Duff or
any other NRSRO as determined by the Securities and Exchange Commission; or
o are determined to be at least equal in quality to one or more of the above
ratings in the discretion of the Adviser.
Municipal Securities generally are classified as "general obligation" or
"revenue" issues. General obligation bonds are secured by the issuer's pledge of
its full credit and taxing power for the payment of principal and interest.
Revenue bonds are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source such as the user of the
facility being financed. Industrial development bonds held by the Fund are in
most cases revenue bonds and are not payable from the unrestricted revenues of
the issuer. Among other types of instruments, the Fund may purchase tax-exempt
commercial paper, warrants and short-term municipal notes such as tax
anticipation notes, bond anticipation notes, revenue anticipation notes,
construction loan notes and other forms of short-term loans. Such notes are
issued with a short-term maturity in anticipation of the receipt of tax
payments, the proceeds of bond placements or other revenues. A more detailed
discussion of Municipal Securities and the Moody's, S&P, Fitch and Duff ratings
outlined above is contained in the Statement of Additional Information. As
indicated under "Dividends and Taxes -- Muni Money Fund," the Fund may invest in
"private activity" bonds.
The Muni Money Fund may purchase securities which provide for the right to
resell them to an issuer, bank or dealer at an agreed upon price or yield within
a specified period prior to the maturity date of such securities. Such a right
to resell is referred to as a "Standby Commitment." Securities may cost more
with Standby Commitments than without them. Standby Commitments will be entered
into solely to facilitate portfolio liquidity. A Standby Commitment may be
exercised before the maturity date of the related Municipal Security if the
Fund's investment manager revises its evaluation of the creditworthiness of the
underlying security or of the entity issuing the Standby Commitment. The Fund's
policy is to enter into Standby Commitments only with issuers, banks or dealers
that are determined by the Fund's investment manager to present minimal credit
risks. If an issuer, bank or dealer should default on
10
<PAGE>
its obligation to repurchase an underlying security, the Fund might be unable to
recover all or a portion of any loss sustained from having to sell the security
elsewhere. For purposes of valuing the Fund's securities at amortized cost, the
stated maturity of Municipal Securities subject to Standby Commitments is not
changed.
The Muni Money Fund may purchase high quality Certificates of Participation in
trusts that hold Municipal Securities. A Certificate of Participation gives the
Fund an undivided interest in the Municipal Security in the proportion that the
Fund's interest bears to the total principal amount of the Municipal Security.
These Certificates of Participation may be variable rate or fixed rate with
remaining maturities of one year or less. A Certificate of Participation may be
backed by an irrevocable letter of credit or guarantee of a financial
institution that satisfies rating agencies as to the credit quality of the
Municipal Security supporting the payment of principal and interest on the
Certificate of Participation. Payments of principal and interest would be
dependent upon the underlying Municipal Security and may be guaranteed under a
letter of credit to the extent of such credit. The quality rating by a rating
service of an issue of Certificates of Participation is based primarily upon the
rating of the Municipal Security held by the trust and the credit rating of the
issuer of any letter of credit and of any other guarantor providing credit
support to the issue. The Fund's Adviser considers these factors as well as
others, such as any quality ratings issued by the rating services identified
above, in reviewing the credit risk presented by a Certificate of Participation
and in determining whether the Certificate of Participation is appropriate for
investment by the Fund. It is anticipated by the Fund's investment manager that,
for most publicly offered Certificates of Participation, there will be a liquid
secondary market or there may be demand features enabling the Fund to readily
sell its Certificates of Participation prior to maturity to the issuer or a
third party. As to those instruments with demand features, the Fund intends to
exercise its right to demand payment from the issuer of the demand feature only
upon a default under the terms of the Municipal Security, as needed to provide
liquidity to meet redemptions, or to maintain a high quality investment
portfolio.
In seeking to achieve its investment objective, the Muni Money Fund may invest
all or any part of its assets in Municipal Securities that are industrial
development bonds. Moreover, although the Fund does not currently intend to do
so on a regular basis, it may invest more than 25% of its assets in Municipal
Securities that are repayable out of revenue streams generated from economically
related projects or facilities, if such investment is deemed necessary or
appropriate by the Fund's investment manager. To the extent that the Fund's
assets are concentrated in Municipal Securities payable from revenues on
economically related projects and facilities, the Fund will be subject to the
risks presented by such projects to a greater extent than it would be if the
Fund's assets were not so concentrated.
From time to time, as a defensive measure or when acceptable short-term
Municipal Securities are not available, the Muni Money Fund may invest in
taxable "temporary investments" which include:
o obligations of the U.S. Government, its agencies or instrumentalities;
11
<PAGE>
o debt securities rated within the two highest grades by Moody's, S&P, Fitch,
Duff or any other NRSRO as determined by the Securities and Exchange
Commission;
o commercial paper rated in the two highest grades by any of these rating
services;
o certificates of deposit of domestic banks with assets of $1 billion or
more; and
o repurchase agreements of the obligations described above (Repurchase
agreements are discussed below).
Interest income from temporary investments is taxable to shareholders as
ordinary income. Although the Fund is permitted to invest in taxable securities,
it is the Fund's primary intention to generate income dividends that are not
subject to federal income taxes. See "Dividends and Taxes." For a description of
the ratings, see "Appendix -- Ratings of Investments" in the Statement of
Additional Information.
Additional Investment Information
In addition to the specific investment objective and policies listed above, each
Fund limits its investments to securities that meet the requirements of Rule
2a-7 under the Investment Company Act of 1940 (the "1940 Act"). See "Determining
Share Price."
Each Fund may purchase and sell securities on a when-issued or delayed delivery
basis. A when-issued or delayed delivery transaction arises when securities are
bought or sold for future payment and delivery to secure what is considered to
be an advantageous price and yield to the Fund at the time it enters into the
transaction. In determining the maturity of portfolio securities purchased on a
when-issued or delayed delivery basis, the Funds will consider them to have been
purchased on the date when it committed itself to the purchase.
A security purchased on a when-issued basis, like all securities held by the
Funds, is subject to changes in market value based upon changes in the level of
interest rates and investors' perceptions of the creditworthiness of the issuer.
Generally such securities will appreciate in value when interest rates decline
and decrease in value when interest rates rise. Therefore if, in order to
achieve higher interest income, a Fund remains substantially fully invested at
the same time that it has purchased securities on a when-issued basis, there
will be a greater possibility that the market value of the Fund's assets will
vary from $1.00 per share, since the value of a when-issued security is subject
to market fluctuation and no interest accrues to the purchaser prior to
settlement of the transaction. See "Determining Share Price."
The Funds will only make commitments to purchase securities on a when-issued or
delayed delivery basis with the intention of actually acquiring the securities,
but the Funds reserve the right to sell these securities before the settlement
date if deemed advisable. The sale of these securities may result in the
realization of gains that are not exempt from federal income tax.
Each Fund may invest in instruments that have interest rates that adjust
periodically or that "float" continuously according to formulae intended to
minimize fluctuation
12
<PAGE>
in values of the instruments ("Variable Rate Securities"). The interest rate on
a Variable Rate Security is ordinarily determined by reference to or is a
percentage of an objective standard such as a bank's prime rate, the 90-day U.S.
Treasury bill rate, or the rate of return on commercial paper or bank
certificates of deposit. Generally, the changes in the interest rate on Variable
Rate Securities reduce the fluctuation in the market value of such securities.
Accordingly, as interest rates decrease or increase, the potential for capital
appreciation or depreciation is less than for fixed-rate obligations. Some
Variable Rate Securities ("Variable Rate Demand Securities") have a demand
feature entitling the purchaser to resell the securities at an amount
approximately equal to amortized cost or the principal amount thereof plus
accrued interest. As is the case for other Variable Rate Securities, the
interest rate on Variable Rate Demand Securities varies according to some
objective standard intended to minimize fluctuation in the values of the
instruments. Each Fund determines the maturity of Variable Rate Securities in
accordance with Securities and Exchange Commission rules which allow the Fund to
consider certain of such instruments as having maturities shorter than the
maturity date on the face of the instrument.
Each Fund may invest in repurchase agreements, which are instruments under which
a Fund acquires ownership of a security from a broker-dealer or bank that agrees
to repurchase the security at a mutually agreed upon time and price (which price
is higher than the purchase price), thereby determining the yield during the
Fund's holding period. Maturity of the securities subject to repurchase may
exceed 397 days. In the event of a bankruptcy or other default of a seller of a
repurchase agreement, a Fund might incur expenses in enforcing its rights, and
could experience losses, including a decline in the value of the underlying
securities and loss of income.
A Fund will not purchase illiquid securities if, as a result thereof, more than
10% of such Fund's net assets valued at the time of the transaction would be
invested in such securities. If a Fund holds a material percentage of its assets
in illiquid securities, there may be a question concerning the ability of such
Fund to make payment within seven days of the date its shares are tendered for
redemption. Securities and Exchange Commission guidelines provide that the usual
limit on aggregate holdings by a money market fund of illiquid assets is 10% of
its net assets. Each Fund's investment manager monitors holdings of illiquid
securities on an ongoing basis and will take such action as it deems appropriate
to help maintain adequate liquidity.
As a matter of fundamental policy, the Government Money Fund and the Muni Money
Fund may not borrow money, except as permitted under Federal law. The Money
Fund, as a fundamental policy, may not borrow money except as a temporary
measure for extraordinary or emergency purposes, and then only in an amount up
to one-third of the value of its total assets, in order to meet redemption
requests without immediately selling any portfolio securities. Any such
borrowings by the Money Fund under this provision will not be collateralized. If
for any reason the current value of the Money Fund's total assets falls below an
amount equal to three times the amount of its indebtedness from money borrowed,
the Fund will, within three days (not including Sundays and holidays), reduce
its indebtedness to the extent necessary. The Money Fund will not borrow for
leverage purposes.
13
<PAGE>
Each Fund has adopted certain investment restrictions that are presented in the
Statement of Additional Information and that, together with the investment
objective of the Money Fund, cannot be changed without approval by holders of a
majority of its outstanding voting shares. As defined in the 1940 Act, this
means the lesser of the vote of (a) 67% of the shares of such Fund present at a
meeting where more than 50% of the outstanding shares are present in person or
by proxy; or (b) more than 50% of the outstanding shares of the Fund. The
investment objective of the Government and the Muni Money Funds and the policies
of each of the Funds that are not incorporated into any of the fundamental
investment restrictions referred to above may be changed by the Board of
Trustees without shareholder approval.
Master-Feeder
Each Fund may in the future seek to achieve its investment objective by pooling
its assets with assets of other mutual funds for investment in another
investment company having the same investment objective and substantially the
same investment policies and restrictions as such Fund. The purpose of such an
arrangement is to achieve greater operational efficiencies and to reduce costs.
It is expected that any such investment company will be managed by the Adviser
in substantially the same manner as the corresponding Fund. Shareholders of a
Fund will be given at least 30 days' prior notice of any such investment,
although they will not be entitled to vote on the action. Such investment would
be made only if the Trustees determine it to be in the best interests of the
respective Fund and its shareholders.
Net Asset Value -- Determining Share Price
The price you pay when you buy shares in a Fund and the price you receive if you
redeem is the net asset value computed after your order to buy or redeem is
received in proper form (as described under "How To Make a Purchase"). The net
asset value per share of each Fund is calculated by dividing the total value of
the assets of the Fund, minus its liabilities, by the total number of its shares
outstanding. Each Fund seeks to maintain a net asset value of $1.00 per share,
although there can be no assurance that each Fund will be able to do so.
The net asset value per share of each Fund is determined on each day the New
York Stock Exchange is open for trading, at 11:00 a.m., 1:00 p.m. and 3:00 p.m.
Central time for the Money Fund and the Government Money Fund and at 11:00 a.m.
and 3:00 p.m. Central time for the Muni Money Fund.
Each Fund values its portfolio instruments at amortized cost in accordance with
Rule 2a-7 under the 1940 Act, which means that they are valued at their
acquisition cost (as adjusted for amortization of premium or discount) rather
than at current market value. Calculations are made to compare the value of the
Fund's investments valued at amortized cost with market-based value.
Market-based valuations are obtained by using actual quotations provided by
market makers, estimates of market value, or values obtained from yield data
relating to classes of money market instruments published by reputable sources
at the mean between the bid and asked prices for the
14
<PAGE>
instruments. If a deviation of 1/2 of 1% or more were to occur between the
Fund's net asset value per share calculated by reference to market-based values
and the Fund's $1.00 per share net asset value, or if there were any other
deviation that the Board of Trustees believed would result in a material
dilution to shareholders or purchasers, the Board of Trustees would promptly
consider what action, if any, should be initiated. In order to value its
investments at amortized cost, the Funds purchase only securities with a
maturity of 397 days or less and maintain a dollar-weighted average portfolio
maturity of 90 days or less. In addition, the Funds limit their portfolio
investments to securities that meet the quality and diversification requirements
of Rule 2a-7.
How to Make a Purchase
Whether you are opening an account or adding to it, you will find making
shareholder transactions is easy. Shares of each Fund are sold at their net
asset value with no sales charge. To open an account you should use the account
application available from the Funds and choose one of the methods outlined in
the table on the following page. Call 1-800-537-6001 if you have questions or
need assistance.
Minimum Investment Amounts
- ------------------------------------------------------------------------------
Initial Investment $ 25,000
For Individual Retirement Accounts $ 10,000
Subsequent Purchase $ 1,000
For Individual Retirement Accounts $ 1,000
Automatic Purchase Plan* $ 500
Minimum Balance Requirement** $ 10,000
- -----------
* See "Special Features" for more information regarding Automatic Purchase Plan.
** There is a $1 per month small account fee for any account with a balance
below $10,000 for 30 consecutive days.
Other Information
Purchases by check or other negotiable bank draft will be invested as of 3:00
p.m. Central time on the next business day after receipt and such shares will
begin earning dividends the following calendar day. Purchases by check drawn on
a foreign bank will normally be effective after the check clears. See "Purchase
and Redemption of Shares" in the Statement of Additional Information.
Purchases by wire of Federal Funds (i.e., monies credited to a bank's account
with its regional Federal Reserve Bank) will be effected at the next determined
net asset value. Purchases will receive that day's dividend if effected at or
prior to 1:00 p.m. Central time for the Money Fund and the Government Money
Fund, and by 11:00 a.m. Central time for the Muni Money Fund, otherwise such
shares will receive the dividend for the next calendar day if effected at 3:00
p.m. Central time.
15
<PAGE>
The Trust reserves the right to withdraw all or any part of the offering made by
this prospectus or to reject purchase orders. The Trust also reserves the right
at any time to waive or increase the minimum investment requirements. All orders
to purchase shares are subject to acceptance by the Trust and are not binding
until confirmed or accepted in writing. Any purchase that would result in total
account balances for a single shareholder in excess of $3 million or 5% of fund
assets is subject to prior approval by the Trust. Share certificates are issued
only on request to the Trust and may not be available for certain types of
account registrations. Investments may also be made in the Funds through
broker-dealers and others, who may charge a commission or other fee for their
services. A $10 service fee will be charged when a check for the purchase of
shares is returned because of insufficient or uncollected funds or a stop
payment order.
If you elect to redeem shares of a Fund purchased by check or through
EZ-Transfer or Automatic Purchase Plan, the Fund may delay transmittal of
redemption proceeds until it has determined that collected funds have been
received for the purchase of such shares, which could be up to 10 calendar days
from receipt by the Fund of the purchase amount. See also "How to Make a
Redemption."
How To Make A Purchase
<TABLE>
<CAPTION>
Initial Investment Subsequent Investment
($25,000 or more) ($1,000 or more)
- --------------------------------------------------------------------------------
<S> <C> <C>
By Mail o Complete the Account o Make your check payable to
Application and mail it with ZYF and mail it to:
your check (payable to ZYF)
to: Kemper Service Company
Transfer Agency Division
Kemper Service Company P.O. Box 419154
Transfer Agency Division Kansas City, MO 64141-6154
P.O. Box 419356
Kansas City, MO 64141-6356 o To exchange by mail, send
your request to:
Zurich YieldWise Funds
P.O. Box 419557
Attention: Exchange Dept.
Kansas City, MO 64141-6557
- ------------------------------------------------------------------------------------
By Phone o Call 1-888-ZURICH-1 o Call 1-888-ZURICH-1
(987-4241) to exchange from (987-4241) to exchange from
a Zurich Money Funds or a a Zurich Money Funds or a
Kemper Funds account. Kemper Funds account.
16
<PAGE>
Initial Investment Subsequent Investment
($25,000 or more) ($1,000 or more)
- --------------------------------------------------------------------------------
In Person o In downtown Chicago, you can o In downtown Chicago, you can
make a direct investment at make a direct investment at
our Service Center at 222 our Service Center at 222
South Riverside Plaza. In South Riverside Plaza. In
Kansas City, you can make a Kansas City, you can make a
direct investment at 811 direct investment at 811
Main Street, 7th Floor. Main Street, 7th Floor.
- ------------------------------------------------------------------------------------
By Wire o To open an account through o Instruct your bank to wire
Transfer wire transfer of Federal your investment, together
(Federal Funds, call 1-800-537-6001. with your name and account
Funds) number, to:
o Provide your account
registration instruction to Zurich YieldWise Funds
the service representative. United Missouri Bank of
You will be provided with Kansas City, N.A.
your new account number over ABA #1010-0069-5
the phone. Zurich YieldWise Money
Fund: 98-7083-881-8,
o The Fund accepts wires at no
charge, although your bank or
may charge you for this
service. Zurich YieldWise
Government Money Fund:
o Instruct your bank to wire your 98-7096-453-8,
investment, together with your or
name and new account : Zurich YieldWise Municipal
number to Money Fund: 98-7096-455-4
Zurich YieldWise Funds: o The Fund accepts wires at no
United Missouri Bank of charge, although your bank
Kansas City, N.A. may charge you for this
ABA #1010-0069-5 service.
Zurich YieldWise Money
Fund: 98-7083-881-8,
or
Zurich YieldWise
Government Money Fund:
98-7096-453-8,
or
Zurich YieldWise Municipal
Money Fund: 98-7096-455-4
17
<PAGE>
Initial Investment Subsequent Investment
($25,000 or more) ($1,000 or more)
- --------------------------------------------------------------------------------
By Electronic o Unavailable for opening an Please see "Special Features"
Funds Transfer account. for more information on these
services.
(Automated
Clearing House o EZ-Transfer
funds)
o Automatic Purchase Plan
($500 minimum)
o Payroll Direct Deposit
o Government Direct Deposit
All transactions are via the
Automated Clearing House ("ACH")
System.
</TABLE>
How to Make a Redemption
You can access all or part of your account by selling your shares. Your shares
will be redeemed at the next determined net asset value after your request has
been received in proper form. If processed at 3:00 p.m. Central time, you will
receive that day's dividend on the shares you sold. If you redeem all your
shares of a Fund, you will receive the net asset value of such shares and all
declared but unpaid dividends on such shares. You may use any of the methods
outlined in the table on the following page to sell your shares.
If your account balance is less than $100,000, the following fees apply to
individual redemption transactions: $2 for each check you write plus a $10
service fee for each such check under the $1,000 minimum, $2 for each electronic
funds transfer, $5 for each exchange, $5 for each telephone redemption and each
redemption by mail, and $10 for each bank wire. There is a $5 fee for closing an
account; however, there is a $10 fee for closing an account within one year of
opening the account. For individual retirement accounts, there is a $5 fee for
closing an account within one year of opening the account.
The individual transaction fees paid by shareholders of a Fund will accrue to
the benefit of that Fund. The fees will be used to offset transfer agency and
out-of-pocket expenses of the Fund, which should benefit all Fund shareholders
by helping to reduce the Fund's expenses.
Signature Guarantee Requirements
If the proceeds of a redemption are $50,000 or less and the proceeds are payable
to the shareholder of record at the address of record, normally a telephone
request or a written request by any one account holder without a signature
guarantee is sufficient for redemptions by individual or joint account holders,
and trust, executor, guardian and custodial account holders, provided the
trustee, executor, guardian or custodian is named in the account registration.
Other institutional account holders may exercise the special privilege of
redeeming shares by telephone request or written request
18
<PAGE>
without signature guarantee subject to the same conditions as individual account
holders and subject to the limitations on liability described under "General"
below, provided that the privilege has been pre-authorized by the institutional
account holder or guardian account holder by written instruction to Kemper
Service Company (the "Shareholder Service Agent") with signatures guaranteed.
All other redemption requests must include a signature guaranteed by a
commercial bank, trust company, savings and loan association, federal savings
bank, member firm of a national securities exchange or other eligible financial
institution. The privilege of redeeming shares by telephone request or by
written request without a signature guarantee may not be used to redeem shares
held in certificated form and may not be used if the shareholder's account has
had an address change within 30 days of the redemption request.
HOW TO MAKE A REDEMPTION
<TABLE>
<S> <C>
By Redemption Check o All Redemption Checks should be for a minimum of
($2 fee per check) $1,000. Redemption Checks written in an amount
less than $1,000 will also be charged a $10
service fee.
o Redemption Checks should not be used to close
your account since the account normally includes
accrued but unpaid dividends and the account
closeout fee must be deducted from your balance.
- -----------------------------------------------------------------------------------
By Phone o Telephone requests may be made by
($5 fee -- check by mail) calling 1-888-ZURICH-1 (987-4241) Monday-Friday,
($2 fee -- electronic funds 7 a.m. to 6 p.m. CST and Saturday, 8 a.m. to 3 p.m. CST
transfer) or use the 24-hour Zurich InfoLine (888)
987-8678. You may receive the proceeds via:
o check by mail to the address to which your
account is registered, or
o electronic funds transfer (minimum $1,000 and
maximum $50,000) to a pre-authorized bank
account. See "Special Features --
EZ-Transfer."
o You may exchange to Zurich Money Funds or Kemper
Funds. See "Moving to Another Fund."
19
<PAGE>
HOW TO MAKE A REDEMPTION (continued)
By Wire o You must sign up for the wire transfer privilege
($10 fee) and file the appropriate forms with the
Shareholder Service Agent before making a wire
transfer. Minimum wire: $1,000
o Telephone requests may be made by calling
1-888-ZURICH-1 (987-4241).
o Proceeds will be sent only to the bank or trust
company you have designated on the Account
Application or on amended signature guaranteed
instructions.
- -----------------------------------------------------------------------------------
By Mail o Complete a written request that includes the
following information: each account owner's name,
($5 fee) your account number, the amount to be redeemed,
and the signature of each owner exactly as it
appears on the account, including any special
capacity of the registered owner. See "Signature
Guarantee Requirements" on previous page.
o Mail the written request to Kemper Service
Company, Transfer Agency Division, P.O. Box
419557, Kansas City, Missouri 64141-6557.
</TABLE>
Additional Information
o Redemption By Wire. Requests for wire transfer redemptions received by the
Shareholder Service Agent prior to 11:00 a.m. Central time will result in
shares being redeemed that day and normally a wire transfer will be sent to
the designated account that day. Dividends for that day will not be earned.
The Funds are not responsible for the efficiency of the federal wire system
or the account holder's financial services firm or bank. You are
responsible for any charges your firm or bank makes for sending or
receiving wire transfers. To change the designated account to receive wire
redemption proceeds, send a written request to the Shareholder Service
Agent with signatures guaranteed as described above.
o Redemption By Redemption Check. If you select the checkwriting method of
redemption on your account application, you will normally receive drafts
("Redemption Checks") within 2 weeks of opening your account which you may
use to draw on your Fund account, but not to close it. When a Redemption
Check is presented for payment, a sufficient number of full and fractional
shares in your account will be redeemed at the next determined net asset
value to cover the amount of the Redemption Check. This will enable you to
continue earning daily dividends until the Fund receives the Redemption
Check. You may not use Redemption Checks if there is a Power of Attorney on
the account.
20
<PAGE>
You may write Redemption Checks payable to the order of any person in any amount
not less than $1,000 but not more than $5 million. Unless one signer is
authorized on the account application, Redemption Checks must be signed by all
account holders. If the Shareholder Service Agent receives written notice by any
owner revoking the authorization to sign individually, all account owners will
be required to sign. Redemption Checks must be signed exactly as the account is
registered. The Funds may refuse to honor Redemption Checks whenever the right
of redemption has been suspended or postponed, or whenever the account is
otherwise impaired. A $10 service fee will be charged when a Redemption Check is
presented to redeem Fund shares in excess of the value of your Fund account or
in an amount less than $1,000; when a Redemption Check is presented that would
require redemption within 10 days of shares that were purchased by check or
through EZ-Transfer or Automatic Purchase Plan; or when you request "stop
payment" of a Redemption Check by telephone or in writing. A "stop payment"
request may be made by calling 1-888-ZURICH-1 (987-4241).
General
If shares of a Fund to be redeemed were purchased by check or through
EZ-Transfer or Automatic Purchase Plan (see "Special Features--Electronic Funds
Transfer Programs") the Fund may delay transmittal of redemption proceeds until
it has determined that collected funds have been received for the purchase of
such shares, which could be up to 10 days from receipt by the Fund of the
purchase amount. Shareholders may not use wire transfer or Redemption Check
features until the shares being redeemed have been owned for at least 10 days.
There is no such delay when the shares being redeemed were originally purchased
by wiring Federal Funds. The Funds reserve the right to terminate or modify the
telephone, wire transfer or check redemption privileges at any time.
If shares being redeemed were acquired from an exchange of shares of a Kemper
fund that were offered subject to a contingent deferred sales charge as
described in the prospectus for that other fund, the redemption of such shares
may be subject to a contingent deferred sales charge as explained in such
prospectus.
Shareholders can request the following telephone privileges: expedited wire
transfer redemptions, ACH transactions and exchange transactions for individual
and institutional accounts and pre-authorized telephone redemption transactions
for certain institutional accounts. Shareholders may choose these privileges on
the account application or by contacting the Shareholder Service Agent for
appropriate instructions. Please note that the telephone exchange privilege is
automatic unless the shareholder refuses it on the account application. The
Trust or its agents may be liable for losses, expenses or costs arising out of
fraudulent or unauthorized telephone requests pursuant to these privileges,
unless the Trust or its agent reasonably believes, based upon reasonable
verification procedures, that the telephonic instructions are genuine. The
shareholder will bear the risk of loss, including loss resulting from fraudulent
or unauthorized transactions, as long as the reasonable verification procedures
are followed. The verification procedures include recording instructions,
21
<PAGE>
requiring certain identifying information before acting upon instructions and
sending written confirmations.
During periods when it is difficult to contact the Shareholder Service Agent by
telephone, it may be difficult to use the telephone redemption privilege or the
wire redemption privilege, although you can still redeem by mail.
The Funds may assess a monthly fee of $1 on any account with a balance below
$10,000 for 30 consecutive days.
Moving to Another Fund
You may exchange your shares of Zurich YieldWise Funds for shares of Zurich
Money Funds or Class A shares of a Kemper Fund. Shares you acquire by dividend
reinvestment may be exchanged into a Kemper Fund with no sales charge; although
shares you purchase are subject to the applicable sales charge when exchanged.
The total value of shares being exchanged must at least equal the minimum
investment requirement of the fund into which they are being exchanged.
Exchanges are made based on relative dollar values of the shares involved in the
exchange. If your account balance is less than $100,000, there will be a $5.00
fee for each exchange out of Zurich YieldWise Funds. In addition, dealers or
other firms may charge for their services. To exchange shares, call us or
contact your financial adviser to obtain prospectuses for Zurich Money Funds or
the Kemper Fund in which you are interested. You may make an exchange by mail or
by telephone.
By Telephone
Once you have completed the authorization section on the account application and
we have it on file, the Shareholder Service Agent will honor requests by
telephone at 1-888-ZURICH-1 (987-4241), subject to the limitations on liability
described under "How To Make a Redemption--General." During periods when it is
difficult to contact the Shareholder Service Agent by telephone, it may be
difficult to use the telephone exchange privilege.
By Mail
Send your request to:
Zurich YieldWise Funds
P.O. Box 419557
Attention: Exchange Department
Kansas City, Missouri 64141-6557
Exchanges will be effected by redemption of shares of the fund held and purchase
of shares of the other fund. For federal income tax purposes, any such exchange
constitutes a sale upon which a gain or loss may be realized, depending upon
whether the value of the shares being exchanged is more or less than the
shareholder's adjusted cost basis. The exchange privilege is not a right and may
be suspended, terminated or
22
<PAGE>
modified at any time. Except as otherwise permitted by applicable regulation, 60
days prior written notice of any termination or material change will be
provided.
Automatic Exchange Plan
With an account balance of $10,000 or more, shareholders may authorize the
automatic exchange of a specified amount ($1,000 minimum) of their shares of
Zurich YieldWise Funds for shares of Zurich Money Funds or Class A shares of a
Kemper Fund. If selected, exchanges will be made automatically until the
privilege is terminated by the shareholder or the Fund. Exchanges are subject to
the terms and conditions described above except that there is no minimum
investment requirement for the Zurich Money Funds or the Kemper Fund acquired on
exchange. For accounts under $100,000, each automatic exchange out of a Zurich
YieldWise Fund is subject to the $5.00 exchange fee.
Subject to the limitations described in this section, Class A Shares (or the
equivalent) of the following Kemper Funds may be exchanged for each other at
their relative net asset values: Kemper Technology Fund, Kemper Total Return
Fund, Kemper Growth Fund, Kemper Small Capitalization Equity Fund, Kemper Income
and Capital Preservation Fund, Kemper Municipal Bond Fund, Kemper Diversified
Income Fund, Kemper High Yield Series, Kemper U.S. Government Securities Fund,
Kemper International Fund, Kemper State Tax-Free Income Series, Kemper
Adjustable Rate U.S. Government Fund, Kemper Blue Chip Fund, Kemper Global
Income Fund, Kemper Target Equity Fund (series are subject to a limited offering
period), Kemper Intermediate Municipal Bond Fund, Kemper Cash Reserves Fund,
Kemper U.S. Mortgage Fund, Kemper Short-Intermediate Government Fund, Kemper
Value Series, Inc., Kemper Value+Growth Fund, Kemper Quantitative Equity Fund,
Kemper Horizon Fund, Kemper Europe Fund, Kemper Asian Growth Fund, Kemper
Aggressive Growth Fund, Kemper Global/International Series, Inc., Kemper U.S.
Growth and Income Fund, Kemper-Dreman Financial Services Fund, Kemper Value
Fund, Kemper Classic Growth Fund and Kemper Global Discovery Fund ("Kemper
Funds") and certain "Money Market Funds" (Zurich Money Funds, Zurich YieldWise
Funds, Cash Equivalent Fund, Tax-Exempt California Money Market Fund, Cash
Account Trust, Investors Municipal Cash Fund and Investors Cash Trust). Shares
of Money Market Funds and Kemper Cash Reserves Fund that were acquired by
purchase (not including shares acquired by dividend reinvestment) are subject to
the applicable sales charge on exchange. In addition, shares of a Kemper Fund
with a value in excess of $1,000,000 (except Kemper Cash Reserves Fund) acquired
by exchange from another Fund may not be exchanged thereafter until they have
been owned for 15 days (the "15-Day Hold Policy"). For purposes of determining
whether the 15-Day Hold Policy applies to a particular exchange, the value of
the shares to be exchanged shall be computed by aggregating the value of shares
being exchanged for all accounts under common control, discretion or advice,
including without limitation accounts administered by a financial services firm
offering market timing, asset allocation or similar services. Series of Kemper
Target Equity Fund will be available on exchange only during the Offering Period
for such series as described in the prospectus for such series. Cash Equivalent
Fund, Tax-Exempt California
23
<PAGE>
Money Market Fund, Cash Account Trust, Investors Municipal Cash Fund and
Investors Cash Trust are available on exchange but only through a financial
services firm having a services agreement with KDI with respect to such funds.
Exchanges may only be made for funds that are available for sale in the
shareholder's state of residence.
Special Features
Electronic Funds Transfer Programs
For your convenience, the Funds have established several investment and
redemption programs using electronic funds transfer via the ACH System which are
described below. For accounts under $100,000, there is currently a $2.00 fee for
each redemption using electronic funds transfer. Shareholders should contact the
Shareholder Service Agent at 1-888-ZURICH-1 (987-4241) for more information.
o EZ-Transfer With just one easy phone call, EZ-Transfer allows you to
quickly and conveniently transfer money (minimum $1,000 and maximum
$50,000) from your bank, savings and loan or credit union account to
purchase shares in a Fund. You can also redeem shares (minimum $1,000 and
maximum $50,000) from your Fund account and transfer the proceeds to your
bank, savings and loan or credit union checking account. When you choose to
participate in the EZ-Transfer program, you designate the bank, savings and
loan or credit union account which will be debited or credited under the
program. After you have received a notice confirming that this service has
been added to your Fund account, please allow a minimum of 20 days for bank
notification and processing. By choosing to participate in this program,
you authorize the Shareholder Service Agent to rely upon telephone
instructions from any person to transfer the specified amounts between your
Fund account and your predesignated bank, savings and loan or credit union
account, subject to the limitations on liability under "How To Make a
Redemption--General." The Shareholder Service Agent will then purchase or
redeem sufficient full and fractional shares in your account to satisfy the
request. Once you are enrolled in EZ-Transfer, you can initiate a
transaction by simply calling Shareholder Services toll free at
1-888-ZURICH-1 (987-4241) Monday through Friday, 7:00 a.m. to 6:00 p.m.
Central time and Saturday 8:00 a.m. to 3:00 p.m. Central time or by calling
the Zurich InfoLine at 1-888-987-8678 24 hours a day. See "How To Make a
Redemption--General" for information on our 10 day hold policy. Any account
holder may terminate this privilege by sending written notice to Zurich
YieldWise Funds, P.O. Box 419415, Kansas City, Missouri 64141-6415.
Termination will become effective as soon as the Shareholder Service Agent
has had a reasonable time to act upon the request. EZ-Transfer cannot be
used with passbook savings accounts. This program may not be used for
tax-deferred plans such as Individual Retirement Accounts (IRAs).
o Automatic Purchase Plan You may establish an automatic investment program
with your Fund account. With Automatic Purchase Plan, monthly investments
24
<PAGE>
(minimum $500 and maximum $50,000) are made automatically from your account
at a bank, savings and loan, or credit union into your Fund account. By
signing up for this privilege, you authorize the Trust and its agents to
take money out of your predesignated bank, savings and loan or credit union
account and invest that money in your Fund account. Any account owner may
terminate this privilege simply by sending written notice to Zurich
YieldWise Funds, P.O. Box 419415, Kansas City, Missouri 64141-6415.
Termination will become effective as soon as the Shareholder Service Agent
has had a reasonable time to act upon the request. This privilege may not
be used with passbook savings accounts.
o Direct Check Deposit Service You may conveniently invest in the Funds
through Payroll Direct Deposit or Government Direct Deposit. You can
arrange to have all or a portion of your net pay or government check ($500
minimum) automatically invested in your Fund account each payment period.
You may terminate your participation in these programs by giving written
notice to your employer or the government agency, as appropriate. (A
reasonable time to act is required.) The Funds are not responsible for the
efficiency of your employer or the government agency making the payment or
any financial institution transmitting payment.
To use these features, the participating financial institution must be
affiliated with the ACH System. This ACH affiliation permits the Shareholder
Service Agent to electronically transfer money between your bank account or
employer's payroll bank in the case of Payroll Direct Deposit or the U.S.
Government in the case of Government Direct Deposit, and your Fund account. Your
financial institution's crediting policies for these transferred funds may vary.
These features may be amended or terminated at any time by the Funds.
Other Special Features
Information about the following special features is contained in the Statement
of Additional Information. Additional information may also be obtained by
contacting the Shareholder Service Agent at 1-888-ZURICH-1 (987-4241).
-- Automatic Withdrawal Plan
-- Tax Sheltered Retirement Programs
Dividends and Taxes
Dividend Payment
To help keep your account growing, dividends from any Fund are automatically
reinvested in additional shares of that Fund, unless you request payment by
check on your account application or make such a request later. Dividends are
declared daily and paid monthly.
Dividends are normally reinvested on the 25th of each month if a business day,
otherwise on the prior business day. If you've chosen to receive dividends in
cash,
25
<PAGE>
checks will be mailed monthly to you or any person you designate. You may
request this option by contacting the Shareholder Service Agent (see "How To
Make a Purchase").
Each Fund will reinvest dividend checks (and future dividends) in shares of that
same Fund if checks are returned as undeliverable. Dividends and other
distributions of a Fund in the aggregate amount of $10 or less are automatically
reinvested in shares of the same Fund unless you request that such policy not be
applied to your account.
Taxable Funds
The Money Fund and the Government Money Fund each intend to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code
(the "Code") and if so qualified will not be subject to federal income taxes to
the extent its earnings are distributed. Dividends derived from interest and
short-term capital gains are taxable as ordinary income whether received in cash
or reinvested in additional shares. Dividends from these Funds do not qualify
for the dividends received deduction available to corporate shareholders.
Muni Money Fund
The Muni Money Fund intends to qualify under the Code as a regulated investment
company and, if so qualified, will not be liable for federal income taxes to the
extent its earnings are distributed. This Fund also intends to meet the
requirements of the Code applicable to regulated investment companies
distributing tax-exempt interest dividends and, accordingly, dividends
representing net interest received on Municipal Securities will not be
includable by shareholders in their gross income for federal income tax
purposes, except to the extent such interest is subject to the alternative
minimum tax as discussed below. Dividends representing taxable net investment
income (such as net interest income from temporary investments in obligations of
the U.S. Government) and net short-term capital gains, if any, are taxable to
shareholders as ordinary income. All taxpayers will be required to disclose on
their federal income tax returns the amount of tax-exempt interest earned during
the year, including exempt-interest dividends from the Muni Money Fund.
Net interest on certain "private activity bonds" issued on or after August 8,
1986 is treated as an item of tax preference and may, therefore, be subject to
both the individual and corporate alternative minimum tax. To the extent
provided by regulations to be issued by the Secretary of the Treasury,
exempt-interest dividends from the Muni Money Fund are to be treated as interest
on private activity bonds in proportion to the interest income the Fund receives
from private activity bonds, reduced by allowable deductions.
Exempt-interest dividends, except to the extent of interest from "private
activity bonds," are not treated as a tax preference item. For a corporate
shareholder, however, such dividends will be included in determining such
corporate shareholder's "adjusted current earnings." Seventy-five percent of the
excess, if any, of "adjusted current earnings" over the corporate shareholder's
other alternative minimum taxable income
26
<PAGE>
with certain adjustments will be a tax preference item. Corporate shareholders
are advised to consult their tax advisers with respect to alternative minimum
tax consequences.
Individuals whose modified income exceeds a base amount will be subject to
federal income tax on up to 85% of their Social Security benefits. Modified
income includes adjusted gross income, tax-exempt interest, including
exempt-interest dividends from the Muni Money Fund, and 50% of Social Security
benefits.
The tax exemption of dividends from the Muni Money Fund for federal income tax
purposes does not necessarily result in exemption under the income or other tax
laws of any state or local taxing authority. The laws of the several states and
local taxing authorities vary with respect to the taxation of such income and
shareholders of the Fund are advised to consult their own tax adviser as to the
status of their accounts under state and local tax laws.
The Funds
Dividends declared in October, November or December to shareholders of record as
of a date in one of those months and paid during the following January are
treated as paid on December 31 of the calendar year in which declared for
federal income tax purposes. Each Fund may adjust its schedule for dividend
reinvestment for the month of December to assist it in complying with reporting
and minimum distribution requirements contained in the Code.
Each Fund is required by law to withhold 31% of taxable dividends paid to
certain shareholders who do not furnish a correct taxpayer identification number
(in the case of individuals, a social security number) and in certain other
circumstances. Trustees of qualified retirement plans and 403(b)(7) accounts are
required by law to withhold 20% of the taxable portion of any distribution that
is eligible to be "rolled over." The 20% withholding requirement does not apply
to distributions from IRAs or any part of a distribution that is transferred
directly to another qualified retirement plan, 403(b)(7) account, or IRA. You
should consult your tax adviser regarding the 20% withholding requirement.
You will receive a monthly statement giving complete details of dividend
reinvestment and purchase and redemption transactions during the month. Tax
information will be provided annually. You should retain copies of your monthly
account statements or year-end statement for tax reporting purposes. However,
those who have incomplete records may obtain historical account transaction
information at a reasonable fee.
When more than one shareholder resides at the same address, certain reports and
communications to be delivered to such shareholders may be combined in the same
mailing package, and certain duplicate reports and communications may be
eliminated. Similarly, account statements to be sent to such shareholders may be
combined in the same mailing package or consolidated into a single statement.
However, you may request that the foregoing policies not be applied to your
account.
27
<PAGE>
Investment Manager
Scudder Kemper Investments, Inc. ("the Adviser"), 345 Park Avenue, New York, New
York, is the investment manager of the Funds and provides the Funds with
continuous professional investment supervision. The Adviser is one of the
largest investment managers in the country with more than $230 billion in assets
under management and has been engaged in the management of investment funds for
more than seventy years. The Adviser is an indirect subsidiary of Zurich
Financial Services, Inc., a newly formed global insurance and financial services
company. Zurich Financial Services, Inc. owns approximately 70% of the Adviser,
with the balance owned by the Adviser's officers and employees. The Zurich
family of companies manages over $403 billion in assets worldwide.
In connection with the formation of Zurich Financial Services, Inc., the Money
Fund's existing investment management agreement with the Adviser was deemed to
have been assigned and, therefore, terminated. The Board has approved a new
investment management agreement with the Adviser, which is substantially
identical to the current investment management agreement, except for the dates
of execution and termination. This agreement became effective upon the
termination of the then current investment management agreement and will be
submitted for shareholder approval at a special meeting currently scheduled to
conclude in December 1998.
Responsibility for the overall management of the Funds rests with the Board of
Trustees and officers of the Trust. Professional investment supervision is
provided by the Adviser. The investment management agreement provides that the
Adviser shall act as the Funds' investment adviser, manage its investments and
provide it with various services and facilities.
Frank J. Rachwalski, Jr. is the lead portfolio manager of the Funds. He has
served in this capacity since the Trust commenced operations in April 1997. Mr.
Rachwalski joined the Adviser in January, 1973 and is currently a Managing
Director of the Adviser and a Vice President of the Trust. He received a B.B.A.
and an M.B.A. from Loyola University, Chicago, Illinois.
For the services and facilities furnished, each Fund pays a monthly investment
management fee on a graduated basis of 1/12 of the annual rate of 0.50% of the
first $215 million of average daily net assets of the Fund, 0.375% of the next
$335 million, 0.30% of the next $250 million and 0.25% of average daily net
assets thereafter.
The Adviser has agreed to temporarily reduce its management fee and reimburse or
pay operating expenses of each Fund as follows: (i) with respect to the Money
Fund, the Adviser has agreed to waive its management fee and absorb operating
expenses to the extent necessary to maintain the Fund's total operating expenses
at no more than 0.45% until January 1, 2000; (ii) with respect to the Government
Money Fund, the Adviser has agreed to waive its management fee and absorb
operating expenses to the extent necessary to maintain the Fund's total
operating expenses at no more than 0.10% through at least June 1, 1999 and,
thereafter, has agreed to waive its management fee and absorb operating expenses
to the extent necessary to maintain
28
<PAGE>
the Fund's total operating expenses at no more than 0.34% until June 1, 2000;
and (iii) with respect to the Muni Money Fund, the Adviser has agreed to waive
its management fee and absorb 100% of the Fund's other operating expenses
through at least June 1, 1999 and, thereafter, has agreed to waive its
management fee and absorb operating expenses to the extent necessary to maintain
the Fund's total operating expenses at no more than 0.34% until June 1, 2000.
The total operating expenses of each Fund set forth under "Summary of Expenses"
include the effect of these management fee and operating expense reductions. The
Adviser reserves the right to terminate its fee reductions and expense
absorptions at any time after these periods. For purposes of these fee waivers
and expense limitations, "operating expenses" do not include taxes, interest,
extraordinary expenses, brokerage commissions or transaction costs.
Fund Accounting Agent
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share of each Fund and
maintaining all accounting records related thereto. For more information
concerning accounting fees, please see the Statement of Additional Information.
Year 2000 Readiness
Like other mutual funds and financial and business organizations worldwide, the
Funds could be adversely affected if computer systems on which the Funds rely,
which primarily include those used by the Adviser, its affiliates or other
service providers, are unable to correctly process date-related information on
and after January 1, 2000. This risk is commonly called the Year 2000 Issue.
Failure to successfully address the Year 2000 Issue could result in
interruptions to and other material adverse effects on the Funds' business and
operations. The Adviser has commenced a review of the Year 2000 Issue as it may
affect the Funds and is taking steps it believes are reasonably designed to
address the Year 2000 Issue, although there can be no assurances that these
steps will be sufficient. In addition, there can be no assurances that the Year
2000 Issue will not have an adverse effect on the companies whose securities are
held by the Funds or on global markets or economies generally.
Distributor
Kemper Distributors, Inc., 222 South Riverside Plaza, Chicago, Illinois
60606-5808, an affiliate of the Adviser, is the principal underwriter of the
Funds and acts as agent of the Funds in the sale of their shares.
Custodian, Transfer Agent and Shareholder Service Agent
Investors Fiduciary Trust Company ("IFTC"), 801 Pennsylvania Ave., Kansas City,
Missouri 64105, as custodian, and State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, as sub-custodian, have custody of
all securities and cash of the Funds. They attend to the collection of principal
and income, and payment for and collection of proceeds of securities bought and
sold by
29
<PAGE>
the Funds. IFTC is also the Funds' transfer and dividend-paying agent. Pursuant
to a services agreement with IFTC, Kemper Service Company, 811 Main Street,
Kansas City, Missouri 64105, an affiliate of the Adviser, serves as Shareholder
Service Agent of the Funds.
Performance
The Funds may advertise several types of performance information, including
"yield," "effective yield," "total return," and "average annual total return"
and for the Muni Money Fund only, "tax equivalent yield." Please remember that
performance information is based upon historical earnings and is not
representative of future performance. The yield of a Fund refers to the net
investment income generated by a hypothetical investment in the Fund over a
specific seven-day period. This net investment income is then annualized, which
means that the net investment income generated during the seven-day period is
assumed to be generated each week over an annual period and is shown as a
percentage of the investment. The effective yield is calculated similarly, but
the net investment income earned by the investment is assumed to be compounded
weekly when annualized. The effective yield will be slightly higher than the
yield due to this compounding effect. Average annual total return and total
return measure both net investment income and any realized or unrealized
appreciation or depreciation of a Fund's investments, assuming reinvestment of
all dividends. Average annual total return represents the average annual
percentage change over the period and total return represents the aggregate
percentage or dollar value change over the period. Tax equivalent yield is the
yield that a taxable investment must generate in order to equal the Muni Money
Fund's yield for an investor in a stated federal income tax bracket (normally
assumed to be the maximum tax rate). Tax equivalent yield is based upon the
portion of the Muni Money Fund's yield that is tax-exempt.
The performance of a Fund may be compared to that of other money market mutual
funds or mutual fund indexes as reported by independent mutual fund reporting
services such as Lipper Analytical Services, Inc. ("Lipper"). A Fund's
performance, expenses and its relative size may be compared to other money
market mutual funds as reported by IBC Financial Data, Inc.'s Money Fund
Report(R) or Money Market Insight(R), reporting services on money market funds.
Investors may want to compare a Fund's performance to that of various bank
products as reported by BANK RATE MONITORTM, a financial reporting service that
weekly publishes average rates of bank and thrift institution money market
deposit accounts and interest bearing checking accounts or various certificate
of deposit indexes. The performance of a Fund also may be compared to that of
U.S. Treasury bills and notes. Certain of these alternative investments may
offer fixed rates of return and guaranteed principal and may be insured. In
addition, investors may want to compare a Fund's performance to the Consumer
Price Index either directly or by calculating its "real rate of return," which
adjusts its return for the effects of inflation.
Information may be quoted from publications such as The Wall Street Journal,
Money Magazine, Forbes, Barron's, Fortune, The Chicago Tribune, and USA Today.
The Funds
30
<PAGE>
may depict the historical performance of the securities in which a Fund may
invest over periods reflecting a variety of market or economic conditions either
alone or in comparison with alternative investments, performance indexes of
those investments or economic indicators. Each Fund may also describe its
portfolio holdings and depict its size or relative size compared to other mutual
funds, the number and make-up of its shareholder base and other descriptive
factors concerning the Fund.
Each Fund's returns will fluctuate. Shares of the Funds are not insured.
Additional information concerning a Fund's performance appears in the Statement
of Additional Information.
Capital Structure
Each Fund is a diversified series of the Trust, an open-end management
investment company, organized as a business trust under the laws of
Massachusetts on June 12, 1995. Effective November 17, 1998, the name of the
Trust was changed from Zurich YieldWise Money Fund to Zurich YieldWise Funds.
The Trust may issue an unlimited number of shares of beneficial interest, all
having no par value which may be divided by the Board of Trustees into classes
of shares, subject to compliance with the Securities and Exchange Commission
regulations permitting the creation of separate classes of shares. The Trust's
shares are not currently divided into classes. While only shares of the Money
Fund, the Government Money Fund and the Muni Money Fund are presently being
offered, the Board of Trustees may authorize the issuance of additional series
if deemed desirable, each with its own investment objective, policies and
restrictions. Since the Trust may offer multiple series, it is known as a
"series company." Shares of a Fund have equal noncumulative voting rights and
equal rights with respect to dividends, assets and liquidation of such Fund
subject to any preferences, rights or privileges of any classes of shares within
the Fund. Generally, each class of shares issued by a particular Fund would
differ as to the allocation of certain expenses of the Fund, such as
distribution and administrative expenses, permitting, among other things,
different levels of services or methods of distribution among various classes.
Shares are fully paid and nonassessable when issued, are transferable without
restriction and have no preemptive or conversion rights. The Trust is not
required to hold annual shareholders' meetings and does not intend to do so.
However, it will hold special meetings as required or deemed desirable for such
purposes as electing trustees, changing fundamental policies or approving an
investment management agreement. Subject to the Agreement and Declaration of
Trust of the Trust, shareholders may remove trustees. Shareholders will vote by
Fund and not in the aggregate or by class except when voting in the aggregate is
required under the 1940 Act, such as for the election of trustees or when the
Board of Trustees determines that such a vote is appropriate.
31
<PAGE>
Account Services Directory
To Open A New Account
The minimum to open an account is $25,000 (or $10,000 for an IRA). Call a Zurich
Money Market Specialist at 1-800-537-6001 Monday through Friday between 8 a.m.
and 6 p.m. Central time to:
o learn the current yield*
o get answers about fund features, benefits, services, and fees
o request an application*
o receive assistance completing an application
o set up a wire transfer initial purchase.
* also available on our Web site: www.zurichfunds.com
Current Account Assistance
Call a Zurich Shareholder Services representative at 1-888-ZURICH-1 (987-4241)
Monday through Friday between 7 a.m. and 6 p.m. Central time and on Saturday
between 8 a.m. and 3 p.m. to:
o establish new account services
o inquire about current statement or tax forms
o request duplicate statements or tax forms
o change the frequency or amount of automated transactions
o initiate a redemption or exchange
o follow-up on correspondence
o learn how to use the Zurich InfoLine automated phone system.
24-Hour Account Information
Call Zurich InfoLine at 1-888-987-8678 to make automated account inquiries and
transactions 24 hours a day from a touch-tone phone, including:
o account balance
o current yield
o transaction confirmation
o last dividend paid
32
<PAGE>
o checkbook and investment slip reorders
o duplicate statement request
o pre-authorized transfers to and from a bank account
o fund redemption requests.
To Start An Automatic Purchase Plan
Call 1-888-ZURICH-1 (987-4241) for the proper forms to add $500 or more to your
account automatically with direct deposit:
o all or part of your paycheck
o all or part of your government check
o an amount you specify directly from your designated bank account.
To Make A Wire Transfer Purchase
Each method requires a minimum investment of $1,000:
o Wire with Federal Funds (same day credit and dividend if received before 1
p.m. Central time for the Money Fund and the Government Money Fund and
before 11:00 a.m. Central time for the Muni Money Fund)
o EZ-Transfer with ACH Funds (same day credit if received before 3 p.m.
Central time)
Send to: United Missouri Bank (ABA # 1010-0069-5), 10th and Grand, Kansas City,
MO for credit to Zurich YieldWise Money Fund (Fund bank account #98-7083-881-8),
Zurich YieldWise Government Money Fund (Fund bank account #98-7096-453-8), or
Zurich YieldWise Municipal Money Fund (Fund bank account #98-7096-455-4), and
further credit to your account number.
To Make A Wire Transfer Redemption
Each method requires a minimum investment of $1,000 and a call to Shareholder
Services at 1-888-ZURICH-1 (987-4241):
o Federal Funds (same day if requested before 11 a.m. Central time; $10 fee
per transfer)
o EZ-Transfer with ACH Funds (generally within two business days; $2 fee per
transfer).
The financial institution receiving your transfer may also charge a fee.
For additional information on account transactions, see tables beginning on
pages 16 and 19.
33
<PAGE>
[ ZURICH LOGO]
Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
www.zurichfunds.com
Telephone: 1-800-537-6001
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
November 30, 1998
ZURICH YIELDWISE FUNDS
222 South Riverside Plaza, Chicago, Illinois 60606-5808
(888) ZURICH-1 (987-4241)
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectus of Zurich YieldWise Funds (the "Trust") dated
November 30, 1998. The prospectus may be obtained without charge by calling or
writing the Zurich YieldWise Funds.
TABLE OF CONTENTS
INVESTMENT RESTRICTIONS......................................................1
MASTER/FEEDER STRUCTURE......................................................3
MUNICIPAL SECURITIES.........................................................3
INVESTMENT MANAGER...........................................................4
PORTFOLIO TRANSACTIONS.......................................................6
PURCHASE AND REDEMPTION OF SHARES............................................7
DIVIDENDS AND NET ASSET VALUE................................................8
PERFORMANCE..................................................................9
OFFICERS AND TRUSTEES.......................................................12
SPECIAL FEATURES............................................................14
SHAREHOLDER RIGHTS..........................................................14
APPENDIX --RATINGS OF INVESTMENTS...........................................16
The financial statements appearing in the Trust's Annual Report to Shareholders
are incorporated herein by reference. The Trust's Annual Report accompanies this
Statement of Additional Information.
INVESTMENT RESTRICTIONS
The Zurich YieldWise Money Fund (the "Money Fund"), Zurich YieldWise Government
Money Fund (the "Government Money Fund") and Zurich YieldWise Municipal Money
Fund (the "Muni Money Fund") have adopted certain investment restrictions which,
together with the investment objective of the Money Fund, cannot be changed
without approval by holders of a majority of such Fund's outstanding voting
shares. As defined in the Investment Company Act of 1940, this means the lesser
of the vote of (a) 67% of the shares of the Fund present at a meeting where more
than 50% of the outstanding shares of the Fund are present in person or by
proxy; or (b) more than 50% of the outstanding shares of the Fund.
The Money Fund may not:
(1) Purchase more than 10% of any class of voting securities of any issuer
except that all or substantially all of the assets of the Fund may be
invested in another registered investment company having the same
investment objective and substantially similar investment policies as
the Fund.
(2) Make loans to others (except through the purchase of debt obligations
or repurchase agreements in accordance with its investment objective
and policies).
(3) Borrow money except as a temporary measure for extraordinary or
emergency purposes and then only in an amount up to one-third of the
value of its total assets, in order to meet redemption requests without
immediately selling any money market instruments (any such borrowings
under this section will not be collateralized). If, for any reason, the
current value of the Fund's total
1
<PAGE>
assets falls below an amount equal to three times the amount of its
indebtedness from money borrowed, the Fund will, within three days (not
including Sundays and holidays), reduce its indebtedness to the extent
necessary. The Fund will not borrow for leverage purposes and will not
purchase securities or make investments while borrowings in excess of
5% of the Fund's total assets are outstanding.
(4) Make short sales of securities, or purchase any securities on margin
except to obtain such short-term credits as may be necessary for the
clearance of transactions.
(5) Invest in commodities or commodity futures contracts or in real estate
(or real estate limited partnerships), although it may invest in
securities which are secured by real estate and securities of issuers
which invest or deal in real estate.
(6) Underwrite securities issued by others except to the extent the Fund
may be deemed to be an underwriter, under the federal securities laws,
in connection with the disposition of portfolio securities except that
all or substantially all of the assets of the Fund may be invested in
another registered investment company having the same investment
objective and substantially similar investment policies as the Fund.
(7) Issue senior securities except as permitted under the Investment
Company Act of 1940.
(8) Concentrate 25% or more of the Fund's total assets in any one industry;
provided, however, that the Fund reserves freedom of action to (a)
invest up to 100% of its assets in obligations of, or guaranteed by,
the United States Government, its agencies or instrumentalities, and
(b) invest 25% or more of its assets in bank certificates of deposit,
time deposits or banker's acceptances of United States banks and their
domestic branches, in accordance with its investment objective and
policies except that all or substantially all of the assets of the Fund
may be invested in another registered investment company having the
same investment objective and substantially similar investment policies
as the Fund.
Each of the Government Money Fund and the Muni Money Fund may not:
(1) Borrow money, except as permitted under the Investment Company Act of
1940, as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time.
(2) Issue senior securities, except as permitted under the Investment
Company Act of 1940, as amended, and as interpreted or modified by
regulatory authority having jurisdiction, from time to time.
(3) Concentrate its investments in a particular industry, as that term is
used in the Investment Company Act of 1940, as amended, and as
interpreted or modified by regulatory authority having jurisdiction,
from time to time.
(4) Engage in the business of underwriting securities issued by others,
except to the extent that the Fund may be deemed to be an underwriter
in connection with the disposition of portfolio securities.
(5) Purchase or sell real estate, which term does not include securities of
companies which deal in real estate or mortgages or investments secured
by real estate or interests therein, except that the Fund reserves
freedom of action to hold and to sell real estate acquired as a result
of the Fund's ownership of securities.
(6) Purchase physical commodities or contracts relating to physical
commodities.
2
<PAGE>
(7) Make loans except as permitted under the Investment Company Act of
1940, as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time.
The Government Money Fund and the Muni Money Fund have no current intention of
making loans as permitted in investment restriction (7) noted above.
If a Fund adheres to a percentage restriction at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values or net assets will not be considered a violation. The Funds
have adopted the following non-fundamental restrictions, which may be changed by
the Board of Trustees without shareholder approval. Each Fund may not:
(i) Invest more than 10% of its net assets in illiquid securities.
(ii) Write, purchase or sell puts, calls or combinations thereof.
(iii) Invest for the purpose of exercising control or management of another
issuer.
MASTER/FEEDER STRUCTURE
The Board of Trustees has the discretion to retain the current distribution
arrangement for the Funds while investing in a master fund in a master/feeder
fund structure as described below.
A master/feeder fund structure is one in which a fund (a "feeder fund"), instead
of investing directly in a portfolio of securities, invests most or all of its
investment assets in a separate registered investment company (the "master
fund") with substantially the same investment objective and policies as the
feeder fund. Such a structure permits the pooling of assets of two or more
feeder funds, preserving separate identities or distribution channels at the
feeder fund level. Based on the premise that certain of the expenses of
operating an investment portfolio are relatively fixed, a larger investment
portfolio may eventually achieve a lower ratio of operating expenses to average
net assets. An existing investment company is able to convert to a feeder fund
by selling all of its investments, which involves brokerage and other
transaction costs and realization of a taxable gain or loss, or by contributing
its assets to the master fund and avoiding transaction costs and, if proper
procedures are followed, the realization of taxable gain or loss.
Municipal Securities
Municipal Securities that the Muni Money Fund may purchase include, without
limitation, debt obligations issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities such as
airports, bridges, highways, housing, hospitals, mass transportation, public
utilities, schools, streets, and water and sewer works. Other public purposes
for which Municipal Securities may be issued include refunding outstanding
obligations, obtaining funds for general operating expenses and obtaining funds
to loan to other public institutions and facilities.
Municipal Securities, such as industrial development bonds, are issued by or on
behalf of public authorities to obtain funds for purposes including privately
operated airports, housing, conventions, trade shows, ports, sports, parking or
pollution control facilities or for facilities for water, gas, electricity or
sewage and solid waste disposal. Such obligations, which may include lease
arrangements, are included within the term Municipal Securities if the interest
paid thereon qualifies as exempt from federal income tax. Other types of
industrial development bonds, the proceeds of which are used for the
construction, equipment, repair or improvement of privately operated industrial
or commercial facilities, may constitute Municipal Securities, although current
federal tax laws place substantial limitations on the size of such issues.
3
<PAGE>
Municipal Securities generally are classified as "general obligation" or
"revenue." General obligation notes are secured by the issuer's pledge of its
full credit and taxing power for the payment of principal and interest. Revenue
notes are payable only from the revenues derived from a particular facility or
class of facilities or, in some cases, from the proceeds of a special excise or
other specific revenue source. Industrial development bonds which are Municipal
Securities are in most cases revenue bonds and generally do not constitute the
pledge of the credit of the issuer of such bonds.
Examples of Municipal Securities that mature in or have remaining maturities of
397 days or less are short-term tax anticipation notes, bond anticipation notes,
revenue anticipation notes, construction loan notes, pre-refunded municipal
bonds, warrants and tax-free commercial paper.
Tax anticipation notes typically are sold to finance working capital needs of
municipalities in anticipation of receiving property taxes on a future date.
Bond anticipation notes are sold on an interim basis in anticipation of a
municipality issuing a longer term bond in the future. Revenue anticipation
notes are issued in expectation of receipt of other types of revenue such as
those available under the Federal Revenue Sharing Program. Construction loan
notes are instruments insured by the Federal Housing Administration with
permanent financing by "Fannie Mae" (the Federal National Mortgage Association)
or "Ginnie Mae" (the Government National Mortgage Association) at the end of the
project construction period. Pre-refunded municipal bonds are bonds which are
not yet refundable, but for which securities have been placed in escrow to
refund an original municipal bond issue when it becomes refundable. Tax-free
commercial paper is an unsecured promissory obligation issued or guaranteed by a
municipal issuer. The Muni Money Fund may purchase other Municipal Securities
similar to the foregoing, which are or may become available, including
securities issued to pre-refund other outstanding obligations of municipal
issuers.
The federal bankruptcy statutes relating to the adjustments of debts of
political subdivisions and authorities of states of the United States provide
that, in certain circumstances, such subdivisions or authorities may be
authorized to initiate bankruptcy proceedings without prior notice to or consent
of creditors, which proceedings could result in material adverse changes in the
rights of holders of obligations issued by such subdivisions or authorities.
Litigation challenging the validity under state constitutions of present systems
of financing public education has been initiated or adjudicated in a number of
states, and legislation has been introduced to effect changes in public school
finances in some states. In other instances there has been litigation
challenging the issuance of pollution control revenue bonds or the validity of
their issuance under state or federal law which ultimately could affect the
validity of those Municipal Securities or the tax-free nature of the interest
thereon.
INVESTMENT MANAGER
Investment Manager. Scudder Kemper Investments, Inc. (the "Adviser") 345 Park
Avenue, New York, New York, is the Funds' investment manager. The Adviser is
approximately 70% owned by Zurich Financial Services, Inc., a newly formed
global insurance and financial services company. The balance of the Adviser is
owned by the Adviser's officers and employees. Pursuant to an investment
management agreement for each Fund, the Adviser acts as each Fund's investment
manager, manages its investments, administers its business affairs, furnishes
office facilities and equipment, provides clerical and administrative services
and permits any of its officers or employees to serve without compensation as
trustees or officers of the Trust if elected to such positions. The Trust pays
the expenses of its operations, including the fees and expenses of independent
auditors, counsel, custodian and transfer agent and the cost of share
certificates, reports and notices to shareholders, costs of calculating net
asset value and maintaining all accounting records related thereto, brokerage
commissions or transaction costs, taxes, registration fees, the fees and
expenses of qualifying the Fund and its shares for distribution under federal
and state securities laws and membership dues in the Investment Company
Institute or any similar organization. Trust expenses generally are allocated
between the Funds on the basis of relative net assets at
4
<PAGE>
the time of allocation, except that expenses directly attributable to a
particular Fund are charged to that Fund.
Each investment management agreement provides that the Adviser shall not be
liable for any error of judgment or of law, or for any loss suffered by the
Funds in connection with the matters to which the agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Adviser in the performance of its obligations and duties, or by
reason of its reckless disregard of its obligations and duties under the
agreement.
Each investment management agreement continues in effect from year to year for
each Fund so long as its continuation is approved at least annually by (a) a
majority vote of the trustees who are not parties to such agreement or
interested persons of any such party except in their capacity as trustees of the
Trust, cast in person at a meeting called for such purpose, and (b) by the
shareholders of each Fund or the Board of Trustees. Each agreement may be
terminated at any time upon 60 days notice by either party, or by a majority
vote of the outstanding shares, and will terminate automatically upon
assignment. Additional Funds may be subject to a different agreement.
On December 31, 1997, pursuant to the terms of an agreement, Scudder, Stevens &
Clark, Inc. ("Scudder") and Zurich Insurance Company ("Zurich") formed a new
global organization by combining Scudder with Zurich Kemper Investments, Inc.
("ZKI"), a former subsidiary of Zurich and the former investment manager to the
Zurich YieldWise Money Fund and Scudder changed its name to Scudder Kemper
Investments, Inc. As a result of the transaction, Zurich owns approximately 70%
of the Adviser, with the balance owned by the Adviser's officers and employees.
On September 7, 1998, the businesses of Zurich (including Zurich's 70% interest
in the Adviser) and the financial services businesses of B.A.T Industries p.l.c.
("B.A.T") were combined to form a new global insurance and financial services
company known as Zurich Financial Services, Inc. By way of a dual holding
company structure, former Zurich shareholders initially owned approximately 57%
of Zurich Financial Services, Inc., with the balance initially owned by former
B.A.T shareholders.
Upon consummation of this transaction, the Money Fund's existing investment
management agreement with the Adviser was deemed to have been assigned and,
therefore, terminated. The Board has approved a new investment management
agreement with the Adviser, which is substantially identical to the current
investment management agreement, except for the date of execution and
termination. This agreement became effective upon the termination of the then
current investment management agreement and will be submitted for shareholder
approval at special meeting currently scheduled to conclude in December 1998.
For the services and facilities furnished, each Fund pays a monthly investment
management fee on a graduated basis of 1/12 of the annual rate of 0.50% of the
first $215 million of average daily net assets of the Fund, 0.375% of the next
$335 million, 0.30% of the next $250 million and 0.25% of the average daily net
assets thereafter. As a result of the fee waiver described in the prospectus
(see "Investment Manager"), for fiscal year 1998 and for the period April 17,
1997 (commencement of operations) to July 31, 1997, the Money Fund paid an
investment management fee of $332,000 and $0, respectively.
Fund Accounting Agent. Scudder Fund Accounting Corporation ("SFAC"), a
subsidiary of the Adviser, is responsible for determining the daily net asset
value per share of the Funds and maintaining all accounting records related
thereto. Currently, SFAC receives no fee for its services to the Money Fund;
however, subject to Board approval, some time in the future, SFAC may seek
payment for its services to the Money Fund under this agreement. The Government
Money Fund and the Muni Money Fund pay SFAC an annual fee equal to 0.0200% of
the first $150 million of average daily net assets, 0.0060% of such assets in
excess of $150 million and 0.0035% of such assets in excess of $1 billion, plus
holding and transaction charges for this service.
5
<PAGE>
Principal Underwriter. Kemper Distributors, Inc. ("KDI"), an affiliate of the
Adviser, is the principal underwriter for shares of the Funds and acts as agent
of the Funds in the sale of their shares. The Funds pay the cost for the
prospectus and shareholder reports to be set in type and printed for existing
shareholders, and KDI pays for the printing and distribution of copies thereof
used in connection with the offering of shares to prospective investors. KDI
also pays for supplementary sales literature and advertising costs. Terms of
continuation, termination and assignment under the underwriting agreement are
identical to those described above with regard to the investment management
agreement, except that termination other than upon assignment requires six
months notice.
Certain officers or trustees of the Trust are also directors or officers of the
Adviser and KDI as indicated under "Officers and Trustees."
Custodian, Transfer Agent and Shareholder Service Agent. Investors Fiduciary
Trust Company ("IFTC"), 801 Pennsylvania Ave., Kansas City, Missouri 64105, as
custodian, and State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, as sub-custodian, have custody of all securities and cash
of the Funds. They attend to the collection of principal and income, and payment
for and collection of proceeds of securities bought and sold by the Funds. IFTC
is also the Funds' transfer and dividend-paying agent. Pursuant to a services
agreement with IFTC, Kemper Service Company ("KSvC"), an affiliate of the
Adviser, serves as "Shareholder Service Agent" of the Fund and, as such,
performs all of IFTC's duties as transfer agent and dividend paying agent. IFTC
receives, as transfer agent, and pays to KSvC, annual account fees of a maximum
of $8 per account plus account set-up, transaction, maintenance and
out-of-pocket expense reimbursement. Effective January 1, 1999, this schedule
will be amended to include a $10 annual account fee, a $5 new account set up
fee, an annual asset based fee of 0.06% of average daily net assets and
out-of-pocket expense reimbursement. For the fiscal year ended July 31, 1998,
IFTC remitted shareholder service fees in the amount of $117,000 to KSvC as
Shareholder Service Agent for the Money Fund.
Independent Auditors and Reports To Shareholders. The Funds' independent
auditors, Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606,
audit and report on the Funds' annual financial statements, review certain
regulatory reports and the Funds' federal income tax return, and perform other
professional accounting, auditing, tax and advisory services when engaged to do
so by the Funds. Shareholders will receive annual audited financial statements
and semi-annual unaudited financial statements.
Legal Counsel. Vedder, Price, Kaufman & Kammholz, 222 North LaSalle Street,
Chicago, Illinois 60601, serves as legal counsel to the Funds.
PORTFOLIO TRANSACTIONS
Portfolio transactions are undertaken principally to pursue the objective of
each Fund in relation to movements in the general level of interest rates, to
invest money obtained from the sale of Fund shares, to reinvest proceeds from
maturing portfolio securities and to meet redemptions of Fund shares. This may
increase or decrease the yield of a Fund depending upon the Adviser's ability to
correctly time and execute such transactions. Since a Fund's assets are invested
in securities with short maturities, its portfolio will turn over several times
a year. Securities with maturities of less than one year are excluded from
required portfolio turnover rate calculations, so each Fund's portfolio turnover
rate for reporting purposes should generally be zero.
The primary objective of the Adviser in placing orders for the purchase and sale
of securities for a Fund's portfolio is to obtain the most favorable net results
taking into account such factors as price, commission where applicable, size of
order, difficulty of execution and skill required of the executing
broker/dealer. The Adviser seeks to evaluate the overall reasonableness of
brokerage commissions paid (to the extent applicable) through its familiarity
with commissions charged on comparable transactions, as well as by comparing
commissions paid by a Fund to reported commissions paid by others. The Adviser
reviews on a
6
<PAGE>
routine basis commission rates, execution and settlement services performed,
making internal and external comparisons.
When it can be done consistently with the policy of obtaining the most favorable
net results, it is the Adviser's practice to place such orders with
broker/dealers who supply research, market and statistical information to a
Fund. The term "research, market and statistical information" includes advice as
to the value of securities: the advisability of investing in, purchasing or
selling securities; the availability of securities or purchasers or sellers of
securities; and analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and the performance of accounts.
The Adviser is authorized when placing portfolio transactions for a Fund to pay
a brokerage commission in excess of that which another broker might charge for
executing the same transaction solely on account of the receipt of research,
market or statistical information. In effecting transactions in over-the-counter
securities, orders are placed with the principal market makers for the security
being traded unless, after exercising care, it appears that more favorable
results are available elsewhere.
In selecting among firms believed to meet the criteria for handling a particular
transaction, the Adviser may give consideration to those firms that have sold or
are selling shares of a Fund managed by the Adviser.
To the maximum extent feasible, it is expected that the Adviser will place
orders for portfolio transactions through Scudder Investor Services, Inc.
("SIS"), a corporation registered as a broker-dealer and a subsidiary of the
Adviser. SIS will place orders on behalf of the Fund with issuers, underwriters
or other brokers and dealers. SIS will not receive any commission, fee or other
remuneration from the Fund for this service.
Although certain research, market and statistical information from
broker/dealers may be useful to a Fund and to the Adviser, it is the opinion of
the Adviser that such information only supplements its own research effort since
the information must still be analyzed, weighed and reviewed by the Adviser's
staff. Such information may be useful to the Adviser in providing services to
clients other than the Fund and not all such information is used by the Adviser
in connection with the Fund. Conversely, such information provided to the
Adviser by broker/dealers through whom other clients of the Adviser effect
securities transactions may be useful to the Adviser in providing services to a
Fund.
The Board members for a Fund review from time to time whether the recapture for
the benefit of a Fund of some portion of the brokerage commissions or similar
fees paid by a Fund on portfolio transactions is legally permissible and
advisable.
Money market instruments are normally purchased in principal transactions
directly from the issuer or from an underwriter or market maker. There usually
are no brokerage commissions paid by the Fund for such purchases. Purchases from
underwriters will include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers serving as market makers will include
the spread between the bid and asked prices.
There are normally no brokerage commissions paid by the Funds for such purchases
and none were paid by the Trust for the Money Fund since it commenced operations
on April 17, 1997.
PURCHASE AND REDEMPTION OF SHARES
Shares of each Fund are sold at their net asset value next determined after an
order and payment are received in the form described in the Funds' prospectus.
There is no sales charge. The minimum initial investment in any Fund is $25,000
($10,000 for IRAs) and the minimum subsequent investment is $1,000 but such
minimum amounts may be changed at any time. See the prospectus for certain
exceptions to these minimums. An investor wishing to open an account should use
the account application form available from the Funds and choose one of the
methods of purchase described in the Funds' prospectus. An order for the
purchase of shares that is accompanied by a check drawn on a foreign bank (other
than a check drawn on a
7
<PAGE>
Canadian bank in U.S. Dollars) will not be considered in proper form and will
not be processed unless and until the Fund determines that it has received
payment of the proceeds of the check. The time required for such a determination
will vary and cannot be determined in advance.
Upon receipt by the Shareholder Service Agent, of a request for redemption in
proper form, shares will be redeemed by a Fund at the applicable net asset value
as described in the Funds' prospectus. A shareholder may elect to use either the
regular or expedited redemption procedures.
The Funds may suspend the right of redemption or delay payment more than seven
days (a) during any period when the New York Stock Exchange ("Exchange") is
closed other than customary weekend and holiday closings or during any period in
which trading on the Exchange is restricted, (b) during any period when an
emergency exists as a result of which (i) disposal of a Fund's investments is
not reasonably practicable, or (ii) it is not reasonably practicable for a Fund
to determine the value of its net assets, or (c) for such other periods as the
Securities and Exchange Commission may by order permit for the protection of the
Funds' shareholders.
Although it is the Trust's present policy to redeem in cash, if the Board of
Trustees determines that a material adverse effect would be experienced by the
remaining shareholders if payment were made wholly in cash, the Trust will pay
the redemption price in whole or in part by a distribution of portfolio
securities in lieu of cash, in conformity with the applicable rules of the
Securities and Exchange Commission, taking such securities at the same value
used to determine net asset value, and selecting the securities in such manner
as the Board of Trustees may deem fair and equitable. If such a distribution
occurs, shareholders receiving securities and selling them could receive less
than the redemption value of such securities and in addition could incur certain
transaction costs. Such a redemption would not be as liquid as a redemption
entirely in cash. The Trust has elected to be governed by Rule 18f-1 under the
Investment Company Act of 1940 pursuant to which the Trust is obligated to
redeem shares of a Fund solely in cash up to the lesser of $250,000 or 1% of the
net assets of the Fund during any 90-day period for any one shareholder of
record.
DIVIDENDS AND NET ASSET VALUE
Dividends. Dividends are declared daily and paid monthly. Shareholders will
receive dividends in additional shares of the same Fund unless they elect to
receive cash. Dividends will be reinvested monthly at the net asset value
normally on the 25th of each month if a business day, otherwise on the prior
business day. The Funds will pay shareholders who redeem their entire accounts
all unpaid dividends at the time of redemption not later than the next dividend
payment date.
Each Fund calculates its dividends based on its daily net investment income. For
this purpose, the net investment income of a Fund consists of (a) accrued
interest income plus or minus amortized discount or premium (excluding market
discount for the Muni Money Fund), (b) plus or minus all short-term realized
gains and losses on portfolio assets and (c) minus accrued expenses allocated to
the Fund. Expenses of the Funds are accrued each day. While each Fund's
investments are valued at amortized cost, there will be no unrealized gains or
losses on portfolio securities. However, should the net asset value of a Fund
deviate significantly from market value, the Board of Trustees could decide to
value the portfolio securities at market value and then unrealized gains and
losses would be included in net investment income above.
Net Asset Value. As described in the prospectus, each Fund values its portfolio
instruments at amortized cost, which does not take into account unrealized
capital gains or losses. This involves initially valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price the Fund would receive if it sold the instrument.
Calculations are made to compare the value of a Fund's investments valued at
amortized cost with market values. Market valuations are obtained by using
actual quotations provided by market makers, estimates of market value, or
values obtained from yield data relating to classes of money market instruments
published
8
<PAGE>
by reputable sources at the mean between the bid and asked prices for the
instruments. If a deviation of 1/2 of 1% or more were to occur between the net
asset value per share calculated by reference to market values and a Fund's
$1.00 per share net asset value, or if there were any other deviation that the
Board of Trustees of the Trust believed would result in a material dilution to
shareholders or purchasers, the Board of Trustees would promptly consider what
action, if any, should be initiated. If a Fund's net asset value per share
(computed using market values) declined, or were expected to decline, below
$1.00 (computed using amortized cost), the Board of Trustees of the Trust might
temporarily reduce or suspend dividend payments in an effort to maintain the net
asset value at $1.00 per share. As a result of such reduction or suspension of
dividends or other action by the Board of Trustees, an investor would receive
less income during a given period than if such a reduction or suspension had not
taken place. Such action could result in investors receiving no dividends for
the period during which they held shares and receiving, upon redemption, a price
per share lower than that which they paid. On the other hand, if a Fund's net
asset value per share (computed using market values) were to increase, or were
anticipated to increase, above $1.00 (computed using amortized cost), the Board
of Trustees of the Trust might supplement dividends in an effort to maintain the
net asset value at $1.00 per share.
Taxes. Interest on indebtedness which is incurred to purchase or carry shares of
a mutual fund portfolio which distributes exempt-interest dividends during the
year is not deductible for federal income tax purposes. Further, the Muni Money
Fund may not be an appropriate investment for persons who are `substantial
users' of facilities financed by industrial development bonds held by the Muni
Money Fund or are `related persons' to such users; such persons should consult
their tax advisers before investing in the Muni Money Fund.
The "Superfund Act of 1986" (the "Superfund Act") imposes a separate tax on
corporations at a rate of 0.12 percent of the excess of such corporation's
"modified alternative minimum taxable income" over $2 million. A portion of
tax-exempt interest, including exempt-interest dividends from the Muni Money
Fund, may be includable in modified alternative minimum taxable income.
Corporate shareholders are advised to consult their tax advisers with respect to
the consequences of the Superfund Act.
PERFORMANCE
As reflected in the prospectus, the historical performance calculation for a
Fund may be shown in the form of "yield," "effective yield," "total return,"
"average annual total return" and, for the Muni Money Fund only, "tax equivalent
yield." These various measures of performance are described below. The Adviser
has agreed to temporarily reduce its management fees and absorb other operating
expenses of the Funds to the extent specified in the prospectus. See "Investment
Manager." These fee reductions and expense absorptions will improve the
performance results of the Funds.
Each Fund's yield is computed in accordance with a standardized method
prescribed by rules of the Securities and Exchange Commission. Under that
method, the current yield quotation is based on a seven-day period and is
computed for each Fund as follows. The first calculation is net investment
income per share, which is accrued interest on portfolio securities, plus or
minus amortized discount or premium (excluding market discount for the Muni
Money Fund), less accrued expenses. This number is then divided by the price per
share (expected to remain constant at $1.00) at the beginning of the period
("base period return"). The result is then divided by 7 and multiplied by 365
and the resulting yield figure is carried to the nearest one-hundredth of one
percent. Realized capital gains or losses and unrealized appreciation or
depreciation of investments are not included in the calculation.
Each Fund's effective yield is determined by taking the base period return
(computed as described above) and calculating the effect of assumed compounding.
The formula for the effective yield is: (base period return +1)^365/7 - 1.
Average annual total return ("AATR") is found for a specific period by first
taking a hypothetical $1,000 investment ("initial investment") on the first day
of the period and computing the "redeemable value" of
9
<PAGE>
that investment at the end of the period. The redeemable value is then divided
by the initial investment, and this quotient is taken to the Nth root (N
representing the number of years in the period) and 1 is subtracted from the
result, which is then expressed as a percentage. The calculation assumes that
all dividends have been reinvested at net asset value on the reinvestment dates.
Total return is not calculated according to a standard formula, except when
calculated for the "Financial Highlights" table in the financial statements.
Total return is calculated similarly to AATR but is not annualized. It may be
shown as a percentage or the increased dollar value of the hypothetical
investment over the period.
All performance information shown below is for periods ended July 31, 1998.
<TABLE>
<CAPTION>
AATR Since Total Return
Yield Effective Yield AATR Inception Total Return Since Inception
Fund* 7 days 7 days 1 yr. (April 17, 1997) 1 yr. (April 17, 1997)
----- ------ ------ ----- ---------------- ----- ----------------
<S> <C> <C> <C> <C> <C> <C>
Money Fund** 5.44% 5.59% 5.83% 5.86% 5.83% 7.62%
</TABLE>
* The Government Money Fund and the Muni Money Fund commenced operations
on or about November 30, 1998.
** Without the effect of the fee waiver and expense absorption, these
yields would have been 5.26% and 5.41%, respectively and the Total
Return and AATR would have been less.
The tax equivalent yield of the Muni Money Fund is computed by dividing that
portion of the Fund's yield (computed as described above) which is tax-exempt by
(one minus the stated federal income tax rate) and adding the result to that
portion, if any, of the yield of the Fund that is not tax-exempt. For additional
information concerning tax-exempt yields, see "Tax-Exempt versus Taxable Yield"
below.
Each Fund's yield fluctuates, and the publication of an annualized yield
quotation is not a representation as to what an investment in a Fund will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
which the investment in a Fund is held, but also on such matters as Fund
expenses.
As indicated in the prospectus (see "Performance"), the performance of the Funds
may be compared to that of other mutual funds tracked by Lipper Analytical
Services, Inc. ("Lipper"). Lipper performance calculations include the
reinvestment of all capital gain and income dividends for the periods covered by
the calculations. A Fund's performance also may be compared to other money
market funds reported by IBC Financial Data, Inc.'s Money Fund Report(R) or
Money Market Insight(R), reporting services on money market funds. As reported
by IBC, all investment results represent total return (annualized results for
the period net of management fees and expenses) and one year investment results
are effective annual yields assuming reinvestment of dividends.
As indicated in the prospectus, a Fund's performance also may be compared to
various bank products, including the average rate of bank and thrift institution
money market deposit accounts, interest bearing checking accounts and
certificates of deposit as reported in the BANK RATE MONITOR National Index(TM)
of 100 leading bank and thrift institutions as published by the BANK RATE
MONITOR(TM), N. Palm Beach, Florida 33408. The rates published by the BANK RATE
MONITOR National Index(TM) are averages of the personal account rates offered on
the Wednesday prior to the date of publication by 100 large banks and thrifts in
the top ten Consolidated Standard Metropolitan Statistical Areas.
With respect to money market deposit accounts and interest bearing checking
accounts, account minimums range upward from $2,000 in each institution and
compounding methods vary. Interest bearing checking accounts generally offer
unlimited check writing while money market deposit accounts generally restrict
10
<PAGE>
the number of checks that may be written. If more than one rate is offered, the
lowest rate is used. Rates are determined by the financial institution and are
subject to change at any time specified by the institution. Generally, the rates
offered for these products take market conditions and competitive product yields
into consideration when set. Bank products represent a taxable alternative
income producing product. Bank and thrift institution deposit accounts may be
insured. Shareholder accounts in the Fund are not insured. Bank passbook savings
accounts compete with money market mutual fund products with respect to certain
liquidity features but may not offer all of the features available from a money
market mutual fund, such as check writing. Bank passbook savings accounts
normally offer a fixed rate of interest while the yield of the Funds fluctuates.
Bank checking accounts normally do not pay interest but compete with money
market mutual fund products with respect to certain liquidity features (e.g.,
the ability to write checks against the account). Bank certificates of deposit
may offer fixed or variable rates for a set term. (Normally, a variety of terms
are available.) Withdrawal of these deposits prior to maturity will normally be
subject to a penalty. In contrast, shares of the Funds are redeemable at the net
asset value (normally, $1.00 per share) next determined after a request is
received.
Investors may also want to compare a Fund's performance to that of U.S. Treasury
bills or notes because such instruments represent alternative income producing
products. Treasury obligations are issued in selected denominations. Rates of
U.S. Treasury obligations are fixed at the time of issuance and payment of
principal and interest is backed by the full faith and credit of the U.S.
Treasury. The market value of such instruments will generally fluctuate
inversely with interest rates prior to maturity and will equal par value at
maturity. Generally, the values of obligations with shorter maturities will
fluctuate less than those with longer maturities. Each Fund's yield will
fluctuate. Also, while each Fund seeks to maintain a net asset value per share
of $1.00, there is no assurance that it will be able to do so.
Tax-Free versus Taxable Yield. You may want to determine which
investment--tax-free or taxable--will provide you with a higher after-tax
return. To determine the taxable equivalent yield, simply divide the yield from
the tax-free investment by the sum of [1 minus your marginal tax rate]. The
tables below are provided for your convenience in making this calculation for
selected tax-free yields and taxable income levels. These yields are presented
for purposes of illustration only and are not representative of any yield that
the Muni Money Fund may generate. Both tables are based upon current law as to
the 1998 federal tax rate schedules.
Taxable Equivalent Yield Table for Persons Whose Adjusted Gross Income is Under
$124,500
<TABLE>
<CAPTION>
Your
Marginal A Tax-Exempt Yield of:
Taxable Income Federal Tax 2% 3% 4% 5% 6% 7%
Single Joint Rate Is Equivalent to a Taxable Yield of:
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$25,350-$61,400 $42,350-$102,300 28.0% 2.78 4.17 5.56 6.94 8.33 9.72
- -------------------------------------------------------------------------------------------------------------
Over $61,400 Over $102,300 31.0 2.90 4.35 5.80 7.25 8.70 10.14
- -------------------------------------------------------------------------------------------------------------
Taxable Equivalent Yield Table for Persons Whose Adjusted Gross Income is Over $124,500*
Your
Marginal A Tax-Exempt Yield of:
Taxable Income Federal Tax 2% 3% 4% 5% 6% 7%
Single Joint Rate Is Equivalent to a Taxable Yield of:
- -------------------------------------------------------------------------------------------------------------
$61,400-$128,100 $102,300-$155,950 31.9% 2.94 4.41 5.87 7.34 8.81 10.28
- -------------------------------------------------------------------------------------------------------------
$128,100-$278,450 $155,950-$278,450 37.1 3.18 4.77 6.36 7.95 9.54 11.13
- -------------------------------------------------------------------------------------------------------------
Over $278,450 Over $278,450 40.8 3.38 5.07 6.76 8.45 10.14 11.82
- -------------------------------------------------------------------------------------------------------------
</TABLE>
* This table assumes a decrease of $3.00 of itemized deductions for each $100
of adjusted gross income over $124,500. For a married couple with adjusted
gross income between $186,800 and $309,300 (single between $124,500 and
$247,000), add 0.7% to the above Marginal Federal Tax Rate for each
personal and dependency exemption. The taxable equivalent yield is the
tax-exempt yield divided by:
11
<PAGE>
100% minus the adjusted tax rate. For example, if the table tax rate is
37.1% and you are married with no dependents, the adjusted tax rate is
38.5% (37.1% + 0.7% + 0.7%). For a tax-exempt yield of 6%, the taxable
equivalent yield is about 9.8% (6% / (100% - 38.5%)).
OFFICERS AND TRUSTEES
The officers and trustees of the Trust, their birthdates, their principal
occupations and their affiliations, if any, with the Adviser and KDI, the
principal underwriter, or their affiliates, are as follows:
DAVID W. BELIN (6/20/28), Trustee, 2000 Financial Center, 7th and Walnut, Des
Moines, Iowa; Member, Belin Lamson McCormick Zumbach Flynn, P.C. (attorneys).
LEWIS A. BURNHAM (1/8/33), Trustee, 16410 Avila Boulevard, Tampa, Florida;
Retired; formerly, Partner, Business Resources Group; formerly, Executive Vice
President, Anchor Glass Container Corporation.
DONALD L. DUNAWAY (3/8/37), Trustee, 7515 Pelican Bay Boulevard, Naples,
Florida; Retired; formerly, Executive Vice President, A. O. Smith Corporation
(diversified manufacturer).
ROBERT B. HOFFMAN (12/11/36), Trustee, 800 North Lindbergh Boulevard, St. Louis,
Missouri; Vice Chairman and Chief Financial Officer, Monsanto Company
(agricultural, pharmaceutical and nutritional/food products); formerly, Vice
President, Head of International Operations FMC Corporation (manufacturer of
machinery and chemicals).
DONALD R. JONES (1/17/30), Trustee, 182 Old Wick Lane, Inverness, Illinois;
Retired; Director, Motorola, Inc. (manufacturer of electronic equipment and
components); formerly, Executive Vice President and Chief Financial Officer,
Motorola, Inc.
SHIRLEY D. PETERSON (9/3/41), Trustee, 401 Rosemont Avenue, Frederick, Maryland;
President, Hood College; formerly, partner, Steptoe & Johnson (attorneys); prior
thereto, Commissioner, Internal Revenue Service; prior thereto, Assistant
Attorney General, U.S. Department of Justice; Director, Bethlehem Steel Corp.
DANIEL PIERCE (3/18/34), Chairman and Trustee*, Two International Place, Boston,
Massachusetts; Managing Director, Adviser; Director, Fiduciary Trust Company and
Fiduciary Company Incorporated.
WILLIAM P. SOMMERS (7/22/33), Trustee, 333 Ravenswood Avenue, Menlo Park,
California; President and Chief Executive Officer, SRI International (research
and development); formerly, Executive Vice President, Iameter (medical
information and educational service provider); prior thereto, Senior Vice
President and Director, Booz, Allen & Hamilton, Inc. (management consulting
firm) (retired); Director, Rohr, Inc., Therapeutic Discovery Corp. and Litton
Industries.
EDMOND D. VILLANI (3/4/47), Trustee*, 345 Park Avenue, New York, New York;
President, Chief Executive Officer and Managing Director, Adviser.
MARK S. CASADY (9/21/60), President*, 345 Park Avenue, New York, New York;
Managing Director, Adviser; formerly, Institutional Sales Manager of an
unaffiliated mutual fund distributor.
PHILIP J. COLLORA (11/15/45), Vice President and Secretary*, 222 South Riverside
Plaza, Chicago, Illinois; Senior Vice President, Adviser.
THOMAS W. LITTAUER (4/26/55), Vice President*, Two International Place, Boston,
Massachusetts; Managing Director, Adviser; formerly, Head of Broker Dealer
Division of an unaffiliated investment
12
<PAGE>
management firm during 1997; prior thereto, President of Client Management
Services of an unaffiliated investment management firm from 1991 to 1996.
ANN M. McCREARY (11/6/56), Vice President*, 345 Park Avenue, New York, New York;
Managing Director, Adviser.
ROBERT C. PECK, JR. (10/1/46), Vice President*, 222 South Riverside Plaza,
Chicago, Illinois; Managing Director, Adviser; formerly, Executive Vice
President and Chief Investment Officer with an unaffiliated investment
management firm from 1988 to June 1997.
KATHRYN L. QUIRK (12/3/52), Vice President*, 345 Park Avenue, New York, New
York; Managing Director, Adviser.
FRANK J. RACHWALSKI, JR. (3/26/45), Vice President*, 222 South Riverside Plaza,
Chicago, Illinois; Managing Director, Adviser.
LINDA J. WONDRACK (9/12/64), Vice President*, Two International Place, Boston,
Massachusetts; Senior Vice President, Adviser.
JOHN R. HEBBLE (6/27/58), Treasurer*, Two International Place, Boston,
Massachusetts; Senior Vice President, Adviser.
BRENDA LYONS (2/21/63), Assistant Treasurer*, Two International Place, Boston,
Massachusetts; Senior Vice President, Adviser.
CAROLINE PEARSON (4/1/62), Assistant Secretary*, Two International Place,
Boston, Massachusetts; Senior Vice President, Adviser; formerly, Associate,
Dechert Price & Rhoads (law firm) 1989 to 1997.
MAUREEN E. KANE (2/14/62), Assistant Secretary*, Two International Place,
Boston, Massachusetts; Vice President, Adviser; formerly, Assistant Vice
President of an unaffiliated investment management firm; prior thereto,
Associate Staff Attorney of an unaffiliated investment management firm;
Associate, Peabody & Arnold (law firm).
ELIZABETH C. WERTH (10/1/47), Assistant Secretary*, 222 South Riverside Plaza,
Chicago, Illinois; Vice President, Adviser and KDI.
* Interested persons of the Funds as defined in the Investment Company
Act of 1940.
The trustees and officers who are "interested persons" as designated above
receive no compensation from the Funds. The table below shows amounts paid or
accrued to those trustees who are not designated "interested persons" during the
Trust's 1998 fiscal year except that the information in the last column is for
calendar year 1997.
<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation
From Trust Adviser-Managed Funds Paid
Name of Trustee to Trustees**
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
David W. Belin*.................................. $ 500 $168,100
Lewis A. Burnham................................. 800 117,800
Donald L. Dunaway................................ 1,000 162,700
Robert B. Hoffman................................ 800 109,400
Donald R. Jones.................................. 900 114,200
Shirley D. Peterson.............................. 600 114,000
William P. Sommers............................... 600 109,400
</TABLE>
13
<PAGE>
* Includes deferred fees and interest thereon pursuant to deferred
compensation agreements with the Trust. Deferred amounts accrue interest
monthly at a rate equal to the yield of Zurich Money Funds--Zurich Money
Market Fund. Total deferred fees and interest accrued for the latest and
all prior fiscal years for the Trust is $500 for Mr. Belin.
** Includes compensation for service during 1997 on the Boards of 26 Kemper
Funds with 43 fund portfolios. Each trustee currently serves as a trustee
of 26 Kemper Funds and 50 fund portfolios. Total compensation does not
reflect amounts paid by Scudder Kemper to the trustees for meetings
regarding the combination of Scudder and ZKI. Such amounts total $21,900,
$25,400, $21,900, $17,300, $20,800, $24,200 and $21,900 for Messrs. Belin,
Burnham, Dunaway, Hoffman, and Jones, Ms. Peterson and Mr. Sommers.
As of October 31, 1998, the trustees and officers as a group owned less than 1%
of the then outstanding shares of each Fund and no person owned of record more
than 5% of the outstanding shares of any Fund.
SPECIAL FEATURES
Automatic Withdrawal Plan. If you own $10,000 or more of a Fund's shares you may
provide for the payment from your account of any requested dollar amount to be
paid to you or your designated payee monthly, quarterly, semi-annually or
annually. Dividend distributions will be automatically reinvested at net asset
value. A sufficient number of full and fractional shares will be redeemed to
make the designated payment. Depending upon the size of the payments requested,
redemptions for the purpose of making such payments may reduce or even exhaust
the account. Additionally, there is a $1/month small account fee for account
balances under $10,000. The program may be amended on thirty days notice by the
Fund and may be terminated at any time by the shareholder or the Funds. The
minimum automatic withdrawal amount is $1,000 and the shareholder will be
charged a $5.00 fee for each withdrawal.
Tax-Sheltered Retirement Programs. The Shareholder Service Agent provides
retirement plan services and documents and can establish your account in any of
the following types of retirement plans:
o Traditional, Roth and Education Individual Retirement Accounts (IRAs) with
IFTC as custodian. This includes Savings Incentive Match Plan for Employees
of Small Employers ("SIMPLE"), IRA accounts and Simplified Employee Pension
Plan (SEP) IRA accounts and prototype documents.
o 403(b) Custodial Accounts also with IFTC as custodian. This type of plan is
available to employees of most non-profit organizations.
o Prototype money purchase pension and profit-sharing plans may be adopted by
employers. The maximum contribution per participant is the lesser of 25% of
compensation or $30,000.
Brochures describing the above plans, as well as providing model defined benefit
plans, target benefit plans, 457 plans, 401(k) plans, SIMPLE 401(k) plans and
materials for establishing them are available from the Shareholder Service Agent
upon request. The brochures for plans with IFTC as custodian describe the
current fees payable to IFTC for its services as custodian. Investors should
consult with their own tax advisers before establishing a retirement plan.
SHAREHOLDER RIGHTS
The Trust generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Trust ("Declaration of Trust"),
however, shareholder meetings will be held in connection with the following
matters: (a) the election or removal of trustees, if a meeting is called for
such purpose; (b) the adoption of any contract for which shareholder approval is
required by the Investment Company Act of 1940 ("1940 Act"); (c) any termination
of the Trust or a Fund or a class to the extent and as provided in the
Declaration of Trust; (d) any amendment of the Declaration of Trust (other than
14
<PAGE>
amendments changing the name of the Trust, supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or inconsistent
provision thereof); and (e) such additional matters as may be required by law,
the Declaration of Trust, the By-laws of the Trust, or any registration of the
Trust with the Securities and Exchange Commission or any state, or as the
trustees may consider necessary or desirable. The shareholders also would vote
upon changes in fundamental investment objectives, policies or restrictions.
Each trustee serves until the next meeting of shareholders, if any, called for
the purpose of electing trustees and until the election and qualification of his
successor or until such trustee sooner dies, resigns, retires or is removed by a
majority vote of the shares entitled to vote (as described below) or a majority
of the trustees. In accordance with the 1940 Act (a) the Trust will hold a
shareholder meeting for the election of trustees at such time as less than a
majority of the trustees have been elected by shareholders, and (b) if, as a
result of a vacancy in the Board of Trustees, less than two-thirds of the
trustees have been elected by the shareholders, that vacancy will be filled only
by a vote of the shareholders.
Trustees may be removed from office by a vote of the holders of a majority of
the outstanding shares at a meeting called for that purpose, which meeting shall
be held upon the written request of the holders of not less than 10% of the
outstanding shares. Upon the written request of ten or more shareholders who
have been such for at least six months and who hold shares constituting at least
1% of the outstanding shares of the Trust stating that such shareholders wish to
communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a trustee, the
Trust has undertaken to disseminate appropriate materials at the expense of the
requesting shareholders.
The Declaration of Trust provides that the presence at a shareholder meeting in
person or by proxy of at least 30% of the shares entitled to vote on a matter
shall constitute a quorum. Thus, a meeting of shareholders of the Trust could
take place even if less than a majority of the shareholders were represented on
its scheduled date. Shareholders would in such a case be permitted to take
action which does not require a larger vote than a majority of a quorum, such as
the election of trustees and ratification of the selection of auditors. Some
matters requiring a larger vote under the Declaration of Trust, such as
termination or reorganization of the Trust and certain amendments of the
Declaration of Trust, would not be affected by this provision; nor would matters
which under the 1940 Act require the vote of a "majority of the outstanding
voting securities" as defined in the 1940 Act.
The Declaration of Trust specifically authorizes the Board of Trustees to
terminate the Trust or any Fund or class by notice to the shareholders without
shareholder approval.
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of the
Trust. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Trust or the trustees. Moreover, the Declaration of Trust provides for
indemnification out of Trust property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust and the
Trust will be covered by insurance which the trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by the Adviser remote and
not material since it is limited to circumstances in which a disclaimer is
inoperative and the Trust itself is unable to meet its obligations.
15
<PAGE>
APPENDIX -- RATINGS OF INVESTMENTS
COMMERCIAL PAPER RATINGS
A-1, A-2; Prime-1, Prime-2, Duff-1, Duff-2; And F-1, F-2 Commercial Paper
Ratings
Commercial paper rated by Standard & Poor's Corporation has the following
characteristics: Liquidity ratios are adequate to meet cash requirements.
Long-term senior debt is rated "A" or better. The issuer has access to at least
two additional channels of borrowing. Basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong position
within the industry. The reliability and quality of management are unquestioned.
Relative strength or weakness of the above factors determine whether the
issuer's commercial paper is rated A-1, A-2 or A-3.
The ratings Prime-1 and Prime-2 are the two highest commercial paper ratings
assigned by Moody's Investors Service, Inc. Among the factors considered by it
in assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations. Relative
strength or weakness of the above factors determines whether the issuer's
commercial paper is rated Prime-1, 2 or 3.
The rating Duff-1 is the highest commercial paper rating assigned by Duff &
Phelps Inc. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors that are supported by ample
asset protection. Risk factors are minor. Paper rated Duff-2 is regarded as
having good certainty of timely payment, good access to capital markets and
sound liquidity factors and company fundamentals. Risk factors are small.
The ratings F-1 and F-2 are the highest commercial paper ratings assigned by
Fitch Investors Services, Inc. Issues assigned a rating of F-1 are regarded as
having the strongest degree of assurance for timely payment. Issues assigned a
rating of F-2 have a satisfactory degree of assurance for timely payment, but
the margin of safety is not as great as for issues assigned an F-1 rating.
MIG-1 and MIG-2 Municipal Notes
Moody's ratings for state and municipal notes and other short-term loans will be
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the differences between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower are uppermost in importance in
short-term borrowing, while various factors of the first importance in bond risk
are of lesser importance in the short run. Loans designated MIG-1 are of the
best quality, enjoying strong protection from established cash flows of funds
for their servicing or from established and broad-based access to the market for
refinancing, or both. Loans designated MIG-2 are of high quality, with margins
of protection ample although not so large as in the preceding group.
STANDARD & POOR'S CORPORATION BOND RATINGS
AAA. This is the highest rating assigned by Standard & Poor's Corporation to a
debt obligation and indicates an extremely strong capacity to pay principal and
interest.
16
<PAGE>
AA. Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A. Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
MOODY'S INVESTORS SERVICE, INC. BOND RATINGS
Aaa. Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa. Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in Aaa securities.
A. Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
DUFF & PHELP'S INC. BOND RATINGS
AAA. Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA. High credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions.
FITCH INVESTORS SERVICE, INC. BOND RATINGS
AAA. Highest credit quality. This rating denotes the lowest degree of credit
risk.
AA. Very high credit quality. This rating denotes a very low expectation of
credit risk.
17
<PAGE>
[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
<PAGE> 25
(This page intentionally left blank)
<PAGE> 26
(This page intentionally left blank)
<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.
<PAGE>
ZURICH YIELDWISE FUNDS
PART C.
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(i) Financial Statements included in Part A of the
Registration Statement: Financial Highlights, Zurich
YieldWise Money Fund.
(ii) Financial Statements included in Part B of the
Registration Statement: The Annual Report for Zurich
YieldWise Money Fund, for the fiscal year ended July
31, 1998, are incorporated herein by reference to the
fund's Statement of Additional Information and were
filed on October 6, 1998 pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are
incorporated herein by reference.
(b) Exhibits
99.B1(a) Agreement and Declaration of Trust.(1)
99.B1(b) Written Instrument Amending the Agreement and Declaration
of Trust.(1)
99.B1(c) Written Instrument Amending the Agreement and Declaration of
Trust.(1)
99.B1(d) Written Instrument Amending the Agreement and Declaration of
Trust. Submitted herewith.
99.B2 By-Laws.(2)
99.B3 Inapplicable.
99.B4(a) Text of Share Certificate.(2)
99.B4(b) Written Instrument Establishing a Designation of New Series.
Submitted herewith.
99.B5(a) Investment Management Agreement dated December 31, 1997 for
Zurich YieldWise Money Fund. Submitted herewith.
99.B5(b) Investment Management Agreement dated September 7, 1998 for
Zurich YieldWise Money Fund. Submitted herewith.
99.B5(c) Investment Management Agreement dated November 30, 1998 for
Zurich YieldWise Government Money Fund. Submitted herewith.
99.B5(d) Investment Management Agreement dated November 30, 1998 for
Zurich YieldWise Municipal Money Fund. Submitted herewith.
99.B6(a) Underwriting Agreement dated December 31, 1997. Submitted
herewith.
99.B6(b) Underwriting Agreement dated September 7, 1998. Submitted
herewith.
99.B7 Inapplicable.
99.B8 Custody Agreement.(2)
99.B9(a) Agency Agreement.(2)
99.B9(b) Fund Accounting Agreement dated December 31, 1997 for Zurich
YieldWise Money Fund. Submitted herewith.
99.B9(c) Fund Accounting Agreement dated November 30, 1998 for Zurich
YieldWise Funds, on behalf of Zurich YieldWise Government
Money Fund. Submitted herewith.
99.B9(d) Fund Accounting Agreement dated November 30, 1998 for Zurich
YieldWise Funds, on behalf of Zurich YieldWise Municipal
Money Fund. Submitted herewith.
99.B10 Inapplicable.
99.B11 Report and Consent of Independent Auditors. Submitted
herewith.
99.B12 Inapplicable.
99.B13 Inapplicable.
99.B14 Inapplicable.
99.B15 Inapplicable.
99.B16 Inapplicable.
99.B18 Inapplicable.
99.B24 Inapplicable.
27 Financial Data Schedule. Submitted herewith.
Part C - Page 1
<PAGE>
(1) Incorporated herein by reference to Registrant's Registration
Statement on Form N-1A filed on February 5, 1997.
(2) Incorporated herein by reference to Registrant's Registration
Statement on Form N-1A filed on March 28, 1997.
Item 25. Persons Controlled by or Under Common Control with Registrant
Not applicable.
Item 26. Number of Holders of Securities
As of November 20, 1998 there were 8,362 holders of record of shares of
the Registrant.
Item 27. Indemnification
Article VIII of the Registrant's Agreement and Declaration of Trust
(Exhibit 1 hereto, which is incorporated herein by reference) provides in effect
that the Registrant will indemnify its officers and trustees under certain
circumstances. However, in accordance with Section 17(h) and 17(i) of the
Investment Company Act of 1940 and its own terms, said Article of the Agreement
and Declaration of Trust does not protect any person against any liability to
the Registrant or its shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such trustee, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question as to whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
On June 26, 1997, Zurich Insurance Company ("Zurich"), ZKI Holding
Corp. ("ZKIH"), Zurich Kemper Investments, Inc. ("ZKI"), Scudder, Stevens &
Clark, Inc. ("Scudder") and the representatives of the beneficial owners of the
capital stock of Scudder ("Scudder Representatives") entered into a transaction
agreement ("Transaction Agreement") pursuant to which Zurich became the majority
stockholder in Scudder with an approximately 70% interest, and ZKI was combined
with Scudder ("Transaction"). In connection with the trustees' evaluation of the
Transaction, Zurich agreed to indemnify the Registrant and the trustees who were
not interested persons of ZKI or Scudder (the "Independent Trustees") for and
against any liability and expenses based upon any action or omission by the
Independent Trustees in connection with their consideration of and action with
respect to the Transaction. In addition, Scudder has agreed to indemnify the
Registrant and the Independent Trustees for and against any liability and
expenses based upon any misstatements or omissions by Scudder to the Independent
Trustees in connection with their consideration of the Transaction.
Item 28. Business or Other Connections of Investment Adviser
Scudder Kemper Investments, Inc. has stockholders and employees who are
denominated officers but do not as such have corporation-wide responsibilities.
Such persons are not considered officers for the purpose of this Item 28.
<TABLE>
<CAPTION>
Business and Other Connections of Board
Name of Directors of Registrant's Adviser
---- ------------------------------------
<S> <C>
Stephen R. Beckwith Treasurer and Chief Financial Officer, Scudder Kemper Investments, Inc.**
Vice President and Treasurer, Scudder Fund Accounting Corporation*
Part C - Page 2
<PAGE>
Director, Scudder Stevens & Clark Corporation**
Director and Chairman, Scudder Defined Contribution Services, Inc.**
Director and President, Scudder Capital Asset Corporation**
Director and President, Scudder Capital Stock Corporation**
Director and President, Scudder Capital Planning Corporation**
Director and President, SS&C Investment Corporation**
Director and President, SIS Investment Corporation**
Director and President, SRV Investment Corporation**
Lynn S. Birdsong Director and Vice President, Scudder Kemper Investments, Inc.**
Director, Scudder, Stevens & Clark (Luxembourg) S.A.#
William H. Bolinder Director, Scudder Kemper Investments, Inc.**
Member Group Executive Board, Zurich Financial Services, Inc. ##
Chairman, Zurich-American Insurance Company o
Laurence W. Cheng Director, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland ##
Director, ZKI Holding Corporation xx
Gunther Gose Director, Scudder Kemper Investments, Inc.**
CFO, Member Group Executive Board, Zurich Financial Services, Inc. ##
CEO/Branch Offices, Zurich Life Insurance Company ##
Rolf Huppi Director, Chairman of the Board, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland##
Director, Chairman of the Board, Zurich Holding Company of America o
Director, ZKI Holding Corporation xx
Kathryn L. Quirk Chief Legal Officer, Chief Compliance Officer and Secretary, Scudder Kemper
Investments, Inc.**
Director, Senior Vice President & Assistant Clerk, Scudder Investor Services, Inc.*
Director, Vice President & Secretary, Scudder Fund Accounting Corporation*
Director, Vice President & Secretary, Scudder Realty Holdings Corporation*
Director & Assistant Clerk, Scudder Service Corporation*
Director, SFA, Inc.*
Vice President, Director & Assistant Secretary, Scudder Precious Metals, Inc.***
Director, Scudder, Stevens & Clark Japan, Inc.***
Director, Vice President and Secretary, Scudder, Stevens & Clark of Canada, Ltd.***
Director, Vice President and Secretary, Scudder Canada Investor Services Limited***
Director, Vice President and Secretary, Scudder Realty Advisers, Inc. x
Director and Secretary, Scudder, Stevens & Clark Corporation**
Director and Secretary, Scudder, Stevens & Clark Overseas Corporation oo
Director and Secretary, SFA, Inc.*
Director, Vice President and Secretary, Scudder Defined Contribution Services, Inc.**
Director, Vice President and Secretary, Scudder Capital Asset Corporation**
Director, Vice President and Secretary, Scudder Capital Stock Corporation**
Director, Vice President and Secretary, Scudder Capital Planning Corporation**
Director, Vice President and Secretary, SS&C Investment Corporation**
Director, Vice President and Secretary, SIS Investment Corporation**
Director, Vice President and Secretary, SRV Investment Corporation**
Director, Vice President and Secretary, Scudder Brokerage Services, Inc.*
Director, Korea Bond Fund Management Co., Ltd.+
Cornelia M. Small Director and Vice President, Scudder Kemper Investments, Inc.**
Part C - Page 3
<PAGE>
Edmond D. Villani Director, President and Chief Executive Officer, Scudder Kemper Investments, Inc.**
Director, Scudder, Stevens & Clark Japan, Inc.###
President and Director, Scudder, Stevens & Clark Overseas Corporation oo
President and Director, Scudder, Stevens & Clark Corporation**
Director, Scudder Realty Advisors, Inc.x
Director, IBJ Global Investment Management S.A. Luxembourg, Grand-Duchy of Luxembourg
* Two International Place, Boston, MA
x 333 South Hope Street, Los Angeles, CA
** 345 Park Avenue, New York, NY
# Societe Anonyme, 47, Boulevard Royal, L-2449 Luxembourg, R.C. Luxembourg B 34.564
*** Toronto, Ontario, Canada
oo 20-5, Ichibancho, Chiyoda-ku, Tokyo, Japan
### 1-7, Kojimachi, Chiyoda-ku, Tokyo, Japan
xx 222 S. Riverside, Chicago, IL
o Zurich Towers, 1400 American Ln., Schaumburg, IL
+ P.O. Box 309, Upland House, S. Church St., Grand Cayman, British West Indies
## Mythenquai-2, P.O. Box CH-8022, Zurich, Switzerland
</TABLE>
Item 29. Principal Underwriters
(a) Kemper Distributors, Inc. acts as principal underwriter of the
Registrant's shares and acts as principal underwriter of the Kemper Funds.
(b) Information on the officers and directors of Kemper Distributors,
Inc., principal underwriter for the Registrant is set forth below. The principal
business address is 222 South Riverside Plaza, Chicago, Illinois 60606.
<TABLE>
<CAPTION>
(1) (2) (3)
Position and Offices with Positions and
Name Kemper Distributors, Inc. Offices with Registrant
---- ------------------------- -----------------------
<S> <C> <C> <C>
James L. Greenawalt President None
Thomas W. Littauer Director, Chief Executive Officer Vice President
Kathryn L. Quirk Director, Secretary, Chief Legal Vice President
Officer & Vice President
James J. McGovern Chief Financial Officer & Vice None
President
Linda J. Wondrack Vice President & Chief Compliance None
Officer
Paula Gaccione Vice President None
Michael E. Harrington Vice President None
Robert A. Rudell Vice President None
Part C - Page 4
<PAGE>
Position and Offices with Positions and
Name Kemper Distributors, Inc. Offices with Registrant
---- ------------------------- -----------------------
William M. Thomas Vice President None
Elizabeth C. Werth Vice President Assistant Secretary
Todd N. Gierke Assistant Treasurer None
Philip J. Collora Assistant Secretary Vice President and
Secretary
Paul J. Elmlinger Assistant Secretary None
Diane E. Ratekin Assistant Secretary None
Daniel Pierce Director, Chairman Trustee
Mark S. Casady Director, Vice Chairman President
Stephen R. Beckwith Director None
</TABLE>
(c) Not applicable
Item 30. Location of Accounts and Records
Accounts, books and other documents are maintained at the offices of
the Registrant, the offices of Registrant's investment adviser, Scudder Kemper
Investments, Inc., 222 South Riverside Plaza, Chicago, Illinois 60606, at the
offices of the Registrant's principal underwriter, Kemper Distributors, Inc.,
222 South Riverside Plaza, Chicago, Illinois 60606 or, in the case of records
concerning custodial functions, at the offices of the custodian, Investors
Fiduciary Trust Company ("IFTC"), 801 Pennsylvania Avenue, Kansas City, Missouri
64105 or, in the case of records concerning transfer agency functions, at the
offices of IFTC and of the shareholder service agent, Kemper Service Company,
811 Main Street, Kansas City, Missouri 64105.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) The Registrant undertakes to furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
Part C - Page 5
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(a) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chicago and State of Illinois, on the 24th day
of November, 1998.
Zurich YieldWise Funds
By /s/Mark S. Casady
--------------------
Mark S. Casady, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on November 24, 1998 on behalf of
the following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/Daniel Pierce November 24, 1998
- --------------------------------------
Daniel Pierce* Chairman and Trustee
/s/David W. Belin November 24, 1998
- --------------------------------------
David W. Belin* Trustee
/s/Lewis A. Burnham November 24, 1998
- --------------------------------------
Lewis A. Burnham* Trustee
/s/Donald L. Dunaway November 24, 1998
- --------------------------------------
Donald L. Dunaway* Trustee
/s/Robert B. Hoffman November 24, 1998
- --------------------------------------
Robert B. Hoffman* Trustee
/s/Donald R. Jones November 24, 1998
- --------------------------------------
Donald R. Jones* Trustee
/s/ Shirley D. Peterson November 24, 1998
- --------------------------------------
Shirley D. Peterson* Trustee
/s/ William P. Sommers November 24, 1998
- --------------------------------------
William P. Sommers* Trustee
<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
/s/Edmond D. Villani November 24, 1998
- --------------------------------------
Edmond D. Villani* Trustee
/s/John R. Hebble November 24, 1998
- --------------------------------------
John R. Hebble Treasurer (Principal Financial and
Accounting Officer)
</TABLE>
*By: /s/Philip J. Collora
Philip J. Collora**
** Philip J. Collora signs this document
pursuant to powers of attorney filed on
August 18, 1998 in Post-Effective
Amendment No. 2 to the Registration
Statement on Form N-1A of Zurich
YieldWise Funds, formerly Zurich
YieldWise Money Fund.
2
<PAGE>
INDEX TO EXHIBITS
Exhibits
99.B1(a) Agreement and Declaration of Trust.(1)
99.B1(b) Written Instrument Amending the Agreement and Declaration of
Trust.(1)
99.B1(c) Written Instrument Amending the Agreement and Declaration of
Trust.(1)
99.B1(d) Written Instrument Amending the Agreement and Declaration of
Trust. Submitted herewith.
99.B2 By-Laws.(2)
99.B3 Inapplicable.
99.B4(a) Text of Share Certificate.(2)
99.B4(b) Written Instrument Establishing a Designation of New Series.
Submitted herewith.
99.B5(a) Investment Management Agreement dated December 31, 1997 for
Zurich YieldWise Money Fund. Submitted herewith.
99.B5(b) Investment Management Agreement dated September 7, 1998 for
Zurich YieldWise Money Fund. Submitted herewith.
99.B5(c) Investment Management Agreement dated November 30, 1998 for
Zurich YieldWise Government Money Fund. Submitted herewith.
99.B5(d) Investment Management Agreement dated November 30, 1998 for
Zurich YieldWise Municipal Money Fund. Submitted herewith.
99.B6(a) Underwriting Agreement dated December 31, 1997. Submitted
herewith.
99.B6(b) Underwriting Agreement dated September 7, 1998. Submitted
herewith.
99.B7 Inapplicable.
99.B8 Custody Agreement.(2)
99.B9(a) Agency Agreement.(2)
99.B9(b) Fund Accounting Agreement dated December 31, 1997 for Zurich
YieldWise Money Fund. Submitted herewith.
99.B9(c) Fund Accounting Agreement dated November 30, 1998 for Zurich
YieldWise Funds, on behalf of Zurich YieldWise Government
Money Fund. Submitted herewith.
99.B9(d) Fund Accounting Agreement dated November 30, 1998 for Zurich
YieldWise Funds, on behalf of Zurich YieldWise Municipal Money
Fund. Submitted herewith.
99.B10 Inapplicable.
99.B11 Report and Consent of Independent Auditors. Submitted
herewith.
99.B12 Inapplicable.
99.B13 Inapplicable.
99.B14 Inapplicable.
99.B15 Inapplicable.
99.B16 Inapplicable.
99.B18 Inapplicable.
99.B24 Inapplicable.
27 Financial Data Schedule. Submitted herewith.
(1) Incorporated herein by reference to Registrant's Registration
Statement on Form N-1A filed on February 5, 1997.
(2) Incorporated herein by reference to Registrant's Registration
Statement on Form N-1A filed on March 28, 1997.
ZURICH YIELDWISE MONEY FUND
Certificate of Amendment of Declaration of Trust
------------------------------------------------
The undersigned, being all of the duly elected and qualified Trustees
of Zurich YieldWise Money Fund, a Massachusetts business trust (the "Trust"),
acting pursuant to Article I, Section 1 and Article IX, Section 4 of the
Declaration of Trust dated June 12, 1995 (the "Declaration of Trust"), do hereby
certify that the Board of Trustees unanimously adopted the resolutions set forth
below at a meeting called, convened and held on November 17, 1998:
RESOLVED, that the name of the Trust be, and it hereby is,
changed from "Zurich YieldWise Money Fund" to "Zurich
YieldWise Funds," effective as hereinafter provided;
FURTHER RESOLVED, that the execution by a majority of this
Board, and the filing with the Secretary of State of The
Commonwealth of Massachusetts of an appropriate instrument in
writing, pursuant to Article I, Section 1 and Article IX,
Section 4, of the Agreement and Declaration of Trust
reflecting the name change is hereby approved; and
FURTHER RESOLVED, that the resolution set forth above shall be
effective upon the earlier of (i) the effective date of the
Registration Statement for Zurich YieldWise Government Money
Fund and Zurich YieldWise Municipal Money Fund or (ii) the
filing of a Certificate of Amendment of the Declaration of
Trust with the Office of the Secretary of State of The
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the undersigned have this day signed this
Certificate.
/s/David W. Belin
---------------------------------------
David W. Belin, Trustee
/s/Lewis A. Burnham
---------------------------------------
Lewis A. Burnham, Trustee
/s/Donald L. Dunaway
---------------------------------------
Donald L. Dunaway, Trustee
<PAGE>
/s/Robert B. Hoffman
---------------------------------------
Robert B. Hoffman, Trustee
/s/Donald R. Jones
---------------------------------------
Donald R. Jones, Trustee
/s/Shirley D. Peterson
---------------------------------------
Shirley D. Peterson, Trustee
/s/Daniel Pierce
---------------------------------------
Daniel Pierce, Trustee
/s/William P. Sommers
---------------------------------------
William P. Sommers, Trustee
/s/Edmond D. Villani
---------------------------------------
Edmond D. Villani, Trustee
Dated: November 17, 1998
<PAGE>
ZURICH YIELDWISE FUNDS
Establishment and Designation of Series
of Shares of Beneficial Interest, $.01 Par Value
The undersigned, being all of the Trustees of Zurich YieldWise Funds
(formerly Zurich YieldWise Money Fund), a Massachusetts business trust (the
"Trust"), acting pursuant to Article III, Section 1 of the Trust's Declaration
of Trust dated June 12, 1995 (the "Declaration of Trust"), as amended, hereby
divide the shares of beneficial interest, $.01 par value per share, of the Trust
into three separate series (each individually a "Fund" or collectively the
"Funds"), each Fund to have the following special and relative rights:
1. The Funds shall be designated as follows:
Zurich YieldWise Money Fund
Zurich YieldWise Government Money Fund
Zurich YieldWise Municipal Money Fund
2. Each Fund shall be authorized to hold cash and invest in securities and
instruments and use investment techniques as described in the Trust's
registration statement under the Securities Act of 1933, as amended from time to
time. Each share of beneficial interest, $.01 par value per share, of each Fund
("share") shall be redeemable as provided in the Declaration of Trust, shall be
entitled to one vote (or fraction thereof with respect to a fractional share) on
matters on which shares of that Fund shall be entitled to vote and shall
represent a pro rata beneficial interest in the assets allocated to that Fund.
The proceeds of sales of shares of a Fund, together with any income and gain
thereon, less any diminution or expenses thereof, shall irrevocably belong to
that Fund, unless otherwise required by law. Each share of a Fund shall be
entitled to receive its pro rata share of net assets of that Fund upon
liquidation of that Fund. Upon redemption of a shareholder's shares or
indemnification for liabilities incurred by reason of a shareholder's being or
having been a shareholder of a Fund, or the entry of a final judgment in favor
of a shareholder by reason of being or having been a shareholder of a Fund, such
shareholder shall be paid solely out of the property of that Fund.
3. Shareholders of the Trust shall vote together on any matter, except to
the extent otherwise required by the Investment Company Act of 1940, as amended
(the "1940 Act"), or when the Trustees have determined that the matter affects
only the interest of Shareholders of one or more series, in which case only the
Shareholders of such series shall be entitled to vote thereon. Any matter shall
be deemed to have been effectively acted upon with respect to a Fund if acted
upon as provided in Rule 18f-2 under the 1940 Act or any successor rule and in
the Declaration of Trust. The Trustees of the Trust may, in conjunction with the
establishment of any additional series or class of shares of the Trust,
establish or reserve the right to establish conditions under which the several
series or classes shall have separate voting rights or no voting rights.
<PAGE>
4. The shares of beneficial interest of the Trust outstanding on the date
hereof shall be deemed to be shares of Zurich YieldWise Money Fund.
5. The assets and liabilities of the Trust existing on the date hereof
shall, except as provided below, be allocated to Zurich YieldWise Money Fund
and, hereafter, the assets and liabilities of the Trust shall be allocated among
the Funds, now or hereafter created, as set forth in Article III, Section 3 and
Article IV, Section 3 of the Declaration of Trust, except as provided below.
(a) Costs incurred in connection with the organization, registration
and public offering of shares of Zurich YieldWise Government Money Fund
and Zurich YieldWise Municipal Money Fund shall be allocated to each
such Fund and shall be amortized by each such Fund over the five-year
period beginning with the month each such Fund commences operations,
unless otherwise required by applicable law or generally accepted
accounting principles.
(b) The liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as belonging to any particular Fund
shall be allocated among the Funds and any Series hereafter established
on the basis of its relative average daily net assets.
(c) The Trustees may from time to time in particular cases make
specific allocations of assets or liabilities to a Fund.
6. The Trustees (including any successor Trustees) shall have the right at
any time and from time to time to reallocate assets and expenses or to change
the designation of a Fund (or any class thereof) now or hereafter created, or to
otherwise change the special and relative rights of a Fund (or any class
thereof) provided that such change shall not adversely affect the rights of
Shareholders of the Funds.
The foregoing shall be effective upon the filing of this instrument with the
office of the Secretary of State of The Commonwealth of Massachusetts.
/s/David W. Belin
---------------------------
David W. Belin, Trustee
/s/Lewis A. Burnham
---------------------------
Lewis A. Burnham, Trustee
/s/Donald L. Dunaway
---------------------------
Donald L. Dunaway, Trustee
2
<PAGE>
/s/Robert B. Hoffman
---------------------------
Robert B. Hoffman, Trustee
/s/Donald R. Jones
---------------------------
Donald R. Jones, Trustee
/s/Shirley D. Peterson
---------------------------
Shirley D. Peterson, Trustee
/s/Daniel Pierce
---------------------------
Daniel Pierce, Trustee
/s/William P. Sommers
---------------------------
William P. Sommers, Trustee
/s/Edmond D. Villani
---------------------------
Edmond D. Villani, Trustee
Dated: November 17, 1998
3
INVESTMENT MANAGEMENT AGREEMENT
Zurich YieldWise Money Fund
222 South Riverside Plaza
Chicago, Illinois 60606
December 31, 1997
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Zurich YieldWise Money Fund
Ladies and Gentlemen:
ZURICH YIELDWISE MONEY FUND (the "Trust") has been established as a
Massachusetts business Trust to engage in the business of an investment company.
Pursuant to the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees is authorized to issue the Trust's shares
of beneficial interest (the "Shares"), in separate series, or funds. The Board
of Trustees has authorized Zurich YieldWise Money Fund (the "Fund"). Series may
be abolished and dissolved, and additional series established, from time to time
by action of the Trustees.
The Trust, on behalf of the Fund, has selected you to act as the investment
manager of the Fund and to provide certain other services, as more fully set
forth below, and you have indicated that you are willing to act as such
investment manager and to perform such services under the terms and conditions
hereinafter set forth. Accordingly, the Trust on behalf of the Fund agrees with
you as follows:
1. Delivery of Documents. The Trust engages in the business of investing and
reinvesting the assets of the Fund in the manner and in accordance with the
investment objectives, policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of Additional Information
(the "SAI") relating to the Fund included in the Trust's Registration Statement
on Form N-1A, as amended from time to time, (the "Registration Statement") filed
by the Trust under the Investment Company Act of 1940, as amended, (the "1940
Act") and the Securities Act of 1933, as amended. Copies of the documents
referred to in the preceding sentence have been furnished to you by the Trust.
The Trust has also furnished you with copies properly certified or authenticated
of each of the following additional documents related to the Trust and the Fund:
(a) The Declaration, as amended to date.
(b) By-Laws of the Trust as in effect on the date hereof (the "By-
Laws").
(c) Resolutions of the Trustees of the Trust and the shareholders of
the Fund selecting you as investment manager and approving the form of this
Agreement.
(d) Establishment and Designation of Series of Shares of Beneficial
Interest relating to the Fund, as applicable.
The Trust will furnish you from time to time with copies, properly certified or
authenticated, of all amendments of or supplements, if any, to the foregoing,
including the Prospectus, the SAI and the Registration Statement.
2. Portfolio Management Services. As manager of the assets of the Fund, you
shall provide continuing investment management of the assets of the Fund in
accordance with the investment objectives, policies and restrictions set forth
<PAGE>
in the Prospectus and SAI; the applicable provisions of the 1940 Act and the
Internal Revenue Code of 1986, as amended, (the "Code") relating to regulated
investment companies and all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which you have knowledge;
subject always to policies and instructions adopted by the Trust's Board of
Trustees. In connection therewith, you shall use reasonable efforts to manage
the Fund so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Fund shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
policy generally available to your investment advisory clients. In managing the
Fund in accordance with the requirements set forth in this section 2, you shall
be entitled to receive and act upon advice of counsel to the Trust. You shall
also make available to the Trust promptly upon request all of the Fund's
investment records and ledgers as are necessary to assist the Trust in complying
with the requirements of the 1940 Act and other applicable laws. To the extent
required by law, you shall furnish to regulatory authorities having the
requisite authority any information or reports in connection with the services
provided pursuant to this Agreement which may be requested in order to ascertain
whether the operations of the Trust are being conducted in a manner consistent
with applicable laws and regulations.
You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Fund and place orders
with broker-dealers, foreign currency dealers, futures commission merchants or
others pursuant to your determinations and all in accordance with Fund policies
as expressed in the Registration Statement. You shall determine what portion of
the Fund's portfolio shall be invested in securities and other assets and what
portion, if any, should be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic reports on the
investment performance of the Fund and on the performance of your obligations
pursuant to this Agreement, and you shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
3. Administrative Services. In addition to the portfolio management services
specified above in section 2, you shall furnish at your expense for the use of
the Fund such office space and facilities in the United States as the Fund may
require for its reasonable needs, and you (or one or more of your affiliates
designated by you) shall render to the Trust administrative services on behalf
of the Fund necessary for operating as an open end investment company and not
provided by persons not parties to this Agreement including, but not limited to,
preparing reports to and meeting materials for the Trust's Board of Trustees and
reports and notices to Fund shareholders; supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring the performance of,
accounting agents, custodians, depositories, transfer agents and pricing agents,
accountants, attorneys, printers, underwriters, brokers and dealers, insurers
and other persons in any capacity deemed to be necessary or desirable to Fund
operations; preparing and making filings with the Securities and Exchange
Commission (the "SEC") and other regulatory and self-regulatory organizations,
including, but not limited to, preliminary and definitive proxy materials,
post-effective amendments to the Registration Statement, semi-annual reports on
Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act; overseeing the
tabulation of proxies by the Fund's transfer agent; assisting in the preparation
and filing of the Fund's federal, state and local tax returns; preparing and
filing the Fund's federal excise tax return pursuant to Section 4982 of the
Code; providing assistance with investor and public relations matters;
monitoring the valuation of portfolio securities and the calculation of net
asset value; monitoring the registration of Shares of the Fund under applicable
federal and state securities laws; maintaining or causing to be maintained for
the Fund all books, records and reports and any other information required under
the 1940 Act, to the extent that such books, records and reports and other
information are not maintained by the Fund's custodian or other agents of the
Fund; assisting in establishing the accounting policies of the Fund; assisting
in the resolution of accounting issues that may arise with respect to the Fund's
operations and consulting with the Fund's independent accountants, legal counsel
and the Fund's other agents as necessary in connection therewith; establishing
and monitoring the Fund's operating expense budgets; reviewing the Fund's bills;
processing the payment of bills that have been approved by an authorized person;
assisting the Fund in determining the amount of dividends and distributions
available to be paid by the Fund to its shareholders, preparing and arranging
for the printing of dividend notices to shareholders, and providing the transfer
and dividend paying agent, the custodian, and the accounting agent with such
information as is required for such parties to effect the payment of dividends
and distributions; and otherwise assisting the Trust as it may reasonably
request in the conduct of the Fund's
2
<PAGE>
business, subject to the direction and control of the Trust's Board of Trustees.
Nothing in this Agreement shall be deemed to shift to you or to diminish the
obligations of any agent of the Fund or any other person not a party to this
Agreement which is obligated to provide services to the Fund.
4. Allocation of Charges and Expenses. Except as otherwise specifically provided
in this section 4, you shall pay the compensation and expenses of all Trustees,
officers and executive employees of the Trust (including the Fund's share of
payroll taxes) who are affiliated persons of you, and you shall make available,
without expense to the Fund, the services of such of your directors, officers
and employees as may duly be elected officers of the Trust, subject to their
individual consent to serve and to any limitations imposed by law. You shall
provide at your expense the portfolio management services described in section 2
hereof and the administrative services described in section 3 hereof.
You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 4. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Fund's Trustees and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of the Fund: organization expenses of the
Fund (including out of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Fund's custodian or
other agents of the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent for which the
Trust is responsible pursuant to the terms of the Fund Accounting Services
Agreement, custodians, subcustodians, transfer agents, dividend disbursing
agents and registrars; payment for portfolio pricing or valuation services to
pricing agents, accountants, bankers and other specialists, if any; expenses of
preparing share certificates and, except as provided below in this section 4,
other expenses in connection with the issuance, offering, distribution, sale,
redemption or repurchase of securities issued by the Fund; expenses relating to
investor and public relations; expenses and fees of registering or qualifying
Shares of the Fund for sale; interest charges, bond premiums and other insurance
expense; freight, insurance and other charges in connection with the shipment of
the Fund's portfolio securities; the compensation and all expenses (specifically
including travel expenses relating to Trust business) of Trustees, officers and
employees of the Trust who are not affiliated persons of you; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
of the Fund; expenses of printing and distributing reports, notices and
dividends to shareholders; expenses of printing and mailing Prospectuses and
SAIs of the Fund and supplements thereto; costs of stationery; any litigation
expenses; indemnification of Trustees and officers of the Trust; and costs of
shareholders' and other meetings.
You shall not be required to pay expenses of any activity which is primarily
intended to result in sales of Shares of the Fund if and to the extent that (i)
such expenses are required to be borne by a principal underwriter which acts as
the distributor of the Fund's Shares pursuant to an underwriting agreement which
provides that the underwriter shall assume some or all of such expenses, or (ii)
the Trust on behalf of the Fund shall have adopted a plan in conformity with
Rule 12b-1 under the 1940 Act providing that the Fund (or some other party)
shall assume some or all of such expenses. You shall be required to pay such of
the foregoing sales expenses as are not required to be paid by the principal
underwriter pursuant to the underwriting agreement or are not permitted to be
paid by the Fund (or some other party) pursuant to such a plan.
3
<PAGE>
5. Management Fee. For all services to be rendered, payments to be made and
costs to be assumed by you as provided in sections 2, 3, and 4 hereof, the Trust
on behalf of the Fund shall pay you in United States Dollars on the last day of
each month the unpaid balance of a fee equal to the excess of (a) 1/12 of .50 of
1 percent of the average daily net assets as defined below of the Fund for such
month; provided that, for any calendar month during which the average of such
values exceeds $215,000,000, the fee payable for that month based on the portion
of the average of such values in excess of $215,000,000 shall be 1/12 of .375 of
1 percent of such portion; provided that, for any calendar month during which
the average of such values exceeds $550,000,000, the fee payable for that month
based on the portion of the average of such values in excess of $550,000,000
shall be 1/12 of .30 of 1 percent of such portion; and provided that, for any
calendar month during which the average of such values exceeds $800,000,000, the
fee payable for that month based on the portion of the average of such values in
excess of $880,000,000 shall be 1/12 of .25 of 1 percent of such portion; over
any compensation waived by you from time to time (as more fully described
below). You shall be entitled to receive during any month such interim payments
of your fee hereunder as you shall request, provided that no such payment shall
exceed 75 percent of the amount of your fee then accrued on the books of the
Fund and unpaid.
The "average daily net assets" of the Fund shall mean the average of the values
placed on the Fund's net assets as of 4:00 p.m. (New York time) on each day on
which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If the determination of net asset value does not take place for any
particular day, then for the purposes of this section 5, the value of the net
assets of the Fund as last determined shall be deemed to be the value of its net
assets as of 4:00 p.m. (New York time), or as of such other time as the value of
the net assets of the Fund's portfolio may be lawfully determined on that day.
If the Fund determines the value of the net assets of its portfolio more than
once on any day, then the last such determination thereof on that day shall be
deemed to be the sole determination thereof on that day for the purposes of this
section 5.
You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services. You
shall be contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Fund's expenses, as if such waiver
or limitation were fully set forth herein.
6. Avoidance of Inconsistent Position; Services Not Exclusive. In connection
with purchases or sales of portfolio securities and other investments for the
account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment advice, management
and services to others. In acting under this Agreement, you shall be an
independent contractor and not an agent of the Trust. Whenever the Fund and one
or more other accounts or investment companies advised by you have available
funds for investment, investments suitable and appropriate for each shall be
allocated in accordance with procedures believed by you to be equitable to each
entity. Similarly, opportunities to sell securities shall be allocated in a
manner believed by you to be equitable. The Fund recognizes that in some cases
this procedure may adversely affect the size of the position that may be
acquired or disposed of for the Fund.
7. Limitation of Liability of Manager. As an inducement to your undertaking to
render services pursuant to this Agreement, the Trust agrees that you shall not
be liable under this Agreement for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters to which this
Agreement relates, provided that nothing in this Agreement shall be deemed to
protect or purport to protect you against any liability to the Trust, the Fund
or its shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties, or
by reason of your reckless disregard of your obligations and duties hereunder.
4
<PAGE>
8. Duration and Termination of This Agreement. This Agreement shall remain in
force until December 1, 1998, and continue in force from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Fund. The aforesaid requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the 1940 Act and the rules and regulations
thereunder and any applicable SEC exemptive order therefrom.
This Agreement may be terminated with respect to the Fund at any time, without
the payment of any penalty, by the vote of a majority of the outstanding voting
securities of the Fund or by the Trust's Board of Trustees on 60 days' written
notice to you, or by you on 60 days' written notice to the Trust. This Agreement
shall terminate automatically in the event of its assignment.
This Agreement may be terminated with respect to the Fund at any time without
the payment of any penalty by the Board of Trustees or by vote of a majority of
the outstanding voting securities of the Fund in the event that it shall have
been established by a court of competent jurisdiction that you or any of your
officers or directors has taken any action which results in a breach of your
covenants set forth herein.
9. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
10. Limitation of Liability for Claims. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Zurich YieldWise
Money Fund" refers to the Trustees under the Declaration collectively as
Trustees and not as individuals or personally, and that no shareholder of the
Fund, or Trustee, officer, employee or agent of the Trust, shall be subject to
claims against or obligations of the Trust or of the Fund to any extent
whatsoever, but that the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability as set
forth in the Declaration and you agree that the obligations assumed by the Trust
on behalf of the Fund pursuant to this Agreement shall be limited in all cases
to the Fund and its assets, and you shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or any other
series of the Trust, or from any Trustee, officer, employee or agent of the
Trust. You understand that the rights and obligations of each Fund, or series,
under the Declaration are separate and distinct from those of any and all other
series.
11. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
In interpreting the provisions of this Agreement, the definitions contained in
Section 2(a) of the 1940 Act (particularly the definitions of "affiliated
person," "assignment" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause the
Fund to fail to comply with the requirements of Subchapter M of the Code.
5
<PAGE>
This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Trust on behalf of the Fund.
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
ZURICH YIELDWISE MONEY FUND, on behalf of Zurich
YieldWise Money Fund
By:
-------------------------
Vice President
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By:
-------------------------
President
6
INVESTMENT MANAGEMENT AGREEMENT
Zurich YieldWise Money Fund
222 South Riverside Plaza
Chicago, Illinois 60606
September 7, 1998
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Zurich YieldWise Money Fund
Ladies and Gentlemen:
ZURICH YIELDWISE MONEY FUND (the "Trust") has been established as a
Massachusetts business Trust to engage in the business of an investment company.
Pursuant to the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees is authorized to issue the Trust's shares
of beneficial interest (the "Shares"), in separate series, or funds. The Board
of Trustees has authorized Zurich YieldWise Money Fund (the "Fund"). Series may
be abolished and dissolved, and additional series established, from time to time
by action of the Trustees.
The Trust, on behalf of the Fund, has selected you to act as the investment
manager of the Fund and to provide certain other services, as more fully set
forth below, and you have indicated that you are willing to act as such
investment manager and to perform such services under the terms and conditions
hereinafter set forth. Accordingly, the Trust on behalf of the Fund agrees with
you as follows:
1. Delivery of Documents. The Trust engages in the business of investing and
reinvesting the assets of the Fund in the manner and in accordance with the
investment objectives, policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of Additional Information
(the "SAI") relating to the Fund included in the Trust's Registration Statement
on Form N-1A, as amended from time to time, (the "Registration Statement") filed
by the Trust under the Investment Company Act of 1940, as amended, (the "1940
Act") and the Securities Act of 1933, as amended. Copies of the documents
referred to in the preceding sentence have been furnished to you by the Trust.
The Trust has also furnished you with copies properly certified or authenticated
of each of the following additional documents related to the Trust and the Fund:
(a) The Declaration, as amended to date.
(b) By-Laws of the Trust as in effect on the date hereof (the "By-
Laws").
(c) Resolutions of the Trustees of the Trust and the shareholders of
the Fund selecting you as investment manager and approving the
form of this Agreement.
(d) Establishment and Designation of Series of Shares of Beneficial
Interest relating to the Fund, as applicable.
The Trust will furnish you from time to time with copies, properly certified or
authenticated, of all amendments of or supplements, if any, to the foregoing,
including the Prospectus, the SAI and the Registration Statement.
<PAGE>
2. Portfolio Management Services. As manager of the assets of the Fund, you
shall provide continuing investment management of the assets of the Fund in
accordance with the investment objectives, policies and restrictions set forth
in the Prospectus and SAI; the applicable provisions of the 1940 Act and the
Internal Revenue Code of 1986, as amended, (the "Code") relating to regulated
investment companies and all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which you have knowledge;
subject always to policies and instructions adopted by the Trust's Board of
Trustees. In connection therewith, you shall use reasonable efforts to manage
the Fund so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Fund shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
policy generally available to your investment advisory clients. In managing the
Fund in accordance with the requirements set forth in this section 2, you shall
be entitled to receive and act upon advice of counsel to the Trust. You shall
also make available to the Trust promptly upon request all of the Fund's
investment records and ledgers as are necessary to assist the Trust in complying
with the requirements of the 1940 Act and other applicable laws. To the extent
required by law, you shall furnish to regulatory authorities having the
requisite authority any information or reports in connection with the services
provided pursuant to this Agreement which may be requested in order to ascertain
whether the operations of the Trust are being conducted in a manner consistent
with applicable laws and regulations.
You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Fund and place orders
with broker-dealers, foreign currency dealers, futures commission merchants or
others pursuant to your determinations and all in accordance with Fund policies
as expressed in the Registration Statement. You shall determine what portion of
the Fund's portfolio shall be invested in securities and other assets and what
portion, if any, should be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic reports on the
investment performance of the Fund and on the performance of your obligations
pursuant to this Agreement, and you shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
3. Administrative Services. In addition to the portfolio management services
specified above in section 2, you shall furnish at your expense for the use of
the Fund such office space and facilities in the United States as the Fund may
require for its reasonable needs, and you (or one or more of your affiliates
designated by you) shall render to the Trust administrative services on behalf
of the Fund necessary for operating as an open end investment company and not
provided by persons not parties to this Agreement including, but not limited to,
preparing reports to and meeting materials for the Trust's Board of Trustees and
reports and notices to Fund shareholders; supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring the performance of,
accounting agents, custodians, depositories, transfer agents and pricing agents,
accountants, attorneys, printers, underwriters, brokers and dealers, insurers
and other persons in any capacity deemed to be necessary or desirable to Fund
operations; preparing and making filings with the Securities and Exchange
Commission (the "SEC") and other regulatory and self-regulatory organizations,
including, but not limited to, preliminary and definitive proxy materials,
post-effective amendments to the Registration Statement, semi-annual reports on
Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act; overseeing the
tabulation of proxies by the Fund's transfer agent; assisting in the preparation
and filing of the Fund's federal, state and local tax returns; preparing and
filing the Fund's federal excise tax return pursuant to Section 4982 of the
Code; providing assistance with investor and public relations matters;
monitoring the valuation of portfolio securities and the calculation of net
asset value; monitoring the registration of Shares of the Fund under applicable
federal and state securities laws; maintaining or causing to be maintained for
the Fund all books, records and reports and any other information required under
the 1940 Act, to the extent that such books, records and reports and other
information are not maintained by the Fund's custodian or other agents of the
Fund; assisting in establishing the accounting policies of the Fund; assisting
in the resolution of accounting issues that may arise with respect to the Fund's
operations and consulting with the Fund's independent accountants, legal counsel
and the Fund's other agents as necessary in connection therewith;
<PAGE>
establishing and monitoring the Fund's operating expense budgets; reviewing the
Fund's bills; processing the payment of bills that have been approved by an
authorized person; assisting the Fund in determining the amount of dividends and
distributions available to be paid by the Fund to its shareholders, preparing
and arranging for the printing of dividend notices to shareholders, and
providing the transfer and dividend paying agent, the custodian, and the
accounting agent with such information as is required for such parties to effect
the payment of dividends and distributions; and otherwise assisting the Trust as
it may reasonably request in the conduct of the Fund's business, subject to the
direction and control of the Trust's Board of Trustees. Nothing in this
Agreement shall be deemed to shift to you or to diminish the obligations of any
agent of the Fund or any other person not a party to this Agreement which is
obligated to provide services to the Fund.
4. Allocation of Charges and Expenses. Except as otherwise specifically provided
in this section 4, you shall pay the compensation and expenses of all Trustees,
officers and executive employees of the Trust (including the Fund's share of
payroll taxes) who are affiliated persons of you, and you shall make available,
without expense to the Fund, the services of such of your directors, officers
and employees as may duly be elected officers of the Trust, subject to their
individual consent to serve and to any limitations imposed by law. You shall
provide at your expense the portfolio management services described in section 2
hereof and the administrative services described in section 3 hereof.
You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 4. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Fund's Trustees and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of the Fund: organization expenses of the
Fund (including out of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Fund's custodian or
other agents of the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent for which the
Trust is responsible pursuant to the terms of the Fund Accounting Services
Agreement, custodians, subcustodians, transfer agents, dividend disbursing
agents and registrars; payment for portfolio pricing or valuation services to
pricing agents, accountants, bankers and other specialists, if any; expenses of
preparing share certificates and, except as provided below in this section 4,
other expenses in connection with the issuance, offering, distribution, sale,
redemption or repurchase of securities issued by the Fund; expenses relating to
investor and public relations; expenses and fees of registering or qualifying
Shares of the Fund for sale; interest charges, bond premiums and other insurance
expense; freight, insurance and other charges in connection with the shipment of
the Fund's portfolio securities; the compensation and all expenses (specifically
including travel expenses relating to Trust business) of Trustees, officers and
employees of the Trust who are not affiliated persons of you; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
of the Fund; expenses of printing and distributing reports, notices and
dividends to shareholders; expenses of printing and mailing Prospectuses and
SAIs of the Fund and supplements thereto; costs of stationery; any litigation
expenses; indemnification of Trustees and officers of the Trust; and costs of
shareholders' and other meetings.
You shall not be required to pay expenses of any activity which is primarily
intended to result in sales of Shares of the Fund if and to the extent that (i)
such expenses are required to be borne by a principal underwriter which acts as
the distributor of the Fund's Shares pursuant to an underwriting agreement which
provides that the underwriter shall assume some or all of such expenses, or (ii)
the Trust on behalf of the Fund shall have adopted a plan in conformity with
Rule 12b-1 under the 1940 Act providing that the Fund (or some other party)
shall assume some or all of such expenses. You shall be required to pay such of
the foregoing sales expenses as are not required to be paid by the principal
underwriter pursuant to the underwriting agreement or are not permitted to be
paid by the Fund (or some other party) pursuant to such a plan.
3
<PAGE>
5. Management Fee. For all services to be rendered, payments to be made and
costs to be assumed by you as provided in sections 2, 3, and 4 hereof, the Trust
on behalf of the Fund shall pay you in United States Dollars on the last day of
each month the unpaid balance of a fee equal to the excess of (a) 1/12 of .50 of
1 percent of the average daily net assets as defined below of the Fund for such
month; provided that, for any calendar month during which the average of such
values exceeds $215,000,000, the fee payable for that month based on the portion
of the average of such values in excess of $215,000,000 shall be 1/12 of .375 of
1 percent of such portion; provided that, for any calendar month during which
the average of such values exceeds $550,000,000, the fee payable for that month
based on the portion of the average of such values in excess of $550,000,000
shall be 1/12 of .30 of 1 percent of such portion; and provided that, for any
calendar month during which the average of such values exceeds $800,000,000, the
fee payable for that month based on the portion of the average of such values in
excess of $800,000,000 shall be 1/12 of .25 of 1 percent of such portion; over
any compensation waived by you from time to time (as more fully described
below). You shall be entitled to receive during any month such interim payments
of your fee hereunder as you shall request, provided that no such payment shall
exceed 75 percent of the amount of your fee then accrued on the books of the
Fund and unpaid.
The "average daily net assets" of the Fund shall mean the average of the values
placed on the Fund's net assets as of 4:00 p.m. (New York time) on each day on
which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If the determination of net asset value does not take place for any
particular day, then for the purposes of this section 5, the value of the net
assets of the Fund as last determined shall be deemed to be the value of its net
assets as of 4:00 p.m. (New York time), or as of such other time as the value of
the net assets of the Fund's portfolio may be lawfully determined on that day.
If the Fund determines the value of the net assets of its portfolio more than
once on any day, then the last such determination thereof on that day shall be
deemed to be the sole determination thereof on that day for the purposes of this
section 5.
You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services. You
shall be contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Fund's expenses, as if such waiver
or limitation were fully set forth herein.
6. Avoidance of Inconsistent Position; Services Not Exclusive. In connection
with purchases or sales of portfolio securities and other investments for the
account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment advice, management
and services to others. In acting under this Agreement, you shall be an
independent contractor and not an agent of the Trust. Whenever the Fund and one
or more other accounts or investment companies advised by you have available
funds for investment, investments suitable and appropriate for each shall be
allocated in accordance with procedures believed by you to be equitable to each
entity. Similarly, opportunities to sell securities shall be allocated in a
manner believed by you to be equitable. The Fund recognizes that in some cases
this procedure may adversely affect the size of the position that may be
acquired or disposed of for the Fund.
7. Limitation of Liability of Manager. As an inducement to your undertaking to
render services pursuant to this Agreement, the Trust agrees that you shall not
be liable under this Agreement for any error of judgment or
4
<PAGE>
mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, provided that nothing in this Agreement
shall be deemed to protect or purport to protect you against any liability to
the Trust, the Fund or its shareholders to which you would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties, or by reason of your reckless disregard of your
obligations and duties hereunder.
8. Duration and Termination of This Agreement. This Agreement shall remain in
force until December 1, 1998, and continue in force from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Fund. The aforesaid requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the 1940 Act and the rules and regulations
thereunder and any applicable SEC exemptive order therefrom.
This Agreement may be terminated with respect to the Fund at any time, without
the payment of any penalty, by the vote of a majority of the outstanding voting
securities of the Fund or by the Trust's Board of Trustees on 60 days' written
notice to you, or by you on 60 days' written notice to the Trust. This Agreement
shall terminate automatically in the event of its assignment.
This Agreement may be terminated with respect to the Fund at any time without
the payment of any penalty by the Board of Trustees or by vote of a majority of
the outstanding voting securities of the Fund in the event that it shall have
been established by a court of competent jurisdiction that you or any of your
officers or directors has taken any action which results in a breach of your
covenants set forth herein.
9. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
10. Limitation of Liability for Claims. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Zurich YieldWise
Money Fund" refers to the Trustees under the Declaration collectively as
Trustees and not as individuals or personally, and that no shareholder of the
Fund, or Trustee, officer, employee or agent of the Trust, shall be subject to
claims against or obligations of the Trust or of the Fund to any extent
whatsoever, but that the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability as set
forth in the Declaration and you agree that the obligations assumed by the Trust
on behalf of the Fund pursuant to this Agreement shall be limited in all cases
to the Fund and its assets, and you shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or any other
series of the Trust, or from any Trustee, officer, employee or agent of the
Trust. You understand that the rights and obligations of each Fund, or series,
under the Declaration are separate and distinct from those of any and all other
series.
11. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
In interpreting the provisions of this Agreement, the definitions contained in
Section 2(a) of the 1940 Act
5
<PAGE>
(particularly the definitions of "affiliated person," "assignment" and "majority
of the outstanding voting securities"), as from time to time amended, shall be
applied, subject, however, to such exemptions as may be granted by the SEC by
any rule, regulation or order.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause the
Fund to fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Trust on behalf of the Fund.
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
ZURICH YIELDWISE MONEY FUND, on behalf of
Zurich YieldWise Money Fund
By: /s/Mark S. Casady
---------------------
President
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By: /s/S R Beckwith
-------------------
Treasurer
6
INVESTMENT MANAGEMENT AGREEMENT
Zurich YieldWise Government Money Fund
222 South Riverside Plaza
Chicago, Illinois 60606
November 30, 1998
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Zurich YieldWise Government Money Fund
Ladies and Gentlemen:
ZURICH YIELDWISE FUNDS (the "Trust") has been established as a Massachusetts
business Trust to engage in the business of an investment company. Pursuant to
the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees is authorized to issue the Trust's shares
of beneficial interest (the "Shares"), in separate series, or funds. The Board
of Trustees has authorized Zurich YieldWise Government Money Fund (the "Fund").
Series may be abolished and dissolved, and additional series established, from
time to time by action of the Trustees.
The Trust, on behalf of the Fund, has selected you to act as the investment
manager of the Fund and to provide certain other services, as more fully set
forth below, and you have indicated that you are willing to act as such
investment manager and to perform such services under the terms and conditions
hereinafter set forth. Accordingly, the Trust on behalf of the Fund agrees with
you as follows:
1. Delivery of Documents. The Trust engages in the business of investing and
reinvesting the assets of the Fund in the manner and in accordance with the
investment objectives, policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of Additional Information
(the "SAI") relating to the Fund included in the Trust's Registration Statement
on Form N-1A, as amended from time to time, (the "Registration Statement") filed
by the Trust under the Investment Company Act of 1940, as amended, (the "1940
Act") and the Securities Act of 1933, as amended. Copies of the documents
referred to in the preceding sentence have been furnished to you by the Trust.
The Trust has also furnished you with copies properly certified or authenticated
of each of the following additional documents related to the Trust and the Fund:
(a) The Declaration, as amended to date.
(b) By-Laws of the Trust as in effect on the date hereof (the "By- Laws").
(c) Resolutions of the Trustees of the Trust and the shareholders of the
Fund selecting you as investment manager and approving the form of
this Agreement.
(d) Establishment and Designation of Series of Shares of Beneficial
Interest relating to the Fund, as applicable.
The Trust will furnish you from time to time with copies, properly certified or
authenticated, of all amendments of or supplements, if any, to the foregoing,
including the Prospectus, the SAI and the Registration Statement.
2. Portfolio Management Services. As manager of the assets of the Fund, you
shall provide continuing investment management of the assets of the Fund in
accordance with the investment objectives, policies and restrictions set forth
in the Prospectus and SAI; the applicable provisions of the 1940 Act and the
<PAGE>
Internal Revenue Code of 1986, as amended, (the "Code") relating to regulated
investment companies and all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which you have knowledge;
subject always to policies and instructions adopted by the Trust's Board of
Trustees. In connection therewith, you shall use reasonable efforts to manage
the Fund so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Fund shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
policy generally available to your investment advisory clients. In managing the
Fund in accordance with the requirements set forth in this section 2, you shall
be entitled to receive and act upon advice of counsel to the Trust. You shall
also make available to the Trust promptly upon request all of the Fund's
investment records and ledgers as are necessary to assist the Trust in complying
with the requirements of the 1940 Act and other applicable laws. To the extent
required by law, you shall furnish to regulatory authorities having the
requisite authority any information or reports in connection with the services
provided pursuant to this Agreement which may be requested in order to ascertain
whether the operations of the Trust are being conducted in a manner consistent
with applicable laws and regulations.
You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Fund and place orders
with broker-dealers, foreign currency dealers, futures commission merchants or
others pursuant to your determinations and all in accordance with Fund policies
as expressed in the Registration Statement. You shall determine what portion of
the Fund's portfolio shall be invested in securities and other assets and what
portion, if any, should be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic reports on the
investment performance of the Fund and on the performance of your obligations
pursuant to this Agreement, and you shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
3. Administrative Services. In addition to the portfolio management services
specified above in section 2, you shall furnish at your expense for the use of
the Fund such office space and facilities in the United States as the Fund may
require for its reasonable needs, and you (or one or more of your affiliates
designated by you) shall render to the Trust administrative services on behalf
of the Fund necessary for operating as an open end investment company and not
provided by persons not parties to this Agreement including, but not limited to,
preparing reports to and meeting materials for the Trust's Board of Trustees and
reports and notices to Fund shareholders; supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring the performance of,
accounting agents, custodians, depositories, transfer agents and pricing agents,
accountants, attorneys, printers, underwriters, brokers and dealers, insurers
and other persons in any capacity deemed to be necessary or desirable to Fund
operations; preparing and making filings with the Securities and Exchange
Commission (the "SEC") and other regulatory and self-regulatory organizations,
including, but not limited to, preliminary and definitive proxy materials,
post-effective amendments to the Registration Statement, semi-annual reports on
Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act; overseeing the
tabulation of proxies by the Fund's transfer agent; assisting in the preparation
and filing of the Fund's federal, state and local tax returns; preparing and
filing the Fund's federal excise tax return pursuant to Section 4982 of the
Code; providing assistance with investor and public relations matters;
monitoring the valuation of portfolio securities and the calculation of net
asset value; monitoring the registration of Shares of the Fund under applicable
federal and state securities laws; maintaining or causing to be maintained for
the Fund all books, records and reports and any other information required under
the 1940 Act, to the extent that such books, records and reports and other
information are not maintained by the Fund's custodian or other agents of the
Fund; assisting in establishing the accounting policies of the Fund; assisting
in the resolution of accounting issues that may arise with respect to the Fund's
operations and consulting with the Fund's independent accountants, legal counsel
and the Fund's other agents as necessary in connection therewith; establishing
and monitoring the Fund's operating expense budgets; reviewing the Fund's bills;
processing the payment of bills that have been approved by an authorized person;
assisting the Fund in determining the amount of dividends and distributions
available to be paid by the Fund to its shareholders, preparing and arranging
for the printing of dividend notices to shareholders, and providing the transfer
and dividend paying agent, the custodian, and the accounting agent with such
information as is required for such parties to effect the payment of dividends
and distributions; and otherwise assisting the Trust as it may reasonably
request in the conduct of the Fund's
2
<PAGE>
business, subject to the direction and control of the Trust's Board of Trustees.
Nothing in this Agreement shall be deemed to shift to you or to diminish the
obligations of any agent of the Fund or any other person not a party to this
Agreement which is obligated to provide services to the Fund.
4. Allocation of Charges and Expenses. Except as otherwise specifically provided
in this section 4, you shall pay the compensation and expenses of all Trustees,
officers and executive employees of the Trust (including the Fund's share of
payroll taxes) who are affiliated persons of you, and you shall make available,
without expense to the Fund, the services of such of your directors, officers
and employees as may duly be elected officers of the Trust, subject to their
individual consent to serve and to any limitations imposed by law. You shall
provide at your expense the portfolio management services described in section 2
hereof and the administrative services described in section 3 hereof.
You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 4. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Fund's Trustees and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of the Fund: organization expenses of the
Fund (including out of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Fund's custodian or
other agents of the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent for which the
Trust is responsible pursuant to the terms of the Fund Accounting Services
Agreement, custodians, subcustodians, transfer agents, dividend disbursing
agents and registrars; payment for portfolio pricing or valuation services to
pricing agents, accountants, bankers and other specialists, if any; expenses of
preparing share certificates and, except as provided below in this section 4,
other expenses in connection with the issuance, offering, distribution, sale,
redemption or repurchase of securities issued by the Fund; expenses relating to
investor and public relations; expenses and fees of registering or qualifying
Shares of the Fund for sale; interest charges, bond premiums and other insurance
expense; freight, insurance and other charges in connection with the shipment of
the Fund's portfolio securities; the compensation and all expenses (specifically
including travel expenses relating to Trust business) of Trustees, officers and
employees of the Trust who are not affiliated persons of you; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
of the Fund; expenses of printing and distributing reports, notices and
dividends to shareholders; expenses of printing and mailing Prospectuses and
SAIs of the Fund and supplements thereto; costs of stationery; any litigation
expenses; indemnification of Trustees and officers of the Trust; and costs of
shareholders' and other meetings.
You shall not be required to pay expenses of any activity which is primarily
intended to result in sales of Shares of the Fund if and to the extent that (i)
such expenses are required to be borne by a principal underwriter which acts as
the distributor of the Fund's Shares pursuant to an underwriting agreement which
provides that the underwriter shall assume some or all of such expenses, or (ii)
the Trust on behalf of the Fund shall have adopted a plan in conformity with
Rule 12b-1 under the 1940 Act providing that the Fund (or some other party)
shall assume some or all of such expenses. You shall be required to pay such of
the foregoing sales expenses as are not required to be paid by the principal
underwriter pursuant to the underwriting agreement or are not permitted to be
paid by the Fund (or some other party) pursuant to such a plan.
5. Management Fee. For all services to be rendered, payments to be made and
costs to be assumed by you as provided in sections 2, 3, and 4 hereof, the Trust
on behalf of the Fund shall pay you in United States Dollars on the last day of
each month the unpaid balance of a fee equal to the excess of (a) 1/12 of .50 of
1 percent of the average daily net assets as defined below of the Fund for such
month; provided that, for any calendar month during which the average of such
values exceeds $215,000,000, the fee payable for that month based on the portion
of the average of such values in excess of $215,000,000 shall be 1/12 of .375 of
1 percent of such portion; provided that, for any calendar month during which
the average of such values exceeds $550,000,000, the fee payable for that month
based on the portion of the average of such values in excess of $550,000,000
shall be 1/12 of .30 of 1 percent of such portion; and provided that, for any
calendar month during which the average of such values exceeds
3
<PAGE>
$800,000,000, the fee payable for that month based on the portion of the average
of such values in excess of $800,000,000 shall be 1/12 of .25 of 1 percent of
such portion; over any compensation waived by you from time to time (as more
fully described below). You shall be entitled to receive during any month such
interim payments of your fee hereunder as you shall request, provided that no
such payment shall exceed 75 percent of the amount of your fee then accrued on
the books of the Fund and unpaid.
The "average daily net assets" of the Fund shall mean the average of the values
placed on the Fund's net assets as of 4:00 p.m. (New York time) on each day on
which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If the determination of net asset value does not take place for any
particular day, then for the purposes of this section 5, the value of the net
assets of the Fund as last determined shall be deemed to be the value of its net
assets as of 4:00 p.m. (New York time), or as of such other time as the value of
the net assets of the Fund's portfolio may be lawfully determined on that day.
If the Fund determines the value of the net assets of its portfolio more than
once on any day, then the last such determination thereof on that day shall be
deemed to be the sole determination thereof on that day for the purposes of this
section 5.
You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services. You
shall be contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Fund's expenses, as if such waiver
or limitation were fully set forth herein.
6. Avoidance of Inconsistent Position; Services Not Exclusive. In connection
with purchases or sales of portfolio securities and other investments for the
account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment advice, management
and services to others. In acting under this Agreement, you shall be an
independent contractor and not an agent of the Trust. Whenever the Fund and one
or more other accounts or investment companies advised by you have available
funds for investment, investments suitable and appropriate for each shall be
allocated in accordance with procedures believed by you to be equitable to each
entity. Similarly, opportunities to sell securities shall be allocated in a
manner believed by you to be equitable. The Fund recognizes that in some cases
this procedure may adversely affect the size of the position that may be
acquired or disposed of for the Fund.
7. Limitation of Liability of Manager. As an inducement to your undertaking to
render services pursuant to this Agreement, the Trust agrees that you shall not
be liable under this Agreement for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters to which this
Agreement relates, provided that nothing in this Agreement shall be deemed to
protect or purport to protect you against any liability to the Trust, the Fund
or its shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties, or
by reason of your reckless disregard of your obligations and duties hereunder.
8. Duration and Termination of This Agreement. This Agreement shall remain in
force until September 30, 2000, and continue in force from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Fund. The aforesaid requirement that continuance of
this Agreement be "specifically approved at least
4
<PAGE>
annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder and any applicable SEC exemptive order
therefrom.
This Agreement may be terminated with respect to the Fund at any time, without
the payment of any penalty, by the vote of a majority of the outstanding voting
securities of the Fund or by the Trust's Board of Trustees on 60 days' written
notice to you, or by you on 60 days' written notice to the Trust. This Agreement
shall terminate automatically in the event of its assignment.
This Agreement may be terminated with respect to the Fund at any time without
the payment of any penalty by the Board of Trustees or by vote of a majority of
the outstanding voting securities of the Fund in the event that it shall have
been established by a court of competent jurisdiction that you or any of your
officers or directors has taken any action which results in a breach of your
covenants set forth herein.
9. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
10. Limitation of Liability for Claims. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Zurich YieldWise
Funds" refers to the Trustees under the Declaration collectively as Trustees and
not as individuals or personally, and that no shareholder of the Fund, or
Trustee, officer, employee or agent of the Trust, shall be subject to claims
against or obligations of the Trust or of the Fund to any extent whatsoever, but
that the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability as set
forth in the Declaration and you agree that the obligations assumed by the Trust
on behalf of the Fund pursuant to this Agreement shall be limited in all cases
to the Fund and its assets, and you shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or any other
series of the Trust, or from any Trustee, officer, employee or agent of the
Trust. You understand that the rights and obligations of each Fund, or series,
under the Declaration are separate and distinct from those of any and all other
series.
11. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
In interpreting the provisions of this Agreement, the definitions contained in
Section 2(a) of the 1940 Act (particularly the definitions of "affiliated
person," "assignment" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.
This Agreement shall be construed in accordance with the laws of The
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause the
Fund to fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Trust on behalf of the Fund.
5
<PAGE>
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
ZURICH YIELDWISE FUNDS, on behalf of Zurich
YieldWise Government Money Fund,
By:
------------------------------------
President
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By:
------------------------------------
6
INVESTMENT MANAGEMENT AGREEMENT
Zurich YieldWise Municipal Money Fund
222 South Riverside Plaza
Chicago, Illinois 60606
November 30, 1998
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Zurich YieldWise Municipal Money Fund
Ladies and Gentlemen:
ZURICH YIELDWISE FUNDS (the "Trust") has been established as a Massachusetts
business Trust to engage in the business of an investment company. Pursuant to
the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees is authorized to issue the Trust's shares
of beneficial interest (the "Shares"), in separate series, or funds. The Board
of Trustees has authorized Zurich YieldWise Municipal Money Fund (the "Fund").
Series may be abolished and dissolved, and additional series established, from
time to time by action of the Trustees.
The Trust, on behalf of the Fund, has selected you to act as the investment
manager of the Fund and to provide certain other services, as more fully set
forth below, and you have indicated that you are willing to act as such
investment manager and to perform such services under the terms and conditions
hereinafter set forth. Accordingly, the Trust on behalf of the Fund agrees with
you as follows:
1. Delivery of Documents. The Trust engages in the business of investing and
reinvesting the assets of the Fund in the manner and in accordance with the
investment objectives, policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of Additional Information
(the "SAI") relating to the Fund included in the Trust's Registration Statement
on Form N-1A, as amended from time to time, (the "Registration Statement") filed
by the Trust under the Investment Company Act of 1940, as amended, (the "1940
Act") and the Securities Act of 1933, as amended. Copies of the documents
referred to in the preceding sentence have been furnished to you by the Trust.
The Trust has also furnished you with copies properly certified or authenticated
of each of the following additional documents related to the Trust and the Fund:
(a) The Declaration, as amended to date.
(b) By-Laws of the Trust as in effect on the date hereof (the "By-
Laws").
(c) Resolutions of the Trustees of the Trust and the shareholders of
the Fund selecting you as investment manager and approving the
form of this Agreement.
(d) Establishment and Designation of Series of Shares of Beneficial
Interest relating to the Fund, as applicable.
The Trust will furnish you from time to time with copies, properly certified or
authenticated, of all amendments of or supplements, if any, to the foregoing,
including the Prospectus, the SAI and the Registration Statement.
2. Portfolio Management Services. As manager of the assets of the Fund, you
shall provide continuing investment management of the assets of the Fund in
accordance with the investment objectives, policies and restrictions set forth
in the Prospectus and SAI; the applicable provisions of the 1940 Act and the
<PAGE>
Internal Revenue Code of 1986, as amended, (the "Code") relating to regulated
investment companies and all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which you have knowledge;
subject always to policies and instructions adopted by the Trust's Board of
Trustees. In connection therewith, you shall use reasonable efforts to manage
the Fund so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Fund shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
policy generally available to your investment advisory clients. In managing the
Fund in accordance with the requirements set forth in this section 2, you shall
be entitled to receive and act upon advice of counsel to the Trust. You shall
also make available to the Trust promptly upon request all of the Fund's
investment records and ledgers as are necessary to assist the Trust in complying
with the requirements of the 1940 Act and other applicable laws. To the extent
required by law, you shall furnish to regulatory authorities having the
requisite authority any information or reports in connection with the services
provided pursuant to this Agreement which may be requested in order to ascertain
whether the operations of the Trust are being conducted in a manner consistent
with applicable laws and regulations.
You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Fund and place orders
with broker-dealers, foreign currency dealers, futures commission merchants or
others pursuant to your determinations and all in accordance with Fund policies
as expressed in the Registration Statement. You shall determine what portion of
the Fund's portfolio shall be invested in securities and other assets and what
portion, if any, should be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic reports on the
investment performance of the Fund and on the performance of your obligations
pursuant to this Agreement, and you shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
3. Administrative Services. In addition to the portfolio management services
specified above in section 2, you shall furnish at your expense for the use of
the Fund such office space and facilities in the United States as the Fund may
require for its reasonable needs, and you (or one or more of your affiliates
designated by you) shall render to the Trust administrative services on behalf
of the Fund necessary for operating as an open end investment company and not
provided by persons not parties to this Agreement including, but not limited to,
preparing reports to and meeting materials for the Trust's Board of Trustees and
reports and notices to Fund shareholders; supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring the performance of,
accounting agents, custodians, depositories, transfer agents and pricing agents,
accountants, attorneys, printers, underwriters, brokers and dealers, insurers
and other persons in any capacity deemed to be necessary or desirable to Fund
operations; preparing and making filings with the Securities and Exchange
Commission (the "SEC") and other regulatory and self-regulatory organizations,
including, but not limited to, preliminary and definitive proxy materials,
post-effective amendments to the Registration Statement, semi-annual reports on
Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act; overseeing the
tabulation of proxies by the Fund's transfer agent; assisting in the preparation
and filing of the Fund's federal, state and local tax returns; preparing and
filing the Fund's federal excise tax return pursuant to Section 4982 of the
Code; providing assistance with investor and public relations matters;
monitoring the valuation of portfolio securities and the calculation of net
asset value; monitoring the registration of Shares of the Fund under applicable
federal and state securities laws; maintaining or causing to be maintained for
the Fund all books, records and reports and any other information required under
the 1940 Act, to the extent that such books, records and reports and other
information are not maintained by the Fund's custodian or other agents of the
Fund; assisting in establishing the accounting policies of the Fund; assisting
in the resolution of accounting issues that may arise with respect to the Fund's
operations and consulting with the Fund's independent accountants, legal counsel
and the Fund's other agents as necessary in connection therewith; establishing
and monitoring the Fund's operating expense budgets; reviewing the Fund's bills;
processing the payment of bills that have been approved by an authorized person;
assisting the Fund in determining the amount of dividends and distributions
available to be paid by the Fund to its shareholders, preparing and arranging
for the printing of dividend notices to shareholders, and providing the transfer
and dividend paying agent, the custodian, and the accounting agent with such
information as is required for such parties to effect the payment of dividends
and distributions; and otherwise assisting the Trust as it may reasonably
request in the conduct of the Fund's
2
<PAGE>
business, subject to the direction and control of the Trust's Board of Trustees.
Nothing in this Agreement shall be deemed to shift to you or to diminish the
obligations of any agent of the Fund or any other person not a party to this
Agreement which is obligated to provide services to the Fund.
4. Allocation of Charges and Expenses. Except as otherwise specifically provided
in this section 4, you shall pay the compensation and expenses of all Trustees,
officers and executive employees of the Trust (including the Fund's share of
payroll taxes) who are affiliated persons of you, and you shall make available,
without expense to the Fund, the services of such of your directors, officers
and employees as may duly be elected officers of the Trust, subject to their
individual consent to serve and to any limitations imposed by law. You shall
provide at your expense the portfolio management services described in section 2
hereof and the administrative services described in section 3 hereof.
You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 4. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Fund's Trustees and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of the Fund: organization expenses of the
Fund (including out of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Fund's custodian or
other agents of the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent for which the
Trust is responsible pursuant to the terms of the Fund Accounting Services
Agreement, custodians, subcustodians, transfer agents, dividend disbursing
agents and registrars; payment for portfolio pricing or valuation services to
pricing agents, accountants, bankers and other specialists, if any; expenses of
preparing share certificates and, except as provided below in this section 4,
other expenses in connection with the issuance, offering, distribution, sale,
redemption or repurchase of securities issued by the Fund; expenses relating to
investor and public relations; expenses and fees of registering or qualifying
Shares of the Fund for sale; interest charges, bond premiums and other insurance
expense; freight, insurance and other charges in connection with the shipment of
the Fund's portfolio securities; the compensation and all expenses (specifically
including travel expenses relating to Trust business) of Trustees, officers and
employees of the Trust who are not affiliated persons of you; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
of the Fund; expenses of printing and distributing reports, notices and
dividends to shareholders; expenses of printing and mailing Prospectuses and
SAIs of the Fund and supplements thereto; costs of stationery; any litigation
expenses; indemnification of Trustees and officers of the Trust; and costs of
shareholders' and other meetings.
You shall not be required to pay expenses of any activity which is primarily
intended to result in sales of Shares of the Fund if and to the extent that (i)
such expenses are required to be borne by a principal underwriter which acts as
the distributor of the Fund's Shares pursuant to an underwriting agreement which
provides that the underwriter shall assume some or all of such expenses, or (ii)
the Trust on behalf of the Fund shall have adopted a plan in conformity with
Rule 12b-1 under the 1940 Act providing that the Fund (or some other party)
shall assume some or all of such expenses. You shall be required to pay such of
the foregoing sales expenses as are not required to be paid by the principal
underwriter pursuant to the underwriting agreement or are not permitted to be
paid by the Fund (or some other party) pursuant to such a plan.
5. Management Fee. For all services to be rendered, payments to be made and
costs to be assumed by you as provided in sections 2, 3, and 4 hereof, the Trust
on behalf of the Fund shall pay you in United States Dollars on the last day of
each month the unpaid balance of a fee equal to the excess of (a) 1/12 of .50 of
1 percent of the average daily net assets as defined below of the Fund for such
month; provided that, for any calendar month during which the average of such
values exceeds $215,000,000, the fee payable for that month based on the portion
of the average of such values in excess of $215,000,000 shall be 1/12 of .375 of
1 percent of such portion; provided that, for any calendar month during which
the average of such values exceeds $550,000,000, the fee payable for that month
based on the portion of the average of such values in excess of $550,000,000
shall be 1/12 of .30 of 1 percent of such portion; and provided that, for any
calendar month during which the average of such values exceeds
3
<PAGE>
$800,000,000, the fee payable for that month based on the portion of the average
of such values in excess of $800,000,000 shall be 1/12 of .25 of 1 percent of
such portion; over any compensation waived by you from time to time (as more
fully described below). You shall be entitled to receive during any month such
interim payments of your fee hereunder as you shall request, provided that no
such payment shall exceed 75 percent of the amount of your fee then accrued on
the books of the Fund and unpaid.
The "average daily net assets" of the Fund shall mean the average of the values
placed on the Fund's net assets as of 4:00 p.m. (New York time) on each day on
which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If the determination of net asset value does not take place for any
particular day, then for the purposes of this section 5, the value of the net
assets of the Fund as last determined shall be deemed to be the value of its net
assets as of 4:00 p.m. (New York time), or as of such other time as the value of
the net assets of the Fund's portfolio may be lawfully determined on that day.
If the Fund determines the value of the net assets of its portfolio more than
once on any day, then the last such determination thereof on that day shall be
deemed to be the sole determination thereof on that day for the purposes of this
section 5.
You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services. You
shall be contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Fund's expenses, as if such waiver
or limitation were fully set forth herein.
6. Avoidance of Inconsistent Position; Services Not Exclusive. In connection
with purchases or sales of portfolio securities and other investments for the
account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment advice, management
and services to others. In acting under this Agreement, you shall be an
independent contractor and not an agent of the Trust. Whenever the Fund and one
or more other accounts or investment companies advised by you have available
funds for investment, investments suitable and appropriate for each shall be
allocated in accordance with procedures believed by you to be equitable to each
entity. Similarly, opportunities to sell securities shall be allocated in a
manner believed by you to be equitable. The Fund recognizes that in some cases
this procedure may adversely affect the size of the position that may be
acquired or disposed of for the Fund.
7. Limitation of Liability of Manager. As an inducement to your undertaking to
render services pursuant to this Agreement, the Trust agrees that you shall not
be liable under this Agreement for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters to which this
Agreement relates, provided that nothing in this Agreement shall be deemed to
protect or purport to protect you against any liability to the Trust, the Fund
or its shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties, or
by reason of your reckless disregard of your obligations and duties hereunder.
8. Duration and Termination of This Agreement. This Agreement shall remain in
force until September 30, 2000, and continue in force from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Fund. The aforesaid requirement that continuance of
this Agreement be "specifically approved at least
4
<PAGE>
annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder and any applicable SEC exemptive order
therefrom.
This Agreement may be terminated with respect to the Fund at any time, without
the payment of any penalty, by the vote of a majority of the outstanding voting
securities of the Fund or by the Trust's Board of Trustees on 60 days' written
notice to you, or by you on 60 days' written notice to the Trust. This Agreement
shall terminate automatically in the event of its assignment.
This Agreement may be terminated with respect to the Fund at any time without
the payment of any penalty by the Board of Trustees or by vote of a majority of
the outstanding voting securities of the Fund in the event that it shall have
been established by a court of competent jurisdiction that you or any of your
officers or directors has taken any action which results in a breach of your
covenants set forth herein.
9. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
10. Limitation of Liability for Claims. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Zurich YieldWise
Funds" refers to the Trustees under the Declaration collectively as Trustees and
not as individuals or personally, and that no shareholder of the Fund, or
Trustee, officer, employee or agent of the Trust, shall be subject to claims
against or obligations of the Trust or of the Fund to any extent whatsoever, but
that the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability as set
forth in the Declaration and you agree that the obligations assumed by the Trust
on behalf of the Fund pursuant to this Agreement shall be limited in all cases
to the Fund and its assets, and you shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or any other
series of the Trust, or from any Trustee, officer, employee or agent of the
Trust. You understand that the rights and obligations of each Fund, or series,
under the Declaration are separate and distinct from those of any and all other
series.
11. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
In interpreting the provisions of this Agreement, the definitions contained in
Section 2(a) of the 1940 Act (particularly the definitions of "affiliated
person," "assignment" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.
This Agreement shall be construed in accordance with the laws of The
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause the
Fund to fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Trust on behalf of the Fund.
5
<PAGE>
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
ZURICH YIELDWISE FUNDS, on behalf of Zurich
YieldWise Municipal Money Fund,
By:
-------------------------------
President
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By:
-------------------------------
UNDERWRITING AGREEMENT
AGREEMENT made as of this 31st day of December, 1997 between ZURICH
YIELDWISE MONEY FUND a Massachusetts business trust (hereinafter called the
"Fund"), and KEMPER DISTRIBUTORS, INC., a Delaware corporation (hereinafter
called the "Underwriter");
WITNESSETH:
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for the distribution
of shares of beneficial interest (hereinafter called "shares") of the Fund in
jurisdictions wherein shares of the Fund may legally be offered for sale;
provided, however, that the Fund in its absolute discretion may (a) issue or
sell shares directly to holders of shares of the Fund upon such terms and
conditions and for such consideration, if any, as it may determine, whether in
connection with the distribution of subscription or purchase rights, the payment
or reinvestment of dividends or distributions, or otherwise; or (b) issue or
sell shares at net asset value to the shareholders of any other investment
company, for which the Underwriter shall act as exclusive distributor, who wish
to exchange all or a portion of their investment in shares of such other
investment company for shares of the Fund.
2. The Underwriter hereby accepts appointment as agent for the distribution
of the shares of the Fund and agrees that it will use its best efforts with
reasonable promptness to sell such part of the authorized shares of the Fund
remaining unissued as from time to time shall be effectively registered under
the Securities Act of 1933 ("Securities Act"), at prices determined as
hereinafter provided and on terms hereinafter set forth, all subject to
applicable Federal and state laws and regulations and to the Agreement and
Declaration of Trust of the Fund.
3. The Fund agrees that it will use its best efforts to keep effectively
registered under the Securities Act for sale as herein contemplated such shares
as the Underwriter shall reasonably request and as the Securities and Exchange
Commission shall permit to be so registered.
4. Notwithstanding any other provision hereof, the Fund may terminate,
suspend or withdraw the offering of shares whenever, in its sole discretion, it
deems such action to be desirable.
5. The Underwriter may as agent of the Fund sell shares of the Fund
directly to investors. In addition, the Underwriter may as agent of the Fund
sell shares of the Fund to or through qualified dealers or others in such
manner, not inconsistent with the provisions hereof and the then effective
registration statement of the Fund under the Securities Act (and related
prospectus), as the Underwriter may determine from time to time, provided that
no dealer or other person shall be appointed or authorized to act as agent of
the Fund without the prior consent of the Fund. It is mutually agreed that, in
addition to sales made by it as agent of the Fund, the Underwriter may, in its
discretion, also sell shares of the Fund as principal to persons with whom it
does not have dealer selling group agreements.
6. Shares of the Fund offered for sale or sold by the Underwriter shall be
so offered or sold at a price per share determined in accordance with the then
current prospectus relating to the sale of such shares except as departure from
such prices shall be permitted by the rules and regulations of the Securities
and Exchange Commission; provided, however, that any public offering price for
shares of the Fund shall be the net value per share. The net asset value per
share shall be determined in the manner and at the times set forth in the then
current prospectus of the Fund relating to such shares.
<PAGE>
7. The price the Fund shall receive for all shares purchased from the Fund
shall be the net asset value used in determining the public offering price
applicable to the sale of such shares.
8. The Underwriter shall issue and deliver on behalf of the Fund such
confirmations of sales made by it as agent pursuant to this agreement as may be
required. At or prior to the time of issuance of shares, the Underwriter will
pay or cause to be paid to the Fund the amount due the Fund for the sale of such
shares. Certificates shall be issued or shares registered on the transfer books
of the Fund in such names and denominations as the Underwriter may specify.
9. The Fund will execute any and all documents and furnish any and all
information which may be reasonably necessary in connection with the
qualification of its shares for sale (including the qualification of the Fund as
a dealer where necessary or advisable) in such states as the Underwriter may
reasonably request (it being understood that the Fund shall not be required
without its consent to comply with any requirement which in its opinion is
unduly burdensome).
10. The Fund will furnish to the Underwriter from time to time such
information with respect to the Fund and its shares as the Underwriter may
reasonably request for use in connection with the sale of shares of the Fund.
The Underwriter agrees that it will not use or distribute or authorize the use,
distribution or dissemination by its dealers or others in connection with the
sale of such shares any statements, other than those contained in the Fund's
current prospectus, except such supplemental literature or advertising as shall
be lawful under Federal and state securities law and regulations, and that it
will furnish the Fund with copies of all such material.
11. The Underwriter shall order shares of the Fund from the Fund only to the
extent that it shall have received purchase orders therefor. The Underwriter
will not make, or authorize any dealers or others to make any short sales of
shares of the Fund.
12. The Underwriter, as agent of and for the account of the Fund, may
repurchase the shares of the Fund at such prices and upon such terms and
conditions as shall be specified in the current prospectus of the Fund.
13. In selling or reacquiring shares of the Fund for the account of the
Fund, the Underwriter will in all respects conform to the requirements of all
state and Federal laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., relating to such sale or reacquisition,
as the case may be, and will indemnify and save harmless the Fund from any
damage or expense on account of any wrongful act by the Underwriter or any
employee, representative or agent of the Underwriter. The Underwriter will
observe and be bound by all the provisions of the Agreement and Declaration of
Trust of the Fund (and of any fundamental policies adopted by the Fund pursuant
to the Investment Company Act of 1940, notice of which shall have been given to
the Underwriter) which at the time in any way require, limit, restrict or
prohibit or otherwise regulate any action on the part of the Underwriter.
14. The Underwriter will require each dealer to conform to the provisions
hereof and the Registration Statement (and related prospectus) at the time in
effect under the Securities Act with respect to the public offering price of the
Fund's shares, and neither the Underwriter nor any such dealers shall withhold
the placing of purchases orders so as to make a profit thereby.
2
<PAGE>
15. The Fund will pay or cause to be paid expenses (including the fees and
disbursements of its own counsel) and all taxes and fees payable to the Federal,
state or other governmental agencies on account of the registration or
qualifications of securities issued by the Fund or otherwise. The Fund will also
pay or cause to be paid expenses incident to the issuance of shares of
beneficial interest, such as the cost of share certificates, issue taxes, and
fees for the transfer agent. The Underwriter will pay all expenses (other than
expenses which one or more dealers may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the shares issued or sold
hereunder, including, without limiting the generality of the foregoing, all
expenses of printing and distributing any prospectus and of preparing, printing
and distributing or disseminating any other literature, advertising and selling
aids in connection with the offering of the shares for sale (except that such
expenses need not include expenses incurred by the Fund in connection with the
preparation, typesetting, printing and distribution of any registration
statement or report or other communication to stockholders in their capacity as
such) and expenses of advertising in connection with such offering.
16. The agreement shall become effective on the date hereof and shall
continue in effect until December 1, 1998 and from year to year thereafter, but
only so long as such continuance is approved in the manner required by the
Investment Company Act of 1940. Either party hereto may terminate this agreement
on any date by giving the other party at least six months prior written notice
of such termination specifying the date fixed therefor. Without prejudice to any
other remedies of the Fund in any such event the Fund may terminate this
agreement at any time immediately upon any failure of fulfillment of any of the
obligations of the Underwriter hereunder.
17. This agreement shall automatically terminate in the event of its
assignment.
18. Any notice under this agreement shall be in writing, addressed and
delivered or mailed, postage postpaid, to the other party at such address as
such other party may designate for the receipt of such notice.
19. All parties hereto are expressly put on notice of the Fund's Agreement
and Declaration of Trust and all amendments thereto, all of which are on file
with the Secretary of The Commonwealth of Massachusetts, and the limitation of
shareholder and trustee liability contained therein. This Agreement has been
executed by and on behalf of the Fund by its representatives as such
representatives and not individually, and the obligations of the Fund hereunder
are not binding upon any of the Trustees, officers or shareholders of the Fund
individually but are binding upon only the assets and property of the Fund. With
respect to any claim by Underwriter for recovery of any liability of the Fund
arising hereunder allocated to a particular series or portfolio ("Portfolio") of
the Fund if there be more than one, whether in accordance with the express terms
hereof or otherwise, the Underwriter shall have recourse solely against the
assets
3
<PAGE>
of that Portfolio to satisfy such claim and shall have no recourse against the
assets of any other Portfolio for such purpose.
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
agreement to be executed on its behalf by an officer thereunto duly authorized
and its seal to be affixed on the day and year first above written.
ZURICH YIELDWISE MONEY FUND
By: /s/John E. Neal
---------------------------------------
Title: Vice President
-------------------------------------
Attest: Philip J. Collora
-------------------------
Title: Secretary
-------------------------
KEMPER DISTRIBUTORS, INC.
By: /s/James L. Greenawalt
---------------------------------------
Title: President
-------------------------------------
Attest: /s/Charles R. Manzoni
-------------------------
Title: Secretary
-------------------------
4
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this 7th day of September, 1998 between ZURICH YIELDWISE MONEY
FUND, a Massachusetts business trust (the "Fund"), and KEMPER DISTRIBUTORS,
INC., a Delaware corporation ("KDI").
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints KDI to act as agent for distribution of
shares of beneficial interest (hereinafter called "shares") of the Fund in
jurisdictions wherein shares of the Fund may legally be offered for sale;
provided, however, that the Fund in its absolute discretion may (a) issue or
sell shares directly to holders of shares of the Fund upon such terms and
conditions and for such consideration, if any, as it may determine, whether in
connection with the distribution of subscription or purchase rights, the payment
or reinvestment of dividends or distributions, or otherwise; or (b) issue or
sell shares at net asset value to the shareholders of any other investment
company, for which KDI shall act as exclusive distributor, who wish to exchange
all or a portion of their investment in shares of such other investment company
for shares of the Fund. KDI shall appoint various financial service firms
("Firms") to provide distribution services to investors. The Firms shall provide
such office space and equipment, telephone facilities, personnel, literature
distribution, advertising and promotion as is necessary or beneficial for
providing information and distribution services to existing and potential
clients of the Firms. KDI may also provide some of the above services for the
Fund.
KDI accepts such appointment as distributor and principal underwriter
and agrees to render such services and to assume the obligations herein set
forth for the compensation herein provided. KDI shall for all purposes herein
provided be deemed to be an independent contractor and, unless expressly
provided herein or otherwise authorized, shall have no authority to act for or
represent the Fund in any way. KDI, by separate agreement with the Fund, may
also serve the Fund in other capacities. The services of KDI to the Fund under
this Agreement are not to be deemed exclusive, and KDI shall be free to render
similar services or other services to others so long as its services hereunder
are not impaired thereby.
In carrying out its duties and responsibilities hereunder, KDI will,
pursuant to separate written contracts, appoint various Firms to provide
advertising, promotion and other distribution services contemplated hereunder
directly to or for the benefit of existing and potential shareholders who may be
clients of such Firms. Such Firms shall at all times be deemed to be independent
contractors retained by KDI and not the Fund.
KDI shall use its best efforts with reasonable promptness to sell such
part of the authorized shares of the Fund remaining unissued as from time to
time shall be effectively
<PAGE>
registered under the Securities Act of 1933 ("Securities Act"), at prices
determined as hereinafter provided and on terms hereinafter set forth, all
subject to applicable federal and state laws and regulations and to the Fund's
organizational documents.
2. KDI shall sell shares of the Fund to or through qualified Firms in
such manner, not inconsistent with the provisions hereof and the then effective
registration statement (and related prospectus) of the Fund under the Securities
Act, as KDI may determine from time to time, provided that no Firm or other
person shall be appointed or authorized to act as agent of the Fund without
prior consent of the Fund. In addition to sales made by it as agent of the Fund,
KDI may, in its discretion, also sell shares of the Fund as principal to persons
with whom it does not have selling group agreements.
Shares of any class of any series of the Fund offered for sale or sold
by KDI shall be so offered or sold at a price per share determined in accordance
with the then current prospectus. The price the Fund shall receive for all
shares purchased from it shall be the net asset value used in determining the
public offering price applicable to the sale of such shares. Any excess of the
sales price over the net asset value of the shares of the Fund sold by KDI as
agent shall be retained by KDI as a commission for its services hereunder. KDI
may compensate Firms for sales of shares at the commission levels provided in
the Fund's prospectus from time to time. KDI may pay other commissions, fees or
concessions to Firms, any may pay them to others in its discretion, in such
amounts as KDI shall determine from time to time. KDI shall be entitled to
receive and retain any applicable contingent deferred sales charge as described
in the Fund's prospectus. KDI shall also receive any distribution services fee
payable by the Fund as provided in the Fund's Amended and Restated 12b-1 Plan,
as amended from time to time (the "Plan").
KDI will require each Firm to conform to the provisions hereof and the
Registration Statement (and related prospectus) at the time in effect under the
Securities Act with respect to the public offering price or net asset value, as
applicable, of the Fund's shares, and neither KDI nor any such Firms shall
withhold the placing of purchase orders so as to make a profit thereby.
3. The Fund will use its best efforts to keep effectively registered
under the Securities Act for sale as herein contemplated such shares as KDI
shall reasonably request and as the Securities and Exchange Commission shall
permit to be so registered. Notwithstanding any other provision hereof, the Fund
may terminate, suspend or withdraw the offering of shares whenever, in its sole
discretion, it deems such action to be desirable.
4. The Fund will execute any and all documents and furnish any and all
information that may be reasonably necessary in connection with the
qualification of its shares for sale (including the qualification of the Fund as
a dealer where necessary or advisable) in such states as KDI may reasonably
request (it being understood that the Fund shall not be required without its
consent to comply with any requirement which in its opinion is unduly
burdensome). The Fund will furnish to KDI from time to time such information
with respect to the Fund and its shares as KDI may reasonably request for use in
connection with the sale of shares of the Fund.
<PAGE>
5. KDI shall issue and deliver or shall arrange for various Firms to
issue and deliver on behalf of the Fund such confirmations of sales made by it
pursuant to this Agreement as may be required. At or prior to the time of
issuance of shares, KDI will pay or cause to be paid to the Fund the amount due
the Fund for the sale of such shares. Certificates shall be issued or shares
registered on the transfer books of the Fund in such names and denominations as
KDI may specify.
6. KDI shall order shares of the Fund from the Fund only to the extent
that it shall have received purchase orders therefor. KDI will not make, or
authorize Firms or others to make (a) any short sales of shares of the Fund; or
(b) any sales of such shares to any Board member or officer of the Fund or to
any officer or Board member of KDI or of any corporation or association
furnishing investment advisory, managerial or supervisory services to the Fund,
or to any corporation or association, unless such sales are made in accordance
with the then current prospectus relating to the sale of such shares. KDI, as
agent of and for the account of the Fund, may repurchase the shares of the Fund
at such prices and upon such terms and conditions as shall be specified in the
current prospectus of the Fund. In selling or reacquiring shares of the Fund for
the account of the Fund, KDI will in all respects conform to the requirements of
all state and federal laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., relating to such sale or reacquisition,
as the case may be, and will indemnify and save harmless the Fund from any
damage or expense on account of any wrongful act by KDI or any employee,
representative or agent of KDI. KDI will observe and be bound by all the
provisions of the Fund's organizational documents (and of any fundamental
policies adopted by the Fund pursuant to the Investment Company Act of 1940 (the
"Investment Company Act"), notice of which shall have been given to KDI) which
at the time in any way require, limit, restrict, prohibit or otherwise regulate
any action on the part of KDI hereunder.
7. The Fund shall assume and pay all charges and expenses of its
operations not specifically assumed or otherwise to be provided by KDI under
this Agreement or the Plan. The Fund will pay or cause to be paid expenses
(including the fees and disbursements of its own counsel) of any registration of
the Fund and its shares under the United States securities laws and expenses
incident to the issuance of shares of beneficial interest, such as the cost of
share certificates, issue taxes, and fees of the transfer agent. KDI will pay
all expenses (other than expenses which one or more Firms may bear pursuant to
any agreement with KDI) incident to the sale and distribution of the shares
issued or sold hereunder, including, without limiting the generality of the
foregoing, all (a) expenses of printing and distributing any prospectus and of
preparing, printing and distributing or disseminating any other literature,
advertising and selling aids in connection with the offering of the shares for
sale (except that such expenses need not include expenses incurred by the Fund
in connection with the preparation, typesetting, printing and distribution of
any registration statement or prospectus, report or other communication to
shareholders in their capacity as such), (b) expenses of advertising in
connection with such offering and (c) expenses (other than the Fund's auditing
expenses) of qualifying or continuing the qualification of the shares for sale
and, in connection therewith, of qualifying or continuing the
<PAGE>
qualification of the Fund as a dealer or broker under the laws of such states as
may be designated by KDI under the conditions herein specified. No transfer
taxes, if any, which may be payable in connection with the issue or delivery or
shares sold as herein contemplated or of the certificates for such shares shall
be borne by the Fund, and KDI will indemnify and hold harmless the Fund against
liability for all such transfer taxes.
8. This Agreement shall become effective on the date hereof and shall
continue until December 1, 1999; and shall continue from year to year thereafter
only so long as such continuance is approved in the manner required by the
Investment Company Act.
This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment of any penalty
by the Fund or by KDI on sixty (60) days' written notice to the other party. The
Fund may effect termination with respect to any class of any series of the Fund
by a vote of (i) a majority of the Board members who are not interested persons
of the Fund and who have no direct or indirect financial interest in the
operation of the Plan, this Agreement, or in any other agreement related to the
Plan, or (ii) a majority of the outstanding voting securities of such series or
class. Without prejudice to any other remedies of the Fund, the Fund may
terminate this Agreement at any time immediately upon KDI's failure to fulfill
any of its obligations hereunder.
All material amendments to this Agreement must be approved by a vote of
a majority of the Board, and of the Board members who are not interested persons
of the Fund and who have no direct or indirect financial interest in the
operation of the Plan, this Agreement or in any other agreement related to the
Plan, cast in person at a meeting called for such purpose.
The terms "assignment," "interested person" and "vote of a majority of
the outstanding voting securities" shall have the meanings set forth in the
Investment Company Act and the rules and regulations thereunder.
KDI shall receive such compensation for its distribution services as
set forth in the Plan. Termination of this Agreement shall not affect the right
of KDI to receive payments on any unpaid balance of the compensation earned
prior to such termination, as set forth in the Plan.
9. KDI will not use or distribute, or authorize the use, distribution
or dissemination by Firms or others in connection with the sale of Fund shares
any statements other than those contained in the Fund's current prospectus,
except such supplemental literature or advertising as shall be lawful under
federal and state securities laws and regulations. KDI will furnish the Fund
with copies of all such material.
10. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder shall not be thereby
affected.
11. Any notice under this Agreement shall be in writing, addressed and
delivered or
<PAGE>
mailed, postage prepaid, to the other party at such address as such other party
may designate for the receipt of such notice.
12. All parties hereto are expressly put on notice of the Fund's
Agreement and Declaration of Trust, and all amendments thereto, all of which are
on file with the Secretary of The Commonwealth of Massachusetts, and the
limitation of shareholder and trustee liability contained therein. This
Agreement has been executed by and on behalf of the Fund by its representatives
as such representatives and not individually, and the obligations of the Fund
hereunder are not binding upon any of the Trustees, officers or shareholders of
the Fund individually but are binding upon only the assets and property of the
Fund. With respect to any claim by KDI for recovery of any liability of the Fund
arising hereunder allocated to a particular series or class, whether in
accordance with the express terms hereof or otherwise, KDI shall have recourse
solely against the assets of that series or class to satisfy such claim and
shall have no recourse against the assets of any other series or class for such
purpose.
13. This Agreement shall be construed in accordance with applicable
federal law and with the laws of The Commonwealth of Massachusetts.
14. This Agreement is the entire contract between the parties relating
to the subject matter hereof and supersedes all prior agreements between the
parties relating to the subject matter hereof.
[SIGNATURES APPEAR ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, the Fund and KDI have caused this Agreement to be
executed as of the day and year first above written.
ZURICH YIELDWISE MONEY FUND
By:/s/Mark S. Casady
--------------------
Title: President
----------------
ATTEST:
/s/Maureen Kane
- ---------------
Title: Asst. Secretary
----------------------
KEMPER DISTRIBUTORS, INC.
By: /s/James L. Greenawalt
--------------------------
Title: President
----------------
ATTEST:
/s/Joan V. Pearson
- ------------------
Title: Executive Assistant
--------------------------
FUND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made on the 31st day of December, 1997 between Zurich
YieldWise Money Fund (the "Fund"), on behalf of the Initial Portfolio
(hereinafter called the "Portfolio"), a registered open-end management
investment company with its principal place of business in 222 South Riverside
Plaza, Chicago, Illinois 60606 and Scudder Fund Accounting Corporation, with its
principal place of business in Boston, Massachusetts (hereinafter called "FUND
ACCOUNTING").
WHEREAS, the Portfolio has need to determine its net asset value which service
FUND ACCOUNTING is willing and able to provide;
NOW THEREFORE in consideration of the mutual promises herein made, the Fund and
FUND ACCOUNTING agree as follows:
Section 1. Duties of FUND ACCOUNTING - General
FUND ACCOUNTING is authorized to act under the terms of this Agreement
to calculate the net asset value of the Portfolio as provided in the
prospectus of the Portfolio and in connection therewith shall:
a. Maintain and preserve all accounts, books, financial records
and other documents as are required of the Fund under Section
31 of the Investment Company Act of 1940 (the "1940 Act") and
Rules 31a-1, 31a-2 and 31a-3 thereunder, applicable federal
and state laws and any other law or administrative rules or
procedures which may be applicable to the Fund on behalf of
the Portfolio, other than those accounts, books and financial
records required to be maintained by the Fund's investment
adviser, custodian or transfer agent and/or books and records
maintained by all other service providers necessary for the
Fund to conduct its business as a registered open-end
management investment company. All such books and records
shall be the property of the Fund and shall at all times
during regular business hours be open for inspection by, and
shall be surrendered promptly upon request of, duly authorized
officers of the Fund. All such books and records shall at all
times during regular business hours be open for inspection,
upon request of duly authorized officers of the Fund, by
employees or agents of the Fund and employees and agents of
the Securities and Exchange Commission.
b. Record the current day's trading activity and such other
proper bookkeeping entries as are necessary for determining
that day's net asset value and net income.
<PAGE>
c. Render statements or copies of records as from time to time
are reasonably requested by the Fund.
d. Facilitate audits of accounts by the Fund's independent public
accountants or by any other auditors employed or engaged by
the Fund or by any regulatory body with jurisdiction over the
Fund.
e. Compute the Portfolio's public offering price and/or its daily
dividend rates and money market yields, if applicable, in
accordance with Section 3 of the Agreement and notify the Fund
and such other persons as the Fund may reasonably request of
the net asset value per share, the public offering price
and/or its daily dividend rates and money market yields.
f. Perform a mark-to-market appraisal in accordance with
procedures by the Board of Trustees pursuant to Rule 2a-7
under the 1940 Act.
Section 2. Valuation of Securities
Securities shall be valued in accordance with (a) the Fund's
Registration Statement, as amended or supplemented from time to time
(hereinafter referred to as the "Registration Statement"); (b) the
resolutions of the Board of Trustees of the Fund at the time in force
and applicable, as they may from time to time be delivered to FUND
ACCOUNTING, and (c) Proper Instructions from such officers of the Fund
or other persons as are from time to time authorized by the Board of
Trustees of the Fund to give instructions with respect to computation
and determination of the net asset value. FUND ACCOUNTING may use one
or more external pricing services, including broker-dealers, provided
that an appropriate officer of the Fund shall have approved such use in
advance.
Section 3. Computation of Net Asset Value, Public Offering Price, Daily Dividend
Rates and Yields
FUND ACCOUNTING shall compute the Portfolio's net asset value,
including net income, in a manner consistent with the specific
provisions of the Registration Statement. Such computation shall be
made as of the time or times specified in the Registration Statement.
FUND ACCOUNTING shall compute the daily dividend rates and money market
yields, if applicable, in accordance with the methodology set forth in
the Registration Statement.
Section 4. FUND ACCOUNTING's Reliance on Instructions and Advice
2
<PAGE>
In maintaining the Portfolio's books of account and making the
necessary computations FUND ACCOUNTING shall be entitled to receive,
and may rely upon, information furnished it by means of Proper
Instructions, including but not limited to:
a. The manner and amount of accrual of expenses to be recorded on
the books of the Portfolio;
b. The source of quotations to be used for such securities as may
not be available through FUND ACCOUNTING's normal pricing
services;
c. The value to be assigned to any asset for which no price
quotations are readily available;
d. If applicable, the manner of computation of the public
offering price and such other computations as may be
necessary;
e. Transactions in portfolio securities;
f. Transactions in capital shares.
FUND ACCOUNTING shall be entitled to receive, and shall be entitled to
rely upon, as conclusive proof of any fact or matter required to be
ascertained by it hereunder, a certificate, letter or other instrument
signed by an authorized officer of the Fund or any other person
authorized by the Fund's Board of Trustees.
FUND ACCOUNTING shall be entitled to receive and act upon advice of
Counsel for the Fund at the reasonable expense of the Portfolio and
shall be without liability for any action taken or thing done in good
faith in reliance upon such advice.
FUND ACCOUNTING shall be entitled to receive, and may rely upon,
information received from the Transfer Agent.
Section 5. Proper Instructions
"Proper Instructions" as used herein means any certificate, letter or
other instrument or telephone call reasonably believed by FUND
ACCOUNTING to be genuine and to have been properly made or signed by
any authorized officer of the Fund or person certified to FUND
ACCOUNTING as being authorized by the Board of Trustees. The Fund, on
behalf of the Portfolio, shall cause oral instructions to be confirmed
in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices as from time
to time agreed to by an authorized officer of the Fund and FUND
ACCOUNTING.
3
<PAGE>
The Fund, on behalf of the Portfolio, agrees to furnish to the
appropriate person(s) within FUND ACCOUNTING a copy of the Registration
Statement as in effect from time to time. FUND ACCOUNTING may
conclusively rely on the Fund's most recently delivered Registration
Statement for all purposes under this Agreement and shall not be liable
to the Portfolio or the Fund in acting in reliance thereon.
Section 6. Standard of Care
FUND ACCOUNTING shall exercise reasonable care and diligence in the
performance of its duties hereunder. The Fund agrees that FUND
ACCOUNTING shall not be liable under this Agreement for any error of
judgment or mistake of law made in good faith and consistent with the
foregoing standard of care, provided that nothing in this Agreement
shall be deemed to protect or purport to protect FUND ACCOUNTING
against any liability to the Fund, the Portfolio or its shareholders to
which FUND ACCOUNTING would otherwise be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties,
or by reason of its reckless disregard of its obligations and duties
hereunder.
Section 7. Compensation and FUND ACCOUNTING Expenses
FUND ACCOUNTING shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed
upon in writing by the two parties. FUND ACCOUNTING shall be entitled,
if agreed to by the Fund on behalf of the Portfolio, to recover its
reasonable telephone, courier or delivery service, and all other
reasonable out-of-pocket, expenses as incurred, including, without
limitation, reasonable attorneys' fees and reasonable fees for pricing
services.
Section 8. Amendment and Termination
This Agreement shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by mutual agreement
of the parties hereto and may be terminated by an instrument in writing
delivered or mailed to the other party. Such termination shall take
effect not sooner than sixty (60) days after the date of delivery or
mailing of such notice of termination. Any termination date is to be no
earlier than four months from the effective date hereof. Upon
termination, FUND ACCOUNTING will turn over to the Fund or its designee
and cease to retain in FUND
4
<PAGE>
ACCOUNTING files, records of the calculations of net asset value and
all other records pertaining to its services hereunder; provided,
however, FUND ACCOUNTING in its discretion may make and retain copies
of any and all such records and documents which it determines
appropriate or for its protection.
Section 9. Services Not Exclusive
FUND ACCOUNTING's services pursuant to this Agreement are not to be
deemed to be exclusive, and it is understood that FUND ACCOUNTING may
perform fund accounting services for others. In acting under this
Agreement, FUND ACCOUNTING shall be an independent contractor and not
an agent of the Fund or the Portfolio.
Section 10. Limitation of Liability for Claims
The Fund's Amended and Restated Declaration of Trust, as amended to
date (the "Declaration"), a copy of which, together with all amendments
thereto, is on file in the Office of the Secretary of State of the
Commonwealth of Massachusetts, provides that the name "Zurich YieldWise
Money Fund" refers to the Trustees under the Declaration collectively
as trustees and not as individuals or personally, and that no
shareholder of the Fund or the Portfolio, or Trustee, officer, employee
or agent of the Fund shall be subject to claims against or obligations
of the Trust or of the Portfolio to any extent whatsoever, but that the
Trust estate only shall be liable.
FUND ACCOUNTING is expressly put on notice of the limitation of
liability as set forth in the Declaration and FUND ACCOUNTING agrees
that the obligations assumed by the Fund and/or the Portfolio under
this Agreement shall be limited in all cases to the Portfolio and its
assets, and FUND ACCOUNTING shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or the
Portfolio or any other series of the Fund, or from any Trustee,
officer, employee or agent of the Fund. FUND ACCOUNTING understands
that the rights and obligations of the Portfolio under the Declaration
are separate and distinct from those of any and all other series of the
Fund.
Section 11. Notices
Any notice shall be sufficiently given when delivered or mailed to the
other party at the address of such party set
5
<PAGE>
forth below or to such other person or at such other address as such
party may from time to time specify in writing to the other party.
If to FUND ACCOUNTING: Scudder Fund Accounting Corporation
Two International Place
Boston, Massachusetts 02110
Attn: Vice President
If to the Fund - Portfolio: Zurich YieldWise Money Fund
222 South Riverside Plaza
Chicago, Illinois 60606
Attn: President, Secretary
or Treasurer
6
<PAGE>
Section 12. Miscellaneous
This Agreement may not be assigned by FUND ACCOUNTING without the
consent of the Fund as authorized or approved by resolution of its
Board of Trustees.
In connection with the operation of this Agreement, the Fund and FUND
ACCOUNTING may agree from time to time on such provisions interpretive
of or in addition to the provisions of this Agreement as in their joint
opinions may be consistent with this Agreement. Any such interpretive
or additional provisions shall be in writing, signed by both parties
and annexed hereto, but no such provisions shall be deemed to be an
amendment of this Agreement.
This Agreement shall be governed and construed in accordance with the
laws of the Commonwealth of Massachusetts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes any and all prior
understandings.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized and its seal to be
hereunder affixed as of the date first written above.
[SEAL] ZURICH YIELDWISE MONEY FUND
on behalf of the Initial Portfolio
By:
---------------------------------
President
[SEAL] SCUDDER FUND ACCOUNTING CORPORATION
By:
---------------------------------
Vice President
8
FUND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made on the 30th day of November, 1998 between Zurich
YieldWise Funds (the "Fund"), on behalf of Zurich YieldWise Government Money
Fund (hereinafter called the "Portfolio"), a registered open-end management
investment company with its principal place of business in Chicago, Illinois and
Scudder Fund Accounting Corporation, with its principal place of business in
Boston, Massachusetts (hereinafter called "FUND ACCOUNTING").
WHEREAS, the Portfolio has need to determine its net asset value which service
FUND ACCOUNTING is willing and able to provide;
NOW THEREFORE in consideration of the mutual promises herein made, the Fund and
FUND ACCOUNTING agree as follows:
Section 1. Duties of FUND ACCOUNTING - General
FUND ACCOUNTING is authorized to act under the terms of this Agreement
to calculate the net asset value of the Portfolio as provided in the
prospectus of the Portfolio and in connection therewith shall:
a. Maintain and preserve all accounts, books, financial records
and other documents as are required of the Fund under Section 31
of the Investment Company Act of 1940 (the "1940 Act") and Rules
31a-1, 31a-2 and 31a-3 thereunder, applicable federal and state
laws and any other law or administrative rules or procedures
which may be applicable to the Fund on behalf of the Portfolio,
other than those accounts, books and financial records required
to be maintained by the Fund's investment adviser, custodian or
transfer agent and/or books and records maintained by all other
service providers necessary for the Fund to conduct its business
as a registered open-end management investment company. All such
books and records shall be the property of the Fund and shall at
all times during regular business hours be open for inspection
by, and shall be surrendered promptly upon request of, duly
authorized officers of the Fund. All such books and records
shall at all times during regular business hours be open for
inspection, upon request of duly authorized officers of the
Fund, by employees or agents of the Fund and employees and
agents of the Securities and Exchange Commission.
b. Record the current day's trading activity and such other
proper bookkeeping entries as are necessary for determining
that day's net asset value and net income.
c. Render statements or copies of records as from time to time
are reasonably requested by the Fund.
d. Facilitate audits of accounts by the Fund's independent public
accountants or by any other auditors employed or engaged by
the Fund or by any regulatory body with jurisdiction over the
Fund.
e. Compute the Portfolio's public offering price and/or its daily
dividend rates and money market yields, if applicable, in
accordance with Section 3 of the Agreement and notify the Fund
and such other persons as the Fund may reasonably request of
the net asset value per share, the public offering price
and/or its daily dividend rates and money market yields.
f. Perform a mark-to-market appraisal in accordance with
procedures by the Board of Trustees pursuant to Rule 2a-7
under the 1940 Act.
<PAGE>
Section 2. Valuation of Securities
Securities shall be valued in accordance with (a) the Fund's
Registration Statement, as amended or supplemented from time to time
(hereinafter referred to as the "Registration Statement"); (b) the
resolutions of the Board of Directors of the Fund at the time in force
and applicable, as they may from time to time be delivered to FUND
ACCOUNTING, and (c) Proper Instructions from such officers of the Fund
or other persons as are from time to time authorized by the Board of
Directors of the Fund to give instructions with respect to computation
and determination of the net asset value. FUND ACCOUNTING may use one
or more external pricing services, including broker-dealers, provided
that an appropriate officer of the Fund shall have approved such use in
advance.
Section 3. Computation of Net Asset Value, Public Offering Price, Daily
Dividend Rates and Yields
FUND ACCOUNTING shall compute the Portfolio's net asset value,
including net income, in a manner consistent with the specific
provisions of the Registration Statement. Such computation shall be
made as of the time or times specified in the Registration Statement.
FUND ACCOUNTING shall compute the daily dividend rates and money market
yields, if applicable, in accordance with the methodology set forth in
the Registration Statement.
Section 4. FUND ACCOUNTING's Reliance on Instructions and Advice
In maintaining the Portfolio's books of account and making the
necessary computations FUND ACCOUNTING shall be entitled to receive,
and may rely upon, information furnished it by means of Proper
Instructions, including but not limited to:
a. The manner and amount of accrual of expenses to be recorded on
the books of the Portfolio;
b. The source of quotations to be used for such securities as may
not be available through FUND
ACCOUNTING's normal pricing services;
c. The value to be assigned to any asset for which no price
quotations are readily available;
d. If applicable, the manner of computation of the public offering
price and such other computations as may be necessary;
e. Transactions in portfolio securities;
f. Transactions in capital shares.
FUND ACCOUNTING shall be entitled to receive, and shall be entitled to
rely upon, as conclusive proof of any fact or matter required to be
ascertained by it hereunder, a certificate, letter or other instrument
signed by an authorized officer of the Fund or any other person
authorized by the Fund's Board of Directors.
FUND ACCOUNTING shall be entitled to receive and act upon advice of
Counsel for the Fund at the reasonable expense of the Portfolio and
shall be without liability for any action taken or thing done in good
faith in reliance upon such advice.
FUND ACCOUNTING shall be entitled to receive, and may rely upon,
information received from the Transfer Agent.
2
<PAGE>
Section 5. Proper Instructions
"Proper Instructions" as used herein means any certificate, letter or
other instrument or telephone call reasonably believed by FUND
ACCOUNTING to be genuine and to have been properly made or signed by
any authorized officer of the Fund or person certified to FUND
ACCOUNTING as being authorized by the Board of Directors. The Fund, on
behalf of the Portfolio, shall cause oral instructions to be confirmed
in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices as from time
to time agreed to by an authorized officer of the Fund and FUND
ACCOUNTING.
The Fund, on behalf of the Portfolio, agrees to furnish to the
appropriate person(s) within FUND ACCOUNTING a copy of the Registration
Statement as in effect from time to time. FUND ACCOUNTING may
conclusively rely on the Fund's most recently delivered Registration
Statement for all purposes under this Agreement and shall not be liable
to the Portfolio or the Fund in acting in reliance thereon.
Section 6. Standard of Care
FUND ACCOUNTING shall exercise reasonable care and diligence in the
performance of its duties hereunder. The Fund agrees that FUND
ACCOUNTING shall not be liable under this Agreement for any error of
judgment or mistake of law made in good faith and consistent with the
foregoing standard of care, provided that nothing in this Agreement
shall be deemed to protect or purport to protect FUND ACCOUNTING
against any liability to the Fund, the Portfolio or its shareholders to
which FUND ACCOUNTING would otherwise be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties,
or by reason of its reckless disregard of its obligations and duties
hereunder.
Section 7. Compensation and FUND ACCOUNTING Expenses
FUND ACCOUNTING shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed
upon in writing by the two parties. FUND ACCOUNTING shall be entitled,
if agreed to by the Fund on behalf of the Portfolio, to recover its
reasonable telephone, courier or delivery service, and all other
reasonable out-of-pocket, expenses as incurred, including, without
limitation, reasonable attorneys fees and reasonable fees for pricing
services.
Section 8. Amendment and Termination
This Agreement shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by mutual agreement
of the parties hereto and may be terminated by an instrument in writing
delivered or mailed to the other party. Such termination shall take
effect not sooner than sixty (60) days after the date of delivery or
mailing of such notice of termination. Any termination date is to be no
earlier than four months from the effective date hereof. Upon
termination, FUND ACCOUNTING will turn over to the Fund or its designee
and cease to retain in FUND ACCOUNTING files, records of the
calculations of net asset value and all other records pertaining to its
services hereunder; provided, however, FUND ACCOUNTING in its
discretion may make and retain copies of any and all such records and
documents which it determines appropriate or for its protection.
3
<PAGE>
Section 9. Services Not Exclusive
FUND ACCOUNTING's services pursuant to this Agreement are not to be
deemed to be exclusive, and it is understood that FUND ACCOUNTING may
perform fund accounting services for others. In acting under this
Agreement, FUND ACCOUNTING shall be an independent contractor and not
an agent of the Fund or the Portfolio.
Section 10. Limitation of Liability for Claims
The Fund's Declaration of Trust, dated June 12, 1995, as amended to
date (the "Declaration"), a copy of which, together with all amendments
thereto, is on file in the Office of the Secretary of State of The
Commonwealth of Massachusetts, provides that the name "Zurich YieldWise
Funds" refers to the Trustees under the Declaration collectively as
trustees and not as individuals or personally, and that no shareholder
of the Fund or the Portfolio, or Trustee, officer, employee or agent of
the Fund shall be subject to claims against or obligations of the Trust
or of the Portfolio to any extent whatsoever, but that the Trust estate
only shall be liable.
FUND ACCOUNTING is expressly put on notice of the limitation of
liability as set forth in the Declaration and FUND ACCOUNTING agrees
that the obligations assumed by the Fund and/or the Portfolio under
this Agreement shall be limited in all cases to the Portfolio and its
assets, and FUND ACCOUNTING shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or the
Portfolio or any other series of the Fund, or from any Trustee,
officer, employee or agent of the Fund. FUND ACCOUNTING understands
that the rights and obligations of the Portfolio under the Declaration
are separate and distinct from those of any and all other series of the
Fund.
Section 10. Notices
Any notice shall be sufficiently given when delivered or mailed to the
other party at the address of such party set forth below or to such
other person or at such other address as such party may from time to
time specify in writing to the other party.
If to FUND ACCOUNTING: Scudder Fund Accounting Corporation
Two International Place
Boston, Massachusetts 02110
Attn: Vice President
If to the Fund - Portfolio: Zurich YieldWise Funds
222 South Riverside Plaza
Chicago, IL 60606
Attn: Secretary
Section 11. Miscellaneous
This Agreement may not be assigned by FUND ACCOUNTING without the
consent of the Fund as authorized or approved by resolution of its
Board of Directors.
In connection with the operation of this Agreement, the Fund and FUND
ACCOUNTING may agree from time to time on such provisions interpretive
of or in addition to the provisions of this
4
<PAGE>
Agreement as in their joint opinions may be consistent with this
Agreement. Any such interpretive or additional provisions shall be in
writing, signed by both parties and annexed hereto, but no such
provisions shall be deemed to be an amendment of this Agreement.
This Agreement shall be governed and construed in accordance with the
laws of The Commonwealth of Massachusetts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes any and all prior
understandings.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized and its seal to be
hereunder affixed as of the date first written above.
ZURICH YIELDWISE FUNDS, on behalf of Zurich
YieldWise Government Money Fund,
By:
---------------------
President
SCUDDER FUND ACCOUNTING CORPORATION
By:
---------------------
Vice President
5
FUND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made on the 30th day of November, 1998 between Zurich
YieldWise Funds (the "Fund"), on behalf of Zurich YieldWise Municipal Money Fund
(hereinafter called the "Portfolio"), a registered open-end management
investment company with its principal place of business in Chicago, Illinois and
Scudder Fund Accounting Corporation, with its principal place of business in
Boston, Massachusetts (hereinafter called "FUND ACCOUNTING").
WHEREAS, the Portfolio has need to determine its net asset value which service
FUND ACCOUNTING is willing and able to provide;
NOW THEREFORE in consideration of the mutual promises herein made, the Fund and
FUND ACCOUNTING agree as follows:
Section 1. Duties of FUND ACCOUNTING - General
FUND ACCOUNTING is authorized to act under the terms of this Agreement
to calculate the net asset value of the Portfolio as provided in the
prospectus of the Portfolio and in connection therewith shall:
a. Maintain and preserve all accounts, books, financial records
and other documents as are required of the Fund under Section
31 of the Investment Company Act of 1940 (the "1940 Act") and
Rules 31a-1, 31a-2 and 31a-3 thereunder, applicable federal
and state laws and any other law or administrative rules or
procedures which may be applicable to the Fund on behalf of
the Portfolio, other than those accounts, books and financial
records required to be maintained by the Fund's investment
adviser, custodian or transfer agent and/or books and records
maintained by all other service providers necessary for the
Fund to conduct its business as a registered open-end
management investment company. All such books and records
shall be the property of the Fund and shall at all times
during regular business hours be open for inspection by, and
shall be surrendered promptly upon request of, duly authorized
officers of the Fund. All such books and records shall at all
times during regular business hours be open for inspection,
upon request of duly authorized officers of the Fund, by
employees or agents of the Fund and employees and agents of
the Securities and Exchange Commission.
b. Record the current day's trading activity and such other
proper bookkeeping entries as are necessary for determining
that day's net asset value and net income.
c. Render statements or copies of records as from time to time
are reasonably requested by the Fund.
d. Facilitate audits of accounts by the Fund's independent public
accountants or by any other auditors employed or engaged by
the Fund or by any regulatory body with jurisdiction over the
Fund.
e. Compute the Portfolio's public offering price and/or its daily
dividend rates and money market yields, if applicable, in
accordance with Section 3 of the Agreement and notify the Fund
and such other persons as the Fund may reasonably request of
the net asset value per share, the public offering price
and/or its daily dividend rates and money market yields.
f. Perform a mark-to-market appraisal in accordance with
procedures by the Board of Trustees pursuant to Rule 2a-7
under the 1940 Act.
<PAGE>
Section 2. Valuation of Securities
Securities shall be valued in accordance with (a) the Fund's
Registration Statement, as amended or supplemented from time to time
(hereinafter referred to as the "Registration Statement"); (b) the
resolutions of the Board of Directors of the Fund at the time in force
and applicable, as they may from time to time be delivered to FUND
ACCOUNTING, and (c) Proper Instructions from such officers of the Fund
or other persons as are from time to time authorized by the Board of
Directors of the Fund to give instructions with respect to computation
and determination of the net asset value. FUND ACCOUNTING may use one
or more external pricing services, including broker-dealers, provided
that an appropriate officer of the Fund shall have approved such use in
advance.
Section 3. Computation of Net Asset Value, Public Offering Price, Daily Dividend
Rates and Yields
FUND ACCOUNTING shall compute the Portfolio's net asset value,
including net income, in a manner consistent with the specific
provisions of the Registration Statement. Such computation shall be
made as of the time or times specified in the Registration Statement.
FUND ACCOUNTING shall compute the daily dividend rates and money market
yields, if applicable, in accordance with the methodology set forth in
the Registration Statement.
Section 4. FUND ACCOUNTING's Reliance on Instructions and Advice
In maintaining the Portfolio's books of account and making the
necessary computations FUND ACCOUNTING shall be entitled to receive,
and may rely upon, information furnished it by means of Proper
Instructions, including but not limited to:
a. The manner and amount of accrual of expenses to be recorded on
the books of the Portfolio;
b. The source of quotations to be used for such securities as may
not be available through FUND ACCOUNTING's normal pricing
service;
c. The value to be assigned to any asset for which no price
quotations are readily available;
d. If applicable, the manner of computation of the public
offering price and such other computations as may be
necessary;
e. Transactions in portfolio securities;
f. Transactions in capital shares.
FUND ACCOUNTING shall be entitled to receive, and shall be entitled to
rely upon, as conclusive proof of any fact or matter required to be
ascertained by it hereunder, a certificate, letter or other instrument
signed by an authorized officer of the Fund or any other person
authorized by the Fund's Board of Directors.
FUND ACCOUNTING shall be entitled to receive and act upon advice of
Counsel for the Fund at the reasonable expense of the Portfolio and
shall be without liability for any action taken or thing done in good
faith in reliance upon such advice.
FUND ACCOUNTING shall be entitled to receive, and may rely upon,
information received from the Transfer Agent.
2
<PAGE>
Section 5. Proper Instructions
"Proper Instructions" as used herein means any certificate, letter or
other instrument or telephone call reasonably believed by FUND
ACCOUNTING to be genuine and to have been properly made or signed by
any authorized officer of the Fund or person certified to FUND
ACCOUNTING as being authorized by the Board of Directors. The Fund, on
behalf of the Portfolio, shall cause oral instructions to be confirmed
in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices as from time
to time agreed to by an authorized officer of the Fund and FUND
ACCOUNTING.
The Fund, on behalf of the Portfolio, agrees to furnish to the
appropriate person(s) within FUND ACCOUNTING a copy of the Registration
Statement as in effect from time to time. FUND ACCOUNTING may
conclusively rely on the Fund's most recently delivered Registration
Statement for all purposes under this Agreement and shall not be liable
to the Portfolio or the Fund in acting in reliance thereon.
Section 6. Standard of Care
FUND ACCOUNTING shall exercise reasonable care and diligence in the
performance of its duties hereunder. The Fund agrees that FUND
ACCOUNTING shall not be liable under this Agreement for any error of
judgment or mistake of law made in good faith and consistent with the
foregoing standard of care, provided that nothing in this Agreement
shall be deemed to protect or purport to protect FUND ACCOUNTING
against any liability to the Fund, the Portfolio or its shareholders to
which FUND ACCOUNTING would otherwise be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties,
or by reason of its reckless disregard of its obligations and duties
hereunder.
Section 7. Compensation and FUND ACCOUNTING Expenses
FUND ACCOUNTING shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed
upon in writing by the two parties. FUND ACCOUNTING shall be entitled,
if agreed to by the Fund on behalf of the Portfolio, to recover its
reasonable telephone, courier or delivery service, and all other
reasonable out-of-pocket, expenses as incurred, including, without
limitation, reasonable attorneys fees and reasonable fees for pricing
services.
Section 8. Amendment and Termination
This Agreement shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by mutual agreement
of the parties hereto and may be terminated by an instrument in writing
delivered or mailed to the other party. Such termination shall take
effect not sooner than sixty (60) days after the date of delivery or
mailing of such notice of termination. Any termination date is to be no
earlier than four months from the effective date hereof. Upon
termination, FUND ACCOUNTING will turn over to the Fund or its designee
and cease to retain in FUND ACCOUNTING files, records of the
calculations of net asset value and all other records pertaining to its
services hereunder; provided, however, FUND ACCOUNTING in its
discretion may make and retain copies of any and all such records and
documents which it determines appropriate or for its protection.
3
<PAGE>
Section 9. Services Not Exclusive
FUND ACCOUNTING's services pursuant to this Agreement are not to be
deemed to be exclusive, and it is understood that FUND ACCOUNTING may
perform fund accounting services for others. In acting under this
Agreement, FUND ACCOUNTING shall be an independent contractor and not
an agent of the Fund or the Portfolio.
Section 10. Limitation of Liability for Claims
The Fund's Declaration of Trust, dated June 12, 1995, as amended to
date (the "Declaration"), a copy of which, together with all amendments
thereto, is on file in the Office of the Secretary of State of The
Commonwealth of Massachusetts, provides that the name "Zurich YieldWise
Funds" refers to the Trustees under the Declaration collectively as
trustees and not as individuals or personally, and that no shareholder
of the Fund or the Portfolio, or Trustee, officer, employee or agent of
the Fund shall be subject to claims against or obligations of the Trust
or of the Portfolio to any extent whatsoever, but that the Trust estate
only shall be liable.
FUND ACCOUNTING is expressly put on notice of the limitation of
liability as set forth in the Declaration and FUND ACCOUNTING agrees
that the obligations assumed by the Fund and/or the Portfolio under
this Agreement shall be limited in all cases to the Portfolio and its
assets, and FUND ACCOUNTING shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or the
Portfolio or any other series of the Fund, or from any Trustee,
officer, employee or agent of the Fund. FUND ACCOUNTING understands
that the rights and obligations of the Portfolio under the Declaration
are separate and distinct from those of any and all other series of the
Fund.
Section 10. Notices
Any notice shall be sufficiently given when delivered or mailed to the
other party at the address of such party set forth below or to such
other person or at such other address as such party may from time to
time specify in writing to the other party.
If to FUND ACCOUNTING: Scudder Fund Accounting Corporation
Two International Place
Boston, Massachusetts 02110
Attn: Vice President
If to the Fund - Portfolio: Zurich YieldWise Funds
222 South Riverside Plaza
Chicago, IL 60606
Attn: Secretary
Section 11. Miscellaneous
This Agreement may not be assigned by FUND ACCOUNTING without the
consent of the Fund as authorized or approved by resolution of its
Board of Directors.
In connection with the operation of this Agreement, the Fund and FUND
ACCOUNTING may agree from time to time on such provisions interpretive
of or in addition to the provisions of this Agreement as in their joint
opinions may be consistent with this Agreement. Any such
4
<PAGE>
interpretive or additional provisions shall be in writing, signed by
both parties and annexed hereto, but no such provisions shall be deemed
to be an amendment of this Agreement.
This Agreement shall be governed and construed in accordance with the
laws of The Commonwealth of Massachusetts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes any and all prior
understandings.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized and its seal to be
hereunder affixed as of the date first written above.
ZURICH YIELDWISE FUNDS, on behalf of Zurich
YieldWise Municipal Money Fund,
By:/s/Mark S. Casady
--------------------------------------------
President
SCUDDER FUND ACCOUNTING CORPORATION
By:/s/John R. Hebble
--------------------------------------------
Vice President
5
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" and "Independent Auditors and Reports to Shareholders" and to the
use of our report on the Zurich YieldWise Money Fund dated September 17, 1998 in
the Registration Statement (Form N-1A) of Zurich YieldWise Funds and its
incorporation by reference in the related Prospectus and statement of Additional
Information filed with the Securities and Exchange Commission in this
Post-Effective Amendment No. 4 to the Registration Statement under the
Securities Act of 1933 (File No. 333-21187) and in this Amendment No. 5 to the
Registration Statement under the Investment Company Act of 1940 (File No.
811-8047).
ERNST & YOUNG LLP
Chicago, Illinois
November 23, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1998
ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001026415
<NAME> ZURICH YIELDWISE MONEY FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 1,073,019
<INVESTMENTS-AT-VALUE> 1,073,019
<RECEIVABLES> 4,714
<ASSETS-OTHER> 106
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,077,839
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,111
<TOTAL-LIABILITIES> 6,111
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,071,728
<SHARES-COMMON-STOCK> 1,071,728
<SHARES-COMMON-PRIOR> 245,064
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,071,728
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 48,129
<OTHER-INCOME> 0
<EXPENSES-NET> (618)
<NET-INVESTMENT-INCOME> 47,511
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 47,511
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (47,511)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,705,314
<NUMBER-OF-SHARES-REDEEMED> (1,922,532)
<SHARES-REINVESTED> 43,882
<NET-CHANGE-IN-ASSETS> 826,664
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,751
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,538
<AVERAGE-NET-ASSETS> 843,216
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.06)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
