<PAGE> 1
[ZURICH LOGO]
Zurich YieldWise Funds
'99
Semiannual Report to Shareholders for the Period Ended January 31, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SUBJECT PAGE
- ------------------------------------------------------------------------
<S> <C>
FUND OBJECTIVE 1
- ------------------------------------------------------------------------
PERFORMANCE SUMMARY 2
- ------------------------------------------------------------------------
VARIABLES AFFECTING PERFORMANCE 5
- ------------------------------------------------------------------------
PERFORMANCE UPDATE 6
- ------------------------------------------------------------------------
TERMS TO KNOW 9
- ------------------------------------------------------------------------
PORTFOLIO COMPOSITION 10
- ------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 11
- ------------------------------------------------------------------------
FINANCIAL STATEMENTS 22
- ------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 29
- ------------------------------------------------------------------------
SPECIAL SHAREHOLDERS' MEETING 32
- ------------------------------------------------------------------------
</TABLE>
<PAGE> 3
FUND OBJECTIVE
Zurich YieldWise Funds (the "Trust") is an open-end, diversified, management
investment company offering a choice of three investment funds. Each 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. Like all money market funds, an investment in these funds is not
insured or guaranteed by the FDIC or any other government agency. Although money
funds seeks to preserve your investment at $1.00 per share, it is possible to
lose money.
ZURICH YIELDWISE MONEY FUND
This fund seeks maximum current income to the extent consistent with stability
of principal by investing primarily in commercial paper and bank obligations.
ZURICH YIELDWISE GOVERNMENT MONEY FUND
This fund seeks maximum current income to the extent consistent with stability
of principal by investing primarily in obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
ZURICH YIELDWISE MUNICIPAL MONEY FUND
This fund seeks maximum current income that is exempt from regular federal
income taxes to the extent consistent with stability of principal by investing
primarily in a portfolio of short-term, high quality tax-exempt municipal
securities.
--
1
<PAGE> 4
2
PERFORMANCE SUMMARY
ZURICH YIELDWISE MONEY FUND
YIELD COMPARISON
Zurich YieldWise Money Fund is compared to its IBC Financial Data
category -- The First Tier Money Fund Average which consists of all non-
institutional taxable money market funds investing in only First Tier (highest
rating) securities tracked by IBC Financial Data. Returns are historical and do
not guarantee future results, and will fluctuate.*
7-day yield is the annualized net investment income per share for the period
shown. Gains or losses are not included.
[PERFORMANCE GRAPH]
Fund Yield vs. First Tier Money Fund Average
Weekly 7-Day Average Yield
<TABLE>
<CAPTION>
FUND YIELD FIRST TIER MONEY FUND AVERAGE
---------- -----------------------------
<S> <C> <C>
8/4/98 5.57 5.04
5.53 5.03
5.55 5.04
5.53 5.03
5.47 5.04
5.51 5.02
5.45 5.04
5.47 5.01
5.43 4.99
5.39 4.95
5.38 4.87
5.25 4.82
5.21 4.74
5.20 4.77
5.17 4.72
5.17 4.70
5.18 4.64
5.12 4.67
5.12 4.63
5.15 4.65
5.15 4.64
5.22 4.62
5.18 4.66
5.09 4.57
5.04 4.54
1/26/99 4.98 4.46
</TABLE>
LIPPER RANKING
Lipper, Inc. Ranking is based upon changes in net asset value with all dividends
reinvested for the year ended 1/31/99. The ranking is historical and does not
guarantee future performance. The Lipper category used for comparison is the
Lipper Money Market Instrument Fund category.
[PERFORMANCE GRAPH]
LIPPER RANKING
<TABLE>
<S> <C> <C>
TOP 1% #3 of 311 Funds 1 Year
</TABLE>
* Performance reflects a partial fee waiver during this period which improved
results. Otherwise, the 7-day average yield would have been 4.88% on 1/26/99.
<PAGE> 5
3
ZURICH YIELDWISE GOVERNMENT MONEY FUND
YIELD COMPARISON
Zurich YieldWise Government Money Fund is compared to its IBC Financial Data
category -- The IBC Government Money Fund Average which consists of all
non-institutional government money market funds tracked by IBC Financial data.
Returns are historical, do not guarantee future results, and will fluctuate.*
7-day yield is the annualized net investment income per share for the period
shown. Gains or losses are not included.
[PERFORMANCE GRAPH]
Fund Yield vs. Government Money Fund Average
7-Day Average Yield on 1/26/99
<TABLE>
<CAPTION>
FUND YIELD GOVERNMENT MONEY FUND AVERAGE
---------- -----------------------------
<S> <C> <C>
1/26/99 5.01 4.25
</TABLE>
IBC RANKING
IBC Financial Data ranking is based upon average annualized net investment
income for the 7-day period ended as indicated. The IBC category used for
comparison is the IBC Government Money Fund category which consists of all
non-institutional government money market funds tracked by IBC Financial Data.
Ranking is historical and does not guarantee future results.
[PERFORMANCE GRAPH]
IBC RANKING
<TABLE>
<S> <C> <C>
AS OF
TOP FUND #1 OF 180 FUNDS 1/26/99
</TABLE>
* Performance reflects 100% fee waiver and expense absorption during this period
which improved results. Otherwise, the 7-day average yield would have been 4.42%
on 1/26/99.
<PAGE> 6
4
ZURICH YIELDWISE FUNDS PERFORMANCE SUMMARY, CONTINUED
ZURICH YIELDWISE MUNICIPAL MONEY FUND
YIELD COMPARISON
Zurich YieldWise Municipal Money Fund is compared to its IBC Financial Data
category -- The Tax-Free Money Fund Average which consists of all
non-institutional tax-free money market funds tracked by IBC Financial Data.
Returns are historical, do not guarantee future results, and will fluctuate.*
Income from Zurich YieldWise Municipal Money Fund may be subject to state and
local taxes and the alternative minimum tax.
7-day yield is the annualized net investment income per share for the period
shown. Gains or losses are not included.
[PERFORMANCE GRAPH]
Fund Yield vs. Tax-Free Money Fund Average
7-Day Average Yield on 1/25/99
<TABLE>
<CAPTION>
FUND YIELD TAX-FREE MONEY FUND AVERAGE
---------- ---------------------------
<S> <C> <C>
1/25/99 2.84 2.53
</TABLE>
IBC RANKING
IBC Financial Data ranking is based upon average annualized net investment
income for the 7-day period ended as indicated. The IBC category used for
comparison is the IBC Tax-Free Money Fund category which consists of all
non-institutional tax-free money market funds tracked by IBC Financial Data.
Ranking is historical and does not guarantee future results.
[PERFORMANCE GRAPH]
IBC RANKING
<TABLE>
<S> <C> <C>
As of
TOP 3% #4 OF 122 funds 1/26/99
</TABLE>
* Performance reflects 100% fee waiver and expense absorption during this period
which improved results. otherwise, the 7-day average yield would have been 2.25%
on 1/25/99.
<PAGE> 7
5
VARIABLES AFFECTING
PERFORMANCE
The investment manager invests in high-quality, short-term securities that are
consistent with each 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)
<PAGE> 8
6
PERFORMANCE UPDATE
AN INTERVIEW WITH PORTFOLIO MANAGER FRANK RACHWALSKI
[RACHWALSKI PHOTO] With three consecutive cuts in interest rates
during the last six months, the Federal Reserve
Board (the "Fed") had a big impact on money market
funds. Since yields will always move, with some
lag-time in the same direction as the Federal Funds
Rates, the six months covered in this report
(8/1/98 -- 1/31/99) proved to be challenging for
money market fund managers. Lead portfolio manager
Frank Rachwalski discusses market events and Zurich
YieldWise Funds' performance during this time
period.
---------------------------------------------------
FRANK RACHWALSKI IS A MANAGING DIRECTOR OF SCUDDER KEMPER INVESTMENTS, INC. AND
LEAD PORTFOLIO MANAGER OF ZURICH YIELDWISE FUNDS. MR. RACHWALSKI HOLDS A B.B.A.
AND AN M.B.A. DEGREE FROM LOYOLA UNIVERSITY.
Q FRANK, PRIOR TO THE INTEREST RATE CUTS STARTING IN SEPTEMBER 1998, THE
FED HAD LEFT INTEREST RATES UNCHANGED FOR OVER A YEAR. WITH A STABLE
U.S. ECONOMY AND LOW EXPECTATION OF INFLATION, WHAT PROMPTED THE FED TO
CHANGE COURSE IN THEIR POLICY?
-------------------------------------------------------------------------
A Several factors entered into the decision. The economic problems in Asia
that surfaced toward the end of 1997 continued with political leadership
in these countries unable to correct the situation. In addition,
economic problems in Russia and Latin America appeared. Eventually, the
financial turmoil overseas started to take its toll on the U.S. economy with the
stock market plunge in late August as investors fled to safer investments. In
fact, with foreign and domestic investors pouring money into U.S. Treasury
securities, the 30-Year Treasury bond was trading below the Fed Funds Rate for
the first time since 1989. The Fed needed to take action at this point to both
- --------------------------------------------------------------------------------
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.
<PAGE> 9
7
stabilize financial markets and provide some protection from slower economic
growth by lowering interest rates.
Q DID THIS MOVE WORK?
------------------------------------------------------------------------
A Yes, it did. You saw a quick recovery in the stock market and investor
concerns dissipated, which in turn brought the spread between long-term
rates for U.S. Treasuries and the Fed Funds Rate more in line.
Q HOW DID ALL THIS TURMOIL, INCLUDING THE THREE CONSECUTIVE CUTS IN
INTEREST RATES AFFECT THE ZURICH YIELDWISE FUNDS?
------------------------------------------------------------------------
A Invariably, the rate cuts affected the Funds. There is no way around it
because money market funds invest in shorter maturities, so when the
rates on short-term securities drop, the Funds' yields will follow.
Q FRANK, ZURICH YIELDWISE MONEY FUND HAS BEEN AROUND FOR OVER A YEAR BUT
WE JUST INTRODUCED ZURICH YIELDWISE GOVERNMENT MONEY FUND AND ZURICH
YIELDWISE MUNICIPAL MONEY FUND ON DECEMBER 1, 1998. WHAT WAS YOUR
INVESTMENT STRATEGY FOR THE FUNDS DURING THIS TIME, ESPECIALLY THE NEW FUNDS,
AND HOW DID THEY PERFORM GIVEN THIS MARKET CLIMATE?
------------------------------------------------------------------------
A With YieldWise Money Fund, we wanted to extend maturities at the
beginning of this period because we felt the Fed was going to lower
interest rates. But, with long-term issues unattractively priced, there
wasn't any reward in extending. However, when rates started getting more in
balance toward the end of the year, we selectively looked to extend, and when
Continued
<PAGE> 10
8
the market offered value for longer maturities, we took advantage of the
opportunity. I feel the Fund performed as it should in a period of volatility
and lowered interest rates. We faced a bigger challenge with YieldWise
Government and YieldWise Muni. Since these funds did not become effective until
the end of the year, we started building their portfolios after interest rates
dropped. However, I feel both funds performed well given the market climate in
which we started investing.
Q WHAT DO YOU SEE HAPPENING IN THE MARKETPLACE DURING THE NEXT SIX MONTHS
AND WHAT IS YOUR STRATEGY FOR THE FUTURE?
------------------------------------------------------------------------
A We see continued moderate growth without any increases in inflation. An
extended period of Fed neutrality -- where they leave interest rates
alone -- is anticipated. Based on this prediction, we're going to keep
the maturities of our investments in the neutral range -- between 25-30 days.
Our main goal is to search for value to ensure the consistent performance we
feel we have always provided our shareholders.
<PAGE> 11
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,
and therefore yield.
MATURITY Maturity is the time remaining before an issuer is
scheduled to repay the principal amount on a debt
security. Money market instruments are debt securities.
FEDERAL FUNDS
("FED FUNDS") Commercial banks are required to keep these funds on
deposit at the Federal Reserve Bank in their district.
In order to meet these reserve requirements,
occasionally commercial banks need to borrow funds.
These funds are borrowed from banks that have an excess
of the required amount on hand in what is called the
"Fed Funds Market". The interest rate on these loans is
called the "Fed Funds Rate" and is the key money market
rate which influences all other short-term rates.
U.S. TREASURIES These debt securities are issued by the U.S. Treasury
and include Treasury bills, Treasury bonds and Treasury
notes. They are considered to be the safest of all
securities. Their safety rests in the power of the U.S.
government to obtain tax revenues in order to repay its
obligations, and in its historical record of always
having done so.
<PAGE> 12
10
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
ZURICH YIELDWISE MONEY FUND On 1/31/99*
- ----------------------------------------------------------------------------
<S> <C> <C>
Commercial paper 86%
----------------------------------------------
Domestic CD's 10
----------------------------------------------
Foreign CD's 3
----------------------------------------------
U.S. Government agency notes 1
----------------------------------------------
[PIE CHART] 100%
----------------------------------------------
WEIGHTED AVERAGE MATURITY+
----------------------------------------------
Zurich YieldWise Money Fund 24 days
----------------------------------------------
First Tier Money Fund Average 64 days
- --------------------------------------------------------------------------------
ZURICH YIELDWISE GOVERNMENT MONEY FUND On 1/31/99*
- --------------------------------------------------------------------------------
Federal agencies 85%
----------------------------------------------
Repurchase agreements 15%
----------------------------------------------
100%
----------------------------------------------
[PIE CHART] WEIGHTED AVERAGE MATURITY+
----------------------------------------------
Zurich YieldWise Government
Money Fund 30 days
----------------------------------------------
Government Money Fund Average 50 days
- ----------------------------------------------------------------------------
ZURICH YIELDWISE MUNICIPAL MONEY FUND On 1/31/99*
- ----------------------------------------------------------------------------
Variable rate demand notes 75%
----------------------------------------------
Tax-exempt commercial paper 25%
----------------------------------------------
100%
[PIE CHART] ----------------------------------------------
WEIGHTED AVERAGE MATURITY+
----------------------------------------------
Zurich YieldWise Municipal
Money Fund 15 days
----------------------------------------------
Tax-Free Money Fund Average 41 days
</TABLE>
* Portfolio composition and holdings are subject to change.
+ The Funds are compared to their respective IBC Financial Data category: The
First Tier Money Fund Average consists of all non-institutional taxable money
market funds investing in only first tier (highest rating) securities and
tracked by IBC Financial Data; Government Money Fund Average includes all
non-institutional government money market funds tracked by IBC Financial Data;
Tax-Free Money Fund Average consists of all non-institutional tax-free money
market funds tracked by IBC Financial Data. Weighted average maturity for Zurich
YieldWise Money Fund and Zurich YieldWise Government Money Fund is as of
1/26/99, Zurich YieldWise Municipal Money Fund is as of 1/25/99.
<PAGE> 13
11
ZURICH YIELDWISE MONEY FUND
PORTFOLIO OF INVESTMENTS
January 31, 1999 (unaudited)
(value in thousands)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
CORPORATE OBLIGATIONS
-------------------------------------------------------------------------------
BANKING -- 3.2% RATE MATURITY VALUE
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Banco Real, S.A. 4.89% 4/1/99 $ 9,921
-------------------------------------------------------------------------------
Commonwealth Bank of
Australia 5.33% 2/26/99 4,982
-------------------------------------------------------------------------------
Merita N.A., Inc. 5.32% 2/10/99 9,987
-------------------------------------------------------------------------------
UBS Finance, Inc. 5.08% 4/19/99 9,893
-------------------------------------------------------------------------------
34,783
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
BUSINESS LOANS -- 18.5%
-------------------------------------------------------------------------------
Corporate Asset Funding Co. 5.38% - 5.43% 2/11/99 - 2/19/99 14,972
-------------------------------------------------------------------------------
Fairway Finance Corp. 4.88% 2/25/99 9,968
-------------------------------------------------------------------------------
International Securitization
Corp. 4.89% - 4.94% 2/1/99 - 3/15/99 24,923
-------------------------------------------------------------------------------
Intrepid Funding Master Trust 4.89% - 5.29% 2/26/99 - 3/11/99 24,884
-------------------------------------------------------------------------------
Lexington Parker Capital Co. 5.45% 3/17/99 9,935
-------------------------------------------------------------------------------
Mont Blanc Capital Corp. 4.87% - 4.92% 2/16/99 - 2/22/99 22,945
-------------------------------------------------------------------------------
Monte Rosa Capital Corp. 4.87% - 4.89% 3/5/99 - 3/19/99 19,895
-------------------------------------------------------------------------------
Preferred Receivables
Funding Corp. 4.88% 2/12/99 4,992
-------------------------------------------------------------------------------
Quincy Capital Corp. 5.45% 2/5/99 9,994
-------------------------------------------------------------------------------
Receivables Capital Corp. 4.89% - 5.33% 2/1/99 - 3/8/99 24,905
-------------------------------------------------------------------------------
Sheffield Receivables Corp. 4.88% - 4.89% 3/15/99 14,915
-------------------------------------------------------------------------------
Special Purpose Accounts
Receivable Cooperative 4.91% 3/24/99 9,931
-------------------------------------------------------------------------------
Wood Street Funding Corp. 4.92% 2/16/99 9,979
-------------------------------------------------------------------------------
202,238
</TABLE>
<PAGE> 14
12
ZURICH YIELDWISE MONEY FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
CAPITAL AND EQUIPMENT
LENDING -- 13.2% RATE MATURITY VALUE
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(a)American Honda Finance
Corp. 4.92% - 4.98% 2/24/99 - 2/26/99 $ 14,497
---------------------------------------------------------------------------------------------
Catepillar Financial Services
Corp. 5.33% 2/16/99 10,000
---------------------------------------------------------------------------------------------
Centric Capital Corp. 5.37% 2/4/99 9,996
---------------------------------------------------------------------------------------------
(a)Chrysler Financial Corp. 4.96% 2/17/99 25,003
---------------------------------------------------------------------------------------------
Enterprise Funding Corp. 4.86% - 5.37% 2/5/99 - 2/19/99 31,959
---------------------------------------------------------------------------------------------
Fountain Square
Commercial Funding 4.90% - 4.99% 2/16/99 - 3/4/99 14,952
---------------------------------------------------------------------------------------------
(a)John Deere Capital Corp. 5.25% 2/9/99 10,000
---------------------------------------------------------------------------------------------
Moat Funding, LLC 5.27% 3/22/99 9,929
---------------------------------------------------------------------------------------------
(a)Sigma Finance, Inc. 4.88% 2/1/99 18,000
---------------------------------------------------------------------------------------------
144,336
---------------------------------------------------------------------------------------------
CAPTIVE BUSINESS LENDING -- 7.3%
---------------------------------------------------------------------------------------------
British Gas Capital, Inc. 4.86% - 4.89% 2/9/99 - 2/10/99 34,959
---------------------------------------------------------------------------------------------
Duke Capital Corp. 4.87% 2/4/99 4,998
---------------------------------------------------------------------------------------------
(a)FINOVA Capital Corp. 5.29% 3/11/99 15,000
---------------------------------------------------------------------------------------------
California,
Oakland-Alameda
County Coliseum 4.90% 3/9/99 10,000
---------------------------------------------------------------------------------------------
Petrobras, International
Finance Co. 5.18% 3/26/99 14,887
---------------------------------------------------------------------------------------------
79,844
---------------------------------------------------------------------------------------------
CONSUMER LENDING -- 3.8%
---------------------------------------------------------------------------------------------
(a)Countrywide Home Loans 5.22% 4/27/99 10,000
---------------------------------------------------------------------------------------------
(a)(b)GMAC Mortgage
Corporation of
Pennsylvania 5.22% 2/1/99 12,000
---------------------------------------------------------------------------------------------
(a)Household Finance Corp. 4.84% 2/26/99 14,998
--------------------------------------------------------------------------------------------------
(a)Transamerica Finance Corp. 5.22% 4/22/99 5,000
--------------------------------------------------------------------------------------------------
41,998
</TABLE>
<PAGE> 15
13
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
CONSUMER PRODUCTS
AND SERVICES -- 1.8% RATE MATURITY VALUE
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Coca-Cola Enterprises, Inc. 4.89% - 5.19% 3/17/99 - 3/22/99 $ 19,871
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
DIVERSIFIED FINANCE -- 20.6%
-------------------------------------------------------------------------------
Alpine Securitization Corp. 4.88% - 4.92% 2/16/99 - 3/9/99 19,931
-------------------------------------------------------------------------------
Amsterdam Funding Corp. 4.89% - 4.99% 2/11/99 - 3/10/99 29,891
-------------------------------------------------------------------------------
Barton Capital Corp. 5.39% - 5.41% 2/9/99 - 2/26/99 19,951
-------------------------------------------------------------------------------
(a)CIT Group Holdings, Inc. 4.84% 2/1/99 4,999
-------------------------------------------------------------------------------
Commercial Credit Co. 5.21% 2/16/99 9,979
-------------------------------------------------------------------------------
CXC, Inc. 4.88%-5.43% 2/12/99 - 3/8/99 14,944
-------------------------------------------------------------------------------
Eureka Securitization, Inc. 4.88% 3/10/99 24,875
-------------------------------------------------------------------------------
General Electric Capital
Corp. 5.12% 3/12/99 24,863
-------------------------------------------------------------------------------
Heller Financial, Inc. 5.58% 2/26/99 24,905
-------------------------------------------------------------------------------
Norwest Financial Corp. 5.33% 3/1/99 9,959
-------------------------------------------------------------------------------
Thunder Bay Funding, Inc. 4.90% - 4.94% 2/8/99 - 3/4/99 19,932
-------------------------------------------------------------------------------
Twin Towers, Inc. 5.37% 2/22/99 4,985
-------------------------------------------------------------------------------
Variable Funding Capital
Corp. 4.91% 2/3/99 14,996
-------------------------------------------------------------------------------
224,210
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
FINANCIAL SERVICES -- 5.9%
-------------------------------------------------------------------------------
(a)Bear Stearns Cos., Inc. 4.93% - 5.69% 2/8/99 - 2/18/99 10,000
-------------------------------------------------------------------------------
(a)CS First Boston, Inc. 4.86% 2/1/99 10,000
-------------------------------------------------------------------------------
(a)Goldman Sachs
Group, L.P. 5.05% 2/8/99 10,000
-------------------------------------------------------------------------------
(a)Lehman Brothers
Holdings, Inc. 5.01% 2/22/99 10,000
-------------------------------------------------------------------------------
(a)Merrill Lynch & Co., Inc. 4.94% - 4.95% 2/16/99 - 2/22/99 25,000
-------------------------------------------------------------------------------
65,000
-------------------------------------------------------------------------------
</TABLE>
<PAGE> 16
ZURICH YIELDWISE MONEY FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
HEALTH CARE -- 2.8% RATE MATURITY VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Baxter International, Inc. 4.88% 2/18/99 - 3/15/99 $ 30,845
- -------------------------------------------------------------------------------------
UTILITIES -- 8.4%
- -------------------------------------------------------------------------------------
Texas, Brazos River Authority 5.30% 3/12/99 10,000
- -------------------------------------------------------------------------------------
California, Pollution Control
Revenue 5.40% 2/3/99 10,000
- -------------------------------------------------------------------------------------
Frontier Corp. 4.89% - 5.06% 2/9/99 - 3/29/99 31,437
- -------------------------------------------------------------------------------------
GTE Corp. 4.91% - 5.58% 2/3/99 - 2/16/99 40,958
- -------------------------------------------------------------------------------------
92,395
- -------------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS -- 85.5%
(AVERAGE MATURITY: 27 DAYS) 935,520
- -------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
BANK OBLIGATIONS
- -------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT AND BANK NOTES --
U.S. BANKS -- 9.6%
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
(a)Amex Centurian Bank 4.95% - 5.07% 2/8/99 - 2/16/99 15,001
----------------------------------------------------------------------------------
(a)Bankers Trust Co. 4.83% 2/1/99 14,998
----------------------------------------------------------------------------------
(a)FCC National Bank 4.80% 2/1/99 14,997
----------------------------------------------------------------------------------
(a)First National Bank
of Boston 4.89% 2/1/99 10,000
----------------------------------------------------------------------------------
(a)First Union National
Bank 5.42% 2/16/99 5,000
----------------------------------------------------------------------------------
(a)Huntington National
Bank 5.08% 2/5/99 14,997
----------------------------------------------------------------------------------
(a)Key Bank, N.A. 4.89% 2/26/99 9,997
----------------------------------------------------------------------------------
(a)J.P. Morgan & Co.,
Inc. 4.94% 2/8/99 9,997
----------------------------------------------------------------------------------
(a)Northern Trust Corp. 4.93% 2/8/99 9,996
----------------------------------------------------------------------------------
104,983
</TABLE>
--
14
<PAGE> 17
15
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT --
FOREIGN BANKS -- 3.6% RATE MATURITY VALUE
--------------------------------------------------------------------------
<S> <C> <C> <C>
(a)Abbey National, N.A. 4.82% 4/20/99 $ 9,995
--------------------------------------------------------------------------
(a)National Bank of Canada 5.00% 2/5/99 10,000
--------------------------------------------------------------------------
(a)Svenska Handelsbanken 4.96% 2/2/99 19,995
--------------------------------------------------------------------------
39,990
--------------------------------------------------------------------------
TOTAL BANK OBLIGATIONS -- 13.2%
(AVERAGE MATURITY: 11 DAYS) 144,973
--------------------------------------------------------------------------
--------------------------------------------------------------------------
U.S. GOVERNMENT
AGENCY NOTES -- 1.1%
--------------------------------------------------------------------------
(a)Federal National Mortgage
Association
(AVERAGE MATURITY: 4 DAYS) 4.44% 2/2/99 12,306
--------------------------------------------------------------------------
--------------------------------------------------------------------------
TOTAL INVESTMENTS -- 99.8%
(AVERAGE MATURITY: 25 DAYS) 1,092,799
--------------------------------------------------------------------------
CASH AND OTHER ASSETS, LESS LIABILITIES -- .2% 1,685
--------------------------------------------------------------------------
NET ASSETS -- 100% $1,094,484
</TABLE>
SEE ACCOMPANYING NOTES TO PORTFOLIOS OF INVESTMENTS.
<PAGE> 18
16
ZURICH YIELDWISE GOVERNMENT MONEY FUND
PORTFOLIO OF INVESTMENTS
January 31, 1999 (unaudited)
(value in thousands)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
SHORT-TERM NOTES RATE MATURITY VALUE
-------------------------------------------------------------------------
<S> <C> <C> <C>
(ISSUED OR GUARANTEED BY U.S. GOVERNMENT AGENCIES
OR INSTRUMENTALITIES)
-------------------------------------------------------------------------
Federal Farm Credit Banks 4.74% - 5.03% 2/2/99 - 3/29/99 $16,752
--------------------------------------------------------------------------
Federal Home Loan Bank 4.74% - 4.79% 2/9/99 - 2/26/99 6,109
--------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp. 4.70% - 4.80% 2/12/99 - 3/12/99 7,709
--------------------------------------------------------------------------
Federal National Mortgage
Association 4.70% - 5.00% 2/5/99 - 3/16/99 11,219
--------------------------------------------------------------------------
TOTAL SHORT-TERM NOTES -- 84.2%
(AVERAGE MATURITY: 25 DAYS) 41,789
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(C)REPURCHASE AGREEMENTS -- 15.1%
--------------------------------------------------------------------------
(DATED 1/99, COLLATERALIZED BY FEDERAL HOME LOAN MORTGAGE
CORPORATION AND FEDERAL NATIONAL MORTGAGE ASSOCIATION SECURITIES)
--------------------------------------------------------------------------
Morgan Stanley,
Dean Witter Co. 4.76% - 6.50% 2/19/99 - 3/29/99 7,500
(held at The Bank of New York)
(AVERAGE MATURITY: 32 DAYS)
--------------------------------------------------------------------------
TOTAL INVESTMENTS -- 99.3%
(AVERAGE MATURITY: 26 DAYS) 49,289
--------------------------------------------------------------------------
CASH AND OTHER ASSETS, LESS LIABILITIES -- .7% 340
--------------------------------------------------------------------------
NET ASSETS -- 100% $49,629
--------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO PORTFOLIOS OF INVESTMENTS.
<PAGE> 19
17
ZURICH YIELDWISE MUNICIPAL MONEY FUND
PORTFOLIO OF INVESTMENTS
January 31, 1999 (unaudited)
(value in thousands)
<TABLE>
<CAPTION>
----------------------------------------------------------------------
(A) VARIABLE RATE DEMAND SECURITIES
----------------------------------------------------------------------
ALABAMA RATE VALUE
<S> <C> <C>
----------------------------------------------------------------------
Phenix County,
Industrial Development Board 3.30% $ 100
----------------------------------------------------------------------
----------------------------------------------------------------------
North Alabama,
Environmental Improvement Authority 3.25% 300
----------------------------------------------------------------------
ARIZONA
----------------------------------------------------------------------
Apache County,
Industrial Development Authority 2.75% 500
----------------------------------------------------------------------
Maricopa County,
Pollution Control Revenue 3.20% 200
----------------------------------------------------------------------
CALIFORNIA
----------------------------------------------------------------------
Los Angeles,
Regional Airports Improvement Corp. 3.25% 200
----------------------------------------------------------------------
DISTRICT OF COLUMBIA
----------------------------------------------------------------------
General Obligation 3.30% 200
----------------------------------------------------------------------
FLORIDA
Citrus Park,
Community Development District 2.80% 300
----------------------------------------------------------------------
Dade County
Housing Finance Authority 2.65% 600
Water and Sewer System Revenue 2.65% 100
----------------------------------------------------------------------
Hillsborough County,
Industrial Development Authority 3.20% 600
----------------------------------------------------------------------
St. Lucie County,
Pollution Control Revenue 3.12% 500
----------------------------------------------------------------------
ILLINOIS
----------------------------------------------------------------------
Development Finance Authority 2.70% 100
----------------------------------------------------------------------
Educational Facilities Authority 2.70% 100
----------------------------------------------------------------------
Chicago,
O'Hare International Airport Revenue 3.02% 500
----------------------------------------------------------------------
INDIANA
----------------------------------------------------------------------
Jasper County,
Pollution Control Revenue 3.20% 700
</TABLE>
<PAGE> 20
18
ZURICH YIELDWISE MUNICIPAL MONEY FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
LOUISIANA RATE VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
Jefferson Parish,
Hospital Service District 2.75% $ 200
- ----------------------------------------------------------------------
MARYLAND
- ----------------------------------------------------------------------
Health and Higher Education
Facilities Authority 2.80% 100
- ----------------------------------------------------------------------
MICHIGAN
- ----------------------------------------------------------------------
Hospital Finance Authority 2.95% 200
- ----------------------------------------------------------------------
Strategic Fund,
Pollution Control Revenue 2.90% 200
- ----------------------------------------------------------------------
University of Michigan,
Hospital Revenue 3.20% 600
- ----------------------------------------------------------------------
NEW YORK
- ----------------------------------------------------------------------
Dormitory Authority Revenue 3.20% 700
- ----------------------------------------------------------------------
General Obligation 3.00% 400
- ----------------------------------------------------------------------
Babylon,
Industrial Development Agency 3.25% 300
- ----------------------------------------------------------------------
NORTH CAROLINA
- ----------------------------------------------------------------------
Raleigh-Durham,
Airport Authority 3.20% 300
- ----------------------------------------------------------------------
Wake County,
Industrial Financing Authority 2.70% 100
- ----------------------------------------------------------------------
OHIO
- ----------------------------------------------------------------------
Solid Waste Revenue 3.30% 600
- ----------------------------------------------------------------------
PENNSYLVANIA
- ----------------------------------------------------------------------
Delaware Valley,
Regional Finance Authority 2.70% 100
- ----------------------------------------------------------------------
Schuylkill County,
Industrial Development Authority 2.70% 100
- ----------------------------------------------------------------------
TENNESSEE
- ----------------------------------------------------------------------
Clarksville,
Public Building Authority 2.70% 200
</TABLE>
<PAGE> 21
19
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
TEXAS RATE VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
Brazos River Authority 3.30% $ 500
- ----------------------------------------------------------------------
Harris County,
Health Facilities Development Corp. 3.03% 900
- ----------------------------------------------------------------------
WISCONSIN
- ----------------------------------------------------------------------
Health and Educational Facilities
Authority 2.70% 100
- ----------------------------------------------------------------------
Eau Claire,
Solid Waste Disposal Revenue 2.85% 600
- ----------------------------------------------------------------------
Wausau,
Pollution Control Revenue 3.20% 600
- ----------------------------------------------------------------------
TOTAL VARIABLE RATE DEMAND SECURITIES -- 73.9%
(AVERAGE MATURITY: 3 DAYS) 11,800
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
OTHER SECURITIES
- ---------------------------------------------------------------------
COLORADO RATE MATURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Platte River
Power Authority 3.05% 3/10/99 100
- ---------------------------------------------------------------------
FLORIDA
- ---------------------------------------------------------------------
Pinellas,
City Education 3.00% 3/10/99 500
- ---------------------------------------------------------------------
ILLINOIS
- ---------------------------------------------------------------------
Educational Facilities
Authority 3.10% 3/11/99 100
- ---------------------------------------------------------------------
Health Facilities Authority 3.05% 5/13/99 200
- ---------------------------------------------------------------------
INDIANA
- ---------------------------------------------------------------------
Sullivan,
Pollution Control Revenue 3.00% 3/9/99 500
- ---------------------------------------------------------------------
KENTUCKY
- ---------------------------------------------------------------------
Danville,
Multi-City Lease Revenue 2.75% 5/12/99 400
- ---------------------------------------------------------------------
Pendleton County,
Multi-County Lease Revenue 2.50% - 2.95% 3/9/99 500
</TABLE>
<PAGE> 22
20
ZURICH YIELDWISE MUNICIPAL MONEY FUND PORTFOLIO OF INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
(value in thousands)
- --------------------------------------------------------------------------
MARYLAND RATE MATURITY VALUE
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Anne Arundel County,
Port Facilities Revenue 3.00% 3/18/99 $ 300
- --------------------------------------------------------------------------
NEW YORK
- --------------------------------------------------------------------------
Nassau County,
Tax Anticipation Note 3.50% 3/18/99 100
- --------------------------------------------------------------------------
TEXAS
- --------------------------------------------------------------------------
Brazos River Authority 3.00% 3/10/99 500
- --------------------------------------------------------------------------
Calhoun County,
Industrial Development Authority 3.05% 2/23/99 100
- --------------------------------------------------------------------------
Texas A&M University 3.00% - 3.05% 3/8/99 - 3/11/99 300
- --------------------------------------------------------------------------
VIRGINIA
- --------------------------------------------------------------------------
Chesterfield County,
Industrial Development Authority 2.75% 5/12/99 300
- --------------------------------------------------------------------------
Louisa,
Industrial Development Authority 3.15% 3/12/99 100
- --------------------------------------------------------------------------
TOTAL OTHER SECURITIES -- 25.0%
(AVERAGE MATURITY: 56 DAYS) 4,000
- --------------------------------------------------------------------------
TOTAL INVESTMENTS -- 98.9%
(AVERAGE MATURITY: 17 DAYS) 15,800
- --------------------------------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES -- 1.1% 170
- --------------------------------------------------------------------------
NET ASSETS -- 100% $ 15,970
</TABLE>
SEE ACCOMPANYING NOTES TO PORTFOLIOS OF INVESTMENTS.
<PAGE> 23
21
NOTES TO
PORTFOLIOS 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 January
31, 1999. The dates shown represent the demand date or the next interest
rate change date. Securities in the Zurich YieldWise Municipal Money Fund
shown without a date are payable within five business days and are backed by
credit support agreements from banks or insurance institutions.
(b) Illiquid securities. At January 31, 1999, the aggregate value of illiquid
securities was $12,000,000 in the Zurich YieldWise Money Market Fund, which
represented 1.1% of net assets.
(c) Repurchase agreements are fully collateralized by U.S. Government or U.S.
Government agency securities. All collateral is held at the Funds' custodian
bank, Investors Fiduciary Trust Company, or at subcustodian banks, as
indicated. The collateral is monitored daily by the Funds so that its market
value exceeds the carrying value of the repurchase agreement.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE> 24
22
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1999 (in thousands) (unaudited)
- -----------------------------------------------------------------------
ASSETS MONEY MARKET GOVERNMENT MUNICIPAL
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Investments, at amortized cost:
Short-term securities $1,092,799 41,789 15,800
- -----------------------------------------------------------------------
Repurchase agreements -- 7,500 --
- -----------------------------------------------------------------------
Cash 1,918 365 138
- -----------------------------------------------------------------------
Interest receivable 1,710 10 39
- -----------------------------------------------------------------------
TOTAL ASSETS 1,096,427 49,664 15,977
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
LIABILITIES AND NET ASSETS
- -----------------------------------------------------------------------
Payable for:
Dividends 860 35 7
- -----------------------------------------------------------------------
Management fee 658 -- --
- -----------------------------------------------------------------------
Custodian and transfer
agent fees and related
expenses 76 -- --
- -----------------------------------------------------------------------
Trustees' fees and other 349 -- --
- -----------------------------------------------------------------------
TOTAL LIABILITIES 1,943 35 7
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
NET ASSETS APPLICABLE TO
SHARES OUTSTANDING $1,094,484 49,629 15,970
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
THE PRICING OF SHARES
- -----------------------------------------------------------------------
Shares outstanding 1,094,484 49,629 15,970
- -----------------------------------------------------------------------
Net asset value and
redemption price per share $1.00 1.00 1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE> 25
23
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------
For the period ended January 31, 1999 (in thousands) (unaudited)
- --------------------------------------------------------------------
NET INVESTMENT INCOME MONEY MARKET GOVERNMENT(A) MUNICIPAL(A)
- --------------------------------------------------------------------
<S> <C> <C> <C>
Interest income $30,286 149 30
- --------------------------------------------------------------------
Expenses:
Management fee 2,187 14 5
- --------------------------------------------------------------------
Custodian and
transfer agent fees
and related expenses 150 1 1
- --------------------------------------------------------------------
Reports to
shareholders 15 1 --
- --------------------------------------------------------------------
Registration costs -- -- --
- --------------------------------------------------------------------
Professional fees 4 -- --
- --------------------------------------------------------------------
Trustees' fees and
other 36 -- --
- --------------------------------------------------------------------
Total expenses
before expense
waiver and
absorption 2,392 16 6
- --------------------------------------------------------------------
Less expenses waived and
absorbed by the
investment manager (542) (16) (6)
- --------------------------------------------------------------------
Total expenses absorbed
by the Fund 1,850 -- --
- --------------------------------------------------------------------
Net investment income $28,436 149 30
</TABLE>
(a) For the period from December 1, 1998 (commencement of operations) to
January 31, 1999.
<PAGE> 26
24
ZURICH YIELDWISE FUNDS FINANCIAL STATEMENTS, CONTINUED
- ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------
<TABLE>
<CAPTION>
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY
- ------------------------------------------------------
<S> <C>
Net investment income
- ------------------------------------------------------
Dividends to shareholders from net investment income
- ------------------------------------------------------
Capital share transactions
(dollar amounts and number of shares are the same):
Shares sold
- ------------------------------------------------------
Shares issued in reinvestment of dividends
- ------------------------------------------------------
- ------------------------------------------------------
Shares redeemed
- ------------------------------------------------------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS AND TOTAL
INCREASE IN NET ASSETS
- ------------------------------------------------------
NET ASSETS
- ------------------------------------------------------
Beginning of period
- ------------------------------------------------------
END OF PERIOD
</TABLE>
(a) Commencement of operations.
<PAGE> 27
25
<TABLE>
<CAPTION>
- --------------------------------------------------------
MONEY MARKET GOVERNMENT MUNICIPAL
- --------------------------------------------------------
SIX MONTHS DECEMBER 1, DECEMBER 1,
ENDED YEAR 1998(A) TO 1998(A) TO
JANUARY 31, ENDED JANUARY 31, JANUARY 31,
1999 JULY 31, 1999 1999
(UNAUDITED) 1998 (UNAUDITED) (UNAUDITED)
- --------------------------------------------------------
<S> <C> <C> <C>
$ 28,436 47,511 149 30
- --------------------------------------------------------
(28,436) (47,511) (149) (30)
- --------------------------------------------------------
694,612 2,705,314 51,528 16,013
- --------------------------------------------------------
27,643 43,882 112 23
- --------------------------------------------------------
722,255 2,749,196 51,640 16,036
- --------------------------------------------------------
(699,499) (1,922,532) (2,011) (66)
- --------------------------------------------------------
22,756 826,664 49,629 15,970
- --------------------------------------------------------
- --------------------------------------------------------
1,071,728 245,064 -- --
- --------------------------------------------------------
$1,094,484 1,071,728 49,629 15,970
</TABLE>
<PAGE> 28
26
NOTES TO
FINANCIAL STATEMENTS
1. DESCRIPTION OF THE FUND
Zurich YieldWise Money Funds (the Trust) is an open-end management investment
company organized as a business trust under the laws of Massachusetts currently
offering three investment funds ("Funds"). Zurich YieldWise Money Market Fund
invests primarily in short-term high quality obligations of major banks and
corporations. Zurich YieldWise Government Money Fund invests exclusively in
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and repurchase agreements thereon. Zurich YieldWise Municipal
Money Fund invests in short-term high quality municipal securities.
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 a 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.
EXPENSES. Expenses arising in connection with a fund are allocated to that fund.
Other Trust expenses are allocated among the Funds in proportion to their
relative net assets.
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, each 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 for Zurich
YieldWise Money Market Fund and Zurich YieldWise Government Money Fund and at
11:00 a.m. and 3:00 p.m. Central time for Zurich YieldWise Municipal Money Fund.
Each fund declares a daily dividend, equal
<PAGE> 29
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. Each 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, each fund paid no federal income taxes and no federal
income tax provision was required.
3. TRANSACTIONS WITH AFFILIATES
MANAGEMENT AGREEMENT. Each 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 six months ended January 31, 1999, the Funds incurred an
aggregate management fee of $1,645,000 after a fee waiver by Scudder Kemper.
ZURICH/B.A.T MERGER. On September 7, 1998, Zurich Insurance Company (Zurich),
majority owner of Scudder Kemper, entered into an agreement with B.A.T
Industries p.l.c. (B.A.T) pursuant to which the financial services businesses of
B.A.T were combined with Zurich's businesses to form a new global insurance and
financial services company known as Zurich Financial Services. Upon consummation
of the transaction, the investment management agreement for the Zurich YieldWise
Money Fund with Scudder Kemper was deemed to have been assigned and, therefore,
terminated. The Board of Trustees of the Trust has approved a new investment
management agreement for that Fund with Scudder Kemper, which is substantially
identical to the former investment management agreement, except for the dates of
execution and termination. Shareholders of the Zurich YieldWise Money Fund
approved the new investment management agreement through a proxy solicitation
that concluded in mid-December.
SHAREHOLDER SERVICES AGREEMENT. Pursuant to a services agreement with the Funds'
transfer agent, Kemper Service Company (KSvC) is the shareholder service agent
of the Trust. Under the agreement, KSvC received shareholder services fees of
$97,000 for the six months ended January 31, 1999.
<PAGE> 30
28
OFFICERS AND TRUSTEES. Certain officers or trustees of the Trust are also
officers or directors of Scudder Kemper. During the six months ended January 31,
1999, the Trust made no payments to its officers and incurred trustees' fees of
$19,000 to independent trustees.
EXPENSE ABSORPTION. Scudder Kemper has agreed to temporarily waive its
management fee and reimburse or pay operating expenses of each fund as follows:
for Zurich YieldWise Money Market Fund, to the extent necessary to maintain the
Fund's total operating expenses at no more than .45% until January 1, 2000; for
Zurich YieldWise Government Money Fund, to the extent necessary to maintain the
Fund's total operating expenses at no more than .10% through at least June 1,
1999, thereafter, to the extent necessary to maintain the Fund's total operating
expenses at no more than .34% until June 1, 2000; for Zurich YieldWise Municipal
Money Fund, 100% of expenses will be waived and absorbed until June 1, 1999,
thereafter, to the extent necessary to maintain the Fund's total operating
expenses at no more than .34% until June 1, 2000. For the six months ended
January 31, 1999, Scudder Kemper absorbed expenses of $564,000.
<PAGE> 31
29
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
ZURICH YIELDWISE MONEY MARKET FUND
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
SIX MONTHS
ENDED APRIL 17,
JANUARY 31, YEAR ENDED 1997(A)
1999 JULY 31, TO JULY
PER SHARE OPERATING PERFORMANCE (UNAUDITED) 1998 31, 1997
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 1.00 1.00 1.00
- --------------------------------------------------------------------------------------
Net investment income .03 .06 .02
- --------------------------------------------------------------------------------------
Less dividends declared .03 .06 .02
- --------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00 1.00
- --------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 2.62% 5.81 1.69
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- --------------------------------------------------------------------------------------
Expenses .33% .07 --
- --------------------------------------------------------------------------------------
Net investment income 5.13% 5.63 5.66
- --------------------------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- --------------------------------------------------------------------------------------
Expenses .43% .44 .60
- --------------------------------------------------------------------------------
Net investment income 5.03% 5.26 5.06
- --------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $1,094,484 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, 2000. The Other Ratios to
Average Net Assets are computed without these expense waivers.
<PAGE> 32
30
FINANCIAL HIGHLIGHTS
ZURICH YIELDWISE GOVERNMENT MONEY FUND
<TABLE>
<CAPTION>
DECEMBER 1,
1998(A) TO
JANUARY 31,
1999
PER SHARE OPERATING PERFORMANCE (UNAUDITED)
--------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $1.00
--------------------------------------------------------------------
Net investment income .01
--------------------------------------------------------------------
Less dividends declared .01
--------------------------------------------------------------------
Net asset value, end of period $1.00
--------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) .86%
--------------------------------------------------------------------
--------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
--------------------------------------------------------------------
Expenses --
--------------------------------------------------------------------
Net investment income 5.36%
--------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
--------------------------------------------------------------------
Expenses .59%
--------------------------------------------------------------------
Net investment income 4.77%
--------------------------------------------------------------------
SUPPLEMENTAL DATA
--------------------------------------------------------------------
Net assets at end of period (in thousands) $49,629
</TABLE>
(a) Commencement of operations.
Note: Scudder Kemper has agreed to temporarily waive its management fee and
absorb certain operating expenses of the Fund to the extent necessary to
maintain the Fund's total operating expenses at no more than .10% through at
least June 1, 1999, thereafter, to the extent necessary to maintain the Fund's
total operating expenses at no more than .34% until June 1, 2000. The Other
Ratios to Average Net Assets are computed without these expense waivers.
<PAGE> 33
31
FINANCIAL HIGHLIGHTS
ZURICH YIELDWISE MUNICIPAL MONEY FUND
<TABLE>
<CAPTION>
DECEMBER 1,
1998(A) TO
JANUARY 31,
1999
PER SHARE OPERATING PERFORMANCE (UNAUDITED)
-------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $1.00
-------------------------------------------------------------------
Net investment income .01
-------------------------------------------------------------------
Less dividends declared .01
-------------------------------------------------------------------
Net asset value, end of period $1.00
-------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) .52%
-------------------------------------------------------------------
-------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
-------------------------------------------------------------------
Expenses --
-------------------------------------------------------------------
Net investment income 3.14%
-------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
-------------------------------------------------------------------
Expenses .59%
-------------------------------------------------------------------
Net investment income 2.55%
-------------------------------------------------------------------
SUPPLEMENTAL DATA
-------------------------------------------------------------------
Net assets at end of period (in thousands) $15,970
</TABLE>
(a) Commencement of operations.
Note: Scudder Kemper has agreed to temporarily waive its management fee and
absorb all operating expenses of the Fund through June 1, 1999, thereafter, to
the extent necessary to maintain the Fund's total operating expenses at no more
than .34% until June 1, 2000. The Other Ratios to Average Net Assets are
computed without these expense waivers.
<PAGE> 34
32
SPECIAL SHAREHOLDERS'
MEETING
ZURICH YIELDWISE MONEY FUND
On December 17, 1998, a special shareholders' meeting was held. Zurich YieldWise
Money Fund shareholders were asked to vote on two separate issues: approval of
the new Investment Agreement between the Fund and Scudder Kemper Investments,
Inc. and to modify or eliminate certain policies and to eliminate the
shareholder approval requirements as to certain other matters. The following are
the results.
1) APPROVAL OF THE NEW INVESTMENT AGREEMENT BETWEEN THE FUND AND SCUDDER KEMPER
INVESTMENTS, INC. THIS ITEM WAS APPROVED.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
YieldWise Money Fund 520,798,140 47,615,546 22,820,519
</TABLE>
2) TO MODIFY OR ELIMINATE CERTAIN POLICIES AND TO ELIMINATE THE SHAREHOLDER
APPROVAL REQUIREMENT AS TO CERTAIN OTHER MATTERS. THESE ITEMS WERE APPROVED.
INVESTMENT OBJECTIVES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 479,520,525 65,678,630 41,538,163 4,496,887
</TABLE>
INVESTMENT POLICIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 480,623,921 63,785,019 42,328,376 4,496,887
</TABLE>
DIVERSIFICATION
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 481,280,747 63,128,194 42,328,377 4,496,887
</TABLE>
BORROWING
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 479,784,680 64,624,260 42,328,376 4,496,887
</TABLE>
SENIOR SECURITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 481,488,746 62,920,195 42,328,377 4,496,887
</TABLE>
<PAGE> 35
33
CONCENTRATION
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 480,971,600 63,437,341 42,328,376 4,496,887
</TABLE>
UNDERWRITING OF SECURITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 479,909,878 64,499,062 42,328,377 4,496,887
</TABLE>
INVESTMENT IN REAL ESTATE
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 478,614,831 65,794,110 42,328,377 4,496,887
</TABLE>
PURCHASE OF COMMODITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 479,686,143 64,722,798 42,328,377 4,496,887
</TABLE>
LENDING
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 478,686,587 65,722,353 42,328,377 4,496,887
</TABLE>
MARGIN PURCHASES AND SHORT SALES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 475,314,532 69,094,409 42,328,377 4,496,887
</TABLE>
PURCHASES OF SECURITIES OF RELATED ISSUERS
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 480,508,874 63,900,067 42,328,377 4,496,887
</TABLE>
RESTRICTED AND ILLIQUID SECURITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 477,587,455 66,691,221 42,458,640 4,496,887
</TABLE>
PURCHASES OF SECURITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 480,421,020 63,857,657 42,458,640 4,496,887
</TABLE>
<PAGE> 36
34
ZURICH YIELDWISE MONEY FUNDS ANNUAL SHAREHOLDERS' MEETING SUMMARY, CONTINUED
PURCHASES OF OPTIONS AND WARRANTS
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 478,351,111 66,057,829 42,328,376 4,496,887
</TABLE>
INVESTMENT FOR THE PURPOSE OF EXERCISING CONTROL OR MANAGEMENT
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 478,863,573 65,415,104 42,458,640 4,496,887
</TABLE>
INVESTMENT IN MINERAL EXPLORATION
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 476,144,580 68,134,096 42,458,640 4,496,887
</TABLE>
INVESTMENT IN ISSUERS WITH SHORT HISTORIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 476,885,927 67,392,750 42,458,640 4,496,887
</TABLE>
INVESTMENT IN OTHER INVESTMENT COMPANIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 478,997,581 65,281,096 42,458,640 4,496,887
</TABLE>
INVESTMENT OTHER THAN IN ACCORDANCE WITH OBJECTIVE AND POLICIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
<S> <C> <C> <C> <C>
YieldWise Money Fund 476,006,764 68,271,913 42,458,640 4,496,887
</TABLE>
<PAGE> 37
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<PAGE> 38
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<PAGE> 39
<PAGE> 40
TRUSTEES AND OFFICERS
TRUSTEES OFFICERS
DANIEL PIERCE MARK S. CASADY
Chairman and Trustee President
LEWIS A. BURNHAM PHILIP J. COLLORA
Trustee Vice President and
Secretary
DONALD L. DUNAWAY
Trustee ANN M. MCCREARY
Vice President
ROBERT B. HOFFMAN
Trustee ROBERT C. PECK, JR.
Vice President
DONALD R. JONES
Trustee KATHRYN L. QUIRK
Vice President
THOMAS W. LITTAUER
Trustee and Vice President FRANK J. RACHWALSKI, JR.
Vice President
SHIRLEY D. PETERSON
Director LINDA J. WONDRACK
Vice President
WILLIAM P. SOMMERS
Trustee
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 KEMPER SERVICE COMPANY
AGENT P.O. Box 419066
Kansas City, MO 64141-6066
- --------------------------------------------------------------------------------
CUSTODIAN AND TRANSFER INVESTORS FIDUCIARY TRUST COMPANY
AGENT 801 Pennsylvania
Kansas City, MO 64105
- --------------------------------------------------------------------------------
This report must be preceded
or accompanied by a Zurich YieldWise
Funds prospectus.
[RECYCLE LOGO]
Printed in the U.S.A. on recycled paper.
[ZURICH LOGO]
ZYF-3 (3/99) 1069540 Telephone: 1-888-ZURICH-1(987-4241)
