DEUTSCHE FUNDS INC, 485BPOS, 1999-12-30

DEUTSCHE FUNDS INC
485BPOS, 1999-12-30

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1933 Act File No. 333-7008
1940 Act File No. 811-8227

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
------

Pre-Effective Amendment No.

Post-Effective Amendment No. 6 X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
------

Amendment No. 12 X

DEUTSCHE FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)

5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010

(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

Victor R. Siclari, Esquire
Federated Investors Tower

1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
X on December 31, 1999 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(i) on _______________
pursuant to paragraph (a)(i) 75 days after filing pursuant to paragraph
(a)(ii) on _________________ pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Copies To:

John T. Bostelman, Esquire
Sullivan & Cromwell
125 Broad Street
New York, New York 10004

410

[LOGO OF FLAG INVESTORS]

Investing With A Difference(R)

Top 50 World

(formerly Deutsche Top 50 World)
Class A Shares and Class B Shares

Prospectus -- December 31, 1999

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

The Fund's objective is high capital appreciation, and as a secondary objective,
reasonable dividend income.

A series of Flag Investors Funds, Inc. (formerly Deutsche Funds, Inc.), an
open-end management investment company.

The Fund offers Shares through investment professionals (securities dealers and
through financial institutions that act as shareholder servicing agents). You
may also buy Shares through the Fund's Transfer Agent. This Prospectus describes
Class A Shares and Class B Shares of the Fund. These separate classes give you a
choice as to sales charges and Fund expenses.

TABLE OF CONTENTS

<S> <C>
Investment Objective, Strategies, Performance and Risk.. 1
What are the Fund's Fees and Expenses?.................. 3
What are the Fund's Investment Strategies?.............. 4
What are the Principal Securities in
Which the Fund Invests?................................. 4
What are the Specific Risks of Investing
in the Fund?............................................ 5
What do Shares Cost?.................................... 6
How is the Fund Sold?................................... 9
How to Purchase Shares.................................. 9
How to Redeem and Exchange Shares....................... 11
Account and Share Information........................... 13
Who Manages the Fund?................................... 13
Financial Information................................... 15
Flag Investors Funds, Inc.
</TABLE>

Flag Investors Funds, Inc.
5800 Corporate Drive
Pittsburgh, PA 15237-7010

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

As with all mutual funds, the Securities and Exchange Commission (SEC) has
not approved or disapproved these securities or passed upon the adequacy of
this prospectus, and any representation to the contrary is a criminal offense.

INVESTMENT OBJECTIVE, STRATEGIES, PERFORMANCE AND RISK
- --------------------------------------------------------------------------------

What is the Fund's Objective and Principal Investment Strategy?

The Fund is part of a series of Flag Investors Funds, Inc. The Fund invests
all of its assets in a corresponding portfolio of Flag Investors Portfolios
Trust (formerly Deutsche Portfolios), with identical investment objectives and
policies through a Hub and Spoke(R) (master-feeder) investment fund structure.
Therefore, all discussions in the prospectus regarding investments relates to
the Fund and its corresponding Portfolio. For a table of the Fund and its
corresponding Portfolio, see "Organization" in the Fund's Statement of
Additional Information. The Fund does not represent a complete investment
program, and may not be suitable for all investors.

Investment Objective: The investment objective of the Fund is high capital
appreciation, and as a secondary objective, reasonable dividend income.

The Fund generally owns equity securities of 50 companies. The portfolio
manager selects companies considered to be of outstanding quality in their
particular field based on some or all of the following attributes:

. strong market position within its market;

. profitability, predictability and duration of earnings growth, reflected
in sound balance sheet ratios and financial statements;

. high quality management with an orientation toward strong, long-term
earnings;

. long-range strategic plans in place;

. generally publicly-held with broad distribution of financial information
related to its operations.

Strategy: The Fund invests at least 65% of its total assets in equity securities
(primarily common and preferred stock) with significant emphasis on North
America, Europe and Asia. The Fund seeks international diversification, although
there is no specific percentage limit on investments in a single country.

The Fund invests in companies with a strong market position that are globally
competitive, have outstanding growth potential and offer above-average
opportunities to take advantage of one or more of the following global future
trends ("megatrends"):

. strong population growth in emerging markets;

. aging population in industrialized nations, leading to growing demands
for the products and services of healthcare and related industries;

. transition to an information and communications society;

. growing demand for brand names; growing oil/energy consumption worldwide.

What are the Main Risks of Investing in the Fund?

All mutual funds take investment risks. Therefore, it is possible to lose
money by investing in the Fund. The primary factors that may reduce the Fund's
returns are listed below.

Investments in the Fund entails the following risks:

. Stock market risks -- the value of securities rise and fall;

. Sector risks -- the possibility that certain sectors may underperform other
sectors or the market as a whole;

. Liquidity risks -- the foreign securities in which the Fund invests may
trade infrequently and may be subject to greater fluctuation in price than
other securities;

. Currency risks -- fluctuations in the exchange rate between the U.S. dollar
and foreign currencies;

. Risks of investing in specific regions -- the Fund may invest a significant
portion of its assets in a particular foreign country or geographic region,
which makes the Fund subject to greater currency risk and more susceptible
to adverse impact from actions of foreign governments;

. Risks of foreign investing -- the foreign markets in which the Fund invests
may be subject to different economic or political conditions from those of
the United States and may lack financial reporting standards or regulatory
requirements compared to those applicable to U.S. companies;

. Risks of investing in emerging market countries -- prices of emerging
market securities in which the Fund invests can be significantly more
volatile than prices of securities in developed countries; and

. Risks of non-diversification -- as a non-diversified Fund, the Fund is
allowed to invest a higher percentage of its assets among fewer issuers of
portfolio securities than diversified Funds. This increases the Fund's
risks by magnifying the impact (positively or negatively) that any one
issuer has on the Fund's share price and performance. Despite this ability
to invest in fewer issuers, the Fund generally attempts to maintain
exposure to a broad number of issuers.

The Fund cannot guarantee that it will achieve its investment objective.

The Shares of the Fund offered by this prospectus are not deposits or
obligations of any bank, are not endorsed or guaranteed by any bank and are not
insured or guaranteed by the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other government agency.

Risk/Return Bar Chart and Table

The following unaudited performance information gives you an indication of the
risks of investing in the Fund by comparing its performance with a broad measure
of market performance. Past performance of the Fund does not necessarily predict
future performance. For more current performance information, call
1-888-433-6385.

Bar Chart. The bar chart represents the 1998 calendar year performance of
Class A Shares of the Fund (which is the share class with the longest operating
history). The bar chart does not reflect the maximum sales charge imposed on
Class A Shares. If these charges or fees had been included, the return would
have been lower. Following the bar chart is the year-to-date performance of the
Fund's Class A Shares through the most recent calendar quarter, again without
reflecting any applicable sales charge imposed on Class A Shares. Also provided
is the best and worst 1998 calendar quarter performance for Class A Shares.

Total Return. The Average Annual Total Return for Class A Shares of the Fund
is compared to an appropriate broad-based securities market index for the
calendar year ended December 31, 1998. Unlike the performance information shown
in the bar chart, the Fund's total return figures reflect the maximum sales
charges that could apply. The market indices are unmanaged and are not adjusted
for any sales charges, expenses or other fees the SEC requires to be reflected
in the Fund's performance. You cannot invest directly in an index.

Class A Shares

Annual Total Return (calendar year-end 1998)

[Graphic representation omitted. See Appendix A.1.]

The Fund's Class A Shares total return from January 1, 1999 to September 30,
1999 was 9.41%.

<TABLE>
<S> <C> <C>
Best quarter (4Q98) 23.20%
Worst quarter (3Q98) -11.89%
</TABLE>

Average Annual Total Return*
(for the periods ended December 31, 1998)

<TABLE>
<CAPTION>
Since Start of
1 Year Performance**
- ---------------------------------------------------------------------------
<S> <C> <C>
Class A Shares 20.64% 14.73%
- ---------------------------------------------------------------------------
MSCI World Index 24.34% 21.28%
- ---------------------------------------------------------------------------
</TABLE>

* The table shows the Fund's total returns averaged over a period of years
relative to the MSCI World Index, a broad-based market index of foreign
equity securities.

** Class A Shares: October 2, 1997

WHAT ARE THE FUND'S FEES AND EXPENSES?
- --------------------------------------------------------------------------------

This table describes the fees and expenses of the Fund including those of the
corresponding Portfolio that you may pay if you buy and hold Class A Shares or
Class B Shares of the Fund.

<TABLE>
<CAPTION>
Class
A Class B

- ------- -------
<S>
<C> <C>
Shareholder Fees:
(fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)..................
5.50% None
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption
proceeds, whichever is lower).......................................................................
0.00%* 5.00%**
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions)
(as a percentage of offering price).................................................................
None None
Redemption Fee (as a percentage of amount redeemed, if applicable)....................................
None None
Exchange Fee..........................................................................................
None None

Annual Fund Operating Expenses:
(expenses that are deducted from Fund assets) (as a percentage of average net assets)
Management Fee........................................................................................
1.00% 1.00%
Distribution and/or Service (12b-1) Fees..............................................................
0.25% 1.00%
Other Expenses........................................................................................
9.31% 10.29%
Total Annual Fund Operating Expenses (before fee waivers and expense reimbursements)..................
10.56% 12.29%
Total Reimbursements of Fund Expenses.................................................................
8.96% 9.94%
Total Net Annual Fund Operating Expenses (after fee waivers and expense reimbursements)***............
1.60% 2.35%
</TABLE>

- --------------------

* A maximum 1% contingent deferred sales charge may be imposed on redemptions
within one year of certain Shares purchased without an initial sales
charge. See "What Do Shares Cost?"

** The contingent deferred sales charge declines from the maximum amount to 1%
in the sixth year, and 0% thereafter.

*** The Manager has contractually agreed to waive its fees and reimburse
expenses of the Fund through December 31, 2000 to the extent necessary to
maintain the Fund's expense ratio at the level indicated as "Total Net
Annual Fund Operating Expenses (after reimbursements)."

Example:

This Example is intended to help you compare the cost of investing in the
Fund's Class A and B Shares with the cost of investing in other mutual funds.

<TABLE>
<CAPTION>
1 year 3years 5 years 10
years
------ ------ -------
- --------
<S> <C> <C> <C> <C>
Class A
Expenses before fee waivers and expense reimbursements..................... $1,520 $3,302 $4,891
$8,152
Expenses after fee waivers and expense reimbursements...................... $ 704 $1,027 $1,373
$2,346

Class B
Expenses before fee waivers and expense reimbursements:
Assuming redemption fee.................................................... $1,648 $3,539 $5,255
$8,624
Assuming no redemption fee................................................. $1,184 $3,300 $5,118
$8,624
Expenses after fee waivers and expense reimbursements:
Assuming redemption fee.................................................... $ 738 $1,050 $1,477
$2,686
Assuming no redemption fee................................................. $ 238 $ 733 $1,255
$2,686
</TABLE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?
- --------------------------------------------------------------------------------

A summary of the Fund's principal investment strategy has been provided above.
The Fund also uses these additional investment strategies.

The Adviser monitors the companies it selects for the Fund to detect risk by
analyzing possible changes in their earnings outlook and/or financial condition.
In order to assess risks, the Adviser monitors the annual and interim financial
statements of a broad universe of companies, conducts sector and industry
analyses and maintains company contact, including company visits and attendance
at company meetings and analyst presentations. In addition, the Adviser will
assess macroeconomic and stock market conditions in the various countries in
which the companies held by the Fund are domiciled or have their primary stock
market listings.

The Adviser will consider the geographic market focus of the Fund in
considering companies proposed for investment.

Hedging

The Fund uses hedging transactions to attempt to reduce specific risks. For
example, to protect the Fund against circumstances that would normally cause the
Fund's portfolio securities to decline in value, the Fund may buy or sell a
derivative contract that would normally increase in value under the same
circumstances. The Fund may also attempt to hedge by using forward contracts,
combinations of different derivatives contracts, or derivatives contracts and
securities. The Fund's ability to hedge may be limited by the costs of the
derivatives contracts. The Fund may attempt to lower the cost of hedging by
entering into transactions that provide only limited protection, including
transactions that (1) hedge only a portion of the Fund, (2) use derivatives
contracts that cover a narrow range of circumstances or (3) involve the sale of
derivatives contracts with different terms. Consequently, hedging transactions
will not eliminate risk even if they work as intended. In addition, hedging
strategies are not always successful, and could result in increased expenses and
losses to the Fund.

Temporary Defensive Investments

The Fund may temporarily depart from its principal investment strategy by
investing its assets in cash, cash items, and shorter-term, higher-quality debt
securities, money market instruments, and similar obligations, such as
repurchase agreements and reverse repurchase agreements. The Fund may do this to
minimize potential losses, maintain liquidity to meet shareholder redemptions,
or during or in anticipation of adverse market conditions. This may cause the
Fund to give up greater investment returns to maintain the safety of principal,
that is, the original amount invested by shareholders.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?
- --------------------------------------------------------------------------------

Fund invests principally in securities of companies that are listed on a stock
exchange or trade on a recognized, regulated market open to the public.

Following are descriptions of the different types of securities that may
comprise the principal securities of the Fund, as explained above in the Fund's
investment strategy. For purposes of the Fund's investments, convertible bonds
and bonds with warrants are considered equity securities, not fixed income
securities. The Fund may invest in each type of security and its related
subtypes.

Equity Securities

Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities. The Fund cannot predict the income it will
receive from equity securities because issuers generally have discretion as to
the payment of any dividends or distributions. However, equity securities offer
greater potential for appreciation than many other types of securities. The
following describes the types of equity securities in which the Fund may invest.

Common Stocks. Common stocks are the most prevalent type of equity security.
Common stocks receive the issuer's earnings after the issuer pays its creditors
and any preferred stockholders. As a result, changes in an issuer's earnings
directly influence the value of its common stock.

Foreign Securities

Foreign securities are securities of issuers based outside the United States.
Foreign securities are primarily denominated in foreign currencies. Along with
the risks normally associated with domestic securities of the same type, foreign
securities are subject to currency risks and risks of foreign investing. Trading
in certain foreign markets is also subject to liquidity risks.

Foreign Currency Exchange Contracts. In order to convert U.S. dollars into the
currency needed to buy a foreign security, or to convert foreign currency
received from the sale of a foreign security into U.S. dollars, the Fund may
enter into spot currency trades. In a spot trade, the Fund agrees to exchange
one currency for another at the current exchange rate. The Fund may also enter
into derivative contracts in which a foreign currency is an underlying asset in
order to hedge currency risks associated with owning assets denominated in
foreign currencies. The exchange rate for currency derivative contracts may be
higher or lower than the spot exchange rate. Use of these derivative contracts
may increase or decrease the Fund's exposure to currency risks.

Derivative Contracts

Derivative contracts are typically financial instruments that require payments
based upon changes in the values of designated (or underlying) securities,
currencies, commodities, financial indices or other assets. Some derivative
contracts (such as futures, forwards and options) require payments relating to a
future trade involving the underlying asset. Other derivative contracts (such as
swaps) require payments relating to the income or returns from the underlying
asset. Still other derivative contracts may involve warrants on the foregoing,
in which case there is an option rather than a requirement to purchase the
underlying instrument. The other party to a derivative contract is referred to
as a counterparty.

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

- --------------------------------------------------------------------------------

Following are descriptions of the different types of risks that an investment
in the Fund may entail, as previously summarized under "What are the Main Risks
of Investing in the Fund?"

Stock Market Risks

The value of equity securities in the Fund's portfolios will rise and fall.
These fluctuations could be a sustained trend or a drastic movement. The Fund's
portfolios will reflect changes in prices of individual portfolio stocks or
general changes in stock valuations. Consequently, the Fund's share price may
decline.

The Adviser attempts to manage market risk by limiting the amount the Fund
invests in each company's equity securities. However, diversification will not
protect the Fund against widespread or prolonged declines in the stock market.

Sector Risks

Companies operating in the same field or area of business may be grouped
together in broad categories called sectors. Sector risk is the possibility that
a certain sector may underperform other sectors or the market as a whole. As the
Adviser allocates more of the Fund's portfolio holdings to a particular sector,
the Fund's performance will be more susceptible to any economic, business or
other developments which generally affect that sector.

Liquidity Risks

Trading opportunities are more limited for equity or fixed income securities
that are not widely held or have no or low credit ratings. This may make it more
difficult to sell or buy a security at a favorable price or time. Consequently,
the Fund may have to accept a lower price to sell a security, sell other
securities to raise cash or give up an investment opportunity, any of which
could have a negative effect on the Fund's performance. Infrequent trading of
securities may also lead to an increase in their price volatility.

Liquidity risk also refers to the possibility that the Fund may not be able to
sell a security or close out a derivative contract when it wants to. If this
happens, the Fund will be required to continue to hold the security or keep the
position open, and the Fund could incur losses.

Currency Risks

Exchange rates for currencies fluctuate daily. The combination of currency
risk and market risk tends to make securities traded in foreign markets more
volatile than securities traded exclusively in the U.S.

With the advent of the Euro, the new single currency of the European Monetary
Union (EMU), the participating countries in the EMU can no longer follow
independent monetary policies. This may limit these countries' ability to
respond to economic downturns or political upheavals, and consequently reduce
the value of their foreign government securities.

Risks of Investing in Specific Countries and Regions

The Fund invests a significant portion of its assets in specific regions or
countries, and therefore it is exposed to the risks associated with that region
or country and could be subject to greater risk due to unanticipated and
negative economic events and/or market action in such countries or regions. For
example, the Fund has invested in Asian countries, which have experienced sudden
and unexpected disruptions in their governments and economies with adverse
consequences for investors.

Risks of Foreign Investing

Foreign securities pose additional risks because foreign economic or political
conditions may be less favorable than those of the United States. Securities in
foreign markets may also be subject to taxation policies that reduce returns for
U.S. investors.

Foreign companies may not provide information (including financial statements)
as frequently or to as great an extent as companies in the United States.
Foreign companies may also receive less coverage than United States companies by
market analysts and the financial press. In addition, foreign countries may lack
uniform accounting, auditing and financial reporting standards or regulatory
requirements comparable to those applicable to U.S. companies. These factors may
prevent the Fund and its Adviser from obtaining information concerning foreign
companies that is as frequent, extensive and reliable as the information
available concerning companies in the United States.

Foreign countries may have restrictions on foreign ownership of securities or
may impose exchange controls, capital flow restrictions or repatriation
restrictions which could adversely affect the liquidity of the Fund's
investments.

Investments trading in foreign countries entail greater risks than in the
United States because of the differences in trading and settlement systems,
liquidity, volatility, commission rates, and regulation.

Risks of Investing in Emerging Market Countries

Securities issued or traded in emerging markets generally entail greater risks
than securities issued or traded in developed markets. For example, their prices
may be significantly more volatile than prices in developed countries. Emerging
market economies may also experience more severe downturns (with corresponding
currency devaluations) than developed economies.

Emerging market countries may have relatively unstable governments and may
present the risk of nationalization of businesses, expropriation, confiscatory
taxation or, in certain instances, reversion to closed market, centrally planned
economies.

Derivative Contracts

The Fund's ability to successfully use futures, options, warrants and currency
transactions will depend on the ability of the Adviser to predict the direction
of the market and correlation of the transactions with changes in the value of
the Fund's assets. These transactions could expose the Fund to the effect of
leverage, and thereby increase the Fund's exposure to the market and loss that
it otherwise would have had if it had not entered into these transactions.

Year 2000 Readiness

The "Year 2000" problem is the potential for computer errors or failures
because certain computer systems may be unable to interpret dates after December
31, 1999 or experience other date-related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses,
such as the Fund, that rely on computers.

The Fund's service providers have made changes to their computer systems to
address any Year 2000 problems. In addition, they have gathered information from
third- party providers to determine their Year 2000 readiness.

Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser continues to
review information regarding the Year 2000 readiness of issuers of securities
the Fund may purchase. However, this may be difficult with certain issuers. For
example, funds dealing with foreign service providers or investing in foreign
securities may find it more difficult to determine the Year 2000 readiness of
those entities. This is especially true of entities or issuers in emerging
markets. The financial impact of these issues for the Fund is still being
determined. There can be no assurance that potential Year 2000 problems would
not have a material adverse effect on the Fund.

WHAT DO SHARES COST?
- --------------------------------------------------------------------------------

You can purchase, redeem, or exchange Shares any day the New York Stock
Exchange (NYSE) is open. The Fund offers Class A Shares and Class B Shares. Each
Share class represents interests in the Fund's portfolio of securities. The
differences between the Share classes relate to the timing and amount of
asset-based sales charge an investor bears directly or indirectly as a
shareholder.

When the Fund receives your transaction request in proper form, it is
processed at the next calculated net asset value (NAV). See "How to Purchase
Shares" and "How to Redeem and Exchange Shares." In addition purchase
transactions and exchange transactions may be subject to an applicable front-end
sales charge (the public offering price), and redemption transactions may be
subject to a contingent deferred sales charge.

NAV of the Fund is determined at the end of regular trading (normally 4:00
p.m. U.S. Eastern time) each day the NYSE is open, but no earlier than the
latest end of regular trading on any European securities exchange on which the
Fund's portfolio securities may trade. Since the Fund owns foreign securities
that trade in foreign markets on days the NYSE is closed, the value of the
Fund's assets may change on days you cannot purchase, redeem or exchange Shares.

The tables below summarize the minimum initial and subsequent investment
amounts, the maximum front-end sales charge that you will pay on a purchase of
Class A Shares, and the maximum contingent deferred sales charge you will pay at
the time you redeem your Shares. The minimum investment amounts may be waived or
lowered from time to time. Keep in mind that investment professionals may charge
you additional fees for their services in connection with your Share
transactions.

Minimum Maximum Sales Charge
Initial/ ------------------------------
Subsequent Front-End Contingent
Investment Sales Deferred
Shares Offered Amounts/1/ Charge/2/ Sales Charge/3/
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Class A...................... $2,000/$100 5.50% 0.00%
Class B...................... $2,000/$100 None 5.00%
- -------------------------------------------------------------------------------
</TABLE>

1 The minimum initial and subsequent investment amounts for retirement plans
are $1,000 and $100, respectively. The minimum monthly and quarterly
subsequent investment amounts for Systematic Investment Programs are $100 and
$250, respectively. Investment professionals may impose higher or lower
minimum investment requirements on their customers than those imposed by the
Fund. Orders for $250,000 or more will be invested in Class A Shares instead
of Class B Shares to maximize your return and minimize the sales charges and
marketing fees. Accounts held in the name of an investment professional may
be treated differently. Class B Shares will automatically convert into Class
A Shares after seven full years from the purchase date. This conversion is a
non-taxable event.

2 Front-End Sales Charge is expressed as a percentage of public offering price.
See "Sales Charge When You Purchase -- Class A Shares Only."

3 See "Sales Charge When You Redeem." As noted in the following tables, certain
Class A Shares may be subject to contingent deferred sales charges.

Sales Charge When You Purchase -- Class A Shares Only

Sales Charge
as a Sales Charge
Percentage as a
of Public Percentage
Purchase Amount Offering Price of NAV
- --------------------------------------------------------------------------------
<S> <C> <C>
Less than $50,000 5.50% 5.82%
$50,000 but less than $100,000 4.50% 4.71%
$100,000 but less than $250,000 3.50% 3.63%
$250,000 but less than $500,000 2.50% 2.56%
$500,000 but less than $1 million 2.00% 2.04%
$1 million or greater1 0.00% 0.00%
- ----------------------------------------------------------------------------
</TABLE>

1 A contingent deferred sales charge of 1% or .5% of the redemption amount
applies to Class A Shares redeemed within the first or second year,
respectively, of purchase under certain investment programs where an
investment professional received an advance payment on the transaction. The
.5% charge only applies to Shares purchased on or after January 18, 2000. See
"Sales Charge When You Redeem".

The sales charge at purchase may be reduced or eliminated by:

. purchasing Shares in greater quantities to reduce the applicable sales
charge;

. combining concurrent purchases of Shares:

. by you, your spouse, and your children under age 21;

. of the same share class of two or more series of Flag Investors Funds,
Inc.* (other than money market funds); or

. by a trustee or fiduciary for a single trust estate or a single fiduciary
account;

. accumulating purchases (in calculating the sales charge on an additional
purchase, include the current value of previous Share purchases still
invested in the Fund);

. signing a letter of intent to purchase a specific dollar amount of Shares
within 13 months (call your investment professional or the Fund for more
information); or

. by exchanging from Class A Shares of the Fund into Class A Shares of any
other series of Flag Investors Funds, Inc.*

* Effective January 18, 2000, series of the Flag Investors Family of Funds can
also be included for purposes of reducing or eliminating sales charges under
these provisions.

The sales charge will be eliminated when you purchase Shares:

. within 90 days of redeeming Shares of an equal or lesser amount;

. through wrap accounts or other investment programs where you pay the
investment professional directly for services;

. through IRA Rollover accounts sponsored by Deutsche Bank Securities, Inc.,
Deutsche Bank Trust Company and its affiliates;

. through retirement and deferred compensation plans and trusts used to fund
those plans;

. through investment professionals that receive no portion of the sales
charge;

. as part of an Eligible Benefit Plan having at least 250 employees or
$1,000,000 invested in Flag Investors Funds, Inc.*;

. as a current or retired Trustee, Director or employee of Deutsche Bank AG
or its affiliates, current or retired Board member of a fund advised by
Deutsche Bank AG or its affiliates, and the spouse or minor children of
these individuals;

. through qualified separate accounts maintained by an insurance company;

. through trust companies and bank trust departments, including Deutsche Bank
Trust Company and its affiliates, initially investing at least $100,000 of
assets on behalf of any one of their investor clients; or

. through accounts investing $100,000 or more for a state or territory of the
U.S., its counties, cities, or instrumentalities; charitable organizations;
charitable remainder trusts; or life income pools.

If your investment qualifies for a reduction or elimination of the sales
charge, you or your investment professional should notify the Fund's
Distributor, ICC Distributors, Inc., at the time of purchase. If the Distributor
is not notified, you will receive the reduced sales charge only on additional
purchases, and not retroactively on previous purchases.

Sales Charge When You Redeem

Your redemption proceeds may be reduced by a sales charge, commonly referred
to as a contingent deferred sales charge (CDSC).

Class B Shares
Shares Held Up To: CDSC
- --------------------------------------------------------------------------------
<S> <C>
1 year 5.00%
2 years 4.00%
3 years 3.00%
4 years 3.00%
5 years 2.00%
6 years 1.00%
7 years 0.00%
- --------------------------------------------------------------------------------
</TABLE>

You will not be charged a CDSC when redeeming Shares:

. purchased with reinvested dividends or capital gains;

. Shares held for more than six full years from the date of purchase with
respect to Class B Shares, and two full years from the date of purchase
with respect to Class A Shares that were purchased without a front-end
sales charge;

. that you exchanged into the same share class of another series of Flag
Investors Funds, Inc. where the shares were held for the applicable CDSC
holding period;

. purchased through investment professionals who did not receive advanced
sales payments;

. if, after you purchase Shares, you become disabled as defined by the
IRS; or

. as a Director/Trustee or employee of the Fund/ Portfolio, the Adviser, the
Distributor and their affiliates, and the spouse or children under age 21
of these individuals.

* Effective January 18, 2000, series of the Flag Investors Family of Funds can
also be included for purposes of reducing or eliminating sales charges under
these provisions.

In addition, you will not be charged a CDSC:

. if the Fund redeems your Shares and closes your account for not meeting the
minimum balance requirement;

. if your redemption is a required retirement plan distribution;

. when you exchange your Shares for the same class of Shares of another
series of Flag Investors Funds, Inc.*;

. upon the death of the last surviving shareholder of the account.

If your redemption qualifies, you or your investment professional should
notify the Distributor at the time of redemption to eliminate the CDSC. If the
Distributor is not notified, the CDSC will apply.

To keep the sales charge as low as possible, the Fund redeems your Shares in
this order:

. Shares that are not subject to a CDSC; and

. Shares held the longest (to determine the number of years your Shares have
been held, include the time you held shares of other series of Flag
Investors Funds, Inc.* that have been exchanged for Shares of the Fund).

* Effective January 18, 2000, series of the Flag Investors Family of Funds can
also be included for purposes of reducing or eliminating sales charges under
these provisions.

HOW IS THE FUND SOLD?
- --------------------------------------------------------------------------------

As noted above, the Fund offers one or more classes of Shares that bear
different sales charges and levels of expenses. Class A Shares are subject to a
front-end sales charge that reduces the amount of your purchase price that is
invested on your behalf. Class B Shares do not impose front-end sales charges,
so that your entire purchase price is invested on your behalf. However, Class B
Shares have higher expense ratios and pay lower dividends than Class A Shares,
and redemptions of those Shares may be reduced by a contingent deferred sales
charge if you did not hold them for the required amount of time. Class B Shares
will convert on a tax-free basis to Class A Shares after seven full years. The
decision of which Share class to purchase should be based on your purchase
amount, your investment horizon, and other personal factors. However, orders for
$250,000 or more will be invested in Class A Shares instead of Class B Shares to
maximize your return and minimize the sales charges and marketing fees. Accounts
held in the name of an investment professional may be treated differently.

The Fund's Distributor, ICC Distributors, Inc., markets the Shares described
in this prospectus to individuals, directly or through investment professionals.

When the Distributor receives sales charges and marketing fees, it may pay
some or all of them to investment professionals. The Distributor and its
affiliates may pay out of their assets other amounts (including items of
material value) to investment professionals for marketing and servicing Shares.

Rule 12b-1 Plan

The Fund has adopted a Rule 12b-1 Distribution and Service Plan, which allows
it to pay marketing fees to the Distributor and investment professionals for the
sale, distribution and customer servicing of Class A Shares and Class B Shares.
Under the Distribution Plan, Class B Shares will pay a marketing fee at an
annual rate of 0.75% of the average daily net assets of that Share class. Under
the Services Plan, Class A Shares and Class B Shares will pay a shareholder
services fee at an annual rate of 0.25% of the average daily net assets of that
Share class. Because Class B Shares pay marketing fees on an ongoing basis, your
investment cost may be higher over time than other Shares with different sales
charges and marketing fees.

HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------

You may purchase Shares through an investment professional or directly from
the Fund. The Fund reserves the right to reject any request to purchase Shares.

If you do not specify the class choice on your New Account Form or form of
payment (e.g., Federal Reserve wire or check) you will be contacted by the Fund.
If the Fund is not successful in contacting you, you will receive Class A
Shares.

Through an Investment Professional

. Establish an account with the investment professional; and

. Submit your purchase order for Shares to the investment professional as
follows:

. When investing through a registered broker/dealer:

- You will receive that day's NAV if the broker/dealer or other investment
professional receives and forwards your order to the Fund by the later
of: (a) the close of regular trading on the NYSE (normally 4:00 p.m.
U.S. Eastern time); or (b) the latest close of regular trading on any
European securities exchange on which the Fund's portfolio securities
may trade.

. When investing through other investment professionals:

You will become the owner of Shares and receive dividends when the Fund
receives your payment. Investment professionals should send payments according
to the instructions in the sections "By Wire" or "By Check."

Directly From the Fund

. Establish your account with the Fund by submitting a completed New Account
Form; and

. Send your payment to the Fund by Federal Reserve wire or check.

You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.
Shares will be priced at the next calculated NAV after the Fund receives your
wire or your check. If you pay by check, you begin earning dividends when your
check is converted into federal funds (normally the business day after the Fund
receives your check).

An institution may establish an account and place an order by calling the
Fund. An institution will become a shareholder of the Fund after the Fund
receives the order.

By Wire. Once your account has been established, you may send your wire to:

Investors Bank & Trust
Boston, MA
[Dollar Amount of Wire]
ABA Number 011001438
BNF Account Number 570000307
[For Credit to:] (Fund Name)(Fund Class)
(Fund Number, you can find this number on your account statement or by
contacting the Fund)
Account Number
Trade Date and Order Number
Group Number/Dealer Number
Nominee/Institution Name

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

By Check. Make your check payable to the name of the Fund, note the class of
Shares and your account number on the check, and mail it to:

Flag Investors Funds, Inc.
P.O. Box 8612
Boston, MA 02266-8612

If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

Flag Investors Funds, Inc.
c/o Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third-party checks (checks originally payable to someone other than
you or Flag Investors Funds, Inc.). Orders by mail are considered received when
payment by check is converted into federal funds (normally the business day
after the check is received) and Shares begin earning dividends the next day.

By Automatic Investments

You may establish an account with your financial institution to automatically
purchase Shares on pre- determined dates or when your bank account reaches a
certain level. Under this program, participating financial institutions are
responsible for prompt transmission of orders and may charge you for this
service. You should read this prospectus along with your financial institution's
agreement or materials describing this service.

By Automated Clearing House (ACH)

Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.

By Phone

Once you establish an account, you may make additional investments by phone
for future Share purchases if you have an account with a bank that is an ACH
member. To apply, call the Fund for an authorization form. You may use this
privilege to purchase Shares approximately two weeks from the date you file the
form with the Fund's transfer agent, Federated Shareholder Services Company.

Through an Exchange

You may purchase Shares through an exchange from the same share class of
another series of Flag Investors Funds, Inc. (or, effective January 18, 2000,
the same class of shares of any series of Flag Investors Family of Funds). You
must meet the minimum investment requirements for purchasing Shares and both
accounts must have identical registrations. In certain cases, exchanges among
Class A Shares of the funds may be subject to applicable front-end sales
charges. See "How to Redeem and Exchange Shares -- Exchange Privileges."

By Systematic Investment Program

Once you have opened an account, you may automatically purchase additional
Shares on a regular basis in a minimum monthly amount of $100 or a minimum
quarterly amount of $250 by completing the Systematic Investment Program section
of the New Account Form or by contacting the Fund or your investment
professional.

Retirement Investments

You may purchase Shares as retirement investments (such as qualified plans and
IRAs or transfer or rollover of assets). Call your investment professional or
the Fund for information on retirement investments. We suggest that you discuss
retirement investments with your tax adviser. You may be subject to an annual
IRA account fee.

HOW TO REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------

You may redeem or exchange Shares:

. through an investment professional if you purchased Shares through an
investment professional; or

. directly from the Fund if you purchased Shares directly from the Fund.

The following describes the deadline by which your redemption or exchange
order must be made to be priced at that day's NAV. Your broker/dealer or other
investment professional is responsible for promptly submitting your requests and
providing proper written instructions to the Fund. Your investment professional
may charge you separate fees and commissions. Your redemption proceeds are
reduced by any applicable contingent deferred sales charge.

. You will receive that day's NAV if your broker/ dealer or other financial
intermediary receives and forwards your order to the Fund by the later of:
(a) the close of regular trading on the NYSE (generally 4:00 p.m. U.S.
Eastern time); or (b) the latest close of regular trading on any European
securities exchange on which the Fund's portfolio securities may trade.

By Telephone. You may redeem or exchange Shares by calling the Fund once you
have completed the appropriate authorization form for telephone transactions.
You may exchange Shares between the same class of shares of any two series of
Flag Investors Funds, Inc. (or, effective January 18, 2000, the same class of
shares of any series of Flag Investors Family of Funds) by telephone only if the
funds have identical shareholder registrations. If you hold Share certificates,
they cannot be exchanged by telephone.

By Mail. You may redeem or exchange Shares by mailing a written request to the
Fund.

You will receive a redemption amount based on the next calculated NAV after
the Fund receives your written request in proper form.

Send requests by mail to:

Flag Investors Funds, Inc.
c/o Federated Shareholder Services Company
P.O. Box 8612
Boston, MA 02266-8612

Send requests by private courier or overnight delivery service to:

Flag Investors Funds, Inc.
c/o Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

. Fund Name and Share Class, account number and account registration;

. amount to be redeemed or exchanged;

. signatures of all shareholders exactly as registered; and

. if exchanging, the Fund Name and Share Class, account number and account
registration into which you are exchanging.

Call your investment professional or the Fund if you need special
instructions.

Signature Guarantees. Signatures must be guaranteed if:

. your redemption will be sent to an address other than the address of
record;

. your redemption will be sent to an address of record that was changed
within the last 30 days;

. a redemption is payable to someone other than the shareholder(s) of
record; or

. if exchanging (transferring) into another Fund with a different shareholder
registration.

A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker/dealer, or securities exchange member. A notary public cannot
provide a signature guarantee.

Payment Methods for Redemptions

We will mail your redemption proceeds by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form. These payment options require a signature guarantee if
they were not established when the account was opened:

. an electronic transfer to your account at a financial institution that is
an ACH member; or

. wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member. Payments will be wired the business day
following a holiday or when wire transfers are restricted. Wire transfers
of less than $5,000 may be subject to additional fees.

Redemption in Kind. Although the Fund intends to pay Share redemptions in
cash, it reserves the right to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.

Limitations on Redemption Proceeds

Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

. to allow your purchase to clear;

. during periods of market volatility; or

. when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed redemption checks from
the Fund if those checks are undeliverable and returned to the Fund.

Exchange Privileges

You may exchange Shares of the Fund into shares of the same class of other
series of Flag Investors Funds, Inc. In addition, effective January 18, 2000,
you may exchange between Shares of the Fund and the same class of shares of any
Flag Investors Family of Funds. To do this, you must:

. ensure that the account registrations are identical;

. meet any minimum initial investment requirements; and

. receive a prospectus for the fund into which you wish to exchange.

An exchange is treated as a redemption and a subsequent purchase, and is a
taxable transaction.

Class A Shares. If you exchange between funds with different sales charges,
the exchange will be made at NAV. If you paid a sales charge once (including
Shares acquired through reinvestment of dividends and capital gains) you will
not have to pay the sales charge again upon the exchange. This is true even if
you exchange out of a fund with a sales charge, then into a fund without a sales
charge, and back into a fund with a sales charge. However, if you purchased into
a fund without a sales charge, and exchange into a fund with a sales charge, you
will be assessed the applicable sales charge when you make the exchange.
However, no sales charge will be assessed on Shares that you acquired through
reinvestment of dividends and distributions.

Class B Shares. Exchanges may be made between the same classes of Shares at
NAV without any sales charge at the time of exchanges. The time you held the
original Shares will be added to the time you held the exchanged-for Shares for
purposes of calculating any applicable CDSC when you redeem those Shares.

The Fund may modify or terminate the exchange privilege at any time. The
Fund's Manager or Adviser may determine from the amount, frequency and pattern
of exchanges that a shareholder is engaged in excessive trading that is
detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other series of Flag Investors Funds, Inc. and Flag
Investors Family of Funds. Shareholders will be notified in advance of the
termination of the exchange privilege.

Please contact your investment professional directly or the Distributor for
information on and prospectuses for the series of Flag Investors Funds, Inc. and
Flag Investors Family of Funds into which you may exchange your Shares free of
charge.

Systematic Withdrawal Program (SWP)

You may automatically redeem Shares in a minimum amount of $100 on a regular
basis. Complete the appropriate section of the New Account Form or contact your
investment professional or the Fund. Your account value must total a minimum of
$10,000 at the time the program is established. This program may reduce, and
eventually deplete, your account. Payments should not be considered yield or
income. Generally, it is not advisable to continue to purchase Class A Shares,
which are subject to a sales charge, while redeeming Shares using this program.
A CDSC may be imposed on redemptions of Class B Shares. You will not be charged
a CDSC on SWP redemptions if you reinvest all dividends and capital gains
distributions.

Additional Conditions

Telephone Transactions. The Fund will record your telephone instructions. If
the Fund follows reasonable procedures, it may not be liable for losses due to
unauthorized or fraudulent telephone instructions. The Fund may terminate or
modify telephone privileges at any time.

Share Certificates. The Fund does not issue Share certificates.

If you are redeeming or exchanging Shares represented by certificates
previously issued by the Fund, you must return the certificates with your
written redemption or exchange request. For your protection, send your
certificates by registered or certified mail, but do not endorse them.

ACCOUNT AND SHARE INFORMATION
- --------------------------------------------------------------------------------

Account Statements and Confirmations

You will receive periodic statements from the Fund reporting all account
activity, including dividends and capital gains paid. In addition, you will
receive confirmation of purchases and redemptions.

Dividends and Capital Gains

The Fund declares and pays any dividends annually to shareholders. Dividends
are paid to all shareholders invested in the Fund on the record date. The record
date is the date on which a shareholder must officially own Shares in order to
earn a dividend.

In addition, the Fund pays any capital gains at least annually. Your dividends
and capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.

If you purchase Shares just before the Fund declares a dividend or capital
gain distribution, you will pay the full price for the Shares and then receive a
portion of the price back in the form of a taxable distribution, whether or not
you reinvest the distribution in Shares. Therefore, you should consider the tax
implications of purchasing Shares shortly before the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.

Accounts With Low Balances

Due to the high cost of maintaining accounts with low balances, non-retirement
accounts may be closed if redemptions or exchanges cause the account balance to
fall below the minimum initial investment amount. Before an account is closed,
you will be notified and allowed 30 days to purchase additional Shares to meet
the minimum.

Tax Information

The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.

Fund distributions are expected to be primarily capital gains by the Fund.
Redemptions and exchanges are taxable sales. Please consult your tax adviser
regarding your federal, state, and local tax liability.

WHO MANAGES THE FUND?
- --------------------------------------------------------------------------------

A Board of Directors governs the Fund, and a Board of Trustees governs the
Portfolio. The Board of Trustees selects the Manager, Deutsche Fund Management,
Inc. (DFM). The Manager is responsible for managing the Portfolio's assets,
including buying and selling portfolio securities. However, the Manager has
delegated daily management of the Portfolio's assets to the Adviser, who is paid
by the Manager and not by the Portfolio. The Manager and Adviser are registered
investment advisers. The Adviser of the Portfolio is DWS International Portfolio
Management GmbH (DWS). The address for the Manager is 280 Park Avenue, New York,
NY 10017. The address for DWS is Grueneburgweg 113-115, 60323 Frankfurt am Main,
Germany.

The Fund may withdraw its investment from its corresponding Portfolio at any
time if the Fund's Board of Directors determines that it is in the Fund's best
interests to do so. The Board would determine what action should be taken to
manage the Fund's investments, including investing of all the Fund's assets in
another investment company having the same investment objective and restrictions
as the Fund or retaining an investment adviser to directly manage the Fund's
assets in accordance with its investment objective and policies.

The Manager is an indirect subsidiary of Deutsche Bank AG, a major global
banking institution. The Adviser is also a subsidiary of Deutsche Bank AG. With
total assets the equivalent of US $874.8billion and 90,850 employees as of June
30, 1999, Deutsche Bank AG is one of Europe's largest universal banks. It is
engaged in a wide range of financial services, including retail and commercial
banking, investment banking and insurance. Deutsche Bank AG and its affiliates
may have commercial lending relationships with companies whose securities may be
held by the Portfolio.

The primary subsidiary of DFH is DWS. Founded in 1956, it is the largest
mutual fund company in Germany, holding a 23.9% share of the German mutual fund
market based on assets under management as of June 30, 1999. DFH and its
subsidiaries are known in the financial market as "DWS Group, Investment Group
of Deutsche Bank."

DFH subsidiaries have received widespread industry recognition in Europe. For
example, Micropal, Europe's leading fund rating organization, has accorded DWS
the following awards: 1994: best fund manager for 1-, 3-, and 5-year periods;
1995: best fund manager for 1-, 3-, and 5-year periods; 1996: best fund manager
for 3- and 5-year periods; 1997: best fund manager for 3- and 5-year periods;
1998: best fund manager for 1-, 3- and 5-year periods. These awards were given
to fund managers having 10 or more funds registered for sale in Germany, based
on the manager with the highest number of funds ranked first within various
categories of investment objectives defined by Micropal. Fund rankings are based
on above-average performance in Deutsche Mark (DM) terms and below-average
volatility.

Deutsche Bank's acquisition of Bankers Trust occurred after the wrongdoing at
Bankers Trust took place. As a result of the plea, however, absent an order from
the SEC, DFM and DWS may not be able to continue to provide advisory services to
the Fund. The SEC has granted a temporary order under Section 9(c) of the
Investment Company Act of 1940 (1940 Act) to permit Bankers Trust and its
affiliates to continue to provide investment advisory services to registered
investment companies, and Bankers Trust, pursuant to Section 9(c) of the 1940
Act, has filed an application for a permanent order. There is no assurance that
the SEC will grant a permanent order.

Portfolio Manager

Mr. Klaus Kaldemorgen has 16 years experience as an investment manager. He
joined the DWS Group in 1982as Senior Investment Officer, Head of the Global
Equity Team, DWS Group, Investment Group of Deutsche Bank. Mr. Kaldemorgen
supervises funds holding assets under management of EUR 3.6 billion (US $3.6
billion) as of June 30, 1999. Mr. Kaldemorgen also serves as Senior Portfolio
Manager for the Top 50 Welt and Top 50 Asien, German registered mutual funds
with substantially the same investment objective, policies and restrictions as
the corresponding Portfolios for the Top 50 World and Top 50 Asian Funds. He has
held this position since the inception of these funds in April 1996, and January
1997, respectively.

Management and Advisory Fees

The Manager receives an annual fee of 1.00% based on the average daily net
assets of the underlying Portfolio in which the Fund invests. The Manager pays
the Adviser a portion of this fee. The Manager has agreed to waive its fee and
reimburse the Fund and Portfolio in order to maintain the Fund's total operating
expenses (other than extraordinary expenses) at not more than the following
percentages of average annual net assets of the Share classes through August 31,
2000: 1.60% for Class A Shares; and 2.35% for Class B Shares.

FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

The financial information is presented for the fiscal year ended August 31,
1999 under the name of the Fund in effect at that time (Deutsche Funds, Inc.).

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

Selected data for a Class A share of common stock outstanding throughout each
period.

<TABLE>
<CAPTION>
Deutsche Top
50 World

- -----------------------------
For the Year
For the Period
Ended
Ended/1/
August 31,
August 31,

1999 1998
-----------
- --------------
<S> <C> <C>
Net asset value at beginning of period...................................................... $ 12.35
$ 12.50
-------
- -------
Investment Operations:
Net investment income.......................................................................
0.01 0.01
Net realized and unrealized gain (loss) on investments, futures contracts and
foreign currency allocated from corresponding Deutsche Portfolio..........................
5.18 (0.16)
-------
- -------
Increase (decrease) from investment operations..............................................
5.19 (0.15)
-------
- -------
Distributions to Shareholders:
Dividends from net investment income........................................................
(0.00)2 --
Distributions from net realized gains.......................................................
(0.19) --
-------
- -------
Total distributions.........................................................................
(0.19) --
-------
- -------
Net asset value at end of period............................................................ $ 17.35
$ 12.35
=======
=======
Total Return (based on net asset value)/3/....................................................
42.19% (1.20)%*
Ratios and Supplemental Data:
Net assets, end of period (000's)........................................................... $ 2,776
$ 181
Ratios to Average Net Assets:
Expenses/4/.................................................................................
1.60% 1.60%**
Net investment income (loss)/4/.............................................................
0.13% 0.13%**
Portfolio turnover of corresponding Deutsche Portfolio......................................
79% 125%*
- -----------------------
1 Commencement of operations.................................................................
10/2/97
2 Amount rounds to less than $0.01.
3 Total Return based on net asset value, excluding transaction charges, assumes
a purchase of common stock at net asset value at
the beginning of each period, reinvestment of distributions at net asset value and a redemption on the last
day of the period,
also at net asset value. During the period, total return would have been lower had certain expenses not been
reimbursed by the
Manager.
4 Includes the Fund's allocated portion of the corresponding Deutsche
Portfolio's expenses net of expense reimbursements. Had the
Manager not undertaken to reimburse such expenses, the ratios of expenses and
net investment income (loss) to average net assets
would have been as follows:
Expenses to average net assets.............................................................
10.56% 127.49%**
Net investment income (loss) to average net assets.......................................... (8.83)%
(125.76)%**
* Not annualized
** Annualized
</TABLE>

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

Selected data for a Class B share of common stock outstanding throughout each
period.

<TABLE>
<CAPTION>
Deutsche Top
50 World

- -----------------------------
For the Year
For the Period
Ended
Ended/1/
August 31,
August 31,

1999 1998
-----------
- --------------
<S> <C> <C>
Net asset value at beginning of period...................................................... $ 11.08
$ 12.50
-------
- -------
Investment operations:
Net investment loss.........................................................................
(0.02) (0.01)
Net realized and unrealized gain (loss) on investments, futures contracts and
foreign currency allocated from corresponding Deutsche Portfolio..........................
4.56 (1.41)
Increase (decrease) from investment operations..............................................
4.54 (1.42)
Distributions to Shareholders:
Dividends from net investment income........................................................
(0.00)/2/ --
Distributions from net realized gains.......................................................
(0.19) --
Total distributions.........................................................................
(0.19) --
Net asset value at end of period............................................................ $ 15.43
$ 11.08
Total Return (based on net asset value)/3/....................................................
41.14% (11.36)%*
Ratios and Supplemental Data:
Net assets, end of period (000's)........................................................... $ 2,131
$ 90
Ratios to average net assets:
Expenses/4/.................................................................................
2.35% 2.35%**
Net investment loss/4/......................................................................
(0.64)% (0.84)%**
Portfolio turnover of corresponding Deutsche Portfolio......................................
79% 125%*
- --------------------
1 Commencement of
operations................................................................. 5/4/98
2 Amount rounds to less than $0.01.
3 Total Return based on net asset value, excluding transaction charges, assumes a purchase of common stock at
net asset value at
the beginning of each period, reinvestment of distributions at net asset value and a redemption on the last
day of the period,
also at net asset value. During the period, total return would have been lower had certain expenses not been
reimbursed by the
Manager.
4 Includes the Fund's allocated portion of the corresponding Deutsche Portfolio's expenses net of expense
reimbursements. Had the
Manager not undertaken to reimburse such expenses, the ratios of expenses and
net investment income (loss) to average net assets
would have been as follows:
Expenses to average net assets.............................................................
12.29% 128.24%**
Net investment income (loss) to average net assets......................................... (10.58)%
(126.73)%**
* Not annualized
** Annualized
</TABLE>

[LOGO OF FLAG INVESTORS]

Investing With A Difference(R)

Flag Investors Funds, Inc.
5800 Corporate Drive
Pittsburgh, PA 15237-7010
(888) 433-6385

- --------------------------------------------------------------------------------

A Statement of Additional Information (SAI) dated December 31, 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is contained in the Fund's SAI and Annual and Semi-Annual
Reports to shareholders as they become available. The Annual Report's Investment
Review discusses market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year. To obtain the SAI,
the Annual Report, Semi-Annual Report and other information without charge, and
make inquiries, call your investment professional or the Fund at 1-888-433-6385.

You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, D.C. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
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Investment Company Act File No. 811-8227

Cusip 33832F796
Cusip 33832F788
- --------------------------------------------------------------------------------
G02179-13

TOP50WPRO

(12/99)

[Logo of Flag Investors]

Top 50 Europe
(formerly Deutsche Top 50 Europe)
Class A Shares, Class B Shares and Class C Shares
Prospectus -- December 31, 1999

The Fund's objective is high capital appreciation, and as a secondary objective,
reasonable dividend income.

A series of Flag Investors Funds, Inc. (formerly Deutsche Funds, Inc.), an
open-end management investment company.)

The Fund offers Shares through investment professionals (securities dealers and
through financial institutions that act as shareholder servicing agents). You
may also buy Shares through the Fund's Transfer Agent. This Prospectus describes
Class A Shares, Class B Shares and Class C Shares of the Fund. These separate
classes give you a choice as to sales charges and Fund expenses.

TABLE OF CONTENTS

Investment Objective, Strategies, Performance and Risk.. 1
What are the Fund's Fees and Expenses?.................. 3
What are the Fund's Investment Strategies?.............. 4
What are the Principal Securities
in Which the Fund Invests?.............................. 5
What are the Specific Risks of
Investing in the Fund?.................................. 6
What do Shares Cost?.................................... 7
How is the Fund Sold?................................... 10
How to Purchase Shares.................................. 10
How to Redeem and Exchange Shares....................... 12
Account and Share Information........................... 14
Who Manages the Fund?................................... 14
Financial Information................................... 15

Flag Investors Funds, Inc.
5800 Corporate Drive
Pittsburgh, PA 15237-7010

INVESTMENT OBJECTIVE, STRATEGIES, PERFORMANCE AND RISK

What is the Fund's Objective and Principal Investment Strategy?

The Fund is part of a series of Flag Investors Funds, Inc. The Fund invests
all of its assets in a corresponding portfolio of Flag Investors Portfolios
Trust (formerly Deutsche Portfolios), with identical investment objectives and
policies through a Hub and Spoke(R) (master- feeder) investment fund structure.
Therefore, all discussions in the prospectus regarding investments relate to the
Fund and its corresponding Portfolio. For a table of the Fund and its
corresponding Portfolio, see "Organization" in the Fund's Statement of
Additional Information. The Fund does not represent a complete investment
program, and may not be suitable for all investors.

Investment Objective: The investment objective of the Fund is high capital
appreciation, and as a secondary objective, reasonable dividend income.

. strong market position within its market;

. profitability, predictability and duration of earnings growth, reflected in
sound balance sheet ratios and financial statements;

. high quality management with an orientation toward strong, long-term
earnings;

. long-range strategic plans in place;

. generally publicly-held with broad distribution of financial information
related to its operations.

Strategy: The Fund invests at least 65% of its total assets in equity
securities (primarily common and preferred stocks) of companies located or
having a business focus in Europe. The Fund selects companies with above-average
potential for capital appreciation. The Fund emphasizes investments in companies
that have clear strategic goals, that concentrate on their core businesses, and
whose management gives appropriate consideration to return on investment.

The Fund targets companies which are well positioned to take advantage of the
introduction of the single European currency. The Fund focuses on stocks which
meet its standards in terms of management quality, earnings growth and
shareholder-oriented information policies.
The advent of the European Monetary Union (EMU) has increased the importance
of the European equity markets and allowed a broader allocation of investments
among many countries rather than focusing investments in historically stable
countries.

The Fund also may select companies that have restructuring potential along
with strong value-oriented management strategies. What are the Main Risks of
Investing in the Fund?

All mutual funds take investment risks. Therefore, it is possible to lose
money by investing in the Fund. The primary factors that may reduce the Fund's
returns are listed below.

Investments in the Fund entails the following risks:

. Stock market risks -- the value of securities rise and fall;

. Sector risks -- the possibility that certain sectors may underperform other
sectors or the market as a whole;

. Liquidity risks -- the foreign securities in which the Fund invests may
trade infrequently and may be subject to greater fluctuation in price than
other securities;

. Currency risks -- fluctuations in the exchange rate between the U.S. dollar
and foreign currencies;

. Risks of investing in emerging market countries -- prices of emerging market
securities in which the Fund invests can be significantly more volatile than
prices of securities in developed countries; and

. Risks of non-diversification -- as a non-diversified Fund, the Fund is
allowed to invest a higher percentage of its assets among fewer issuers of
portfolio securities than diversified Funds. This increases the Fund's risks
by magnifying the impact (positively or negatively) that any one issuer has
on the Fund's share price and performance. Despite this ability to invest in
fewer issuers, the Fund generally attempts to maintain exposure to a broad
number of issuers.

The Fund cannot guarantee that it will achieve its investment objective.

Risk/Return Bar Chart and Table

Bar Chart. The bar chart represents the 1998 calendar year performance of
Class A Shares of the Fund (which is the share class with the longest operating
history). The bar chart does not reflect the maximum sales charge imposed on
Class A Shares. If these charges or fees had been included, the return would
have been lower. Following the bar chart is the year-to-date performance of a
Fund's Class A Shares through the most recent calendar quarter, again without
reflecting any applicable sales charge imposed on Class A Shares. Also provided
is the best and worst 1998 calendar quarter performance for Class A Shares.

Class A Shares

Annual Total Return (calender year-end 1998)

[Graphic representation omitted. See Appendix A.2.]

The Fund's Class A Shares total return from January 1, 1999 to September 30,
1999 was (1.92)%.

Best quarter (1Q98) 13.21%
Worst quarter (3Q98) -20.60%

Average Annual Total Return*
(for the periods ended December 31, 1998)

Since Start of
1 Year Performance**
Class A Shares 4.32% 1.81%
MSCI Europe Index 28.53% 28.62%

* The table shows the Fund's total returns averaged over a period of years
relative to the MSCI Europe Index, a broad-based market index of European
equity securities.

**Class A Shares: October 2, 1997

WHAT ARE THE FUND'S FEES AND EXPENSES?

This table describes the fees and expenses of the Fund including those of the
corresponding Portfolio that you may pay if you buy and hold Class A Shares,
Class B Shares or Class C Shares of the Fund. <TABLE> <CAPTION>
Class A
Class B Class C
<S> <C>
<C> <C>
Shareholder Fees:
(fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price) 5.50% None None Maximum Deferred Sales Charge (Load) (as a percentage of
original purchase price or redemption 0.00%*
5.00%** 1.00%***
proceeds, whichever is lower)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) None
None None
(as a percentage of offering price)
Redemption Fee (as a percentage of amount redeemed, if applicable) None
None None
Exchange Fee None
None None

Annual Fund Operating Expenses:
(expenses that are deducted from Fund assets) (as a percentage of average net assets)
Management Fee 1.00%
1.00% 1.00%
Distribution and/or Service (12b-1) Fees 0.25%
1.00% 1.00%
Other Expenses 3.48%
3.39% 3.97%
Total Annual Fund Operating Expenses (before fee waivers and expense reimbursements) 4.73%
5.39% 5.97%
Total Reimbursements of Fund Expenses 3.13%
3.04% 3.62%
Total Net Annual Fund Operating Expenses (after fee waivers and expense reimbursements)**** 1.60%
2.35% 2.35%
</TABLE>
- ---------------
* A maximum 1% contingent deferred sales charge may be imposed on redemptions
within one year of certain Shares purchased without an initial sales charge.
See "What Do Shares Cost?"

** The contingent deferred sales charge declines from the maximum amount to 1%
in the sixth year, and 0% thereafter.

*** The contingent deferred sales charge is assessed on the lower of the
original purchase price or the current net asset value of Shares redeemed
within one year of purchase.

****The Manager has contractually agreed to waive its fees and reimburse
expenses of the Fund through December 31, 2000 to the extent necessary to
maintain the Fund's expense ratio at the level indicated as "Total Net
Annual Fund Operating Expenses (after reimbursements)."

Example:

This Example is intended to help you compare the cost of investing in the
Fund's Class A, B, and C Shares with the cost of investing in other mutual
funds.
The Example assumes that you invest $10,000 in the Fund's Class A, B, and C
Shares for the time periods indicated and then redeem all of your Shares at the
end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund's Class A, B, and C Shares' operating
expenses remain the same during the period. The example shows expenses using two
different assumptions: Fund operating expenses before and after fee waivers and
expense reimbursements by the Manager. Please note that the Manager is only
bound to waive fees and reimburse expenses through December 31, 2000. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be: <TABLE> <CAPTION>
1 year 3 years 5 years 10 years
Class A
<S> <C> <C> <C> <C>
Expenses before fee waivers and expense reimbursements $ 998 $1,896 $2,800 $5,081
Expenses after fee waivers and expense reimbursements $ 704 $1,027 $1,373 $2,346
Class B
Expenses before fee waivers and expense reimbursements:
Assuming redemption fee $1,036 $1,904 $2,865 $5,286
Assuming no redemption fee $ 538 $1,608 $2,669 $5,286
Expenses after fee waivers and expense reimbursements:
Assuming redemption fee $ 738 $1,050 $1,477 $2,686
Assuming no redemption fee $ 238 $ 733 $1,255 $2,686
Class C
Expenses before fee waivers and expense reimbursements:
Assuming redemption fee $ 693 $1,765 $2,913 $5,688
Assuming no redemption fee $ 594 $1,765 $2,913 $5,688
Expenses after fee waivers and expense reimbursements:
Assuming redemption fee $ 338 $ 733 $1,255 $2,686
Assuming no redemption fee $ 238 $ 733 $1,255 $2,686
</TABLE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

A summary of the Fund's principal investment strategy has been provided above.
Below is additional information on the Fund's principal investment strategies.

The Adviser will consider the geographic market focus of the Fund in
considering companies proposed for investment.

The Adviser targets companies which are well positioned to take advantage of
the introduction of the single European currency. The Adviser focuses on stocks
which meet its high standards in terms of management quality, earnings growth
and shareholder-oriented information policies.
The advent of the European Monetary Union (EMU) has increased the importance
of the European equity markets and allowed a broader allocation of investments
among many countries rather than focusing investments in historically stable
countries. The Fund tends to have a heavier weighting of its assets in German
issuers, although this can change.
The Fund may also select companies that have restructuring potential along
with strong value-oriented management strategies.

Hedging

Temporary Defensive Investments

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

The Fund invests principally in securities of companies that are listed on a
stock exchange or trade on a recognized, regulated market open to the public.

Following are descriptions of the different types of securities that may
comprise the principal securities of the Fund, as explained above and in the
Fund's investment strategy. For purposes of the Fund's investments, convertible
bonds and bonds with warrants are considered equity securities, not fixed income
securities. The Fund may invest in each type of security and its related
subtypes. Equity Securities

Foreign Securities

Derivative Contracts

Following are descriptions of the different types of risks that an investment
in the Fund may entail, as previously summarized under "What are the Main Risks
of Investing in the Fund?"

Stock Market Risks

The value of equity securities in the Fund's portfolio will rise and fall.
These fluctuations could be a sustained trend or a drastic movement. The Fund's
portfolio will reflect changes in prices of individual portfolio stocks or
general changes in stock valuations. Consequently, the Fund's share price may
decline.

Sector Risks

Liquidity Risks

Currency Risks

Risks of Investing in Specific Countries and Regions

The Fund invests a significant portion of its assets in specific regions or
countries, and therefore is exposed to the risks associated with that region or
country and could be subject to greater risk due to unanticipated and negative
economic events and/or market action in such countries or regions. For example,
the Fund has invested a substantial portion of its assets in Germany.

Risks of Foreign Investing

Risks of Investing in Emerging Market Countries

Derivative Contracts

Year 2000 Readiness

While it is impossible to determine in advance all of the risks to the Fund,
the Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.
The Fund's service providers have made changes to their computer systems to
address any Year 2000 problems. In addition, they have gathered information from
third-party providers to determine their Year 2000 readiness.

You can purchase, redeem, or exchange Shares any day the New York Stock
Exchange (NYSE) is open. The Fund offers Class A Shares, Class B Shares and
Class C Shares. Each Share class represents interests in the Fund's portfolio of
securities. The differences between the Share classes relate to the timing and
amount of asset-based sales charge an investor bears directly or indirectly as a
shareholder.
When the Fund receives your transaction request in proper form, it is
processed at the next calculated net asset value (NAV). See "How to Purchase
Shares" and "How to Redeem and Exchange Shares." Purchases and exchanges may be
subject to an applicable front-end sales charge (the public offering price), and
redemptions may be subject to a contingent deferred sales charge.

The value of Shares of the Fund is generally determined based upon the market
value of the portfolio securities held by the underlying Portfolios. However,
the Fund's Board may determine in good faith that another method of valuing
investments is necessary to appraise their fair value.
NAV of the Fund is determined at 4:00 p.m. (U.S. Eastern time) each day the
NYSE is open. Since the Fund owns foreign securities that trade in foreign
markets on days the NYSE is closed, the value of the Fund's assets may change on
days you cannot purchase, redeem or exchange Shares.

<TABLE>
<CAPTION>
Maximum Sales Charge
-----------------------------------
Minimum Front-End Contingent
Initial/Subsequent Sales Deferred
Shares Offered Investment Amounts/1/ Charge/2/ Sales Charge/3/
<S> <C> <C> <C>
Class A $2,000/$100 5.50% 0.00%
Class B $2,000/$100 None 5.00%
Class C $2,000/$100 None 1.00%
</TABLE>

2 Front-End Sales Charge is expressed as a percentage of public offering price.
See "Sales Charge When You Purchase -- Class A Shares Only."

3 See "Sales Charge When You Redeem." As noted in the following tables, certain
Class A Shares may be subject to contingent deferred sales charges.

Sales Charge When You Purchase -- Class A Shares Only
<TABLE>
<CAPTION>
Sales Charge as Sales Charge
a Percentage of as a
Public Offering Percentage of
Purchase Amount Price NAV
<S> <C> <C>
Less than $50,000 5.50% 5.82%
$50,000 but less than $100,000 4.50% 4.71%
$100,000 but less than $250,000 3.50% 3.63%
$250,000 but less than $500,000 2.50% 2.56%
$500,000 but less than $1 million 2.00% 2.04%
$1 million or greater/1/ 0.00% 0.00%
</TABLE>

The sales charge at purchase may be reduced or eliminated by:

. purchasing Shares in greater quantities to reduce the applicable sales
charge;

. combining concurrent purchases of Shares:

. by you, your spouse, and your children under age 21;

. of the same share class of two or more series of Flag Investors Funds, Inc.*
(other than money market funds); or