<PAGE> 1
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
- --------------------------------------------------------------------------------
We appreciate your decision to invest in the Cash Equivalent Fund.
The following pages include the annual report covering the
twelve-months ended July 31, 1999 for the portfolios listed below:
- - Money Market Portfolio
- - Government Securities Portfolio
- - Tax-Exempt Portfolio
During the past year, the portfolios registered solid performance and achieved
their objective of providing maximum current income while maintaining the
stability of principal.
Economic Review and Outlook
Over the past 12 months, we have seen a little bit of everything in terms of
market conditions. Late last year, the economic growth in the U.S. was strong
while problems emerged in Russia, Latin America and Asia. This prompted the Fed
to cut interest rates .25% three different times toward the end of 1998 to help
stabilize the financial markets. The effect may have worked too well because the
Fed ended up reversing some of the effect of those cuts by raising interest
rates by .25% in June 1999 and again in August, after our fiscal year end.
Consequently, we took a defensive position with the fund by keeping average
maturity of the portfolios relatively short. Relying on our more than 100+
collective years of money fund experience, we felt that we should be less
aggressive during these unpredictable conditions.
As 1999 comes to a close, the outlook is good for economic growth coupled with
modest inflationary pressures, which could lead rates to move upward. Meanwhile,
it will be interesting to see the public's reaction to Y2K concerns with regard
to their investments and asset allocation. Early next year, once Y2K is out of
the way, we believe that spending will increase and assets will be
redistributed, so the Fed may boost rates again.
Considering this information, we plan to continue with our slightly defensive
positioning and maintain greater than normal liquidity to accommodate investor
needs as the millennium draws to a close. We will manage each of the Fund's
portfolios so that we continue to offer you attractive yield potential with a
high degree of stability, making the funds an excellent place for you to invest.
Thank you again for your investment. We look forward to serving your investment
needs for years to come.
/s/ Frank Rachwalski
Frank J. Rachwalski
Vice President and Lead Portfolio Manager
September 17, 1999
Frank Rachwalski is a Managing Director of Scudder Kemper Investments, Inc. and
is Vice President and Lead Portfolio Manager of Cash Equivalent Fund. Mr.
Rachwalski holds B.B.A. and M.B.A. degrees from Loyola University.
Fund Results
For the 12-month period ended 7/31/99
<TABLE>
<CAPTION>
EQUIVALENT
NET YIELD TAXABLE YIELD
--------- -------------
<S> <C> <C>
Money Market Portfolio 4.34% not applicable
Government Securities
Portfolio 4.28% not applicable
Tax-Exempt Portfolio 2.65% 4.21%
</TABLE>
Notes
Each fund's net yield is the annualized sum of the daily dividend rates for the
period. Yields are historical, may fluctuate, and do not guarantee future
performance.
The equivalent taxable yield allows you to compare the fund with the performance
of taxable money market funds. For the Tax-Exempt Portfolio, the equivalent
taxable yield is based upon the marginal income tax rate of 37.1%. Income may be
subject to local taxes and for some investors, the alternative minimum tax.
Like all money market funds, an investment in these funds is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the funds seek to preserve your investment at $1.00 per share,
it is possible to lose money.
The views expressed in this report reflect those of the portfolio manager only
through the end of the period stated above. The manager's views are subject to
change at any time, based on market and other conditions.
<PAGE> 2
Cash Equivalent Fund 2
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
Investments at July 31, 1999
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMERCIAL PAPER VALUE
<S> <C>
Ace Overseas Corp.,
5.15%, 8/27/99 $ 9,963
- ---------------------------------------------------------
AES Shady Point, Inc.,
5.12%, 8/10/99 9,987
- ---------------------------------------------------------
American General Finance Corp.,
4.96%, 8/23/99 9,970
- ---------------------------------------------------------
(a)Anheuser-Busch Cos., Inc.,
5.08%, 8/16/99 9,992
- ---------------------------------------------------------
Asset Portfolio Funding Corp.,
4.87%, 8/4/99 19,992
- ---------------------------------------------------------
Asset Securitization Cooperative Corp.,
5.12%, 8/25/99 8,969
- ---------------------------------------------------------
Atlantis One Funding Corp.,
4.99%, 8/10/99 14,981
- ---------------------------------------------------------
(a)Bank of America,
5.39%, 8/3/99 12,011
- ---------------------------------------------------------
Bank of Novia Scotia,
4.97%, 8/11/99 9,986
- ---------------------------------------------------------
Banque Nationale de Paris,
5.29%, 12/15/99 5,883
- ---------------------------------------------------------
Barton Capital Corp.,
5.14%, 8/12/99 9,984
- ---------------------------------------------------------
Baxter International, Inc.,
4.93%, 8/18/99 9,977
- ---------------------------------------------------------
(a)Bear Stearns Cos., Inc.,
5.35%, 8/8/99 10,000
- ---------------------------------------------------------
Beta Finance, Inc.,
5.17%, 9/15/99 9,936
- ---------------------------------------------------------
Brazos River Authority, Texas,
5.00%, 8/17/99 10,000
- ---------------------------------------------------------
Centric Capital Corp.,
4.91%, 8/5/99 9,995
- ---------------------------------------------------------
Citicorp,
5.13%, 8/26/99 9,965
- ---------------------------------------------------------
Commercial Credit Co.,
5.13%, 8/24/99 7,974
- ---------------------------------------------------------
Corporate Asset Funding Co.,
5.12%, 8/11/99 9,986
- ---------------------------------------------------------
Corporate Receivables Corp.,
5.12% - 5.18%, 8/5/99 - 9/20/99 14,959
- ---------------------------------------------------------
(a)Countrywide Home Loans, Inc.,
5.56%, 10/26/99 10,000
- ---------------------------------------------------------
CSW Credit, Inc.,
5.11%, 8/5/99 9,994
- ---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
CXC, Inc.,
4.92%, 8/2/99 $ 9,999
- ---------------------------------------------------------
Delaware Funding Corp.,
5.14%, 8/23/99 9,969
- ---------------------------------------------------------
(a)Den Danske Bank,
5.10%, 8/17/99 4,998
- ---------------------------------------------------------
Den Danske Corp.,
4.91%, 8/16/99 4,990
- ---------------------------------------------------------
Duke Capital Corp.,
5.12% - 5.13%, 8/6/99 9,993
- ---------------------------------------------------------
Enterprise Funding Corp.,
5.14%, 8/27/99 9,963
- ---------------------------------------------------------
Eureka Securitization, Inc.,
5.13%, 8/16/99 9,979
- ---------------------------------------------------------
Fairway Finance Corp.,
5.01%, 11/17/99 9,854
- ---------------------------------------------------------
Falcon Asset Securitization Corp.,
5.14%, 9/1/99 9,956
- ---------------------------------------------------------
FCAR Owner Trust,
5.13%, 8/17/99 9,977
- ---------------------------------------------------------
(a)FINOVA Capital Corp.,
5.15%, 9/13/99 15,000
- ---------------------------------------------------------
Ford Motor Credit Co.,
5.08%, 8/5/99 9,994
- ---------------------------------------------------------
Fountain Square Commercial Funding,
5.14%, 8/26/99 5,890
- ---------------------------------------------------------
Giro Funding Corp.,
5.13% - 5.16%, 8/19/99 - 9/22/99 12,943
- ---------------------------------------------------------
(b)GMAC Mortgage Corporation of Pennsylvania,
5.30%, 8/2/99 9,999
- ---------------------------------------------------------
(a)Goldman Sachs Group, L.P.,
5.18%, 8/8/99 10,000
- ---------------------------------------------------------
(a)Heller Financial, Inc.,
5.53%, 10/7/99 15,016
- ---------------------------------------------------------
Household Finance Corp.,
4.92%, 8/18/99 9,977
- ---------------------------------------------------------
International Securitization Corp.,
5.14%, 8/26/99 14,947
- ---------------------------------------------------------
Intrepid Funding Master Trust,
4.93%, 9/20/99 9,933
- ---------------------------------------------------------
Kitty Hawk Funding Corp.,
5.17%, 9/7/99 9,947
- ---------------------------------------------------------
Lehman Brothers Holdings, Inc.,
5.27%, 9/20/99 9,928
- ---------------------------------------------------------
</TABLE>
<PAGE> 3
Cash Equivalent Fund 3
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
Investments at July 31, 1999
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
Lexington Parker Capital Co.,
5.15%, 8/5/99 $ 4,997
- ---------------------------------------------------------
(a)Merrill Lynch & Co.,
5.16%, 8/21/99 10,000
- ---------------------------------------------------------
Mont Blanc Capital Corp.,
5.13%, 8/18/99 9,976
- ---------------------------------------------------------
Monte Rosa Capital Corp.,
5.13%, 8/19/99 14,962
- ---------------------------------------------------------
Moriarty, LLC,
5.04%, 9/7/99 9,949
- ---------------------------------------------------------
(a)National Rural Utilities Cooperative
Finance Corp.,
5.18%, 9/25/99 9,999
- ---------------------------------------------------------
New Center Asset Trust,
5.22%, 10/12/99 9,897
- ---------------------------------------------------------
Nordebanken NA,
4.91%, 8/9/99 9,989
- ---------------------------------------------------------
Oakland-Alameda County Coliseum, California,
5.12%, 8/18/99 10,000
- ---------------------------------------------------------
Park Avenue Receivables Corp.,
5.16%, 9/8/99 9,946
- ---------------------------------------------------------
Pemex Capital, Inc.,
5.27%, 9/20/99 9,928
- ---------------------------------------------------------
Petrobras Inc. Finance Co.,
4.95%, 8/9/99 9,989
- ---------------------------------------------------------
Pollution Control Financing Authority,
California
4.88%, 8/10/99 10,000
- ---------------------------------------------------------
Preferred Receivables Funding Corp.,
5.12%, 8/24/99 12,958
- ---------------------------------------------------------
Prudential Funding Corp.,
4.92%, 8/24/99 9,969
- ---------------------------------------------------------
Quincy Capital Corp.,
5.12% - 5.17%, 8/9/99 - 9/8/99 24,680
- ---------------------------------------------------------
Receivables Capital Corp.,
5.17%, 9/8/99 4,973
- ---------------------------------------------------------
Salomon Smith Barney Holdings, Inc.,
5.15%, 8/2/99 4,999
- ---------------------------------------------------------
Sears Roebuck Acceptance Corp.,
5.14% - 5.18%, 8/12/99 - 9/7/99 19,931
- ---------------------------------------------------------
Sheffield Receivables Corp.,
5.14%, 8/16/99 4,989
- ---------------------------------------------------------
Skandinaviska Enskilda Banken AB,
5.12%, 8/9/99 9,989
- ---------------------------------------------------------
Swedbank, Inc.,
4.91%, 8/16/99 9,980
- ---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
Thunder Bay Funding, Inc.,
5.04% - 5.14%, 8/5/99 - 8/6/99 $ 9,994
- ---------------------------------------------------------
(a)Transamerica Finance Corp.,
5.56%, 10/22/99 10,000
- ---------------------------------------------------------
Twin Tower, Inc.,
5.14%, 8/12/99 9,984
- ---------------------------------------------------------
U.S. WEST Communications, Inc.,
5.17%, 8/17/99 7,982
- ---------------------------------------------------------
UBS Finance, Inc.,
5.04%, 12/22/99 9,806
- ---------------------------------------------------------
Variable Funding Capital Corp.,
5.15%, 8/19/99 9,974
- ---------------------------------------------------------
Windmill Funding Corp.,
5.13%, 8/19/99 9,974
- ---------------------------------------------------------
Wood Street Funding Corp.,
5.18%, 9/21/99 9,928
- ---------------------------------------------------------
(a)Xerox Capital Europe, PLC,
4.92%, 8/20/99 10,000
- ---------------------------------------------------------
TOTAL COMMERCIAL PAPER--74.6%
(average maturity: 27 days) 777,498
- ---------------------------------------------------------
CERTIFICATES OF DEPOSIT
- ---------------------------------------------------------
(a)American Honda Finance Corp.,
5.19%, 8/24/99 4,999
- ---------------------------------------------------------
(a)American Express Centurion Bank,
5.17%, 8/15/99 10,000
- ---------------------------------------------------------
(a)Bank of Montreal,
5.15%, 8/1/99 9,997
- ---------------------------------------------------------
(a)Barclays Bank PLC,
5.14%, 8/1/99 9,996
- ---------------------------------------------------------
(a)Bayerische Hypo-Und Vereinsbank AG,
5.10%, 8/19/99 9,997
- ---------------------------------------------------------
(a)Bayerische Landesbank,
5.07%, 8/10/99 9,995
- ---------------------------------------------------------
(a)Caterpillar Financial Services Corp.,
5.00%, 8/11/99 10,003
- ---------------------------------------------------------
(a)Comerica Bank,
5.15%, 8/1/99 9,997
- ---------------------------------------------------------
(a)Commerzbank AG,
5.16%, 8/1/99 9,997
- ---------------------------------------------------------
(a)CS First Boston,
5.22%, 8/1/99 15,000
- ---------------------------------------------------------
(a)Deutsche Bank,
5.13% - 5.14%, 8/1/99 9,995
- ---------------------------------------------------------
</TABLE>
<PAGE> 4
Cash Equivalent Fund 4
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
Investments at July 31, 1999
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
(a)Dresdner Bank,
5.14%, 8/26/99 $ 14,994
- ---------------------------------------------------------
(a)First Union National Bank,
5.23%, 8/17/99 10,000
- ---------------------------------------------------------
(a)Harris Trust and Savings Bank,
5.16%, 8/1/99 9,997
- ---------------------------------------------------------
(a)J.P. Morgan & Co, Inc.,
5.03%, 8/3/99 10,000
- ---------------------------------------------------------
(a)John Deere Capital Corp.,
5.15%, 8/1/99 9,997
- ---------------------------------------------------------
(a)Key Bank, NA,
5.13%, 8/29/99 9,999
- ---------------------------------------------------------
(a)National City Bank of Kentucky,
5.39%, 10/7/99 10,010
- ---------------------------------------------------------
(a)Northern Trust Corp.,
5.07%, 8/9/99 9,999
- ---------------------------------------------------------
(a)PNC Bank, NA,
5.14%, 8/28/99 10,001
- ---------------------------------------------------------
(a)Royal Bank of Canada,
5.14%, 8/1/99 9,996
- ---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
(a)U.S. Bank, NA,
5.13%, 8/21/99 $ 9,994
- ---------------------------------------------------------
(a)Wells Fargo & Co.,
5.17%, 9/29/99 9,995
- ---------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT--22.6%
(average maturity: 15 days) 234,958
- ---------------------------------------------------------
U.S. GOVERNMENT AGENCY NOTE--1.9%
(average maturity: 3 days)
(a)Student Loan Marketing Association,
5.06%, 8/3/99 19,998
- ---------------------------------------------------------
REPURCHASE AGREEMENT--.9%
State Street Bank and Trust Company
5.04%, 8/2/99 9,100
- ---------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO--100%
(average maturity: 24 days) $1,041,554
- ---------------------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
<PAGE> 5
Cash Equivalent Fund 5
- --------------------------------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO
Investments at July 31, 1999
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHORT-TERM NOTES Value
<S> <C>
(Issued or guaranteed by U.S. Government agencies
or instrumentalities)
- -----------------------------------------------------------
(a)Export-Import Bank of the United States,
Kuwait Investment Authority,
5.52%, 8/15/99 $ 2,506
- -----------------------------------------------------------
(a)Federal Farm Credit Bank,
5.10%, 8/1/99 4,999
- -----------------------------------------------------------
(a)Federal Home Loan Bank,
5.02% - 5.10%, 8/1/99 - 8/28/99 49,982
- -----------------------------------------------------------
Federal Home Loan Bank,
5.03% - 5.05%, 10/29/99 - 3/3/00 28,000
- -----------------------------------------------------------
Federal Home Loan Mortgage Corp.,
4.78% - 4.94%, 8/2/99 - 11/18/99 29,057
- -----------------------------------------------------------
(a)Federal Home Loan Mortgage Corp.,
4.98%, 8/18/99 19,987
- -----------------------------------------------------------
Federal National Mortgage Association,
4.87% - 5.05%, 8/20/99 - 2/23/00 20,956
- -----------------------------------------------------------
(a)Overseas Private Investment Corp.,
International Paper Co.,
5.26%, 10/15/99 5,800
- -----------------------------------------------------------
(a)Overseas Private Investment Corp.,
Omolon,
5.31%, 8/3/99 2,778
- -----------------------------------------------------------
(a)Student Loan Marketing Association,
4.92% - 5.30%, 8/1/99 - 8/3/99 53,462
- -----------------------------------------------------------
TOTAL SHORT-TERM NOTES--48.0%
(average maturity: 38 days) 217,527
- -----------------------------------------------------------
<CAPTION>
REPURCHASE AGREEMENTS Value
<S> <C>
(Dated 6/99 and 7/99, collateralized by
Federal Home Loan Mortgage Corp. and
Federal National Mortgage Association securities)
- -----------------------------------------------------------
Bear, Stearns Cos., Inc.
(held at The Bank of New York)
5.07%, 8/4/99 $ 66,000
- -----------------------------------------------------------
Chase Securities, Inc.
(held at The Chase Manhattan Bank)
5.13%, 8/2/99 10,000
- -----------------------------------------------------------
Donaldson, Lufkin and Jenrette
(held at The Chase Manhattan Bank)
5.02% - 5.04%, 8/2/99 - 8/25/99 25,000
- -----------------------------------------------------------
Merrill Lynch Government Securities, Inc.
(held at The Chase Manhattan Bank)
5.06% - 5.08%, 9/8/99 - 9/30/99 32,000
- -----------------------------------------------------------
Morgan Stanley, Dean Witter & Co.
(held at The Bank of New York)
4.96% - 5.11%, 8/5/99 - 8/30/99 36,000
- -----------------------------------------------------------
Salomon Smith Barney Holdings, Inc.
(held at The Bank of New York)
5.06%, 8/16/99 66,000
- -----------------------------------------------------------
State Street Bank and Trust Company
5.04%, 8/2/99 950
- -----------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS--52.0%
(average maturity: 18 days) 235,950
- -----------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO--100%
(average maturity: 28 days) $453,477
- -----------------------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
<PAGE> 6
Cash Equivalent Fund 6
- --------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
Investments at July 31, 1999
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(a)VARIABLE RATE DEMAND SECURITIES Value
<S> <C>
CALIFORNIA
- -----------------------------------------------------------
Los Angeles,
Harbor Improvement Corp.,
3.30% $ 6,900
COLORADO
- -----------------------------------------------------------
Smith Creek,
Metropolitan District,
3.20% 5,000
DISTRICT OF COLUMBIA
- -----------------------------------------------------------
American Public Health Association,
3.15% 6,000
FLORIDA
- -----------------------------------------------------------
Orange County,
Health Facilities Authority,
3.25% 4,000
GEORGIA
- -----------------------------------------------------------
Fulton County,
Morehouse College Project,
3.15% 4,145
- -----------------------------------------------------------
Fulton County,
United Way Metropolitan Atlanta Project,
3.15% 3,000
- -----------------------------------------------------------
Gainesville-Riverside,
Redevelopment Authority,
3.15% 5,000
- -----------------------------------------------------------
Laurens County,
Development Revenue,
3.25% 5,000
ILLINOIS
- -----------------------------------------------------------
Alsip,
Industrial Development Revenue,
3.25% 3,750
- -----------------------------------------------------------
Development Finance Authority,
Adventist Health System,
3.20% 7,000
Grecian Delight Foods Project,
3.30% 8,300
- -----------------------------------------------------------
Rockford,
Industrial Development Revenue,
3.25% 4,000
- -----------------------------------------------------------
Student Assistance Commission,
3.25% 4,800
INDIANA
- -----------------------------------------------------------
Ossian,
Economic Development Revenue,
3.25% 3,200
</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
KENTUCKY
- -----------------------------------------------------------
Boone County,
Pollution Control Revenue,
3.50% $ 8,000
- -----------------------------------------------------------
Mason County,
Pollution Control Revenue,
3.20% 13,500
- -----------------------------------------------------------
Mayfield,
Multi-City Lease Revenue,
3.25% 7,100
MARYLAND
- -----------------------------------------------------------
Baltimore County,
Oak Crest Village Inc. Project,
3.15% 3,000
MICHIGAN
- -----------------------------------------------------------
Strategic Fund,
Continental Aluminum Project,
3.30% 4,200
MINNESOTA
- -----------------------------------------------------------
Owatonna,
Hospital Revenue,
3.30% 5,340
MISSOURI
- -----------------------------------------------------------
Environmental Improvement and Energy Authority,
3.20% 3,000
- -----------------------------------------------------------
Kansas City,
Industrial Development Authority,
3.20% 3,000
NEVADA
- -----------------------------------------------------------
Department of Business and Industry,
3.35% 4,000
NORTH CAROLINA
- -----------------------------------------------------------
Wake County,
Industrial Facilities and Pollution Control
Financing Authority,
3.05% 9,600
- -----------------------------------------------------------
Winston-Salem,
Multi-Family Housing,
3.15% 4,000
OHIO
- -----------------------------------------------------------
Medina County,
Health Care Facilities Revenue,
3.27% 3,000
</TABLE>
<PAGE> 7
Cash Equivalent Fund 7
- --------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
Investments at July 31, 1999
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
OKLAHOMA
- -----------------------------------------------------------
Development Finance Authority Revenue,
3.37% $ 3,200
OREGON
- -----------------------------------------------------------
Economic Development Revenue,
3.25% 4,000
PENNSYLVANIA
- -----------------------------------------------------------
Higher Education Facilities Authority,
3.30% 7,500
- -----------------------------------------------------------
Lehigh County,
Industrial Development Authority,
3.50% 4,800
- -----------------------------------------------------------
Schuylkill County,
Industrial Development Authority,
3.05% 6,000
TENNESSEE
- -----------------------------------------------------------
Coffee County,
Eagle-Picher Hillsdale Tool Project,
3.30% 4,000
TEXAS
- -----------------------------------------------------------
Brazos River Authority,
Pollution Control Revenue,
3.45% 500
- -----------------------------------------------------------
Harris County,
Health Facilities Development Corp. Revenue,
3.45% 6,400
- -----------------------------------------------------------
Sabine River Authority,
Pollution Control Revenue,
3.55% 7,000
- -----------------------------------------------------------
Small Business Industrial Development Corp.,
3.20% 2,000
VIRGINIA
- -----------------------------------------------------------
Albemarle County,
Industrial Development Authority,
3.15% 4,000
WASHINGTON
- -----------------------------------------------------------
Port of Vancouver,
3.20% 5,000
WEST VIRGINIA
- -----------------------------------------------------------
Preston County,
Industrial Development Revenue,
3.37% 3,550
WISCONSIN
- -----------------------------------------------------------
Health and Educational Facilities Authority,
3.05% 6,500
</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
TOTAL VARIABLE RATE
DEMAND SECURITIES--53.0%
(average maturity: 7 days) $202,285
- -----------------------------------------------------------
OTHER SECURITIES
ALASKA
- -----------------------------------------------------------
Valdez,
Marine Terminal Revenue,
3.35%, 10/12/99 3,000
ARIZONA
- -----------------------------------------------------------
Salt River Project,
Agricultural Improvement and Power District,
3.20% - 3.25%, 8/12/99 - 8/17/99 8,800
COLORADO
- -----------------------------------------------------------
Platte River Power Authority,
3.25%, 8/17/99 5,000
FLORIDA
- -----------------------------------------------------------
Jacksonville,
Electric Authority,
3.30%, 9/16/99 3,000
- -----------------------------------------------------------
Municipal Power Agency,
3.15%, 8/12/99 2,500
- -----------------------------------------------------------
Orange County,
Health Facilities Authority,
3.20%, 8/19/99 6,200
- -----------------------------------------------------------
Orlando,
Capital Improvement Revenue,
3.20% - 3.30%, 8/17/99 - 9/10/99 6,500
- -----------------------------------------------------------
Sunshine State,
Governmental Financing Commission,
3.20% - 3.30%, 8/11/99 - 9/20/99 6,880
GEORGIA
- -----------------------------------------------------------
Municipal Electric Authority,
3.20% - 3.35%, 8/12/99 - 9/21/99 8,885
ILLINOIS
- -----------------------------------------------------------
Education Facilities Authority,
3.25%, 8/12/99 - 8/16/99 7,500
Health Facilities Authority,
3.25%, 9/7/99 3,500
INDIANA
- -----------------------------------------------------------
Jasper County,
Pollution Control Revenue,
3.25%, 8/11/99 - 8/12/99 10,000
</TABLE>
<PAGE> 8
Cash Equivalent Fund 8
- --------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
Investments at July 31, 1999
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
KENTUCKY
- -----------------------------------------------------------
Danville,
MultiCity Lease Revenue,
3.25% - 3.35%, 9/13/99 - 9/15/99 $ 7,000
Pendleton County,
Lease Revenue,
3.25% - 3.30%, 8/12/99 - 9/13/99 13,200
LOUISIANA
- -----------------------------------------------------------
Industrial District of West Baton Rouge,
Pollution Control Revenue,
3.30%, 8/9/99 4,950
- -----------------------------------------------------------
Public Facilities Authority,
3.35%, 8/27/99 4,100
NEVADA
- -----------------------------------------------------------
Las Vegas,
Valley Water,
3.25% - 3.30%, 8/12/99 - 9/20/99 6,000
NEW HAMPSHIRE
- -----------------------------------------------------------
Business Finance Authority,
3.25%, 8/18/99 2,500
NEW YORK
- -----------------------------------------------------------
Nassau County,
General Obligation,
3.50%, 8/18/99 - 12/22/99 5,704
PENNSYLVANIA
- -----------------------------------------------------------
Allegheny County,
3.35%, 8/10/99 3,400
- -----------------------------------------------------------
Philadelphia,
Tax and Revenue Anticipation Notes,
4.25%, 6/30/00 3,020
SOUTH CAROLINA
- -----------------------------------------------------------
Public Services Authority,
3.20%, 8/12/99 3,407
</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
TEXAS
- -----------------------------------------------------------
Austin,
Combined Utility System,
3.30%, 9/13/99 - 9/16/99 $ 12,730
- -----------------------------------------------------------
Municipal Power Agency,
3.35%, 9/8/99 - 9/15/99 15,900
- -----------------------------------------------------------
Public Finance Authority,
3.20%, 8/26/99 2,000
- -----------------------------------------------------------
University of Texas,
3.25% - 3.35%, 8/11/99 - 9/14/99 6,500
- -----------------------------------------------------------
Tax and Revenue Anticipation Notes,
4.50%, 8/31/99 4,504
UTAH
- -----------------------------------------------------------
Intermountain Power Agency,
3.35%, 9/8/99 2,500
VIRGINIA
- -----------------------------------------------------------
Lousia County,
Industrial Development Authority,
3.30%, 9/16/99 - 9/23/99 7,000
- -----------------------------------------------------------
York County,
Industrial Development Authority,
3.35%, 9/16/99 3,000
TOTAL OTHER SECURITIES--47.0%
(average maturity: 36 days) 179,180
- -----------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO--100.0%
(average maturity: 20 days) $381,465
- -----------------------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
<PAGE> 9
Cash Equivalent Fund 9
- --------------------------------------------------------------------------------
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 July 31,
1999. The dates shown represent the demand date or the next interest rate change
date. Securities in the Tax-Exempt Portfolio 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 July 31, 1999, the aggregate value of illiquid
securities was $9,999,000 in the Money Market Portfolio, which represented 1.0%
of net assets.
See accompanying Notes to Financial Statements.
<PAGE> 10
Cash Equivalent Fund 10
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS
CASH EQUIVALENT FUND
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of the Money Market, Government Securities and
Tax-Exempt Portfolios, comprising Cash Equivalent Fund, as of July 31, 1999, and
the related statements of operations for the year then ended and changes in net
assets for each of the two years in the period then ended, and the financial
highlights for each of the fiscal periods since 1995. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of July
31, 1999, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Portfolios comprising Cash Equivalent Fund at July 31, 1999, the results
of their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended and the financial highlights for
each of the fiscal periods since 1995, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
September 16, 1999
<PAGE> 11
Cash Equivalent Fund 11
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1999
(in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY GOVERNMENT
MARKET SECURITIES TAX-EXEMPT
ASSETS PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Investments, at amortized cost:
Short-term securities $1,032,454 217,527 381,465
- --------------------------------------------------------------------------------------------------------
Repurchase agreements 9,100 235,950 --
- --------------------------------------------------------------------------------------------------------
Cash 34 463 110
- --------------------------------------------------------------------------------------------------------
Receivable for:
Interest 2,018 2,447 1,478
- --------------------------------------------------------------------------------------------------------
Fund shares sold 4 112 6
- --------------------------------------------------------------------------------------------------------
Investments sold -- -- 80
- --------------------------------------------------------------------------------------------------------
Total assets 1,043,610 456,499 383,139
- --------------------------------------------------------------------------------------------------------
LIABILITIES AND NET ASSETS
Payable for:
Dividends 1,917 856 454
- --------------------------------------------------------------------------------------------------------
Fund shares redeemed 2,131 710 330
- --------------------------------------------------------------------------------------------------------
Management fee 364 75 71
- --------------------------------------------------------------------------------------------------------
Distribution services fee 339 188 105
- --------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 278 108 1
- --------------------------------------------------------------------------------------------------------
Trustees' fees and other 265 32 49
- --------------------------------------------------------------------------------------------------------
Total liabilities 5,294 1,969 1,010
- --------------------------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $1,038,316 454,530 382,129
- --------------------------------------------------------------------------------------------------------
THE PRICING OF SHARES
- --------------------------------------------------------------------------------------------------------
Shares outstanding 1,038,316 454,530 382,129
- --------------------------------------------------------------------------------------------------------
Net asset value and redemption price per share $1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 12
Cash Equivalent Fund 12
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Year ended July 31, 1999
(in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY GOVERNMENT
MARKET SECURITIES TAX-EXEMPT
PORTFOLIO PORTFOLIO PORTFOLIO
-----------------------------------------
<S> <C> <C> <C>
INTEREST INCOME $50,564 23,025 12,525
- -------------------------------------------------------------------------------------------------------
EXPENSES:
Management fee 1,930 896 843
- -------------------------------------------------------------------------------------------------------
Distribution services fee 3,586 1,709 1,217
- -------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 2,838 1,018 194
- -------------------------------------------------------------------------------------------------------
Trustees' fees 32 16 11
- -------------------------------------------------------------------------------------------------------
Reports to shareholders 100 42 25
- -------------------------------------------------------------------------------------------------------
Audit 45 19 16
- -------------------------------------------------------------------------------------------------------
Legal 7 5 3
- -------------------------------------------------------------------------------------------------------
Registration fee 52 49 54
- -------------------------------------------------------------------------------------------------------
Other 37 45 5
- -------------------------------------------------------------------------------------------------------
Total expenses 8,627 3,799 2,368
- -------------------------------------------------------------------------------------------------------
Net investment income $41,937 19,226 10,157
- -------------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
Years ended July 31, 1999 and 1998
(in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET GOVERNMENT SECURITIES TAX-EXEMPT
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------ ----------------------- -----------------------
1999 1998 1999 1998 1999 1998
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS, DIVIDENDS AND CAPITAL SHARE
ACTIVITY
Net investment income $ 41,937 44,830 19,226 19,873 10,157 13,242
- -----------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment
income (41,937) (44,830) (19,226) (19,873) (10,157) (13,242)
- -----------------------------------------------------------------------------------------------------------------------------
Capital share transactions (dollar amounts and
number of shares are the same):
Shares sold 5,167,353 3,846,037 2,213,704 3,401,622 1,169,312 1,244,764
- -----------------------------------------------------------------------------------------------------------------------------
Shares issued in reinvestment of dividends 41,555 44,898 19,057 19,761 10,087 13,241
- -----------------------------------------------------------------------------------------------------------------------------
5,208,908 3,890,935 2,232,761 3,421,383 1,179,399 1,258,005
Shares redeemed (5,022,184) (4,009,859) (2,170,092) (3,433,559) (1,130,697) (1,369,517)
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from capital share
transactions and total increase (decrease) in
net assets 186,724 (118,924) 62,669 (12,176) 48,702 (111,512)
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of year 851,592 970,516 391,861 404,037 333,427 444,939
- -----------------------------------------------------------------------------------------------------------------------------
End of year $ 1,038,316 851,592 454,530 391,861 382,129 333,427
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 13
Cash Equivalent Fund 13
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE FUND Cash Equivalent Fund (the "Fund") is registered
under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end
diversified management investment company
organized as a Massachusetts business trust.
The Fund currently offers three series of
shares (portfolios). The Money Market Portfolio
invests primarily in short-term high quality
obligations of major banks and corporations.
The Government Securities Portfolio invests
exclusively in obligations issued or guaranteed
by the U.S. Government, its agencies or
instrumentalities and repurchase agreements
thereon. The Tax-Exempt Portfolio invests in
short-term high quality municipal securities.
The fund's financial statements are prepared in
accordance with generally accepted accounting
principles which require the use of management
estimates. The policies described below are
followed consistently by the fund in the
preparation of its financial statements.
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING SECURITY VALUATION The Fund values all portfolio
POLICIES securities utilizing the amortized cost method
permitted in accordance with Rule 2a-7 under the
1940 Act and pursuant to which the fund must
adhere to certain conditions. Under this method,
which does not take into account unrealized
gains or losses on securities, an instrument is
initially valued at its cost and thereafter
assumes a constant accretion/amortization to
maturity of any discount/premium.
REPURCHASE AGREEMENTS Each portfolio may enter
into repurchase agreements with certain banks
and broker/dealers whereby the fund, through its
custodian or sub-custodian bank, receives
delivery of the underlying securities, the
amount of which at the time of purchase and each
subsequent business day is required to be
maintained at such a level that the market value
is equal to at least the principal amount of the
repurchase price plus accrued interest.
FEDERAL INCOME TAXES Each portfolio's policy is
to comply with the requirements of the Internal
Revenue Code, as amended, which are applicable
to regulated investment companies and to
distribute all of its taxable and tax-exempt
income to its shareholders. Accordingly, each
portfolio paid no federal income taxes and no
federal income tax provision was required.
DISTRIBUTION OF INCOME AND GAINS All of the net
investment income of each portfolio is declared
as a daily dividend and is distributed to
shareholders monthly. Net investment income
includes all realized gains and losses on
portfolio securities.
INVESTMENT TRANSACTIONS AND INTEREST INCOME
Investment transactions are accounted for on the
trade date. Interest income is recorded on the
accrual basis. All discounts and premiums are
accreted/amortized for both tax and financial
reporting purposes.
EXPENSES Expenses arising in connection with a
specific portfolio are allocated to that
portfolio. Other Fund expenses are allocated
between the portfolios in proportion to their
relative net assets.
3. TRANSACTIONS WITH MANAGEMENT AGREEMENT The Fund has a management
AFFILIATES agreement with Scudder Kemper Investments, Inc.
(Scudder Kemper) and pays a monthly investment
management fee for the Money Market and
Government Securities Portfolios of 1/12 of the
annual rate of .22% of the first $500 million of
combined average daily net assets of those
portfolios declining to .15% of
<PAGE> 14
Cash Equivalent Fund 14
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
combined average daily net assets in excess of
$3 billion. The Tax-Exempt Portfolio pays a
monthly investment management fee of 1/12 of the
annual rate of .22% of the first $500 million of
average daily net assets of such portfolio
declining to .15% of average daily net assets in
excess of $3 billion. During the year ended July
31, 1999, the fund incurred management fees of
$3,669,000.
DISTRIBUTION AGREEMENT The fund also has an
administration, shareholder services and
distribution agreement with Kemper Distributors,
Inc. (KDI). For its services as primary
distributor, the fund pays KDI an annual fee of
.38% of average daily net assets for the Money
Market and Government Securities Portfolios and
.33% of average daily net assets for the
Tax-Exempt Portfolio pursuant to separate Rule
12b-1 plans for these portfolios. For the year
ended July 31, 1999, the fund incurred
distribution fees of $6,512,000. KDI has related
service agreements with various firms to provide
cash management and other services for fund
shareholders.
SHAREHOLDER SERVICES AGREEMENT Pursuant to a
services agreement with the fund's transfer
agent, Kemper Service Company (KSvC) is the
shareholder services agent of the fund. Under
the agreement, KSvC received shareholder
services fees of $2,616,000 for the year ended
July 31, 1999.
OFFICERS AND TRUSTEES Certain officers or
trustees of the fund are also officers or
directors of Scudder Kemper. During the year
ended July 31, 1999, the fund made no payments
to its officers and incurred trustees' fees of
$59,000 to independent trustees.
<PAGE> 15
Cash Equivalent Fund 15
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------------------------------------------
MONEY MARKET PORTFOLIO 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.00 1.00 1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income .04 .05 .05 .05 .05
- ----------------------------------------------------------------------------------------------------------------------------
Less dividends declared .04 .05 .05 .05 .05
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 1.00 1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 4.43% 4.93 4.78 4.94 4.95
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses .89% .91 .93 .89 .87
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income 4.34% 4.83 4.64 4.86 4.84
- ----------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of year (in thousands) $1,038,316 851,592 970,516 2,774,595 3,593,294
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note:
The Money Market Portfolio's total return for the year ended July 31, 1995
includes the effect of a capital contribution from the investment manager.
Without the capital contribution, the total return would have been 4.28%.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.00 1.00 1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------------------------
Net investment income .04 .05 .05 .05 .05
- ----------------------------------------------------------------------------------------------------------------------
Less dividends declared .04 .05 .05 .05 .05
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 1.00 1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 4.37% 4.89 4.85 5.00 4.96
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses .85% .85 .83 .79 .81
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 4.29% 4.79 4.73 4.90 4.87
- ----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of year (in thousands) $454,530 391,861 404,037 1,594,128 1,785,098
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------------------------------------
TAX-EXEMPT PORTFOLIO 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.00 1.00 1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------------------------
Net investment income .03 .03 .03 .03 .03
- ----------------------------------------------------------------------------------------------------------------------
Less dividends declared .03 .03 .03 .03 .03
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 1.00 1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 2.68% 3.13 3.03 3.11 3.21
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses .62% .66 .71 .70 .68
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 2.65% 3.09 2.97 3.08 3.15
- ----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of year (in thousands) $382,129 333,427 444,939 931,564 1,109,861
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 16
Cash Equivalent Fund 16
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
TAX INFORMATION
All of the dividends from the Money Market and Government Securities Portfolios
are taxable as ordinary income. These dividends, whether received in cash or
reinvested in shares, must be included in your federal income tax return and
must be reported by the Portfolio to the Internal Revenue Service in accordance
with U.S. Treasury Department Regulations.
Of the dividends paid from the Tax-Exempt Portfolio for the taxable year ended
July 31, 1999, 100% are designated as exempt interest dividends for federal
income tax purposes. However, a portion of the dividends may be includable in
the alternative minimum tax calculation.
Please consult a tax adviser if you have questions about federal or state income
tax laws, or on how to prepare your tax returns.
<PAGE> 17
Cash Equivalent Fund 17
- --------------------------------------------------------------------------------
SPECIAL SHAREHOLDERS' MEETING
- --------------------------------------------------------------------------------
On December 17, 1998, a special shareholders' meeting was held. Cash Equivalent
Fund shareholders were asked to vote on two separate issues:
approval of the new Investment Management Agreement between the fund and Scudder
Kemper Investments, Inc. and approval to modify or eliminate certain policies
and to eliminate the shareholder approval requirements as to certain other
matters. The second proposal (Proposal #2) did not receive sufficient votes to
approve the proposed changes and the meeting was adjourned. When the meeting
reconvened on January 25, 1999, Proposal #2 did not pass. The following are the
results.
1.) APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE FUND AND
SCUDDER KEMPER INVESTMENTS, INC. THIS ITEM WAS APPROVED.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 716,142,588 5,427,957 16,772,116
Government Securities
Portfolio 348,323,769 4,347,588 5,606,356
Tax-Exempt Portfolio 193,372,477 1,914,877 2,587,851
</TABLE>
2.) TO MODIFY OR ELIMINATE CERTAIN POLICIES AND TO ELIMINATE THE SHAREHOLDER
APPROVAL REQUIREMENT AS TO CERTAIN OTHER MATTERS. THERE WAS AN INSUFFICIENT
NUMBER OF VOTES FOR EACH ITEM. THESE ITEMS WERE NOT APPROVED.
INVESTMENT OBJECTIVES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,736,214 16,454,492 27,119,043
Government Securities
Portfolio 119,994,863 9,558,524 11,105,115
Tax-Exempt Portfolio 85,650,956 9,454,550 5,215,929
</TABLE>
INVESTMENT POLICIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,794,754 16,395,952 27,119,043
Government Securities
Portfolio 120,068,702 9,484,685 11,105,115
Tax-Exempt Portfolio 85,757,255 9,348,251 5,215,929
</TABLE>
DIVERSIFICATION
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 232,392,033 15,798,672 27,119,043
Government Securities
Portfolio 120,290,004 9,263,383 11,105,115
Tax-Exempt Portfolio 85,781,507 9,323,999 5,215,929
</TABLE>
BORROWING
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,802,207 16,388,498 27,119,043
Government Securities
Portfolio 119,788,619 9,764,768 11,105,115
Tax-Exempt Portfolio 85,651,006 9,454,501 5,215,929
</TABLE>
SENIOR SECURITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 232,531,493 15,659,212 27,119,043
Government Securities
Portfolio 120,230,188 9,323,199 11,105,115
Tax-Exempt Portfolio 85,849,872 9,255,635 5,215,929
</TABLE>
CONCENTRATION
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 232,443,027 15,747,648 27,119,043
Government Securities
Portfolio 120,275,888 9,277,499 11,105,115
Tax-Exempt Portfolio 85,786,191 9,319,315 5,215,929
</TABLE>
UNDERWRITING OF SECURITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 232,474,582 15,716,123 27,119,043
Government Securities
Portfolio 120,212,884 9,340,503 11,105,115
Tax-Exempt Portfolio 85,831,154 9,274,352 5,215,929
</TABLE>
<PAGE> 18
Cash Equivalent Fund 18
- --------------------------------------------------------------------------------
SPECIAL SHAREHOLDERS' MEETING
- --------------------------------------------------------------------------------
INVESTMENT IN REAL ESTATE
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,799,921 16,390,785 27,119,043
Government Securities
Portfolio 120,043,693 9,509,694 11,105,115
Tax-Exempt Portfolio 85,803,731 9,301,776 5,215,929
</TABLE>
PURCHASE OF COMMODITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,451,989 16,738,717 27,119,043
Government Securities
Portfolio 119,620,520 9,932,868 11,105,115
Tax-Exempt Portfolio 85,756,051 9,349,456 5,215,929
</TABLE>
LENDING
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 232,288,084 15,902,622 27,119,043
Government Securities
Portfolio 119,987,836 9,565,551 11,105,115
Tax-Exempt Portfolio 85,814,993 9,290,513 5,215,929
</TABLE>
MARGIN PURCHASES AND SHORT SALES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 230,895,235 17,295,470 27,119,043
Government Securities
Portfolio 119,515,100 10,038,287 11,105,115
Tax-Exempt Portfolio 85,560,620 9,544,886 5,215,929
</TABLE>
PURCHASES OF SECURITIES OF RELATED ISSUERS
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 232,057,560 16,133,145 27,119,043
Government Securities
Portfolio 119,972,191 9,581,196 11,105,115
Tax-Exempt Portfolio 85,791,607 9,313,900 5,215,929
</TABLE>
PLEDGING OF ASSETS
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,853,618 16,337,088 27,119,043
Government Securities
Portfolio 119,694,192 9,859,195 11,105,115
Tax-Exempt Portfolio 85,668,382 9,437,125 5,215,929
</TABLE>
RESTRICTED AND ILLIQUID SECURITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,683,134 16,507,572 27,119,043
Government Securities
Portfolio 119,838,201 9,715,186 11,105,115
Tax-Exempt Portfolio 85,708,892 9,396,615 5,215,929
</TABLE>
PURCHASES OF SECURITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 232,085,300 16,105,406 27,119,043
Government Securities
Portfolio 119,973,761 9,579,626 11,105,115
Tax-Exempt Portfolio 85,810,980 9,294,527 5,215,929
</TABLE>
PURCHASES OF PUTS AND CALLS
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,061,889 17,128,816 27,119,043
Government Securities
Portfolio 119,787,362 9,766,025 11,105,115
Tax-Exempt Portfolio 85,697,643 9,407,864 5,215,929
</TABLE>
INVESTMENT FOR THE PURPOSE OF EXERCISING CONTROL OR MANAGEMENT
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,555,509 16,635,197 27,119,043
Government Securities
Portfolio 120,031,862 9,521,525 11,105,115
Tax-Exempt Portfolio 85,796,616 9,308,891 5,215,929
</TABLE>
INVESTMENT IN MINERAL EXPLORATION
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 230,977,737 17,212,968 27,119,043
Government Securities
Portfolio 119,355,245 10,198,143 11,105,115
Tax-Exempt Portfolio 85,493,340 9,612,167 5,215,929
</TABLE>
INVESTMENT IN ISSUERS WITH SHORT HISTORIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,127,594 17,063,112 27,119,043
Government Securities
Portfolio 119,478,663 10,074,724 11,105,115
Tax-Exempt Portfolio 85,564,338 9,541,169 5,215,929
</TABLE>
<PAGE> 19
Cash Equivalent Fund 19
- --------------------------------------------------------------------------------
SPECIAL SHAREHOLDERS' MEETING
- --------------------------------------------------------------------------------
INVESTMENT IN OTHER INVESTMENT COMPANIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 232,206,825 15,983,880 27,119,043
Government Securities
Portfolio 120,063,626 9,489,761 11,105,115
Tax-Exempt Portfolio 85,740,151 9,365,355 5,215,929
</TABLE>
INVESTMENT IN NON-US GOVERNMENT SECURITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,368,083 16,822,622 27,119,043
Government Securities
Portfolio 119,435,457 10,117,930 11,105,115
Tax-Exempt Portfolio 85,533,771 9,571,736 5,215,929
</TABLE>
INVESTMENT OTHER THAN IN ACCORDANCE WITH OBJECTIVE AND POLICIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 231,054,996 17,135,710 27,119,043
Government Securities
Portfolio 119,357,271 10,196,949 11,104,283
Tax-Exempt Portfolio 85,690,335 9,415,171 5,215,929
</TABLE>
INVESTMENT IN MUNICIPAL SECURITIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Money Market Portfolio 232,513,084 15,677,621 27,119,043
Government Securities
Portfolio 120,221,865 9,331,522 11,105,115
Tax-Exempt Portfolio 85,719,736 9,385,771 5,215,929
</TABLE>
<PAGE> 20
Cash Equivalent
Fund
Annual Report
July 31, 1999
INVESTMENT MANAGER
Scudder Kemper Investments, Inc.
PRINCIPAL UNDERWRITER
Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606
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509641
CEF-2 1090230 9/30/99 [LOGO]printed on recycled paper
