<PAGE> 1
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
- --------------------------------------------------------------------------------
We appreciate your decision to invest in the Cash Equivalent Fund. The
following pages include the semi-annual report for the six-months
ended January 31, 2000 for:
- - 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 six months, we saw very strong U.S. economic conditions with
growth above 5%. In addition, the economies in both Europe and Asia appear to be
on the recovery platform, which will mean reasonable growth in exports and will
keep the U.S. economy strong. The unemployment rate in the U.S. continued to
decline and consumer confidence continued to rise. This prompted the Federal
Reserve Board ("the Fed") to raise interest rates .25% on three separate
occasions last year to help stabilize the financial markets and economic
conditions.
As a result, we took a defensive position with the Fund by keeping average
maturity of the portfolios relatively short, to take advantage of additional
rate increases as they occurred. Because of the uncertainties associated with
the calendar change to a new millennium, including mass concern whether or not
systems would function normally, we felt that we should be less aggressive.
Therefore, we positioned the Fund in order to provide liquidity for investors
when and if they needed it.
As 1999 came to a close, the Fund took advantage of income incentives being
offered for extending maturities into the new year, which were very attractive
in both taxable and tax-exempt issues. It became clear the Fund would have
sufficient liquidity to meet demand. Also, the market was reacting appropriately
without a lot of safety concerns, especially given that the Fed provided
whatever liquidity the market needed to function routinely in the final months
of 1999.
Considering this information, we plan to continue with our slightly defensive
positioning and will manage each of the Fund's portfolios so that we continue to
offer you competitive yield potential with a high degree of stability, seeking
to make 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
February 25, 2000
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 periods ended 1/31/00
<TABLE>
<CAPTION>
NET YIELD
----------------------
6-MONTH SEC 7-DAY
--------- ---------
<S> <C> <C>
Money Market Portfolio 4.80% 5.18%
Government Securities
Portfolio 4.66% 5.03%
Tax-Exempt Portfolio 2.90% 2.92%
(EQUIVALENT TAXABLE YIELD 4.61% 4.64%)
</TABLE>
NOTES
Each portfolio'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 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
Portfolio of Investments at January 31, 2000
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
COMMERCIAL PAPER Amount Value
<S> <C> <C>
Accor, SA, 6.09%, 03/14/2000 $10,000,000 $ 9,930,000
- --------------------------------------------------------------
Ace Overseas Corp., 5.74%,
02/15/2000 10,000,000 9,977,755
- --------------------------------------------------------------
Ace Overseas Corp., 6.05%,
03/10/2000 10,000,000 9,937,194
- --------------------------------------------------------------
Alpine Securitization, Corp.,
6.00%, 02/03/2000 5,000,000 4,998,333
- --------------------------------------------------------------
Anheuser-Busch Cos., Inc.,
5.68%, 02/16/2000* 10,000,000 9,996,684
- --------------------------------------------------------------
Atlantis One Funding Corp.,
5.89%, 02/10/2000 15,000,000 14,978,550
- --------------------------------------------------------------
Banco Del Istmo, 5.75%,
02/11/2000 10,000,000 9,984,111
- --------------------------------------------------------------
Bavaria Universal Funding,
5.73%, 02/11/2000 10,000,000 9,984,167
- --------------------------------------------------------------
Bavaria Universal Funding,
5.98%, 04/25/2000 20,000,000 19,725,133
- --------------------------------------------------------------
Beta Finance, Inc., 5.98%,
03/20/2000 10,000,000 9,922,667
- --------------------------------------------------------------
Brazos River Authority, Texas,
6.09%, 02/08/2000 15,000,000 15,000,000
- --------------------------------------------------------------
Centric Capital Corp., 5.74%,
02/29/2000 10,650,000 10,602,785
- --------------------------------------------------------------
Coca Cola Enterprises, 5.90%,
02/01/2000 5,000,000 5,000,000
- --------------------------------------------------------------
Countrywide Home Loans, Inc.,
5.70%, 02/10/2000 15,000,000 14,978,738
- --------------------------------------------------------------
Den Danske Bank, 5.71%,
02/17/2000* 5,000,000 4,999,538
- --------------------------------------------------------------
Falcon Asset Securitization
Corp., 5.73%, 02/23/2000 10,000,000 9,965,167
- --------------------------------------------------------------
Falcon Asset Securitization
Corp., 5.78%, 03/13/2000 10,000,000 9,934,628
- --------------------------------------------------------------
FINOVA Capital Corp., 6.17%,
03/13/2000* 30,000,000 30,000,000
- --------------------------------------------------------------
FINOVA Capital Corp., 5.85%,
03/21/2000 10,000,000 9,921,056
- --------------------------------------------------------------
Fortis Finance, NV, 6.04%,
02/24/2000 10,000,000 9,961,986
- --------------------------------------------------------------
Fountain Square Commercial Funding,
5.35%, 02/04/2000 15,071,000 15,063,942
- --------------------------------------------------------------
GTE Capital Corp., 6.13%,
03/10/2000* 20,000,000 19,985,605
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Galaxy Funding Corp., 6.11%,
02/23/2000 $ 5,000,000 $ 4,981,605
- --------------------------------------------------------------
Galaxy Funding Corp., 6.16%,
03/23/2000 5,000,000 4,957,146
- --------------------------------------------------------------
GMAC Mortgage Corporation of Pennsylvania,
5.88%, 02/01/2000 10,000,000 10,000,000
- --------------------------------------------------------------
Goldman Sachs Group, L.P.,
6.21%, 02/03/2000 10,000,000 10,000,000
- --------------------------------------------------------------
Heller Financial, Inc., 6.25%,
04/07/2000* 25,000,000 25,009,862
- --------------------------------------------------------------
Intrepid Funding Master Trust,
6.00%, 02/29/2000 5,000,000 4,977,289
- --------------------------------------------------------------
Kitty Hawk Funding Corp., 6.06%,
02/10/2000 11,000,000 10,983,528
- --------------------------------------------------------------
Kitty Hawk Funding Corp., 6.07%,
02/11/2000 5,000,000 4,991,667
- --------------------------------------------------------------
Knight Ridder, Inc., 6.03%,
02/16/2000 10,000,000 9,975,208
- --------------------------------------------------------------
Moat Funding, LLC, 5.92%,
02/07/2000 15,000,000 14,985,625
- --------------------------------------------------------------
Moat Funding, LLC, 6.14%,
03/09/2000 15,000,000 14,906,729
- --------------------------------------------------------------
Monte Rosa Capital Corp., 6.09%,
02/14/2000 10,000,000 9,978,442
- --------------------------------------------------------------
National Rural Utilities
Cooperative Finance Corp.,
6.14%, 03/25/2000* 10,000,000 9,999,610
- --------------------------------------------------------------
Old Line Funding Corp., 6.10%,
02/16/2000 10,000,000 9,975,125
- --------------------------------------------------------------
Quincy Capital Corp., 5.73%,
02/23/2000 10,000,000 9,965,167
- --------------------------------------------------------------
Receivables Capital Corp.,
6.03%, 02/15/2000 10,000,000 9,977,094
- --------------------------------------------------------------
Royal Bank of Scotland, 6.04%,
02/17/2000 10,000,000 9,973,733
- --------------------------------------------------------------
Scaldis Capital, LLC, 6.00%,
02/01/2000 5,000,000 5,000,000
- --------------------------------------------------------------
Sheffield Receivables Corp.,
5.74%, 02/24/2000 10,000,000 9,963,519
- --------------------------------------------------------------
Sigman Finance, Inc., 5.73%,
02/17/2000 10,000,000 9,974,622
- --------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 3
Cash Equivalent Fund 3
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
Portfolio of Investments at January 31, 2000
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Sinochem America, 6.06%,
02/08/2000 $ 5,000,000 $ 4,994,167
- --------------------------------------------------------------
Spintab, AB, 6.06%, 03/14/2000 5,000,000 4,965,583
- --------------------------------------------------------------
Superior Funding Capital Corp.,
6.13%, 02/10/2000 5,000,000 4,992,438
- --------------------------------------------------------------
Superior Funding Capital Corp.,
5.73%, 02/29/2000 10,000,000 9,955,667
- --------------------------------------------------------------
Sweetwater Capital Corp., 5.73%,
02/18/2000 10,000,000 9,973,083
- --------------------------------------------------------------
Sweetwater Capital Corp., 5.73%,
02/22/2000 10,341,000 10,306,616
- --------------------------------------------------------------
Thunder Bay Funding, Inc.,
5.74%, 02/23/2000 20,000,000 19,930,333
- --------------------------------------------------------------
Xerox Corp., 5.86%, 02/01/2000 20,000,000 20,000,000
- --------------------------------------------------------------
TOTAL COMMERCIAL PAPER--70.1%
(cost $550,541,897) 550,541,897
- --------------------------------------------------------------
CERTIFICATES OF DEPOSIT
Bank of Montreal, 5.65%,
02/01/2000* 10,000,000 9,999,141
- --------------------------------------------------------------
Bank of Novia Scotia, 5.83%,
02/03/2000 10,000,000 10,000,000
- --------------------------------------------------------------
Barclays Bank PLC, 5.64%,
02/01/2000* 10,000,000 9,998,337
- --------------------------------------------------------------
Bayerische Hypo-Und Vereinsbank AG,
6.38%, 02/19/2000* 10,000,000 9,998,949
- --------------------------------------------------------------
Bayerische Landesbank, 5.68%,
02/10/2000* 10,000,000 9,998,684
- --------------------------------------------------------------
Comerica Bank, 5.65%,
02/01/2000* 10,000,000 9,999,441
- --------------------------------------------------------------
Commerzbank AG, 5.66%,
02/01/2000* 10,000,000 9,999,313
- --------------------------------------------------------------
CS First Boston, 5.72%,
02/01/2000* 15,000,000 15,000,000
- --------------------------------------------------------------
Deutsche Bank, 5.64%,
02/01/2000* 5,000,000 4,999,390
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Deutsche Bank, 5.63%,
02/01/2000* $ 5,000,000 $ 4,999,185
- --------------------------------------------------------------
Dresdner Bank, NY, 5.78%,
02/26/2000* 15,000,000 14,997,221
- --------------------------------------------------------------
Fleet National Bank, Inc.,
6.32%, 02/15/2000* 10,000,000 10,003,599
- --------------------------------------------------------------
Harris Trust and Savings Bank,
5.66%, 02/01/2000* 10,000,000 9,999,302
- --------------------------------------------------------------
J.P. Morgan & Co, Inc., 6.47%,
02/03/2000* 10,000,000 10,000,000
- --------------------------------------------------------------
John Deere Capital Corp., 5.65%,
02/01/2000* 10,000,000 9,999,408
- --------------------------------------------------------------
MBNA America Bank, NA, 5.88%,
03/06/2000 10,000,000 10,000,000
- --------------------------------------------------------------
Mellon Bank, NA, 6.10%,
02/29/2000* 10,000,000 9,998,270
- --------------------------------------------------------------
National City Bank of Kentucky,
6.11%, 04/07/2000* 10,000,000 10,004,515
- --------------------------------------------------------------
PNC Bank, NA, 5.80%, 02/28/2000* 10,000,000 10,000,303
- --------------------------------------------------------------
Royal Bank of Canada, 5.64%,
02/01/2000* 10,000,000 9,999,001
- --------------------------------------------------------------
Skandinaviska Enskilda Banken
AB, 5.84%, 02/29/2000* 15,000,000 14,996,613
- --------------------------------------------------------------
U.S. Bank, NA North Dakota,
5.76%, 02/21/2000* 10,000,000 9,997,232
- --------------------------------------------------------------
Wells Fargo & Co., 6.06%,
03/29/2000* 10,000,000 9,998,528
- --------------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT--29.9%
(cost $234,986,432) 234,986,432
- --------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO--100%
(cost $785,528,329)(a) $785,528,329
- --------------------------------------------------------------
</TABLE>
NOTES TO PORTFOLIO
- --------------------------------------------------------------------------------
Interest rates represent annualized yield to date of maturity, except for
floating rate securities described below.
(a) The cost for federal income tax purposes was $785,528,329.
* Floating rate notes are securities whose yields vary with a designated
market or market rate, such as the coupon-equivalent of the Treasury bill
rate. These securities are shown at their current rate as of January 31,
2000. The dates shown represent the demand date or next interest rate change
date.
The accompanying notes are an integral part of the financial statements.
<PAGE> 4
Cash Equivalent Fund 4
- --------------------------------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO
Portfolio of Investments at January 31, 2000
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
REPURCHASE AGREEMENTS Amount Value
<S> <C> <C>
Bear, Stearns Cos., Inc.
5.70%, 02/16/2000 to be
repurchased at $68,955,726 $68,000,000 $ 68,000,000
- --------------------------------------------------------------
Chase Securities, Inc.
5.65%, 02/03/2000 to be
repurchased at $15,030,185 15,000,000 15,000,000
- --------------------------------------------------------------
Chase Securities, Inc.
5.83%, 02/01/2000 to be
repurchased at $20,003,195 20,000,000 20,000,000
- --------------------------------------------------------------
Goldman Sachs, Inc.
5.62%, 02/07/2000 to be
repurchased at $40,086,225 40,000,000 40,000,000
- --------------------------------------------------------------
Morgan Stanley, Dean Witter &
Co.
5.55%, 02/02/2000 to be
repurchased at $20,021,288 20,000,000 20,000,000
- --------------------------------------------------------------
Salomon Smith Barney Holdings,
Inc.
5.60%, 02/08/2000 to be
repurchased at $10,032,219 10,000,000 10,000,000
- --------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS--39.3%
(cost $173,000,000)(b) 173,000,000
- --------------------------------------------------------------
SHORT-TERM NOTES
- --------------------------------------------------------------
Federal Farm Credit Bank,
5.60%, 02/07/2000* 5,000,000 4,999,984
- --------------------------------------------------------------
Federal Home Loan Bank,
5.05%, 03/01/2000 6,000,000 6,000,000
- --------------------------------------------------------------
Federal Home Loan Bank,
5.05%, 03/03/2000 7,000,000 7,000,000
- --------------------------------------------------------------
Federal Home Loan Bank,
5.55%, 03/17/2000* 9,000,000 8,999,458
- --------------------------------------------------------------
Federal Home Loan Bank,
5.55%, 04/05/2000* 11,000,000 10,999,057
- --------------------------------------------------------------
Federal Home Loan Bank,
5.55%, 04/07/2000* 1,000,000 999,912
- --------------------------------------------------------------
Federal Home Loan Bank,
6.01%, 09/29/2000* 40,000,000 39,981,776
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
SHORT-TERM NOTES Amount Value
<S> <C> <C>
Federal Home Loan Bank,
5.66%, 07/28/2000* $25,000,000 $ 24,993,904
- --------------------------------------------------------------
Federal Home Loan Bank.,
5.82%, 01/10/2001* 10,000,000 9,991,071
- --------------------------------------------------------------
Federal Home Loan Mortgage
Corp.,
5.56%, 02/03/2000 6,752,000 6,749,955
- --------------------------------------------------------------
Federal Home Loan Mortgage
Corp.,
5.65%, 02/03/2000 6,775,000 6,772,922
- --------------------------------------------------------------
Federal Home Loan Mortgage
Corp.,
5.57%, 02/24/2000 15,000,000 14,947,819
- --------------------------------------------------------------
Federal Home Loan Mortgage
Corp.,
5.69%, 03/15/2000 20,305,000 20,170,395
- --------------------------------------------------------------
Federal Home Loan Mortgage
Corp.,
5.60%, 05/18/2000* 20,000,000 19,995,322
- --------------------------------------------------------------
Federal Home Loan Mortgage
Corp.,
5.67%, 09/21/2000* 25,000,000 24,995,299
- --------------------------------------------------------------
Federal National Mortgage
Association,
5.08%, 02/23/2000 4,000,000 3,999,906
- --------------------------------------------------------------
Overseas Private Investment Corp., Omolon,
6.20%, 03/15/2000* 2,222,500 2,222,500
- --------------------------------------------------------------
Student Loan Marketing
Association,
6.20%, 02/14/2000* 12,000,000 11,999,749
- --------------------------------------------------------------
Student Loan Marketing
Association,
5.46%, 04/05/2000* 19,000,000 18,998,372
- --------------------------------------------------------------
Student Loan Marketing
Association,
6.20%, 08/01/2000* 10,000,000 9,997,671
- --------------------------------------------------------------
Student Loan Marketing
Association,
5.81%, 03/07/2001* 12,500,000 12,484,302
- --------------------------------------------------------------
TOTAL SHORT-TERM NOTES--60.7%
(cost $267,299,374) 267,299,374
- --------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO--100%
(cost $440,299,374)(a) $440,299,374
- --------------------------------------------------------------
</TABLE>
NOTES TO PORTFOLIO
- --------------------------------------------------------------------------------
Interest rates represent annualized yield to date of maturity except for
floating rate securities described below.
(a) The cost for federal income tax purposes was $440,299,374.
* Floating rate notes are securities whose yields vary with a designated market
or market rate, such as the coupon-equivalent of the Treasury bill rate.
(b) Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
The accompanying notes are an integral part of the financial statements.
<PAGE> 5
Cash Equivalent Fund 5
- --------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
Portfolio of Investments at January 31, 2000
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE RATE Principal
DEMAND SECURITIES* Amount Value
<S> <C> <C>
CALIFORNIA
- --------------------------------------------------------------
Los Angeles,
Harbor Improvement Corp.,
3.50% $ 6,900,000 $ 6,900,000
FLORIDA
- --------------------------------------------------------------
Dade County,
Water & Sewer Systems Revenue,
3.15% 3,000,000 3,000,000
- --------------------------------------------------------------
Orange County,
Health Facilities Authority,
3.35% 3,700,000 3,700,000
GEORGIA
- --------------------------------------------------------------
Laurens County,
Development Revenue,
3.40% 5,000,000 5,000,000
ILLINOIS
- --------------------------------------------------------------
Development Finance Authority,
Grecian Delight Foods Project,
3.50% 8,300,000 8,300,000
- --------------------------------------------------------------
Chicago,
O'Hare International
Airport Revenue,
3.65% 4,000,000 4,000,000
- --------------------------------------------------------------
Quad Cities,
Solid Waste Disposal Revenue,
3.50% 3,500,000 3,500,000
INDIANA
- --------------------------------------------------------------
Fort Wayne,
Pollution Control Revenue,
3.40% 2,480,000 2,480,000
- --------------------------------------------------------------
Ossian,
Economic Development Revenue,
3.35% 3,200,000 3,200,000
KANSAS
- --------------------------------------------------------------
Kansas City,
Pollution Control Revenue,
3.25% 6,000,000 6,000,000
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
KENTUCKY
- --------------------------------------------------------------
Boone County,
Pollution Control Revenue,
3.75% $ 8,000,000 $ 8,000,000
- --------------------------------------------------------------
Glasgow,
Industrial Building Revenue,
3.50% 3,345,000 3,345,000
- --------------------------------------------------------------
Mason County,
Pollution Control Revenue,
3.25% 8,300,000 8,300,000
- --------------------------------------------------------------
Mayfield,
Multi-City Lease Revenue,
3.30% 2,670,000 2,670,000
MICHIGAN
- --------------------------------------------------------------
Strategic Fund,
Continental Aluminum Project,
3.45% 4,200,000 4,200,000
MISSOURI
- --------------------------------------------------------------
Environmental Improvement & Energy
Authority,
3.25% 2,460,000 2,460,000
NEVADA
- --------------------------------------------------------------
Department of Business and
Industry,
3.45% 3,600,000 3,600,000
OKLAHOMA
- --------------------------------------------------------------
Development Finance
Authority Revenue,
3.50% 3,095,000 3,095,000
OREGON
- --------------------------------------------------------------
Clackams County,
Health Facilities Authority,
3.45% 3,000,000 3,000,000
- --------------------------------------------------------------
Economic Development Revenue,
3.40% 4,000,000 4,000,000
PENNSYLVANIA
- --------------------------------------------------------------
Higher Education Facilities
Authority,
3.28% 2,400,000 2,400,000
- --------------------------------------------------------------
Lehigh County,
Industrial Development Authority,
3.75% 4,600,000 4,600,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 6
Cash Equivalent Fund 6
- --------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
Portfolio of Investments at January 31, 2000
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
TENNESSEE
- --------------------------------------------------------------
Clarksville,
Education Facilities Authority,
3.30% $ 6,000,000 $ 6,000,000
TEXAS
- --------------------------------------------------------------
Trinity River Authority,
GM, 3.45% 2,000,000 2,000,000
UTAH
- --------------------------------------------------------------
Heber City, Industrial Development
Authority, 3.50% 3,650,000 3,650,000
VERMONT
- --------------------------------------------------------------
Student Loan Association,
Student Loan Revenue,
3.75% 5,000,000 5,000,000
WEST VIRGINIA
- --------------------------------------------------------------
Preston County,
Industrial Development Revenue,
3.50% 3,350,000 3,350,000
TOTAL VARIABLE RATE
DEMAND SECURITIES--45.6%
(cost: $115,750,000) 115,750,000
- --------------------------------------------------------------
OTHER SECURITIES
ALASKA
- --------------------------------------------------------------
Valdez,
Marine Terminal Revenue,
3.45%, 03/08/2000 2,500,000 2,500,000
ARIZONA
- --------------------------------------------------------------
Salt River Project,
Agricultural Improvement
and Power District,
3.50% - 3.80%,
02/10/2000 - 04/10/2000 7,000,000 7,000,000
COLORADO
- --------------------------------------------------------------
Platte River Power Authority,
3.60% - 3.90%,
02/15/2000 - 02/17/2000 6,200,000 6,200,000
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
FLORIDA
- --------------------------------------------------------------
Orange County,
Health Facilities Authority,
3.90%, 02/23/2000 $ 2,800,000 $ 2,800,000
- --------------------------------------------------------------
Sunshine State,
Governmental Financing Commission,
3.50%, 03/01/2000 4,000,000 4,000,000
GEORGIA
- --------------------------------------------------------------
Monroe County
Georgia Power Company,
3.70%, 02/18/2000 6,000,000 6,000,000
ILLINOIS
- --------------------------------------------------------------
Education Facilities Authority,
3.70% - 3.75%,
02/09/2000 - 02/15/2000 6,500,000 6,500,000
INDIANA
- --------------------------------------------------------------
Jasper County,
Pollution Control Revenue,
4.00%,
02/07/2000 - 02/14/2000 6,500,000 6,500,000
KENTUCKY
- --------------------------------------------------------------
Danville,
Multi-City Lease Revenue,
3.85%, 02/10/2000 4,000,000 4,000,000
- --------------------------------------------------------------
Pendleton County,
Lease Revenue,
3.65% - 3.70%,
02/09/2000 - 02/16/2000 12,800,000 12,800,000
LOUISIANA
- --------------------------------------------------------------
Parish of West Baton Rouge,
Pollution Control Revenue,
3.65%, 02/15/2000 2,000,000 2,000,000
MARYLAND
- --------------------------------------------------------------
Anne Arundel County Port
Facilities Authority,
3.50 - 3.80%,
03/08/2000 - 03/09/2000 6,820,000 6,820,000
MISSOURI
- --------------------------------------------------------------
Environmental Improvement and
Energy Authority,
3.65%, 02/10/2000 3,000,000 3,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 7
Cash Equivalent Fund 7
- --------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
Portfolio of Investments at January 31, 2000
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
NEW HAMPSHIRE
- --------------------------------------------------------------
General Obligation,
3.85%, 03/08/2000 $ 2,500,000 $ 2,500,000
- --------------------------------------------------------------
Business Finance Authority,
3.60%, 02/16/2000 4,000,000 4,000,000
NEW YORK
- --------------------------------------------------------------
Nassau County,
Tax Anticipation Note,
4.75%, 08/31/2000 2,500,000 2,510,558
OHIO
- --------------------------------------------------------------
Air Quality Development,
3.80%, 04/10/2000 4,000,000 4,000,000
PENNSYLVANIA
- --------------------------------------------------------------
Allegheny County Hospital
Development Authority,
3.85%, 02/09/2000 3,400,000 3,400,000
- --------------------------------------------------------------
Philadelphia,
Tax and Revenue Anticipation
Notes,
4.25%, 06/30/2000 3,000,000 3,008,926
SOUTH CAROLINA
- --------------------------------------------------------------
Public Services Authority,
3.85%, 02/16/2000 3,000,000 3,000,000
TEXAS
- --------------------------------------------------------------
Austin,
Combined Utility System,
3.45%, 03/10/2000 3,000,000 3,000,000
- --------------------------------------------------------------
Municipal Power Agency,
3.90%, 03/09/2000 6,900,000 6,900,000
- --------------------------------------------------------------
Houston Water & Sewer,
3.85%, 03/06/2000 3,000,000 3,000,000
- --------------------------------------------------------------
Tax and Revenue Anticipation
Notes,
4.50%, 08/31/2000 11,850,000 11,902,133
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
UTAH
- --------------------------------------------------------------
Intermountain Power Agency,
3.60% - 3.85%,
02/14/2000 - 04/11/2000 $10,000,000 $ 10,000,000
VIRGINIA
- --------------------------------------------------------------
Chesterfield,
Industrial Development Authority,
3.50%, 03/14/2000 3,700,000 3,700,000
- --------------------------------------------------------------
York County,
Industrial Development Authority,
3.55%, 03/07/2000 4,000,000 4,000,000
WYOMING
- --------------------------------------------------------------
Converse County,
3.80%, 03/10/2000 3,000,000 3,000,000
TOTAL OTHER SECURITIES--54.4%
(cost: $138,041,617) 138,041,617
- --------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO--100%
(cost: $253,791,617) $253,791,617
- --------------------------------------------------------------
</TABLE>
NOTES TO PORTFOLIO
- --------------------------------------------------------------------------------
Interest rates represent annualized yield to date of maturity, except for
variable rate securities described below.
(a) The cost for federal income tax purposes was $253,791,617.
* Variable rate demand securities are securities whose yields vary with a
designated market or market rate, such as the coupon-equivalent of the
Treasury bill rate. These securities are shown at their current rate as of
January 31, 2000, and are payable within five business days.
The accompanying notes are an integral part of the financial statements.
<PAGE> 8
8
Cash Equivalent Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
- --------------------------------------------------------------------------------
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
MONEY GOVERNMENT
MARKET SECURITIES TAX-EXEMPT
PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investments in securities, at amortized cost $785,528,329 267,299,374 253,791,617
- --------------------------------------------------------------------------------------------------------------
Repurchase agreements -- 173,000,000 --
- --------------------------------------------------------------------------------------------------------------
Cash 970,962 2,901,405 --
- --------------------------------------------------------------------------------------------------------------
Interest receivable 2,521,488 2,381,786 1,645,688
- --------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 13,552,062 6,374,012 4,022,781
- --------------------------------------------------------------------------------------------------------------
Other assets -- -- 177,610
- --------------------------------------------------------------------------------------------------------------
Total assets 802,572,841 451,956,577 259,637,696
- --------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------
Due to custodian bank -- -- 3,115,959
- --------------------------------------------------------------------------------------------------------------
Dividends payable 1,441,871 798,666 263,857
- --------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 13,228,874 10,723,930 1,707,841
- --------------------------------------------------------------------------------------------------------------
Accrued management fee 132,000 41,769 219,879
- --------------------------------------------------------------------------------------------------------------
Other accrued expenses and payables 1,082,557 487,339 172,756
- --------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 15,885,302 12,051,704 5,480,292
- --------------------------------------------------------------------------------------------------------------
Net assets, at value $786,687,539 439,904,873 254,157,404
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
- --------------------------------------------------------------------------------------------------------------
Shares outstanding 786,687,539 439,904,873 254,157,404
- --------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share
(Net asset value / outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares
authorized) $1.00 1.00 1.00
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 9
Cash Equivalent Fund 9
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six months ended January 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY GOVERNMENT
MARKET SECURITIES TAX-EXEMPT
INVESTMENT INCOME PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Interest $25,881,480 12,836,763 5,964,295
- ---------------------------------------------------------------------------------------------------------
EXPENSES:
Management fee 902,379 459,664 368,022
- ---------------------------------------------------------------------------------------------------------
Services to shareholders 835,896 428,349 80,947
- ---------------------------------------------------------------------------------------------------------
Custodian fees 9,242 11,077 7,957
- ---------------------------------------------------------------------------------------------------------
Distribution service fees 1,746,063 886,354 556,516
- ---------------------------------------------------------------------------------------------------------
Auditing 21,500 9,692 7,876
- ---------------------------------------------------------------------------------------------------------
Legal 2,450 2,189 2,713
- ---------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 15,575 10,139 6,802
- ---------------------------------------------------------------------------------------------------------
Reports to shareholders 200,255 23,171 46,569
- ---------------------------------------------------------------------------------------------------------
Registration fees 54,775 24,486 30,609
- ---------------------------------------------------------------------------------------------------------
Other 33,731 97,269 2,500
- ---------------------------------------------------------------------------------------------------------
Total expenses, before expense reductions 3,821,866 1,952,390 1,110,511
- ---------------------------------------------------------------------------------------------------------
Expense reductions (5,252) (5,098) (544)
- ---------------------------------------------------------------------------------------------------------
Total expenses, after expense reductions 3,816,614 1,947,292 1,109,967
- ---------------------------------------------------------------------------------------------------------
Net investment income 22,064,866 10,889,471 4,854,328
- ---------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $22,064,866 10,899,471 4,854,328
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 10
Cash Equivalent Fund 10
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET GOVERNMENT SECURITIES TAX-EXEMPT
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------- ------------------------------- -------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
JANUARY 31, YEAR ENDED JANUARY 31, YEAR ENDED JANUARY 31,
2000 JULY 31, 2000 JULY 31, 2000
(UNAUDITED) 1999 (UNAUDITED) 1999 (UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
- ---------------------------------------------------------------------------------------------------------------------
Net investment income $ 22,064,866 $ 41,936,558 $ 10,889,471 $ 19,226,609 $ 4,854,328
- ---------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
- ---------------------------------------------------------------------------------------------------------------------
From net investment income (22,064,866) (41,936,558) (10,889,471) (19,226,609) (4,854,328)
- ---------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS:
- ---------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 2,351,983,838 5,167,352,553 1,387,706,370 2,213,704,201 564,054,308
- ---------------------------------------------------------------------------------------------------------------------
Reinvestment of distributions 22,385,934 41,555,021 10,877,170 19,057,353 4,975,491
- ---------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (2,625,998,192) (5,022,184,071) (1,413,208,516) (2,170,092,701) (697,001,369)
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from Fund
share transactions and total
increase (decrease) in net
assets (251,628,420) 186,723,503 (14,624,976) 62,668,853 (127,971,570)
- ---------------------------------------------------------------------------------------------------------------------
Net assets at beginning of period 1,038,315,959 851,592,456 454,529,849 391,860,999 382,128,974
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS AT END OF PERIOD $ 786,687,539 $1,038,315,959 $ 439,904,873 $ 454,529,849 $ 254,157,404
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
TAX-EXEMPT
PORTFOLIO
---------------
YEAR ENDED
JULY 31,
1999
INCREASE (DECREASE) IN NET ASSETS ---------------
<S> <C>
OPERATIONS:
- ---------------------------------
Net investment income $ 10,156,562
- ---------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
- ---------------------------------
From net investment income (10,156,562)
- ---------------------------------
FUND SHARE TRANSACTIONS:
- ---------------------------------
Proceeds from shares sold 1,169,311,949
- ---------------------------------
Reinvestment of distributions 10,086,903
- ---------------------------------
Cost of shares redeemed (1,130,697,172)
- ---------------------------------
Net increase (decrease) from Fund
share transactions and total
increase (decrease) in net
assets 48,701,680
- ---------------------------------
Net assets at beginning of period 333,427,294
- ---------------------------------
NET ASSETS AT END OF PERIOD $ 382,126,974
- ---------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 11
Cash Equivalent Fund 11
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following tables include selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED JULY 31,
JANUARY 31, 2000 ---------------------------------------------------------
MONEY MARKET PORTFOLIO (UNAUDITED) 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net assets value, beginning of period $ 1.00 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.02 0.04 0.05 0.05 0.05 0.05
- ---------------------------------------------------------------------------------------------------------------------------------
Less distribution from net investment income (0.02) (0.04) (0.05) (0.05) (0.05) (0.05)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(%) 2.47** 4.43 4.93 4.78 4.94 4.95(a)
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
Net Assets, end of period ($ thousands) 786,688 1,038,316 851,592 970,516 2,774,595 3,593,294
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) 0.83* 0.89 0.91 0.93 0.89 0.87
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense reductions 0.83 0.89 0.91 0.93 0.89 0.87
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (%) 4.80* 4.34 4.83 4.64 4.86 4.84
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED JULY 31,
JANUARY 31, 2000 -------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO (UNAUDITED) 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net assets value, beginning of period $ 1.00 1.00 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.02 0.04 0.05 0.05 0.05 0.05
- --------------------------------------------------------------------------------------------------------------------------------
Less distribution from net investment income $ (0.02) (0.04) (0.05) (0.05) (0.05) (0.05)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(%) 2.37** 4.37 4.89 4.85 5.00 4.96
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
Net Assets, end of period ($ thousands) 439,905 454,530 391,661 404,037 1,594,126 1,785,096
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) 0.83* 0.85 0.85 0.83 0.79 0.81
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense reductions 0.83 0.85 0.85 0.83 0.79 0.81
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (%) 4.66* 4.29 4.79 4.73 4.90 4.87
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED JULY 31,
JANUARY 31, 2000 -----------------------------------------------------
TAX-EXEMPT PORTFOLIO (UNAUDITED) 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net assets value, beginning of period $ 1.00 1.00 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.02 0.03 0.03 0.03 0.03 0.03
- --------------------------------------------------------------------------------------------------------------------------------
Less distribution from net investment income (0.02) (0.03) (0.03) (0.03) (0.03) (0.03)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(%) 1.47** 2.68 3.13 3.03 3.11 3.21
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
Net Assets, end of period ($ thousands) 254,157 382,129 333,427 444,939 931,564 1,109,861
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) 0.66* 0.62 0.66 0.71 0.70 0.68
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) 0.66 0.62 0.66 0.71 0.70 0.68
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (%) 2.90* 2.65 3.09 2.97 3.08 3.15
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
** Not annualized
(a) 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%.
<PAGE> 12
Cash Equivalent Fund 12
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
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.
SECURITY VALUATION
The Fund values all portfolio 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
The Fund 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
The Fund's policy is to comply with the requirements of the Internal Revenue
Code, as amended, which are applicable to regulated investment companies and to
distribute all of its taxable 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.
<PAGE> 13
Cash Equivalent Fund 13
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH AFFILIATES
MANAGEMENT AGREEMENT
The Fund has a management agreement with Scudder Kemper Investments, Inc.
("Scudder Kemper") and pays a monthly investment management fee 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 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 $3 billion. During the six months ended January 31, 2000, the Fund incurred
the following management fees:
<TABLE>
<CAPTION>
MANAGEMENT FEE EFFECTIVE
PORTFOLIO IMPOSED ($) RATE (%)
--------- -------------- ---------
<S> <C> <C>
Money Market Portfolio 902,379 .20
Government Securities
Portfolio 459,664 .20
Tax-Exempt Portfolio 368,022 .22
</TABLE>
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 six months ended January 31, 2000, the Fund
incurred distribution fees as follows:
<TABLE>
<CAPTION>
UNPAID AT
PORTFOLIO FEES ($) JANUARY 31, 2000 ($)
--------- -------- --------------------
<S> <C> <C>
Money Market
Portfolio 1,746,063 246,000
Government Securities
Portfolio 886,354 240,371
Tax-Exempt Portfolio 556,516 70,631
</TABLE>
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. For the six
months ended January 31, 2000, KSvC received shareholder service fees for the
Money Market, Government Securities and Tax-Exempt Portfolios of $748,682,
$422,725 and $67,124, respectively, of which $232,562, $37,429, and $0,
respectively, is unpaid at January 31, 2000.
OFFICERS AND TRUSTEES
Certain officers or trustees of the Fund are also officers or directors of
Scudder Kemper. During the six months ended January 31, 2000, the Fund made no
payments to its officers and incurred trustees' fees of $32,516 to independent
trustees.
<PAGE> 14
Cash Equivalent Fund 14
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3. EXPENSE OFF-SET ARRANGEMENTS
The Fund has entered into arrangements with its custodian and transfer agent
whereby credits realized as a result of uninvested cash balances were used to
reduce a portion of the Fund's expenses. During the six months ended January 31,
2000, Money Market Portfolio's, Government Securities Portfolio's and Tax-Exempt
Portfolio's custodian and transfer agent fees were reduced by $785 and $4,467,
$482 and $4,616 and $260 and $284, respectively.
4. LINE OF CREDIT
The Fund and several Kemper Funds(the "Participants") share in a $1 billion
revolving credit facility for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated pro rata among each of the Participants. Interest is
calculated based on the market rates at the time of the borrowing. The Fund may
borrow up to a maximum of 33% of its assets under the agreement.
<PAGE> 15
SEMIANNUAL REPORT
CASH EQUIVALENT
FUND
JANUARY 31, 2000
Principal Underwriter
Kemper Distributors, Inc.
222 S. Riverside Plaza
Chicago, IL 60606
This report is not to be distributed unless preceded or
accompanied by a prospectus.
513215
CEF-3 1090230 3/31/00 [RECYCLED LOGO] Printed on recycled paper
