<PAGE>
LOGO
Flag
Investors
Cash
Reserve
Prime
Shares
Annual Report
March 31, 1996
<PAGE>
KEY FEATURES OF FLAG INVESTORS CASH RESERVE PRIME SHARES
DAILY DIVIDENDS
Flag Investors Cash Reserve Prime Shares (the "Fund") declares dividends
daily and distributes them monthly in the form of additional shares.
CONSTANT NET ASSET VALUE PER SHARE
The Fund uses the amortized cost method of valuing
its portfolio securities and accordingly, will
attempt to maintain a constant net asset value of
$1.00 per share. Since the Fund's inception on
January 5, 1989, a constant net asset value of
$1.00 per share has been maintained.
An investment in a money market fund is neither
insured nor guaranteed by the U.S. Government.
There can be no assurance that the Fund will be
able to maintain a stable net asset value of $1.00
per share.
MINIMUM INVESTMENT
The minimum initial investment is $2,000. Subsequent
investments may be made in an amount of $100 or more.
This report is submitted for the general information of the shareholders of
Flag Investors Cash Reserve Prime Shares. The report may only be distributed
to current shareholders or to persons who have received a current prospectus.
<PAGE>
LETTER TO SHAREHOLDERS
May 6, 1996
We are pleased to report on the progress of your Fund for the fiscal year
ended March 31, 1996.
YEAR IN REVIEW
During the last quarter, interest rates rose, reversing the downward trend
experienced during the first nine months of the year. The year commenced with
long-term rates at approximately 8%, decreasing to a low approaching 6%.
Currently, inflation fears triggered by strong employment results in February
and March have surfaced. As a result, long-term rates have reversed their
downward trend and are presently nearing the 7% level. Intermediate-term
rates have also followed this course.
Throughout the year, a flattening yield curve prompted investors not to
extend their time horizons to receive a small incremental gain in yield. As a
result, investors funneled record amounts of cash reserves into money market
funds. As of March 31, 1996, assets in all taxable and nontaxable money
market funds, according to money market research service IBC/Donoghue, Inc.,
totaled $825.3 billion, a 27.5% increase over the same date last year.
Historical Yield Chart
(For the twelve months ended 3/31/96)
6% ---------------------------------------------------
*
*
*
5% --------------------------*------------------------
-----------------------------------------------*--- 4.72%
4% ---------------------------------------------------
3% ---------------------------------------------------
2% ---------------------------------------------------
1% ---------------------------------------------------
0% ---------------------------------------------------
3/31/95 6/30/95 9/30/95 12/31/95 3/31/96
*Flag Investors Cash
Reserve Prime Shares
3/31/95 6/30/95 9/30/95 12/31/95 3/31/96
------- ------- ------- -------- -------
5.63 5.54 5.2 5.14 4.72
1
<PAGE>
PORTFOLIO QUALITY
The steady flow of assets into the Fund did not impact its portfolio
characteristics and a relatively short weighted average maturity was
maintained in the Fund's portfolio.
In addition to conservative maturity management, Fund policy requires that
the Fund invest only in the highest quality issues. Evidence of our
insistence on high quality can be found in the Standard & Poor's (S&P) rating
of the portfolio, of which Flag Investors Cash Reserve Prime Shares is a
class. The portfolio maintains a "AAAm" rating, the highest that S&P awards
to money market funds.
MARKET OUTLOOK
Against the backdrop of a surging stock market, apparent benign inflation
and low GDP growth, the bond market was surprised for two consecutive months
by strong employment results. Since then, rates have risen sharply, two-year
notes have climbed to 6.06% from 4.38%, the Dow Jones Industrial Average has
fallen approximately 4% and inflation concerns seem to have resurfaced. The
widespread notion of further near-term rate cuts by the Federal Reserve have
all but disappeared.
Going forward, inflation should remain around 3%. Given the one- to two-year
lead time for Fed tightening in 1995 to take effect, 1996/1997 should produce
a sluggish economy. Consumer debt has risen dramatically, and the rise in
mortgage rates from 7% to 8% is slowing home buying and refinancing
activities. In the business sector, capital spending is slowing. Pressure to
increase wages is limited. These factors, among others, suggest slow GDP
growth and in time, the possible reversal of the recent increase in interest
rates.
SUMMARY
Many investors are using money market funds as protection against turbulent
markets. We assure you that our commitment remains the same - to provide our
shareholders with a very high quality money fund and a competitive yield.
As always, we appreciate your continued support.
Sincerely,
/s/ W. James Price /s/ Richard T. Hale
- - -------------------------- --------------------------
W. James Price Richard T. Hale
Chairman President
2
<PAGE>
CHAIRMAN'S LETTER
May 6, 1996
The year 1995 saw the retirement of two of our longtime Directors. We would
like to thank them for their valuable and tireless service over the years.
Alonzo G. Decker, former Chairman and CEO of Black & Decker, was one of our
original Directors, joining the Fund's Board in 1981. He served with
distinction, and his wise counsel will be much missed, but we know he will
enjoy having more time to spend on his farm on the Eastern Shore of Maryland.
Bruce Hannay, former Vice President for Patents and Research at Bell Labs,
joined our Board in 1984. His willingness to cross the country four times
each year to attend our Board meetings tells us a great deal about his energy
and loyalty. We wish him well in his retirement in the beautiful State of
Washington.
Al and Bruce, we thank you and will miss you.
Sincerely,
/s/ W. James Price
- - -------------------------
W. James Price
Chairman
3
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
Statement of Net Assets
March 31, 1996
<TABLE>
<CAPTION>
Rating (a)
------------------- Par
S&P Moody's (000) Value
------ --------- --------- -----------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER -- 87.5%(b)
Automobiles & Trucks -- 4.9%
Ford Motor Credit Corp.
5.50% 4/1/96 ...................... A-1 P-1 $15,000 $ 15,000,000
PACCAR Financial Corp.
5.32% 4/18/96 ..................... A-1+ P-1 11,000 10,972,366
5.30% 4/24/96 ..................... A-1+ P-1 10,000 9,966,139
5.03% 5/16/96 ..................... A-1+ P-1 5,000 4,968,562
5.03% 5/23/96 ..................... A-1+ P-1 11,000 10,920,079
Toyota Motor Credit Corp.
5.31% 4/22/96 ..................... A-1+ P-1 30,000 29,907,075
5.30% 5/2/96 ...................... A-1+ P-1 15,450 15,379,488
5.00% 5/20/96 ..................... A-1+ P-1 15,000 14,897,917
5.00% 5/22/96 ..................... A-1+ P-1 15,000 14,893,750
-----------------
126,905,376
-----------------
Beverages -- 1.9%
Anheuser-Busch Companies, Inc.
5.34% 4/18/96 ..................... A-1+ P-1 15,000 14,962,175
4.90% 10/21/96 .................... A-1+ P-1 20,000 19,447,389
4.75% 10/28/96 .................... A-1+ P-1 15,000 14,584,375
-----------------
48,993,939
-----------------
Chemicals, General -- 2.1%
E.I. duPont de Nemours
5.31% 4/29/96 ..................... A-1+ P-1 25,000 24,896,750
5.02% 6/17/96 ..................... A-1+ P-1 15,000 14,833,167
5.03% 7/19/96 ..................... A-1+ P-1 5,000 4,923,851
5.50% 8/1/96 ...................... A-1+ P-1 10,000 9,813,611
-----------------
54,467,379
-----------------
Chemicals, Specialty -- 1.3%
Air Products & Chemicals
5.48% 4/16/96 ..................... A-1 P-1 9,000 8,979,450
5.35% 6/17/96 ..................... A-1 P-1 15,000 14,828,354
5.125% 7/11/96 .................... A-1 P-1 9,000 8,870,594
-----------------
32,678,398
-----------------
Computer & Office Equipment -- 7.9%
Hewlett-Packard
5.35% 4/18/96 ..................... A-1+ P-1 10,000 9,974,736
5.24% 4/19/96 ..................... A-1+ P-1 10,000 9,973,800
5.22% 4/26/96 ..................... A-1+ P-1 20,500 20,425,687
4.97% 6/19/96 ..................... A-1+ P-1 10,000 9,890,936
4.95% 6/25/96 ..................... A-1+ P-1 15,000 14,824,688
5.04% 7/19/96 ..................... A-1+ P-1 9,750 9,601,215
</TABLE>
4
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
Statement of Net Assets -- (continued)
March 31, 1996
<TABLE>
<CAPTION>
Rating (a)
------------------- Par
S&P Moody's (000) Value
------ --------- --------- -----------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER -- continued
Computer & Office Equipment -- continued
Pitney Bowes Credit Corp.
5.24% 4/18/96 ..................... A-1+ P-1 $10,000 $ 9,975,256
5.11% 4/30/96 ..................... A-1+ P-1 15,000 14,938,254
5.14% 5/2/96 ...................... A-1+ P-1 10,000 9,955,739
5.02% 10/3/96 ..................... A-1+ P-1 15,000 14,613,042
5.03% 10/3/96 ..................... A-1+ P-1 15,000 14,612,271
5.02% 10/4/96 ..................... A-1+ P-1 20,000 19,481,267
5.04% 10/4/96 ..................... A-1+ P-1 17,000 16,557,320
Xerox Credit Corp.
5.10% 5/8/96 ...................... A-1 P-1 20,000 19,895,167
5.05% 8/29/96 ..................... A-1 P-1 10,000 9,789,583
-----------------
204,508,961
-----------------
Credit Unions -- 2.5%
Central Corp. Credit
5.39% 4/15/96 ..................... A-1+ P-1 24,225 24,174,222
Mid-States Corporate Federal Credit Union
5.33% 4/12/96 ..................... A-1+ P-1 18,000 17,970,685
5.33% 4/23/96 ..................... A-1+ P-1 8,000 7,973,942
U.S. Central Credit Union
5.30% 4/17/96 ..................... A-1+ P-1 15,000 14,964,667
-----------------
65,083,516
-----------------
Defense & Aircraft -- 2.1%
Rockwell International Corp.
5.31% 4/30/96 ..................... A-1+ P-1 55,000 54,764,939
-----------------
Electrical & Electronics -- 2.9%
General Electric Company
5.43% 4/4/96 ...................... A-1+ P-1 25,000 24,988,687
5.42% 5/2/96 ...................... A-1+ P-1 25,000 24,883,319
5.07% 5/3/96 ...................... A-1+ P-1 10,000 9,954,933
Motorola Inc.
5.06% 4/25/96 ..................... A-1+ P-1 15,000 14,949,400
-----------------
74,776,339
-----------------
Electric Utility -- 1.4%
Indianapolis Power & Light
5.17% 4/2/96 ...................... A-1+ P-1 10,700 10,698,463
Northern States Power
5.35% 4/17/96 ..................... A-1+ P-1 25,000 24,940,556
-----------------
35,639,019
-----------------
</TABLE>
5
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
Statement of Net Assets -- (continued)
March 31, 1996
<TABLE>
<CAPTION>
Rating (a)
------------------- Par
S&P Moody's (000) Value
------ --------- --------- -----------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER -- continued
Entertainment -- 2.6%
Walt Disney Co.
5.18% 7/15/96 ..................... A-1 P-1 $10,000 $ 9,848,917
5.18% 8/14/96 ..................... A-1 P-1 15,000 14,708,625
5.20% 9/10/96 ..................... A-1 P-1 20,000 19,532,000
5.18% 12/6/96 ..................... A-1 P-1 10,000 9,641,717
5.18% 12/9/96 ..................... A-1 P-1 15,000 14,456,100
-----------------
68,187,359
-----------------
Finance/Commercial -- 0.4%
CIT Group Holdings Inc.
5.32% 4/8/96 ...................... A-1 P-1 10,000 9,989,656
-----------------
Finance/Consumer -- 2.2%
USAA Capital Corp.
5.32% 4/3/96 ...................... A-1+ P-1 7,000 6,997,931
5.12% 4/10/96 ..................... A-1+ P-1 15,000 14,980,800
5.02% 5/20/96 ..................... A-1+ P-1 10,000 9,931,672
5.05% 6/6/96 ...................... A-1+ P-1 8,500 8,421,304
5.05% 6/14/96 ..................... A-1+ P-1 18,006 17,819,088
-----------------
58,150,795
-----------------
Finance/Diversified -- 0.5%
General Electric Capital Corp.
5.15% 4/4/96 ...................... A-1+ P-1 12,000 11,994,850
-----------------
Food -- 6.0%
Campbell Soup Co.
5.34% 6/6/96 ...................... A-1+ P-1 25,000 24,755,250
4.98% 10/4/96 ..................... A-1+ P-1 10,000 9,742,700
Cargill, Inc.
5.35% 4/2/96 ...................... A-1+ P-1 10,000 9,998,514
5.08% 4/30/96 ..................... A-1+ P-1 8,000 7,967,262
5.02% 5/8/96 ...................... A-1+ P-1 10,000 9,948,406
5.02% 5/20/96 ..................... A-1+ P-1 10,000 9,931,672
5.23% 6/17/96 ..................... A-1+ P-1 10,000 9,888,136
5.23% 6/18/96 ..................... A-1+ P-1 20,000 19,773,367
H.J.Heinz
5.37% 4/1/96 ...................... A-1 P-1 10,000 10,000,000
Hershey Foods
5.10% 4/26/96 ..................... A-1+ P-1 20,000 19,929,167
Kellogg Company
5.09% 4/16/96 ..................... A-1+ P-1 4,122 4,113,258
5.25% 6/3/96 ...................... A-1+ P-1 21,000 20,807,062
-----------------
156,854,794
-----------------
</TABLE>
6
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
Statement of Net Assets -- (continued)
March 31, 1996
<TABLE>
<CAPTION>
Rating (a)
------------------- Par
S&P Moody's (000) Value
------ --------- --------- -----------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER -- continued
Household Products -- 5.8%
Clorox Company
5.33% 4/8/96 ...................... A-1+ P-1 $20,000 $ 19,979,272
5.30% 4/22/96 ..................... A-1+ P-1 15,000 14,953,625
5.03% 5/28/96 ..................... A-1+ P-1 5,000 4,960,179
Colgate-Palmolive Co.
5.35% 4/4/96 ...................... A-1 P-1 15,000 14,993,313
5.09% 7/12/96 ..................... A-1 P-1 10,000 9,855,783
Procter & Gamble Co.
5.23% 4/12/96 ..................... A-1+ P-1 18,200 18,170,915
5.23% 4/17/96 ..................... A-1+ P-1 15,000 14,965,133
5.07% 5/13/96 ..................... A-1+ P-1 14,000 13,917,190
5.07% 6/11/96 ..................... A-1+ P-1 20,000 19,800,017
5.00% 6/12/96 ..................... A-1+ P-1 9,000 8,910,000
5.07% 6/14/96 ..................... A-1+ P-1 12,000 11,874,940
-----------------
152,380,367
-----------------
Insurance, Property & Casualty -- 4.3%
A.I. Credit Corp.
5.00% 5/7/96 ...................... A-1+ P-1 15,000 14,925,000
5.00% 5/13/96 ..................... A-1+ P-1 20,000 19,883,333
AIG Funding Inc.
5.30% 4/19/96 ..................... A-1+ P-1 15,000 14,960,250
5.30% 5/20/96 ..................... A-1+ P-1 10,000 9,927,861
5.20% 7/31/96 ..................... A-1+ P-1 15,000 14,737,833
Chubb Capital Corp.
5.55% 4/12/96 ..................... A-1+ P-1 24,200 24,160,473
Marsh & McLennan Companies Inc.
5.15% 9/27/96 ..................... A-1+ P-1 15,000 14,615,896
-----------------
113,210,646
-----------------
Integrated Oil -- 3.7%
Amoco Co.
5.18% 4/18/96 ..................... A-1+ P-1 17,106 17,064,157
Exxon Imperial U.S. Inc.
5.28% 4/17/96 ..................... A-1+ P-1 25,000 24,941,422
5.30% 4/26/96 ..................... A-1+ P-1 30,000 29,889,583
Shell Oil Co.
5.37% 4/4/96 ...................... A-1+ P-1 25,000 24,988,812
-----------------
96,883,974
-----------------
Oil Transportation -- 0.6%
Colonial Pipeline
5.25% 4/11/96 ..................... A-1+ P-1 6,600 6,590,375
5.12% 4/12/96 ..................... A-1+ P-1 10,000 9,984,356
-----------------
16,574,731
-----------------
</TABLE>
7
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
Statement of Net Assets -- (continued)
March 31, 1996
<TABLE>
<CAPTION>
Rating (a)
------------------- Par
S&P Moody's (000) Value
------ --------- --------- -----------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER -- continued
Paper -- 1.3%
Kimberly-Clark Corp.
5.13% 4/19/96 ..................... A-1+ P-1 $ 5,850 $ 5,834,995
5.30% 5/1/96 ...................... A-1+ P-1 20,000 19,911,667
5.27% 5/7/96 ...................... A-1+ P-1 8,000 7,957,840
-----------------
33,704,502
-----------------
Pharmaceuticals -- 8.9%
Abbott Laboratories
5.33% 4/25/96 ..................... A-1+ P-1 20,000 19,928,933
Eli Lilly & Co.
5.11% 4/23/96 ..................... A-1+ P-1 15,000 14,953,158
5.30% 5/23/96 ..................... A-1+ P-1 10,000 9,923,444
4.92% 6/17/96 ..................... A-1+ P-1 10,000 9,894,767
5.21% 6/20/96 ..................... A-1+ P-1 15,000 14,826,333
4.95% 8/20/96 ..................... A-1+ P-1 15,000 14,709,187
4.78% 8/22/96 ..................... A-1+ P-1 10,000 9,810,128
Pfizer Inc.
5.15% 4/4/96 ...................... A-1+ P-1 3,000 2,998,713
5.13% 4/17/96 ..................... A-1+ P-1 20,000 19,954,400
Schering-Plough Corp.
5.25% 5/24/96 ..................... A-1+ P-1 20,000 19,845,417
Warner-Lambert Co.
5.25% 6/10/96 ..................... A-1+ P-1 15,000 14,846,875
5.33% 6/12/96 ..................... A-1+ P-1 12,200 12,069,948
5.35% 6/18/96 ..................... A-1+ P-1 25,000 24,710,208
5.03% 7/30/96 ..................... A-1+ P-1 14,500 14,256,883
5.05% 7/30/96 ..................... A-1+ P-1 10,000 9,831,667
4.80% 8/8/96 ...................... A-1+ P-1 10,000 9,828,000
4.87% 9/3/96 ...................... A-1+ P-1 10,000 9,790,319
-----------------
232,178,380
-----------------
Publishing -- 6.8%
Dun & Bradstreet Corp.
5.30% 5/21/96 ..................... A-1+ P-1 20,000 19,852,778
Gannett Co.
5.22% 4/9/96 ...................... A-1 P-1 30,000 29,965,200
5.30% 4/11/96 ..................... A-1 P-1 26,200 26,161,428
5.27% 4/17/96 ..................... A-1 P-1 25,000 24,941,444
Knight-Ridder Inc.
5.60% 4/2/96 ...................... A-1+ P-1 25,000 24,996,111
5.25% 4/26/96 ..................... A-1+ P-1 10,000 9,963,542
5.07% 5/28/96 ..................... A-1+ P-1 25,000 24,799,312
McGraw-Hill, Inc.
5.50% 4/4/96 ...................... A-1 P-1 7,500 7,496,563
RR Donnelley & Sons
5.25% 4/26/96 ..................... A-1+ P-1 10,000 9,963,542
-----------------
178,139,920
-----------------
</TABLE>
8
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
Statement of Net Assets -- (continued)
March 31, 1996
<TABLE>
<CAPTION>
Rating (a)
------------------- Par
S&P Moody's (000) Value
------ --------- --------- -----------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER -- continued
Railroad -- 1.5%
Norfolk Southern Corporation
5.03% 6/7/96 ...................... A-1+ P-1 $12,500 $ 12,382,983
5.23% 6/21/96 ..................... A-1+ P-1 26,364 26,053,762
-----------------
38,436,745
-----------------
Retail, Specialty -- 2.0%
Toys "R" Us
5.30% 4/26/96 ..................... A-1 P-1 27,000 26,900,625
5.37% 5/6/96 ...................... A-1 P-1 25,000 24,869,479
-----------------
51,770,104
-----------------
Structured Finance -- 6.5%
CIESCO, L.P.
5.32% 4/11/96 ..................... A-1+ P-1 25,000 24,963,014
5.15% 5/8/96 ...................... A-1+ P-1 40,000 39,788,278
5.07% 5/23/96 ..................... A-1+ P-1 15,000 14,890,150
Corporate Asset Funding Company, Inc.
5.15% 4/4/96 ...................... A-1+ P-1 30,000 29,987,125
5.38% 4/22/96 ..................... A-1+ P-1 20,000 19,937,233
5.15% 5/2/96 ...................... A-1+ P-1 20,000 19,911,306
5.27% 5/23/96 ..................... A-1+ P-1 20,000 19,847,756
-----------------
169,324,862
-----------------
Telephone -- 7.0%
AT&T
5.50% 4/10/96 ..................... A-1+ P-1 10,000 9,986,250
5.30% 4/30/96 ..................... A-1+ P-1 15,000 14,935,958
5.18% 7/9/96 ...................... A-1+ P-1 15,000 14,786,325
Ameritech Capital Funding Corp.
5.07% 6/6/96 ...................... A-1+ P-1 30,000 29,721,150
5.02% 6/7/96 ...................... A-1+ P-1 20,000 19,813,144
5.20% 12/10/96 .................... A-1+ P-1 15,000 14,451,833
Ameritech Corp.
5.14% 4/12/96 ..................... A-1+ P-1 10,000 9,984,294
BellSouth Capital Fund
5.00% 5/7/96 ...................... A-1+ P-1 15,000 14,925,000
BellSouth Telecommunications
5.16% 4/23/96 ..................... A-1+ P-1 18,300 18,242,294
GTE North Inc.
5.48% 4/9/96 ...................... A-1+ P-1 20,000 19,975,644
Southwestern Bell Telephone Co.
5.32% 6/7/96 ...................... A-1+ P-1 15,000 14,851,483
-----------------
181,673,375
-----------------
</TABLE>
9
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
Statement of Net Assets -- (continued)
March 31, 1996
<TABLE>
<CAPTION>
Rating (a)
------------------- Par
S&P Moody's (000) Value
------ --------- --------- -----------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER -- continued
Waste Management -- 0.4%
WMX Technologies
4.78% 11/1/96 ..................... A-1 P-1 $ 10,000 $ 9,715,856
-----------------
TOTAL COMMERCIAL PAPER ........... -- 2,276,988,782
-----------------
VARIABLE RATE NOTE -- 1.9%
Coca-Cola Master Note
5.382%(c) 7/22/96 .................. A-1+ P-1 50,000 50,000,000
-----------------
FEDERAL HOME LOAN BANK -- 0.6%
FHLB
5.18% 4/24/96 ..................... AAA -- 15,000 14,950,358
-----------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION -- 3.1%
FNMA
Discount Note
5.30% 4/16/96 ..................... -- P-1 25,000 24,944,792
5.18% 5/2/96 ...................... -- P-1 15,000 14,933,092
4.95% 9/5/96 ...................... -- P-1 10,000 9,784,125
Note
5.68% 10/7/96 ..................... AAA Aaa 20,000 20,017,657
5.39% 12/4/96 ..................... AAA Aaa 10,000 10,016,832
--------- -----------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION ................... 80,000 79,696,498
--------- -----------------
REPURCHASE AGREEMENTS -- 7.0%(d)
Goldman Sachs & Co.
5.37%(e) 4/1/96 ................... -- -- 83,000 83,000,000
Morgan Stanley & Co.
5.33%(f) 4/1/96 ................... -- -- 100,000 100,000,000
-----------------
TOTAL REPURCHASE AGREEMENTS .......................... 183,000,000
-----------------
TOTAL INVESTMENTS -- 100.1% ................................... $2,604,635,638(g)
LIABILITIES IN EXCESS OF OTHER ASSETS, NET -- (0.1%) .......... (1,855,863)
-----------------
NET ASSETS -- 100.0% .......................................... $ 2,602,779,775
=================
</TABLE>
10
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
Statement of Net Assets -- (continued)
March 31, 1996
<TABLE>
<CAPTION>
Value
-------
<S> <C>
Net Asset Value, Offering and Redemption Price Per:
Prime Share
($2,386,681,216 / 2,386,684,392 shares outstanding) ........... $1.00
=======
Flag Investors Class A Share
($5,976,831 / 5,976,824 shares outstanding) .................. $1.00
=======
Flag Investors Class B Share
($10,200 / 10,200 shares outstanding) ........................ $1.00
=======
Institutional Prime Share
($53,699,315 / 53,699,535 shares outstanding) ................ $1.00
=======
Quality Cash Reserve Prime Share
($156,412,213 / 156,412,393 shares outstanding) .............. $1.00
=======
</TABLE>
- - ------
(a) Ratings assigned by Moody's Investors Service, Inc. ("Moody's") and
Standard & Poor's Corporation ("S&P") are not covered by the Independent
Accountant's Report.
(b) Most commercial paper is traded on a discount basis. In such cases, the
interest rate shown represents the rate of discount paid or received at time
of purchase by the Fund.
(c) Master note is payable upon demand by the Fund with no more than five days'
notice. Interest rates on master notes are redetermined weekly. Rates shown
are the rates in effect on March 31, 1996.
(d) Collateral on repurchase agreements is taken into possession by the Fund
upon entering into the repurchase agreement. The collateral is marked
to market daily to insure market value as being at least 102 percent of the
resale price of the repurchase agreement.
(e) Dated 3/29/96 to be repurchased on 4/1/96, collateralized by U.S. Treasury
Notes with a market value of $84,660,143.
(f) Dated 3/29/96 to be repurchased on 4/1/96, collateralized by U.S. Treasury
Notes with a market value of $102,042,479.
(g) Aggregate cost for financial reporting and federal tax purposes.
MOODY'S RATINGS:
Aaa Bonds that are judged to be of the best quality.
P-1 Commercial paper bearing this designation is of the best quality.
S&P RATINGS:
AAA These are obligations of the highest quality.
A-1 Commercial paper that has a strong degree of safety regarding timely
payment. Those issues determined to possess very strong safety
characteristics are denoted with a plus (+) sign.
A detailed description of the above ratings can be found in the
Fund's Statement of Additional Information.
See Notes to Financial Statements.
11
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Investment Income (Note 1):
Interest income ................................ $120,275,367
--------------
Expenses:
Distribution fee (Note 2) ...................... 5,575,592
Investment advisory fees (Note 2) ............... 5,134,900
Transfer agent fees ............................ 1,105,948
Custodian fees ................................. 272,140
Printing & postage fees ........................ 181,021
Registration fees .............................. 169,236
Accounting fees (Note 2) ....................... 150,692
Other expenses ................................. 125,781
Directors' fees ................................ 99,134
Legal fees ..................................... 65,876
--------------
Total expenses ............................... 12,880,320
Less: Fees waived (Note 2) ................. (59,331)
--------------
Net expenses ............................. 12,820,989
--------------
Net investment income ............................... 107,454,378
Net realized loss from security
transactions ...................................... (6,050)
--------------
Net increase in net assets resulting
from operations ................................... $107,448,328
==============
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
March 31, March 31,
1996 1995
--------- ---------
<S> <C> <C>
Increase/(Decrease) in net assets
Operations:
Net investment income ................................. $ 107,454,378 $ 64,805,363
Net realized gain/(loss) on sales of investments ...... (6,050) 355
-------------- ---------------
Net increase in net assets resulting from operations... 107,448,328 64,805,718
Distributions to shareholders from:
Net investment income:
Prime Shares ....................................... (99,181,255) (59,535,578)
Institutional Shares ............................... (1,334,079) (635,062)
Flag Investors Class A Shares ...................... (402,702) (699,891)
Flag Investors Class B Shares ...................... (300) --
Quality Cash Reserve Prime Shares .................. (6,536,042) (3,934,832)
-------------- ---------------
Total distributions ................................ (107,454,378) (64,805,363)
Capital share transactions, net - (Note 3) .............. 1,016,482,516 101,735,438
-------------- ---------------
Total increase in net assets .......................... 1,016,476,466 101,735,793
Net assets:
Beginning of year .................................. 1,586,303,309 1,484,567,516
-------------- ---------------
End of year ........................................ $2,602,779,775 $1,586,303,309
============== ===============
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
PRIME SHARES
<TABLE>
<CAPTION>
Year ended March 31,
-----------------------------------------------------------------------------------
1996 1995 1994 1993 1992
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value at beginning
of year ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- -------------- -------------- -------------- --------------
Income from Investment
Operations:
Net investment income ........ 0.0524 0.0442 0.0262 0.0295 0.0485
Less Distributions:
Dividends from net investment
income and/or short-term
gains ..................... (0.0524) (0.0442) (0.0262) (0.0295) (0.0485)
-------------- -------------- -------------- -------------- --------------
Net asset value at end of
year ...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ============== ==============
Total Return:
Based on net asset value per
share ..................... 5.36% 4.51% 2.65% 2.99% 4.96%
Ratios to Average Daily Net
Assets:
Expenses ..................... 0.60% 0.61% 0.62% 0.63% 0.61%
Net investment income ........ 5.21% 4.46% 2.62% 2.95% 4.84%
Supplemental Data:
Net assets at end of year .... $2,386,681,216 $1,472,079,739 $1,350,334,979 $1,470,711,552 $1,505,012,086
Number of shares outstanding
at end of year ............ 2,386,684,392 1,472,077,488 1,350,332,916 1,470,709,489 1,505,010,023
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
FLAG INVESTORS CASH RESERVE PRIME SHARES -- CLASS A
<TABLE>
<CAPTION>
Year ended March 31,
---------------------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value at beginning
of year ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------- ------------- ------------
Income from Investment
Operations:
Net investment income .... 0.0524 0.0442 0.0262 0.0295 0.0485
Less Distributions:
Dividends from net investment
income and/or short-term
gains ................. (0.0524) (0.0442) (0.0262) (0.0295) (0.0485)
------------ ------------ ------------- ------------- ------------
Net asset value at end of
year .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============= ============= ============
Total Return:
Based on net asset value per
share ................. 5.36% 4.51% 2.65% 2.99% 4.96%
Ratios to Average Daily Net
Assets:
Expenses ................. 0.60% 0.61% 0.62% 0.63% 0.61%
Net investment income .... 5.25% 4.26% 2.62% 2.95% 4.84%
Supplemental Data:
Net assets at end of year . $5,976,831 $7,726,696 $18,116,648 $10,392,282 $7,350,424
Number of shares outstanding
at end of year ........ 5,976,824 7,726,698 18,116,633 10,392,267 7,350,409
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
FLAG INVESTORS CASH RESERVE PRIME SHARES -- CLASS B
<TABLE>
<CAPTION>
April 3, 1995*
through
March 31, 1996
--------------
<S> <C>
Per Share Operating
Performance:
Net asset value at beginning of year ..... $ 1.00
--------------
Income from Investment
Operations:
Net investment income .................... 0.0361
Less Distributions:
Dividends from net investment income ..... (0.0361)
--------------
Net asset value at end of
year .................................. $ 1.00
==============
Total Return:
Based on net asset value per share ....... 3.69%**
Ratios to Average Daily Net
Assets:
Expenses ................................. 1.38%**
Net investment income .................... 4.30%**
Supplemental Data:
Net assets at end of year ................ $ 10,200
Number of shares outstanding at end of year 10,200
</TABLE>
- - ------
* Commencement of operations.
** Annualized.
See Notes to Financial Statements.
16
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
INSTITUTIONAL PRIME SHARES
<TABLE>
<CAPTION>
Year ended March 31,
------------------------------------------------------------------------------
1996 1995 1994 1993 1992
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value at beginning
of year ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- ------------- -------------
Income from Investment Operations:
Net investment income .......... 0.0548 0.0472 0.0294 0.0327 0.0515
Less Distributions:
Dividends from net investment
income and/or short-term
gains ....................... (0.0548) (0.0472) (0.0294) (0.0327) (0.0515)
------------- ------------- ------------- ------------- -------------
Net asset value at end of year . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= ============= =============
Total Return:
Based on net asset value per
share ......................... 5.62% 4.82% 2.98% 3.32% 5.27%
Ratios to Average Daily Net Assets:
Expenses ....................... 0.35% 0.36% 0.30% 0.31% 0.32%
Net investment income .......... 5.32% 4.57% 2.94% 3.24% 5.34%
Supplemental Data:
Net assets at end of year ...... $53,699,315 $11,904,716 $23,437,449 $28,884,078 $21,867,108
Number of shares outstanding at
end of year ................. 53,699,535 11,904,663 23,437,512 28,884,132 21,867,108
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
PRIME SERIES
- - -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
QUALITY CASH RESERVE PRIME SHARES
<TABLE>
<CAPTION>
Year ended March 31, May 6, 1991*
----------------------------------------------------------------- through
1996 1995 1994 1993 March 31, 1992
------------- ------------ ----------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value at
beginning of year ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ----------- ----------- ------------ -----------
Income from Investment
Operations:
Net investment income ......... 0.0493 0.0402 0.0218 0.0253 0.0399
Less Distributions:
Dividends from net
investment income and/or
short-term gains .......... (0.0493) (0.0402) (0.0218) (0.0253) (0.0399)
------------ ----------- ----------- ------------ -----------
Net asset value at end of
year ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ =========== =========== ============ ===========
Total Return:
Based on net asset value
per share ................ 5.04% 4.09% 2.20% 2.53% 4.30%**
Ratios to Average Daily Net
Assets:
Expenses .................... 0.90%(1) 0.96% 1.06% 1.04% 0.96%**
Net investment income ....... 4.91%(2) 4.04% 2.18% 2.53% 4.30%**
Supplemental Data:
Net assets at end of year....... $156,412,213 $94,592,158 $92,678,440 $101,321,868 $94,887,669
Number of shares outstanding
at end of year............. 156,412,393 94,591,979 92,678,268 101,321,668 94,887,669
</TABLE>
- - ------
* Commencement of operations.
** Annualized.
1 Ratio of expenses to average daily net assets prior to partial fee waviers
was 0.95% for the year ended March 31, 1996.
2 Ratio of net investment income to average daily net assets prior to partial
fee waivers was 4.86% for the year ended March 31, 1996.
See Notes to Financial Statements.
18
<PAGE>
Notes to Financial Statements
March 31, 1996
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
Alex. Brown Cash Reserve Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund is organized as a Maryland
corporation consisting of three different portfolios, the Prime Series, the
Treasury Series, and the Tax-Free Series. The Prime Series consists of five
different classes of shares: Alex. Brown Cash Reserve Prime Shares ("Prime
Shares"), Flag Investors Cash Reserve Prime Shares Class A ("Flag Investors
Class A Shares"), Flag Investors Cash Reserve Prime Shares Class B ("Flag
Investors Class B Shares"), Quality Cash Reserve Prime Shares ("Quality Cash
Shares") and Institutional Prime Shares. Matters affecting each class are
voted on exclusively by such shareholders.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. The following is a
summary of the significant accounting policies followed by the Fund in the
preparation of its financial statements.
A. Security Valuation -- The Fund maintains a dollar-weighted average
maturity of 90 days or less for each portfolio. The securities of each
portfolio are valued on the basis of amortized cost, which approximates
market value. This method values a security at its cost on the date of
purchase, and thereafter, assumes a constant amortization to maturity of
any original issue or other discount or premium.
B. Security Transactions, Investment Income and Distributions --
Securities transactions are accounted for on a trade date basis. Realized
gains or losses on sales, if any, are computed on the basis of specific
identification of the securities sold. Interest income is recorded on an
accrual basis and includes, when applicable, amortization of premiums and
accretion of discounts. Dividends to shareholders are declared daily and
distributions or reinvestments of the dividends are made monthly.
C. Repurchase Agreement -- The Prime Series may agree to purchase money
market instruments subject to the seller's agreement to repurchase them at
an agreed upon date and price. The seller, under a repurchase agreement,
will be required on a daily basis to maintain the value of the securities
subject to the agreement at not less than the repurchase price. The
agreement is conditioned upon the collateral being deposited under the
Federal Reserve book-entry system.
19
<PAGE>
Notes to Financial Statements -- (continued)
March 31, 1996
NOTE 1 -- CONCLUDED
D. Federal Income Taxes -- The Fund intends to continue to comply with the
requirements of the Internal Revenue Code necessary to continue to qualify
as a regulated investment company and, as such, will not be subject to
federal income taxes on otherwise taxable income (including net realized
capital gains) which is distributed to shareholders.
E. Expenses -- Operating expenses directly attributable to a class of
shares are charged to that class' operations. Expenses of the Fund which
are not directly attributable to a specific class are prorated among the
classes to which the expense relates based on the relative net assets of
each class.
NOTE 2 -- ADVISORY FEES AND TRANSACTIONS WITH OTHER AFFILIATES
The Fund has entered into an investment advisory agreement with Investment
Company Capital Corp. ("ICC"), a subsidiary of Alex. Brown Financial Corp.,
with respect to the Prime Series. Under the terms of the investment advisory
agreement, ICC receives a fee from the Fund, calculated daily and paid
monthly, at the following annual rates based upon the Fund's aggregate
average daily net assets: .30% of the first $500 million, .26% of the next
$500 million, .25% of the next $500 million, .24% of the next $1 billion,
.23% of the next $1 billion and .22% of that portion in excess of $3.5
billion. In addition, the Advisor is entitled to receive an additional fee
with respect to the Prime Series, calculated daily and paid monthly, at the
annual rate of .02% of the Prime Series' average daily net assets. Prior to
August 23, 1995, ICC received a fee from the Fund, calculated daily and paid
monthly, at the following annual rates based upon the Fund's aggregate
average daily net assets: .25% of the first $500 million, .21% of the next
$500 million, .20% of the next $500 million and .19% of that portion in
excess of $1.5 billion.
ICC may, from time to time, voluntarily waive a portion of its advisory
fee with respect to the Prime Series to preserve or enhance the performance
of each Series as compared to certain industry benchmarks. No advisory fees
were waived for the year ended March 31, 1996.
Under the terms of these agreements, ICC and the Fund's distributor will,
if necessary, reimburse the Fund for any fiscal year to the extent that
expenses (exclusive of any interest, taxes, brokerage commissions and
extraordinary expenses) exceed 1% of aggregate average daily net assets of
the Prime Series. The obligation of ICC to reimburse the Fund is limited to
the fees actually received by ICC for such fiscal year.
As compensation for its accounting services, ICC receives from the Prime
Series an annual fee, calculated daily and paid monthly, based on the Fund's
average daily net assets. ICC received $150,692 for accounting services for
the year ended March 31, 1996 for the Prime Series.
20
<PAGE>
Notes to Financial Statements -- (continued)
March 31, 1996
As compensation for its transfer agent services, ICC receives from the
Prime Series a per account fee, calculated and paid monthly. ICC received
$1,105,948 for transfer agent services for the year ended March 31, 1996 for
the Prime Series.
The Fund has entered into a distribution agreement with Alex. Brown & Sons
Incorporated ("Alex. Brown"). Under the terms of the distribution agreement,
Alex. Brown receives a fee from the Prime Shares and Flag Investors Class A
Shares, at the annual rate of .25% of the aggregate average daily net assets
of these classes of shares. Alex. Brown also receives a fee from the Quality
Cash Shares and the Flag Investors Class B Shares at the annual rate of .60%
and 1.00%, respectively, of the aggregate average daily net assets of the
class. Alex. Brown voluntarily waived distribution fees in the amount of
$59,331 for the Quality Cash Shares for the year ended March 31, 1996.
The fund complex of which the Fund is a part has adopted a retirement plan
for eligible Directors. The actuarially computed pension expense for the year
ended March 31, 1996 was approximately $72,000 for the Prime Series.
NOTE 3 -- CAPITAL STOCK AND SHARE INFORMATION
The Fund is authorized to issue up to 6,400,000,000 shares of $.001 par
value capital stock (3,550,000,000 Prime Series). Changes in shares
outstanding during the years ended March 31, 1996 and March 31, 1995 are
listed below.
<TABLE>
<CAPTION>
March 31, 1996 March 31, 1995
---------------- ----------------
<S> <C> <C>
Prime Series:
Sold:
Prime Shares .................. 19,439,463,533 10,195,279,007
Flag Investors Class A Shares . 12,118,053 16,905,684
Flag Investors Class B Shares . 24,535 --
Institutional Prime Shares .... 213,159,539 60,472,629
Quality Cash Shares ........... 1,285,040,597 509,661,769
Issued as reinvestment of dividends:
Prime Shares .................. 93,103,137 57,178,155
Flag Investors Class A Shares . 374,561 666,245
Institutional Prime Shares .... 753,855 40,493
Quality Cash Shares ........... 6,300,386 3,847,996
Redeemed:
Prime Shares .................. (18,617,959,766) (10,130,712,590)
Flag Investors Class A Shares . (14,242,488) (27,961,864)
Flag Investors Class B Shares . (14,335) --
Institutional Prime Shares .... (172,118,522) (72,045,971)
Quality Cash Shares ........... (1,229,520,569) (511,596,054)
---------------- ----------------
Net increase ............. 1,016,482,516 101,735,499
================ ================
</TABLE>
NOTE 4 -- NET ASSETS
At March 31, 1996, net assets consisted of:
<TABLE>
<CAPTION>
Prime
Series
--------------
<S> <C>
Paid-in-capital ............................................. $2,602,785,854
Undistributed net realized gain/(loss) on sales of investments (6,079)
--------------
$2,602,779,775
==============
</TABLE>
21
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To The Shareholders and Board of Directors of
Flag Investors Cash Reserve Prime Shares:
We have audited the accompanying statements of net assets of the Prime Series
of Alex. Brown Cash Reserve Fund, Inc. as of March 31, 1996, and the related
statement of operations for the year then ended and the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the three years in the period then ended.
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. The
financial highlights for each of the respective years in the period ended
March 31, 1993 were audited by other auditors whose report dated May 7, 1993,
expressed an unqualified opinion thereon.
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 March 31, 1996 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Prime Series of Alex. Brown Cash Reserve Fund, Inc. as of March 31, 1996, and
the results of their operations for the year then ended and the changes in
their net assets for each of the two years in the period then ended and their
financial highlights for each of the three years in the period then ended, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
May 10, 1996
22
<PAGE>
BOARD OF DIRECTORS
W. JAMES PRICE LOUIS E. LEVY
Chairman Director
CHARLES W. COLE JR. EUGENE J. McDONALD
Director Director
JAMES J. CUNNANE REBECCA W. RIMEL
Director Director
RICHARD T. HALE CARL W. VOGT, Esq.
Director Director
JOHN F. KROEGER HARRY WOOLF
Director Director
- - -----------------------------------------------------------------------------
OFFICERS
W. JAMES PRICE M. ELLIOTT RANDOLPH, JR. BRIAN C. NELSON
Chairman Vice President Vice President
& Secretary
RICHARD T. HALE PAUL D. CORBIN
President Vice President JOSEPH A. FINELLI
Treasurer
EDWARD J. VEILLEUX
Executive Vice President MONICA M. HAUSNER LAURIE D. DEPRINE
Vice President Assistant Secretary
- - -----------------------------------------------------------------------------
Distributor Custodian
ALEX. BROWN & SONS PNC BANK, N.A.
INCORPORATED 17th and Chestnut Streets
135 East Baltimore Street Philadelphia, PA 19101
Baltimore, MD 21202
(410) 727-1700
Transfer Agent
Investment Advisor INVESTMENT COMPANY CAPITAL CORP.
INVESTMENT COMPANY CAPITAL CORP. 135 East Baltimore Street
135 East Baltimore Street Baltimore, MD 21202
Baltimore, MD 21202 (800) 553-8080
Auditors
COOPERS & LYBRAND L.L.P.
217 E. Redwood Street
Baltimore, MD 21202
- - -----------------------------------------------------------------------------
23
<PAGE>
LOGO
FLAG INVESTORS
MUTUAL FUNDS
Growth
Flag Investors Emerging Growth Fund
Flag Investors Equity Partners Fund
Flag Investors International Fund
Equity Income
Flag Investors Real Estate Securities Fund
Flag Investors Telephone Income Fund
Balanced
Flag Investors Value Builder Fund
Income
Flag Investors Intermediate-Term Income Fund
Flag Investors Total Return U.S. Treasury Fund Shares
Tax-Free Income
Flag Investors Managed Municipal Fund Shares
Flag Investors Maryland Intermediate Tax-Free Income Fund
Current Income
Flag Investors Cash Reserve Prime Shares
P.O. Box 515
Baltimore, Maryland
800-767-FLAG
Distributed by:
ALEX. BROWN & SONS
INCORPORATED