[GRAPHIC OMITTED]
FLAG INVESTORS
Investing With A Difference
Cash Reserve Prime
Shares
Semi-Annual Report
September 30, 1999
<PAGE>
FUND FEATURES
- --------------------------------------------------------------------------------
o Daily Dividends
The Fund declares dividends daily and distributes them monthly in the form of
additional shares.
o Constant Net Asset Value
The Fund will attempt to maintain a constant net asset value of $1.00 per
share and has done so since its inception on January 5, 1989. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund. An investment in a money
market fund is neither insured nor guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
o Minimum Investment
The minimum initial investment is $2,000. Subsequent investments may be $100
or more.
<PAGE>
LETTER TO SHAREHOLDERS
- --------------------------------------------------------------------------------
We are pleased to report on the progress of your Fund for the six months ended
September 30, 1999.
Market Activity
During this semi-annual period, money market participants shifted their
focus away from the overseas crises that dominated the Fund's last fiscal year
to the ongoing strength of the U.S. economy. U.S. GDP growth was in excess of
2.5%-3%, and, except for certain commodities such as oil and gold, inflation
overall remained benign. In fact, the core Consumer Price Index increased only
1.9% on an annual basis through the end of August 1999, the lowest twelve month
rate of change in 33 years.
Even with the strong economy/low inflation scenario, the Federal Reserve
Board chose to focus on economic statistics such as strong retail sales and a
robust labor market as potential catalysts for future inflation. The Federal
Reserve Board did not officially move interest rates at their May meeting, but
it did adopt a policy bias tilted toward higher rates. Market expectations of
this Fed tightening together with consumer optimism, signs of global growth, and
above-trend U.S. growth combined to push short-term yields dramatically higher
in both the taxable and tax-exempt money markets. Finally, and as generally
expected, the Federal Reserve Board voted to raise the fed funds rate by 0.25%
to 5.0% on June 30th and to 5.25% on August 24th.
Investment Review
We continue to manage the Fund conservatively, maintaining high portfolio
quality, adjusting weighted average maturities in response to market conditions,
and strictly limiting exposure to any particular issue. Evidence of our
insistence on these unusually high investment standards can be found in Standard
& Poor's (S&P) rating of the portfolio of which Flag Cash Reserve
Performance Comparisons
- --------------------------------------------------------------------------------
7-Day Current Yield as of 9/30/99
- --------------------------------------------------------------------------------
Flag Cash Reserve Prime Shares--Class A 4.83%
- --------------------------------------------------------------------------------
First Tier Retail Money Fund Average 4.65%
- --------------------------------------------------------------------------------
Source: IBC/Donoghue, Inc. "Money Fund Report".
The yields shown represent past performance, which is no guarantee of future
results. An investment in a money market fund is neither insured nor guaranteed
by the U.S. government. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
Fund. The Money Fund Averages are average yields of all funds in their
respective categories.
1
<PAGE>
LETTER TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
Prime Shares are classes. The portfolio maintains a "AAAm" rating. This rating
is the highest that S&P awards to money market funds. We have always believed
that a money fund is not a place to take chances or to speculate for additional
yield.
Our strategy in the Fund continued to be concentrated on investing in high
quality issues. As of September 30, 1999, 91.8% of the Fund was invested in U.S.
commercial paper, 4.2% in corporate floating rate securities, 3.4% in U.S.
certificates of deposit, 0.3% in U.S. corporate notes/bonds, 0.2% in government
agency securities, and 0.1% in repurchase agreements. For most of the
semi-annual period, we maintained a relatively neutral to the benchmark maturity
position. At September 30, 1999, the Fund's weighted average maturity stood at
47 days.
Looking Ahead
We believe that the Federal Reserve Board will likely pause for the near
term while it assesses the results of its two previous tightenings and
vigilantly monitors future economic data for signs of future inflation.
Unemployment and the strength of the U.S. dollar become key factors in the Fed's
determinations. If the Federal Reserve Board tightens monetary policy once more,
it will probably be in November 1999. Early in the year 2000, the rate of U.S.
economic growth may slow enough for interest rates to reverse course and begin
drifting downward.
Our strategy for the Fund going forward is to continue to slowly extend the
portfolio's maturities into next year to take advantage of the present steep
yield curve caused by issuers aggressively extending their liabilities to avoid
any potential Y2K problems. We believe this strategy will also allow us to
maintain competitive yields, take advantage of any potential rate hikes, and
retain the liquidity needed for anticipated year-end redemptions. We will
continue to concentrate the portfolio in very high quality credits and to
maintain our conservative investment strategies and standards for the
foreseeable future.
2
<PAGE>
LETTER TO SHAREHOLDERS (CONCLUDED)
- --------------------------------------------------------------------------------
We continue to believe that the conservative approach we apply to investing
on behalf of the Fund will provide comfort, as well as competitive yields, to
our shareholders.
As always, we appreciate your continued support.
Sincerely,
/s/ Darlene M. Rasel
Darlene M. Rasel
Portfolio Manager
September 30, 1999
3
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Statement of Net Assets September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Rating
------------- Par
Prime Series S&P Moody's (000) Value
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER - 91.8%
Automobiles & Trucks - 8.3%
Ford Motor Credit Co.
5.56% 10/1/99 .............. A-1 P-1 $ 60,000 $ 60,000,000
5.29% 10/22/99 ............. A-1 P-1 40,000 39,876,567
5.28% 11/17/99 ............. A-1 P-1 30,000 29,793,200
PACCAR Financial Corp.
5.28% 10/20/99 ............. A-1+ P-1 28,000 27,921,973
5.11% 10/21/99 ............. A-1+ P-1 18,350 18,297,751
5.11% 10/22/99 ............. A-1+ P-1 25,000 24,925,479
5.30% 10/26/99 ............. A-1+ P-1 10,000 9,963,194
5.29% 10/28/99 ............. A-1+ P-1 10,000 9,960,325
5.30% 11/12/99 ............. A-1+ P-1 5,000 4,969,083
5.31% 11/24/99 ............. A-1+ P-1 26,240 26,030,998
5.31% 12/3/99 .............. A-1+ P-1 10,000 9,907,075
5.32% 12/20/99 ............. A-1+ P-1 10,000 9,881,778
5.16% 2/2/00 ............... A-1+ P-1 25,000 24,538,789
Toyota Motor Credit Corp.
5.21% 10/18/99 ............. A-1+ P-1 15,000 14,963,096
5.28% 10/26/99 ............. A-1+ P-1 8,755 8,722,898
5.27% 11/23/99 ............. A-1+ P-1 60,000 59,534,483
--------------
379,286,689
--------------
Bank Holding Companies - 2.2%
Wachovia Bank
4.93% 2/7/00 ............... A-1+ P-1 30,000 29,470,025
5.18% 2/15/00 .............. A-1+ P-1 15,000 14,704,308
Wells Fargo & Co.
5.75% 2/22/00 .............. A-1 P-1 30,000 29,310,000
5.77% 2/29/00 .............. A-1 P-1 25,000 24,394,951
--------------
97,879,284
--------------
Beverages - Soft Drinks - 2.4%
Coca Cola Co.
5.26% 10/8/99 .............. A-1+ P-1 50,000 49,948,861
5.27% 11/22/99 ............. A-1+ P-1 50,000 49,619,389
5.27% 1/20/00 .............. A-1+ P-1 10,000 9,837,508
--------------
109,405,758
--------------
Chemicals - 3.7%
E.I. duPont de Nemours and Co.
5.11% 10/18/99 ............. A-1+ P-1 30,685 30,610,955
5.27% 10/19/99 ............. A-1+ P-1 30,000 29,920,950
5.27% 11/22/99 ............. A-1+ P-1 60,000 59,543,267
5.27% 12/2/99 .............. A-1+ P-1 50,000 49,546,194
--------------
169,621,366
--------------
</TABLE>
4
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rating
------------- Par
Prime Series S&P Moody's (000) Value
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (continued)
Computers - Equipment - 2.8%
Hewlett-Packard Co.
5.30% 10/8/99 .............. A-1+ P-1 $ 10,000 $ 9,989,694
5.29% 11/1/99 .............. A-1+ P-1 50,000 49,772,236
5.30% 11/24/99 ............. A-1+ P-1 40,000 39,682,000
Xerox Credit Corp.
5.29% 11/10/99 ............. A-1 P-1 30,000 29,823,667
--------------
129,267,597
--------------
Electrical and Electronics - 3.2%
Emerson Electric Co.
5.27% 1/31/00 .............. A-1+ P-1 25,000 24,553,514
5.32% 2/4/00 ............... A-1+ P-1 35,000 34,348,300
Motorola Credit Corp.
5.25% 10/14/99 ............. A-1 P-1 33,600 33,536,300
5.31% 11/19/99 ............. A-1 P-1 23,000 22,833,767
Vermont American Co.
5.63% 2/9/00 ............... A-1+ P-1 30,000 29,385,392
--------------
144,657,273
--------------
Entertainment - 0.7%
The Walt Disney Co.
4.82% 10/7/99 .............. A-1 P-1 6,735 6,729,590
4.83% 11/10/99 ............. A-1 P-1 2,450 2,436,852
5.27% 2/2/00 ............... A-1 P-1 22,315 21,909,313
--------------
31,075,755
--------------
Finance - Consumer - 4.5%
American Express Credit Corp.
5.28% 11/10/99 ............. A-1 P-1 25,000 24,853,333
American General Finance Corp.
5.14% 10/18/99 ............. A-1 P-1 20,000 19,951,456
USAA Capital Corp.
5.13% 10/13/99 ............. A-1+ P-1 27,336 27,288,544
5.28% 10/18/99 ............. A-1+ P-1 10,000 9,975,067
5.29% 10/28/99 ............. A-1+ P-1 20,000 19,920,650
5.52% 2/9/00 ............... A-1+ P-1 43,713 42,821,333
5.70% 2/16/00 .............. A-1+ P-1 25,000 24,453,750
5.70% 2/23/00 .............. A-1+ P-1 17,100 16,707,413
5.70% 2/24/00 .............. A-1+ P-1 18,000 17,583,900
--------------
203,555,446
--------------
</TABLE>
5
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Rating
------------- Par
Prime Series S&P Moody's (000) Value
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (continued)
Finance: Diversified - 5.3%
Associates Corp.
5.30% 10/7/99 .............. A-1+ P-1 $ 45,000 $ 44,960,250
5.27% 11/10/99 ............. A-1+ P-1 30,000 29,824,333
5.72% 2/9/00 ............... A-1+ P-1 25,000 24,479,639
Associates First Capital Corp.
5.19% 10/4/99 .............. A-1 P-1 5,000 4,997,838
General Electric Capital Corp. International Fund
5.47% 2/3/00 ............... A-1+ P-1 15,000 14,715,104
5.77% 3/8/00 ............... A-1+ P-1 25,000 24,362,896
General Electric Capital Corp.
5.12% 10/6/99 .............. A-1+ P-1 12,000 11,991,467
5.31% 10/12/99 ............. A-1+ P-1 15,000 14,975,663
5.43% 1/31/00 .............. A-1+ P-1 8,000 7,852,787
5.20% 2/2/00 ............... A-1+ P-1 20,000 19,641,778
5.36% 2/11/00 .............. A-1+ P-1 13,000 12,742,571
5.29% 2/15/00 .............. A-1+ P-1 20,000 19,597,372
5.78% 2/18/00 .............. A-1+ P-1 12,000 11,730,267
--------------
241,871,965
--------------
Finance - Leasing - 2.0%
International Lease Finance Corp.
5.28% 10/14/99 ............. A-1+ P-1 30,000 29,942,800
5.28% 11/18/99 ............. A-1+ P-1 30,000 29,788,800
4.94% 2/4/00 ............... A-1+ P-1 30,000 29,481,300
--------------
89,212,900
--------------
Foods - 4.6%
Campbell Soup Co.
5.20% 10/12/99 ............. A-1+ P-1 25,000 24,960,278
5.23% 10/13/99 ............. A-1+ P-1 35,000 34,938,983
5.26% 10/25/99 ............. A-1+ P-1 26,800 26,706,021
4.82% 1/18/00 .............. A-1+ P-1 22,000 21,678,934
H.J. Heinz Co.
5.33% 1/21/00 .............. A-1 P-1 25,000 24,585,444
5.34% 1/28/00 .............. A-1 P-1 17,800 17,486,290
Hershey Foods Corp.
5.23% 10/15/99 ............. A-1 P-1 28,000 27,943,051
Kellogg Co.
5.27% 11/1/99 .............. A-1+ P-1 8,400 8,361,880
5.67% 2/11/00 .............. A-1+ P-1 25,000 24,476,313
--------------
211,137,194
--------------
</TABLE>
6
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rating
------------- Par
Prime Series S&P Moody's (000) Value
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (continued)
Household Products - 3.2%
Procter & Gamble Co.
5.28% 10/14/99 ............. A-1+ P-1 $ 20,000 $ 19,961,867
5.28% 10/18/99 ............. A-1+ P-1 57,200 57,057,381
5.11% 10/29/99 ............. A-1+ P-1 16,400 16,334,819
5.28% 11/5/99 .............. A-1+ P-1 20,000 19,897,333
5.28% 11/8/99 .............. A-1+ P-1 20,000 19,888,533
5.29% 12/17/99 ............. A-1+ P-1 14,000 13,841,594
--------------
146,981,527
--------------
Machinery and Machine Tools - 0.3%
Illinois Tool Works, Inc.
5.33% 10/19/99 ............. A-1+ P-1 15,000 14,960,250
--------------
Oil Integrated - Domestic - 3.0%
Mobil Corp.
5.55% 10/1/99 .............. A-1+ P-1 135,000 135,000,000
--------------
Oil Transportation - 0.8%
Colonial Pipeline Co.
5.14% 10/13/99 ............. A-1+ P-1 15,000 14,974,300
5.32% 11/17/99 ............. A-1+ P-1 12,000 11,916,653
5.34% 11/29/99 ............. A-1+ P-1 11,000 10,903,732
--------------
37,794,685
--------------
Paper Products - 1.5%
Kimberly-Clark Corp.
5.23% 10/13/99 ............. A-1+ P-1 69,500 69,378,200
--------------
Pharmaceutical - 6.7%
Abbott Laboratories
5.38% 10/7/99 .............. A-1+ P-1 45,000 44,959,688
Johnson & Johnson
4.90% 10/15/99 ............. A-1+ P-1 13,600 13,574,084
4.79% 11/1/99 .............. A-1+ P-1 12,000 11,950,503
5.17% 1/18/00 .............. A-1+ P-1 25,000 24,608,660
5.26% 2/2/00 ............... A-1+ P-1 11,000 10,800,704
Merck & Co., Inc.
5.30% 2/4/00 ............... A-1+ P-1 30,000 29,443,500
Pfizer, Inc.
5.28% 10/13/99 ............. A-1+ P-1 35,000 34,938,400
5.27% 10/14/99 ............. A-1+ P-1 25,000 24,952,424
5.27% 10/15/99 ............. A-1+ P-1 20,000 19,959,011
5.29% 11/3/99 .............. A-1+ P-1 50,000 49,757,542
5.28% 11/4/99 .............. A-1+ P-1 40,000 39,800,533
--------------
304,745,049
--------------
</TABLE>
7
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Rating
------------- Par
Prime Series S&P Moody's (000) Value
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (continued)
Property - Casualty Insurance - 1.7%
AIG Funding, Inc.
5.60% 10/1/99 .............. A-1+ P-1 $ 75,000 $ 75,000,000
--------------
Publishing - 3.8%
Gannett Co., Inc.
5.28% 10/13/99 ............. A-1+ P-1 90,000 89,841,600
5.27% 10/19/99 ............. A-1+ P-1 60,000 59,841,900
McGraw-Hill, Inc.
5.12% 10/19/99 ............. A-1 P-1 5,000 4,987,200
5.12% 10/21/99 ............. A-1 P-1 2,540 2,532,775
Times Mirror Co.
5.12% 10/19/99 ............. A-1 P-1 15,000 14,961,600
--------------
172,165,075
--------------
Retail - 3.6%
Wal-Mart Stores, Inc.
5.28% 10/4/99 .............. A-1+ P-1 50,000 49,978,000
5.28% 10/18/99 ............. A-1+ P-1 81,000 80,798,040
5.28% 10/19/99 ............. A-1+ P-1 20,000 19,947,200
5.28% 10/25/99 ............. A-1+ P-1 15,000 14,947,200
--------------
165,670,440
--------------
Structured Finance - 10.1%
Ciesco, LP.
5.31% 10/5/99 .............. A-1+ P-1 47,500 47,471,975
5.32% 10/8/99 .............. A-1+ P-1 50,000 49,948,278
5.32% 10/8/99 .............. A-1+ P-1 2,500 2,497,414
5.32% 11/4/99 .............. A-1+ P-1 6,000 5,969,853
5.32% 11/5/99 .............. A-1+ P-1 20,000 19,896,556
5.32% 11/19/99 ............. A-1+ P-1 30,000 29,782,767
Corporate Receivables Corp.
5.33% 10/6/99 .............. A-1+ P-1 25,000 24,981,493
5.17% 10/14/99 ............. A-1+ P-1 10,000 9,981,331
5.20% 10/20/99 ............. A-1+ P-1 8,000 7,978,044
5.35% 10/28/99 ............. A-1+ P-1 50,000 49,799,375
5.36% 11/3/99 .............. A-1+ P-1 10,000 9,950,867
5.37% 11/8/99 .............. A-1+ P-1 50,000 49,716,583
5.36% 11/15/99 ............. A-1+ P-1 10,000 9,933,000
</TABLE>
8
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rating
------------- Par
Prime Series S&P Moody's (000) Value
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (continued)
Structured Finance (concluded)
Corporate Asset Funding Co., Inc.
5.32% 10/1/99 .............. A-1+ P-1 $ 30,000 $ 30,000,000
5.15% 10/5/99 .............. A-1+ P-1 30,000 29,982,833
5.33% 10/12/99 ............. A-1+ P-1 30,000 29,951,142
5.17% 10/20/99 ............. A-1+ P-1 10,000 9,972,714
5.17% 10/21/99 ............. A-1+ P-1 20,000 19,942,556
5.35% 11/15/99 ............. A-1+ P-1 10,000 9,933,125
5.36% 11/16/99 ............. A-1+ P-1 10,000 9,931,511
--------------
457,621,417
--------------
Telephone - 13.8%
Ameritech Corp.
5.57% 10/1/99 .............. A-1+ P-1 100,000 100,000,000
5.31% 10/5/99 .............. A-1+ P-1 70,000 69,958,700
AT&T Corp.
5.29% 10/27/99 ............. A-1+ P-1 96,500 96,131,316
Bell Atlantic Network Funding Corp.
5.32% 10/18/99 ............. A-1+ P-1 40,000 39,899,511
5.30% 10/21/99 ............. A-1+ P-1 45,000 44,867,500
BellSouth Capital Funding Corp.
5.23% 10/4/99 .............. A-1+ P-1 33,000 32,985,618
5.29% 11/23/99 ............. A-1+ P-1 75,000 74,418,104
BellSouth Telecommunications, Inc.
5.32% 2/7/00 ............... A-1+ P-1 50,000 49,009,208
SBC Communications, Inc.
5.29% 10/14/99 ............. A-1+ P-1 25,000 24,952,243
5.18% 10/25/99 ............. A-1+ P-1 14,500 14,449,927
5.30% 11/29/99 ............. A-1+ P-1 10,000 9,913,139
5.33% 1/20/00 .............. A-1+ P-1 50,000 49,178,292
5.70% 2/22/00 .............. A-1+ P-1 20,000 19,544,000
--------------
625,307,558
--------------
Utilities - 3.6%
National Rural Utilities CFC.
5.27% 10/13/99 ............. A-1+ P-1 12,365 12,343,279
5.25% 10/18/99 ............. A-1+ P-1 4,000 3,990,083
5.30% 11/9/99 .............. A-1+ P-1 18,500 18,393,779
5.78% 1/27/00 .............. A-1+ P-1 27,860 27,332,177
5.75% 2/10/00 .............. A-1+ P-1 30,000 29,367,500
5.79% 2/17/00 .............. A-1+ P-1 8,000 7,821,153
</TABLE>
9
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Statement of Net Assets (concluded) September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Rating
------------- Par
Prime Series S&P Moody's (000) Value
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (continued)
Utilities (concluded)
5.31% 11/10/99 ............. A-1+ P-1 $ 25,000 $ 24,852,500
5.30% 11/16/99 ............. A-1+ P-1 24,000 23,837,467
5.31% 11/18/99 ............. A-1+ P-1 15,000 14,893,800
--------------
162,831,738
--------------
Total Commercial Paper
(Cost $4,174,427,166) 4,174,427,166
--------------
U.S. CORPORATE NOTE/BOND - 0.3%
Associates Corp.
6.00% 3/15/00 .............. A-1+ P-1 12,000 12,027,012
--------------
Total U.S. Corporate Note/Bond
(Cost $12,027,012) 12,027,012
--------------
FLOATING RATE - NOTE - 4.2%
Associates Corp.
5.26% 3/20/00 .............. A-1+ P-1 40,000 39,987,058
AT&T Corp.
5.27% 7/13/00 .............. A-1+ P-1 15,000 14,995,311
Federal Home Loan Bank
5.26% 11/9/99 .............. A-1+ P-1 25,000 24,998,168
5.31% 4/14/00 .............. A-1+ P-1 50,000 49,986,612
5.22% 5/12/00 .............. A-1+ P-1 20,000 19,989,596
5.21% 7/12/00 .............. A-1+ P-1 6,000 5,997,664
General Electric Capital Corp.
5.26% 4/12/00 .............. A-1+ P-1 25,000 25,000,000
5.39% 5/12/00 .............. A-1+ P-1 10,000 10,000,000
--------------
Total Floating Rate - Note
(Cost $190,954,409) 190,954,409
--------------
CERTIFICATE OF DEPOSIT - 3.4%
First Chicago NBD Corp.
5.20% 10/26/99 ............. A-1 P-1 25,000 25,000,000
5.48% 1/18/00 .............. A-1 P-1 5,000 4,992,940
First Union National Bank of N.C.
4.93% 10/20/99 ............. A-1 P-1 10,000 10,000,000
Mellon Bank Corp.
5.52% 2/10/00 .............. A-1+ P-1 25,000 25,000,000
5.52% 2/11/00 .............. A-1+ P-1 25,000 25,000,000
</TABLE>
10
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rating
------------- Par
Prime Series S&P Moody's (000) Value
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CERTIFICATE OF DEPOSIT (continued)
Certificate of Deposit (concluded)
NationsBank Corp.
4.93% 11/3/99 .............. A-1 P-1 $ 25,000 $ 25,000,000
4.94% 11/10/99 ............. A-1 P-1 30,000 30,000,000
4.99% 1/11/00 .............. A-1 P-1 10,000 9,987,084
--------------
Total Certificate of Deposit
(Cost $154,980,024) ............................................ 154,980,024
--------------
FHLB - 0.2%
Federal Home Loan Bank
5.16% 3/8/00 ............... A-1+ P-1 8,000 8,003,430
--------------
Total FHLB
(Cost $8,003,430) .............................................. 8,003,430
--------------
REPURCHASE AGREEMENTS - 0.1%/b
Goldman Sachs
5.15% 10/1/99/d ............................... 4,809 4,808,763
--------------
Total Repurchase Agreements
(Cost $4,808,763) .............................................. 4,808,763
--------------
Total Investments--100.0%
(Cost $4,545,200,804)/c ........................................ $4,545,200,804
Liabilities in excess of Other assets--0.0% ....................... (7,840,122)
--------------
Net Assets--100.0% ................................................ $4,537,360,682
==============
Net Asset Value, Offering and Redemption Price Per:
Prime Share
($3,995,564,474 / 3,995,480,297 shares outstanding) ......... $1.00
=====
Flag Investors Class A Share
($13,118,065 / 13,117,559 shares outstanding) ............... $1.00
=====
Flag Investors Class B Share
($6,273,802 / 6,273,698 shares outstanding) ................. $1.00
=====
Institutional Prime Share
($451,946,360 / 451,939,552 shares outstanding) ............. $1.00
=====
Quality Cash Reserve Prime Share
($70,457,982 / 70,451,450 shares outstanding) ............... $1.00
=====
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1999
(Unaudited)
Prime Series
- --------------------------------------------------------------------------------
- -----------
a Most commercial paper is traded on a discount basis. In such cases, the
interest rate shown represents the yield at time of purchase by the Fund.
b Collateral on tri party repurchase agreements held by the agent of 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 at time of purchase.
c Aggregate cost for financial reporting and federal tax purposes.
d Dated 9/30/99 principal and interest in the amount of $4,809,451, due
10/01/99 (Collateralized by U.S. Treasury Note, par value of $5,128,000,
coupon rate of 4.25%, due 11/15/03, value of $4,905,652.
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 Obligations that are 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.
12
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Statement of Operations
(Unaudited)
For the Six
Months Ended
Prime Series September 30,
- -------------------------------------------------------------------------------
1999
Investment Income:
Interest income ........................................ $108,333,920
------------
Expenses:
Investment advisory fees ............................... 5,474,942
Distribution fees ...................................... 5,016,300
Transfer agent fees .................................... 1,111,923
Registration fees ...................................... 362,038
Custodian fees ......................................... 211,740
Shareholder service fees ............................... 950,690
Professional fees ...................................... 85,117
Accounting fees ........................................ 86,498
Directors' fees ........................................ 84,414
Miscellaneous .......................................... 264,343
------------
Total expenses ................................ 13,648,005
------------
Net investment income ..................................... 94,685,915
------------
Net realized gain from security transactions .............. 45
------------
Net increase in net assets resulting from operations ...... $ 94,685,960
============
See Notes to Financial Statements.
13
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
Prime Series September 30, March 31,
- ----------------------------------------------------------------------------------------------
1999/1 1999
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net investment income .................. $ 94,685,915 $ 178,689,887
Net realized gain (loss) from
security transactions ................ 45 88,481
--------------- ---------------
Net increase in net assets resulting
from operations ...................... 94,685,960 178,778,368
--------------- ---------------
Distributions to Shareholders From:
Net investment income:
Deutsche Banc Alex. Brown Cash Reserve
Prime Shares ....................... (84,206,344) (151,410,202)
Deutsche Banc Alex. Brown Cash Reserve
Prime Institutional Shares ......... (8,622,128) (16,058,016)
Flag Investors Class A Shares ........ (262,028) (435,677)
Flag Investors Class B Shares ........ (67,912) (72,373)
Quality Cash Reserve Shares .......... (1,581,609) (10,713,744)
--------------- ---------------
Total distributions .................. (94,740,021) (178,690,012)
--------------- ---------------
Capital Share Transactions, net ........... 323,594,286 496,268,896
--------------- ---------------
Total increase in net assets ........... 323,594,330 496,357,252
Net Assets:
Beginning of period .................... 4,213,766,352 3,717,409,100
--------------- ---------------
End of period .......................... $ 4,537,360,682 $ 4,213,766,352
=============== ===============
</TABLE>
- ----------
1/ Unaudited.
See Notes to Financial Statements.
14
<PAGE>
This page intentionally left blank.
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Financial Highlights -- Prime Shares
(For shares outstanding throughout each period)
<TABLE>
<CAPTION>
For the For the
Six Months Ended Year Ended
September 30, March 31,
- ----------------------------------------------------------------------------------
1999/1 1999
<S> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period .... $ 1.00 $ 1.00
-------------- --------------
Income from Investment Operations:
Net investment income ..................... 0.0222 0.0473
Less Distributions:
Dividends from net investment income ...... (0.0222) (0.0473)
-------------- --------------
Net asset value at end of period .......... $ 1.00 $ 1.00
============== ==============
Total Return:
Based on net asset value per share ........ 2.24% 4.84%
Ratios to Average Net Assets:
Expenses .................................. 0.66%/1 0.63%
Net investment income ..................... 4.43%/1 4.71%
Supplemental Data:
Net assets at end of period ............... $3,995,564,474 $3,727,990,170
Number of shares outstanding at
end of period ........................... 3,995,480,297 3,727,906,079
</TABLE>
- ----------
1/ Annualized.
2/ Unaudited.
16
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended March 31,
------------------------------------------------------------------------
1998 1997 1996 1995
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- -------------- -------------- --------------
Income from Investment Operations:
Net investment income ..................... 0.0494 0.0478 0.0524 0.0442
Less Distributions:
Dividends from net investment income ...... (0.0494) (0.0478) (0.0524) (0.0442)
-------------- -------------- -------------- --------------
Net asset value at end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ==============
Total Return:
Based on net asset value per share ........ 5.05% 4.88% 5.36% 4.51%
Ratios to Average Net Assets:
Expenses .................................. 0.67% 0.63% 0.60% 0.61%
Net investment income ..................... 4.94% 4.78% 5.21% 4.46%
Supplemental Data:
Net assets at end of period ............... $3,164,537,551 $2,545,532,365 $2,386,681,216 $1,472,079,739
Number of shares outstanding at
end of period ........................... 3,164,529,071 2,545,523,885 2,386,684,392 1,472,077,488
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Financial Highlights -- Flag Investors Class A Shares
(For shares outstanding throughout each period)
<TABLE>
<CAPTION>
For the For the
Six Months Ended Year Ended
September 30, March 31,
- -----------------------------------------------------------------------------
1999/1 1999
<S> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period .... $ 1.00 $ 1.00
----------- -----------
Income from Investment Operations:
Net investment income ..................... 0.0224 0.0474
Less Distributions:
Dividends from net investment income ...... (0.0224) (0.0474)
----------- -----------
Net asset value at end of period .......... $ 1.00 $ 1.00
=========== ===========
Total Return:
Based on net asset value per share ........ 2.26% 4.85%
Ratios to Average Net Assets:
Expenses .................................. 0.61%/1 0.63%
Net investment income ..................... 4.55%/1 4.67%
Supplemental Data:
Net assets at end of period ............... $13,118,065 $13,028,272
Number of shares outstanding at
end of period ........................... 13,117,559 13,027,769
</TABLE>
- ----------
1/ Annualized.
2/ Unaudited.
18
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended March 31,
--------------------------------------------------------
1998 1997 1996 1995
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations:
Net investment income ..................... 0.0494 0.0478 0.0524 0.0442
Less Distributions:
Dividends from net investment income ...... (0.0494) (0.0478) (0.0524) (0.0442)
----------- ---------- ----------- -----------
Net asset value at end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== =========== ==========
Total Return:
Based on net asset value per share ........ 5.05% 4.88% 5.36% 4.51%
Ratios to Average Net Assets:
Expenses .................................. 0.67% 0.63% 0.60% 0.61%
Net investment income ..................... 4.94% 4.78% 5.25% 4.26%
Supplemental Data:
Net assets at end of period ............... $ 7,736,785 $ 6,521,574 $ 5,976,831 $ 7,726,696
Number of shares outstanding at
end of period ........................... 7,736,522 6,521,310 5,976,824 7,726,698
</TABLE>
- ----------
See Notes to Financial Statements.
19
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Financial Highlights-- Flag Investors Class B Shares
(For shares outstanding throughout each period)
<TABLE>
<CAPTION>
For the For the
Six Months Ended Year Ended
September 30, March 31,
- -----------------------------------------------------------------------------
1999/3 1999
<S> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period ... $ 1.00 $ 1.00
----------- -----------
Income from Investment Operations:
Net investment income .................... 0.0187 0.0400
Less Distributions:
Dividends from net investment ............ (0.0187) (0.0400)
----------- ----------
Net asset value at end of period ......... $ 1.00 $ 1.00
=========== ===========
Total Return:
Based on net asset value per share ....... 1.88% 4.07%
Ratios to Average Net Assets:
Expenses ................................. 1.36%/2 1.37%
Net investment income .................... 3.81%/2 3.92%
Supplemental Data:
Net assets at end of period .............. $ 6,273,802 $ 2,355,863
Number of shares outstanding at
end of period .......................... 6,273,698 2,355,780
</TABLE>
- ----------
1/ Commencement of operations.
2/ Annualized.
3/ Unaudited.
20
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period April 3, 1995/2
For the Years Ended March 31, through March 31,
----------------------------- ------------------------------
1998 1997 1996
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period ... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from Investment Operations:
Net investment income .................... 0.0418 0.0414 0.0361
Less Distributions:
Dividends from net investment ............ (0.0418) (0.0414) (0.0361)
--------- --------- ---------
Net asset value at end of period ......... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return:
Based on net asset value per share ....... 4.27% 4.22% 3.69%
Ratios to Average Net Assets:
Expenses ................................. 1.42% 1.38% .38%/2
Net investment income .................... 4.18% 4.14% 4.30%/2
Supplemental Data:
Net assets at end of period .............. $ 184,382 $ 227,098 $ 10,200
Number of shares outstanding at
end of period .......................... 184,382 227,098 10,200
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Financial Highlights-- Prime Institutional Shares
(For shares outstanding throughout each period)
<TABLE>
<CAPTION>
For the For the
Six Months Ended Year Ended
September 30, March 31,
- ------------------------------------------------------------------------------
1999/1 1999
<S> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period .... $ 1.00 $ 1.00
------------ ------------
Income from Investment Operations:
Net investment income ..................... 0.0237 0.0499
Less Distributions:
Dividends from net investment income ...... (0.0237) (0.0499)
------------ ------------
Net asset value at end of period .......... $ 1.00 $ 1.00
============ ============
Total Return:
Based on net asset value per share ........ 2.39% 5.11%
Ratios to Average Net Assets:
Expenses .................................. 0.35%/1 0.36%
Net investment income ..................... 4.69%/1 4.98%
Supplemental Data:
Net assets at end of period ............... $451,946,360 $388,447,492
Number of shares outstanding at
end of period ........................... 451,939,552 388,440,636
</TABLE>
- ----------
1/ Unaudited.
2/ Annualized.
22
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended March 31,
------------------------------------------------------------------------------
1998 1997 1996 1995
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ----------- -----------
Income from Investment Operations:
Net investment income ..................... 0.0519 0.0503 0.0548 0.0472
Less Distributions:
Dividends from net investment income ...... (0.0519) (0.0503) (0.0548) (0.0472)
------------ ------------ ----------- -----------
Net asset value at end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ =========== ===========
Total Return:
Based on net asset value per share ........ 5.31% 5.15% 5.62% 4.82%
Ratios to Average Net Assets:
Expenses .................................. 0.42% 0.38% 0.35% 0.36%
Net investment income ..................... 5.22% 5.04% 5.32% 4.57%
Supplemental Data:
Net assets at end of period ............... $317,971,693 $117,812,047 $53,699,315 $11,904,716
Number of shares outstanding at
end of period ........................... 317,971,413 117,811,768 53,699,535 11,904,663
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Financial Highlights-- Quality Cash Reserve Prime Shares
(For shares outstanding throughout each period)
<TABLE>
<CAPTION>
For the For the
Six Months Ended Year Ended
September 30, March 31,
- ---------------------------------------------------------------------------------
1999/1 1999
<S> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period .... $ 1.00 $ 1.00
------------ ------------
Income from Investment Operations:
Net investment income ..................... 0.0207 0.0444
Less Distributions:
Dividends from net investment income ...... (0.0207) (0.0444)
------------ ------------
Net asset value at end of period .......... $ 1.00 $ 1.00
============ ============
Total Return:
Based on net asset value per share ........ 2.08% 4.53%
Ratios to Average Net Assets:
Expenses .................................. 0.96%/3 0.92%/1
Net investment income ..................... 4.12%/3 4.44%/2
Supplemental Data:
Net assets at end of period ............... $ 70,457,982 $ 81,944,555
Number of shares outstanding at
end of period ........................... 70,451,450 81,938,027
</TABLE>
- ----------
1/ Ratios of expenses to average net assets prior fee waivers was 0.97%, 1.02%,
0.98% and 0.95% for the years ended March 31, 1999, 1998, 1997 and 1996,
respectively.
2/ Ratios of net investment income to average net assets prior to partial fee
waivers was 4.39%, 4.60%, 4.43% and 4.86% for the years ended March 31, 1999,
1998, 1997 and 1996, respectively.
3/ Annualized.
4/ Unaudited.
24
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Financial Highlights-- Quality Cash Reserve Prime Shares
(For shares outstanding throughout each period)
<TABLE>
<CAPTION>
For the Years Ended March 31,
-------------------------------------------------------------------------------
1998 1997 1996 1995
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income ..................... 0.0465 0.0449 0.0493 0.0402
Less Distributions:
Dividends from net investment income ...... (0.0465) (0.0449) (0.0493) (0.0402)
------------ ------------ ------------ ------------
Net asset value at end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============
Total Return:
Based on net asset value per share ........ 4.75% 4.59% 5.04% 4.09%
Ratios to Average Net Assets:
Expenses .................................. 0.96%/1 0.91%/1 0.90%/1 0.96%
Net investment income ..................... 4.66%/2 4.50%/2 4.91%/2 4.04%
Supplemental Data:
Net assets at end of period ............... $226,978,689 $197,370,530 $156,412,213 $ 94,592,158
Number of shares outstanding at
end of period ........................... 226,978,007 197,369,848 156,412,393 94,591,979
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
NOTE 1 -- Significant Accounting Policies
Deutsche Banc Alex. Brown Cash Reserve Fund, Inc. ("the Fund") began
operations August 11, 1981. The Fund is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end Investment Management
Company. Its objective is to seek as high a level of current income as is
consistent with preservation of capital and liquidity.
The Fund consists of three portfolios: the Prime Series, the Treasury
Series and the Tax-Free Series. The Prime Series consists of five classes:
Deutsche Banc 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 Deutsche
Banc Alex. Brown Cash Reserve Prime Institutional Shares ("Prime Institutional
Shares"). The Treasury Series consists of two classes: Deutsche Banc Alex. Brown
Cash Reserve Treasury Shares ("Treasury Shares") and Deutsche Banc Alex. Brown
Cash Reserve Treasury Institutional Shares ("Treasury Institutional Shares").
The Tax-Free Series consists of two classes: Deutsche Banc Alex. Brown Cash
Reserve Tax-Free Shares ("Tax-Free Shares") and Deutsche Banc Alex. Brown Cash
Reserve Tax Free Institutional Shares ("Tax Free Institutional Shares").
Shareholders can vote only on issues that affect the share classes they own.
When preparing the Fund's financial statements, management makes estimates
and assumptions to comply with generally accepted accounting principles. These
estimates affect 1) the assets and liabilities that we report at the date of the
financial statements; 2) the contingent assets and liabilities that we disclose
at the date of the financial statements; and 3) the revenues and expenses that
we report for the period. Our estimates could be different from the actual
results. The Fund's significant accounting policies are:
A. Security Valuation--Each portfolio has a weighted average maturity of
90 days or less.The Fund values portfolio securities on the basis of
amortized cost, which is in accordance with Rule 2a-7 of the Investment
Company Act of 1940 and, which approximates market value. Using this
method, the Fund values a security at its cost. The Fund then assumes a
constant amortization to maturity of any discount or premium.
B. Repurchase Agreements--The Prime Series may enter into tri-party
repurchase agreements with broker-dealers and domestic banks. A
26
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
NOTE 1 -- concluded
repurchase agreement is a short-term investment in which the Fund buys
a debt security that the broker agrees to repurchase at a set time and
price. The third party, which is the broker's custodial bank, holds the
collateral in a separate account until the repurchase agreement
matures. The agreement ensures that the collateral's market value,
including any accrued interest, is sufficient if the broker defaults.
The Fund's access to the collateral may be delayed or limited if the
broker defaults and the value of the collateral declines or if the
broker enters into an insolvency proceeding.
C. Federal Income Taxes--The Fund is organized as a regulated investment
company. As long as it maintains this status and distributes to its
shareholders substantially all of its taxable net investment income and
net realized capital gains, it will be exempt from most, if not all,
federal income and excise taxes. As a result, the Fund has made no
provisions for federal income taxes. Each portfolio is treated as a
separate entity for federal income tax purposes.
The Fund determines its distributions according to income tax
regulations, which may be different from generally accepted accounting
principles. As a result, the Fund occasionally makes reclassifications
within its capital accounts to reflect income and gains that are
available for distribution under income tax regulations
D. Security Transactions, Investment Income, Distributions--The Fund uses
the trade date to account for security transactions and the specific
identification method for financial reporting and income tax purposes
to determine the gain or loss on investments sold or redeemed. Interest
income is recorded on an accrual basis and includes the pro rata
amortization of premiums and accretion of discounts when appropriate.
Dividends to shareholders are declared daily. Dividend distributions or
reinvestments are made monthly.
E. Expenses--Operating expenses for each share class are recorded on an
accrual basis, and are charged to that classes' operations. If a Fund
expense cannot be directly attributed to a share class, the expense is
prorated among the classes that the expense affects and is based on the
classes' relative net assets.
27
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
NOTE 2 -- Investment Advisory Fee, Transactions with Affiliates and Other Fees
Investment Company Capital Corp. ("ICC"), a subsidiary of Deutsche Banc
Corporation, is the investment advisor for all series. Under the terms of the
investment advisory agreement, the Fund pays ICC a fee. This fee is 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 the amount over $3.5 billion. The Prime
Series pays an additional fee that is calculated daily and paid monthly at the
annual rate of .02% of its average daily net assets. The Tax-Free Series also
pays an additional fee that is calculated daily and paid monthly at the annual
rate of .03% of its average daily net assets.
ICC also provides accounting services to the Fund. As compensation for
these services, the Prime Series, Treasury Series and Tax-Free Series pay ICC an
annual fee that is calculated daily and paid monthly from its three series'
average daily net assets. The Prime Series paid $86,498, the Treasury Series
paid $66,614 and the Tax-Free Series paid $70,885 for accounting services for
the six months ended September 30, 1999.
ICC also provides transfer agency services to the Fund. As compensation for
its transfer agent services, the three series pay ICC a per account fee that is
calculated and paid monthly. The Prime Series paid $1,111,923, the Treasury
Series paid $223,260 and the Tax-Free Series paid $112,730 to ICC for transfer
agent services for the six months ended September 30, 1999.
ICC Distributors, Inc., a member of the Forum Group of Companies, ("ICC
Distributors"), provides distribution services to the Fund. As compensation for
these services, the Prime Shares, Flag Investors Class A Shares., Treasury
Shares and the Tax-Free Shares pay ICC Distributors an annual fee equal to 0.25%
of these classes' average daily net assets. For the six months ended September
30, 1999, Distribution fees aggregated $4,753,449, $14,357, $915,464 and
$1,306,254 for distribution services for the Prime Shares, Flag Investors Class
A Shares, Treasury Shares and Tax-Free Shares, respectively. The Quality Cash
Shares and Flag Investors Class B Shares also pay ICC Distributors an annual fee
for distribution services. This fee is equal to .60% of the Quality Cash Shares'
aggregate average daily net assets or $230,664 for the six months ended
September 30, 1999 and 1.00% (includes .25% shareholder servicing fee) of the
Flag Investors Class B Shares' aggregate average daily net assets or $17,830 for
the six months ended September 30, 1999.
28
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Note 2 -- continued
ICC and ICC Distributors may voluntarily waive a portion of their advisory
or distribution fees for the Prime, Treasury and Tax-Free Series to preserve or
enhance each series' performance. These voluntary waivers are not contractual
and could change. ICC did not waive any advisory fees for the six months ended
September 30, 1999. ICC Distributors voluntarily waived $114,329 of its
distribution fees for the period April 1, 1998 to December 31, 1998.
There was no waiver from January 1, 1999 thru September 30, 1999.
The Fund's complex offers a retirement plan for eligible Directors. The
actuarially computed pension expense allocated to the Fund for the six months
ended September 30, 1999 was $52,521 for the Prime Series, $16,503 for the
Treasury Series and $7,723 for the Tax-Free Series. The accrued liability at
September 30, 1999 was $290,689 for the Prime Series, $98,861 for the Treasury
Series and $96,569 for the Tax-Free Series.
Investment Company Capital Corp. ("ICC"), an indirect subsidiary of Bankers
Trust Corporation ("BT Corp."), is the Fund's investment advisor. On June 4,
1999, BTCorp. was acquired by Deutsche Bank AG ("Deutsche Banc"). As a result of
the transaction, ICC became an indirect subsidiary of Deutsche Bank.
On January 1, 1999 the "Fund" adopted a Shareholder Service Plan (the
"Plan") for the Prime, Treasury and Tax-Free Series of the Fund "Shares" in
order to provide compensation to third parties ("Shareholder Servicing Agents")
who provide shareholder services to clients ("Clients") who from time to time
beneficially own shares. In consideration of services provided by any
Shareholder Servicing Agent, the Fund pays the Distributor an annual fee,
calculated daily and paid monthly equal to 0.05% of the shares' daily average
net assets.
29
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
NOTE 3 -- Capital Stock and Share Information
The Fund is authorized to issue up to 9 billion shares of $.001 par value
capital stock (5.4 billion Prime Series, 1.5 billion Treasury Series, 1.75
billion Tax-Free Series and 350 million undesignated). Transactions in shares of
the Fund were as follows:
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
September 30, March 31,
1999/1 1999
--------------- ---------------
<S> <C> <C>
Prime Series:
Sold:
Prime Shares ..................... 13,514,122,041 21,238,313,843
Flag Investors Class A Shares .... 98,334,734 86,081,920
Flag Investors Class B Shares .... 7,054,784 8,010,702
Prime Institutional Shares ....... 3,427,597,300 5,126,320,627
Quality Cash Shares .............. 210,239,146 1,143,097,219
Issued as reinvestment of dividends:
Prime Shares ..................... 78,188,624 143,654,045
Flag Investors Class A Shares .... 208,257 385,752
Flag Investors Class B Shares .... 55,245 55,849
Prime Institutional Shares ....... 7,851,805 12,241,514
Quality Cash Shares .............. 1,537,466 10,243,851
Redeemed:
Prime Shares ..................... (13,324,736,425) (20,818,590,880)
Flag Investors Class A Shares .... (98,453,195) (81,176,425)
Flag Investors Class B Shares .... (3,192,111) (5,895,153)
Prime Institutional Shares ....... (3,371,950,190) (5,068,292,918)
Quality Cash Shares .............. (223,263,189) (1,298,381,050)
--------------- ---------------
Net increase .................. 323,594,286 496,268,896
=============== ===============
Treasury Series:
Sold:
Treasury Shares .................. 1,859,625,373 4,361,406,499
Treasury Institutional Shares .... 190,811,381 826,662,420
Issued as reinvestment of dividends:
Treasury Shares .................. 13,884,671 32,190,535
Treasury Institutional Shares .... 2,467,738 2,757,290
Redeemed:
Treasury Shares .................. (2,035,284,795) (4,375,328,973)
Treasury Institutional Shares .... (217,189,270) (805,626,922)
--------------- ---------------
Net increase (decrease) ....... (185,684,902) 42,060,849
=============== ===============
</TABLE>
- ----------
1/ Unaudited.
30
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
NOTE 3 -- concluded
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
September 30, March 31,
1999/1 1999
--------------- ---------------
<S> <C> <C>
Tax-Free Series:
Sold:
Tax Free Shares .................. 3,338,298,958 5,341,857,730
Tax Free Institutional Shares .... 369,635,867 1,008,685,495
Issued as reinvestment of dividends:
Tax Free Shares .................. 12,375,931 23,390,210
Tax Free Institutional Shares .... 519,796 1,157,547
Redeemed:
Tax Free Shares .................. (3,339,656,505) (5,159,012,230)
Tax Free Institutional Shares .... (360,839,263) (1,001,918,560)
--------------- ---------------
Net increase .................. 20,334,784 214,160,192
=============== ===============
</TABLE>
Note 4 -- Net Assets/1
<TABLE>
<CAPTION>
Prime Treasury Tax-Free
Series Series Series
--------------- --------------- ---------------
<S> <C> <C> <C>
Paid-in capital ............ $ 4,537,265,313 $ 753,494,812 $ 1,152,436,056
Undistributed net
investment income/
(distribution in excess) 8,345 (44,873) (59,537)
Undistributed net realized
gain/(loss) on sales
of investments ........... 87,024 194,873 (103,457)
--------------- --------------- ---------------
$ 4,537,360,682 $ 753,644,813 $ 1,152,273,062
=============== =============== ===============
</TABLE>
- ----------
1/ Unaudited.
31
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Notes to Financial Statements (concluded)
NOTE 5-- Subsequent Event.
On June 4, 1999, Bankers Trust Corporation, the parent company of
Investment Company Capital Corp ("ICC"), the investment advisor to the Fund was
acquired by Deutsche Bank AG. As a result, ICC also became an indirect
wholly-owned subsidiary of Deutsche Bank AG.
A Special Meeting of Shareholders (the "Special Meeting") was held on
October 7, 1999, at which time shareholders voted to approve a new investment
advisory agreement (the "Advisory Agreement") with ICC. Additionally,
shareholders elected the Board of Directors and voted to eliminate or modify
certain fundamental investment restrictions of the Fund.
The results of the shareholder voting at the Special Meeting are as
follows:
<TABLE>
<CAPTION>
Withheld/ Broker
Proposal For Against Abstain Non-Votes
- -------------------------------------------------------------------------------------------------
Prime Series:
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Elect Richard T. Hale 2,486,642,715 18,231,386
- -------------------------------------------------------------------------------------------------
Elect Richard R. Burt 2,483,949,933 20,924,168
- -------------------------------------------------------------------------------------------------
Elect Joseph R. Hardiman 2,486,503,693 18,370,408
- -------------------------------------------------------------------------------------------------
Elect Louis E. Levy 2,484,070,592 20,803,509
- -------------------------------------------------------------------------------------------------
Elect Eugene J. McDonald 2,484,456,056 20,418,045
- -------------------------------------------------------------------------------------------------
Elect Rebecca W. Rimel 2,484,572,288 20,301,813
- -------------------------------------------------------------------------------------------------
Elect Truman T. Semans 2,485,018,646 19,855,455
- -------------------------------------------------------------------------------------------------
Elect Robert H. Wadsworth 2,484,690,148 20,183,953
- -------------------------------------------------------------------------------------------------
Investment Advisory Agreement
with ICC 2,464,162,742 16,263,731 24,447,628
- -------------------------------------------------------------------------------------------------
Eliminate policy regarding investing
for exercising control or management 2,391,371,420 78,146,574 30,051,315 5,304,792
- -------------------------------------------------------------------------------------------------
Eliminate policy regarding pledging,
mortgaging or hypothecating assets 2,376,751,127 94,102,855 28,715,327 5,304,792
- -------------------------------------------------------------------------------------------------
Eliminate policy regarding investment
in other investment companies 2,391,536,912 79,218,566 28,813,831 5,304,792
- -------------------------------------------------------------------------------------------------
Eliminate policy regarding short sales,
purchasing securities on margin, and
investing in puts and calls and
commodities 2,364,466,643 103,338,495 31,764,171 5,304,792
- -------------------------------------------------------------------------------------------------
Eliminate policy regarding oil, gas and
mineral leases 2,378,303,653 91,645,404 29,620,252 5,304,792
- -------------------------------------------------------------------------------------------------
Modify policy regarding borrowing 2,381,377,496 88,045,672 30,146,141 5,304,792
- -------------------------------------------------------------------------------------------------
Modify policy regarding loans 2,371,610,123 98,042,664 29,916,522 5,304,792
- -------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
Directors and Officers
RICHARD T. HALE TRUMAN T. SEMANS
Chairman Director
JAMES J. CUNNANE CARL W. VOGT, ESQ.
Director Director
JOSEPH R. HARDIMAN HARRY WOOLF
Director President
LOUIS E. LEVY AMY M. OLMERT
Director Secretary
EUGENE J. MCDONALD CHARLES A. RIZZO
Director Treasurer
REBECCA W. RIMEL DANIEL O. HIRSCH
Director Assistant Secretary
Investment Objective
A money market fund designed to seek as high a level of current income as is
consistent with preservation of capital and liquidity.
- --------------------------------------------------------------------------------
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by an effective prospectus.
For more complete information regarding any of the Flag Investors Funds,
including charges and expenses, obtain a prospectus from your investment
representative or directly from the Fund at 1-800-767-FLAG. Read it carefully
before you invest.
- --------------------------------------------------------------------------------
<PAGE>
[GRAPHIC OMITTED]
FLAG INVESTORS
Investing With A Difference
Growth
Flag Investors Emerging Growth Fund
Flag Investors Equity Partners Fund
Flag Investors International Fund
Specialty
Flag Investors Communications Fund
Flag Investors Real Estate Securities Fund
Balanced
Flag Investors Value Builder Fund
Fixed Income
Flag Investors Short-Intermediate Income Fund
Flag Investors Total Return U.S. Treasury Fund Shares
Tax-Free Income
Flag Investors Managed Municipal Fund Shares
Money Market
Flag Investors Cash Reserve Prime Shares
P.O. Box 515
Baltimore, Maryland 21203
800-767-FLAG
Distributed by:
ICC Distributors, Inc.
