QUALITY
CASH RESERVE PRIME SHARES
ANNUAL REPORT
March 31, 2000
<PAGE>
FUND FEATURES
--------------------------------------------------------------------------------
O DAILY DIVIDENDS
The Fund declares dividends daily and distributes them monthly in the form of
additional shares.
O CHECK REDEMPTION PRIVILEGE
After completing an authorization form, you may redeem your shares by writing
a check (in a minimum amount of $250) on your account. You will continue to
earn dividends until your check reaches the bank for clearance.
O NO SALES CHARGE AND IMMEDIATE LIQUIDITY
You may buy or redeem shares in your account at any time. There is no sales
charge or penalty imposed by the Fund for the purchase or redemption of shares
(other fees and expenses do apply to a continued investment in the Fund and
are described in the prospectus).
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 of the Quality Cash Reserve Prime
Shares on May 6, 1991. 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 $1,500. Subsequent investments may be $100
or more.
This report is prepared for the general information of shareholders of Quality
Cash Reserve Prime Shares. It may be distributed only to current shareholders
or to persons who have received a current prospectus.
This Fund is not insured by the FDIC and is not a deposit, obligation of or
guaranteed by Deutsche Bank.
<PAGE>
LETTER TO SHAREHOLDERS
--------------------------------------------------------------------------------
We are pleased to report on the progress of your Fund for the twelve months
ended March 31, 2000.
MARKET ACTIVITY
Three major factors impacted the money markets over the annual period ended
March 31, 2000--the ongoing extraordinary performance of the U.S. economy, the
actions of the Federal Reserve Board, and the liquidity concerns surrounding
Y2K. These factors combined to push yields on short-term money market securities
significantly higher.
o RAPID U.S. ECONOMIC GROWTH, BENIGN INFLATION, THE LOWEST UNEMPLOYMENT RATE IN
A GENERATION, AND A SPECTACULAR RUNUP IN THE U.S. EQUITY MARKET GAVE CONSUMERS
THE CONFIDENCE NECESSARY TO UTILIZE THEIR PURCHASING POWER. Housing, retail
sales, and auto sales were all at historic levels. Subdued wage demands,
competitive pressures, productivity improvements and global overcapacity
combined to keep prices in check. Simultaneously, foreign economies around the
world showed clear signs of recovery, with growth rates in Europe and Asia, in
particular, increasing.
o THE FEDERAL RESERVE BOARD RAISED SHORT-TERM INTEREST RATES FIVE TIMES DURING
THE FUND'S FISCAL YEAR. The Fed argued that the pace of the economy could not
be indefinitely supported by labor force growth and productivity and thus may
rekindle inflation. The Fed moved interest rates three times in 1999--on June
30, August 24 and November 16--and twice in the first quarter of 2000--on
February 2 and March 21. The increases were slow and methodical at hikes of
0.25% each time.
o MONEY MARKET INVESTORS AND ISSUERS ALIKE BELIEVED LIQUIDITY WOULD BE SCARCE
OVER YEAR-END 1999, AS ANTICIPATION OF Y2K GREW INCREASINGLY UNCERTAIN. Both
corporate and asset-backed issuers flooded the market with paper early in the
fourth quarter of 1999, hoping to secure their year-end financing. To calm the
markets, the Fed announced in October that it would provide the market with
several liquidity
--------------------------------------------------------------------------------
PERFORMANCE
(7-DAY CURRENT YIELD AT MARCH 31, 2000)
--------------------------------------------------------------------------------
QUALITY CASH RESERVE PRIME SHARES 5.01%
--------------------------------------------------------------------------------
THE YIELD SHOWN REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. YIELDS WILL VARY.
1
<PAGE>
LETTER TO SHAREHOLDERS (CONTINUED)
--------------------------------------------------------------------------------
facilities, including a repurchase agreement facility with expanded collateral
guidelines and a Standby Financing Facility. The U.S. Treasury also issued
substantial amounts of cash management bills, adding much needed liquidity to
the market at year end. As with most other secular Y2K fears, the money markets'
liquidity concerns also turned out to be for naught.
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 Quality Cash Reserve Prime
Shares is a class. 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 this Fund continued to be concentrated on investing in high
quality issues. As of March 31, 2000, 77.8% of the Fund was invested in
securities rated A-1+/P-1 and 22.2% in securities rated A-1/P-1, by Standard &
Poor's and Moody's.
Throughout most of 1999, we maintained a slightly long to the benchmark
weighted average maturity position, taking advantage of the steep yield curve in
money markets, as issuers and investors anticipated higher interest rates.
Towards the end of the year, money market issuers were very aggressive, seeking
to extend their maturities into the year 2000 to avoid potential Y2K problems.
This excessive issuance caused both an abnormally steep yield curve in fixed
rate securities and wide yield spreads on floating rate notes. We took advantage
of both--as well as the Fed rate increases--by "barbelling" the portfolio, with
fixed securities and floating rate instruments. This strategy proved to be
effective for the portfolio. We also successfully maintained the liquidity
necessary for potential Y2K problems by purchasing Treasury bills and other very
liquid instruments during the last quarter of 1999.
In the first quarter of 2000, we began to utilize the expanded guidelines
approved by the Fund's Board of Directors. Although we purchased foreign
issuers' securities, we did not change the credit quality of the portfolio, and
all issuers still must be rated in the highest rating categories by two rating
agencies, such as Standard & Poor's and Moody's Investors Services. As of March
31, 2000, 67.9% of the Fund was invested in U.S. commercial paper, 16.3% in
corporate floating rate securities, 6.8% in Euro time deposits, 4.0% in Yankee
certificates of deposit, 3.2% in Euro-dollar certificates of deposit, 0.9% in
U.S. certificates of deposit, 0.8% in U.S. medium-term notes, and 0.1% in
government agency securities.
2
<PAGE>
LETTER TO SHAREHOLDERS (CONCLUDED)
--------------------------------------------------------------------------------
LOOKING AHEAD
We now know that the concerns and fears surrounding Y2K turned out to be a
non-event. The world at large and the financial markets in particular continued
to hum along without interruption. Looking ahead for the near term, we believe
the U.S. economy still has substantial momentum, and the financial fundamentals
for both households and businesses remain strong. Thus, we also feel that it
will take somewhat higher interest rates to tone down the economy. We believe
that more 0.25% incremental increases in rates are forthcoming from the Federal
Reserve Board over the next few months before it pauses to assess the results of
these tightenings on economic growth.
Our strategy for the Fund going forward is to continue managing the
portfolio with a shorter duration than we did in 1999. We also intend to
maintain a significant position in floating rate securities seeking to take
advantage not only of any further increases in interest rates but also of the
potential higher yields offered by these types of securities. 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.
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/ SIGNATURE
DARLENE M. RASEL
Darlene M. Rasel
Portfolio Manager
March 31, 2000
3
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS MARCH 31, 2000
Rating(a)
--------------- Par
PRIME SERIES S&P Moody's (000) Value
--------------------------------------------------------------------------------
COMMERCIAL PAPER b - 68.7%
AIRCRAFT & AEROSPACE - 1.1%
BAE Systems PLC
6.05% 4/24/00 ......... A-1 P-1 $ 50,000 $ 49,806,736
British Aerospace PLC
5.99% 6/8/00 .......... A-1 P-1 25,000 24,717,139
-------------
74,523,875
-------------
ASSET BACKED - 21.0%
Bavaria TRR Corp.
6.07% 5/4/00 .......... A-1 P-1 19,000 18,900,688
Ciesco, LP.
6.08% 4/20/00 ......... A-1+ P-1 50,000 49,839,556
6.08% 4/28/00 ......... A-1+ P-1 25,000 24,886,000
Compass Securitization LLC
5.88% 4/4/00 .......... A-1+ P-1 40,000 39,980,400
6.04% 4/19/00 ......... A-1+ P-1 25,000 24,924,500
6.07% 4/25/00 ......... A-1+ P-1 20,000 19,919,067
5.87% 4/28/00 ......... A-1+ P-1 45,000 44,801,888
5.93% 5/3/00 .......... A-1+ P-1 19,300 19,198,268
Corporate Asset Funding Co., Inc.
5.87% 4/11/00 ......... A-1+ P-1 65,000 64,894,014
6.08% 4/25/00 ......... A-1+ P-1 75,000 74,696,000
6.05% 5/4/00 .......... A-1+ P-1 45,000 44,750,438
6.06% 5/15/00 ......... A-1+ P-1 25,000 24,814,833
Corporate Receivables Corp.
5.875% 4/10/00 ......... A-1+ P-1 30,000 29,955,937
5.94% 6/19/00 ......... A-1+ P-1 10,000 9,869,650
Delaware Funding Corp.
6.03% 4/5/00 .......... A-1+ P-1 30,000 29,979,900
5.86% 4/26/00 ......... A-1+ P-1 14,308 14,249,774
6.10% 6/5/00 .......... A-1+ P-1 15,000 14,834,792
Greyhawk Funding LLC.
5.87% 4/24/00 ......... A-1+ P-1 15,000 14,943,746
5.87% 4/26/00 ......... A-1+ P-1 25,000 24,898,090
5.92% 5/17/00 ......... A-1+ P-1 30,000 29,773,066
Moriarty Ltd.
6.20% 9/25/00 ......... A-1+ P-1 25,000 24,237,917
Park Avenue Receivables Corp.
6.12% 4/10/00 ......... A-1 P-1 30,000 29,954,100
Private Export Funding Corp.
5.99% 4/6/00 .......... A-1+ P-1 25,000 24,979,201
6.00% 6/22/00 ......... A-1+ P-1 22,000 21,699,333
Quincy Capital Corp.
5.97% 5/2/00 .......... A-1+ P-1 10,000 9,948,592
Receivables Capital Corp.
5.85% 4/5/00 .......... A-1+ P-1 10,000 9,993,500
6.10% 4/20/00 ......... A-1+ P-1 40,000 39,871,222
6.00% 5/5/00 .......... A-1+ P-1 7,795 7,750,828
4
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
Rating(a)
--------------- Par
PRIME SERIES S&P Moody's (000) Value
--------------------------------------------------------------------------------
COMMERCIAL PAPER - (continued)
ASSET BACKED - (CONTINUED)
Riverwoods Funding Corp.
5.85% 4/20/00 ......... A-1+ P-1 $ 20,000 $ 19,938,250
Santander Finance Bank
5.92% 4/25/00 ......... A-1 P-1 35,000 34,861,867
Sheffield Receivables Corp.
6.06% 4/19/00 ......... A-1+ P-1 70,000 69,787,900
6.09% 4/20/00 ......... A-1+ P-1 166,700 166,167,154
6.10% 4/27/00 ......... A-1+ P-1 25,000 24,889,861
6.10% 4/28/00 ......... A-1+ P-1 20,000 19,908,500
5.98% 6/5/00 .......... A-1+ P-1 20,000 19,784,055
Tulip Funding Corp.
5.95% 5/26/00 ......... A-1+ P-1 25,000 24,772,743
6.15% 6/15/00 ......... A-1+ P-1 60,000 59,231,667
Windmill Funding Corp.
5.92% 4/10/00 ......... A-1+ P-1 40,000 39,940,800
6.05% 4/19/00 ......... A-1+ P-1 44,000 43,866,900
5.87% 4/25/00 ......... A-1+ P-1 25,000 24,902,166
6.11% 6/21/00 ......... A-1+ P-1 12,000 11,835,030
6.09% 6/26/00 ......... A-1+ P-1 15,000 14,781,776
--------------
1,363,213,969
--------------
AUTOMOBILES & TRUCKS - 5.0%
Ford Motor Credit Corp.
6.12% 4/4/00 .......... A-1 P-1 100,000 99,949,000
PACCAR Financial Corp.
5.90% 5/18/00 ......... A-1+ P-1 13,000 12,899,864
Toyota Motor Credit Corp.
5.99% 4/20/00 ......... A-1+ P-1 49,750 49,592,721
6.04% 4/26/00 ......... A-1+ P-1 50,000 49,790,278
6.00% 5/8/00 .......... A-1+ P-1 16,500 16,398,250
5.945% 5/9/00 .......... A-1+ P-1 50,000 49,686,236
6.00% 5/11/00 ......... A-1+ P-1 20,000 19,866,667
6.05% 8/28/00 ......... A-1+ P-1 25,000 24,373,992
--------------
322,557,008
--------------
BANKS - 2.5%
Bank of America
5.89% 5/3/00 .......... A-1 P-1 25,000 24,869,111
6.06% 8/9/00 .......... A-1 P-1 40,000 39,124,667
6.10% 9/8/00 .......... A-1 P-1 18,000 17,512,000
Fortis Funding LLC
6.02% 4/24/00 ......... A-1+ P-1 50,000 49,807,694
6.08% 9/1/00 .......... A-1+ P-1 30,000 29,224,800
--------------
160,538,272
--------------
5
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
Rating(a)
--------------- Par
PRIME SERIES S&P Moody's (000) Value
--------------------------------------------------------------------------------
COMMERCIAL PAPER - (continued)
CONGLOMERATES - 0.9%
Honeywell International Inc.
6.05% 4/26/00 ......... A-1 P-1 $ 19,798 $ 19,714,821
5.91% 5/15/00 ......... A-1 P-1 40,000 39,711,067
--------------
59,425,888
--------------
CONSUMER PRODUCTS - 0.8%
Gillette Co.
6.01% 4/10/00 ......... A-1+ P-1 53,500 53,419,616
--------------
CORPORATE - 0.2%
Rio Tinto America, Inc.
5.90% 4/26/00 ......... A-1+ P-1 12,000 11,950,833
--------------
ELECTRICAL & ELECTRONICS - 0.4%
Invensys PLC
5.92% 5/8/00 .......... A-1 P-1 25,000 24,847,889
--------------
FINANCE, CONSUMER - 1.5%
American Express Co.
6.40% 4/3/00 .......... A-1 P-1 97,800 97,765,227
--------------
FINANCE, DIVERSIFIED - 5.8%
Associates First Capital Corp.
6.03% 4/12/00 ......... A-1 P-1 40,000 39,926,300
5.90% 5/3/00 .......... A-1 P-1 25,000 24,868,889
5.88% 5/11/00 ......... A-1 P-1 30,000 29,804,000
5.92% 5/25/00 ......... A-1 P-1 20,000 19,822,400
General Electric Capital Corp.
5.78% 4/20/00 ......... A-1+ P-1 25,000 24,923,736
6.04% 4/26/00 ......... A-1+ P-1 35,000 34,853,194
5.91% 5/3/00 .......... A-1+ P-1 20,000 19,894,933
5.83% 5/5/00 .......... A-1+ P-1 10,000 9,944,939
5.90% 5/11/00 ......... A-1+ P-1 25,000 24,836,111
5.94% 5/17/00 ......... A-1+ P-1 30,000 29,772,300
5.88% 5/18/00 ......... A-1+ P-1 50,000 49,616,167
5.90% 5/19/00 ......... A-1+ P-1 40,000 39,685,333
5.94% 5/22/00 ......... A-1+ P-1 25,000 24,789,626
--------------
372,737,928
--------------
FINANCIAL SERVICES - 3.1%
Goldman Sachs, Inc.
6.09% 8/22/00 ......... A-1+ P-1 65,000 63,427,596
Merrill Lynch & Co., Inc.
5.93% 5/22/00 ......... A-1+ P-1 60,000 59,495,950
Morgan Stanley Dean Witter
5.85% 4/3/00 .......... A-1 P-1 30,000 29,990,250
6
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
Rating(a)
--------------- Par
PRIME SERIES S&P Moody's (000) Value
--------------------------------------------------------------------------------
COMMERCIAL PAPER - (continued)
FINANCIAL SERVICES - (CONTINUED)
Salomon Smith Barney, Inc.
5.95% 5/15/00 ......... A-1 P-1 $ 50,000 $ 49,636,389
--------------
202,550,185
--------------
FOODS - 1.5%
Albertsons, Inc.
6.02% 4/6/00 .......... A-1 P-1 45,000 44,962,375
6.08% 4/13/00 ......... A-1 P-1 20,000 19,959,467
H.J. Heinz Co.
5.98% 4/20/00 ......... A-1 P-1 24,000 23,924,253
Sysco Corp.
6.25% 4/3/00 .......... A-1+ P-1 7,000 6,997,569
--------------
95,843,664
--------------
FOREIGN SOVEREIGNS - 1.9%
Eksportfinans A/S
6.07% 4/12/00 ......... A-1+ P-1 45,000 44,916,538
5.92% 5/24/00 ......... A-1+ P-1 35,000 34,694,956
Province of Quebec
6.09% 8/17/00 ......... A-1+ P-1 35,000 34,182,925
6.09% 8/21/00 ......... A-1+ P-1 8,000 7,807,827
--------------
121,602,246
--------------
INSURANCE, PROPERTY AND CASUALTY - 7.1%
Aegon Funding Corp.
5.91% 5/22/00 ......... A-1+ P-1 20,000 19,832,550
6.17% 9/13/00 ......... A-1+ P-1 25,000 24,293,021
6.18% 9/18/00 ......... A-1+ P-1 15,000 14,562,250
6.20% 12/1/00 ......... A-1+ P-1 30,000 28,739,333
John Hancock Capital Corp.
5.98% 4/14/00 ......... A-1+ P-1 40,255 40,168,072
Met Life Funding Inc.
6.03% 4/17/00 ......... A-1+ P-1 30,789 30,706,485
6.03% 4/18/00 ......... A-1+ P-1 46,000 45,869,015
6.03% 4/24/00 ......... A-1+ P-1 46,645 46,465,300
Teachers Insurance & Annuity
Association of America
6.25% 4/3/00 .......... A-1+ P-1 113,434 113,394,613
6.02% 4/20/00 ......... A-1+ P-1 50,000 49,841,139
Transamerica Finance Corp.
6.25% 4/3/00 .......... A-1 P-1 50,000 49,982,639
--------------
463,854,417
--------------
7
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
Rating(a)
--------------- Par
PRIME SERIES S&P Moody's (000) Value
--------------------------------------------------------------------------------
COMMERCIAL PAPER - (continued)
INTEGRATED OIL - 3.1%
Exxon Mobil Australia Ltd.
5.98% 4/6/00 .......... A-1+ P-1 $100,000 $ 99,916,944
BP Amoco Capital PLC.
6.23% 4/3/00 .......... A-1+ P-1 100,000 99,965,389
--------------
199,882,333
--------------
OIL TRANSPORTATION - 0.5%
Colonial Pipeline Co.
5.75% 4/4/00 .......... A-1+ P-1 10,750 10,744,849
5.75% 4/27/00 ......... A-1+ P-1 11,500 11,452,243
5.78% 5/17/00 ......... A-1+ P-1 8,000 7,940,916
6.05% 7/17/00 ......... A-1+ P-1 3,500 3,437,063
--------------
33,575,071
--------------
PHARMACEUTICALS - 1.0%
Johnson & Johnson
5.82% 4/14/00 ......... A-1+ P-1 65,000 64,863,572
--------------
TELEPHONE - 8.3%
AT&T Corp.
6.00% 4/4/00 .......... A-1+ P-1 30,000 29,985,000
6.00% 4/6/00 .......... A-1+ P-1 20,000 19,983,333
5.87% 5/10/00 ......... A-1+ P-1 5,000 4,968,204
Bell Atlantic Network Funding Corp.
5.82% 4/4/00 .......... A-1+ P-1 20,000 19,990,300
5.99% 4/18/00 ......... A-1+ P-1 5,702 5,685,871
5.99% 4/24/00 ......... A-1+ P-1 10,492 10,451,848
Bell South Telecommunications, Inc.
6.07% 4/26/00 ......... A-1+ P-1 11,300 11,252,367
British Telecomunications PLC, Inc.
6.22% 12/4/00 ......... A-1+ P-1 30,000 28,719,717
France Telecom
6.10% 4/3/00 .......... A-1+ P-1 60,000 59,979,667
6.02% 4/17/00 ......... A-1+ P-1 63,795 63,624,313
6.08% 4/20/00 ......... A-1+ P-1 8,877 8,848,515
6.08% 4/28/00 ......... A-1+ P-1 35,000 34,840,400
6.05% 5/22/00 ......... A-1+ P-1 45,000 44,614,313
5.93% 6/1/00 .......... A-1+ P-1 40,000 39,598,078
SBC Communications, Inc.
5.68% 5/15/00 ......... A-1+ P-1 15,000 14,895,867
6.06% 5/19/00 ......... A-1+ P-1 40,000 39,676,800
Vodafone Airtouch PLC.
6.27% 4/3/00 .......... A-1 P-1 100,000 99,965,166
--------------
537,079,759
--------------
8
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
Rating(a)
--------------- Par
PRIME SERIES S&P Moody's (000) Value
--------------------------------------------------------------------------------
COMMERCIAL PAPER - (continued)
UTILITIES - 3.2%
National Rural Utilities Corporate
Finance Corporation
5.90% 4/3/00 .......... A-1+ P-1 $ 25,000 $ 24,991,806
5.83% 4/7/00 .......... A-1+ P-1 45,000 44,956,275
6.13% 7/17/00 ......... A-1+ P-1 20,000 19,635,606
6.12% 7/18/00 ......... A-1+ P-1 51,136 50,197,143
6.08% 9/11/00 ......... A-1+ P-1 20,000 19,449,422
6.145% 9/19/00 ......... A-1+ P-1 25,000 24,270,282
6.22% 12/1/00 ......... A-1+ P-1 25,000 23,946,056
--------------
207,446,590
--------------
TOTAL COMMERCIAL PAPER
(Amortized Cost $4,467,678,342) ........................... 4,467,678,342
--------------
MEDIUM-TERM NOTE - 0.8%
E.I. Dupont de Nemours and Co.
5.079% 4/3/00 .......... A-1+ P-1 30,000 29,998,114
4.998% 4/14/00 ......... A-1+ P-1 20,000 19,991,906
--------------
TOTAL MEDIUM TERM NOTE
(Amortized Cost $49,990,020) ............................. 49,990,020
--------------
FLOATING RATE - NOTE - 16.5%
American Express Co.
6.081% 2/23/01 ......... A-1 P-1 30,000 30,000,000
AT&T Corp.
5.99% 7/13/00 ......... A-1+ P-1 15,000 14,998,312
6.128% 8/7/00 .......... A-1+ P-1 10,000 10,000,685
5.89% 3/8/01 .......... A-1+ P-1 60,000 59,989,109
Associates Corp. of North America
5.917% 3/16/01 ......... A-1 P-1 65,000 64,954,214
Bank of America
6.25% 1/25/01 ......... A-1 P-1 35,000 35,000,000
Bayerische Landesbank Girozentrale
5.925% 11/9/00 ......... A-1+ P-1 40,000 39,993,529
6.04% 2/26/01 ......... A-1+ P-1 50,000 49,977,809
6.049% 2/28/01 ......... A-1+ P-1 40,000 39,982,185
6.051% 3/1/01 .......... A-1+ P-1 40,000 39,982,099
Chase Manhattan Bank
6.358% 11/2/00 ......... A-1+ P-1 35,000 35,066,880
6.34% 11/17/00 ........ A-1+ P-1 15,000 15,027,480
Credit Agricole Indosuez SA
5.94% 11/8/00 ......... A-1+ P-1 35,000 34,999,793
Credit Suisse First Boston, Inc.
5.84% 2/20/01 ......... A-1+ P-1 30,000 29,997,358
9
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
Rating(a)
--------------- Par
PRIME SERIES S&P Moody's (000) Value
--------------------------------------------------------------------------------
FLOATING RATE - NOTE - (continued)
Federal Home Loan Bank
6.156% 4/14/00 ......... A-1+ P-1 $ 50,000 $ 49,999,112
5.874% 5/12/00 ......... A-1+ P-1 20,000 19,998,096
5.819% 7/12/00 ......... A-1+ P-1 6,000 5,999,164
Federal National Mortgage Association
5.85% 11/17/00 ........ A-1+ P-1 10,000 9,993,150
5.953% 11/22/00 ........ A-1+ P-1 15,000 14,992,295
Ford Motor Credit Corp.
6.06% 11/22/00 ........ A-1 P-1 35,000 35,000,676
General Electric Capital Corp.
5.976% 4/12/00 ......... A-1+ P-1 25,000 25,000,000
6.049% 5/12/00 ......... A-1+ P-1 10,000 10,000,000
Goldman Sachs, Inc
6.22% 1/25/01 ......... A-1+ P-1 40,000 40,059,602
Household Finance Corp.
6.15% 9/14/00 ......... A-1 P-1 35,000 35,024,560
Merrill Lynch & Co.,Inc.
6.298% 9/25/00 ......... A-1+ P-1 25,000 25,009,721
6.327% 1/12/01 ......... A-1+ P-1 35,000 35,094,138
Morgan J.P., Inc.
5.994% 3/16/01 ......... A-1+ P-1 60,000 60,000,000
Morgan Stanley Dean Witter
5.775% 5/4/00 .......... A-1 P-1 50,000 50,000,000
5.97% 3/16/01 ......... A-1 P-1 55,000 55,000,000
Societe Generale
6.054% 1/19/01 ......... A-1+ P-1 45,000 44,978,575
West Deustsche Landesbank Girozentrale
6.045% 2/26/01 ......... A-1+ P-1 55,000 54,975,589
--------------
TOTAL FLOATING RATE - NOTE
(Amortized Cost $1,071,094,131) .......................... 1,071,094,131
--------------
CERTIFICATE OF DEPOSIT - 0.9%
Bank of America
5.88% 4/5/00 .......... A-1 P-1 10,000 9,999,961
Bank One Corp.
6.18% 6/23/00 ......... A-1 P-1 50,000 50,000,000
--------------
TOTAL CERTIFICATE OF DEPOSIT
(Amortized Cost $59,999,961) ............................. 59,999,961
--------------
EURO TIME DEPOSITS - 6.8%
Bank of Scotland
5.97% 4/11/00 ......... A-1+ P-1 30,000 30,000,000
West Deustsche Landesbank Girozentrale
5.97% 4/7/00 .......... A-1+ P-1 40,000 40,000,000
6.125% 6/28/00 ......... A-1+ P-1 75,000 75,000,000
6.32% 8/24/00 ......... A-1+ P-1 40,000 40,000,000
10
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
Rating(a)
--------------- Par
PRIME SERIES S&P Moody's (000) Value
--------------------------------------------------------------------------------
EURO TIME DEPOSITS - (continued)
Bayerische Landesbank Girozentrale
5.97% 4/14/00 ......... A-1+ P-1 $ 50,000 $ 50,000,000
6.25% 7/3/00 .......... A-1+ P-1 50,000 50,000,000
6.17% 7/18/00 ......... A-1+ P-1 25,000 25,000,000
6.20% 7/24/00 ......... A-1+ P-1 30,000 30,000,000
6.38% 9/21/00 ......... A-1+ P-1 35,000 35,000,000
Norddeutsche Landesbank Girozentrale
5.98% 4/7/00 .......... A-1+ P-1 40,000 40,000,000
6.28% 8/3/00 .......... A-1+ P-1 30,000 30,000,000
--------------
TOTAL EURO TIME DEPOSITS
(Amortized Cost $445,000,000) ............................. 445,000,000
--------------
FNMA - 0.1%
Federal National Mortgage Association
6.35% 2/2/01 .......... A-1+ P-1 5,000 4,995,554
--------------
TOTAL FNMA (Amortized Cost $4,995,554) ...................... 4,995,554
--------------
EURODOLLAR CERTIFICATES OF DEPOSIT - 3.2%
Bank of Scotland
5.95% 4/12/00 ......... A-1+ P-1 30,000 29,999,992
Bayerische Landesbank Girozentrale
5.97% 5/8/00 .......... A-1+ P-1 10,000 9,999,112
5.955% 4/18/00 ......... A-1+ P-1 50,000 50,000,116
Credit Agricole Indosuez
6.15% 7/21/00 ......... A-1+ P-1 40,000 40,000,599
Internationale Nederlanden Bank
6.26% 8/3/00 .......... A-1+ P-1 30,000 30,000,000
Societe Generale
6.07% 4/28/00 ......... A-1+ P-1 50,000 50,000,000
--------------
TOTAL EURODOLLAR CERTIFICATES OF DEPOSIT
(Amortized Cost $209,999,819) ............................ 209,999,819
--------------
YANKEE CERTIFICATES OF DEPOSIT - 4.0%
Bank of Austria
6.55% 2/1/01 .......... A-1+ P-1 10,000 9,996,018
Bank of Nova Scotia
6.743% 2/16/01 ......... A-1 P-1 20,000 19,990,409
Paribas SA
5.98% 4/7/00 .......... A-1 P-1 10,000 10,000,034
5.98% 4/10/00 ......... A-1 P-1 25,000 25,000,031
6.70% 2/20/01 ......... A-1 P-1 20,000 19,991,553
Bayerische Landesbank Girozentrale
6.14% 5/16/00 ......... A-1+ P-1 70,000 70,000,000
11
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
Rating(a)
--------------- Par
PRIME SERIES S&P Moody's (000) Value
--------------------------------------------------------------------------------
YANKEE CERTIFICATES OF DEPOSIT - (continued)
Bayerishe Hypotheka Vereinsbank
6.77% 2/22/01 ......... A-1 P-1 $42,000 $ 41,982,161
Commerz Bank
6.70% 2/20/01 ......... A-1+ P-1 15,000 14,993,665
Svenska Handelsbanken Inc.
6.77% 3/21/01 ......... A-1 P-1 25,000 24,990,800
West Deustsche Landesbank Girozentrale
6.03% 5/16/00 ......... A-1+ P-1 25,000 25,000,000
--------------
TOTAL YANKEE CERTIFICATES OF DEPOSIT
(Amortized Cost $261,944,671) ............................ 261,944,671
--------------
TOTAL INVESTMENTS--101.0%
(Amortized Cost $6,570,702,498)(c) ....................... $6,570,702,498
LIABILITIES IN EXCESS OF OTHER ASSETS--(1.0)% .................. (65,841,249)
--------------
NET ASSETS--100.0% ............................................. $6,504,861,249
==============
Net Asset Value, Offering and Redemption Price Per:
Prime Share
($5,772,616,045 (DIVIDE) 5,772,511,318 shares outstanding) ...... $1.00
=====
Flag Investors Class A Share
($16,214,395 (DIVIDE) 16,213,799 shares outstanding) ............ $1.00
=====
Flag Investors Class B Share
($2,979,619 (DIVIDE) 2,979,496 shares outstanding) .............. $1.00
=====
Flag Investors Class C Share
($778,515 (DIVIDE) 778,515 shares outstanding) .................. $1.00
=====
Institutional Prime Share
($637,767,262 (DIVIDE) 637,758,133 shares outstanding) .......... $1.00
=====
Quality Cash Reserve Prime Share
($74,505,413 (DIVIDE) 74,498,534 shares outstanding) ............ $1.00
=====
----------
a Unaudited.
b 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.
c Aggregate cost for financial reporting and federal tax purposes.
MOODY'S RATINGS:
P-1 Commercial paper bearing this designation is of the best quality.
S&P RATINGS:
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.
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2000
Prime Series
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income ............................................ $263,490,701
------------
EXPENSES:
Investment advisory fees ................................... 12,216,487
Distribution fees
Deutsche Banc Alex. Brown Cash Reserve Prime Shares ...... 10,408,188
Flag Investors Class AShares ............................. 37,421
Flag Investors Class B Shares ............................ 35,959
Quality Cash Reserve Shares .............................. 456,848
Transfer agent fees ........................................ 2,607,854
Shareholder service fees ................................... 2,106,168
Registration fees .......................................... 1,200,491
Custodian fees ............................................. 396,407
Accounting fees ............................................ 176,115
Professional fees .......................................... 161,705
Directors' fees ............................................ 168,828
Miscellaneous .............................................. 268,398
------------
Total expenses .................................... 30,240,869
------------
Net investment income ......................................... 233,249,832
------------
Net realized gain from security transactions .................. 23,373
------------
Net increase in net assets resulting from operations .......... $233,273,205
============
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Prime Series
--------------------------------------------------------------------------------
For the For the
Year Ended Year Ended
March 31, March 31,
--------------- ----------------
2000 1999
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ..................... $ 233,249,832 $ 178,689,887
Net realized gain from
security transactions ................... 23,373 88,481
-------------- --------------
Net increase in net assets resulting
from operations ......................... 233,273,205 178,778,368
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Deutsche Banc Alex. Brown Cash Reserve
Prime Shares .......................... (204,114,790) (151,410,202)
Deutsche Banc Alex. Brown Cash Reserve
Prime Institutional Shares ............ (24,839,929) (16,058,016)
Flag Investors Class A Shares ........... (729,448) (435,677)
Flag Investors Class B Shares ........... (154,996) (72,373)
Flag Investors Class C Shares ........... (2,633) --
Quality Cash Reserve Shares ............. (3,408,016) (10,713,744)
-------------- --------------
Total distributions ..................... (233,249,812) (178,690,012)
-------------- --------------
CAPITAL SHARE TRANSACTIONS, NET .............. 2,291,071,504 496,268,896
-------------- --------------
Total increase in net assets .............. 2,291,094,897 496,357,252
NET ASSETS:
Beginning of period ....................... 4,213,766,352 3,717,409,100
-------------- --------------
End of period ............................. $6,504,861,249 $4,213,766,352
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
This page intentionally left blank.
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the
Year Ended
March 31, For the Years Ended March 31,
---------- ----------------------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... 0.0447 0.0444 0.0465 0.0449 0.0493
LESS DISTRIBUTIONS:
Dividends from net investment income ...... (0.0447) (0.0444) (0.0465) (0.0449) (0.0493)
----------- ----------- ------------ ------------ ------------
Net asset value at end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== ============ ============ ============
TOTAL RETURN:
Based on net asset value per share ........ 4.57% 4.53% 4.75% 4.59% 5.04%
RATIOS TO AVERAGE NET ASSETS:
Expenses after waiver ..................... 0.87% 0.92% 0.96% 0.91% 0.90%
Expenses before waiver .................... 0.87% 0.97% 1.02% 0.98% 0.95%
Net investment income ..................... 3.10% 4.44% 4.66% 4.50% 4.91%
SUPPLEMENTAL DATA:
Net assets at end of period ............... $74,505,413 $81,944,555 $226,978,689 $197,370,530 $156,412,213
Number of shares outstanding at
end of period ........................... 74,498,534 81,938,027 226,978,007 197,369,848 156,412,393
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16-17
<PAGE>
17
<PAGE>
PRIME SERIES
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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 six 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"), Flag Investors Cash Reserve PrimeShares Class C ("Flag Investors Class
C Shares"), Quality Cash Reserve Prime Shares ("Quality Cash Shares") and
Deutsche Banc Alex. Brown Cash Reserve Prime Institutional Shares ("Prime
Institutional Shares"). Shareholders can vote only on issues that affect the
share classes they own. These financial statements present the Prime Series.
Information about the Treasury and Tax Free Series is contained in a separate
report to their shareholders. Please call 1-800-767-FLAG to receive this report.
When preparing the Fund's financial statements, management makes estimates
and assumptions to comply with accounting principles generally accepted in the
United States. 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 initially values a security at its purchased cost. The
Fund then values the investment at amortized cost assuming 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
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.
18
<PAGE>
PRIME SERIES
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1--CONCLUDED
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 accounting principles generally
accepted in the United States. 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 AND 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
amortization of premiums and accretion of discounts. 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.
NOTE 2--INVESTMENT ADVISORY FEES, TRANSACTIONS WITH AFFILIATES AND OTHER FEES
Investment Company Capital Corp. ("ICCC"), a subsidiary of Deutsche Bank
A.G., is the investment advisor for all series. Under the terms of the
investment advisory agreement, the Fund pays ICCC 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.
ICCC also provides accounting services to the Fund. As compensation for
these services, the Prime Series pays ICCC an annual fee that is calculated
daily and paid monthly from its average daily net assets. The Prime Series paid
$176,115 for accounting services for the year ended March 31, 2000.
19
<PAGE>
PRIME SERIES
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--CONCLUDED
ICCC also provides transfer agency services to the Fund. As compensation
for its transfer agent services, the Prime Series pays ICCC a per account fee
that is calculated and paid monthly. The Prime Series paid $2,607,854, to ICCC
for transfer agent services for the year ended March 31, 2000.
ICC Distributors, Inc., ("ICC Distributors"), provides distribution
services to the Fund. As compensation for these services, the Prime Shares and
Flag Investors Class A Shares pay ICC Distributors an annual fee equal to 0.25%
of these classes' average daily net assets. For the year ended March 31, 2000,
distribution fees aggregated $10,408,188 and $37,421 for distribution services
for the Prime Shares and Flag Investors Class A Shares, respectively. The
Quality Cash Shares, Flag Investors Class B Shares and Flag Investors pay ICC
Distributors an annual fee for distribution services. This fee is equal to 0.60%
of the Quality Cash Shares' aggregate average daily net assets or $456,848 for
the year ended March 31, 2000, and 1.00% (includes 0.25% shareholder servicing
fee) of the Flag Investors Class B and Class C Shares' aggregate average daily
net assets or $35,959 and a non-meaningful amount, respectively, for the year
ended March 31, 2000.
Effective January 1, 1999, the Fund has adopted a Shareholder Service Plan
(the "Plan") for the Deutsche Banc Alex. Brown Cash Reserve Shares of the Prime
Series of the Fund ("Shares") in order to provide compensation to third parties
who provide shareholder services to clients, who from time to time beneficially
own shares. In consideration of these services provided by any Shareholder
Servicing Agent, the Fund will pay the Distributor an annual fee, calculated
daily and paid monthly, equal to 0.05% of the shares' average daily net assets.
ICCC and ICC Distributors may voluntarily waive a portion of their advisory
or distribution fees for the Prime, to preserve or enhance performance. These
voluntary waivers are not contractual and could change. ICCC did not waive any
advisory fees for the year ended March 31, 2000. ICC Distributors voluntarily
waived $114,329 of its distribution fees for the Quality Cash Shares for the
period April 1, 1998 to December 31, 1998. There was no waiver from January 1,
1999 thru March 31, 2000.
The Fund's complex offers a retirement plan for eligible Directors. The
actuarially computed pension expense/(credit) allocated to the Fund for the year
ended March 31, 2000 was $(49,685) for the Prime Series. The accrued liability
at March 31, 2000 was $194,571 for the Prime Series.
20
<PAGE>
PRIME SERIES
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3--CAPITAL STOCK AND SHARE INFORMATION
The Fund is authorized to issue up to 12.81 billion shares of $.001 par
value capital stock (8.66 billion Prime Series, 1.55 billion Treasury Series,
2.25 billion Tax-Free Series and 350 million undesignated). Transactions in
shares of the Prime Series were as follows:
For the For the
Year Ended Year Ended
March 31, 2000 March 31, 1999
-------------- --------------
PRIME SERIES:
SOLD:
Prime Shares .......................... 35,722,744,712 21,238,313,843
Flag Investors Class A Shares ......... 333,773,644 86,081,920
Flag Investors Class B Shares ......... 10,774,115 8,010,702
Flag Investors Class C Shares ......... 1,047,381 --
Prime Institutional Shares ............ 8,800,227,522 5,126,520,627
Quality Cash Shares ................... 430,807,975 1,143,097,219
ISSUED AS REINVESTMENT OF DIVIDENDS:
Prime Shares .......................... 191,935,470 143,654,045
Flag Investors Class A Shares ......... 564,622 385,752
Flag Investors Class B Shares ......... 131,700 55,849
Flag Investors Class C Shares ......... 1,722 --
Prime Institutional Shares ............ 19,239,279 12,241,514
Quality Cash Shares ................... 3,348,365 10,243,851
REDEEMED:
Prime Shares ..........................(33,870,074,943) (20,818,590,880)
Flag Investors Class A Shares ......... (331,152,236) (81,176,425)
Flag Investors Class B Shares ......... (10,282,099) (5,895,153)
Flag Investors Class C Shares ......... (270,588) --
Prime Institutional Shares ............ (8,570,149,304) (5,068,292,918)
Quality Cash Shares ................... (441,595,833) (1,298,381,050)
--------------- --------------
Net increase ........................ 2,291,071,504 496,268,896
=============== ==============
21
<PAGE>
PRIME SERIES
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
NOTE 4--NET ASSETS
Prime
Series
--------------
Paid-in capital ...................... $6,504,742,514
Undistributed net investment income .. 95,362
Undistributed net realized gain on
sales of investments .............. 23,373
--------------
$6,504,861,249
==============
22
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Board of Directors of Deutsche Banc Alex. Brown Cash Reserve Fund, Inc.
and Shareholders of the Prime Series:
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Prime Series (one of the portfolios constituting the Deutsche Banc Alex.
Brown Cash Reserve Shares, hereafter referred to as the "Fund") at March 31,
2000, and the results of its operations, the changes in its net assets and the
financial highlights for each of the fiscal periods presented, in conformity
with accounting principles generally accepted in the United States. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at March 31, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
May 9, 2000
23
<PAGE>
BOARD OF DIRECTORS
--------------------------------------------------------------------------------
RICHARD T. HALE
CHAIRMAN
RICHARD R. BURT
DIRECTOR
JOSEPH R. HARDIMAN
DIRECTOR
LOUIS E. LEVY
DIRECTOR
EUGENE J. McDONALD
DIRECTOR
REBECCA W. RIMEL
DIRECTOR
TRUMAN T. SEMANS
DIRECTOR
ROBERT H. WADSWORTH
DIRECTOR
OFFICERS
--------------------------------------------------------------------------------
CARL W. VOGT, Esq.
PRESIDENT
CHARLES A. RIZZO
TREASURER
AMY M. OLMERT
SECRETARY
DANIEL O. HIRSCH
ASSISTANT SECRETARY
--------------------------------------------------------------------------------
DISTRIBUTOR
ICC DISTRIBUTORS, INC.
Two Portland Square
Portland, ME 04101
(207) 879-6200
INVESTMENT ADVISOR
INVESTMENT COMPANY CAPITAL CORP.
One South Street
Baltimore, MD 21202
CUSTODIAN
BANKERS TRUST
130 Liberty Street
New York, NY 10006
TRANSFER AGENT
INVESTMENT COMPANY CAPITAL CORP.
One South Street
Baltimore, MD 21202
(800) 553-8080
AUDITORS
PRICEWATERHOUSECOOPERS LLP
250 West Pratt Street
Baltimore, MD 21201
24
<PAGE>
<PAGE>
QUALITY CASH RESERVE PRIME SHARES
P.O. Box 1346
Baltimore, MD 21203
Bulk Rate
U.S. Postage
PAID
Farmingdale, NY
Permit No. 225
