[Flag logo omitted]
CASH RESERVE
PRIME SHARES [LOGO OMITTED]
Semi-Annual Report
September 30, 2000
<PAGE>
FUND FEATURES
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o DAILY DIVIDENDS
The Fund declares dividends daily and distributes them monthly in the form of
additional shares, unless you have elected to have dividends paid in cash.
o SEEKS A 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. 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, 2000.
MARKET ACTIVITY
TWO MAJOR FACTORS IMPACTED THE MONEY MARKETS OVER THE SEMI-ANNUAL PERIOD --
ONGOING STRENGTH OF THE US ECONOMY AND THE ACTIONS OF THE FEDERAL RESERVE BOARD.
THESE FACTORS COMBINED TO PUSH YIELDS ON SHORT-TERM MONEY MARKET SECURITIES
SIGNIFICANTLY HIGHER.
o The US economy continued to expand, causing concern that inflation may be
imminent and that the Federal Reserve Board may continue its tightening
cycle.
o In fact, the Federal Reserve Board followed up its three 1999 interest
rate hikes and two first quarter 2000 rate hikes with another increase on
May 16th, bringing the total increase to 1.75%. Since then, the Federal
Reserve Board has chosen not to raise interest rates, primarily based on
signs that the economy may be slowing. On September 30, 2000, the
targeted federal funds rate stood at 6.50%.
INVESTMENT REVIEW
We continue to manage the Fund conservatively, seeking to maintain high
portfolio quality, adjusting weighted average maturities in response to market
conditions, and strictly limiting exposure to any particular issuer. 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 Prime
Shares are Classes. The portfolio has received a "AAAm" rating*. This rating is
the highest that S&P awards to money market funds.
PERFORMANCE
--------------------------------------------------------------------------------
7-DAY CURRENT YIELD AS OF 9/30/00
-----------------------------------
Flag Cash Reserve Prime Shares-- Class A 6.08%
iMoneyNet-First Tier Retail Money Funds Average 5.91%
--------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Yields will fluctuate.
Money Fund Report Averages, a service of iMoneyNet, Inc., are averages for
categories of similar money market funds. Averages do not reflect expenses,
which have been deducted from the Fund's yield.
* Ratings are subject to change and do not remove market risk.
1
<PAGE>
LETTER TO SHAREHOLDERS (CONCLUDED)
--------------------------------------------------------------------------------
Our strategy in this Fund continued to be concentrated on investing in high
quality issues. As of September 30, 2000, 62% of the Series was invested in
securities rated A1+/P1 and 38% in securities rated A1/P1, by S&P and Moody's.
The Series' performance can be attributed to the "barbell" strategy we
instituted toward the end of 1999 and maintained throughout this semi-annual
period. By combining a high percentage of floating rate notes, longer-dated
securities, and short-term paper, we were able not only to take advantage of the
steep yield curve but also to capture the higher yields that became available
each time the Federal Reserve Board increased interest rates.
As of September 30, 2000, 64.2% of the Series was invested in US commercial
paper, 20.3% in corporate floating rate securities, 8.8% in euro time deposits,
1.8% in Yankee certificates of deposit, 1.8% in euro-dollar certificates of
deposit, 2.0% in US certificates of deposit, 0.1% in US medium-term notes, 0.1%
in interest-bearing commercial paper, and 0.9% in cash.
LOOKING AHEAD
Going forward, we expect the "soft landing" scenario -- slower economic
growth without inflation -- to play out. While the Federal Reserve Board seems
to be on hold for now, the larger question for them may be whether or not this
slowdown is temporary or if it is a longer lasting downturn. One key indicator
to monitor will be oil prices, as the current higher prices are noticeably
diminishing consumer purchasing power and slowing demand in the economy.
In the Fund, then, since we do not feel the Federal Reserve Board will move
rates for the next few months, we intend to manage the portfolio with a slightly
longer duration then we did during the semi-annual period just ended. Of course,
we will carefully monitor the economic numbers and inflation data to see whether
or not the economic slowdown is long-standing. We will also continue to seek to
concentrate the portfolios in very high quality credits and maintain our
conservative investment strategies and standards for the foreseeable future.
2
<PAGE>
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We continue to believe in the conservative approach that we apply to
investing on behalf of the Fund and will continue to seek competitive yields,
for our shareholders.
As always, we appreciate your continued support.
Sincerely,
/S/SIGNATURE DARLENE M. RASEL
Darlene M. Rasel
Portfolio Manager
September 30, 2000
3
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FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED) SEPTEMBER 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
RATING
------------- PAR
PRIME SERIES (CONCLUDED) S&P MOODY'S (000) MARKET VALUE
------------------------------------------------------------------------------------------
----------------------------
COMMERCIAL PAPER(A) -- 64.3%
----------------------------
<S> <C> <C> <C> <C> <C>
AIRCRAFT & AEROSPACE -- 2.0%
BAE Systems Holdings Inc.:
6.50% 11/20/00 A-1 P-1 $73,428 $ 72,778,366
6.48% 12/11/00 A-1 P-1 48,570 47,958,018
------------
120,736,384
------------
ASSET BACKED COMMERCIAL PAPER-- 18.2%
Asset Portfolio Funding Corporation:
6.53% 10/16/00 A-1+ P-1 50,000 49,873,028
6.70% 12/6/00 A-1+ P-1 40,000 39,516,111
Bavaria TRR Corporation,
6.52% 10/11/00 A-1 P-1 20,000 19,967,400
Compass Securitization LLC:
6.52% 10/10/00 A-1+ P-1 57,620 57,536,515
6.55% 10/16/00 A-1+ P-1 12,600 12,567,905
6.55% 10/18/00 A-1+ P-1 40,000 39,883,556
6.52% 10/20/00 A-1+ P-1 14,261 14,214,509
6.51% 11/10/00 A-1+ P-1 10,000 9,929,475
Corporate Asset Funding Co., Inc.,
6.50% 11/22/00 A-1+ P-1 50,000 49,539,583
Corporate Receivables Corporation:
6.56% 11/9/00 A-1+ P-1 30,000 29,792,267
6.50% 11/21/00 A-1+ P-1 25,000 24,774,306
Delaware Funding Corporation:
6.57% 10/4/00 A-1+ P-1 40,000 39,985,400
6.70% 10/4/00 A-1+ P-1 85,000 84,968,361
6.50% 11/15/00 A-1+ P-1 30,000 29,761,667
Moriarty Ltd.:
6.56% 10/11/00 A-1+ P-1 25,000 24,959,000
6.62% 1/24/01 A-1+ P-1 10,000 9,790,367
Old Line Funding Corporation:
6.51% 10/25/00 A-1+ P-1 33,641 33,501,081
6.51% 10/26/00 A-1+ P-1 30,000 29,869,800
Receivables Capital Corporation:
6.51% 11/14/00 A-1+ P-1 20,000 19,844,483
6.50% 11/17/00 A-1+ P-1 33,000 32,725,917
Sheffield Receivables Corporation:
6.51% 10/10/00 A-1+ P-1 50,000 49,927,667
6.51% 10/17/00 A-1+ P-1 12,100 12,067,179
6.52% 10/20/00 A-1+ P-1 30,000 29,902,200
6.51% 10/23/00 A-1+ P-1 39,500 39,349,999
6.50% 11/20/00 A-1+ P-1 40,000 39,646,111
6.63% 1/8/01 A-1+ P-1 57,800 56,756,806
6.50% 3/2/01 A-1+ P-1 10,000 9,727,361
</TABLE>
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FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATING
------------- PAR
PRIME SERIES (CONCLUDED) S&P MOODY'S (000) MARKET VALUE
------------------------------------------------------------------------------------------
--------------------------------
COMMERCIAL PAPER (CONTINUED)
--------------------------------
<S> <C> <C> <C> <C> <C>
ASSET BACKED COMMERCIAL PAPER (CONTINUED)
Tulip Funding Corporation:
6.55% 10/10/00 A-1+ P-1 $35,000 $ 34,949,056
6.52% 10/11/00 A-1+ P-1 25,000 24,959,250
6.55% 10/25/00 A-1+ P-1 40,000 39,832,611
6.53% 10/30/00 A-1+ P-1 25,000 24,873,028
6.52% 11/27/00 A-1+ P-1 45,000 44,543,600
Windmill Funding Corporation:
6.54% 10/19/00 A-1+ P-1 30,000 29,907,350
6.52% 10/20/00 A-1+ P-1 30,000 29,902,200
--------------
1,119,345,149
--------------
AUTOMOBILES & TRUCKS-- 1.8%
American Honda Finance Corporation,
6.49% 11/20/00 A-1+ P-1 30,000 29,734,992
General Motors Acceptance Corporation,
6.51% 1/10/01 A-1 P-1 24,175 23,737,835
Toyota Motor Credit Corporation:
6.53% 10/20/00 A-1+ P-1 30,000 29,902,050
6.48% 11/22/00 A-1+ P-1 17,500 17,339,350
Volkswagen of America,
6.50% 11/27/00 A-1 P-1 12,500 12,373,611
--------------
113,087,838
--------------
BANKS -- 0.7%
Danske Bank Corporation,
6.68% 11/13/00 A-1 P-1 16,000 15,875,307
Santander Finance Inc.,
6.53% 2/5/01 A-1 P-1 30,000 29,314,350
--------------
45,189,657
--------------
BEVERAGES -- SOFT DRINKS -- 1.0%
Coca Cola Enterprises Inc.:
6.50% 11/21/00 A-1 P-1 40,000 39,638,889
6.50% 12/14/00 A-1 P-1 25,000 24,670,486
--------------
64,309,375
--------------
CONGLOMERATES-- 0.5%
Honeywell International Inc.:
6.50% 11/27/00 A-1 P-1 20,000 19,797,778
6.47% 12/21/00 A-1 P-1 13,200 13,010,213
--------------
32,807,991
--------------
COMPUTERS -- 0.8%
Hewlett Packard Co.,
6.50% 10/11/00 A-1+ P-1 48,000 47,922,000
--------------
</TABLE>
5
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED) SEPTEMBER 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
RATING
------------- PAR
PRIME SERIES (CONCLUDED) S&P MOODY'S (000) MARKET VALUE
------------------------------------------------------------------------------------------
-----------------------------
COMMERCIAL PAPER (CONTINUED)
-----------------------------
<S> <C> <C> <C> <C> <C>
CONSUMER PRODUCTS -- 2.7%
Unilever Capital Corporation:
6.52% 11/2/00 A-1 P-1 $40,000 $ 39,775,422
6.50% 11/3/00 A-1 P-1 70,000 69,595,556
6.51% 11/3/00 A-1 P-1 60,000 59,652,800
--------------
169,023,778
--------------
ELECTRICAL & ELECTRONICS -- 0.8%
Invensys PLC,
6.52% 11/9/00 A-1 P-2 20,000 19,862,356
Motorola Inc.,
6.55% 11/28/00 A-1 P-1 29,400 29,095,098
--------------
48,957,454
--------------
FINANCE, CONSUMER-- 1.6%
Associates First Capital Corporation:
6.53% 1/19/01 A-1 P-1 17,000 16,663,886
6.52% 2/23/01 A-1 P-1 20,000 19,478,400
Citi Group Inc.,
6.535% 11/14/00 A-1 P-1 40,000 39,687,772
Fortis Funding LLC,
6.51% 2/16/01 A-1+ P-1 20,800 20,284,697
--------------
96,114,755
--------------
FINANCE, DIVERSIFIED-- 6.7%
Associates Corporation of North America:
6.53% 1/23/01 A-1 P-1 20,000 19,590,061
6.53% 1/24/01 A-1 P-1 25,000 24,483,042
6.53% 1/25/01 A-1 P-1 25,000 24,478,507
Cregem North America, Inc.:
6.54% 1/17/01 A-1 P-1 20,000 19,611,233
6.54% 1/26/01 A-1 P-1 25,000 24,473,167
General Electric Capital International Funding Inc.:
6.54% 10/17/00 A-1+ P-1 24,000 23,934,600
6.53% 1/25/01 A-1+ P-1 9,900 9,693,489
6.52% 1/26/01 A-1+ P-1 25,000 24,474,778
6.50% 2/13/01 A-1+ P-1 15,000 14,637,083
6.51% 2/27/01 A-1+ P-1 45,000 43,795,650
General Electric Capital Corporation:
6.51% 10/27/00 A-1+ P-1 20,000 19,909,583
6.52% 1/17/01 A-1+ P-1 40,000 39,224,844
6.52% 1/26/01 A-1+ P-1 30,000 29,369,733
6.50% 1/29/01 A-1+ P-1 40,000 39,140,556
6.53% 2/8/01 A-1+ P-1 40,000 39,064,033
6.49% 2/22/01 A-1+ P-1 15,000 14,613,304
--------------
410,493,663
--------------
</TABLE>
6
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATING
------------- PAR
PRIME SERIES (CONCLUDED) S&P MOODY'S (000) MARKET VALUE
------------------------------------------------------------------------------------------
--------------------------------
COMMERCIAL PAPER (CONTINUED)
--------------------------------
<S> <C> <C> <C> <C> <C>
FINANCIAL SERVICES -- 3.2%
Credit Suisse First Boston Inc.:
6.56% 1/24/01 A-1+ P-1 $35,000 $ 34,272,933
6.50% 3/13/01 A-1+ P-1 40,000 38,830,000
Goldman Sachs & Co.,
6.56% 1/19/01 A-1+ P-1 40,000 39,205,511
Salomon Smith Barney Holdings Inc.:
6.54% 10/10/00 A-1 P-1 50,000 49,927,333
6.50% 10/20/00 A-1 P-1 33,000 32,892,750
--------------
195,128,527
--------------
FOODS -- 0.8%
Diageo PLC,
6.52% 1/17/01 A-1 P-1 50,000 49,031,056
--------------
HOLDING COMPANIES -- 2.0%
Bank of America Corporation:
6.26% 10/3/00 A-1 P-1 30,000 29,994,783
6.68% 12/4/00 A-1 P-1 30,000 29,649,300
6.57% 1/18/01 A-1 P-1 40,000 39,211,600
6.50% 3/1/01 A-1 P-1 25,000 24,322,917
--------------
123,178,600
--------------
INSURANCE, PROPERTY AND CASUALTY -- 5.6%
Aegon Funding Corporation:
6.70% 10/2/00 A-1+ P-1 70,000 70,000,000
6.20% 12/1/00 A-1+ P-1 30,000 29,690,000
6.52% 2/13/01 A-1+ P-1 30,000 29,271,933
Prudential Funding Corporation,
6.50% 10/10/00 A-1 P-1 50,000 49,927,778
Teachers Insurance and Annuity Association of America:
6.70% 10/2/00 A-1+ P-1 60,000 60,000,000
6.61% 10/6/00 A-1+ P-1 30,000 29,977,967
Transamerica Finance Corporation:
6.53% 10/17/00 A-1 P-1 43,700 43,581,100
6.50% 11/10/00 A-1 P-1 15,000 14,894,375
6.50% 12/12/00 A-1 P-1 18,520 18,282,584
--------------
345,625,737
--------------
MACHINERY & MACHINE TOOLS -- 0.4%
Illinois Tool Works Inc.,
6.47% 12/12/00 A-1+ P-1 25,000 24,680,993
--------------
</TABLE>
7
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FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED) SEPTEMBER 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
RATING
------------- PAR
PRIME SERIES (CONCLUDED) S&P MOODY'S (000) MARKET VALUE
------------------------------------------------------------------------------------------
-------------------------------
COMMERCIAL PAPER (CONTINUED)
-------------------------------
<S> <C> <C> <C> <C> <C>
MINING -- 2.8%
Rio Tinto America Inc.:
6.50% 10/4/00 A-1+ P-1 $34,217 $ 34,204,644
6.51% 10/10/00 A-1+ P-1 30,000 29,956,600
6.51% 11/6/00 A-1+ P-1 25,815 25,651,613
6.51% 11/15/00 A-1+ P-1 50,000 49,602,167
6.49% 11/22/00 A-1+ P-1 31,205 30,918,096
--------------
170,333,120
--------------
PHARMACEUTICAL -- 1.6%
Merck & Co., Inc.,
6.68% 10/2/00 A-1+ P-1 15,007 15,007,000
Pfizer, Inc.,
6.48% 11/6/00 A-1+ P-1 25,000 24,842,500
Pharmacia Corporation:
6.50% 10/16/00 A-1 P-1 19,250 19,201,340
6.50% 10/27/00 A-1 P-1 39,500 39,321,701
--------------
98,372,541
--------------
PUBLISHING -- 0.1%
Gannett Co., Inc.,
6.49% 11/8/00 A-1+ P-1 6,200 6,158,644
--------------
TELEPHONE -- 9.3%
Alcatel S.A.:
6.55% 11/3/00 A-1 P-1 33,000 32,807,867
6.61% 2/7/01 A-1 P-1 20,000 19,529,956
AT & T Corporation:
6.50% 1/25/01 A-1+ P-1 30,000 29,377,083
6.51% 2/14/01 A-1+ P-1 30,000 29,267,625
Bell Atlantic Financial Services Inc.,
6.52% 10/11/00 A-1 P-1 30,000 29,951,100
British Telecomunications PLC:
6.27% 10/11/00 A-1+ P-1 20,000 19,968,650
6.25% 10/12/00 A-1+ P-1 16,746 16,716,927
6.71% 11/8/00 A-1+ P-1 17,000 16,882,761
6.22% 12/4/00 A-1+ P-1 30,000 29,673,450
6.52% 2/12/01 A-1+ P-1 20,000 19,518,244
France Telecom S.A.:
6.51% 10/12/00 A-1+ P-1 43,900 43,820,614
6.49% 10/30/00 A-1+ P-1 54,200 53,926,410
6.50% 11/9/00 A-1+ P-1 31,348 31,132,918
6.52% 12/4/00 A-1+ P-1 35,000 34,600,650
</TABLE>
8
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATING
------------- PAR
PRIME SERIES (CONCLUDED) S&P MOODY'S (000) MARKET VALUE
------------------------------------------------------------------------------------------
--------------------------------
COMMERCIAL PAPER (CONTINUED)
--------------------------------
<S> <C> <C> <C> <C> <C>
TELEPHONE (CONTINUED)
Verizon Global Funding:
6.50% 10/6/00 A-1 P-1 $22,395 $ 22,378,826
6.50% 10/24/00 A-1 P-1 39,658 39,500,470
6.49% 11/17/00 A-1 P-1 20,670 20,498,588
6.49% 11/20/00 A-1 P-1 47,895 47,471,914
6.49% 11/21/00 A-1 P-1 19,500 19,324,229
6.49% 11/28/00 A-1 P-1 15,000 14,845,863
--------------
571,194,145
--------------
UTILITIES-- 1.7%
National Rural Utilities CFC:
6.48% 11/29/00 A-1+ P-1 16,400 16,228,784
6.22% 12/1/00 A-1+ P-1 25,000 24,740,833
6.47% 3/14/01 A-1+ P-1 18,600 18,055,118
6.45% 3/29/01 A-1+ P-1 48,000 46,469,200
--------------
105,493,935
--------------
TOTAL COMMERCIAL PAPER (Amortized Cost $3,957,185,342) 3,957,185,342
--------------
FLOATING RATE - NOTE -- 20.3%
American Express Co.:
6.582% 2/23/01 A-1 P-1 30,000 30,000,000
6.59% 5/9/01 A-1 P-1 25,000 25,000,000
Associates Corporation of North America:
6.564% 1/12/01 A-1 P-1 30,000 29,998,174
6.523% 3/16/01 A-1 P-1 65,000 64,978,353
AT & T Corporation:
6.56% 3/8/01 A-1+ P-1 60,000 59,994,985
6.63% 6/14/01 A-1+ P-1 15,000 14,997,044
Bank of America Corporation,
6.73% 1/25/01 A-1 P-1 35,000 35,000,000
Bayerishe Hypotheka Vereinsbank,
6.537% 2/26/01 A-1+ P-1 50,000 49,990,145
Bayerische Landesbank Girozentrale:
6.585% 11/9/00 A-1+ P-1 40,000 39,998,892
6.54% 2/28/01 A-1+ P-1 40,000 39,992,029
6.541% 3/1/01 A-1+ P-1 40,000 39,991,961
Chase Manhattan Corporation:
7.002% 11/2/00 A-1 P-1 35,000 35,009,643
6.94% 11/17/00 A-1 P-1 15,000 15,005,496
Commerzbank A.G.:
6.564% 4/20/01 A-1+ P-1 25,000 24,995,967
6.571% 4/26/01 A-1+ P-1 25,000 24,995,852
Compass Securitization LLC,
6.603% 10/16/00 A-1+ P-1 25,000 24,999,858
</TABLE>
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FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED) SEPTEMBER 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
RATING
------------- PAR
PRIME SERIES (CONCLUDED) S&P MOODY'S (000) MARKET VALUE
------------------------------------------------------------------------------------------
------------------------------------
FLOATING RATE -- NOTE (CONTINUED)
------------------------------------
<S> <C> <C> <C> <C> <C>
Credit Agricole Indosuez S.A.,
6.61% 11/8/00 A-1+ P-1 $35,000 $ 34,999,965
Credit Suisse First Boston, Inc.,
6.68% 2/20/01 A-1+ P-1 30,000 29,998,854
Federal National Mortgage Association:
6.45% 11/17/00 A-1 P-1 10,000 9,998,630
6.461% 11/22/00 A-1 P-1 15,000 14,998,328
Ford Motor Credit Co.,
6.64% 11/22/00 A-1 P-1 35,000 35,000,147
Goldman Sachs Group, Inc.,
6.898% 1/25/01 A-1+ P-1 40,000 40,022,924
J.P. Morgan Securities, Inc.,
6.613% 3/16/01 A-1 P-1 60,000 60,000,000
John Deere B.V.,
6.643% 10/20/00 A-1 P-1 15,000 15,002,329
Merrill Lynch & Co. Inc.:
7.03% 1/12/01 A-1 P-1 35,000 35,033,574
6.603% 4/17/01 A-1 P-1 50,000 49,997,130
6.603% 4/18/01 A-1 P-1 30,000 29,998,405
6.81% 9/10/01 A-1 P-1 20,000 20,013,858
Morgan Stanley Dean Witter & Co.:
6.21% 12/18/00 A-1+ P-1 30,000 30,000,000
6.775% 1/29/01 A-1+ P-1 55,000 55,000,000
6.603% 3/16/01 A-1+ P-1 55,000 55,000,000
National Rural Utilities CFC,
6.62% 6/15/01 A-1+ P-1 13,000 13,000,000
SBC Communications Inc.:
6.661% 5/1/01 A-1+ P-1 30,000 30,000,000
6.63% 5/15/01 A-1+ P-1 15,000 14,999,099
Societe Generale,
6.568% 1/19/01 A-1+ P-1 45,000 44,992,030
West Deutsche Landesbank Girozentrale,
6.542% 2/26/01 A-1+ P-1 55,000 54,989,159
Westpac Banking Corporation,
6.61% 9/13/01 A-1+ P-1 25,000 24,996,509
--------------
TOTAL FLOATING RATE - NOTE (Amortized Cost $1,252,989,340) 1,252,989,340
--------------
CERTIFICATE OF DEPOSIT -- 2.0% Bank of America N.A.,
6.67% 10/6/00 A-1+ P-1 20,000 20,000,000
6.87% 1/19/01 A-1+ P-1 30,000 30,000,000
First Union National Bank of N.C.,
6.95% 10/23/00 A-1 P-1 31,000 31,000,000
</TABLE>
10
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATING
------------- PAR
PRIME SERIES (CONCLUDED) S&P MOODY'S (000) MARKET VALUE
------------------------------------------------------------------------------------------
-----------------------------------------
CERTIFICATE OF DEPOSIT -- (CONTINUED)
-----------------------------------------
<S> <C> <C> <C> <C> <C>
Suntrust Bank Inc.,
6.64% 10/10/00 A-1 P-1 $40,000 $ 40,000,000
--------------
TOTAL CERTIFICATE OF DEPOSIT (Amortized Cost $121,000,000) 121,000,000
--------------
EURO TIME DEPOSIT-CAYMAN-- 8.8%
Banca Commerciale Italiana Spa,
6.69% 1/29/01 A-1 P-1 25,000 25,000,000
Banque Bruxelles Lambert,
6.50% 10/6/00 A-1+ P-1 25,000 25,000,000
Bayerishe Hypotheka Vereinsbank:
6.75% 2/26/01 A-1+ P-1 45,000 45,000,000
6.92% 3/26/01 A-1+ P-1 25,000 25,000,000
Commerzbank A.G.,
7.04% 11/20/00 A-1+ P-1 30,000 30,000,000
Credit Agricole Indosuez S.A.,
6.67% 10/13/00 A-1+ P-1 50,000 50,000,000
Credit Commercial De France,
6.70% 2/28/01 A-1 P-1 40,000 40,000,000
Dexia Public Finance Bank S.A.,
6.68% 11/3/00 A-1+ P-1 40,000 40,000,000
First Union National Bank of N.C.,
6.97% 10/26/00 A-1 P-1 25,000 25,000,000
ING Bank N.V.,
6.60% 12/7/00 A-1+ P-1 25,000 25,000,000
Landesbank Baden Wurttemberg:
6.68% 10/13/00 A-1+ P-1 50,000 50,000,000
6.75% 2/28/01 A-1+ P-1 40,000 40,000,000
Norddeutsche Landesbank Girozentrale,
6.70% 1/19/01 A-1+ P-1 40,000 40,000,000
Paribas SA,
6.50% 10/6/00 A-1 P-1 40,000 40,000,000
Suntrust Bank Inc.,
6.625% 10/2/00 A-1 P-1 16,480 16,480,000
Wells Fargo Bank
6.71% 1/16/01 A-1+ P-1 25,000 25,000,000
--------------
TOTAL EURO TIME DEPOSIT-CAYMAN (Amortized Cost $541,480,000) 541,480,000
--------------
FNMA -- 0.1%
Federal National Mortgage Association,
6.35% 2/2/01 A-1+ P-1 5,000 4,998,219
--------------
TOTAL FNMA (Amortized Cost $4,998,219) 4,998,219
--------------
</TABLE>
11
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED) SEPTEMBER 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
RATING
------------- PAR
PRIME SERIES (CONCLUDED) S&P MOODY'S (000) MARKET VALUE
------------------------------------------------------------------------------------------
----------------------------------------------
EURODOLLAR CERTIFICATES OF DEPOSIT -- 1.8%
----------------------------------------------
<S> <C> <C> <C> <C> <C>
Bank Austria A.G.,
6.69% 10/24/00 A-1+ P-1 $30,000 $ 30,000,677
Landesbank Baden Wurttemberg,
6.65% 10/31/00 A-1+ P-1 30,000 30,000,000
Norddeutsche Landesbank Girozentrale,
6.82% 1/8/01 A-1+ P-1 25,000 25,001,323
Svenska Handelsbanken Inc.,
6.60% 12/29/00 A-1 P-1 25,000 25,000,601
--------------
TOTAL EURODOLLAR CERTIFICATES OF DEPOSIT
(Amortized Cost $110,002,601) 110,002,601
--------------
YANKEE CERTIFICATES OF DEPOSIT -- 1.8%
Bank Austria A.G.,
6.55% 2/1/01 A-1+ P-1 10,000 9,998,412
Bank of Nova Scotia,
6.742% 2/16/01 A-1 P-1 23,000 22,996,302
BNP Paribas,
6.70% 2/20/01 A-1 P-1 20,000 19,996,335
Bayerishe Hypotheka Vereinsbank,
6.77% 2/22/01 A-1+ P-1 20,000 19,996,285
Commerzbank A.G.,
6.70% 2/20/01 A-1+ P-1 15,000 14,997,252
Svenska Handelsbanken Inc.,
6.77% 3/21/01 A-1 P-1 25,000 24,995,583
--------------
TOTAL YANKEE CERTIFICATES OF DEPOSIT
(Amortized Cost $112,980,169) 112,980,169
--------------
TOTAL INVESTMENTS (Amortized Cost $6,100,635,671) 99.1% $6,100,635,671
OTHER ASSETS IN EXCESS OF LIABILITIES 0.9 59,874,340
----- --------------
NET ASSETS 100.0% $6,160,510,011
===== ==============
<FN>
------------
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.
MOODY'S RATINGS:
P-1 Commercial paper bearing this designation is of the best quality.
P-2 Commercial paper bearing this designation have a strong ability for
repayment of senior short-term debt obligations.
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.
</FN>
</TABLE>
A DETAILED DESCRIPTION OF THE ABOVE RATINGS CAN BE FOUND IN THE FUND'S STATEMENT
OF ADDITIONAL INFORMATION.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
FOR THE SIX
MONTHS ENDED
PRIME SERIES SEPTEMBER 30,
--------------------------------------------------------------------------------
2000
Assets:
Investments, at value $6,100,635,671
Receivable for securities sold 48,551,000
Receivable for capital shares sold 2,504,125
Interest receivable 19,799,732
Prepaid expenses and other assets 1,021,506
--------------
Total assets 6,172,512,034
--------------
Liabilities:
Payable for capital shares redeemed 12,150
Incomedividend payable 7,976,585
Accrued expenses and other liabilities 4,013,288
--------------
Total liabilities 12,002,023
--------------
Net assets $6,160,510,011
--------------
Net Assets Consist of:
Paid-in capital 6,160,403,240
Accumulated net investment income (loss) 95,209
Accumulated net realized gain (loss) on
investment transactions 11,562
--------------
Net assets $6,160,510,011
==============
Shares outstanding $6,160,400,569
==============
Net assets value $ 1.00
==============
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
(UNAUDITED)
FOR THE SIX
MONTHS ENDED
PRIME SERIES SEPTEMBER 30,
--------------------------------------------------------------------------------
2000
Computation of Net Asset Value, Redemption Price and
Offering Price per share:
Deutsche Banc Alex. Brown Cash Reserve Prime Shares
Net assets $5,582,133,030
==============
Shares Outstanding 5,582,035,613
==============
Net asset value $ 1.00
==============
Deutsche Banc Alex. Brown Cash Reserve Prime Institutional
Shares
Net assets $ 511,680,955
==============
Shares Outstanding 511,676,824
==============
Net asset value $ 1.00
==============
Flag Investors Class A Shares
Net assets $ 10,138,930
==============
Shares Outstanding 10,138,366
==============
Net asset value $ 1.00
==============
Flag Investors Class B Shares
Net assets $ 4,281,153
==============
Shares Outstanding 4,280,954
==============
Net asset value $ 1.00
==============
Flag Investors Class C Shares
Net assets $ 536,737
==============
Shares Outstanding 536,929
==============
Net asset value $ 1.00
==============
Quality Cash Reserve Shares
Net assets $ 51,739,206
==============
Shares Outstanding 51,731,883
==============
Net asset value $ 1.00
==============
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE SIX
MONTHS ENDED
PRIME SERIES SEPTEMBER 30,
--------------------------------------------------------------------------------
2000
Investment Income:
Interest income $196,690,888
------------
Expenses:
Investment advisory fees 7,654,219
Distribution fees:
Deutsche Banc Alex. Brown Cash Reserve Prime 7,061,696
Flag Investors Class A Shares 19,591
Flag Investors Class B Shares 14,358
Flag Investors Class C Shares 1,393
Quality Cash Reserve Shares 188,826
Registration fees 235,793
Accounting fees 94,902
Professional fees 77,027
Transfer agent fees 1,854,563
Custodian fees 211,418
Directors' fees 81,565
Shareholder service fees 1,354,692
Miscellaneous 116,289
------------
Total expenses 18,966,332
------------
Net investment income 177,724,556
------------
Net realized loss from securities transactions (11,811)
------------
Net increase in net assets resulting from operations $177,712,745
============
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
PRIME SERIES SEPTEMBER 30, MARCH 31,
--------------------------------------------------------------------------------
20001 2000
Increase (Decrease) in Net Assets
Operations:
Net investment income $ 177,724,556 $ 233,249,832
Net realized gain (loss) from
securities transactions (11,811) 23,373
-------------- --------------
Net increase in net assets resulting
from operations 177,712,745 233,273,205
-------------- --------------
Distributions to Shareholders From:
Net investment income:
Deutsche Banc Alex. Brown Cash
Reserve Prime Shares (158,839,177) (204,114,790)
Deutsche Banc Alex. Brown Cash
Reserve Prime Institutional
Shares (16,591,158) (24,839,929)
Flag Investors Class A Shares (444,892) (729,448)
Flag Investors Class B Shares (98,177) (154,996)
Flag Investors Class C Shares (9,951) (2,633)
Quality Cash Reserve Shares (1,741,354) (3,408,016)
-------------- --------------
Total distributions (177,724,709) (233,249,812)
-------------- --------------
Capital Share Transactions, net (344,339,274) 2,291,071,504
-------------- --------------
Total increase (decrease) in net assets (344,351,238) 2,291,094,897
Net Assets:
Beginning of period 6,504,861,249 4,213,766,352
-------------- --------------
End of period $6,160,510,011 $6,504,861,249
============== ==============
------------
1 Unaudited.
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS -- CLASS A SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
SEPTEMBER 30, FOR THE YEARS ENDED MARCH 31,
----------------------------------------------------------------------------------------------------------------------------------
20001 2000 1999
<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 0.0294 0.0483 0.0474
Less Distributions:
Dividends from net investment income (0.0294) (0.0483) (0.0474)
----------- ----------- -----------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00
=========== =========== ===========
Total Return 2.97% 4.94% 4.85%
Ratios to Average Net Assets:
Expenses 0.64%2 0.63% 0.63%
Net investment income 5.87%2 4.89% 4.67%
Supplemental Data:
Net assets at end of period $10,138,930 $16,214,395 $13,028,272
Number of shares outstanding at end of period 10,138,366 16,213,799 13,027,769
<FN>
-------------
1 Unaudited.
2 Annualized.
</FN>
</TABLE>
18
<PAGE>
SEE NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED 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 0.0494 0.0478 0.0524
Less Distributions:
Dividends from net investment income (0.0494) (0.0478) (0.0524)
---------- ---------- ----------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00
========== ========== ==========
Total Return 5.05% 4.88% 5.36%
Ratios to Average Net Assets:
Expenses 0.67% 0.63% 0.60%
Net investment income 4.94% 4.78% 5.25%
Supplemental Data:
Net assets at end of period $7,736,785 $6,521,574 $5,976,831
Number of shares outstanding at end of period 7,736,522 6,521,310 5,976,824
</TABLE>
19
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS -- CLASS B SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
SEPTEMBER 30, FOR THE YEARS ENDED MARCH 31,
--------------------------------------------------------------------------------------------------------------------------------
20001 2000 1999
<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 0.0256 0.0406 0.0400
Less Distributions:
Dividends from net investments income (0.0256) (0.0406) (0.0400)
---------- ---------- ----------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00
========== ========== ==========
Total Return 2.59% 4.14% 4.07%
Ratios to Average Net Assets:
Expenses 1.41%2 1.38% 1.37%
Net investment income 5.10%2 4.14% 3.92%
Supplemental Data:
Net assets at end of period $4,281,153 $2,979,619 $2,355,863
Number of shares outstanding at end of period 4,280,954 2,979,496 2,355,780
<FN>
-------------
1 Unaudited.
2 Annualized.
3 Commencement of operations
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
APRIL 3, 19953
THROUGH
FOR THE YEARS ENDED MARCH 31, 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 investments income (0.0418) (0.0414) (0.0361)
-------- -------- -------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00
======== ======== =======
Total Return 4.27% 4.22% 3.69%
Ratios to Average Net Assets:
Expenses 1.42% 1.38% 1.38%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 -- CLASS C SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JAN. 17, 20003
MONTHS ENDED THROUGH
SEPTEMBER 30, MARCH 31,
------------------------------------------------------------------------------------------
20001 2000
<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 0.0267 0.0115
Less Distributions:
Dividends from net investment income (0.0267) (0.0115)
-------- --------
Net asset value at end of period $ 1.00 $ 1.00
======== ========
Total Return 2.70% 1.15%
Ratios to Average Net Assets:
Expenses 1.29%2 1.38%2
Net investment income 5.22%2 4.14%2
Supplemental Data:
Net assets at end of period $536,737 $778,515
Number of shares outstanding
at end of period 536,929 778,515
<FN>
-----------
1 Unaudited.
2 Annualized.
3 Commencement of operations.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 -- ORGANIZATION AND 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 management investment
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 Shares ("Flag Investors Class A
Shares"), Flag Investors Cash Reserve Prime Shares Class B Shares ("Flag
Investors Class B Shares"), Flag Investors Cash Reserve Prime Shares Class C
Shares ("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 are
for the Prime Series.
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. VALUATION OF SECURITIES -- 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.
23
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 (CONCLUDED)
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.
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. SECURITIES TRANSACTIONS, INVESTMENT INCOME, DISTRIBUTIONS -- The Fund
uses the trade date to account for securities 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 class' 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.
24
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
NOTE 2 -- INVESTMENT ADVISORY FEE, TRANSACTIONS WITH AFFILIATES AND OTHER FEES
Investment Company Capital Corp. ("ICCC"), an indirect wholly owned
subsidiary of Deutsche Bank AG, is the investment advisor to each series. Under
the terms of the investment advisory agreement, the Fund pays ICCC a fee,
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
$94,902, for accounting services for the six months ended September 30, 2000.
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 $1,854,563 to ICCC
for transfer agency services for the six months ended September 30, 2000.
ICC Distributors, Inc. ("ICC Distributors"), provides distribution services
to the Fund. As compensation for these services, the Flag Investors Class A
Shares pay ICC Distributors an annual fee equal to 0.25% of average daily net
assets. For the six months ended September 30, 2000, distribution fees for the
Flag Investors Class A Shares aggregated $19,591. The Quality Cash Shares, Flag
Investors Class B Shares and Flag Investors Class C Shares also 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 $188,826 for
the six months ended September 30, 2000 and 1.00% (including a 0.25% shareholder
servicing fee) of the Flag Investors Class B and Class C Shares' aggregate
average daily net assets or $19,144 and a $1,858, respectively, for the six
months ended September 30, 2000.
ICCC may voluntarily waive a portion of its advisory or distribution fees
for the Prime Series to preserve or enhance performance.
25
<PAGE>
FLAG INVESTORS CASH RESERVE PRIME SHARES
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
NOTE 2 (CONCLUDED)
The Fund's complex offers a retirement plan for eligible Directors. The
actuarially computed pension expense/(credit) allocated to the Fund for the six
months ended September 30, 2000 was $(21,859) for the Prime Series. The accrued
liability at September 30, 2000 was $151,393 for the Prime Series.
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:
NOTE 3 -- CAPITAL STOCK AND SHARE INFORMATION
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 20001 MARCH 31, 2000
------------------- --------------
PRIME SERIES:
SOLD:
Prime Shares 18,614,210,956 35,722,744,712
Flag Investors Class A Shares 201,891,502 333,773,644
Flag Investors Class B Shares 8,087,180 10,774,115
Flag Investors Class C Shares 680,321 1,047,381
Prime Institutional Shares 5,702,187,295 8,800,227,522
Quality Cash Shares 141,973,604 430,807,975
ISSUED AS REINVESTMENT OF DIVIDENDS:
Prime Shares 148,110,433 191,935,470
Flag Investors Class A Shares 295,647 564,622
Flag Investors Class B Shares 84,279 131,700
Flag Investors Class C Shares 6,669 1,722
Prime Institutional Shares 13,712,696 19,239,279
Quality Cash Shares 1,651,536 3,348,365
REDEEMED:
Prime Shares (18,952,797,142) (33,870,074,943)
Flag Investors Class A Shares (208,262,582) (331,152,236)
Flag Investors Class B Shares (6,870,001) (10,282,099)
Flag Investors Class C Shares (928,576) (270,588)
Prime Institutional Shares (5,841,981,300) (8,570,149,304)
Quality Cash Shares (166,391,791) (441,595,833)
--------------- ----------------
Net increase (344,339,274) 2,291,071,504
=============== ================
-------
1 Unaudited.
26
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
DIRECTORS AND OFFICERS
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
CARL W. VOGT, ESQ.
PRESIDENT
CHARLES A. RIZZO
TREASURER
AMY M. OLMERT
SECRETARY
DANIEL O. HIRSCH
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 other 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>
[FLAG INVESTORS logo omitted]
DOMESTIC EQUITY
Communications Fund
Emerging Growth Fund
Equity Partners Fund
Real Estate Securities Fund
Top 50 US
Value Builder Fund
INTERNATIONAL EQUITY
European Mid-Cap Fund
International Equity Fund
Japanese Equity Fund
Top 50 Asia
Top 50 Europe
Top 50 World
FIXED INCOME
Managed Municipal Fund Shares
Short-Intermediate Income Fund
Total Return US Treasury Fund Shares
MONEY MARKET
Cash Reserve Prime Shares
P.O. Box 515
Baltimore, Maryland 21203
800-767-FLAG
WWW.FLAGINVESTORS.COM
Distributed by:
ICC DISTRIBUTORS, INC.
CASHSA(11/00)
