<PAGE>
As filed with the Securities and Exchange Commission on January 19, 1996
Registration Nos. 2-91889
811-4060
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Pre-Effective Amendment No. ___ / /
Post-Effective Amendment No. 19 / X /
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
Amendment No. 20 / X /
CASH ACCUMULATION TRUST
(Exact Name of Registrant as Specified in Charter)
2187 Atlantic Street
Stamford, Connecticut 06902
(Address of principal executive offices)
(203) 352-4990
(Registrant's telephone number, including area code)
Name and address
of agent for service Copy to
- -------------------- -------
Newton B. Schott, Jr., Esq. Douglass N. Ellis, Jr., Esq.
c/o PIMCO Advisors L.P. Ropes & Gray
2187 Atlantic Street One International Place
Stamford, Connecticut 06902 Boston, Massachusetts 02110
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b), or
/ X / on February 1, 1996 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on (date) pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective
date for post-effective amendment No. 18 filed on January
20, 1995
<PAGE>
Pursuant to Rule 24f-2(a) under the Investment Company Act of 1940, the
Registrant has registered an indefinite number or amount of its shares of
beneficial interest under the Securities Act of 1933. The Registrant filed a
Rule 24f-2 Notice with respect to the Registrant's fiscal year ended September
30, 1995 on November 20, 1995.
-2-
<PAGE>
CASH ACCUMULATION TRUST
NATIONAL MONEY MARKET FUND
CROSS REFERENCE SHEET
Part A: Information Required
in a Prospectus Prospectus Caption
--------------- ------------------
1. . . . . . . . . . . . . . . . Cover Page
2. . . . . . . . . . . . . . . . Schedule of Fees
3. . . . . . . . . . . . . . . . Financial Highlights
4. . . . . . . . . . . . . . . . Investment Objective and Policies
General Policies; Net Asset Value;
Yields; Description of Trust
5. . . . . . . . . . . . . . . . Manager of the Funds; Distributor
and Distribution Plan; Schedule of
Fees; Back Cover
6. . . . . . . . . . . . . . . . Description of the Trust,
Dividends; Taxes
7. . . . . . . . . . . . . . . . Investment Objective and Policies;
How to Buy Shares; Distributor and
Distribution Plan; Net Asset Value
8. . . . . . . . . . . . . . . . How to Redeem
9. . . . . . . . . . . . . . . . None
-3-
<PAGE>
Part B: Information Required
in a Statement of Statement of Additional
Additional Information Information Caption
---------------------- -------------------
10. . . . . . . . . . . . . . . . Cover Page
11. . . . . . . . . . . . . . . . Table of Contents
12. . . . . . . . . . . . . . . . Not Applicable
13. . . . . . . . . . . . . . . . Investment Objectives, Policies
and Restrictions; Credit and
Market Risk
14. . . . . . . . . . . . . . . . Management of the Fund
15. . . . . . . . . . . . . . . . Management of the Fund
16. . . . . . . . . . . . . . . . Investment Advisory and Other
Services
17. . . . . . . . . . . . . . . . Portfolio Transactions and
Brokerage
18. . . . . . . . . . . . . . . . Organization and Capitalization
of the Trust
19. . . . . . . . . . . . . . . . Net Income, Yields and Valuation;
Redemption
20. . . . . . . . . . . . . . . . Taxes
21. . . . . . . . . . . . . . . . Investment Advisory and Other
Services
22. . . . . . . . . . . . . . . . Net Income, Yields and Valuation
23. . . . . . . . . . . . . . . . Financial Statements
-4-
<PAGE>
NATIONAL MONEY MARKET FUND
CASH ACCUMULATION TRUST
2187 ATLANTIC STREET
STAMFORD, CONNECTICUT 06902
(203) 352-4990
PROSPECTUS
FEBRUARY 1, 1996
The National Money Market Fund (the "Fund") is an open-end, diversified
management investment company organized as a series of Cash Accumulation Trust
(the "Trust"). The Fund's investment objective is current income to the extent
consistent with preservation of capital and liquidity. As a money market fund,
the Fund seeks to achieve its objective by investing in a variety of high
quality "money market" instruments.
Shares of the Fund are offered without a sales charge at net asset value.
INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
This Prospectus concisely presents the information which investors ought to
know before investing. Please read this Prospectus carefully and keep it for
further reference.
A Statement of Additional Information (the "SAI") dated February 1, 1996, as
supplemented from time to time, is available free of charge by writing to PIMCO
Advisors Distribution Company, 2187 Atlantic Street, Stamford, Connecticut
06902, or by telephoning (800) 628-1237 or (203) 352-4900. The SAI, which
contains more detailed information about the Fund, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Schedule of Fees....................... 2
Financial Highlights................... 2
Investment Objective and Policies...... 3
General Policies....................... 4
Net Asset Value........................ 5
Yields................................. 5
How to Buy Shares...................... 5
<CAPTION>
PAGE
---
<S> <C>
How to Redeem.......................... 7
Manager of the Fund.................... 11
Distributor and Distribution Plan...... 12
Dividends.............................. 12
Taxes.................................. 12
Description of the Trust............... 13
Custodian.............................. 13
</TABLE>
<PAGE>
SCHEDULE OF FEES
<TABLE>
<CAPTION>
ANNUAL FUND EXAMPLE: YOU WOULD PAY THE
OPERATING EXPENSES FOLLOWING EXPENSES ON A $1,000
(AS A PERCENTAGE OF AVERAGE NET ASSETS) INVESTMENT ASSUMING (1) 5% ANNUAL
---------------------------------------------- RETURN AND (2) REDEMPTION AT THE
END OF EACH TIME PERIOD:
TOTAL ----------------------------------
FUND
MANAGEMENT OTHER OPERATING 3 5 10
FEES 12b-1 FEES EXPENSES EXPENSES 1 YEAR YEARS YEARS YEARS
---------- ---------- -------- --------- ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
National Money Market
Fund.................. .42% .10% .17% .69% $ 7 $ 22 $ 38 $ 86
</TABLE>
The purpose of this table is to assist an investor in understanding the
various costs and expenses of the Fund that are borne directly or indirectly by
shareholders. Annual Operating Expenses for the Fund are based on actual
expenses during the fiscal year ended September 30, 1995 and the Fund's average
net assets during this fiscal year. NOTE: THE FIGURES SHOWN IN THE EXAMPLE ARE
ENTIRELY HYPOTHETICAL. THEY ARE NOT REPRESENTATIONS OF PAST OR FUTURE
PERFORMANCE OR EXPENSES. ACTUAL PERFORMANCE AND/OR EXPENSES MAY BE MORE OR LESS
THAN SHOWN.
FINANCIAL HIGHLIGHTS
The following information for the five years ended September 30, 1995 has
been audited by Coopers & Lybrand L.L.P., independent accountants, whose report
appears in the SAI. Financial Statements and related Notes are included in the
SAI.
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
----- ----- ----- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of
period....................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations -- net investment
income and net realized gain
on investments............... .05 .03 .02 .04 .06 .08 .09 .07 .06 .07
Dividends and distributions to
shareholders................. (.05) (.03) (.02) (.04) (.06) (.08) (.09) (.07) (.06) (.07)
----- ----- ----- ------ ------ ------ ------ ------ ------ ------
Net asset value, end of
period....................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ------ ------ ------ ------ ------ ------ ------
----- ----- ----- ------ ------ ------ ------ ------ ------ ------
TOTAL RETURN 5.2% 3.2% 2.3% 3.7% 6.2% 7.8% 8.6% 6.8% 5.7% 6.7%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period
(in millions)................ $685 $823 $652 $2,286 $2,523 $2,217 $2,438 $2,034 $1,925 $1,856
Ratios to average net assets:
Net investment income......... 5.15% 3.20% 2.26% 3.70% 6.17% 7.75% 8.64% 6.77% 5.77% 6.69%
Expenses...................... .69% .61% .71% .74% .74% .73% .71% .73% .74% .77%
</TABLE>
2
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund seeks to achieve its objective of current income to the extent
consistent with preservation of capital and liquidity through investment in the
different types of securities described below.
The Fund invests in a variety of "money market" instruments rated in the two
highest rating categories by at least two major rating agencies (or by one major
rating agency, if only one major agency has issued a rating) or unrated but
considered by the Fund's manager to be of comparable quality. These instruments
include:
- Prime commercial paper and master demand
notes.
- Short-term U.S. Government Securities -- "U.S.
Government Securities" are issued or guaranteed by the United States
Government or its agencies, authorities or instrumentalities. Some are
backed by the full faith and credit of the U.S. Treasury (e.g., Treasury
Bills and obligations of the Small Business Administration) while others are
not backed by the full faith and credit of the U.S. Government, but instead
are backed only by the credit instrumentality, or by the discretionary
authority of the U.S. Government to purchase the issuing entity's
obligations. Agencies or instrumentalities whose obligations are not backed
by the full faith and credit of the U.S. Government include, among others,
the Federal Home Loan Mortgage Corporation, Federal Home Loan Banks, the
Federal National Mortgage Association, the Tennessee Valley Authority and
the Bank for Cooperatives.
- Short-term corporate debt securities.
- Short-term debt securities that are backed by
pools of commercial or consumer finance loans.
- Certificates of deposit, bankers' acceptances and
other bank obligations (when and if such other bank obligations become
available in the future) -- the obligations must be those issued by a bank
having total assets of at least $2 billion as of the date of the bank's most
recently published financials. In addition to the foregoing, the Fund may
also invest in certificates of deposit of $100,000 or less of domestic banks
and savings and loan associations, regardless of total assets, if the
certificates of deposit are fully insured as to principal by the Federal
Deposit Insurance Corporation. If the principal amount of a certificate of
deposit plus accrued interest exceeds $100,000, then the excess will not be
so insured.
The Fund may invest up to 100% of its assets in obligations issued by
banks. If the bank is a domestic bank, it must be a member of the Federal
Deposit Insurance Corporation. This does not prevent the Fund from investing
in obligations issued by foreign branches of domestic banks and there is
currently no limit on the portion of the Fund's assets that may be invested
in these obligations. If the bank is foreign, the obligation must be issued
by a domestic branch or domestic subsidiary and the obligation must, in the
opinion of the Fund's manager, be of a quality comparable to the other debt
securities which may be purchased by the Fund. There are special risks
associated with investments in such foreign bank obligations, including the
risks associated with foreign political, economic and legal developments
(see below) and the fact that foreign banks may not be subject to regulatory
requirements the same as or similar to those that apply to domestic banks.
- Other money market instruments.
The Fund may invest some or all of its assets in any of the foregoing money
market instruments, depending upon its manager's view of market and broader
economic conditions.
The Fund may purchase any of the foregoing money market instruments through
firm commitment arrangements with domestic commercial banks and registered
broker-dealers and may enter into repurchase agreements with domestic commercial
banks and registered broker-dealers with respect to any of the foregoing
3
<PAGE>
money market instruments, longer term U.S. Government Securities or corporate
debt securities rated in the highest rating category by at least two major
rating agencies (or by one major agency, if only one has issued a rating). The
Fund will only enter into firm commitment arrangements and repurchase agreements
with banks and broker-dealers which the Fund's manager determines present
minimal credit risks.
The Fund may invest in foreign securities denominated in U.S. dollars, which
may be subject to risks of foreign political, economic and legal developments.
These investments are also considered to be riskier than U.S. investments
because there may not be as much publicly available information about the
issuers. Those issuers may also have different auditing and financial reporting
standards and their securities may be less liquid and more volatile than
comparable U.S. securities. The Fund will invest in these securities only when
the Fund's manager believes the risks are minimal.
Federal law limits the portion of the Fund's assets that may be invested in
instruments that are not rated in the highest rating category (or that are
unrated but determined to be of comparable quality by the Fund's manager).
GENERAL POLICIES
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with banks and broker dealers.
These are agreements by which the Fund acquires a security (usually a U.S.
Government Security) for cash and obtains a simultaneous commitment from the
seller to repurchase the security at an agreed upon price and date. The resale
price is in excess of the acquisition price and reflects an agreed-upon market
rate unrelated to the coupon rate on the purchased security. Repurchase
agreements will provide that the value of the underlying security will always be
greater than or equal to the repurchase price. Such transactions afford an
opportunity for the Fund to earn a return on temporarily available cash at no
market risk, although there is a risk that the seller may default on its
obligation to pay the agreed-upon sum on the redelivery date. Such a default may
subject the Fund to expenses, delays and risks of loss. While the underlying
security in a repurchase agreement transaction may mature in more than 397 days,
the repurchase agreements themselves usually run for less than seven days and
the Fund will not, without shareholder approval, enter into a repurchase
agreement if as a result more than 10% of the Fund's net assets would be
invested in "illiquid securities." The staff of the Securities and Exchange
Commission is currently of the view that repurchase agreements maturing in seven
days or more are illiquid securities.
LOANS OF PORTFOLIO SECURITIES
The Fund may lend its portfolio securities to broker-dealers under contracts
calling for collateral in U.S. Government Securities or cash equal to at least
the market value of the securities loaned. The Fund will continue to benefit
from interest on the securities loaned and will also receive either interest,
through investment of cash collateral in the Fund's permissible investments, or
lending fees, if the collateral is U.S. Government Securities. The Fund would
normally pay lending fees to the lending broker-dealer. Any voting rights, or
rights to consent, relating to securities loaned pass to the borrower. However,
if a material event affecting the investment occurs, such loans will be called
so that the securities may be voted by the Fund.
MATURITIES OF PORTFOLIO SECURITIES
All of the Fund's investments will, at the time of investment, have remaining
maturities of 397 days or less and the dollar-weighted average maturity of the
Fund's portfolio securities will not exceed 90 days. When the Fund has purchased
a security subject to a repurchase agreement, the amount and maturity of the
investment will be determined by reference to the amount and term of the
repurchase agreement rather than of the underlying security. In the case of
certain variable or floating rate instruments or instruments subject to certain
demand or put arrangements, the maturity of the instrument will be determined by
reference to the time remaining until the next readjustment of the interest rate
or until the principal amount can be recovered through exercise of the demand or
put right. The stated maturity of such securities may be greater
4
<PAGE>
than 397 days. If the disposition of a portfolio security results in a
dollar-weighted average portfolio maturity in excess of 90 days, the Fund will
invest its available cash in such a manner as to reduce its dollar-weighted
average maturity to 90 days or less as soon as reasonably practicable.
CHANGES IN RATINGS
In determining whether a security is a suitable investment for the Fund,
reference will be made to the quality of the security, including its rating, at
the time of purchase. The Fund may or may not dispose of a portfolio security as
a result of a change in the security's rating, depending on an evaluation of the
security in light of the Fund's investment objective and policies.
CREDIT RISK
All investments of the Fund will be in instruments that the Fund's manager,
acting under standards established by the Trust's Trustees, determines present
minimal credit risk at time of acquisition. Neither this determination nor the
ratings assigned by rating agencies constitute an assurance against default by
the issuers of instruments held by the Fund. For a description of rating agency
rating categories, see the SAI.
FUNDAMENTAL POLICIES
The investment objective of the Fund set forth in the second sentence on the
front page of this Prospectus is fundamental and may not be changed without
shareholder approval. Except as otherwise indicated, the investment policies of
the Fund are not fundamental and may be changed without shareholder approval.
NET ASSET VALUE
Normally, the Fund will value its portfolio securities by using the "amortized
cost" method of valuation. This means that the net asset value of the Fund's
shares will be unaffected by minor shifts in the market value of its portfolio
securities, even though the market value of its portfolio may change as a result
of variations in the level of prevailing interest rates and yield relationships.
The Trustees of the Trust will consider what action, if any, should be taken to
maintain the net asset value per share of the Fund at $1, including the pro rata
increase or decrease of the number of shares of the Fund held in each
shareholder's account. There can be no assurance that a net asset value of $1
per share will be maintained at all times. The Fund will value its shares once
on each day the New York Stock Exchange is open, as of the close of regular
trading on the Exchange.
YIELDS
Considerations of liquidity, safety and preservation of capital mean that the
Fund may not necessarily invest in money market instruments paying the highest
available yield at any particular time. Shareholders comparing the Fund's yield
with those of alternative investments (such as savings accounts, various types
of bank deposits and other money market funds) should consider such things as
liquidity, minimum balance requirements, penalties for early withdrawal and the
impact of taxes on alternative types of investments.
Yield information may be useful in reviewing the Fund's performance and
providing a basis for comparison with other investment alternatives. However,
unlike bank deposits or other investments which pay a fixed yield for a stated
period of time, money market fund yields fluctuate.
The Fund may advertise its Yield and its Effective Yield. The Yield of the
Fund is based upon the income earned by the Fund over a seven-day period and
then annualized, i.e., the income earned in the period is assumed to be earned
every seven days over a 52-week period and stated as a percentage of the
investment. Effective Yield is calculated similarly but, when annualized, the
income earned by the investment is assumed to be reinvested in Fund shares and
thus compounded in the course of a 52-week period. Effective Yield will be
higher than Yield because of the compounding effect of this assumed
reinvestment.
HOW TO BUY SHARES
Shares of the Fund are continuously offered through PIMCO Advisors
Distribution Company (the "Distributor"), the Fund's principal underwriter, and
through other firms which are members of the National Association of Securities
Dealers, Inc. and which have dealer agreements with the Distributor
("participating brokers") or which have agreed to act as introducing brokers for
the Distributor ("introducing brokers").
5
<PAGE>
Shares of the Fund are offered for sale at the net asset value next determined
after receipt by the Fund of an order in proper form. The Fund seeks to maintain
the net asset value of the Fund at a constant $1 per share. There is no sales
charge to the investor, although Fund assets are used to pay some of the costs
of distributing Fund shares.
There are two ways to purchase shares: either (1) through your dealer or
broker which has a dealer agreement or (2) directly by mailing an Account
Application with payment, as described below under the heading "Direct
Investment," to the Distributor (if no dealer is named in the application, the
Distributor may act as dealer).
The minimum initial investment is $1,000 and the minimum additional investment
is $100, except that lower minimums may apply to purchases through the CAT
Auto-Invest Plan described below, and higher minimums may apply for purchases
through certain brokers.
INVESTMENTS THROUGH YOUR BROKER
Brokerage firms provide varying arrangements for their clients to purchase and
redeem Fund shares. For information about your brokerage firm's arrangements,
including information about procedures for forwarding purchase and redemption
orders to the Fund and crediting dividends to your account, contact your broker.
Some firms may establish higher minimum investment requirements than set forth
above. Firms may arrange with their clients for other investment or
administrative services. Such firms may independently establish and charge
additional amounts to their clients for such services, which charges would
reduce their clients' return. Firms will ordinarily hold Fund shares in nominee
or street name as agent for and on behalf of their customers. In such instances,
the Fund's transfer agent (the "Transfer Agent") will have no information with
respect to or control over accounts of specific shareholders. Such shareholders
may obtain access to their accounts and information about their accounts only
from their broker. In addition, certain privileges with respect to the purchase
and redemption of shares or the reinvestment of dividends may not be available
through such firms. Some firms may participate in a program allowing them access
to their clients' accounts for servicing including, without limitation,
transfers of registration and dividend payee changes, and may perform functions
such as generation of confirmation statements and disbursements of cash
dividends. This Prospectus should be read in connection with such firms'
material regarding their fees and services.
DIRECT INVESTMENT
Investors who wish to invest in the Fund directly, rather than through a
participating broker, may do so by opening an account through the Distributor.
To open an account, an investor should complete the Account Application, which
can be obtained by calling (800) 628-1237 or by writing to the Distributor at
2187 Atlantic Street, Stamford, CT 06902. All shareholders who open direct
accounts through the Distributor will receive from the Distributor individual
confirmations of each purchase, redemption, dividend reinvestment or transfer of
Fund shares, including the total number of Fund shares owned as of the
confirmation date. Information regarding direct investment or any other features
or plans offered by the Fund may be obtained by calling the Transfer Agent at
(800) 426-0107.
PURCHASES BY MAIL. Investors who wish to invest directly may send a check
payable to PIMCO Advisors Distribution Company along with a completed Account
Application to:
PIMCO Advisors Distribution Company
c/o Shareholder Services, Inc.
P.O. Box 5866
Denver, Colorado 80217-5866
Purchases are accepted subject to collection of checks at full value and
conversion into federal funds. Payment by a check drawn on any bank that is a
member of the Federal Reserve System can normally be converted into federal
funds within two business days after receipt of the check. Checks drawn on a
non-member bank may take up to 15 days to convert into federal funds.
SUBSEQUENT PURCHASES BY MAIL. Subsequent direct purchases can be made as
indicated above by mailing a
6
<PAGE>
check with (1) a letter specifying the amount of the investment and the
shareholder's name and account number or (2) the additional investment portion
of a confirmation statement. Except for the CAT Auto-Invest plan, the minimum
subsequent direct purchase is $100. All payments should be made payable to PIMCO
Advisors Distribution Company. Checks should be mailed to the address above
under "Purchases by Mail."
CHANGES IN ACCOUNT REGISTRATION. For an account maintained through the
Distributor (rather than a participating broker), changes in registration
information or account privileges may be made by writing to the Transfer Agent,
Shareholder Services, Inc., P.O. Box 5866, Denver, Colorado 80217-5866, or by
use of forms which are available from the Distributor. A signature guarantee is
required. See "Signature Guarantee" under "How to Redeem."
ALL PURCHASES
A purchase order does not become effective until the custodian has federal
funds immediately available to it, whether by direct wire or conversion of other
forms of payment, prior to the close of regular trading on the New York Stock
Exchange on days the Exchange is open (generally, weekdays other than normal
holidays). Orders received in good order by the Fund or its agents prior to the
close of regular trading on the Exchange (normally 4:00 p.m. Eastern time) will
be executed at the net asset value calculated at the close of regular trading on
that day and begin to earn dividends on the next day, except that orders
received in good order and accompanied by full payment in federal funds (or
converted into federal funds before the close of regular trading on the
Exchange) will begin to earn dividends on the day the order is received. The
Distributor will promptly forward orders received by it for shares of the Fund.
Participating brokers are responsible for forwarding their customers' orders.
The Distributor and the Fund are not responsible for any delay by your broker in
forwarding an order to the Fund. The Fund and the Distributor reserve the right
to reject any purchase order for any reason.
CAT AUTO-INVEST
The CAT Auto-Invest plan provides for periodic investments into the
shareholder's account with the Fund by means of automatic transfers of a
designated amount from the shareholder's bank account. Investments may be made
monthly or quarterly, and may be in any amount subject to a minimum of $50 per
month. Further information regarding the CAT Auto-Invest plan is available from
the Distributor or participating brokers. You may enroll by completing the
appropriate section on the Supplemental Application, which is available by
calling (800) 628-1237.
HOW TO REDEEM
Shareholders may withdraw all or any portion of their investments in the Fund
by redeeming shares at the Fund's net asset value, which the Fund seeks to
maintain at $1 per share. Shareholders may redeem shares of the Fund on any day
that the New York Stock Exchange is open for business.
ACCOUNTS MAINTAINED WITH A BROKER
If your account is maintained with a participating broker, you may redeem by
submitting a written withdrawal request to your broker. For the convenience of
their customers, participating brokers may also offer checkwriting, debit card
and telephone redemption services, and may charge fees for these services. For
more information, contact your participating broker.
ACCOUNTS MAINTAINED THROUGH THE DISTRIBUTOR
If you maintain your account directly through the Distributor (rather than
through a participating broker), you may redeem shares from your account (1) by
submitting a written redemption request directly to the Transfer Agent, (2) by
telephone redemption (unless you have elected in writing not to utilize this
option), (3) through an Automatic Withdrawal Plan or (4) through the
checkwriting privilege. Your original Account Application permits you to redeem
by written request and to elect one or more of the additional redemption
procedures described below. You may change the instructions indicated on your
original Account Application, or may request additional redemption options, only
by transmitting written directions to
7
<PAGE>
the Transfer Agent. Requests to institute or change any of the additional
redemption procedures will require a signature guarantee. Redemption proceeds
will normally be mailed to the redeeming shareholder within one business day
after receipt of the redemption request in good order by the Fund's agent,
except where those shares have recently been purchased by personal check.
WRITTEN REQUESTS. To redeem shares in writing (whether or not represented by
certificates), send the following items to the Transfer Agent, Shareholder
Services, Inc., P.O. Box 5866, Denver, Colorado 80217-5866: (1) a written
request for redemption signed by all registered owners exactly as the account is
registered on the Transfer Agent's records, including fiduciary titles, if any,
and specifying the account number, the dollar amount or number of shares to be
redeemed and the name of the Fund; (2) a guarantee of all signatures on the
written request or on the share certificate or accompanying stock power, as
described below under "Signature Guarantee"; (3) any share certificates issued
for any of the shares to be redeemed (see "Certificated Shares" below); and (4)
any additional documents which may be required by the Transfer Agent for
redemption by corporations, partnerships or other organizations, executors,
administrators, trustees, custodians or guardians, or if the redemption is
requested by anyone other than the shareholder(s) of record. Transfers of shares
are subject to the same requirements. A signature guarantee is not required for
redemptions of $50,000 or less, requested by and payable to all shareholders of
record for the account, to be sent to the address of record for that account. To
avoid delay in redemption or transfer, shareholders having any questions about
these requirements should contact the Transfer Agent in writing or by calling
(800) 426-0107 before submitting a request. Redemption or transfer requests will
not be honored until all required documents in the proper form have been
received by the Transfer Agent.
TELEPHONE REDEMPTIONS. The Fund accepts telephone requests for redemption of
uncertificated shares for amounts up to $50,000 from shareholders who maintain
their account through the Distributor. (Telephone redemptions are not available
for shareholders who have elected in writing not to utilize this option.) The
proceeds of a telephone redemption will be sent to the shareholder at his
address as set forth in the Account Application or in a subsequent written
authorization with a signature guarantee. By completing an Account Application,
an investor agrees that the Fund shall not be liable for any loss incurred by
the investor by reason of the Fund accepting unauthorized telephone redemption
requests for his account if the Fund reasonably believes the request is genuine,
unless the investor has specifically elected in writing not to utilize the
telephone redemption service. Thus, shareholders risk possible losses in the
event of a telephone redemption not authorized by them. The Fund will employ
reasonable procedures to confirm that shareholders' telephone instructions are
genuine, and, if it does not, it may be liable for any losses due to
unauthorized or fraudulent instructions. The Fund will require a form of
personal identification prior to acting upon telephone instructions, will
provide written confirmations of such transactions and will record shareholders'
instructions.
A shareholder making a telephone redemption should call the Transfer Agent at
(800) 426-0107 and state (i) the name of the shareholder as it appears on the
Transfer Agent's records, (ii) his account number with the Fund, (iii) the
amount to be withdrawn and (iv) the name of the person requesting the
redemption. Usually the proceeds are sent to the investor on the next Fund
business day after the redemption is effected. If the redemption request is
received after the closing of the Exchange, the redemption is effected on the
following Fund business day at that day's net asset value and the proceeds are
usually sent to the investor on the second Fund business day following receipt
of the request. The Fund reserves the right to terminate or modify the telephone
redemption service at any time. During times of severe disruptions in the
securities markets, the volume of calls may make it difficult to redeem by
telephone, in which case a shareholder may wish to send a written request for
redemption as described under "Written Requests" above. Telephone communications
may be recorded by the Distributor or the Transfer Agent.
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CHECKWRITING PRIVILEGE. Shareholders who maintain their accounts through the
Distributor may withdraw money from their accounts by writing checks. Checks are
drawn on First National Bank of Boston.
To establish checkwriting privileges, complete the appropriate portion of the
Account Application, and request a special checkwriting application from the
Distributor by calling (800) 628-1237. Mail the completed applications to
Shareholder Services, Inc., P.O. Box 5866, Denver, CO 80217. A checkbook will
then be issued to you. The minimum amount of any check is $250. The checkwriting
privilege does not apply to certificated shares. There is no charge to
shareholders who elect these checkwriting privileges, the costs of which are
borne by the Fund as an expense of all shareholders.
EXPEDITED WIRE TRANSFER REDEMPTIONS. If a shareholder who maintains his
account through the Distributor has given authorization for expedited wire
redemptions, shares can be redeemed and the proceeds sent by wire transfer to a
single previously designated bank account. Requests received by the Fund prior
to the close of regular trading on the New York Stock Exchange will result in
shares being redeemed that day at the next determined net asset value and
normally the proceeds being sent to the designated bank account the following
business day. The bank must be a member of the Federal Reserve wire system.
Delivery of the proceeds of a wire redemption request may be delayed by the Fund
for up to 7 days if the Distributor deems it appropriate under then current
market conditions. Once authorization is on file, the Fund will honor requests
by any person by telephone at (800) 525-7041 or by written instructions. The
Fund cannot be responsible for the efficiency of the Federal Reserve wire system
or the shareholder's bank. The Fund does not currently charge for wire
transfers. The shareholder is responsible for any charges imposed by the
shareholder's bank. The minimum amount that may be wired is $2,500. The Fund
reserves the right to change this minimum or to terminate the wire redemption
privilege at any time. Shares purchased by check may not be redeemed by wire
transfer until such shares have been owned (i.e., paid for) for at least 15
days. Expedited wire transfer redemptions may be authorized by completing a form
available from the Distributor. Wire redemptions may not be used to redeem
shares in certificated form. To change the name of the single designated bank
account to receive wire redemption proceeds, it is necessary to send a written
request with signature(s) guaranteed to PIMCO Advisors Distribution Company, c/o
Shareholder Services, Inc., P.O. Box 5866, Denver, Colorado 80217-5866.
CERTIFICATED SHARES. To redeem shares for which certificates have been issued,
the certificates must be mailed to or deposited with the Fund, duly endorsed or
accompanied by a duly endorsed stock power and a written request for redemption.
Signatures must be guaranteed as described under "Signature Guarantee." Further
documentation may be requested from institutions or fiduciary accounts, such as
corporations, custodians (e.g., under the Uniform Gifts to Minors Act),
executors, administrators, trustees or guardians ("institutional account
owners"). The redemption request and stock power must be signed exactly as the
account is registered, including indication of any special capacity of the
registered owner.
AUTOMATIC WITHDRAWAL PLAN. An investor who owns or buys Fund shares having a
net asset value of $10,000 or more in an account maintained with the Distributor
may open a Withdrawal Plan and have a designated sum of money not less than $100
paid monthly (or quarterly) out of the investor's Fund account to the investor
or another person. Such a Plan may be established by completing the appropriate
section of the Supplemental Application available by calling (800) 628-1237.
Shares of the Fund are deposited in a Plan account and all distributions are
reinvested in additional shares of the Fund at net asset value. Shares in a Plan
account are then redeemed to make each withdrawal payment. Redemptions for the
purpose of withdrawals are ordinarily made on the last business day of the month
preceding payment at that day's closing net asset value and checks are mailed on
the first business day of the next month. The Distributor may accelerate the
redemption and check mailing date by one day to avoid weekend delays. Payment
will be made to any person the investor designates; however, if the
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shares are registered in the name of a trustee or other fiduciary, payment will
be made only to the fiduciary, except in the case of a profit-sharing or pension
plan where payment will be made to the designee. As withdrawal payments may
include a return of principal, they cannot be considered a guaranteed annuity or
actual yield of income to the investor. Continued withdrawals in excess of
income will reduce and possibly exhaust invested principal. The minimum
investment accepted from a shareholder while a Withdrawal Plan is in effect for
that shareholder is $1,000. An investor may not maintain a plan for the
accumulation of shares of the Fund and a Withdrawal Plan at the same time. The
cost of administering Automatic Withdrawal Plans for the benefit of those
shareholders participating in them is borne by the Fund as an expense of all
shareholders. The Fund or the Distributor may terminate or change the terms of
the Withdrawal Plan at any time.
Because a Withdrawal Plan may involve invasion of capital, investors should
consider carefully with their own financial advisers whether the Plan and the
specified amounts to be withdrawn are appropriate in their circumstances. The
Fund and the Distributor make no recommendations or representations in this
regard.
ALL REDEMPTIONS
If investors purchase shares with a check, the Fund may withhold redemption
proceeds until it can be reasonably assured that payment has been collected on
the check, which may take 15 or more days. To avoid such withholding, investors
should purchase shares by certified or official bank check or by wire transfer.
Dividends are paid through the day on which the shares are redeemed.
There is no charge by the Distributor with respect to redemptions; however, a
participating broker who processes a redemption for an investor may charge
customary commissions for its services. Dealers and other financial services
firms are responsible for transmitting their customers' redemption orders, and
neither the Fund nor the Distributor is responsible for such firms' delays in
order transmission. Requests for redemption received by the Distributor by the
close of regular trading on the New York Stock Exchange (normally 4:00 p.m.
Eastern time) on a regular business day, and requests for redemption received by
brokers or other firms prior to the close of regular trading on the Exchange on
a regular business day and received by the Distributor prior to the close of the
Distributor's business that day, will be effected at the net asset value
effective at the close of regular trading on the Exchange on that day. Requests
received by the Distributor after the close of regular trading on the Exchange
(or received by such time by brokers or other firms and received by the
Distributor after its close of business) will be confirmed at the net asset
value effective at the close of regular trading on the next business day.
SIGNATURE GUARANTEE
When a signature guarantee is called for, the shareholder should have
"Signature Guaranteed" stamped under his signature and guaranteed by any of the
following entities: U.S. banks, foreign banks having U.S. correspondent banks,
credit unions, savings associations, U.S. registered dealers and brokers,
municipal securities dealers and brokers, government securities dealers and
brokers, national securities exchanges, registered securities associations and
clearing agencies (each an "Eligible Guarantor Institution"). The Transfer Agent
reserves the right to reject any signature guarantee pursuant to its written
signature guarantee standards or procedures, which may be revised in the future
to permit it to reject signature guarantees from Eligible Guarantor Institutions
that do not, based on credit guidelines, satisfy such written standards or
procedures.
If the proceeds of the redemption (i) exceed $50,000, (ii) are to be paid to a
person other than the record owner (which may be the shareholder's broker),
(iii) are to be sent other than to the account record owner's address as listed
in the Transfer Agent's records, or (iv) are to be paid to a corporation,
partnership, trust or fiduciary (other than the shareholder's broker where the
broker is the record owner), the signature(s) on the redemption request and on
the certificates, if any, or stock power must be guaranteed as described
above.
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The Fund may change the signature guarantee requirements from time to time upon
notice to shareholders, which may be given by means of a new Prospectus or
prospectus supplement.
SMALL ACCOUNTS
The Trust reserves the right to redeem involuntarily any shares in a
shareholder's account in excess of an amount set from time to time by the
Trustees of the Trust and to redeem involuntarily all shares in a shareholder's
account if the number of shares in such account is less than a minimum amount
(not to exceed 1,000 shares) set from time to time by the Trustees. Shareholders
will be notified before any such redemptions are made and will have at least 30
days to purchase shares to bring their accounts up to the required minimum.
MANAGER OF THE FUND
PIMCO Advisors L.P. (the "Manager") is the investment manager of the Fund. The
Fund also has a sub-adviser, Columbus Circle Investors ("CCI"), which, under the
supervision of the Manager and the Trust's Trustees, directs the investment of
the Fund's assets. Reference in this Prospectus to "the manager" or "the Fund's
manager" are references to either or both of the Manager and CCI, as
appropriate. CCI is an affiliate of the Manager. In addition to overseeing the
sub-adviser, the Manager also provides executive and other personnel for
management of the Trust. Pursuant to the Trust's Agreement and Declaration of
Trust, the Trustees supervise the affairs of the Trust as conducted by the
Manager.
The Manager provides management and investment advisory services to other
mutual funds, investment accounts and pension plans. As of the date of this
Prospectus, the Manager and its affiliates managed approximately $87 billion in
assets.
The Manager is a Delaware limited partnership. The general partner of the
Manager, PIMCO Partners, G.P., has two partners: (i) an indirect wholly-owned
subsidiary of Pacific Mutual Life Insurance Company; and (ii) PIMCO Partners,
L.L.C. ("LLC"), a limited liability company owned and controlled by a group
consisting of William H. Gross, Dean S. Meiling, James F. Muzzy, William F.
Polich, III, Frank B. Rabinovitch, Brent R. Harris, John L. Hague, William S.
Thompson, Jr., William C. Powers and David H. Edington (collectively, the
"Managing Directors"). PIMCO Partners, G.P. has substantially delegated its
control of the Manager to an Equity Board and an Operating Board of the Manager.
The activities of the Manager are controlled by its Operating Board except that
certain non-routine or extraordinary actions may not be effected by the
Operating Board without the approval of the Manager's Equity Board. The
Operating Board has in turn delegated the authority to manage day-to-day
operations and policies to an Operating Committee. Because of the ability to
designate a majority of the Members of the Operating Board, Pacific Investment
Management Company and the Managing Directors could be said to control the
Manager, although the Managing Directors disclaim such authority.
CCI is the sub-adviser of the Fund. CCI also advises other mutual funds and
private accounts and is registered as an investment adviser with the SEC. CCI is
a general partnership with the Manager and a wholly-owned subsidiary of the
Manager as its only partners.
Under a Management Contract between the Trust and the Manager, the Fund pays
the Manager a monthly fee based on its average daily net asset value at the
following annual rates: 0.425% of the first $500 million of net assets; 0.400%
of the next $500 million of net assets; 0.375% of the next $500 million of net
assets; 0.350% of the next $500 million of net assets; and 0.325% of amounts in
excess of $2 billion. Under a Sub-Adviser Agreement between the Manager and CCI,
the Manager pays CCI a monthly fee based on the Fund's average daily net asset
value at the annual rate of 0.050% of net assets. For the fiscal year ended
September 30, 1995, the Fund paid a fee equal to 0.420% of its average daily net
asset value to the Manager for advisory services.
In addition to the fee paid to the Manager described above, the Fund pays all
expenses not assumed by the Manager. These expenses include, without limitation,
fees and expenses of Trustees who are not "interested persons" of the Manager,
the sub-adviser or the Fund, interest charges, taxes, expenses of issue or
redemption of shares, distribution fees pursuant to the Distribution Plan, fees
and expenses of registering and qualifying the
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Fund and its shares for distribution under federal and state laws and
regulations, charges of custodians, auditing and legal expenses, expenses of
determining net asset value of the Fund's shares, reports to shareholders,
expenses of meetings of shareholders, expenses of printing and mailing
prospectuses, proxy materials to existing shareholders, and its proportionate
share of insurance premiums and professional association dues or assessments.
DISTRIBUTOR AND DISTRIBUTION PLAN
PIMCO Advisors Distribution Company (the "Distributor") is the principal
underwriter of the Fund.
As compensation for the services provided and expenses borne by the
Distributor (including fees paid to participating brokers as compensation for
their distribution services), the Fund pays the Distributor a distribution fee
which is accrued daily and paid monthly at an annual rate not to exceed .175% of
the Fund's average daily net assets. The fee is paid pursuant to a Distribution
Plan adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The Distribution Plan is of the type known as a "reimbursement" plan. This
means that the Fund will make payments under the Plan only to the extent of
expenses incurred by the Distributor. The Distributor's expenses may include
printing of sales literature and prospectuses for non-shareholders, commissions
for personnel of participating brokers (up to 0.175% of average daily net assets
in their customers' accounts), compensation expenses for the Distributor's
personnel, advertising, overhead expenses allocable to the Fund and other
expenses of the Distributor and its predecessor. If in any year the
Distributor's expenses exceed the distribution fee paid by the Fund, the
Distributor can recover such excess only if the Distribution Plan continues to
be in effect in some later year when the Distributor's expenses for that year
are less than .175% of the Fund's average daily net assets.
From the Fund's inception to September 30, 1995, the expenses of the Fund's
principal underwriter exceeded the distribution fee by $73,000 which represented
.01% of the Fund's net assets at September 30, 1995.
The Distributor is a wholly-owned subsidiary of the Manager.
DIVIDENDS
The Fund declares daily dividends of all of the net investment income of the
Fund and expects to pay shareholders on the third Thursday of the month such
dividends as are declared through the date of payment. If all of an investor's
shares of the Fund are redeemed at any time during a month, all dividends
accrued to date for the Fund will be paid together with the redemption proceeds.
Shareholders begin earning dividends on the day that the Fund receives federal
funds as payment for the shares and will continue to earn dividends through the
day on which shares are redeemed. Dividends of the Fund are paid in additional
shares of the Fund, based on its net asset value on the payment date, by credit
to the shareholder's account with the participating broker. At the shareholder's
election, dividends may be paid in cash rather than in additional shares.
Investors whose shares are held in a broker "street name" account should consult
their broker for information about their broker's practice concerning the
crediting of Fund dividends to the investor's account with the broker.
TAXES
The Fund plans to distribute substantially all of its net investment income
and net realized short-term capital gains, if any, to its shareholders on a
current basis and substantially all of its net realized long-term capital gains,
if any, at least annually. So long as it does so and otherwise satisfies the
requirements for being taxed as a regulated investment company, the Fund itself
does not pay federal income tax on the amount distributed. Shareholders will
receive an annual statement detailing federal tax information about dividends
and distributions paid to shareholders during or with respect to the preceding
calendar year.
Dividends of net interest or other ordinary income of the Fund and
distributions of its short-term capital gains, if any, are taxable to
shareholders as ordinary income for federal income tax purposes and will not
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qualify for the dividends-received deduction. Distributions paid from long-term
capital gains, if any, are taxable to shareholders as long-term capital gains
regardless of how long the shareholders have held their shares and will not
qualify for the dividends-received deduction.
To avoid imposition of a non-deductible federal excise tax, the Fund will
distribute prior to calendar year-end substantially all of its ordinary income
on a calendar year basis, and substantially all of the capital gain net income
the Fund realizes in the one-year period ending October 31, that has not
previously been distributed.
Distributions will be taxable as described above whether received in cash or
in additional shares. A dividend paid to a shareholder by the Fund in January of
a year generally is deemed to have been paid by the Fund on December 31 of the
preceding year, if the dividend was declared and payable to shareholders of
record on a date in October, November or December of that preceding year.
The Fund does not expect distributions to be exempt generally from state and
local taxes, although in some states dividends attributable to interest paid on
U.S. Government Securities held by the Fund may be exempt from state and local
taxes. Shareholders should consult with their tax advisers about the status of
such dividends in their own states and localities.
The foregoing is only a general summary of the federal income tax consequences
of investing in the Fund. Shareholders should consult with their own tax
advisers to determine the specific tax consequences of investments in the Fund
in light of their particular situations.
DESCRIPTION OF THE TRUST
The Trust was organized on April 27, 1984 as a Massachusetts business trust
and is a diversified open-end management investment company. The Trust has an
unlimited number of authorized shares of beneficial interest which may be
divided into an unlimited number of series of such shares, and which presently
consist of the one series of shares constituting the Fund. The Trustees may,
without shareholder approval, establish one or more additional series, or, also
without shareholder approval, terminate any series and distribute such series'
assets to its shareholders. These shares are entitled to one vote per share
(with proportional voting for fractional shares) on such matters as to which
shareholders are entitled to vote. The shares of each series vote individually
by series on all matters except those matters as to which the Investment Company
Act of 1940 requires shares of the series to vote together as a single class.
When the Trustees determine that a matter affects only the interests of one or
more series, only shareholders of the affected series shall be entitled to vote
on that matter. There will not normally be annual shareholders' meetings.
Shareholders may remove Trustees from office by votes cast at a meeting of
shareholders or by written consent. Shares are freely transferable.
Shareholders could, under certain circumstances, be held personally liable for
the obligations of the Trust. However, the risk of a shareholder incurring
financial loss on account of that liability is considered remote.
Shareholders may direct any questions they may have about the Fund to their
broker or to PIMCO Advisors Distribution Company, 2187 Atlantic Street,
Stamford, Connecticut 06902 (telephone (800) 628-1237).
CUSTODIAN
The Bank of New York, 110 Washington Street, New York, New York 10286, is the
Fund's custodian.
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CASH ACCUMULATION TRUST
2187 Atlantic Street
Stamford, CT 06902
MANAGER
PIMCO Advisors L.P.
800 Newport Center Drive, Suite 100
Newport Beach, CA 92660
SUB-ADVISER
Columbus Circle Investors
One Station Place
Stamford, CT 06902
DISTRIBUTOR
PIMCO Advisors Distribution Company
2187 Atlantic Street
Stamford, CT 06902
SHAREHOLDER SERVICING AND TRANSFER AGENT
Shareholder Services, Inc.
P.O. Box 5866
Denver, CO 80217
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
1301 Avenue of the Americas
New York, NY 10019
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110
- -------------------------------------------
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PROSPECTUS
FEBRUARY 1, 1996
- -------------------------------------------
- -------------------------------------------
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<PAGE>
CASH ACCUMULATION TRUST
NATIONAL MONEY MARKET FUND
STATEMENT OF ADDITIONAL INFORMATION
February 1, 1996
------------------------------------------------
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the Prospectus dated February 1,
1996 of the National Money Market Fund as supplemented from time to time, and
should be read in conjunction therewith. A copy of the Prospectus may be
obtained from PIMCO Advisors Distribution Company, 2187 Atlantic Street,
Stamford, Connecticut 06902.
<PAGE>
TABLE OF CONTENTS
Page
----
Investment Objectives, Policies and Restrictions . . . . . . . . 3
Credit and Market Risk . . . . . . . . . . . . . . . . . . . . 7
Portfolio Transactions and Brokerage . . . . . . . . . . . . . . 8
Management of the Fund . . . . . . . . . . . . . . . . . . . . . 9
Investment Advisory and Other Services . . . . . . . . . . . . . 13
Organization and Capitalization of the Trust . . . . . . . . . . 19
Net Income, Yields and Valuation . . . . . . . . . . . . . . . . 21
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Description of Investments . . . . . . . . . . . . . . . . . . . 24
Appendix A-1 . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Financial Statements . . . . . . . . . . . . . . . . . . . . . . F-1
2
<PAGE>
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The investment objectives and policies of the National Money Market
Fund (the "Fund") of Cash Accumulation Trust (the "Trust") are summarized on the
front page of the Prospectus and in the text of the Prospectus following the
captions "Investment Objective and Policies" and "General Policies." For a
description of the investments which the Fund may make, see "Description of
Investments." For a description of the relevant rating categories established
by five major rating agencies, see Appendix A-1.
PIMCO Advisors L.P., the manager of the Fund (the "Manager"), and
Columbus Circle Investors, the sub-adviser of the Fund ("CCI" or the "Sub-
adviser"), will monitor the Fund's investments in light of general economic and
market conditions and the creditworthiness of the issuers of the Fund's
portfolio securities, including the creditworthiness of issuers of master demand
notes insofar as it relates to the ability of the issuer to make payments on
demand. The Fund does not expect to invest more than 5% of its total assets in
master demand notes in the foreseeable future. As described in the Prospectus,
after purchase by the Fund, a security may cease to be rated, its rating may be
reduced below the minimum required for purchase by the Fund, or the security may
otherwise cease to be eligible for purchase by the Fund. No such event will
require the sale of such security by the Fund. However, the Manager, the Sub-
adviser or the Trust's Trustees will consider any such event in determining
whether the Fund should continue to hold the security.
The Fund, consistent with its investment objective, attempts to
maximize yields by engaging in portfolio trading and by buying and selling
portfolio investments in anticipation of or in response to changing economic and
money market conditions and trends. The Fund also invests to take advantage of
what are believed to be temporary disparities in the yields of the different
segments of the high-grade money market or among particular instruments within
the same segment of the market. These policies may result in frequent changes
in the Fund's portfolio. See "Portfolio Transactions and Brokerage."
As noted in the Prospectus, the Fund may invest in foreign securities
which may be subject to risks of foreign political, economic and legal
conditions and developments. Such conditions or developments might include
favorable or unfavorable changes in currency rates, exchange control regulations
(including currency blockage), the expropriation or nationalization of assets or
deposits and the imposition of withholding taxes on dividend or interest
payments and possible difficulty in obtaining and enforcing judgments against
foreign entities. There may also be less publicly available information about a
foreign company than about a domestic company and foreign companies may not be
subject to accounting, auditing and financial reporting standards and
requirements comparable to those of U.S. companies. In addition, securities of
some foreign companies are less liquid and more volatile than securities of
comparable U.S. companies, and foreign brokerage commissions and other
transaction costs generally are higher than in the United States.
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REPURCHASE AGREEMENTS
As is disclosed in the text of the Prospectus following the caption
"General Policies - Repurchase Agreements," there is a risk that in a repurchase
agreement the seller may fail to repurchase the underlying security. In such
event, the Fund would attempt to dispose of the underlying security in the
market or would hold the underlying security until maturity. However, the Fund
may be subject to various delays and risks of loss in attempting to dispose of
the underlying security, including (a) possible declines in the value of the
underlying security during the period while the Fund seeks to enforce its rights
thereto, (b) possible reduced levels of income and lack of access to income
during this period and (c) expenses involved in the enforcement of the Fund's
rights.
FIRM COMMITMENTS
As described in the text of the Prospectus following the caption
"Investment Objective and Policies," the Fund may enter into firm commitment
agreements with banks or broker-dealers for the purchase of securities at an
agreed-upon price on a specified future date. Such agreements might be entered
into, for example, when the Fund anticipates a decline in the yield of
securities of a given issuer and is able to obtain a more advantageous yield by
committing currently to purchase securities to be issued later. Entry into firm
commitment agreements with broker-dealers requires the creation and maintenance
of a segregated account. The underlying securities subject to a firm commitment
agreement are subject to fluctuation in market value and therefore to the extent
that the Fund remains fully invested at the same time that it has entered into
firm commitment agreements there will be a greater possibility that the net
asset value of the Fund's shares will vary from $1.00.
Pending delivery of securities purchased under firm commitment
agreements, the amount of the purchase price will be held in liquid assets such
as cash or high-quality debt obligations. Such obligations will be maintained
in a separate account with the Fund's custodian in an amount equal on a daily
basis to the amount of the Fund's firm commitments. When the time comes to pay
for securities subject to firm commitment agreements, the Fund will meet its
obligations from then-available cash flow or the sale of securities.
NOTE ON SHAREHOLDER APPROVAL
The Prospectus describes the investment objective of the Fund which is
fundamental and may be changed only with the approval of shareholders. The
Prospectus also identifies some of the policies of the Fund which are
fundamental and may be changed only with the approval of the shareholders.
Unless otherwise indicated, the investment policies of the Fund may be changed
without shareholder approval. Approval by the shareholders of the Fund requires
approval by the holders of a majority of the outstanding shares of the Fund. As
used in this Statement of Additional Information, the term "majority of the
outstanding shares" of the Fund means the lesser of (i) 67% of the shares of the
Fund represented at a
4
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meeting at which more than 50% of the outstanding shares of the Fund are
represented or (ii) more than 50% of the outstanding shares of the Fund.
INVESTMENT RESTRICTIONS
The investment restrictions set forth below are fundamental policies
of the Fund and, accordingly, without the approval of the holders of a majority
of the outstanding shares of the Fund, the Fund will not:
(1) Purchase any security if, as a result, more than 5% of its total
assets (based on current value) would then be invested in the securities of a
single issuer, except that the Fund may invest up to 15% of its total net assets
(based on current value) in the obligations of any one bank. This limitation
does not apply to U.S. Government Securities (as defined in the Prospectus).
(2) Purchase voting securities or make investments for the purpose of
exercising control or management.
(3) Invest more than 25% of its total assets in any one industry.
This restriction does not apply to U.S. Government Securities or to bank
obligations. For purposes of this restriction, telephone, gas and electric
public utilities are each regarded as separate industries and finance companies
whose financing activities are related primarily to the activities of their
parent companies are classified in the industry of their parents.
(4) Participate on a joint or joint and several basis in any trading
account in securities. (The "bunching" of orders for the purchase or sale of
portfolio securities with other accounts managed by the Manager or the Sub-
adviser to reduce acquisition costs, to average prices among them, or to
facilitate such transactions, is not considered participating in a trading
account in securities.)
(5) Make short sales of securities, maintain a short position or
purchase securities on margin, except that the Fund may obtain short-term
credits as necessary for the clearance of security transactions.
(6) Borrow money except for temporary or emergency purposes and then
only in an amount not exceeding 10% of its total assets taken at cost; provided,
however, that the Fund may loan its securities as described in the Prospectus
under the caption "General Policies - Loans of Portfolio Securities." However,
the Fund will not borrow if the value of the Fund's assets would be less than
300% of its borrowing obligations. In addition, when borrowings (other than
permissible securities loans) exceed 5% of its total assets, the Fund will not
purchase additional portfolio securities. Permissible borrowings will be
entered into solely for the purpose of facilitating the orderly sale of
portfolio securities to accommodate redemption requests.
5
<PAGE>
(7) Make loans, except that the Fund may purchase or hold debt
instruments in accordance with its investment objective and policies. This
restriction does not apply to repurchase agreements or loans of portfolio
securities.
(8) Pledge, mortgage or hypothecate more than 10% of its net assets
taken at cost at the time of the incurrence of such borrowings.
(9) Act as an underwriter of securities of other issuers except that,
in the disposition of portfolio securities, it may be deemed to be an
underwriter under the federal securities laws.
(10) Invest in securities of other investment companies, except by
purchases in the open market involving only customary brokers' commissions, or
in connection with a merger, consolidation, reorganization or similar
transactions. For the purposes of this restriction, foreign banks or their
agents or subsidiaries are not considered investment companies. (Under the
Investment Company Act of 1940 (the "Investment Company Act") no registered
investment company may (a) invest more than 10% of its total assets (taken at
current value) in securities of other investment companies, (b) own securities
of any one investment company having a value in excess of 5% of its total assets
(taken at current value), or (c) own more than 3% of the outstanding voting
stock of any one investment company.)
(11) Purchase or retain securities of an issuer if, to the knowledge
of the Trust, any officers, trustees and directors of the Trust or any
investment adviser of the Trust, who individually own beneficially more than 1/2
of 1% of the shares or securities of that issuer, own in the aggregate more than
5% of such shares or securities.
(12) Purchase securities of any company which has (with predecessor
businesses and entities) a record of less than three years' continuous operation
or purchase securities whose source of repayment is based, directly or
indirectly, on the credit of such a company if as a result more than 5% of the
total assets of the Fund (taken at current value) would be invested in such
securities; provided, however, that the Fund may purchase U.S. Government
Securities without regard to this limitation.
(13) Buy or sell oil, gas or other mineral leases, rights or royalty
contracts, commodities or commodity contracts or real estate. This restriction
does not prevent the Fund from purchasing securities of companies investing in
real estate or of companies which are not principally engaged in the business of
buying or selling such leases, rights or contracts nor does it prevent the Fund
from purchasing securities secured by real estate or interests therein.
(14) Purchase any illiquid security, including any securities whose
disposition is restricted under federal securities laws and securities that are
not readily marketable, if, as a result, more than 10% of the Fund's total
assets (based on current value) would then be
6
<PAGE>
invested in such securities. The staff of the Securities and Exchange
Commission is presently of the view that repurchase agreements maturing in more
than seven days are subject to this restriction. Until that position is
revised, modified or rescinded, the Fund will conduct its operations in a manner
consistent with this view.
(15) Write or purchase puts, calls, warrants, straddles, spreads or
combinations thereof except that, as described above under "Firm Commitment
Agreements," the Fund may enter into firm commitment agreements with respect to
securities otherwise eligible for purchase by the Fund.
Restriction (1) applies to securities subject to repurchase agreements
but not to the repurchase agreements themselves. Although Restriction (1)
permits the Fund to invest up to 15% of its total assets in the obligations of
any one bank, federal regulations applicable to the Fund currently prohibit the
Fund (with limited exceptions) from making any investment that would result in
more than 5% of the Fund's assets being invested in obligations of a single
issuer.
The percentages and percentage limitations set forth above or in the
Prospectus will apply at the time of the purchase of a security and shall not be
considered violated unless an excess or deficiency occurs or exists immediately
after and as a result of a purchase of such security.
CREDIT AND MARKET RISK
The portfolio securities of the Fund are subject to credit risk and
market risk. Credit risk relates to the ability of the issuer of an obligation
to make timely payments of principal and interest. In a repurchase agreement
transaction, credit risk relates to the performance by the other party of its
obligation to repurchase the underlying security from the Fund. Obligations of
issuers are subject to the provisions of bankruptcy, insolvency and other laws,
such as the Federal Bankruptcy Reform Act of 1978, affecting the rights and
remedies of creditors. As noted in the Prospectus, the Fund invests only in
instruments which are rated in the top two rating categories by at least two
major rating agencies (or by one such agency, if only one agency has issued a
rating), or in the case of unrated instruments, which are of comparable quality
as determined by the Fund's manager.
Market risk relates to changes in the market value of a security as a
result of variations in the level of prevailing interest rates and yield
relationships among particular segments of the high-grade money market or the
U.S. Government Securities market. Generally, prices tend to fluctuate less for
higher quality issues than for lower quality issues, and, for any given change
in the level of interest rates, prices for shorter maturity issues tend to
fluctuate less than for longer maturity issues. By restricting the maturity of
its investments and purchasing only high-quality instruments, the Fund seeks to
limit changes in
7
<PAGE>
the value of its portfolio securities resulting from market factors and thereby
to maintain a constant net asset value of $1 per share.
The value of the securities in the Fund's portfolio can be expected to
vary inversely to the changes in prevailing interest rates. Thus, if interest
rates increase after a security is purchased, that security, if sold, might be
sold at less than cost. Conversely, if interest rates decline after purchase,
the security, if sold, might be sold at a profit. In either instance, if the
security were held to maturity, no gain or loss would normally be realized as a
result of these fluctuations. Substantial redemptions of shares of the Fund
could require the sale of portfolio investments in the Fund at a time when a
sale might not be desirable.
PORTFOLIO TRANSACTIONS AND BROKERAGE
In general, the Fund will purchase securities with the expectation of
holding them to maturity. However, the Fund may engage in short-term trading to
attempt to take advantage of short-term market variations. The Fund may also
sell securities prior to maturity to meet redemptions or as a result of a
revised management evaluation of the issuer. The Fund will have a high
portfolio turnover due to the short maturities of the securities held in its
portfolio.
In placing orders for the purchase and sale of portfolio securities
for the Fund, the Sub-adviser will always seek the best price and execution. It
is expected that portfolio transactions will generally be with issuers or
dealers in money market instruments acting as principal. Purchases from
underwriters will include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers will include the spread between the bid
and asked price. Accordingly, the Fund is not expected to pay significant
brokerage commissions.
Some of the Fund's portfolio transactions are placed with dealers who
provide the Manager or the Sub-adviser with supplementary investment and
statistical information or furnish market quotations to the Fund or other
advisory accounts or investment companies advised by the Manager or the Sub-
adviser. The business would not be so placed if the Fund would not thereby
obtain the best price and execution. Although it is not possible to assign an
exact dollar value to these services, they may, to the extent used, tend to
reduce the expenses of the Manager or the Sub-adviser. The services may also be
used by the Manager or the Sub-adviser in connection with its other advisory
accounts and in some cases may not be used with respect to the Fund.
Certain officers of the Manager or the Sub-adviser have responsibility
for portfolio management of certain other investment companies and investment
accounts which may invest in securities in which the Fund also invests. When
one or more of these other
8
<PAGE>
investment companies or accounts and the Fund desire to purchase or sell the
same security at or about the same time, purchase and sale orders will
ordinarily be placed and confirmed separately but may be combined to the extent
practicable on a pro rata basis in proportion to the amounts desired to be
purchased or sold for each. It is believed that the ability of the Fund to
participate in larger volume transactions will in some cases produce better
executions for the Fund. However, in some cases, these procedures could have a
detrimental effect on the price and amount of a security available to the Fund
or the price at which a security may be sold.
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
E. PHILIP CANNON. Trustee of the Trust. Trustee of PIMCO Advisors Funds.
Headmaster, St. John's School, Houston, Texas. Formerly General Partner,
J.B. Poindexter & Co., Houston, Texas (private investment partnership) and
Partner, Iberia Petroleum Company (oil and gas production).
DONALD P. CARTER. Trustee of the Trust. Trustee of PIMCO Advisors Funds.
Retired Chairman of Cunningham & Walsh, Inc., Chicago (advertising agency).
GARY A. CHILDRESS. Trustee of the Trust. Trustee of PIMCO Advisors Funds.
Chairman and Director, Bellefonte Lime Company, Inc. Director, Woodings &
Verona Toolworks Inc.
GARY L. LIGHT. Trustee of the Trust. Trustee of PIMCO Advisors Funds.
President, E.V.A. Investors (private investments).
JOEL SEGALL. Trustee of the Trust. Trustee of PIMCO Advisors Funds.
Former President, Bernard M. Baruch College, The City University of New
York. Formerly, Deputy Under Secretary for International Affairs, United
States Department of Labor and Professor of Finance, University of Chicago.
Board of Managers, Coffee, Sugar and Cocoa Exchange.
W. BRYANT STOOKS. Trustee of the Trust. Trustee of PIMCO Advisors Funds.
Retired President, Director and CEO, Archirodon Group Inc. Former Partner,
Arthur Andersen & Co.
GERALD M. THORNE. Trustee of the Trust. Trustee of PIMCO Advisors Funds.
Retired President and Director, Firstar National Bank of Milwaukee.
Formerly President and Director, Firstar Corporation, Chairman, Firstar
National Bank of Sheboygan and Director of other Firstar Banks.
* ROBERT A. PRINDIVILLE. Trustee and President of the Trust. Trustee and
President
9
<PAGE>
of PIMCO Advisors Funds . Executive Vice President, PIMCO Advisors L.P.
Director and Chairman, PIMCO Advisors Distribution Company ("PADCO").
Formerly, President, Thomson Advisory Group L.P., President and Director,
Thomson Advisory Group Inc., Director and Chairman, Thomson Investor
Services Inc., Director and Executive Vice President, Thomson McKinnon
Securities Inc.
* WILLIAM D. CVENGROS. Trustee of the Trust. Trustee of PIMCO Advisors
Funds. President and CEO of PIMCO Advisors L.P. and Member of the Equity
and Operating Boards (and Chairman of its Operating Committee) of PIMCO
Advisors L.P. Director, PADCO. Trustee and Chairman, PIMCO Advisors
Institutional Funds. Director, Furon Corporation. Formerly, Vice
Chairman, Chief Investment Officer and Director, Pacific Mutual Life
Insurance Company; Director and Chairman, Pacific Financial Asset
Management Company; Director, Mutual Service Corporation; Director, Pacific
Equities Network; Director, PFAMCo UK Limited; Non-Executive Director,
Blairlogie Capital Management Limited; Trustee and Vice President, PFAMCo
Funds; Chairman and Director, Parametric Portfolio Associates, Inc.;
President, Chairman, Chief Executive Officer, Director and Trustee of
various realty group trusts, and PMRealty Advisors, Inc.; President, Chief
Executive Officer and Director, NFJ Investment Group, Inc.; Vice President
and Trustee, Pacific Select Fund; and Director, Cadence Capital Management
Corporation.
NEWTON B. SCHOTT, JR. Vice President and Clerk of the Trust and of PIMCO
Advisors Funds. Senior Vice President and Secretary of PIMCO Advisors
L.P.; Director, Senior Vice President and Secretary of PADCO. Formerly,
Executive Vice President, Secretary and General Counsel, Thomson Advisory
Group L.P. and Thomson Advisory Group Inc., Executive Vice President and
Secretary, Thomson Investor Services Inc., Director, Executive Vice
President, Secretary and General Counsel, Thomson McKinnon Inc.
JOHN O. LEASURE. Vice President of the Trust and of PIMCO Advisors Funds.
Senior Vice President of PIMCO Advisors L.P. Director, President and Chief
Executive Officer of PADCO. Formerly, Executive Vice President of Thomson
Advisory Group L.P. and President and Director of Thomson Investor Services
Inc.
R. WESLEY BURNS. Vice President of the Trust and of PIMCO Advisors Funds.
President, PIMCO Funds. Vice President, Pacific Investment Management
Company.
10
<PAGE>
JOHN P. HARDAWAY. Treasurer of the Trust and of PIMCO Advisors Funds.
Treasurer, PIMCO Funds. Vice President and Manager of Fund Operations, Pacific
Investment Management Company.
TERESA A. WAGNER. Vice President and Assistant Clerk of the Trust and of
PIMCO Advisors Funds. Vice President, PIMCO Funds. Vice President, Pacific
Investment Management Company.
- ---------------
* Trustees who are "interested persons" (as defined in the Act) of the
Trust or the Manager.
The mailing address of each of the officers and Trustees is c/o Cash
Accumulation Trust, 2187 Atlantic Street, Stamford, Connecticut 06902.
Except as stated above, the principal occupations of the officers and
Trustees for the last five years have been with the employers as shown above,
although in some cases they have held different positions with such employers.
PIMCO Advisors L.P. serves as manager and PIMCO Advisors Distribution Company
(the "Distributor") serves as principal underwriter for PIMCO Advisors Funds.
The Trust's Agreement and Declaration of Trust provides that the Trust
will indemnify its Trustees and officers against liabilities and expenses
incurred in connection with litigation in which they may be involved because of
their offices with the Trust, except if it is determined in the manner specified
in the Agreement and Declaration of Trust that they have not acted in good faith
in the reasonable belief that their actions were in the best interests of the
Trust or that such indemnification would relieve any officer or Trustee of any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his or her duties. The Trust,
at its expense, will provide liability insurance for the benefit of its Trustees
and officers.
The Trust does not pay any remuneration to Trustees who are interested
persons of the Trust or the Manager. The Trust and PIMCO Advisors Funds ("PAF")
have identical Boards of Trustees which generally hold meetings on the same
dates. During 1995, the Trustees of the Trust and PAF adopted a unified fee
plan, pursuant to which the common disinterested Trustees of the Trust and PAF
receive combined fees for their services on behalf of both the Trust and PAF.
The plan went into effect on July 27, 1995.
For their services on behalf of the Trust and PAF, disinterested
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<PAGE>
Trustees receive an annual retainer of $35,000 and a fee of $3,000 for each
meeting attended. The Trustee who serves as chairman of the Contract Committees
for CAT and PAF receives a combined annual fee of $6,000. The Chairman of the
Audit Committees for CAT and PAF receives a combined annual fee of $2,000 and
each member of such Audit Committees receives a combined annual fee of $1,000.
Under the plan, Trustees fees and expenses are allocated between the Trust and
PAF, and among their constituent fund(s), based on relative net assets.
Fees paid to the disinterested Trustees for their services on behalf of
the Trust during the fiscal year ended September 30, 1995 (including the Trust's
allocable portion of fees paid under the unified fee plan) aggregated $88,060.
The following table sets forth information concerning fees paid (including the
Trust's allocable portion of fees paid under the unified fee plan) and
retirement benefits accrued during the fiscal year ended September 30, 1995 to
persons who served as disinterested Trustees of the Trust and PAF during such
year.
COMPENSATION TABLE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Pension or
Aggregate Retirement Estimated Annual Total Compensation
Name of Compensation Benefits Accrued Benefits Upon from Trust and
Trustee from Trust(2) as Part of Fund Retirement(3) Fund Complex Paid to
Expenses(3) Trustees(4)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
E. Philip Cannon(1) $ 11,750 $ 8,260 $ 12,000 $ 36,400
- ----------------------------------------------------------------------------------------------------------------------------------
Gerald M. Thorne(1) 11,750 8,260 12,000 36,400
- ----------------------------------------------------------------------------------------------------------------------------------
Donald P. Carter 12,150 8,260 12,000 37,400
- ----------------------------------------------------------------------------------------------------------------------------------
Gary A. Childress 11,750 8,260 12,000 36,400
- ----------------------------------------------------------------------------------------------------------------------------------
Gary L. Light 12,550 8,260 12,000 38,650
- ----------------------------------------------------------------------------------------------------------------------------------
Joel Segall 14,550 8,260 12,000 43,650
- ----------------------------------------------------------------------------------------------------------------------------------
W. Bryant Stooks 12,150 8,260 12,000 37,400
- ----------------------------------------------------------------------------------------------------------------------------------
Emmet Cashin, Jr.(5) 1,410 0 0 23,750(5)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All compensation earned by Messrs. Cannon and Thorne for the fiscal
year ended September 30, 1995 was deferred at their election.
(2) Through September 30, 1995, the following amounts of deferred
compensation had been accrued for the following persons (including amounts
accrued in prior years) for their services on behalf of the Trust and PAF:
E. Philip Cannon - $58,950; Gerald M. Thorne - $74,350;
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<PAGE>
Donald P. Carter - $82,150; Gary L. Light - $70,159; Joel Segall -
$37,497; Emmet Cashin, Jr. - $91,430. A portion of the deferred
compensation listed for Messrs. Light and Segall accrued pursuant to
1987 Deferred Fee Agreements with the Trust and PAF which were terminated
effective December 14, 1995. These benefits will be distributed to
Messrs. Light and Segall during 1996.
(3) The amounts listed in columns (3) and (4) relate to pension or
retirement benefits earned by the Trustees for their services on behalf of
PAF for the fiscal year ended September 30, 1995 pursuant to a Trustees'
Pension Plan for PAF (the "Pension Plan"). PAF's disinterested Trustees
voted to terminate the Pension Plan as of September 28, 1995 and to receive
benefits that had accrued thereunder in lump-sum payments in January of
1996. Therefore, it is currently expected that no pension or retirement
benefits will accrue for the disinterested Trustees of the Trust and PAF in
subsequent fiscal periods. Accordingly, columns (3) and (4) of the Trust's
Compensation Tables relating to subsequent fiscal periods are expected to
list $0 for each Trustee.
(4) Includes total compensation paid to the Trustees for their services
on behalf of PAF.
(5) Emmet Cashin, Jr. retired from the boards of the Trust and PAF
effective September 30, 1994 and received fees for services rendered as a
Trustee Emeritus of the Trust and PAF during the fiscal year ended
September 30, 1995. His total compensation from the Trust and PAF (listed
in column (5) above) includes retirement benefits which had accrued in
prior years under the Pension Plan for his services as a Trustee of PAF.
As of January 12, 1996, the Trust believes that the officers and
Trustees as a group own less than 1% of the outstanding shares of the Fund.
Other than Prudential Securities, Inc. which owned of record 94.98% of the
Fund's shares, the Trust believes that no person as of January 12, 1996 owned
of record or beneficially 5% or more of the shares of the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
MANAGEMENT CONTRACT
As is disclosed in the text of the Prospectus under the caption
"Manager of the Fund," the Manager has agreed, pursuant to a Management
Contract, to furnish continuously an investment program for the Fund and to make
investment decisions and place all orders for the purchase and sale of portfolio
securities on behalf of the Fund; provided, however that, so long as a sub-
adviser serves as the sub-adviser of the Fund, the Manager's obligation under
the Management Contract is, subject always to the control of the Trustees, to
determine and review with the sub-adviser the investment policies of the Fund.
Subject to the control of the Trustees, the Manager or the sub-adviser also
manages, supervises and conducts the other affairs and business of the Trust and
of the Fund, furnishes office space and equipment, provides certain clerical
services (excluding determination of the net asset value of the Fund, trust
accounting services supplied by Oppenheimer Management Corporation and
shareholder accounting services) and pays all salaries, fees and expenses of
officers and Trustees of the Trust who are affiliated with the Manager. As
indicated under "Portfolio Transactions and Brokerage," the Fund's portfolio
transactions may be placed with broker-dealers which furnish to the Manager at
no cost certain research, statistical and quotation services of value to it or
its affiliates in advising the Fund or other clients.
The Manager's compensation with respect to the Fund under the
Management Contract described in the Prospectus under the heading "Manager of
the Fund" is subject to reduction to the extent that in any year the expenses of
the Fund exceed the limits on investment company expenses imposed by any statute
or regulatory authority of any jurisdiction in which shares of the Fund are
qualified for offer and sale. The term "expenses" is defined in the statutes or
regulations of such jurisdictions, and, generally speaking, excludes brokerage
commissions, taxes, interest, distribution-related expenses and extraordinary
expenses. Generally, this means that the distribution fees
13
<PAGE>
payable to the Distributor under the Distribution Agreement would be excluded
from expenses for the purposes of statutory or regulatory expense limitations,
although such fees are expenses for the purposes of determining the net income
and yield of the Fund. The most restrictive of such limitations as of the date
of this Statement of Additional Information is believed to be 2 1/2% of the
first $30 million of average annual net assets, 2% of the next $70 million and 1
1/2% of any excess over $100 million.
The Fund pays the Manager a monthly fee based on the level of the
Fund's average daily net asset value as follows:
Annual Average
Percentage Net Asset Value
Rate Level
---------- ---------------
.425% the first $500 million
.400% the next $500 million
.375% the next $500 million
.350% the next $500 million
.325% amounts in excess of $2 billion
For the fiscal years ended September 30, 1993, 1994 and 1995, the Fund paid
the Manager $4,984,248, $3,155,585 and $2,915,606, respectively, for its
services under the Management Contract.
The Management Contract provides that it will continue in force for one
year from its date of execution, and from year to year thereafter, but only so
long as its continuance is approved at least annually by (i) vote, cast in
person at a meeting called for that purpose, of a majority of those Trustees who
are not "interested persons" of the Manager or the Fund, and by (ii) the
majority vote of either the full Board of Trustees or the vote of a majority of
the outstanding shares of the Fund. The Management Contract automatically
terminates on assignment, and is terminable by either the Fund or the Manager on
not more than 60 days' notice to the other party. If, at any time that the
Management Contract is submitted for approval by the shareholders of the Fund,
the shareholders of the Fund should fail to approve the Management Contract, the
Manager would continue to serve as manager and adviser with respect to the Fund
pending consideration by the Trustees of such further action as they may deem to
be in the best interests of the shareholders of the Fund.
The Management Contract provides that the Manager shall not be subject to
any liability in connection with the performance of its services thereunder in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties.
14
<PAGE>
As of the date of this Statement of Additional Information, the Fund also
has a sub-adviser, Columbus Circle Investors ("CCI") responsible for portfolio
investment decisions for the Fund. CCI is an affiliate of the Manager and
serves the Fund pursuant to a Sub-Adviser Agreement between the Manager and CCI.
Under the Sub-Adviser Agreement, the Manager pays CCI a monthly fee at the
annual rate of 0.05% of the Fund's average daily net assets for its services as
the Fund's sub-adviser.
Under the Sub-Adviser Agreement, subject always to the control of the
Trustees of the Trust, the Sub-adviser's obligation is to furnish continuously
an investment program for the Fund, to make investment decisions on behalf of
the Fund and to place all orders for the purchase and sale of portfolio
securities and all other investments for the Fund. In performing its duties
under the Sub-Adviser Agreement, CCI is subject to the control of the Trustees,
the policies determined by the Trustees and the Manager, the provisions of the
Trust's Declaration of Trust, its by-laws and the relevant investment
objectives, policies and restrictions stated in the Prospectus.
The Sub-Adviser Agreement continues in force with respect to the Fund for
two years from the date thereof, and from year to year thereafter, but only so
long as its continuance is approved at least annually by (i) vote, cast in
person at a meeting called for that purpose, of a majority of those Trustees who
are not "interested persons" of the Manager, CCI or the Trust, and by (ii) the
majority vote of either the full Board of Trustees or the vote of the majority
of the outstanding shares of the Fund. The Sub-Adviser Agreement automatically
terminates on assignment. The Sub-Adviser Agreement is terminable upon notice
by the Trust at any time, may be terminated by the Manager on not less than 60
days' notice to CCI and may be terminated by CCI on not less than 180 days'
notice to the Manager.
The Fund will pay its management fee, taxes, brokerage commissions,
distribution fees pursuant to the Distribution Plan, and fees and expenses of
the registration or qualification of its shares under federal and state
securities laws, and of the Fund's custodian and transfer agent, as well as the
Trust's general expenses, which include the charges of independent auditors and
legal counsel, all expenses of shareholders' and Trustees' meetings, of
preparing and typesetting prospectuses, of printing and mailing prospectuses to
existing shareholders and the compensation of Trustees who are not directors,
officers or employees of the Manager or its affiliates, other than a registered
investment company.
The Fund is responsible for such nonrecurring expenses as may arise,
including litigation in which the Fund may be a party, and other expenses as
determined by the Trustees. The Fund may have an obligation to indemnify its
officers and Trustees with respect to such litigation.
The Manager is a Delaware limited partnership. The general partner of the
Manager, PIMCO Partners, G.P., has two partners: (i) an indirect wholly-owned
15
<PAGE>
subsidiary of Pacific Mutual Life Insurance Company; and (ii) PIMCO Partners,
L.L.C. ("LLC"), a limited liability company, all of the interests of which are
held directly by the Managing Directors of Pacific Investment Management Company
who are: William H. Gross, Dean S. Meiling, James F. Muzzy, William F. Podlich
III, Frank B. Rabinovitch, Brent R. Harris, John L. Hague, William S. Thompson,
Jr., William C. Powers and David H. Edington (collectively, the "Managing
Directors"). PIMCO Partners, G.P. has substantially delegated its management
and control of the Manager to an Equity Board and an Operating Board of the
Manager. The activities of the Manager are controlled by its Operating Board
except that certain non-routine or extraordinary actions may not be effected by
the Operating Board without the approval of the Manager's Equity Board. The
Operating Board has in turn delegated the authority to manage day-to-day
operations and policies to an Operating Committee. Because of the ability to
designate a majority of the members of the Operating Board, Pacific Investment
Management Company and the Managing Directors could be said to control the
Manager, although the Managing Directors disclaim such authority.
CCI is a general partnership with the Manager and a wholly-owned subsidiary
of the Manager as its only partners.
DISTRIBUTION PLAN AND DISTRIBUTION AGREEMENT. Terms of the Distribution
Plan of the Fund and the Distribution Agreement between the Trust and PIMCO
Advisors Distribution Company (the "Distributor") are summarized in the text of
the Prospectus following the caption "Distributor and Distribution Plan."
Pursuant to its Distribution Agreement with the Trust, the Distributor
bears the expense of commissions with respect to sales of Fund shares to brokers
having sales agreements with the Distributor, as well as certain associated
expenses, including allocated overhead expenses, and also bears the cost of
making information about the Fund available through advertising and other means
and the cost of printing and mailing prospectuses to persons other than
shareholders. The Distributor's and such brokers' overhead expenses may include
rental payments, salaries, telephone and communications, data processing and
professional services. The Fund pays up to a 0.175% distribution fee, as
described in the Prospectus, which is designed to reimburse the Distributor and
such brokers, in whole or in part, for these expenses and services.
The formula for determining the Distributor's reimbursement as distributor
is set forth in the Prospectus. Subject to the 0.175% limitation described in
the Prospectus, the distribution fee may be paid in respect of services rendered
and expenses borne in the past as to which no distribution fee was paid on
account of such limitation. The Distributor does not now include in its
calculation of distribution-related expenses interest, carrying or other finance
charges in respect of other expenses for which it is not compensated under the
Fund's Distribution Plan, but reserves the right to do so in the future.
16
<PAGE>
For the fiscal year ended September 30, 1995, the Trust paid the
Distributor distribution fees of $697,646.
During the fiscal year ended September 30, 1995, expenditures by the
Distributor from funds collected pursuant to the Distribution Plan totaled
$636,000, and were used as follows: sales commissions and other compensation to
sales personnel, $22,000; preparing, printing and distributing sales material
and advertising and preparing, printing and distributing prospectuses to non-
shareholders and other expenses (including data processing, legal and
operations), $614,000.
The Trustees believe that the Distribution Plan has provided benefits to
the Fund. The Trustees believe that the Plan has resulted in greater sales
and/or fewer redemptions of the Fund shares, although it is impossible to know
for certain the level of sales and redemptions of Fund shares in the absence of
the Plan or under an alternative distribution scheme. The effect on sales
and/or redemptions is believed to benefit the Fund by reducing Fund expense
ratios and/or by affording greater flexibility to Fund managers.
The Distribution Plan may be terminated as to the Fund by vote of a
majority of the Trustees who are not "interested persons" (as defined in the
Investment Company Act) of the Trust and who have no interest in the Plan or any
agreement related thereto (the "Independent Trustees"), or by vote of a majority
of the outstanding voting securities of the Fund. The Trustees review quarterly
a written report of distribution costs and the purposes for which such costs
have been incurred. The Plan may be amended by vote of the Trustees, including
a majority of the Independent Trustees, cast in person at a meeting called for
the purpose, provided, however, that any change in the Plan that would
materially increase the distribution cost to the Fund also requires shareholder
approval.
The Distribution Agreement may be terminated as to the Fund at any time on
60 days' written notice without payment of any penalty by the Distributor or by
vote of a majority of the outstanding voting securities of the Fund or by vote
of a majority of the Independent Trustees.
The Distribution Agreement and the Distribution Plan will continue in
effect for successive one-year periods, provided that each such continuance is
specifically approved (i) by the vote of a majority of the Independent Trustees
and (ii) by the vote of a majority of the entire Board of Trustees cast in
person at a meeting called for the purpose.
Although the Fund has no present intention to do so, it reserves the right
at any time to suspend the offering of the shares of the Fund.
17
<PAGE>
Under arrangements with participating or introducing brokers, the
Distributor may pay commissions to such brokers accrued daily and paid monthly
at an annual rate of up to 0.125% of the average daily net asset value of Fund
shares held by shareholders purchasing through such brokers.
CUSTODIAL ARRANGEMENTS. The Bank of New York, 110 Washington Street, New
York, New York 10286 is the Fund's custodian. As such, The Bank of New York
holds in safekeeping certificated securities and cash belonging to the Fund and,
in such capacity, is the registered owner of securities in book-entry form
belonging to the Fund. Upon instruction, the Bank of New York receives and
delivers cash and securities of the Fund in connection with the transactions of
the Fund and collects all dividends and other distributions made with respect to
the portfolio securities of the Fund. The Bank of New York also maintains
certain accounts and records of the Fund.
ACCOUNTING SERVICES. Pursuant to an agreement among Oppenheimer Management
Corporation, the Manager and the Fund, Oppenheimer Management Corporation
calculates the total net asset value, total net income and net asset value per
share of the Fund on a daily basis (and as otherwise may be required by the
Investment Company Act, that is, when there is a sufficient degree of trading in
the Fund's portfolio securities to affect its net asset value) and performs
certain accounting services for the Fund.
INDEPENDENT AUDITORS. The Fund's independent accountants are Coopers &
Lybrand L.L.P., 1301 Avenue of the Americas, New York, New York 10019. Coopers
& Lybrand L.L.P. conducts an annual audit of the Fund, assists in the
preparation of the Fund's federal and state income tax returns and consults with
the Fund as to matters of accounting and federal and state income taxation.
18
<PAGE>
ORGANIZATION AND CAPITALIZATION OF THE TRUST
The organization of the Trust and the voting rights of shareholders are
summarized in the text of the Prospectus following the caption "Description of
the Trust."
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest, which may be divided into
an unlimited number of series of such shares, and which presently consist of the
one series of shares constituting the Fund. Each share of a series represents
an equal proportionate interest in that series with each other share of that
series and is entitled to a proportionate interest in the dividends and
distributions from that series. Upon termination of a series, whether pursuant
to liquidation of the series or otherwise, shareholders of that series are
entitled to share pro rata in the net assets of the series then available for
distribution to such shareholders. Shareholders have no preemptive rights.
A copy of the Agreement and Declaration of Trust (the "Declaration of
Trust") establishing the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts. The Declaration of Trust provides for the
perpetual existence of the Trust. The Trust or a series, however, may be
terminated at any time by vote of at least two-thirds of the outstanding shares
of an affected series or by the Trustees upon written notice to the
shareholders. Upon termination of the Trust or of a series, after paying or
otherwise providing for all charges, taxes, expenses and liabilities, whether
due or accrued or anticipated, of the Trust or of the series as may be
determined by the Trustees, the series shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash or shares or other securities, or any combination
thereof, and distribute the proceeds to the shareholders of the series involved,
ratably according to the number of shares of such series held by the several
shareholders of the series on the date of termination.
The assets received by the Trust for the issue or sale of shares of a
series and all income, earnings, profits, losses and proceeds therefrom, subject
only to the rights of creditors, are allocated to that series, and constitute
the underlying assets of that series. The underlying assets of a series are
segregated and are charged with the expenses, including the organizational
expenses, in respect of that series and with a share of the general expenses of
the Trust as described above under "Investment Advisory and Other
Services." While the expenses of the Trust are allocated to the separate books
of account of the series, if more than one series has shares outstanding,
certain expenses may be legally chargeable against the assets of all series.
19
<PAGE>
Under Massachusetts law, shareholders could, under certain circumstances,
be held liable for the obligations of the Trust. However, the Declaration of
Trust disclaims shareholder liability for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or the Trustees. The
Declaration of Trust provides for indemnification out of the property of a
series for all loss and expense of any shareholder of that series held liable on
account of being or having been a shareholder. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the series of which he was a shareholder would be unable
to meet its obligations.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, nothing in
the Declaration of Trust protects a Trustee against any liability to which the
Trustee would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office. The Declaration of Trust provides for indemnification by the Trust
of the Trustees and the officers of the Trust except with respect to any matter
as to which any such person did not act in good faith in the reasonable belief
that his action was in or not opposed to the best interests of the Trust. Such
person may not be indemnified against any liability to the Trust or the Trust
shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
As described in the Prospectus, the Trust will not normally hold annual
shareholders' meetings. At such time as less than a majority of the Trustees
have been elected by the shareholders, the Trustees then in office will call a
shareholders' meeting for the election of Trustees. In addition, Trustees may
be removed from office by a written consent signed by the holders of two-thirds
of the outstanding shares and filed with the Trust's custodian or by a vote of
the holders of two-thirds of the outstanding shares at a meeting duly called for
the purpose, which meeting shall be held upon written request of the holders of
not less than 10% of the outstanding shares. Upon written request by ten or
more shareholders, who have been such for at least six months and who hold
shares constituting 1% of the outstanding shares, stating that such shareholders
wish to communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a Trustee, the
Trust has undertaken to provide a list of shareholders or to disseminate
appropriate materials (at the expense of the requesting shareholders).
Except as otherwise disclosed in the Prospectus and in this Statement of
Additional Information, the Trustees shall continue to hold office and may
appoint their successors.
20
<PAGE>
NET INCOME, YIELDS AND VALUATION
DETERMINATION OF NET INCOME
The net income of the Fund is determined as of the close of regular trading
on the New York Stock Exchange (ordinarily 4:00 p.m. (New York Time)) on each
day that the Exchange is open for trading. Net income includes (i) all interest
accrued and discount earned on the portfolio investments of the Fund, minus
(ii) amortized premium on such investments, plus or minus (iii) all realized
gains and losses on such investments, and minus (iv) all expenses of the Fund.
YIELD
As summarized in the Prospectus under the heading "Yield," the "Yield" of
the Fund for a seven-day period (the "base period") will be computed by
determining the "net change in value" (calculated as set forth below) of a
hypothetical account having a balance of one share at the beginning of the
period, dividing the net change in account value by the value of the account at
the beginning of the base period to obtain the base period return, and
multiplying the base period return by 365/7 with the resulting yield figure
carried to the nearest hundredth of one percent. Net changes in value of a
hypothetical account will include the value of additional shares purchased with
dividends from the original share and dividends declared on both the original
share and any such additional shares, but will not include realized gains or
losses or unrealized appreciation or depreciation on portfolio investments.
Yield may also be calculated on a compound basis ("Effective Yield") which
assumes that net income is reinvested in Fund shares at the same rate as net
income is earned for the base period.
The Fund's Yield and Effective Yield will vary in response to fluctuations
in interest rates and in the expenses of the Fund. For comparative purposes the
current and effective yields should be compared to current and effective yields
offered by competing financial institutions for that base period only and
calculated by the methods described above.
For the seven day period ending September 30, 1995, the Fund's Yield was
5.15% and the Fund's Effective Yield was 5.28%, calculated as described above.
VALUING THE FUND'S PORTFOLIO INVESTMENTS
The total net asset value of the Fund (the excess of its assets over its
liabilities) is determined by Oppenheimer Management Corporation as of the close
of regular trading on the New York Stock Exchange on each day the Exchange is
open for trading. The Trust expects that the days, other than weekend days,
that the New York Stock
21
<PAGE>
Exchange will not be open will be New Year's Day, Washington's Birthday, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
As described in the text of the Prospectus following the caption "Net Asset
Value," under normal market conditions, the securities will be valued at
amortized cost in order to maintain a constant net asset value of $1 per share.
The amortized cost method of valuation may be used by the Fund so long as
it complies with Rule 2a-7 under the Investment Company Act. Under this Rule,
the Fund is required to maintain a dollar-weighted average portfolio maturity of
90 days or less, to purchase only instruments having remaining maturities of 397
days or less and to invest only in securities determined under the supervision
of the Trustees to present minimal credit risks. The Fund is further required
to establish procedures designed to stabilize, to the extent reasonably
possible, its price per share as computed for the purpose of distribution,
redemption and repurchase at $1 per share. Such procedures will include review
of the Fund's portfolio holdings by the Trustees, at such intervals as they may
deem appropriate, to determine whether the Fund's net asset value calculated by
using readily available market quotations deviates from $1 per share, and, if
so, whether such deviation may result in material dilution or is otherwise
unfair to existing shareholders. In the event the Trustees determine that such
a deviation exists, or in any event if the deviation exceeds 1/2%, they have
agreed to take such corrective action as they regard as necessary and
appropriate, including the sale of portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity,
withholding dividends, redemptions of shares in kind or a pro rata increase or
decrease in the number of shares of the Fund held in each shareholder's account.
As a result of the Fund valuing its securities at amortized cost, the yield
on a shareholder's investment may be more or less than that which would be
recognized if the net asset value per share of the Fund were not constant and
were permitted to fluctuate with the market value of the portfolio securities of
the Fund. However, as a result of the foregoing procedures, the Fund believes
any difference will normally be minimal.
TAXES
The tax status of the Fund and the distributions which it may make are
summarized in the text of the Prospectus immediately following the caption
"Taxes."
The Fund intends to qualify each year as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). In order so
to qualify and to qualify for the special tax treatment accorded regulated
investment
22
<PAGE>
companies and their shareholders, the Fund must, among other things, (a) derive
at least 90% of its gross income from dividends, interest, payments with respect
to certain securities loans, and gains from the sale of stock, securities and
foreign currencies, or other income (including but not limited to gains from
options, futures or forward contracts) derived with respect to its business of
investing in such stock, securities or currencies, (b) derive less than 30% of
its gross income from the sale or other disposition of certain assets held for
less than three months; (c) each year distribute at least 90% of its net
investment income (including tax-exempt interest) and certain other income and
the excess, if any, of its net short-term capital gains over its net long-term
capital losses; and (d) diversify its holdings so that, at the end of each
fiscal quarter (i) at least 50% of the market value of the Fund's assets is
represented by cash items, U.S. Government securities, securities of other
regulated investment companies, and other securities, limited in respect of any
one issuer to a value not greater than 5% of the value of the Fund's total
assets and 10% of the outstanding voting securities of such issuer, and (ii) not
more than 25% of the value of its assets is invested in the securities (other
than those of the U.S. Government or other regulated investment companies) of
any one issuer or of two or more issuers which the Fund controls and which are
engaged in the same, similar or related trades or businesses. Under the 30% of
gross income test described above, the Fund may be restricted in selling certain
assets held (or considered under Code rules to have been held) for less than
three months, and in engaging in certain hedging transactions (including hedging
transactions in options and futures) that in some circumstances could cause
certain Fund assets to be treated as held for less than three months.
If the Fund qualifies for taxation as a regulated investment company, the
Fund will not be subject to federal income tax on income paid to its
shareholders in the form of dividends or capital gain distributions. Except
where specifically noted, the remainder of this section assumes that the Fund
will so qualify.
If the Fund distributes amounts in excess of its current earnings and
profits, such distributions to shareholders would be treated as a return of
capital to the extent of a shareholder's basis in his or her shares, and
thereafter as capital gain. A return of capital is not taxable to a
shareholder and has the effect of reducing the shareholder's basis in the
relevant shares.
Current federal tax law requires the holder of a Treasury or other fixed-
income zero-coupon security to accrue as income each year a portion of the
discount at which the security was purchased, even though the holder receives no
interest payment in cash on the security during the year. Accordingly, if the
Fund holds such securities, it may be required to pay out as an income
distribution each year an amount which is greater than the total amount of cash
interest actually received. Such distributions may be made from the cash assets
of the Fund or by liquidation of portfolio securities, if necessary. The Fund
may realize gains or losses from such liquidations. In the event the Fund
realized net capital gains from such transactions, its shareholders may receive
a larger
23
<PAGE>
capital gain distribution, if any, than they would in the absence of such
transactions.
The Trust under which the Fund is created is organized as a Massachusetts
business trust. Under current law, so long as the Fund qualifies for federal
income tax treatment as described above, it is believed that neither the Trust
nor the Fund should be liable for any income or franchise tax in The
Commonwealth of Massachusetts.
The Fund is generally required to withhold and remit to the U.S. Treasury
31% of redemption proceeds and dividends from net investment income and capital
gains distributions credited to any shareholder account for which an incorrect
or no taxpayer identification number has been provided or where the Fund is
notified that the shareholder has under-reported income in the past (or the
shareholder fails to certify that he is not subject to such withholding).
Shareholders are advised to consult their own tax advisers for more
detailed information concerning the federal taxation of the Fund and the income
tax consequences of an investment in the Fund to its shareholders.
REDEMPTIONS
The procedures for redemptions and withdrawals are summarized in the
Prospectus following the caption "How to Redeem."
The Fund may suspend the right of redemption for the Fund and may postpone
payment when the New York Stock Exchange is closed for other than weekends or
holidays, or if permitted by the rules of the Securities and Exchange Commission
during periods when trading on the Exchange is restricted or during an emergency
which makes it impracticable for the Fund to dispose of its securities or fairly
to determine the value of the net assets of the Fund, or during any other period
permitted by the Securities and Exchange Commission for the protection of
investors.
The Fund will normally redeem a shareholder's shares for cash. However, if
in any 90-day period a shareholder seeks to redeem shares totaling the lesser of
$250,000 or 1% of the Fund's total assets, the Fund may, in unusual
circumstances, redeem any additional shares by payment in kind of securities
held in the portfolio of the Fund.
DESCRIPTION OF INVESTMENTS
1. U.S. GOVERNMENT SECURITIES.
OBLIGATIONS BACKED BY FULL FAITH AND CREDIT OF THE U.S. GOVERNMENT -- are
24
<PAGE>
bills, certificates of indebtedness, notes and bonds issued by (i) the U.S.
Treasury or (ii) agencies, authorities and instrumentalities of the U.S.
Government or other entities and backed by the full faith and credit of the U.S.
Government. Such obligations include, but are not limited to, obligations
issued by the Government National Mortgage Association, Farmers' Home
Administration and the Small Business Administration.
OTHER U.S. GOVERNMENT SECURITIES -- are bills, certificates of
indebtedness, notes, and bonds issued by agencies, authorities and
instrumentalities of the U.S. Government which are supported by the right of the
issuer to borrow from the U.S. Treasury or by the credit of the agency,
authority or instrumentality itself. Such obligations include, but are not
limited to, obligations issued by the Tennessee Valley Authority, the Bank for
Cooperatives, Federal Home Loan Banks, Federal Intermediate Credit Banks,
Federal Land Banks, and the Federal National Mortgage Association.
2. MONEY MARKET INSTRUMENTS.
CERTIFICATES OF DEPOSIT - certificates issued against funds deposited in a
bank, are for a definite period of time, earn a specified rate of return, and
are normally negotiable.
BANKERS' ACCEPTANCES - short-term credit instruments used to finance the
import, export, transfer or storage of goods. They are termed "accepted" when a
bank guarantees their payment at maturity.
EURODOLLAR OBLIGATIONS - obligations of foreign branches of U.S. banks.
YANKEEDOLLAR OBLIGATIONS - obligations of domestic branches or subsidiaries
of foreign banks.
COMMERCIAL PAPER - promissory notes issued by corporations (including banks
and bank holding companies), in order to finance their short-term credit needs.
MASTER DEMAND NOTES - notes issued by corporations that are payable on
demand by either the holder or the issuer.
CORPORATE OBLIGATIONS - bonds and notes issued by corporations in order to
finance longer term credit needs.
REPURCHASE AGREEMENTS - are agreements by which the Fund acquires a
security (usually a U.S. Government Security) and a simultaneous commitment from
the seller (a member bank of the Federal Reserve System or, to the extent
permitted by the Investment Company Act of 1940, a recognized securities dealer)
to repurchase the security at an agreed upon price and date. The resale price
is in excess of the purchase price and reflects an agreed upon market rate
unrelated to the coupon rate on the
25
<PAGE>
purchased security. Such transactions afford an opportunity for the Fund to
earn a return on temporarily available cash at no market risk, although the Fund
may be subject to various delays and risks of loss if the seller is unable to
meet its obligation to repurchase.
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<PAGE>
APPENDIX A-1
The nationally recognized statistical rating organizations (individually, an
"NRSRO") that may be utilized with regard to portfolio investments for the Fund
include Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P"), Duff & Phelps, Inc. ("Duff"), Fitch Investors Service, Inc.
("Fitch"), IBCA Limited and its affiliate, IBCA Inc. (collectively, "IBCA"), and
Thomson BankWatch, Inc. ("Thomson"). Set forth below is a description of the
relevant ratings of each such NRSRO. The NRSROs that may be utilized by MERUS
and the description of each NRSRO's ratings is as of the date of this Statement
of Additional Information, and may subsequently change.
LONG-TERM DEBT RATINGS (may be assigned, for example, to corporate and municipal
bonds)
Description of the two highest long-term debt ratings by Moody's (Moody's
applies numerical modifiers (1, 2 and 3) in each rating category to indicate the
security's ranking within the category):
Aaa Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-
term risk appear somewhat larger than in Aaa securities.
Description of the two highest long-term debt ratings by S&P (S&P may apply a
plus (+) or minus (-) to a particular rating classification to show relative
standing within that classification):
AAA Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
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<PAGE>
AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small
degree.
Description of the two highest long-term debt ratings by Duff:
AAA Highest credit quality. The risk factors are negligible being only
slightly more than for risk-free U.S. Treasury debt.
AA+ High credit quality Protection factors are strong.
AA Risk is modest but may vary slightly from time to time
AA- because of economic conditions.
Description of the two highest long-term debt ratings by Fitch (plus or minus
signs are used with a rating symbol to indicate the relative position of the
credit within the rating category):
AAA Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated "AAA."
Because bonds rated in the "AAA" and "AA" categories are not
significantly vulnerable to foreseeable future developments, short-
term debt of these issues is generally rated "[-]+."
IBCA's description of its two highest long-term debt ratings:
AAA Obligations for which there is the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial such that adverse changes in business, economic or
financial conditions are unlikely to increase investment risk
significantly.
AA Obligations for which there is a very low expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic, or financial
conditions may increase investment risk albeit not very significantly.
Thomson's description of its two highest long-term debt ratings:
A Company possesses an exceptionally strong balance sheet and earnings
record, translating into an excellent reputation and unquestioned
access to its natural money markets. If weakness or vulnerability
exists in any aspect of
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<PAGE>
the company's business, it is entirely mitigated by the strengths of
the organization.
A/B Company is financially very solid with a favorable track record and no
readily apparent weakness. Its overall risk profile, while low, is
not quite as favorable as for companies in the highest rating
category.
SHORT-TERM DEBT RATINGS (may be assigned, for example, to commercial paper,
master demand notes, bank instruments, and letters of credit)
Moody's description of its two highest short-term debt ratings:
Prime-1 Issuers rated Prime-1 (or supporting institutions) have a
superior capacity for repayment of senior short-term promissory
obligations. Prime-1 repayment capacity will normally be
evidenced by many of the following characteristics:
-Leading market positions in well-established industries.
-High rates of return on funds employed.
-Conservative capitalization structures with moderate
reliance on debt and ample asset protection.
-Broad margins in earnings coverage of fixed financial
charges and high internal cash generation.
-Well-established access to a range of financial markets and
assured sources of alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have a strong
capacity for repayment of senior short-term debt obligations.
This will normally be evidenced by many of the characteristics
cited above but to a lesser degree. Earnings trends and coverage
ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity
is maintained.
S&P's description of its two highest short-term debt ratings:
A-1 This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to have extremely strong
safety characteristics are denoted with a plus sign (+).
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<PAGE>
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high
as for issues designated "A-1."
Duff's description of its two highest short-term debt ratings (Duff incorporates
gradations of "1+" (one plus) and "1-" (one minus) to assist investors in
recognizing quality differences within the highest rating category):
Duff 1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-
free U.S. Treasury short-term obligations.
Duff 1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors.
Risk factors are minor.
Duff 1- High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk
factors are very small.
Duff 2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets
is good. Risk factors are small.
Fitch's description of its two highest short-term debt ratings:
F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely
payment.
F-1 Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues
rated F-1+.
F-2 Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is
not as great as for issues assigned F-1+ or F-1 ratings.
IBCA's description of its two highest short-term debt ratings:
A+ Obligations supported by the highest capacity for timely repayment.
A1 Obligations supported by a very strong capacity for timely repayment.
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<PAGE>
SHORT-TERM LOAN/MUNICIPAL NOTE RATINGS
Moody's description of its two highest short-term loan/municipal note ratings:
MIG-1/VMIG-1 This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
S&P's description of its two highest municipal note ratings:
SP-1 Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
Thomson's description of its two highest short-term ratings:
TBW-1 The highest category; indicates the degree of safety regarding
timely repayment of principal and interest is very strong.
TBW-2 The second highest category; while the degree of safety
regarding timely repayment of principal and interest is strong,
the relative degree of safety is not as high as for issues rated
"TBW-1".
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FINANCIAL STATEMENTS
---------------------
F-1
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, at amortized cost (cost $685,403,210) (Note 1)....... $685,403,210
Cash.............................................................. 44,251
Shares of beneficial interest sold................................ 30,902,340
Other............................................................. 246,954
------------
Total assets.............................................. 716,596,755
------------
LIABILITIES:
Payables and other liabilities:
Shares of beneficial interest redeemed.......................... 29,749,146
Dividends....................................................... 843,540
Management fees (Note 3)........................................ 228,521
Trustees' fees.................................................. 143,832
Transfer and dividend disbursing agent fees..................... 91,732
Shareholder communications...................................... 70,716
Distribution fees (Note 4)...................................... 54,561
Other........................................................... 186,416
------------
Total liabilities......................................... 31,368,464
------------
NET ASSETS............................................................ $685,228,291
------------
------------
NET ASSET VALUE, REDEMPTION VALUE AND OFFERING PRICE PER SHARE
($685,228,291 DIVIDED BY 685,228,291 shares)....................... $1.00
------------
------------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest and discount earned.................................. $40,718,843
------------
EXPENSES:
Management fees (Note 3)...................................... 2,915,606
Distribution fees (Note 4).................................... 697,646
Transfer and dividend disbursing agent fees................... 355,314
Trustees' fees and expenses (Note 3).......................... 180,590
Legal and auditing fees....................................... 174,180
Registration and filing fees.................................. 132,728
Shareholder reports........................................... 122,793
Custodian fees and expenses................................... 122,493
Insurance expenses............................................ 91,590
Other......................................................... 3,250
------------
Total expenses............................................ 4,796,190
------------
NET INVESTMENT INCOME AND NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS.......................................................... $35,922,653
------------
------------
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------
1995 1994
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income and net increase in net assets resulting
from operations................................................. $ 35,922,653 $ 24,198,835
------------- -------------
DIVIDENDS TO SHAREHOLDERS............................................. (35,922,653) (24,198,835)
------------- -------------
BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from beneficial
interest transactions........................................... (172,769,469) 148,784,922
Proceeds from shares issued to shareholders in reinvestment of
dividends....................................................... 34,655,237 22,301,742
------------- -------------
Total increase (decrease)......................................... (138,114,232) 171,086,664
NET ASSETS:
Beginning of period............................................... 823,342,523 652,255,859
------------- -------------
End of period..................................................... $ 685,228,291 $ 823,342,523
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
MARKET
FACE VALUE (+)
AMOUNT -
- ------------ -------------
<C> <S> <C>
SHORT-TERM NOTES -- 100.0%
BANKS -- 6.5%
Matterhorn Capital Corp.:
$ 14,216,000 5.71%, 10/27/95....................................................... $ 14,157,374
5,994,000 5.72%, 10/25/95....................................................... 5,971,143
Spiegal Funding Corp.:
12,000,000 5.73%, 11/8/95........................................................ 11,927,420
12,750,000 5.75%, 10/4/95........................................................ 12,743,891
-------------
44,799,828
-------------
BEVERAGES -- 6.1%
20,000,000 Bass Finance (C.I.) Ltd., guaranteed by Bass PLC, 5.75%, 12/12/95..... 19,770,000
PepsiCo, Inc.:
10,000,000 5.69%, 10/27/95....................................................... 9,958,906
11,800,000 5.69%, 10/30/95....................................................... 11,745,913
-------------
41,474,819
-------------
BROKER/DEALERS -- 4.3%
14,600,000 Bear Stearns & Co., Inc., 5.73%, 10/13/95............................. 14,572,114
15,000,000 Goldman Sachs & Co., 5.72%, 10/23/95.................................. 14,947,567
-------------
29,519,681
-------------
BUILDING MATERIALS -- 2.6%
Redland Finance, Inc.:
9,000,000 5.73%, 10/13/95....................................................... 8,982,810
9,000,000 5.74%, 11/2/95........................................................ 8,954,080
-------------
17,936,890
-------------
COMMERCIAL FINANCE -- 21.8%
11,000,000 APRECO, Inc., 5.72%, 11/22/95......................................... 10,909,116
15,000,000 Asset Securitization Cooperative Corp., 5.77%, 11/7/95................ 14,911,046
CIESCO L.P.:
10,000,000 5.70%, 10/30/95....................................................... 9,954,083
5,750,000 6%, 10/11/95.......................................................... 5,740,417
Corporate Asset Securitization Australia Ltd., Inc.:
10,000,000 5.70%, 11/27/95....................................................... 9,909,750
15,400,000 5.72%, 11/10/95....................................................... 15,302,124
Corporate Receivable Corp.:
10,000,000 5.72%, 10/25/95....................................................... 9,961,867
3,200,000 5.72%, 10/30/95....................................................... 3,185,255
4,700,000 5.75%, 11/8/95........................................................ 4,671,474
CXC, Inc.:
5,000,000 5.74%, 10/6/95........................................................ 4,996,014
15,200,000 5.75%, 10/11/95....................................................... 15,175,722
10,000,000 5.77%, 10/3/95........................................................ 9,996,794
</TABLE>
F-4
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT VALUE (+)
- ------------ -------------
<C> <S> <C>
SHORT-TERM NOTES -- (CONTINUED)
$ 10,000,000 ESC Securitization, Inc., 5.70%, 11/16/95............................. $ 9,927,167
10,000,000 Fleet Funding, Inc., 5.76%, 10/20/95.................................. 9,969,600
Sheffield Receivables Corp.:
7,200,000 5.68%, 11/15/95....................................................... 7,148,880
7,600,000 5.72%, 11/3/95........................................................ 7,560,151
-------------
149,319,460
-------------
CONSUMER FINANCE -- 14.1%
CSW Credit, Inc.:
13,000,000 5.72%, 10/19/95....................................................... 12,962,820
17,800,000 5.72%, 10/24/95....................................................... 17,734,951
10,000,000 Dean Witter, Discover & Co., 5.74%, 10/2/95........................... 9,998,406
Eiger Capital Corp.:
7,000,000 5.72%, 10/26/95....................................................... 6,972,194
9,200,000 5.74%, 10/12/95....................................................... 9,183,864
15,100,000 5.75%, 10/2/95........................................................ 15,097,588
McKenna Triangle National Corp.:
5,000,000 5.70%, 11/6/95........................................................ 4,971,500
10,000,000 5.72%, 10/27/95....................................................... 9,958,689
10,000,000 5.73%, 10/26/95....................................................... 9,960,208
-------------
96,840,220
-------------
DIVERSIFIED FINANCIAL -- 5.2%
26,500,000 Beta Finance, Inc., 5.72%, 10/16/95................................... 26,436,841
9,283,000 General Electric Capital Corp., 5.72%, 11/17/95....................... 9,213,677
-------------
35,650,518
-------------
ELECTRIC UTILITIES -- 3.1%
National Rural Utilities Cooperative Finance Corp.:
10,400,000 5.72%, 10/20/95....................................................... 10,368,604
10,800,000 5.72%, 11/13/95....................................................... 10,726,212
-------------
21,094,816
-------------
LEASING & FACTORING -- 9.3%
PHH Corp.:
10,000,000 5.73%, 10/10/95....................................................... 9,985,675
10,000,000 5.73%, 10/5/95........................................................ 9,993,633
12,000,000 5.74%, 10/4/95........................................................ 11,994,260
USL Capital Corp.:
13,000,000 5.71%, 10/31/95....................................................... 12,938,142
5,255,000 5.72%, 11/6/95........................................................ 5,224,941
13,400,000 5.73%, 10/12/95....................................................... 13,376,539
-------------
63,513,190
-------------
</TABLE>
F-5
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT VALUE (+)
- ------------ -------------
<C> <S> <C>
SHORT-TERM NOTES -- (CONTINUED)
OIL-INTEGRATED -- 1.8%
$ 12,500,000 Tiger Managers Acceptance Corp., 5.75%, 10/24/95...................... $ 12,454,080
-------------
PUBLISHING/PRINTING -- 2.3%
15,500,000 Pearson, Inc., 5.73%, 10/11/95........................................ 15,475,329
-------------
RESTAURANTS -- 5.4%
Golden Managers Acceptance Corp.:
6,000,000 5.75%, 10/18/95....................................................... 5,983,708
11,000,000 5.77%, 10/18/95....................................................... 10,970,028
10,400,000 5.80%, 11/1/95........................................................ 10,348,058
9,900,000 Supplier Managers Acceptance Corp., 5.74%, 10/25/95................... 9,862,116
-------------
37,163,910
-------------
SPECIAL PURPOSE FINANCIAL -- 17.5%
Cooperative Association of Tractor Dealers, Inc.:
6,900,000 5.72%, 11/20/95....................................................... 6,845,183
2,500,000 5.75%, 10/19/95....................................................... 2,492,813
9,500,000 5.78%, 10/5/95........................................................ 9,493,899
9,000,000 6.05%, 10/5/95........................................................ 8,993,950
20,000,000 Corporate Asset Funding Co., Inc., 5.72%, 10/24/95.................... 19,926,911
Falcon Asset Securitization:
15,000,000 5.71%, 11/6/95........................................................ 14,914,350
10,000,000 5.72%, 10/16/95....................................................... 9,976,167
Preferred Receivables Funding Corp.:
10,000,000 5.73%, 10/25/95....................................................... 9,961,800
10,000,000 5.73%, 11/1/95........................................................ 9,950,658
7,000,000 5.75%, 10/17/95....................................................... 6,982,111
Windmill Funding Corp.:
10,663,000 5.75%, 10/20/95....................................................... 10,630,641
10,000,000 5.77%, 10/6/95........................................................ 9,991,986
-------------
120,160,469
-------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS, AT AMORTIZED COST (Cost $685,403,210)................ 100.0% $ 685,403,210
Liabilities in Excess of Other Assets................................... 0.0 (174,919)
----- -------------
NET ASSETS.............................................................. 100.0% $ 685,228,291
----- -------------
----- -------------
</TABLE>
Notes to Statement of Investments:
+ See Note 1 of notes to financial statements.
Short-term notes are generally traded on a discount basis; the interest rate is
the discount rate received by the Fund at the time of purchase.
See accompanying notes to financial statements.
F-6
<PAGE>
NATIONAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations -- net
investment income and net realized gain
on investments......................... .05 .03 .02 .04 .06
Dividends and distributions to
shareholders........................... (.05) (.03) (.02) (.04) (.06)
--------- --------- --------- ----------- -----------
Net asset value, end of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ----------- -----------
--------- --------- --------- ----------- -----------
Total Return.......................... 5.2% 3.2% 2.3% 3.7% 6.2%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)............................. $685,228 $823,343 $652,256 $2,286,067 $2,523,392
Ratios to average net assets:
Net investment income................... 5.15% 3.20% 2.26% 3.70% 6.17%
Expenses................................ .69% .61% .71% .74% .74%
</TABLE>
See accompanying notes to financial statements.
F-7
<PAGE>
NATIONAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash Accumulation Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end, diversified, management
investment company. The Trust consists of the National Money Market Fund, which
is managed by PIMCO Advisors L.P. ("the Manager").
INVESTMENT VALUATION -- The Trust values its portfolio on the basis of
amortized cost which approximates market value. The Trust maintains a
dollar-weighted average portfolio maturity of 90 days or less and only purchases
instruments having remaining maturities of 397 days or less.
FEDERAL TAXES -- No provision for Federal income taxes has been made since
the Trust has qualified as a regulated investment company under the Internal
Revenue Code. The cost basis of investments approximates amortized cost, which
is used for both tax and book purposes.
OTHER -- Security transactions are accounted for on the date the investments
are purchased or sold (trade date). Dividends (representing net investment
income) are declared daily and paid or reinvested in additional Trust shares
monthly. Investment income consists solely of interest income which includes
amortization of premium or discount.
2) SHARES OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of $.00001 par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994
--------------- ---------------
<S> <C> <C>
Shares sold........................ 5,211,739,188 5,921,149,745
Shares issued to shareholders in
reinvestment of dividends......... 34,655,237 22,301,742
--------------- ---------------
Total...................... 5,246,394,425 5,943,451,487
Shares redeemed.................... (5,384,508,657) (5,772,364,823)
--------------- ---------------
Net increase (decrease)............ (138,114,232) 171,086,664
--------------- ---------------
--------------- ---------------
</TABLE>
F-8
<PAGE>
NATIONAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1995
3) MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees are paid to the Manager in accordance with the investment
advisory agreement (the "Agreement") with the Trust. Under the Agreement, the
Manager selects and reviews investments and provides executive and other
personnel for management of the Trust. For such services, the Manager receives a
fee, computed daily and paid monthly, based on the annual percentage rates of
the corresponding levels of the Trust's average daily net assets as follows:
.425% of the first $500 million,
.400% of the next $500 million,
.375% of the next $500 million,
.350% of the next $500 million,
.325% on amounts in excess of $2 billion.
The Managers compensation is subject to reduction to the extent in any year
that the expenses (excluding brokerage commissions, taxes, interest,
distribution-related expenses and extraordinary expenses) of the Trust exceed
statutory limits of any jurisdiction in which the Trust's shares are qualified
for offer and sale. The most restrictive of such limitations is presently
believed to be 2 1/2% of the first $30 million of average annual net assets, 2%
of the next $70 million and 1 1/2% of any excess over $100 million.
Effective July 27, 1995, the Trustees approved a unified fee plan, covering
compensation from both Trusts for which they serve as independent Trustees, the
Pimco Advisors Funds and the Cash Accumulation Trust. The fee is allocated
between the Trusts and among the funds of the Trusts based on relative net
assets. Trustees other than those affiliated with the Manager are compensated as
follows:
<TABLE>
<S> <C>
Annual Retainer................................... $35,000
Meeting Fee (each meeting attended)............... 3,000
Committees:
Contract Chairman............................. 6,000
Audit Chairman................................ 2,000
Audit Member.................................. 1,000
</TABLE>
In addition, the Trustees receive reimbursement for travel and out-of-pocket
costs. Several individuals who are trustees or officers (or both) of the Trust
are also directors or officers of the Manager or its affiliates.
4) DISTRIBUTION ASSISTANCE
Pursuant to a Distribution Plan adopted by the Trust, the Trust compensated
the distributor, PIMCO Advisors Distribution Company, an affiliate of the
Manager, $697,646 for services provided and expenses incurred during the year
ended September 30, 1995 in connection with assistance rendered in the sale of
Trust shares. During the year ended September 30, 1995, the distribution fee,
which is accrued daily and paid monthly, was equal on an annual basis to .10% of
the Trust's average daily net assets.
F-9
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of Cash Accumulation Trust:
We have audited the accompanying statement of assets and liabilities of the
Cash Accumulation Trust (National Money Market Fund), including the statement of
investments, as of September 30, 1995, and the related statement of operations
for the year then ended and the statements of changes in net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1995 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
National Money Market Fund of the Cash Accumulation Trust as of September 30,
1995, and the results of its operations, changes in net assets and the financial
highlights for the periods referred to above, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
October 26, 1995
F-10
<PAGE>
CASH ACCUMULATION TRUST
REGISTRATION STATEMENT ON FORM N-1A
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements (included in Part B).
(b) Exhibits:
1.(a) Agreement and Declaration of Trust of the Trust dated
April 27, 1984 and Amendment No. 1 dated June 19, 1984
incorporated by reference to Exhibit 1 to Registration
Statement on Form N-1A (No. 2-91889) filed on June 26,
1984 (the "Registration Statement").
(b) Amendment No. 2 to Agreement and Declaration of Trust of
the Trust dated August 9, 1984 incorporated by reference
to Exhibit 1 to Pre-Effective Amendment No. 1 to the
Registration Statement filed on September 12, 1984.
(c) Amendment No. 3 to Agreement and Declaration of Trust of
the Trust dated September 11, 1984 incorporated by
reference to Exhibit 2 to Post-Effective Amendment No. 1
to the Registration Statement filed on February 1, 1985.
2.(a) By-Laws of the Trust incorporated by reference to Exhibit
2 to the Registration Statement.
(b) Amendment to By-Laws of the Trust dated July 25, 1990
incorporated by reference to
<PAGE>
Exhibit 2(b) to Post-Effective Amendment No. 12 to the
Registration Statement filed on November 16, 1992.
(c) Amendment to By-Laws of the Trust dated May 24, 1991
incorporated by reference to Exhibit 2(c) to
Post-Effective Amendment No. 12 to the Registration
Statement filed on November 16, 1992.
3. None
4. Specimen Share Certificates of the National Money Market
Fund incorporated by reference to Exhibit 4 to Pre-
Effective Amendment No. 1 to the Registration Statement
filed on September 12, 1984.
5.(a) Management Contract between the Trust and PIMCO Advisors
L.P. incorporated by reference to Exhibit 5(a) to Post-
Effective Amendment No. 18 to the Registration Statement
filed on January 20, 1995.
(b) Sub-Adviser Agreement between PIMCO Advisors L.P. and
Columbus Circle Investors incorporated by reference to
Exhibit 5(b) to Post-Effective Amendment No. 18 to the
Registration Statement filed on January 20, 1995.
6.(a) Selected Dealer Agreement between Thomson Investor
Services Inc. and Prudential Securities Inc. dated July
31, 1991 incorporated by reference to Exhibit 6(b) to
Post-Effective Amendment No. 12 to the Registration
Statement filed on November 16, 1992.
-2-
<PAGE>
(b) Distributor's Contract dated November 16, 1994 between the
Trust and PIMCO Advisors Distribution Company incorporated
by reference to Exhibit 6(c) to Post-Effective Amendment
No. 18 to the Registration Statement filed on January 20,
1995.
7. None.
8. Custody Agreement dated December 10, 1993 between the
Trust and The Bank of New York incorporated by reference
to Exhibit 8 to Post-Effective Amendment No. 18 to the
Registration Statement filed on January 20, 1995.
9.(a) Shareholder Service Agreement dated October 31, 1984
between the Trust and Shareholder Services, Inc.
incorporated by reference to Exhibit 9(a) to
Post-Effective Amendment No. 12 to the Registration
Statement filed on November 16, 1992.
(b) Accounting Services Agreement dated October 31, 1984 among
the Trust, Thomson McKinnon Asset Management Inc. and
Oppenheimer Asset Management Corporation incorporated by
reference to Exhibit 9(b) to Post-Effective Amendment
No. 12 to the Registration Statement filed on November 16,
1992.
(c) Organizational Expense Reimbursement Agreement dated
October, 1984 between the Trust and Thomson McKinnon Asset
Management Inc. incorporated by reference to Exhibit 9(c)
to Post-Effective Amendment No. 12 to the Registration
Statement filed on November 16, 1992.
-3-
<PAGE>
(d) Blue Sky Service Agreement dated December 11, 1990 between
the Trust and Thomson Advisory Group incorporated by
reference to Exhibit 9(d) to Post-Effective Amendment
No. 12 to the Registration Statement filed on November 16,
1992.
10. Opinion and consent of counsel submitted with the Trust's
Rule 24f-2 Notice on November 20, 1995 filed herewith.
11. Consent of Coopers & Lybrand L.L.P. filed herewith.
12. None.
13. Investment Letter from Thomson McKinnon Asset Management
Inc. to the Trust incorporated by reference to Exhibit 13
to Pre-Effective Amendment No. 1 to the Registration
Statement filed on September 10, 1984.
14. None.
15. Amended Distribution Plan of the Trust, as revised through
October 26, 1989, incorporated by reference to Exhibit 15
to Post-Effective Amendment No. 9 to the Registration
Statement filed on December 4, 1989.
16. Schedule for calculation of performance information
incorporated by reference to Post-Effective Amendment No.
10 to the Registration Statement filed on December 3,
1990.
17. Financial Data Schedule for the fiscal year ended
September 30, 1995 (filed as Exhibit 27 for EDGAR
purposes) filed herewith.
-4-
<PAGE>
18. None
19.(a) Powers of Attorney for E. Philip Cannon, Donald P. Carter,
Emmet Cashin, Jr., Gary L. Light, Robert A. Prindiville
and Joel Segall incorporated by reference to Post-
Effective Amendment No. 8 to the Registration Statement
filed on November 23, 1988.
(b) Power of Attorney for W. Bryant Stooks incorporated by
reference to Exhibit 17(c) to Post-Effective Amendment No.
14 to the Registration Statement filed on November 18,
1993.
(c) Power of Attorney for Gary A. Childress incorporated by
reference to Exhibit 17(d) to Post-Effective Amendment No.
14 to the Registration Statement filed on November 18,
1993.
(d) Power of Attorney for Gerald M. Thorne incorporated by
reference to Exhibit 17(e) to Post-Effective Amendment No.
14 to the Registration Statement filed on November 18,
1993.
(e) Power of Attorney for William D. Cvengros incorporated by
reference to Exhibit 17(f) to Post-Effective Amendment No.
16 to the Registration Statement filed on November 18,
1993.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT.
None.
-5-
<PAGE>
Item 26. NUMBER OF HOLDERS OF SECURITIES.
As of 12/31/95, there were 23,884 record holders of the Trust's
securities.
Item 27. INDEMNIFICATION.
Item 27 of the Trust's Registration Statement, filed with the Commission
on June 26, 1984, is incorporated herein by reference.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT
ADVISER.
(a) PIMCO Advisors L.P.(referred to herein as either the "Manager"
or PIMCO Advisors L.P.) was organized as a limited partnership under Delaware
law in 1987 and is registered as an investment adviser under the Investment
Advisers Act of 1940. The Manager manages two mutual fund complexes other
than the Trust: PIMCO Advisors Funds and PIMCO Advisors Institutional Funds.
The Manager also has various subsidiary partnerships which advise and manage
mutual funds, individual accounts, profit-sharing and pension funds and
institutional accounts and act as sub-advisers to certain mutual funds.
PIMCO Partners, G.P. ("PIMCO GP"), the Manager's general partner, is a
general partnership with two partners: (i) an indirect wholly-owned subsidiary
of Pacific Mutual Life Insurance Company; and (ii) PIMCO Partners, L.L.C.
("LLC"), a limited liability company, all of the interests of which are held
directly by the Managing Directors of Pacific Investment Management Company who
are William H. Gross, Dean S. Meiling, James F. Muzzy, William F. Podlich, III,
Frank B. Rabinovitch, Brent R. Harris, John L. Hague, William S. Thompson, Jr.,
William C. Powers and David H. Edington (collectively, the "Managing
Directors"). PIMCO Partners, G.P. has substantially delegated its management
and control of the Manager to an Equity Board and an Operating Board of the
Manager. The activities of the Manager are controlled by its Operating Board
except that certain non-routine or extraordinary actions may not be effected by
the Operating
-6-
<PAGE>
Board without the approval of the Manager's Equity Board. The Operating Board
has in turn delegated the authority to manage day-to-day operations and policies
to an Operating Committee. The Operating Board is composed of twelve members,
of which seven (including the chairman) are designated by Pacific Investment
Management Company, a subsidiary general partnership of the Manager and a sub-
adviser to several of the Funds. The Equity Board is composed of twelve members
including the chief executive officer of the Manager, three members designated
by Pacific Financial Asset Management Company, the chairman of the Operating
Board, two members designated by LLC, two members designated by holders of
Series B Preferred Stock of Thomson Advisory Group Inc., the former general
partner of the Manager, and three independent members. Because of the ability
to designate a majority of the Members of the Operating Board, Pacific
Investment Management Company and the Managing Directors could be said to
control the Manager, although the Managing Directors disclaim such authority.
Set forth below are the substantial business engagements during at least
the two past fiscal years of each director or officer of the Manager and of each
member of the Manager's Operating and Equity Boards:
NAME AND POSITION BUSINESS AND
WITH MANAGER OTHER CONNECTIONS
William D. Cvengros Trustee of the Trust; Trustee of PAF;
President, Chief Trustee and Chairman, PIMCO Advisors
Executive Officer, Institutional Funds; Director, PIMCO
Member of Equity and Advisors Distribution Company ("PADCO");
Operating Boards and Director, Furon Corporation. Formerly,
Operating Committee Vice Chairman, Chief Investment Officer
and Director, Pacific Mutual Life
Insurance Company, Director and
Chairman, Pacific Financial Asset
Management Company, Director, Mutual
Service Corporation, Director, Pacific
Equities Network, Director, PFAMCo UK
Limited, Non-Executive Director,
-7-
<PAGE>
Blairlogie Capital Management Limited,
Trustee and Vice President, PFAMCo Funds,
Chairman and Director, Parametric
Portfolio Associates, Inc., President,
Chairman, Chief Executive Officer,
Director and Trustee of various realty
group trusts, and PMRealty Advisors,
Inc., President, Chief Executive Officer
and Director, NFJ Investment Group, Inc.,
Vice President and Trustee, Pacific
Select Fund, Director, Cadence Capital
Management Corporation
Irwin F. Smith Chairman, Managing Director, Chief
Member of Operating Executive Officer and Chief Investment
and Equity Boards and Officer, Columbus Circle Investers
Operating Committee Company ("CCI"); Formerly, Chairman of
Thomson Advisory Group L.P. ("TAGLP") and
of the Columbus Circle Investors Division
of TAGLP, Director and Chairman, Thomson
Advisory Group Inc. ("TAG Inc.")
Robert A. Prindiville Trustee and President of the Trust and
Executive Vice PAF; Director and Chairman, PADCO.
President Formerly, President of TAGLP, President
and Director, TAG Inc.; Chairman of TIS
Donald K. Miller Chairman, Greylock Financial Inc.;
Member of Equity Director of Huffy Corporation, RPM, Inc.
Board and Christensen Boyles Corporation;
Director, President and Chief Executive
Officer, TAG Inc. Formerly, Vice
Chairman, TAGLP, and Director and Vice
Chairman of TIS
John O. Leasure Director, President and Chief Executive
Senior Vice President Officer of PADCO. Formerly, Executive
Vice President, TAGLP, and President, TIS
-8-
<PAGE>
Newton B. Schott, Jr. Senior Vice President, Director,
Senior Vice President Secretary, PADCO; Formerly, Executive
- Legal, and Vice President, Secretary and General
Secretary Counsel, TAGLP, Executive Vice President,
Secretary and General Counsel, TAG Inc.,
Executive Vice President and Secretary,
TIS
Robert M. Fitzgerald Senior Vice President - Finance, and
Senior Vice President Controller, PADCO. Formerly, Chief
- Finance, Chief Financial Officer, TPM Financial, Vice
Financial Officer and President, Mechanics National Bank, and
Controller Partner, Price Waterhouse.
Donald A. Chiboucas Managing Director and President, CCI;
Member of Operating Formerly, Senior Executive Vice
Board President, TAGLP, President, Columbus
Circle Investors Division, TAGLP, Senior
Executive Vice President, TAG Inc.
Walter E. Auch, Sr. Outside business consultant; Director of
Member of Equity Fort Dearborn Fund, Shearson VIP Fund,
Board Shearson Advisors Fund, Shearson TRAK
Fund, Banyan Land Trust, Banyan Land Fund
II, Banyan Mortgage Fund, Allied
Healthcare Products, Inc., First Western
Inc., DHR Group and Geotech Industries;
Formerly, Director, TAG Inc.
Donald R. Kurtz Formerly, Vice President of General
Member of Equity Motors Investment Management Corp. and
Board Director, TAG Inc.
Kenneth M. Poovey Partner, Latham & Watkins
General Counsel and
Board Secretary
Sharon A. Cheever Vice President and Investment Counsel,
Pacific Mutual Life Insurance Company
-9-
<PAGE>
Vice President, Legal
and Assistant
Secretary
Ernest L. Schmider Vice President, Chief Administrative and
Vice President, Legal Legal Officer, Pacific Investment
and Assistant Management Company
Secretary
James F. McIntosh Executive Director, Allen Matkins, Leck,
Member of Equity Board Gamble & Mallory; Formerly, Director of
Pacific Investment Management Company
Samuel C. Newman Senior Vice President and Assistant
Vice President Secretary, PADCO; Formerly, Vice
President, TAGLP, Senior Vice President
Mutual Fund Division, TAGLP; Senior Vice
President and Assistant Secretary of TIS
John Fieseler Formerly, Vice President, TAGLP
Vice President
Brian C. Molloy Formerly, Vice President, TAGLP
Vice President
Walter B. Gerken Trustee, PIMCO Funds; Formerly, Director,
Chairperson and Pacific Investment Management Company,
Member of Equity Chairman, Director, Chairman of Executive
Board Committee and Chief Executive Officer,
Pacific Mutual
William H. Gross Managing Director, Pacific Investment
Member of Equity Management Company; Director and Vice
Board and Operating President, PIASCO and StocksPLUS; Senior
Board Vice President, PIMCO Funds
Brent R. Harris Managing Director, Pacific Investment
Member of Operating Management Company; Director, PIMCO
Board Commercial Mortgage Securities Trust,
Inc.; Director and Vice President,
-10-
<PAGE>
StocksPLUS; Trustee and Chairman, PIMCO
Funds and PIMCO Commercial Mortgage
Securities Trust, Inc.
Dean S. Meiling Managing Director, Pacific Investment
Member of Operating Management Company; Director, StocksPLUS;
Board Vice President, PIMCO Funds
James F. Muzzy Managing Director, Pacific Investment
Member of Operating Management Company; Director and Vice
Board President, StocksPLUS; Vice President,
PIMCO Funds
Daniel S. Pickett Managing Director, CCI; formerly Senior
Member of Operating Vice President Columbus Circle Division,
Board TAGLP
William F. Podlich III Managing Director, Pacific Investment
Member of Equity Management Company
Board and Operating
Board
William C. Powers Managing Director, Pacific Investment
Member of Operating Management Company
Board
Glenn S. Schafer President, Pacific Mutual; Director,
Member of Equity Mutual Service Corporation, United
Board Planners Group, Inc., Pacific Equities
Network and Pacific Financial Holding
Company
Thomas C. Sutton Director, Chairman and Chief Executive
Member of Equity Officer, Pacific Mutual; Chairman and
Board President, Pacific Select Fund; Director,
United Planners Group Inc., Pacific
Equities Network, Mutual Service
Corporation, Pacific Financial Holding
Company and PMRA
-11-
<PAGE>
William S. Thompson, Chief Executive Officer and Managing
Jr. Director, Pacific Investment Management
Member of Equity Company; Director and President,
Board; Chairman and StocksPLUS
Member of Operating
Board; Member of
Operating Committee
Michelle Mitchell Senior Vice President, PIMCO Advisors
Vice President Institutional Services; Vice President,
PIMCO Advisors Institutional Funds;
Formerly, Vice President of PFAMCO
The principal business address of the Manager is 800 Newport Center
Drive, Suite 100, Newport Beach, CA 92660. The address of PADCO and PAF is
2187 Atlantic Street, Stamford, CT 06902. The address of CCI is One Station
Place, Stamford, CT 06902.
The address of PIMCO Advisors Institutional Funds, Parametric, Pacific
Financial Holding Company, Pacific Equities Network, Pacific Mutual and Pacific
Select Fund is 700 Newport Center Drive, Newport Beach, CA 92660.
The address of PMRA is 800 Newport Center Drive, Newport Beach, CA 92660.
The address of Pacific Investment Management Company is 840 Newport Center
Drive, Newport Beach, CA 92660.
The address of Mutual Service Corporation is 7108 Fairway Drive, Palm Beach
Gardens, FL 33418.
The address of United Planners Group, Inc. is 7333 East Double Tree Ranch
Road, Scottsdale, AZ 85258.
(b) Columbus Circle Investors Company ("CCI") is a general partnership
formed on September 9, 1994 which is registered as an investment adviser under
the Investment Advisers Act of 1940. The Manager and Columbus Circle Investors
Management Inc.("CCI,
-12-
<PAGE>
Inc."), a wholly-owned subsidiary of the Manager, are the general partners of
CCI. CCI consists of the personnel of the former Columbus Circle Investors
Division of TAGLP and the investment personnel of the former Mutual Funds
Division of TAGLP. CCI acts as sub-adviser to other mutual funds and also
advises and manages individual accounts, profit sharing and pension funds and
institutional accounts.
Set forth below are the substantial business engagements during at least
the two past fiscal years of each director or officer of CCI:
NAME AND POSITION BUSINESS AND
WITH CCI OTHER CONNECTIONS
Irwin F. Smith Member of Equity and Operating Boards and
Chairman, Managing Operating Committee, PIMCO Advisors L.P.;
Director, Chief Formerly, Chairman of TAGLP and of the
Executive Officer and Columbus Circle Investors Division of
Chief Investment TAGLP, Director and Chairman, TAG Inc.
Officer
Donald A. Chiboucas Member of Operating Board, PIMCO
President and Advisors, L.P.; Formerly, Senior
Managing Director Executive Vice President, TAGLP;
President, Columbus Circle Investors
Division of TAGLP, Senior Executive Vice
President, TAG Inc.
Louis P. Celentano Formerly Senior Vice President, TAGLP and
Managing Director CCI
Daniel S. Pickett Member of Operating Board, PIMCO Advisors
Managing Director L.P.; Formerly Senior Vice President,
Columbus Circle Investors Division, TAGLP
Amy M. Hogan Formerly Senior Vice President, Columbus
Managing Director Circle Investors Division, TAGLP
Robert W. Fehrmann Formerly Senior Vice President, Columbus
Managing Director Circle Investors Division, TAGLP
-13-
<PAGE>
The address of CCI is One Station Place, Stamford, CT 06902.
Item 29. PRINCIPAL UNDERWRITERS.
(a) PIMCO Advisors Distribution Company (PADCO"), the Registrant's
principal underwriter, also serves as underwriter for PAF, PIMCO Funds and PIMCO
Advisors Institutional Funds, other open-end investment companies. PADCO is a
wholly-owned subsidiary of the Manager.
(b) Information with respect to directors and officers of PADCO is as
follows:
Positions and Offices Positions and
Names and Principal with Principal Offices with
Business Addresses Underwriter Registrant
- ------------------ --------------------- -------------
Robert A. Prindiville Director and Chairman Trustee and
President
John O. Leasure Director and President Vice President
William D. Cvengros Director Trustee
Robert M. Fitzgerald Senior Vice President None
- Finance, Chief
Financial Officer
and Controller
Newton B. Schott, Jr. Director, Senior Vice Vice President
President and and Clerk
Secretary
Samuel C. Newman Senior Vice President None
and Assistant Secretary
Andrew J. Meyers Executive Vice President None
-14-
<PAGE>
Brian F. Trumbore Senior Vice President None
Paul R. Moody Vice President None
William E. Lynch Vice President None
Paul H. Troyer Vice President None
William Thomas, Jr. Vice President None
Edward W. Janeczek, Jr. Vice President None
Matthew M. Russell Vice President None
Jeffrey L. Booth Vice President None
The principal business address of each such individual is 2187 Atlantic
Street, Stamford, CT 06902.
(c) The Registrant has no principal underwriter that is not an affiliated
person of the Registrant or an affiliated person of such an affiliated person.
Item 30. LOCATION OF ACCOUNTS AND RECORDS.
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and the Rules promulgated thereunder include Registrant's
Clerk, Newton B. Schott, Jr.; Registrant's Investment Manager, PIMCO Advisors
L.P., and sub-advisor, Columbus Circle Investors; Registrant's Custodian, The
Bank of New York; and Registrant's Transfer Agent and Shareholder Servicing
Agent, Shareholder Services, Inc. The address of the Investment Manager is
800 Newport Center Drive, Suite 100, Newport Beach, CA 92660; the address of
the Clerk is 2187 Atlantic Street, Stamford, CT 06902; the address of the
sub-advisor is One Station Place, Stamford, CT 06902; the address of the
Custodian is 110
-15-
<PAGE>
Washington Street, New York, NY 10286; and the address of the Transfer Agent and
Shareholder Servicing Agent is 3410 South Galena Street, Denver, CO 80231.
Item 31. MANAGEMENT SERVICES.
None.
Item 32. UNDERTAKINGS.
(a) The Registrant undertakes to comply with Section 16(c) of the
Investment Company Act of 1940 as though such provisions of the Act were
applicable to the Registrant, except that the request referred to in the third
full paragraph thereof may only be made by shareholders who hold in the
aggregate at least 1 per centum of the outstanding shares of the Registrant,
regardless of the net asset value of the shares held by such requesting
shareholders.
-16-
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust of Cash Accumulation Trust
is on file with the Secretary of State of The Commonwealth of Massachusetts and
notice is hereby given that this instrument is executed on behalf of the
Registrant by an officer of the Registrant in his capacity as an officer and not
individually and that the obligations of or arising out of this instrument are
not binding upon any of the Trustees or shareholders of the Trust individually
but are binding only upon the assets and property of the Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment No. 19 to this Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Stamford, and
the State of Connecticut on the 12th day of January, 1996.
CASH ACCUMULATION TRUST
By: /s/ Robert A. Prindiville
-----------------------------
Robert A. Prindiville,
President
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 19 has been signed below by the following persons in the
capacities and on the dates indicated.
Name Capacity Date
- ---- -------- ----
/s/ Robert A. Prindiville Trustee, President January 12, 1996
- ------------------------- and Principal
Robert A. Prindiville Executive Officer
/s/ Brian C. Molloy Treasurer and January 12, 1996
- ------------------------- Principal
Brian C. Molloy Financial and
Accounting Officer
William D. Cvengros* Trustee
- -------------------------
William D. Cvengros
Gary L. Light* Trustee
- -------------------------
Gary L. Light
Joel Segall* Trustee
- -------------------------
Joel Segall
Donald P. Carter* Trustee
- -------------------------
Donald P. Carter
E. Philip Cannon* Trustee
- -------------------------
E. Philip Cannon
Gary A. Childress* Trustee
- -------------------------
Gary A. Childress
W. Bryant Stooks* Trustee
- -------------------------
W. Bryant Stooks
Gerald M. Thorne* Trustee
- -------------------------
Gerald M. Thorne
* By: /s/ Robert A. Prindiville
--------------------------------
Robert A. Prindiville
Attorney-In-Fact
Date: January 12, 1996
<PAGE>
EXHIBIT LIST
Exhibit
- -------
10. Opinion and consent of counsel - 24f-2 Notice
11. Consent of Coopers & Lybrand L.L.P.
17. Financial Data Schedule (filed as Exhibit 27 for EDGAR purposes)
17
<PAGE>
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2624
(617) 951-7000
Telecopier (617) 951-7050
November 20, 1995
Cash Accumulation Trust
2187 Atlantic Street
Stamford, CT 06902
Gentlemen:
You have informed us that you intend to file a Rule 24f-2 Notice (the
"Notice") with the Securities and Exchange Commission (the "Commission")
pursuant to Rule 24f-2 (the "Rule") under the Investment Company Act of 1940, as
amended, making definite the registration of 5,211,739,188 shares of beneficial
interest (the "Shares"), par value $0.00001, of Cash Accumulation Trust (the
"Trust"), sold in reliance upon the Rule during your fiscal year ended September
30, 1995.
We have examined the Trust's Agreement and Declaration of Trust dated April
27, 1984, as amended, on file in the office of the Secretary of State of The
Commonwealth of Massachusetts (the "Agreement and Declaration of Trust"). We
are familiar with the actions taken by the Trust's Trustees to authorize the
issue and sale from time to time of shares of beneficial interest of the Trust
at not less than net asset value and not less than par value, and have assumed
that the Shares have been issued and sold in accordance with such actions. We
have also examined a copy of the Trust's By-laws, as amended through May 24,
1991, and such other documents as we have deemed necessary for the purposes of
this opinion.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and validly issued and are fully paid and non-assessable by the
Trust.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder
<PAGE>
Cash Accumulation Trust -2- November 20, 1995
liability for acts or obligations of the Trust and requires that notice of such
disclaimer be given in each agreement, obligation or instrument entered into or
executed by the Trust or its Trustees. The Agreement and Declaration of Trust
provides for indemnification out of the property of the particular series of
shares for all loss and expense of any shareholder of that series held
personally liable solely by reason of his being or having been a shareholder.
Thus, the risk of shareholder liability is limited to circumstances in which
that series of shares itself would be unable to meet its obligations.
We consent to this opinion accompanying the Notice when filed with the
Commission.
Very truly yours,
Ropes & Gray
<PAGE>
Coopers Coopers & Lybrand L.L.P.
& Lybrand a professional services firm
CONSENT OF INDEPENDENT ACCOUNTANTS
____________________________________________
We consent to the inclusion in Post-Effective Amendment No. 19 to the
Registration Statement of Cash Accumlation Trust on Form N-1A of our report
dated October 26, 1995 on our audit of the financial statements and financial
highlights of the Fund.
We also consent to the reference to our firm under the captions "Financial
Highlights" in the prospectus and "Independent Auditors" in the Statement of
Additional Information.
Coopers & Lybrand L.L.P.
New York, New York
January 12, 1995
Coopers & Lybrand L.L.P., a registered limited liability partnership, is a
member firm of Coopers & Lybrand International
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE ANNUAL REPORT, DATED SEPTEMBER 30,
1995, OF CASH ACCUMULATION TRUST, NATIONAL MONEY
MARKET FUND.
</LEGEND>
<CIK> 0000748719
<NAME> CASH ACCUMULATION TRUST
<SERIES>
<NUMBER> 02
<NAME> NATIONAL MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 685403
<INVESTMENTS-AT-VALUE> 685403
<RECEIVABLES> 30902
<ASSETS-OTHER> 247
<OTHER-ITEMS-ASSETS> 44
<TOTAL-ASSETS> 716596
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 31368
<TOTAL-LIABILITIES> 31368
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 685228
<SHARES-COMMON-STOCK> 685228
<SHARES-COMMON-PRIOR> 823343
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 685228
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 40719
<OTHER-INCOME> 0
<EXPENSES-NET> (4796)
<NET-INVESTMENT-INCOME> 35923
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 35923
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (34655)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5211739
<NUMBER-OF-SHARES-REDEEMED> 5384509
<SHARES-REINVESTED> 34655
<NET-CHANGE-IN-ASSETS> (138115)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2916
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4796
<AVERAGE-NET-ASSETS> 697209
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .69
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
