<PAGE>
CASH ACCUMULATION TRUST
840 Newport Center Drive
Newport Beach, CA 92660
October 20, 1997
Dear Cash Accumulation Trust Shareholder:
We are pleased to report that the Cash Accumulation Trust continues to meet
its objective of providing current income, to the extent consistent with
preservation of capital and liquidity. As of September 30, 1997, the Fund's 7-
day yield was 4.99%. This is higher than six months ago, when the 7-day yield
was 4.83%.
Given this year's stock and bond market volatility, it is apparent that
money market funds continue to play an important role in an investor's
diversified portfolio. They offer the stability and liquidity that can help
add balance to investments in stocks and bonds. In addition, they can serve as
a temporary "parking place" until a longer-term investment choice is made.
It is important to note that money market funds 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.
As always, we appreciate your investing with us. You will shortly receive
proxy materials describing various proposals by which Prudential Securities
Inc., Prudential Fund Management L.L.C. and their affiliates will take over
the management of this Trust. Please read the proxy materials carefully.
Again, thank you for your support.
Sincerely,
/s/ Stephen J. Treadway
Stephen J. Treadway
President
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
----------- ------------
<C> <S> <C>
SHORT-TERM NOTES--95.7%
BANKS--21.7%
$30,000,000 Bayerische Landesbank Girozentrale, 5.50%,
10/8/97.......................................... $ 29,967,917
20,000,000 BHF Finance (DE), Inc., 5.52%, 10/3/97............ 19,993,867
5,700,000 Commonwealth Bank of Australia, 6.35%, 10/1/97.... 5,700,000
Cregem North America, Inc.:
10,000,000 5.50%, 10/28/97.................................. 9,958,750
10,000,000 5.52%, 11/26/97.................................. 9,914,133
10,000,000 5.52%, 12/5/97................................... 9,900,333
15,000,000 Deutsche Bank Financial, Inc., 5.50%, 10/9/97..... 14,981,667
10,900,000 Dresdner U.S. Finance, Inc., 5.52%, 10/2/97....... 10,898,329
25,000,000 Societe Generale, 5.51%, 10/2/97.................. 24,996,174
16,200,000 UBS Finance (DE), Inc., 5.50%, 10/9/97............ 16,180,200
------------
152,491,370
------------
BEVERAGES--5.5%
7,870,000 Bass Finance (CI) Ltd., guaranteed by Bass PLC,
5.60%, 11/7/97................................... 7,824,704
PepsiCo, Inc.:
9,800,000 5.49%, 10/1/97................................... 9,800,000
13,000,000 5.50%, 10/1/97................................... 13,000,000
8,000,000 5.50%, 10/2/97................................... 7,998,778
------------
38,623,482
------------
BROKER/DEALERS--14.5%
Bear Stearns & Co., Inc.:
17,000,000 5.54%, 12/18/97................................. 16,795,943
16,000,000 5.55%, 10/6/97.................................. 15,987,667
Goldman Sachs Group, LP:
17,000,000 5.50%, 11/10/97................................. 16,896,111
17,200,000 5.51%, 10/14/97................................. 17,165,777
Merrill Lynch & Co., Inc.:
14,000,000 5.52%, 11/3/97.................................. 13,929,160
12,000,000 5.53%, 11/5/97.................................. 11,935,483
9,000,000 5.53%, 12/10/97................................. 8,903,225
------------
101,613,366
------------
</TABLE>
1
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1997 (CONTINUED)
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
----------- ------------
<C> <S> <C>
BUILDING MATERIALS--2.5%
Redland Finance, Inc.:
$ 5,000,000 5.52%, 10/6/97.................................. $ 4,996,167
5,000,000 5.52%, 10/20/97................................. 4,985,433
8,000,000 5.52%, 10/22/97................................. 7,974,240
------------
17,955,840
------------
COMMERCIAL FINANCE (ASSET-BACKED)--6.3%
10,300,000 Corporate Asset Securitization Australia Ltd.,
5.54%, 10/27/97................................ 10,258,789
Sheffield Receivables Corp.:
8,400,000 5.53%, 10/17/97................................. 8,379,355
12,000,000 5.54%, 10/29/97................................. 11,948,293
14,000,000 5.54%, 11/21/97................................. 13,890,123
------------
44,476,560
------------
CONSUMER FINANCE--6.3%
CSW Credit, Inc.:
6,600,000 5.52%, 10/8/97................................... 6,592,916
11,000,000 5.52%, 10/20/97.................................. 10,967,953
11,000,000 5.53%, 11/12/97.................................. 10,929,032
5,000,000 5.53%, 12/2/97................................... 4,952,381
11,000,000 Eiger Capital Corp., 5.52%, 10/10/97.............. 10,984,820
------------
44,427,102
------------
DIVERSIFIED FINANCIAL--2.7%
18,700,000 General Electric Capital Corp., 5.49%, 10/8/97.... 18,680,038
------------
ELECTRIC UTILITIES--4.1%
National Rural Utilities Cooperative Finance
Corp.:
8,000,000 5.50%, 11/4/97................................... 7,958,444
10,000,000 5.51%, 10/16/97.................................. 9,977,042
1,200,000 5.55%, 10/9/97................................... 1,198,520
9,400,000 5.55%, 10/24/97.................................. 9,366,669
------------
28,500,675
------------
ELECTRONICS--1.4%
10,000,000 General Electric Co., 5.50%, 10/24/97............. 9,964,861
------------
</TABLE>
2
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1997 (CONTINUED)
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
----------- ------------
<C> <S> <C>
OIL-INTEGRATED--9.2%
Petrofina (DE), Inc.:
$20,000,000 5.50%, 10/6/97................................... $ 19,984,722
11,250,000 5.51%, 10/10/97.................................. 11,234,503
Statoil:
10,000,000 5.50%, 10/21/97.................................. 9,969,444
11,900,000 5.53%, 10/28/97.................................. 11,850,645
11,500,000 5.55%, 10/28/97.................................. 11,452,131
------------
64,491,445
------------
RESTAURANTS--4.8%
Golden Managers Acceptance Corp.:
17,000,000 5.54%, 10/23/97................................... 16,942,446
16,736,000 5.55%, 10/15/97................................... 16,699,878
------------
33,642,324
------------
SPECIAL PURPOSE FINANCIAL--13.7%
Cooperative Assn. of Tractor Dealers, Inc.:
10,600,000 5.53%, 10/14/97................................... 10,578,832
9,000,000 5.53%, 11/4/97.................................... 8,947,860
9,600,000 5.54%, 11/12/97................................... 9,537,952
4,100,000 5.54%, 11/18/97................................... 4,069,715
10,000,000 Delaware Funding Corp., 5.52%, 10/31/97............ 9,954,000
Preferred Receivables Funding Corp.:
11,000,000 5.53%, 10/9/97.................................... 10,986,482
7,900,000 5.55%, 10/7/97.................................... 7,892,692
Windmill Funding Corp.:
14,000,000 5.54%, 10/30/97................................... 13,937,521
8,000,000 5.54%, 11/25/97................................... 7,932,289
8,000,000 5.55%, 10/10/97................................... 7,988,900
4,300,000 5.55%, 10/17/97................................... 4,289,393
------------
96,115,636
------------
</TABLE>
3
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1997 (CONTINUED)
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
----------- ------------
<C> <S> <C>
TELEPHONE UTILITIES--3.0%
Southern New England Telecom:
$10,000,000 5.52%, 10/6/97.................................... $ 9,992,333
10,900,000 5.54%, 10/7/97.................................... 10,889,936
------------
20,882,269
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $671,864,968) 95.7% 671,864,968
Other Assets Net of Liabilities 4.3 30,137,782
----- ------------
NET ASSETS 100.0% $702,002,750
===== ============
</TABLE>
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.
4
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
<TABLE>
<S> <C>
ASSETS
Investments, at amortized cost (cost $671,864,968)................ $671,864,968
Cash.............................................................. 31,543
Receivable for Fund shares sold................................... 57,317,059
Other............................................................. 124,240
------------
Total assets.................................................. 729,337,810
------------
LIABILITIES
Payables and other liabilities:
Fund shares redeemed............................................. 25,486,685
Dividends........................................................ 1,116,908
Management fees.................................................. 240,319
Shareholder communications....................................... 92,515
Distribution fees................................................ 57,511
Trustees' fees................................................... 26,303
Other............................................................ 314,819
------------
Total liabilities............................................. 27,335,060
------------
NET ASSETS.......................................................... $702,002,750
============
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE
($702,002,750 / 702,002,750 SHARES)................................ $ 1.00
============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1997
INVESTMENT INCOME
Interest and discount earned...................................... $ 38,267,809
------------
EXPENSES
Management fees................................................... 2,886,449
Distribution fees................................................. 690,378
Transfer and dividend disbursing agent fees....................... 343,606
Registration and filing fees...................................... 341,903
Legal and auditing fees........................................... 116,071
Custodian fees and expenses....................................... 48,229
Trustees' fees and expenses....................................... 47,312
Other............................................................. 22,204
------------
Total expenses................................................ 4,496,152
------------
NET INVESTMENT INCOME AND NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS......................................................... $ 33,771,657
============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
NATIONAL MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS
Net investment income and net increase in net
assets resulting from operations................ $ 33,771,657 $ 29,603,431
------------ ------------
DIVIDENDS TO SHAREHOLDERS.......................... (33,771,657) (29,603,431)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting
from beneficial interest transactions........... 49,675,319 (32,900,860)
------------ ------------
Net increase (decrease) in net assets............ 49,675,319 (32,900,860)
NET ASSETS
Beginning of period.............................. 652,327,431 685,228,291
------------ ------------
End of period.................................... $702,002,750 $652,327,431
============ ============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
NATIONAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<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..................... 0.05 0.05 0.05 0.03 0.02
Dividends to shareholders... (0.05) (0.05) (0.05) (0.03) (0.02)
-------- -------- -------- -------- --------
Net asset value, end of
period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return................ 5.0% 5.0% 5.2% 3.2% 2.3%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands)............. $702,003 $652,327 $685,228 $823,343 $652,256
Ratios to average net
assets:
Net investment income..... 4.89% 4.86% 5.15% 3.20% 2.26%
Expenses.................. 0.65% 0.69% 0.69% 0.61% 0.71%
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
NATIONAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
1) ORGANIZATION AND 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's investment objective is current income to the
extent consistent with preservation of capital and liquidity. The Trust
consists of the National Money Market Fund (the "Fund"), which is managed by
PIMCO Advisors L.P. (the "Manager"). The Fund also has a sub-advisor, Columbus
Circle Investors ("CCI"), which, under the supervision of the Manager and the
Trust's Trustees, directs the investment of the Fund's assets.
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 and accretion of discount.
ESTIMATES--The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
2) SHARES AND DOLLARS OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of $.00001 par value shares of
beneficial interest. Transactions in shares and dollars of beneficial interest
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
-------------- --------------
<S> <C> <C>
Shares and dollars sold....................... 6,248,712,913 5,037,785,418
Shares and dollars issued to shareholders in
reinvestment of dividends.................... 32,440,525 27,657,940
-------------- --------------
Total..................................... 6,281,153,438 5,065,443,358
Shares and dollars redeemed................... (6,231,478,119) (5,098,344,218)
-------------- --------------
Net increase (decrease)....................... 49,675,319 (32,900,860)
============== ==============
</TABLE>
8
<PAGE>
NATIONAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1997
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:
0.425% of the first $500 million,
0.400% of the next $500 million,
0.375% of the next $500 million,
0.350% of the next $500 million,
0.325% on 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 an
annual rate of 0.05% of net assets.
The Trustees have approved a unified fee plan, covering compensation from
both of the Trusts for which they serve as independent Trustees, the Cash
Accumulation Trust and the PIMCO Funds: Multi-Manager Series. The fee is
allocated between the Trusts and among the Funds of the Trusts based on
relative net assets. The approved Trustees' fees are as follows:
<TABLE>
<S> <C>
Annual Retainer................................ $45,000
Meeting Fee (each meeting attended)............ 2,000
Committees:
Chairman..................................... 2,000
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 was informed
that the distributor, PIMCO Funds Distribution Company, an affiliate of the
Manager, received $690,378 for services provided and expenses incurred during
the year ended September 30, 1997 in connection with assistance rendered in
the sale of Trust shares. During the year ended September 30, 1997, the
distribution fee, which is accrued daily and paid monthly, was equal on an
annual basis to 0.10% of the Trust's average daily net assets.
9
<PAGE>
NATIONAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1997
5) PROPOSED TRANSACTION
Prudential Investments Fund Management LLC ("PIFM"), a subsidiary of
Prudential Insurance Company of America, proposed to the Trust's Board of
Trustees that the Trust become part of the Prudential Mutual Fund Family. In
connection with such proposal, on October 22, 1997, the Trust's Board of
Trustees: (i) nominated a new slate of Trustees; (ii) approved a new
investment manager and investment management agreement; and (iii) approved a
new sub-advisor and a new sub-advisory agreement. A meeting of shareholders to
approve all of those actions is scheduled for December 1997.
10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of the National Money Market Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the statement of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the National Money
Market Fund (the "Fund") at September 30, 1997, the results of its operations,
the changes in its net assets and the financial highlights for the year then
ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audit, which included confirmation of
securities at September 30, 1997 by correspondence with the custodian,
provides a reasonable basis for the opinion expressed above. The statement of
changes in net assets for the year ended September 30, 1996 and the financial
highlights for each of the years then ended were audited by other independent
accountants whose report dated October 23, 1996 expressed an unqualified
opinion on those statements.
Price Waterhouse LLP
Kansas City, Missouri
October 28, 1997
11
<PAGE>
INVESTMENT ADVISER
PIMCO Advisors L.P.
DISTRIBUTOR
PIMCO Funds Distribution Company
SHAREHOLDER SERVICING AND TRANSFER AGENT
Shareholder Services, Inc.
CUSTODIAN OF PORTFOLIO SECURITIES
The Bank of New York
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
LEGAL COUNSEL
Ropes & Gray
This is a copy of a report by Cash Accumulation Trust to its shareholders.
Distribution of this report to persons other than shareholders of the Trust is
authorized only in connection with or when preceded by the Trust's Prospectus.
This report does not offer for sale or solicit orders to buy any securities.
ANNUAL
REPORT
SEPTEMBER 30, 1997
[ART]
