(ICON)
Cash
Accumulation
Trust
- ------------------
Liquid Assets Fund
SEMI
ANNUAL
REPORT
March 31, 1998
(LOGO)
<PAGE>
Cash Accumulation Trust
Liquid Assets Fund
Performance At A Glance.
Money market securities fell, then rose sharply
during the four months ended
March 31, 1998. Yields fell as concern over the
Asian financial crisis
increased the probability of a reduction in
U.S. short-term interest rates.
Conversely, money market yields rose in late
February and March after Federal
Reserve Chairman Alan Greenspan abruptly
dispelled the notion that a federal
funds rate cut was imminent. The Cash
Accumulation Trust -- Liquid Assets
Fund's performance improved as we acted quickly
to lock in higher yields
during late February and March.
Fund Facts As of 3/31/98
<TABLE>
<CAPTION>
7-Day Net Asset
Weighted Avg. Net
Current Yld. Value (NAV)
Mat. (WAM) Assets (mil.)
<S> <C> <C>
<C> <C>
Liquid Assets Fund 5.46% $1.00
69 Days $353.0
IBC Financial Data
Money Fund Avg.
(General Purpose*) 4.93 $1.00
62 Days N/A
</TABLE>
Note: Yields will fluctuate from time to time
and past performance is not
indicative of future results. An investment in
the Fund is 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 $1 net asset
value per share.
*This is the average seven-day current yield,
NAV and WAM of all funds in the
International Business Communications Financial
Data's money fund category as
of March 31, 1998.
Cash Fund Yield Comparison
(GRAPH)
How Investments Compared.
(As of 3/31/98)
(GRAPH)
Source: Lipper Analytical Services. Financial
markets change, so a mutual
fund's past performance should never be used to
predict future results. The
risks to each of the investments listed above
are different -- we provide
12-month total return averages for several
Lipper mutual fund categories to
show you that reaching for higher returns means
tolerating more risk. The
greater the risk, the larger the potential
reward or loss. In addition, we've
included historical 20-year average annual
returns. These returns assume the
reinvestment of dividends.
U.S. Growth Funds will fluctuate a great deal.
Investors have received higher
historical total returns from stocks than from
most other investments. Smaller
capitalization stocks offer greater potential
for long-term growth but may be
more volatile than larger capitalization
stocks.
General Bond Funds provide more income than
stock funds, which can help smooth
out their total returns year by year. But their
prices still fluctuate
(sometimes significantly) and their returns
have been historically lower than
those of stock funds. Unlike bond funds, bonds,
if held to maturity, generally
offer a fixed rate of return and fixed
principal value.
General Municipal Debt Funds invest in bonds
issued by state governments, state
agencies and/or municipalities. This investment
provides income that is usually
exempt from federal and state income taxes.
U.S. Taxable Money Funds attempt to preserve a
constant share value; they
don't fluctuate much in price but,
historically, their returns have been
generally among the lowest of the major
investment categories.
<PAGE>
Michelle Errico Gonnella, Fund Manager
Portfolio
Manager's Report
The Liquid Assets Fund, one of two series of
the Cash Accumulation Trust, seeks
current income consistent with preservation of
capital and liquidity. The Fund
is a diversified portfolio of high-quality,
U.S. dollar-denominated money
market securities issued by the U.S. government
and its agencies, major
corporations and commercial banks of the U.S.
and foreign countries. Maturities
can range from one day to 13 months. We
typically purchase securities rated in
one of the two highest rating categories by at
least two major, independent
rating agencies, or if not rated, deemed to be
of equivalent quality by our
credit research staff. There can be no
assurance that the Fund will achieve
its investment objective.
Strategy Session.
- -----------------------------------------------
- --------------------------------
U.S. Economy Roars Ahead.
Predictions of lackluster U.S. economic growth
were widespread as the new year
began. Financial problems in Asia and dwindling
corporate profits were expected
to slow U.S. economic growth to approximately
2% in 1998, about half of last
year's growth rate. But the world's largest
economy defied Wall Street
forecasts by surging 4.8% in the first three
months of the year, and inflation
fell to levels not seen since the early 1950s.
Money market yields were on a roller coaster
during the reporting period as
investors reacted to developments in the Far
East and the U.S. In January,
prices of money market securities soared and
yields plunged on the belief that
U.S. economic growth would slow dramatically as
exports to struggling Asian
countries slumped while cheaply priced imports
from Asia flooded U.S. markets.
The supply of U.S. Treasury securities was also
expected to decrease as the
federal government borrowed less in the first
three months of 1998 because of
the rapidly shrinking budget deficit and hefty
tax revenues. Thus, investors
pushed prices of money market securities higher
and yields lower, fearing a
dwindling supply of short-term securities.
The market rally faded, however, as government
reports indicated the economy
was picking up steam. Indeed, more than 300,000
non-farm jobs were created in
January as the unemployment rate held steady at
4.7%. As a result, money market
yields crept higher then jumped in late
February after Federal Reserve Chairman
Alan Greenspan hinted that monetary policy
would remain unchanged. His remarks
disappointed investors who believed U.S.
central bankers would have to reduce
the federal funds rate (what banks charge each
other for overnight loans) to
keep the economy growing amid continued
financial difficulties in Asia. But
strong economic statistics proved that a short-
term rate cut was the last
thing the robust U.S. economy needed.
Welcome to the Rock.
Prudential has more than $25 billion in assets
under management in 20
short-term funds. We welcome you and will work
to make doing business with us
as convenient as possible.
<PAGE>
What Went Well.
- -----------------------------------------------
- --------------------------------
We Watched. We Waited. We Bought.
We believed all along that U.S. economic growth
was stronger than expected.
Therefore, when the one-year London Interbank
Offered Rate (LIBOR) fell more
than a quarter percentage point in mid-January,
we doubted such low yields
would last.
We figured that reports would eventually show
the economic expansion remained
on track and short-term yields would head
higher. With this in mind, we largely
avoided purchasing longer-term money market
securities in January.
When yields began to rise in late February as
investors realized a federal
funds rate cut was not imminent, we went
bargain hunting. Bank obligations
maturing in one year provided solid yields, so
we bought these securities
along with others as yields climbed further.
Our purchases increased the
Fund's weighted average maturity (WAM) in mid-
March to nearly 75 days, which
was longer than the average comparable fund.
Extending the WAM enhanced the
Fund's return.
And Not So Well.
- -----------------------------------------------
- --------------------------------
Not Enough Floaters.
Variable rate notes, or floaters, are
securities whose interest rates adjust
periodically based on an index such as the one-
month LIBOR. We did not increase
our holdings of floaters because we expected
the securities would become
cheaper. Unfortunately, floaters became more
expensive. Owning more of these
securities would have boosted the Fund's return
because their interest rates
adjusted higher as money market yields climbed
in late February and March.
Weighted Average Maturity Compared
To The Average Fund.
(GRAPH)
Looking Ahead.
While inflation in the U.S. remains in check,
continued robust economic growth
could reignite mounting inflationary pressures
later in the year. Based on
experience, we believe the Federal Reserve
prefers to act sooner rather than
later when it comes to inflation. The central
bank could raise the federal
funds rate this year. Accordingly, we are
targeting money market securities
with yields that factor in the risk of higher
short-term rates down the road.
1
<PAGE>
President's Letter
May 15, 1998
- -----------------------------------------------
- --------------------------------
(PHOTO)
See You On the
Net!
Dear Shareholder:
We are proud to be part of the worldwide web
and we invite you to visit our two
web sites, if you have not already done so.
Yes, we currently offer two
sites -- each with its own distinctive
identity.
http://www.prudential.com
The Prudential web site features information on
personal investing, retirement
planning, commercial and residential real
estate opportunities, as well as
insurance products for life, health, home and
property.
You can look up performance data on your
Prudential mutual funds, learn about
proven investment strategies, or take one of
our many interactive quizzes that
will help guide you in determining long-term
goals -- like how much to save for
your child's college education or for your
retirement.
http://www.prusec.com
The Prudential Securities Virtual Branch Office
is a full-service brokerage web
site specifically designed to provide investors
with the information they need
to make informed financial decisions. It was
rated the No. 1 full-service
brokerage web site of its type by Financial Net
News (February 1998), a
subsidiary of Institutional Investor magazine,
and was also rated among the
top corporate web sites by Fortune magazine
(Winter 1998).
What investors can find here are -- daily
market commentaries, stock quotes,
economic forecasts, product news, and current
market research, in addition to
interactive investing programs. Investors,
through their Prudential Securities
Financial Advisors, may also enroll in
Prudential Online(R) and have access to
their personal account information which
includes balances, security values,
transactions and account activities. They can
also easily E-mail their
Financial Advisor.
Both sites also contain professional
opportunities for people who are
searching for employment or considering a
change of career paths.
We plan to make further enhancements to our web
pages as the year progresses.
So please, the next time you are "web browsing"
or "surfing the net," pay us
a visit. Let us know what you think and what
you'd like to see added in the
future.
Sincerely,
Brian M. Storms
President, Prudential Mutual Funds & Annuities
<PAGE>
Portfolio of Investments as of CASH
ACCUMULATION TRUST
March 31, 1998 (Unaudited) LIQUID
ASSETS FUND
- -----------------------------------------------
- ----------------
- -----------------------------------------------
- ----------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description
Value (Note 1)
<C> <S>
<C>
- -----------------------------------------------
- -------------
Bank Notes--2.3%
Corestates Bank, N.A.
$2,000 5.63359%, 4/21/98(b)
$ 2,000,000
Key Bank, N.A.
1,000 5.64625%, 4/13/98(b)
1,000,440
1,000 5.54%, 4/29/98(b)
999,559
4,000 5.52%, 6/18/98(b)
3,997,771
- ------------
7,997,770
- -----------------------------------------------
- -------------
Certificates Of Deposit - Domestic--2.6%
Chase Manhattan Bank
4,000 5.56%, 6/4/98
4,000,000
3,000 5.62%, 7/6/98
3,000,000
Morgan Guaranty Trust Co.
2,000 5.93%, 8/31/98
2,001,804
- ------------
9,001,804
- -----------------------------------------------
- -------------
Certificates Of Deposit - Eurodollar--0.9%
Abbey National Treasury Services
PLC
2,000 5.75%, 3/5/99
2,000,000
Creditanstalt Bankverein
1,000 5.59%, 5/12/98
1,000,005
- ------------
3,000,005
- -----------------------------------------------
- -------------
Certificates Of Deposit - Yankee--22.1%
Barclays Bank PLC
10,000 5.53%, 2/23/99
9,994,826
Bayerishe Hypotheken Und Wechsel
Bank
2,000 5.47%, 7/14/98
1,999,472
Canadian Imperial Bank of Commerce
1,378 5.57%, 6/22/98
1,378,000
6,000 5.55%, 2/10/99
5,997,516
Commerzbank
4,000 5.54%, 5/27/98
4,000,000
Credit Communal De Belgique, S.A.
1,800 5.57%, 4/21/98
1,800,000
Deutsche Bank
5,000 5.57%, 2/26/99
4,997,825
3,000 5.62%, 2/26/99
2,998,696
Deutsche Bank
$3,000 5.63%, 2/26/99
$ 2,997,654
3,000 5.66%, 3/3/99
2,998,677
Rabobank Nederland, N. V.
4,000 5.50%, 2/9/99
3,997,358
Societe Generale
10,000 5.58%, 6/12/98
10,000,000
Swiss Bank Corp.
15,000 5.625%, 4/8/98
15,000,000
Westdeutcshe Landesbank
Girozentrale
10,000 5.57%, 4/22/98
10,000,000
- ------------
78,160,024
- -----------------------------------------------
- -------------
Commercial Paper--53.9%
Abbey National North America Corp.
1,060 5.50%, 4/29/98
1,055,466
American General Finance Corp.
5,000 5.52%, 5/8/98
4,971,633
1,000 5.49%, 6/30/98
986,275
Aon Corp.
1,000 5.59%, 4/14/98
997,981
1,000 5.56%, 5/19/98
992,587
3,000 5.59%, 5/27/98
2,973,913
Aristar, Inc.
1,000 5.53%, 4/9/98
998,771
3,030 5.58%, 5/5/98
3,014,032
1,000 5.52%, 5/11/98
993,867
Associates Corp. of North America
1,000 5.50%, 6/12/98
989,000
Bank Of Montreal
5,000 5.65%, 4/2/98
4,999,215
Barton Capital Corp.
2,000 5.58%, 5/18/98
1,985,430
1,376 5.57%, 5/22/98
1,365,142
Carnival Corp.
5,500 5.70%, 4/21/98
5,482,583
Centric Capital Corp.
1,000 5.70%, 4/7/98
999,050
Coca-Cola Enterprises, Inc.
4,200 5.55%, 6/3/98
4,159,208
Commercial Credit Co.
2,000 5.50%, 6/12/98
1,978,000
</TABLE>
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments as of CASH
ACCUMULATION TRUST
March 31, 1998 (Unaudited) LIQUID
ASSETS FUND
- -----------------------------------------------
- ----------------
- -----------------------------------------------
- ----------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description
Value (Note 1)
<C> <S>
<C>
- -----------------------------------------------
- -------------
Commercial Paper (cont'd.)
Commerzbank U.S. Finance, Inc.
$2,000 5.54%, 5/1/98
$ 1,990,767
Cregem North America, Inc.
15,843 5.55%, 4/3/98
15,838,115
CXC, Inc.
1,000 5.55%, 5/11/98
993,833
2,000 5.55%, 5/12/98
1,987,358
1,000 5.55%, 5/22/98
992,138
Duke Capital Corp.
1,000 5.59%, 4/29/98
995,652
Finova Capital Corp.
5,000 5.65%, 4/28/98
4,978,813
Ford Motor Credit Co.
1,010 5.52%, 5/8/98
1,004,270
General Electric Capital Corp.
1,000 5.54%, 4/30/98
995,537
8,526 5.53%, 5/1/98
8,486,709
3,791 5.45%, 5/29/98
3,757,713
2,000 5.51%, 6/12/98
1,977,960
General Motors Acceptance Corp.
3,000 5.54%, 4/29/98
2,987,073
1,378 5.53%, 5/18/98
1,368,051
General Signal Corp.
10,000 5.60%, 4/2/98
9,998,444
Household International, Inc.
5.80%, 4/13/98
(cost $998,067, date purchased
3/30/98)(c)
998,067
1,000
Ing America Insurance Holdings,
Inc.
6,000 5.74%, 4/3/98
5,998,087
2,000 5.74%, 4/28/98
1,991,390
Intenational Nederland U.S.
Funding
Corp.
5,000 5.63%, 4/8/98
4,994,526
J.C. Penny Funding Corp.
1,058 5.55%, 4/24/98
1,054,249
Merrill Lynch & Co., Inc.
4,000 5.51%, 6/11/98
3,956,532
5,000 5.51%, 6/12/98
4,944,900
Mont Blanc Capital Corp.
5,000 5.55%, 6/25/98
4,934,479
Monte Rosa Capital Corp.
$2,405 5.55%, 5/14/98
$ 2,389,057
Nationwide Building Society
4,000 5.51%, 6/3/98
3,961,430
Nordbanken North America
1,000 5.55%, 5/28/98
991,213
Old Line Funding Corp.
1,916 5.58%, 4/17/98
1,911,248
2,000 5.60%, 4/27/98
1,991,911
Paccar Financial Corp.
6,000 5.60%, 4/27/98
5,975,733
Rubbermaid, Inc.
1,000 5.53%, 5/27/98
991,398
Safeco Corp.
5,000 5.54%, 5/11/98
4,969,222
Special Purpose Accounts
Recreation
Cooperative Corp.
3,493 5.53%, 5/21/98
3,466,172
Svenska Handelsbanken, Inc.
3,000 5.51%, 5/20/98
2,977,501
Unifunding, Inc.
3,000 5.51%, 5/20/98
2,977,501
3,000 5.50%, 6/16/98
2,965,167
Variable Funding Capital Corp.
14,506 5.55%, 5/6/98
14,427,728
WCP Funding, Inc.
3,000 5.55%, 5/28/98
2,973,638
Windmill Funding Corp.
3,000 5.57%, 4/17/98
2,992,573
1,162 5.56%, 4/29/98
1,156,975
2,000 5.53%, 5/15/98
1,986,482
Wood Street Funding Corp.
1,000 5.58%, 5/8/98
994,265
2,000 5.53%, 6/19/98
1,975,730
Xerox Overseas Holdings PLC
2,112 5.55%, 4/20/98
2,105,814
- ------------
190,347,574
- -----------------------------------------------
- -------------
Loan Participations(c)--3.2%
Bell Atlantic Network Funding
Corp.
5.65%, 4/13/98
(cost $1,000,000, date
purchased
3/24/98)
1,000,000
1,000
</TABLE>
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as of CASH
ACCUMULATION TRUST
March 31, 1998 (Unaudited) LIQUID
ASSETS FUND
- -----------------------------------------------
- ----------------
- -----------------------------------------------
- ----------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description
Value (Note 1)
<C> <S>
<C>
- -----------------------------------------------
- -------------
Loan Participations(c)--(cont'd.)
Bell Atlantic Network Funding
Corp.
5.60%, 4/30/98
(cost $276,000, date purchased
3/20/98)
$ 276,000
$276
Cooper Industries, Inc.
5.60%, 4/17/98
(cost $2,000,000, date
purchased
2/17/98)
2,000,000
2,000
Countrywide Home Loans, Inc.
5.75%, 4/10/98
(cost $2,000,000, date
purchased
3/24/98)
2,000,000
2,000
5.75%, 4/23/98
(cost $5,100,000, date
purchased
3/24/98)
5,100,000
5,100
Paccar Financial Corp.
5.57%, 4/21/98
(cost $1,000,000, date
purchased
3/20/98)
1,000,000
1,000
- ------------
11,376,000
- -----------------------------------------------
- -------------
Time Deposit - Eurodollar--2.6%
Republic National Bank of New York
9,339 6.125%, 4/1/98
9,339,000
- -----------------------------------------------
- -------------
Other Corporate Obligations--13.9%
Abbey National Treasury Services
PLC
7,331 5.50%, 2/5/99
7,326,169
Bank of New York Co., Inc.
5,000 5.54%, 4/16/98
4,988,458
General Motors Acceptance Corp.
13,000 5.63234%, 5/4/98(b)
12,996,824
Liquid Asset Backed Securities
Trust,
Series 1998-1
2,906 5.6875%, 4/27/98(b)
2,905,955
Mellon Bank, N.A.
6,000 5.6275%, 6/16/98(b)
5,999,995
Strategic Money Market Trust,
Series
1998-B
15,000 5.6875%, 4/6/98(b)
15,000,000
- ------------
49,217,401
Total Investments--101.5%
(amortized cost $358,439,578(a))
$358,439,578
Liabilities in excess of other
assets--(1.5%)
(5,332,776)
- ------------
Net Assets--100%
$353,106,802
- ------------
- ------------
</TABLE>
(a) The cost of securities for federal income
tax purposes is substantially the
same as for financial reporting purposes.
(b) Variable rate instrument. The maturity date
presented for these instruments
is the later of the next date on which the
security can be redeemed at par
or the next date on which the rate of
interest is adjusted.
(c) Private placement restricted as to resale
and does not have a readily
available market; the aggregate cost of
such securities is $12,374,067. The
aggregate value ($12,374,067) is
approximately 3.5% of net assets.
The industry classification of portfolio
holdings and liabilities in excess of
other assets shown as a percentage of net
assets as of March 31, 1998 was as
follows:
<TABLE>
<S>
<C>
Commercial
Banks...................................
45.3%
Asset Backed
Securities............................ 13.8
Motor
Vehicles.....................................
7.2
Bank Holding
Companies............................. 5.9
Business Credit
(Finance).......................... 5.7
Fire
Insurance.....................................
3.7
Personal Credit
Institutions....................... 3.7
Miscellaneous Electrical
Equipment................. 2.9
Securities Brokers &
Dealers....................... 2.6
Mortgage
Banks.....................................
2.0
Special Purpose
Entity............................. 2.0
Water
Transportation...............................
1.6
Accident & Health
Insurance........................ 1.4
Beverages......................................
.... 1.2
Financial
Services.................................
0.6
Photo
Equipment....................................
0.6
Telephone &
Communications......................... 0.4
Department
Stores.................................. 0.3
Electrical
Services................................ 0.3
Plastics.......................................
.... 0.3
- -----
101.5
Liabilities in excess of other
assets.............. (1.5)
- -----
100.0%
- -----
- -----
</TABLE>
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 5
<PAGE>
CASH ACCUMULATION TRUST
Statement of Assets and Liabilities (Unaudited)
LIQUID ASSETS FUND
- -----------------------------------------------
- ---------------------------------
<TABLE>
<CAPTION>
December 22,
1997(a)
Through
Assets
March 31, 1998
<S>
<C>
Investments, at amortized cost which
approximates market
value..........................................
$ 358,439,578
Cash...........................................
...............................................
.......... 470
Receivable for Fund shares
sold...........................................
..............................
14,891,633
Interest
receivable.....................................
...............................................
. 999,748
- -----------------
Total
assets.........................................
...............................................
. 374,331,429
- -----------------
Liabilities
Payable for Fund shares
reacquired.....................................
.................................
18,742,562
Payable for investments
purchased......................................
.................................
1,990,767
Dividends
payable........................................
...............................................
426,221
Management fee
payable........................................
..........................................
62,137
Accrued
expenses.......................................
...............................................
.. 2,940
- -----------------
Total
liabilities....................................
...............................................
. 21,224,627
- -----------------
Net
Assets.........................................
...............................................
...... $ 353,106,802
- -----------------
- -----------------
Net assets were comprised of:
Shares of beneficial interest, at
par............................................
.................... $ 3,531
Paid-in capital in excess of
par............................................
......................... 353,103,271
- -----------------
Net assets, March 31,
1998...........................................
................................... $
353,106,802
- -----------------
- -----------------
Net asset value, offering and redemption price
per share
($353,106,802 / 353,106,802 shares of
beneficial interest issued and
outstanding)....................
$1.00
- -----------------
- -----------------
</TABLE>
- ---------------
(a) Commencement of investment operations.
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 6
<PAGE>
CASH ACCUMULATION TRUST
LIQUID ASSETS FUND
Statement of Operations (Unaudited)
- -----------------------------------------------
- -------------
<TABLE>
<CAPTION>
December 22,
1997(a)
Through
Net Investment Income
March 31, 1998
<S>
<C>
Income
Interest.................................
$ 5,232,507
- -----------------
Expenses
Management fee...........................
67,137
Registration fees........................
43,000
Transfer agent's fees and expenses.......
33,000
Reports to shareholders..................
21,000
Custodian's fees and expenses............
19,000
Audit fee and expenses...................
9,000
Legal fees and expenses..................
5,000
Directors' fees..........................
4,500
Miscellaneous............................
3,834
- -----------------
Total expenses........................
205,471
- -----------------
Net investment income.......................
5,027,036
- -----------------
Realized Gain on Investments
Net realized gain on investment
transactions.............................
6,877
- -----------------
Net Increase in Net Assets
Resulting from Operations...................
$ 5,033,913
- -----------------
- -----------------
</TABLE>
- ---------------
(a) Commencement of investment operations.
CASH ACCUMULATION TRUST
LIQUID ASSETS FUND
Statement of Changes in Net Assets (Unaudited)
- -----------------------------------------------
- -------------
<TABLE>
<CAPTION>
December 22,
1997(a)
Through
Increase (Decrease)
March 31,
in Net Assets
1998
<S>
<C>
Operations
Net investment income......................
$ 5,027,036
Net realized gain on investment
transactions............................
6,877
- ---------------
Net increase in net assets resulting from
operations..............................
5,033,913
- ---------------
Dividends and distributions (Note 1)..........
(5,033,913)
- ---------------
Fund share transactions
Net Proceeds from shares sold..............
1,172,640,855(a)
Net asset value of shares issued in
reinvestment of dividends and
distributions...........................
4,557,700
Cost of shares reacquired..................
(824,091,753)
- ---------------
Net increase in net assets from Fund share
transactions............................
353,106,802
- ---------------
Total increase................................
353,106,802
Net Assets
Beginning of period...........................
- --
- ---------------
End of period.................................
$ 353,106,802
- ---------------
- ---------------
- ---------------
(a) Includes $295,683,132 that was transferred
from the
National Money Market Fund.
</TABLE>
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 7
<PAGE>
CASH ACCUMULATION TRUST
LIQUID ASSETS FUND
Notes to Financial Statements (Unaudited)
- -----------------------------------------------
- ---------------------------------
Cash Accumulation Trust (the 'Trust') is
registered under the Investment Company
Act of 1940 as an open-end, diversified
management investment company. The Trust
consists of two series - the National Money
Market Fund and Liquid Assets Fund
(the 'Fund'). The Fund commenced investment
operations on December 22, 1997,
when $295,683,132 was transferred from the
National Money Market Fund to the
Fund. The investment objective of the Fund is
current income to the extent
consistent with the preservation of capital and
liquidity. The Fund invests
primarily in a portfolio of U.S. Government
obligations, financial institution
obligations and other high quality money market
instruments maturing in thirteen
months or less whose ratings are within the two
highest ratings categories by a
nationally recognized statistical rating
organization or, if not rated, are of
comparable quality. The ability of the issuers
of the securities held by the
Fund to meet its obligations may be affected by
economic developments in a
specific industry or region.
- -----------------------------------------------
- -------------
Note 1. Accounting Policies
The following is a summary of significant
accounting policies followed by the
Trust, and the Fund, in the preparation of its
financial statements.
Securities Valuations: Portfolio securities are
valued at amortized cost, which
approximates market value. The amortized cost
method involves valuing a security
at its cost on the date of purchase and
thereafter assuming a constant
amortization to maturity of any discount or
premium.
Securities Transactions and Net Investment
Income: Securities transactions are
recorded on the trade date. Realized gains and
losses on sales of investments
are calculated on the identified cost basis.
Interest income is recorded on the
accrual basis. Expenses are recorded on the
accrual basis which may require the
use of certain estimates by management.
Federal Income Taxes: For Federal income tax
purposes, each Fund in the Trust is
treated as a separate tax paying entity. It is
the intent of the Fund to meet
the requirements of the Internal Revenue Code
applicable to regulated investment
companies and to distribute all of its taxable
net income to its shareholders.
Therefore, no federal income tax provision is
required.
Dividends and Distributions: The Fund declares
all of its net investment income
and net realized short-term capital
gains/losses, if any, as dividends daily to
its shareholders of record at the time of such
declaration. Net investment
income for dividend purposes includes interest
accrued or discount earned less
amortization of premium and the estimated
expenses applicable to the dividend
period. Payment of dividends is made monthly.
The Fund does not expect to
realize long-term capital gains or losses.
Note 2. Agreements
The Fund has a management agreement with
Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM
has responsibility for all
investment advisory services and supervises the
subadviser's performance of such
services. PIFM has entered into a subadvisory
agreement with The Prudential
Investment Corporation ('PIC'), doing business
as Prudential Investments (PI,
the Subadviser or the investment adviser), PI
furnishes investment advisory
services in connection with the management of
the Fund. PIFM pays for the cost
of the subadviser's services, the compensation
of officers of the Fund,
occupancy and certain clerical and bookkeeping
costs of the Fund. The Fund bears
all other costs and expenses.
Under the management agreement, PIFM is
reimbursed by the Fund for its direct
administrative costs and expenses, excluding
overhead and profit incurred in
providing services to the Fund up to a maximum
of .39% of the average daily net
assets.
PIFM and PIC are wholly owned subsidiaries of
The Prudential Insurance Company
of America.
- -----------------------------------------------
- -------------
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a
wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. Transfer
agent fees and expenses in the
Statement of Operations include certain out-of-
pocket expenses paid to
nonaffiliates.
- -----------------------------------------------
- ---------------------------------
8
<PAGE>
CASH ACCUMULATION TRUST
Financial Highlights (Unaudited)
LIQUID ASSETS FUND
- -----------------------------------------------
- ---------------------------------
<TABLE>
<CAPTION>
December 22,
1997(a)
Through
March 31,
1998
<S>
<C>
- ------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period.........................................
................................... $
1.00
- ------------
Net investment income and net realized
gains..........................................
.......................... .02
Dividends and distributions to
shareholders...................................
..................................
(.02)
- ------------
Net asset value, end of
period.........................................
.........................................
$ 1.00
- ------------
- ------------
TOTAL
RETURN(b):.....................................
...............................................
............ 1.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)..........................................
.......................................
$353,107
Average net assets
(000)..........................................
..............................................
$324,996
Ratios to average net assets:
Expenses.......................................
...............................................
............... .23%(c)
Net investment
income.........................................
...............................................
5.65%(c)
</TABLE>
- ---------------
(a) Commencement of investment operations.
(b) Total return is calculated assuming a
purchase of shares on the first day
and a sale on the last day of each period
reported and includes reinvestment
of dividends and distributions. Total
returns for less than a full year are
not annualized.
(c) Annualized.
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 9
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Edward D. Beach
Stephen C. Eyre
Delayne Dedrick Gold
Robert F. Gunia
Don G. Hoff
Robert E. LaBlanc
Mendel A. Melzer, CFA
Richard A. Redeker
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Robert C. Rosselot, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
The views expressed in this report and
information about the Fund's portfolio
holdings are for the period covered by this
report and are subject to change
thereafter.
The accompanying financial statements as of
March 31, 1998 were not audited
and, accordingly, no opinion is expressed on
them.
This report is not authorized for distribution
to prospective investors unless
preceded or accompanied by a current
prospectus.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
BULK RATE
U.S. POSTAGE
PAID
Permit 6807
New York, NY
147541502 MF175E2
(ICON)
Cash
Accumulation
Trust
National Money
Market Fund
SEMI
ANNUAL
REPORT
March 31, 1998
(LOGO)
<PAGE>
Cash Accumulation Trust
National Money Market Fund
Performance At A Glance.
Money market yields fell then rose sharply
during the period ended March 31,
1998. Yields declined as investors believed
events overseas might slow U.S.
economic growth. Yields increased as that view
shifted to one that the economy
was expanding too rapidly and short-term
interest rates would either remain
unchanged or rise to head off inflation. The
National Money Market Fund beat
the return on the average comparable money fund
because we purchased
attractively priced securities in December that
bridged the period of markedly
lower yields that lasted from January through
mid-February.
Fund Facts
As of 3/31/98
<TABLE>
<CAPTION>
7-Day Net Asset
Weighted Avg. Net
Current Yld. Value (NAV)
Mat. (WAM) Assets (mil.)
<S> <C> <C>
<C> <C>
National MM Fund 5.08% $1.00
77 Days $476.5
IBC Financial Data
Money Fund Avg.
(General Purpose*) 4.93 $1.00
62 Days N/A
</TABLE>
Note: Yields will fluctuate from time to time
and past performance is not
indicative of future results. An investment in
the Fund is 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 $1 net
asset value per share.
*This is the average seven-day current yield,
NAV and WAM of all funds in the
International Business Communications Financial
Data's all taxable money fund
category as of March 31, 1998.
Cash Fund Yield Comparison.
(PIE CHART)
Cash Accumulation Trust - National Money Market
Fund is not included in the
Average for the weeks of December 22 and 29,
1997.
How Investments Compared.
(As of 3/31/98)
(GRAPH)
U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds
Source: Lipper Analytical Services. Financial
markets change, so a mutual
fund's past performance should never be used to
predict future results. The
risks to each of the investments listed above
are different -- we provide 12-
month total return averages for several Lipper
mutual fund categories to show
you that reaching for higher returns means
tolerating more risk. The greater
the risk, the larger the potential reward or
loss. In addition, we've included
historical 20-year average annual returns.
These returns assume the reinvestment
of dividends.
U.S. Growth Funds will fluctuate a great deal.
Investors have received higher
historical total returns from stocks than from
most other investments. Smaller
capitalization stocks offer greater potential
for long-term growth but may be
more volatile than larger capitalization
stocks.
General Bond Funds provide more income than
stock funds, which can help smooth
out their total returns year by year. But their
prices still fluctuate
(sometimes significantly) and their returns
have been historically lower than
those of stock funds. Unlike bond funds, bonds,
if held to maturity, generally
offer a fixed rate of return and fixed
principal value.
General Municipal Debt Funds invest in bonds
issued by state governments,
state agencies and/or municipalities. This
investment provides income that is
usually exempt from federal and state income
taxes.
U.S. Taxable Money Funds attempt to preserve a
constant share value; they
don't fluctuate much in price but,
historically, their returns have been
generally among the lowest of the major
investment categories.
<PAGE>
Robert Browne, Fund Manager
Portfolio
Manager's Report (PICTURE)
The National Money Market Fund, one of two
series of Cash Accumulation Trust,
seeks current income to the extent consistent
with the preservation of capital
and liquidity. The Fund is a diversified
portfolio of high-quality, U.S.
dollar-denominated money market securities
issued by the U.S. government and
its agencies, major corporations and commercial
banks of the U.S. and foreign
countries. Maturities can range from one day to
13 months. We typically purchase
securities rated in one of the two highest
rating categories by at least two
major, independent rating agencies, or if not
rated, deemed to be of equivalent
quality by our credit research staff. There can
be no assurance that the Fund
will achieve its investment objective.
Welcome To The Rock!
We began managing your Fund in December after
succeeding Columbus Circle
Investors as investment adviser. Prudential has
more than $25 billion of
assets under management in 20 money market
funds. We welcome you and will
work to make doing business with us as
convenient as possible.
Strategy Session.
U.S. Economy Roars Into '98.
Predictions of lackluster U.S. economic growth
were widespread as the new year
began. Financial problems in Asia and dwindling
corporate profits were expected
to slow the U.S. economic expansion to
approximately 2% in 1998 compared with
nearly twice that rate last year. But the
world's largest economy defied Wall
Street forecasts by surging at an annualized
rate of 4.8% in the first three
months of the year and inflation fell to levels
not seen since the early 1950s.
Money market yields were on a roller coaster
during the reporting period as
investors reacted to developments in the Far
East and the U.S. In mid-January,
prices of money market securities soared (and
yields plunged) amid concern
that U.S. economic growth would slow
dramatically as exports to struggling
Asian countries slumped, while cheaply priced
imports from Asia flooded U.S.
markets. The supply of U.S. Treasury securities
was also expected to decrease
as the federal government borrowed fewer
dollars in the first three months of
1998 because of the rapidly shrinking budget
deficit and healthy tax revenues.
Thus, investors pushed prices of money market
securities higher fearing a
dwindling supply of short-term securities.
The market rally faded, however, as data
indicated the economy was picking up
steam. Indeed more than 300,000 non-farm jobs
were created in January as the
unemployment rate held steady at 4.7%. As a
result, money market yields crept
higher then jumped in late February after
Federal Reserve Chairman Alan
Greenspan hinted that monetary policy would
remain unchanged. His remarks
disappointed investors who believed U.S.
central bankers would have to reduce
the federal funds rate (what banks charge each
other for overnight loans) to
keep the economy growing and counteract the
drag of continued financial
difficulties in Asia. But a short-term rate cut
was the last thing the robust
U.S. economy needed.
<PAGE>
What Went Well.
A Buying Opportunity.
In late December, yields on money market
securities typically climb (and
prices fall) because of seasonal funding
pressures. The end of 1997 brought a
larger-than-usual increase in yields as the
Asian economic crisis temporarily
pushed up short-term borrowing costs for many
corporations. This trend was
reflected in the rise in London Interbank
Offered Rates (LIBOR), which are
base rates for many corporate debt securities.
We were quick to spot a buying opportunity when
the three-month LIBOR rose
toward 6% in December. We purchased
attractively priced floating-rate
securities tied to either the one- or three-
month LIBOR, as well as short-term
corporate debt that matured in late February or
March. These purchases helped
because we did not have to reinvest this money
during the period of sharply
lower yields that lasted from January through
mid-February.
Weighted Average Maturity Compared
To The Average Fund.
(GRAPH)
Cash Accumulation Trust - National Money Market
Fund is not included in the
Average for the weeks of December 22 and 29,
1997.
And Not So Well.
Too Little Of A Good Thing.
If we had invested more heavily in debt
maturing in March and April, we could
have stayed on the sidelines while money market
yields hovered at low levels
during the first two months of the year.
Instead, our purchases in December
included very short-term securities that came
due in January and early
February. Because of this, your Fund's weighted
average maturity (WAM) was
shorter than the average comparable portfolio
from January through mid-February.
As securities matured during those two months,
we were forced to reinvest some
of our cash when rates were at unattractive
levels. This hindered your Fund's
return.
Looking Ahead.
While inflation in the U.S. remains in check,
continued robust economic growth
could reignite mounting inflationary pressures
later in the year. Based on
experience, we believe that the Federal Reserve
prefers to act sooner rather
than later when it comes to inflation. The
central bank could raise the
federal funds rate this year. Accordingly, we
are targeting money market
securities with yields that factor in the risk
that short-term interest rates
may be headed higher.
- -----------------------------------------------
- --------------------------------
1
<PAGE>
President's Letter
May 15, 1998
(PHOTO)
See You On the Net!
Dear Shareholder:
We are proud to be part of the worldwide web
and we invite you to visit our
two web sites, if you have not already done so.
Yes, we currently offer two
sites -- each with its own distinctive
identity.
http://www.prudential.com
The Prudential web site features information on
personal investing, retirement
planning, commercial and residential real
estate opportunities, as well as
insurance products for life, health, home and
property.
You can look up performance data on your
Prudential mutual funds, learn about
proven investment strategies, or take one of
our many interactive quizzes that
will help guide you in determining long-term
goals -- like how much to save
for your child's college education or for your
retirement.
http://www.prusec.com
The Prudential Securities Virtual Branch Office
is a full-service brokerage
web site specifically designed to provide
investors with the information they
need to make informed financial decisions. It
was rated the No. 1 full-service
brokerage web site of its type by Financial Net
News (February 1998), a
subsidiary of Institutional Investor magazine,
and was also rated among the
top corporate web sites by Fortune magazine
(Winter 1998).
What investors can find here are -- daily
market commentaries, stock quotes,
economic forecasts, product news, and current
market research, in addition to
interactive investing programs. Investors,
through their Prudential Securities
Financial Advisors, may also enroll in
Prudential Online(R) and have access to
their personal account information which
includes balances, security values,
transactions and account activities. They can
also easily E-mail their
Financial Advisor.
Both sites also contain professional
opportunities for people who are searching
for employment or considering a change of
career paths.
We plan to make further enhancements to our web
pages as the year progresses.
So please, the next time you are "web browsing"
or "surfing the net," pay us a
visit. Let us know what you think and what
you'd like to see added in the
future.
Sincerely,
Brian M. Storms
President, Prudential Mutual Funds & Annuities
- -----------------------------------------------
- --------------------------------
2
<PAGE>
Portfolio of Investments as of March 31, 1998
CASH ACCUMULATION TRUST
(Unaudited)
NATIONAL MONEY MARKET FUND
- -----------------------------------------------
- -------------
<TABLE>
<CAPTION>
Principal
<S> <C> <C>
Amount
(000) Description
Value (Note 1)
- -----------------------------------------------
- -------------
Bank Notes--4.6%
Bank of America National Trust &
Savings Association
$1,775 5.50%, 4/23/98
$ 1,774,803
Corestates Bank, N.A.
4,000 5.63359%, 4/21/98 (b)
4,000,000
First USA Bank
8,000 5.98359%, 6/17/98 (b)
8,012,852
Keybank, N.A.
1,000 5.64625%, 4/13/98 (b)
1,000,440
7,000 5.52%, 6/18/98 (b)
6,996,099
- ------------
21,784,194
- -----------------------------------------------
- -------------
Certificates of Deposit - Domestic--1.9%
Wachovia Bank, N.A.
9,000 5.55%, 4/14/98
9,000,032
- -----------------------------------------------
- -------------
Certificates of Deposit - Yankee--16.4%
Bayerishe Hypotheken und Wechsel
Bank
2,000 5.675%, 3/3/99
1,999,206
Canadian Imperial Bank of Commerce
24,000 5.55%, 2/10/99
23,990,064
Deutsche Bank
5,000 5.62%, 2/26/99
4,997,826
3,000 5.63%, 2/26/99
2,997,654
6,000 5.66%, 3/3/99
5,997,353
National Bank of Canada
5,000 5.53%, 5/18/98
4,999,475
8,000 5.59%, 6/3/98
8,000,000
National Westminster Bank, PLC
3,000 5.935%, 6/26/98
3,000,676
Rabobank Nederland
9,000 5.50%, 2/9/99
8,994,056
Societe Generale
10,000 5.705%, 6/11/98 (a)
9,998,066
Westpac Banking Corp.
3,000 6.22%, 4/7/98
3,000,185
- ------------
77,974,561
Commercial Paper--51.0%
Aon Corp.
$4,746 5.56%, 5/27/98
$ 4,704,952
5,392 5.55%, 5/28/98
5,344,618
3,745 5.53%, 6/10/98
3,704,731
Associates Corp. of North America
19,400 6.10%, 4/1/98
19,400,000
Associates First Capital Corp.
5,000 5.53%, 5/20/98
4,962,365
Bank Austria Finance, Inc.
5,000 5.63%, 4/8/98
4,994,526
Bank of Montreal
5,000 5.65%, 4/2/98
4,999,215
Bank of New York Co., Inc.
8,000 5.55%, 5/14/98
7,946,967
Carnival Corp.
10,000 5.60%, 4/21/98
9,968,889
Centric Capital Corp.
5,000 5.64%, 4/30/98
4,977,283
CIGNA Corp.
1,000 5.72%, 4/15/98
997,776
Commerzbank U.S. Finance, Inc.
2,000 5.54%, 5/1/98
1,990,767
Cregem North America, Inc.
6,000 5.50%, 6/17/98
5,929,417
6,000 5.50%, 6/25/98
5,922,083
Duke Capital Corp.
4,000 5.59%, 4/29/98
3,982,609
Eastman Kodak Co.
2,300 5.55%, 5/11/98
2,285,817
First Chicago Financial Corp.
2,000 5.46%, 5/29/98
1,982,407
Fortune Brands, Inc.
4,500 5.53%, 5/21/98
4,465,437
General Electric Capital Corp.
20,000 5.60%, 4/27/98
19,919,111
General Motors Acceptance Corp.
7,000 5.50%, 6/15/98
6,919,792
1,000 5.49%, 6/22/98
987,495
</TABLE>
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments as of March 31, 1998
CASH ACCUMULATION TRUST
(Unaudited)
NATIONAL MONEY MARKET FUND
- -----------------------------------------------
- -------------
<TABLE>
<CAPTION>
Principal
<S> <C> <C>
Amount
(000) Description
Value (Note 1)
- -----------------------------------------------
- -------------
Commercial Paper (cont'd.)
Hertz Corp.
$2,000 5.53%, 4/8/98
$ 1,997,849
Ing America Insurance Holdings,
Inc.
8,000 5.74%, 4/3/98
7,997,449
3,000 5.74%, 4/28/98
2,987,085
Market Street Funding Corp.
1,000 5.53%, 6/11/98
989,094
Martin Marietta Material
10,000 5.56%, 5/13/98
9,935,133
Mont Blanc Capital Corp.
12,000 5.59%, 4/28/98
11,949,690
Monte Rosa Capital Corp.
3,000 5.54%, 5/19/98
2,977,840
Nationwide Building Society
6,000 5.51%, 6/3/98
5,942,145
Newell Co.
2,848 5.65%, 4/27/98
2,836,379
Nordbanken North America, Inc.
2,000 5.55%, 5/28/98
1,982,425
Unifunding, Inc.
1,635 5.55%, 5/5/98
1,626,430
Variable Funding Capital Corp.
3,866 5.70%, 4/8/98
3,861,715
3,000 5.60%, 5/8/98
2,982,733
WCP Funding, Inc.
4,000 5.55%, 5/28/98
3,964,850
Weyerhauser Real Estate Co.
18,392 5.57%, 5/6/98
18,292,402
Windmill Funding Corp.
13,000 5.57%, 4/17/98
12,967,818
5,041 5.54%, 5/20/98
5,002,988
6,300 5.55%, 5/22/98
6,250,466
Wood Street Funding Corp.
4,165 5.59%, 4/30/98
4,146,245
4,000 5.52%, 6/11/98
3,956,453
4,000 5.53%, 6/19/98
3,951,459
- ------------
242,984,905
Loan Participations--2.6%
Bell Atlantic Network Funding
Corp.
$3,000 5.65%, 4/9/98
$ 3,000,000
Cooper Industries, Inc.
4,000 5.60%, 4/17/98
4,000,000
Countrywide Home Loan, Inc.
2,000 5.75%, 4/22/98
2,000,000
3,416 5.75%, 4/23/98
3,416,000
- ------------
12,416,000
- -----------------------------------------------
- -------------
Other Corporate Obligations--20.9%
Abbey National Treasury Services,
PLC
21,000 5.50%, 2/5/99
20,986,160
American General Finance Corp.
1,400 8.50%, 8/15/98
1,414,314
Chase Manhattan Corp.
3,000 5.59375%, 4/15/98 (b)
3,000,635
Chrysler Financial Corp.
10,000 5.6725%, 4/15/98 (b)
10,001,360
Ford Motor Credit Co.
5,000 6.07578%, 6/2/98 (b)
5,003,920
General Motors Acceptance Corp.
5,000 5.56891%, 5/12/98 (b)
4,999,364
5,000 5.545%, 5/25/98 (b)
4,998,934
6,000 6.45%, 6/24/98
6,010,728
1,000 7.75%, 1/15/99
1,016,277
International Lease Finance Corp.
2,400 8.35%, 10/1/98
2,430,222
2,235 6.625%, 4/1/99
2,252,463
Liquid Asset Backed Securities
Trust,
Ser. 1997-7
6,849 5.68359%, 4/22/98 (b)
6,849,169
Liquid Asset Backed Securities
Trust,
Ser. 1998-1
4,843 5.6875%, 4/27/98 (b)
4,843,258
Strategic Money Market Trust, Ser.
1997-A
21,000 5.6875%, 6/23/98(a)/(b)
(cost $21,000,000;
purchase date-12/19/97)
21,000,000
</TABLE>
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as of March 31, 1998
CASH ACCUMULATION TRUST
(Unaudited)
NATIONAL MONEY MARKET FUND
- -----------------------------------------------
- -------------
<TABLE>
<CAPTION>
Principal
<S> <C> <C>
Amount
(000) Description
Value (Note 1)
- -----------------------------------------------
- -------------
Other Corporate Obligations (cont'd.)
Strategic Money Market Trust,
Ser. 1998-B
$5,000 5.6875%, 4/6/98 (b)
$ 5,000,000
- ------------
99,806,804
- -----------------------------------------------
- -------------
Time Deposit - Eurodollar--8.1%
Republic National Bank New York
24,400 6.125%, 4/1/98
24,400,000
Societe Generale North America,
Inc.
14,400 6.1875%, 4/1/98
14,400,000
- ------------
38,800,000
- -----------------------------------------------
- -------------
Total Investments--105.5%
(amortized cost $502,766,496)
502,766,496
Liabilities in excess of other
assets--(5.5%)
(26,221,793)
- ------------
Net Assets--100%
$476,544,703
- ------------
- ------------
</TABLE>
- ---------------
(a) Indicates a security restricted as to
resale.
(b) Variable rate instrument. The maturity date
presented for these instruments
is the later of the next date on which the
security can be redeemed at par
or the next date on which the rate of
interest is adjusted.
The industry classification of portfolio
holdings and other assets in excess of
liabilities shown as a percentage of net assets
as of March 31, 1998 was as
follows:
<TABLE>
<S>
<C>
Commercial
Banks...................................
45.4%
Asset Backed
Securities............................ 14.3
Motor Vehicle
Parts................................ 8.4
Personal Credit
Institutions....................... 5.4
Bank Holding Companies-
Domestic.................... 5.2
Short-Term Business
Credit......................... 4.2
Chemicals & Allied
Products........................ 3.8
Accident & Health
Insurance........................ 2.9
Fire, Marine & Casualty
Insurance.................. 2.5
Surety
Insurance...................................
2.5
Water
Transportation...............................
2.1
Mining.........................................
.... 2.1
Mortgage
Banks.....................................
1.1
Equipment Rental &
Leasing......................... 1.0
Cigarettes.....................................
.... 0.9
Miscellaneous Electrical Equipment &
Supplies...... 0.8
Electrical
Services................................ 0.8
Telephone &
Communications......................... 0.6
Miscellaneous
Furniture............................ 0.6
Photographic
Equipment............................. 0.5
Auto Rental &
Leasing.............................. 0.4
- -----
105.5
Liabilities in excess of other
assets.............. (5.5)
- -----
100.0%
- -----
- -----
</TABLE>
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 5
<PAGE>
CASH ACCUMULATION TRUST
Statement of Assets and Liabilities (Unaudited)
NATIONAL MONEY MARKET FUND
- -----------------------------------------------
- ---------------------------------
<TABLE>
Assets
March 31, 1998
- ---------------
<S>
<C>
Investments, at amortized cost which
approximates market
value..........................................
... $502,766,496
Cash...........................................
...............................................
............. 287
Receivable for Fund shares
sold...........................................
.................................
19,147,122
Interest
receivable.....................................
...............................................
.... 1,777,163
Deferred expenses and other
assets.........................................
................................
137,255
- --------------
Total
assets.........................................
...............................................
.... 523,828,323
- --------------
Liabilities
Payable for investments
purchased......................................
....................................
17,139,289
Payable for Fund shares
reacquired.....................................
....................................
29,080,362
Dividends
payable........................................
...............................................
... 537,161
Accrued expenses and other
liabilities....................................
.................................
320,464
Management fee
payable........................................
.............................................
164,233
Distribution fee
payable........................................
...........................................
42,111
- --------------
Total
liabilities....................................
...............................................
.... 47,283,620
- --------------
Net
Assets.........................................
...............................................
......... $476,544,703
- --------------
- --------------
Net assets were comprised of:
Shares of beneficial interest, at $.00001
par
value..........................................
........... $ 4,765
Paid-in capital in excess of
par............................................
............................ 476,539,938
- --------------
Net assets, March 31,
1998...........................................
......................................
$476,544,703
- --------------
- --------------
Net asset value, offering price and redemption
price per share
($476,544,703 / 476,544,703 shares of common
stock issued and
outstanding)..............................
$1.00
- --------------
- --------------
</TABLE>
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 6
<PAGE>
CASH ACCUMULATION TRUST
NATIONAL MONEY MARKET FUND
Statement of Operations (Unaudited)
- -----------------------------------------------
- -------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income
March 31, 1998
<S>
<C>
Income
Interest....................................
$ 17,571,325
- --------------
Expenses
Management fee..............................
1,164,319
Distribution fee............................
310,348
Transfer agent's fees and expenses..........
189,000
Custodian's fees and expenses...............
45,000
Reports to shareholders.....................
38,000
Registration fees...........................
16,000
Audit fee...................................
13,000
Trustees' fees..............................
11,000
Miscellaneous...............................
1,051
- --------------
Total expenses...........................
1,787,718
- --------------
Net investment income..........................
15,783,607
- --------------
Net Increase in Net Assets
Resulting from Operations......................
$ 15,783,607
- --------------
- --------------
</TABLE>
CASH ACCUMULATION TRUST
NATIONAL MONEY MARKET FUND
Statement of Changes in Net Assets (Unaudited)
- -----------------------------------------------
- -------------
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended
Increase (Decrease) March 31,
September 30,
in Net Assets 1998
1997
<S> <C>
<C>
Operations
Net investment income.... $ 15,783,607
$ 33,771,657
---------------
- ---------------
Net increase in net
assets resulting from
operations............ 15,783,607
33,771,657
---------------
- ---------------
Dividends and distributions
to shareholders (Note
1)....................... (15,783,607)
(33,771,657)
---------------
- ---------------
Fund share transactions (at
$1 per share)
Net proceeds from shares
sold.................. 3,031,871,473
6,248,712,913
Net asset value of shares
issued in reinvestment
of dividends and
distributions......... 12,618,322
32,440,525
Cost of shares
reacquired............
(3,269,947,842)(a) (6,231,478,119)
---------------
- ---------------
Net increase (decrease)
in net assets from
Fund share
transactions.......... (225,458,047)
49,675,319
---------------
- ---------------
Total increase (decrease)... (225,458,047)
49,675,319
Net Assets
Beginning of period......... 702,002,750
652,327,431
---------------
- ---------------
End of period............... $ 476,544,703
$ 702,002,750
---------------
- ---------------
---------------
- ---------------
</TABLE>
- ---------------
(a) Includes $295,683,132 that was transferred
into Liquid Assets Fund.
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 7
<PAGE>
CASH ACCUMULATION TRUST
Notes to Financial Statements (Unaudited)
NATIONAL MONEY MARKET FUND
- -----------------------------------------------
- ---------------------------------
Cash Accumulation Trust (the 'Trust') is
registered under the Investment Company
Act of 1940 as an open-end, diversified
management investment company. The Trust
consists of National Money Market Fund (the
'Fund') and Liquid Assets Fund. The
investment objective of the Fund is current
income to the extent consistent with
the preservation of capital and liquidity. The
Fund invests primarily in a
portfolio of U.S. Government obligations,
financial institution obligations and
other high quality money market instruments
maturing in 13 months or less whose
ratings are within the 2 highest ratings
categories by a nationally recognized
statistical rating organization or, if not
rated, are of comparable quality. The
ability of the issuers of the securities held
by the Fund to meet its
obligations may be affected by economic
developments in a specific industry or
region.
- -----------------------------------------------
- -------------
Note 1. Accounting Policies
The following is a summary of significant
accounting policies followed by the
Trust and the Fund in the preparation of its
financial statements.
Securities Valuations: Portfolio securities are
valued at amortized cost, which
approximates market value. The amortized cost
method involves valuing a security
at its cost on the date of purchase and
thereafter assuming a constant
amortization to maturity of any discount or
premium.
Securities Transactions and Net Investment
Income: Securities transactions are
recorded on the trade date. Realized gains and
losses on sales of investments
are calculated on the identified cost basis.
Interest income is recorded on the
accrual basis. Expenses are recorded on the
accrual basis, which may require the
use of certain estimates by management. The
cost of portfolio securities for
federal income tax purposes is substantially
the same as for financial reporting
purposes.
Federal Income Taxes: For federal income tax
purposes, each fund in the Trust is
treated as a separate taxpaying entity. It is
the intent of the Fund to continue
to meet the requirements of the Internal
Revenue Code applicable to regulated
investment companies and to distribute all of
its taxable net income to its
shareholders. Therefore, no federal income tax
provision is required.
Dividends and Distributions: The Fund declares
all of its net investment income
and net realized short-term capital gains or
losses, if any, as dividends daily
to its shareholders of record at the time of
such declaration. Net investment
income for dividend purposes includes interest
accrued or discount earned less
amortization of premium and the estimated
expenses applicable to the dividend
period. The Fund does not expect to realize
long-term capital gains or losses.
Note 2. Agreements
The Fund has a management agreement with
Prudential Investments Fund Management
LLC ('PIFM') as of December 12, 1997. Pursuant
to this agreement, PIFM has
responsibility for all investment advisory
services and supervises the
subadviser's performance of such services. PIFM
has entered into a subadvisory
agreement with The Prudential Investment
Corporation ('PIC'); PIC furnishes
investment advisory services in connection with
the management of the Fund.
Prior to December 12, 1997, the Fund had a
management agreement with PIMCO
Advisors L.P. (PIMCO). PIMCO also had a
subadvisory agreement with Columbus
Circle Investors. PIFM pays for the cost of the
subadviser's services, the
compensation of officers of the Fund, occupancy
and certain clerical and
bookkeeping costs of the Fund. The Fund bears
all other costs and expenses.
Beginning December 22, 1997, the management fee
paid PIFM is computed daily and
payable monthly, at an annual rate of .39% of
the Fund's average daily net
assets up to and including $1 billion, .375% of
the next $500 million, .35% of
the next $500 million and .325% of the Fund's
average daily net assets in excess
of $2 billion. The management fee paid to PIMCO
through December 11, 1997 was
computed daily and payable monthly at an annual
rate of .425% of the Fund's
average daily net assets up to and including
$500 million, .400% of the next
$500 million, .375% of the next $500 million,
.350% of the next $500 million and
.325% of the Fund's average daily net assets in
excess of $2 billion.
The Fund has a distribution agreement with
Prudential Securities Incorporated
('PSI') as of December 12, 1997, which acts as
the distributor of the shares of
the Fund. The Fund compensates PSI for
distributing and servicing the Fund's
shares pursuant to the plan of distribution at
an annual rate of .10 of 1% of
the average daily net assets of the shares.
Prior to December 12, 1997, PIMCO
Funds Distribution Company served as the Fund's
distributor and was compensated
at the same rate.
PSI, PIFM and PIC are indirect, wholly owned
subsidiaries of The Prudential
Insurance Company of America.
- -----------------------------------------------
- -------------
Note 3. Other Transactions with Affiliates
On December 12, 1997, Prudential Mutual Fund
Services LLC ('PMFS'), a wholly
owned subsidiary of PIFM, began serving as the
Fund's transfer agent. Prior to
December 12, 1997, Shareholder Services, Inc.
('SSI') served as the Fund's
tranfer agent. During the period December 12,
1997 through March 31, 1998, the
Fund incurred fees of approximately $83,700 for
the services of PMFS. As of
March 31, 1998, $21,000 of such fees were
- -----------------------------------------------
- ---------------------------------
8
<PAGE>
CASH ACCUMULATION TRUST
Notes to Financial Statements (Unaudited)
NATIONAL MONEY MARKET FUND
- -----------------------------------------------
- ---------------------------------
due to PMFS. Transfer agent fees and expenses
in the Statement of Operations
include fees paid to SSI and certain out-of-
pocket expenses paid to
nonaffiliates.
- -----------------------------------------------
- -------------
Note 4. Change in Custodian and Accounting
Agent
As of December 12, 1997, the custodian and
accounting agent is State Street Bank
and Trust Company. Prior to December 12, 1997,
Oppenheimer Funds, Inc. served as
the Fund's accounting agent and The Bank of New
York served as the custodian.
- -----------------------------------------------
- ---------------------------------
9
<PAGE>
CASH ACCUMULATION TRUST
Financial Highlights (Unaudited)
NATIONAL MONEY MARKET FUND
- -----------------------------------------------
- ---------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended September
30,
March 31, --------------------------------
- ---------------
1998 1997 1996 1995
1994
- ----------- -------- -------- -----
- --- --------
<S>
<C> <C> <C> <C>
<C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 1.00
$ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment
income........................................
0.03 0.05 0.05 0.05
0.03
Dividends and distributions to
shareholders.................. (0.03)
(0.05) (0.05) (0.05) (0.03)
- ----------- -------- -------- -----
- --- --------
Net asset value, end of
period............................... $
1.000 $ 1.00 $ 1.00 $ 1.00
$ 1.00
- ----------- -------- -------- -----
- --- --------
- ----------- -------- -------- -----
- --- --------
TOTAL
RETURN(a):.....................................
........ 2.6% 5.0%
5.0% 5.2% 3.2%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $
476,545 $702,003 $652,327 $685,228
$823,343
Ratios to average net assets:
Expenses, including distribution
fee...................... 0.58%(b)
0.65% 0.69% 0.69% 0.61%
Expenses, excluding distribution
fee...................... 0.48%(b)
0.55% 0.59% 0.59% 0.51%
Net investment
income.....................................
5.09%(b) 4.89% 4.86% 5.15%
3.20%
<CAPTION>
1993
<S>
<C>
- --------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 1.00
Net investment
income........................................
0.02
Dividends and distributions to
shareholders.................. (0.02)
- --------
Net asset value, end of
period............................... $ 1.00
- --------
- --------
TOTAL
RETURN(a):.....................................
........ 2.3%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $652,256
Ratios to average net assets:
Expenses, including distribution
fee...................... 0.71%
Expenses, excluding distribution
fee...................... 0.61%
Net investment
income.....................................
2.26%
</TABLE>
- ---------------
(a) Total return is calculated assuming a
purchase of shares on the first day
and a sale on the last day of each period
reported and includes reinvestment
of dividends and distributions. Total
returns for less than a full year are
not annualized.
(b) Annualized.
- -----------------------------------------------
- ---------------------------------
See Notes to Financial Statements. 10
<PAGE>
CASH ACCUMULATION TRUST
Supplemental Proxy Information
NATIONAL MONEY MARKET FUND
- -----------------------------------------------
- ---------------------------------
A Special Meeting of Shareholders of the
National Money Market Fund (the
'Fund') of Cash Accumulation Trust was held on
December 11, 1997 at the offices
of Columbus Circle Investors, 2187 Atlantic
Street, Stamford, Connecticut. The
meeting was held for the following purposes:
(1) To elect the Directors as follows:
Edward D. Beach, Stephen C. Eyre,
Delayne D. Gold, Robert F. Gunia,
Donald G. Hoff, Robert F. LaBlanc,
Mendel A. Melzer, Robin B. Smith,
Stephen Stoneburn and Nancy H.
Teeters.
(2) To approve the Management Agreement
between Cash Accumulation Trust
and Prudential Investments Fund
Management LLC relating to the Fund
as proposed and described in the
Proxy Statement.
(3) To approve the Subadvisory Agreement
between Prudential Investments
Fund Management LLC and The
Prudential Investment Corporation
relating to the Fund as proposed and
described in the Proxy Statement.
(4) The selection of Price Waterhouse LLP
as independent public
accountants for the Cash Accumulation
Trust for the fiscal year
ending September 30, 1998.
The results of the proxy solicitation on the
above matters were as follows:
Director/Matter Votes for
Votes against Votes withheld
-------------------- -------------
- ------------- --------------
(1) Edward D. Beach 339,433,211
3,424,122 --
Stephen C. Eyre 339,311,626
3,545,707 --
Delayne D. Gold 339,650,617
3,206,716 --
Robert F. Gunia 339,665,453
3,191,880 --
Donald G. Hoff 339,684,017
3,173,316 --
Robert F. LaBlanc 339,700,000
3,157,333 --
Mendel A. Melzer 339,672,361
3,184,972 --
Robin B. Smith 339,661,691
3,195,642 --
Stephen Stoneburn 339,630,622
3,226,711 --
Nancy H. Teeters 339,475,391
3,381,942 --
(2) Approval of Management
Agreement 288,505,037
2,927,378 6,312,918
(3) Approval of Subadvisory
Agreement 288,059,267
3,254,058 6,432,008
(4) Ratification of Selection
of Price Waterhouse LLP 335,512,128
1,158,935 6,186,270
- -----------------------------------------------
- ---------------------------------
11
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Trustees
Edward D. Beach
Stephen C. Eyre
Delayne Dedrick Gold
Robert F. Gunia
Don G. Hoff
Robert E. LaBlanc
Mendel A. Melzer, CFA
Richard A. Redeker
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Robert C. Rosselot, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
The views expressed in this report and
information about the Fund's portfolio
holdings are for the period covered by this
report and are subject to change
thereafter.
The accompanying financial statements as of
March 31, 1998 were not audited
and, accordingly, no opinion is expressed on
them.
This report is not authorized for distribution
to prospective investors unless
preceded or accompanied by a current
prospectus.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
BULK RATE
U.S. POSTAGE
PAID
Permit 6807
New York, NY
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