(ICON)
Cash
Accumulation
Trust
Liquid Assets Fund
SEMI
ANNUAL
REPORT
March 31, 1999
(LOGO)
<PAGE>
Cash Accumulation Trust
Liquid Assets Fund
Performance At A Glance
During the six months ended March 31, 1999, money market
yields initially
tumbled as the Federal Reserve cut a key short-term rate
three times in the
autumn of 1998 to protect the U.S. economy from a global
financial crisis.
Later on, yields rose amid talk that this key rate might
soon be increased
to slow robust U.S. economic growth. Despite these volatile
market
conditions, your Liquid Assets Fund provided a better-than-
average yield.
Fund Facts As
of 3/31/99
<TABLE>
<CAPTION>
7-Day Net Asset
Weighted Avg. Net Assets
Current Yld. Value (NAV)
Mat. (WAM) (Millions)
<S> <C> <C>
<C> <C>
Liquid Assets Fund 4.73% $1.00
77 Days $371.5
IBC Financial Data
Money Fund Avg.
(General Purpose)* 4.23 $1.00
65 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
not insured or
guaranteed by the Federal Deposit Insurance Corporation or
any other
government agency. Although the Fund seeks to preserve the
value of your
investment at $1.00 per share, it is possible to lose money
by investing
in the Fund.
* IBC Financial Data reports a seven-day current yield, NAV,
and WAM on
Tuesdays. This is the data of all funds in the International
Business
Communications (IBC) Financial Data Money Fund Average
(General Purpose)
category as of March 30, 1999.
Money market fund yield comparison
(GRAPH)
How Investments Compared.
(As of 3/31/99)
(GRAPH)
U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds
Source: Lipper, Inc. 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
returns 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.
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>
Portfolio Manager's Report
(PHOTO)
Michelle Errico Gonnella
Fund Manager
Investment Goals and Style
The Liquid Assets Fund--one of two series of Cash
Accumulation Trust--seeks
current income to the extent 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 in the
United States and
foreign countries. Maturities can range from one day to 13
months. We
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.
Performance Review
Money market yields fell sharply
In early October 1998, anxiety still prevailed in fixed-
income markets because
a global financial crisis had spread from Asia to Russia and
Latin America.
There was also concern that the overseas financial turmoil
might hurt U.S.
economic growth if struggling nations in Asia and Latin
America continued to
buy fewer American-made goods. Investors responded to these
volatile market
conditions by purchasing "safe haven" securities such as
U.S. Treasury bills,
and selling assets that carried more risk. This trend drove
money market
yields sharply lower, caused Treasuries to become
overvalued, and impaired
market liquidity.
Money market yields also fell in sympathy with the Federal
funds rate, which
is the rate U.S. banks charge each other for overnight
loans. On September 29,
1998, the Federal Reserve cut this key rate by a quarter
percentage point to
5.25%. Two more reductions of the same magnitude followed on
October 15 and
November 17, leaving the Federal funds rate at 4.75%.
Reducing interest rates
helps to protect the U.S. economy by lowering borrowing
costs which, in turn,
stimulates economic growth.
Year-end bargains helped the Fund
As it turned out, the Federal-funds-rate cuts helped to calm
global
financial markets, and reassured investors so much that they
began to sell
the safest securities and purchase stocks and other riskier
assets. Although
money market yields generally lingered at low levels in
early December, we
were still able to buy securities with solid yields as
companies anxious to
borrow money over year end paid handsomely to do so. We
took advantage of
this brief jump in yields by purchasing variable-rate
securities, as well as
securities maturing in two months, three months, and one
year. All carried
yields that were attractive relative to the Federal funds
rate.
We should have waited a little longer
Further buying opportunities emerged in the first three
months of 1999.
Continued strong economic growth in the United States led
many investors to
believe that the next change in U.S. monetary policy would
be a short-term
rate increase to slow the economy and head off higher
inflation. With this
in mind, investors pushed money market yields higher. For
example, the 12-
month London Interbank Offered Rate (LIBOR) rose from
approximately 5.00% at
the beginning of 1999 to roughly 5.45% in March.
<PAGE>
We viewed this rise in rates as a buying opportunity because
we expected the
Federal Reserve to keep short-term interest rates unchanged.
After all,
inflation was still subdued in the United States, and the
global economy
remained weak. We, therefore, bought one-year securities in
January and
February that significantly extended the Fund's weighted
average maturity
(WAM). The WAM takes into account the maturity of each
security held by a
fund. It is a measurement tool that determines a fund's
sensitivity to
fluctuations in interest rates. Having a longer WAM would
enable the Fund's
yield to remain higher for a longer time if money market
yields fell. While
our purchases helped the Fund, it would have benefited even
more if we had
waited to buy securities in March when money market yields
were higher. On
March 30, the Federal Reserve policymakers met and decided,
as we expected,
to leave short-term rates unchanged.
Weighted average maturity compared to
the average money market fund
(GRAPH)
Looking Ahead
Good buying opportunities seen
Continued brisk U.S. economic growth raises the risk for
higher inflation and
lends credence to the view that the Federal Reserve might
increase the Federal
funds rate to keep the economy from overheating. The U.S.
central bank
recently announced it is considering raising short-term
interest rates.
Consequently, we believe investors will push up money market
yields in
response to any new data indicating the economy remains
robust. We stand
ready to take advantage of any attractive buying
opportunities.
- ------------------------------------------------------------
- -------------------
1
<PAGE>
A Message to Our Shareholders
May 19, 1999
(PHOTO)
Dear Shareholder:
As 1999 began, major index advances have been driven by the
stocks of a
handful of very large companies. These stocks were getting
more and more
expensive--out of proportion to their earnings expectations.
As a result,
there was a substantial disparity in value between large and
small companies,
and between growth and value stocks. In recent months,
however, that gap has
started to narrow amid news of strong economic growth.
Our current economic environment has prompted many investors
to turn to
value stocks that typically fare better in a growing
economy, and
have been selling at a significant discount to the market.
Many sectors of the bond market have also begun to rebound
from last year's
global financial crisis. Furthermore, while bonds have not
generated higher
returns than stocks in recent years, they have demonstrated
that they hold
up better during market downturns. That's a thought to keep
in mind going
forward.
Diversification is critical
History shows that the markets generally bring prices in
line with earnings
performance, sooner or later. It also shows that two
investment styles--value
and growth--typically alternate in periods of superior
performance.
What does this suggest? Instead of chasing popular market
winners, investors
should have a well-diversified asset allocation strategy in
place and keep to
it. It is also a good practice to rebalance your holdings,
when necessary, to
keep your asset allocation consistent with your long-term
objectives and risk
tolerance. A properly diversified portfolio of value- and
growth-oriented
equity funds, bond funds, and money market funds could help
you weather
inevitable market turbulence and receive more consistent
returns over time.
Prudential offers a wide range of mutual funds to help our
shareholders
diversify. We have also designed several balanced and
diversified funds to
allow one-decision diversification.
Thank you for your continued confidence in Prudential mutual
funds.
Sincerely,
John R. Strangfeld
Chief Investment Officer
Prudential Investments
- ------------------------------------------------------------
- -------------------
2
<PAGE>
Portfolio of Investments as of March 31, 1999 CASH
ACCUMULATION TRUST
(Unaudited)
LIQUID ASSETS FUND
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Bank Notes--5.1%
FCC National Bank
$5,000 5.12%, 2/23/00 $
4,998,485
2,000 5.14%, 3/22/00
1,999,345
First National Bank Chicago Illinois
5,000 5.75%, 5/10/99
5,003,186
Harris Trust & Savings
4,899 5.05%, 2/14/00
4,897,762
Nationsbank N. A.
2,000 4.85%, 4/30/99
1,999,934
--------
- ----
18,898,712
- ------------------------------------------------------------
Certificates of Deposit - Domestic--2.4%
Toronto Dominion Bank
5,000 5.02%, 2/4/00
4,998,775
2,000 5.06%, 2/10/00
1,999,335
2,000 5.13%, 2/17/00
2,000,000
--------
- ----
8,998,110
- ------------------------------------------------------------
Certificates of Deposit - Eurodollar--5.8%
Abbey National Treasury Services PLC
10,000 4.90%, 6/29/99
10,000,000
Bank Brussels Lambert
2,000 4.86%, 4/30/99
2,000,000
Deutsche Bank
3,000 4.83%, 4/12/99
2,999,956
ING Bank, NV
5,000 4.97%, 9/20/99
4,999,671
Morgan Guaranty Trust Co.
1,500 4.86%, 5/4/99
1,499,914
--------
- ----
21,499,541
- ------------------------------------------------------------
Certificates of Deposit - Yankee--10.5%
ABN-Amro Bank N.A.
5,000 4.92%, 12/23/99
4,998,241
Banque Nationale De Paris
4,000 4.89%, 5/3/99
4,000,000
Bayerische Landesbank Girozentrale
$5,000 4.80%, 6/30/99 $
4,999,014
5,000 4.89%, 12/20/99
4,997,740
Commerzbank
1,000 5.14%, 9/15/99
1,000,299
Credit Agricole Indosuez
3,000 5.74%, 4/26/99
2,999,882
Deutsche Bank
5,000 5.06%, 1/18/00
4,998,844
5,000 4.98%, 2/2/00
4,998,783
Rabobank Nederland N.V.
1,000 5.68%, 5/28/99
1,000,848
UBS AG
5,000 5.16%, 2/28/00
4,998,243
--------
- ----
38,991,894
- ------------------------------------------------------------
Commercial Paper--47.0%
American General Finance Corp.
2,000 4.84%, 5/13/99
1,988,707
Associates First Capital Corp.
6,000 4.80%, 5/26/99
5,956,000
3,000 4.85%, 5/28/99
2,976,963
Barton Capital Corp.
4,000 5.125%, 4/1/99
4,000,000
Bishops Gate Resident Mortgage
4,064 4.90%, 4/14/99
4,056,809
BL North America
2,000 4.83%, 4/13/99
1,996,780
6,000 4.81%, 4/28/99
5,978,355
Bradford & Bingley Building Society
1,000 4.84%, 5/24/99
992,874
Centric Capital Corp.
1,000 4.89%, 5/10/99
994,703
Coca-Cola Enterprises, Inc.
2,800 4.87%, 4/12/99
2,795,833
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments as of March 31, 1999 CASH
ACCUMULATION TRUST
(Unaudited)
LIQUID ASSETS FUND
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Commercial Paper (cont'd.)
Commercial Credit Co.
$1,000 4.84%, 5/13/99 $
994,353
Countrywide Home Loan, Inc.
2,000 4.89%, 5/20/99
1,986,688
1,000 4.875%, 5/24/99
992,823
Diageo Capital Corp.
2,000 4.85%, 6/9/99
1,981,408
Edison Asset Securitization
2,000 4.86%, 9/8/99
1,956,800
Enterprise Funding Corp.
4,000 4.88%, 5/14/99
3,976,684
Finova Capital Corp.
1,277 4.94%, 4/13/99
1,274,897
First Chicago Financial Corp.
3,000 4.81%, 5/20/99
2,980,359
Fleet Funding Corp.
6,759 4.88%, 4/16/99
6,745,257
Ford Motor Credit Co.
8,000 4.80%, 4/23/99
7,976,533
General Electric Capital Corp.
2,000 5.12%, 4/1/99
2,000,000
4,686 4.85%, 6/10/99
4,641,808
1,418 4.82%, 7/23/99
1,396,546
3,000 4.79%, 8/5/99
2,949,705
General Motors Acceptance Corp.
5,000 4.84%, 5/14/99
4,971,094
GTE Corp.
5,450 4.90%, 4/19/99
5,436,648
2,631 4.95%, 4/9/99
2,628,106
5,018 4.91%, 4/19/99
5,005,681
2,000 4.93%, 5/10/99
1,989,318
Market Street Funding Corp.
1,000 4.87%, 5/10/99
994,724
1,000 4.87%, 6/11/99
990,395
Mont Blanc Capital Corp.
3,000 4.88%, 5/21/99
2,979,667
Monte Rosa Capital Corp.
2,000 4.87%, 5/14/99
1,988,366
2,342 4.88%, 5/14/99
2,328,349
3,225 4.88%, 5/17/99
3,204,890
Morgan (J.P.) & Co., Inc.
$5,000 4.84%, 6/21/99 $
4,945,550
Morgan Stanley Group, Inc.
5,000 4.87%, 4/14/99
4,991,207
5,000 4.84%, 6/17/99
4,948,239
Nationwide Building Society
4,000 4.84%, 6/28/99
3,952,676
Nordbanken North America, Inc.
3,000 4.83%, 4/15/99
2,994,365
PNC Funding Corp.
1,000 4.88%, 5/24/99
992,816
Preferred Receivables Funding Corp.
1,000 4.81%, 4/26/99
996,660
Safeco Corp.
8,530 5.08%, 4/19/99
8,508,334
2,000 4.85%, 4/28/99
1,992,725
4,000 4.89%, 6/9/99
3,962,510
Sears Roebuck Acceptance Corp.
2,000 4.85%, 6/10/99
1,981,139
Toronto Dominion Bank
1,779 4.90%, 6/4/99
1,763,503
8,000 4.90%, 6/8/99
7,925,956
Wells Fargo Co.
2,494 4.79%, 5/28/99
2,475,085
Windmill Funding Corp.
1,000 5.10%, 4/9/99
998,867
3,366 4.92%, 4/21/99
3,356,800
3,000 4.87%, 5/25/99
2,978,085
Wood Street Funding Corp.
5,000 5.05%, 4/1/99
5,000,000
3,650 4.87%, 5/14/99
3,628,768
--------
- ----
174,501,408
- ------------------------------------------------------------
Loan Participation(c)--0.5%
John Hancock Capital Corp.
2,000 5.14%, 2/13/00
(cost $2,000,000; date purchased
1/12/99)
2,000,000
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as of March 31, 1999 CASH
ACCUMULATION TRUST
(Unaudited)
LIQUID ASSETS FUND
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Time Deposit - Eurodollar--4.8%
Bank of Austria
$18,000 5.00%, 4/5/99 $
18,000,000
- ------------------------------------------------------------
U. S. Government Agencies--2.4%
Federal Home Loan Bank
4,000 5.04%, 2/25/00
3,997,179
5,000 4.95%, 2/17/00
4,997,640
--------
- ----
8,994,819
- ------------------------------------------------------------
U. S. Treasury Obligations - Discount--2.7%
United States Treasury Bills
10,000 4.85%, 4/15/99
9,986,528
- ------------------------------------------------------------
Other Corporate Obligations--21.8%
Abbey National Treasury Services PLC
2,000 5.72%, 6/11/99(b)
1,999,702
Barclays Bank PLC
9,000 4.823%, 4/2/99(b)
8,998,792
Bayerische Landesbank
1,000 4.80%, 6/29/99(b)
999,664
Bishops Gate Residental Mortgage
3,000 5.16%, 4/1/99(b)
3,000,000
Citicorp Medium Term Note Bank Entry
3,000 5.37%, 4/26/99(b)
3,006,696
Comerica Bank Detroit Michigan
10,000 4.82%, 7/19/99(b)
9,998,236
General Electric Capital Corp.
Medium Term Note
7,000 4.84%, 4/5/99(b)
6,998,537
Household Finance Corp.
1,660 7.75%, 6/1/99
1,666,892
International Business Machines
$6,000 4.91%, 4/1/99(b) $
6,000,000
Nationsbank N.A.
3,000 5.04%, 7/1/99(b)
2,999,513
Restructured Asset Certificates
7,000 5.05%, 4/12/99(b)
7,000,000
10,000 4.95%, 9/2/99(b)
10,000,000
Royal Bank Canada
7,000 4.84%, 4/6/99(b)
6,998,343
1,000 4.81%, 6/29/99(b)
999,677
Strategic Money Market Trust
4,000 5.11%, 6/15/99(b)
4,000,000
Strats Trust
6,000 4.94%, 8/18/99(b)(c)
(cost $6,000,000; date purchased
9/17/98)
6,000,000
--------
- ----
80,666,052
- ------------------------------------------------------------
Total Investments--103.0%
(amortized cost $382,537,064(a))
$382,537,064
Liabilities in excess of other
assets--(3.0%)
(11,055,868)
--------
- ----
Net Assets--100%
$371,481,196
--------
- ----
--------
- ----
</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 $8,000,000. The
aggregate value (8,000,000) is approximately 2.2% of net
assets.
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 5
<PAGE>
CASH ACCUMULATION TRUST
LIQUID ASSETS FUND
Portfolio of Investments as of March 31, 1999
(Unaudited)
- ------------------------------------------------------------
The industry classification of portfolio holdings and
liabilities in excess of
other assets shown as a percentage of net assets as of March
31, 1999 was as
follows:
<TABLE>
<S> <C>
Commercial Banks....................................
52.6%
Asset Backed Securities............................. 10.9
Business Credit (Finance)........................... 5.2
Telephone & Communications.......................... 4.1
Securities Brokers & Dealers........................ 4.0
Fire Insurance...................................... 3.9
Personal Credit Institutions........................ 3.7
Motor Vehicles...................................... 3.5
Bank Holding Companies.............................. 3.4
Mortgage Banks...................................... 2.7
U.S. Gov't Agency................................... 2.7
Federal Credit Agencies............................. 2.4
Office Machines..................................... 1.6
Beverages........................................... 0.8
Life Insurance...................................... 0.5
Miscellaneous Industry.............................. 0.5
Department Stores................................... 0.5
-----
103.0
Liabilities in excess of other assets...............
(3.0)
-----
100.0%
-----
-----
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 6
<PAGE>
Statement of Assets and Liabilities CASH
ACCUMULATION TRUST
(Unaudited) LIQUID ASSETS
FUND
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Six Months
Ended
Assets
March 31, 1999
<S>
<C>
Investments, at amortized cost which approximates market
value.............................................
$382,537,064
Cash........................................................
...............................................
85,639
Receivable for Fund shares
sold........................................................
.................... 19,505,790
Interest
receivable..................................................
...................................... 1,535,374
Prepaid expenses and other
assets......................................................
.................... 135,736
- --------------
Total
assets......................................................
...................................... 403,799,603
- --------------
Liabilities
Payable for Fund shares
reacquired..................................................
....................... 18,834,585
Payable for investments
purchased...................................................
....................... 12,996,949
Dividends
payable.....................................................
..................................... 381,741
Management fee
payable.....................................................
................................ 86,792
Accrued
expenses....................................................
....................................... 18,340
- --------------
Total
liabilities.................................................
...................................... 32,318,407
- --------------
Net
Assets......................................................
...........................................
$371,481,196
- --------------
Net assets were comprised of:
Shares of beneficial interest, at
par.........................................................
.......... $ 3,715
Paid-in capital in excess of
par.........................................................
............... 371,477,481
- --------------
Net assets, March 31,
1999........................................................
......................... $371,481,196
- --------------
- --------------
Net asset value, offering and redemption price per share
($371,481,196 / 371,481,196 shares of beneficial interest
issued and outstanding).......................
$1.00
- --------------
- --------------
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 7
<PAGE>
CASH ACCUMULATION TRUST
LIQUID ASSETS FUND
Statement of Operations (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income March 31,
1999
<S> <C>
Income
Interest................................. $ 10,489,658
-------------
- -
Expenses
Management fee........................... 142,109
Registration fees........................ 90,000
Transfer agent's fees and expenses....... 90,000
Custodian's fees and expenses............ 41,000
Legal fees and expenses.................. 31,500
Audit fee and expenses................... 13,500
Reports to shareholders.................. 11,000
Trustees' fees and expenses.............. 6,000
Miscellaneous............................ 614
-------------
- -
Total expenses........................ 425,723
-------------
- -
Net investment income....................... 10,063,935
-------------
- -
Realized Gain on Investments
Net realized gain on investment
transactions............................. 9,290
-------------
- -
Net Increase in Net Assets
Resulting from Operations................... $ 10,073,225
-------------
- -
-------------
- -
</TABLE>
CASH ACCUMULATION TRUST
LIQUID ASSETS FUND
Statement of Changes in Net Assets (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months December 22,
1997(a)
Ended
Through
Increase (Decrease) March 31, September
30,
in Net Assets 1999 1998
<S> <C> <C>
Operations
Net investment income... $ 10,063,935 $
16,036,653
Net realized gain on
investment
transactions......... 9,290
7,050
--------------- ------------
- --------
Net increase in net
assets resulting from
operations .......... 10,073,225
16,043,703
--------------- ------------
- --------
Dividends and distributions
(Note 1)................ (10,073,225)
(16,043,703)
--------------- ------------
- --------
Fund share transactions
Net proceeds from shares
sold................. 1,940,270,341
3,011,683,905(b)
Net asset value of
shares issued in
reinvestment of
dividends and
distributions........ 9,977,674
15,377,615
Cost of shares
reacquired........... (2,020,711,307)
(2,585,117,032)
--------------- ------------
- --------
Net increase (decrease)
in net assets from
Fund share
transactions......... (70,463,292)
441,944,488
--------------- ------------
- --------
Total increase
(decrease)........... (70,463,292)
441,944,488
Net Assets
Beginning of period........ 441,944,488
- --
--------------- ------------
- --------
End of period.............. $ 371,481,196 $
441,944,488
--------------- ------------
- --------
--------------- ------------
- --------
(a) Commencement of investment operations.
(b) Includes $295,683,132 that was transferred from the
National
Market Fund.
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 8
<PAGE>
Notes to Financial Statements CASH
ACCUMULATION TRUST
(Unaudited) LIQUID
ASSETS 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 two series - the National Money Market Fund and
the 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
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. Payment of dividends is made monthly. The Fund does
not expect to
realize long-term capital gains or losses.
- ------------------------------------------------------------
Nore 2. Agreements
The Trust 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 Trust.
PIFM pays for the cost
of the subadviser's services, the compensation of officers
of the Trust,
occupancy and certain clerical and bookkeeping costs of the
Trust. The Trust
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. For the six months ended March 31, 1999, the
management costs were .07%
of the Fund's average daily net assets.
The Trust has a distribution agreement with Prudential
Investment Management
Services LLC ('PIMS'). No distribution or service fees are
paid to PIMS as
distributor of the Fund.
PIFM, PIC and PIMS 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. During the six months ended March 31, 1999,
the Fund incurred
fees of approximately $67,500 for the services of PMFS. As
of March 31, 1999
$17,300 of such fees were due to PMFS. Transfer agent fees
and expenses in the
Statement of Operations include certain out-of-pocket
expenses paid to
nonaffiliates.
- ------------------------------------------------------------
- --------------------
9
<PAGE>
Financial Highlights CASH
ACCUMULATION TRUST
(Unaudited) LIQUID
ASSETS FUND
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
December 22,
Six Months 1997(a)
Ended Through
March 31, September 30,
1999 1998
- ----------- -------------
<S>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period.....................................................
$ 1.00 $ 1.00
- ----------- -------------
Net investment income and net realized
gains.............................................
.03 .04
Dividends and distributions to
shareholders..............................................
(.03) (.04)
- ----------- -------------
Net asset value, end of
period......................................................
..... $ 1.00 $ 1.00
- ----------- -------------
- ----------- -------------
TOTAL
RETURN(b):..................................................
....................... 2.54% 4.52%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).......................................................
... $ 371,481 $ 441,944
Average net assets
(000).......................................................
.......... $ 399,972 $ 374,141
Ratios to average net assets:
Expenses....................................................
.......................... .21%(c)
.21%(c)
Net investment
income......................................................
........... 5.05%(c) 5.53%(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. 10
<PAGE>
Getting The Most From Your Prudential Mutual Fund
How many times have you read these letters -- or other
financial materials --
and stumbled across a word that you don't understand?
Many shareholders have run into the same problem. We'd like
to help. So we'll
use this space from time to time to explain some of the
words you might have
read, but not understood. And if you have a favorite word
that no one can
explain to your satisfaction, please write to us.
Basis Point: 1/100th of 1%. For example, one-half of one
percent is 50 basis
points.
Collateralized Mortgage Obligations (CMOs): Mortgage-backed
bonds that
separate mortgage pools into different maturity classes,
called tranches.
These instruments are sensitive to changes in interest rates
and homeowner
refinancing activity. They are subject to prepayment and
maturity extension
risk.
Derivatives: Securities that derive their value from other
securities. The
rate of return of these financial instruments rises and
falls -- sometimes
very suddenly -- in response to changes in some specific
interest rate,
currency, stock, or other variable.
Discount Rate: The interest rate charged by the Federal
Reserve on loans to
member banks.
Federal Funds Rate: The interest rate charged by one bank to
another on
overnight loans.
Futures Contract: An agreement to purchase or sell a
specific amount of a
commodity or financial instrument at a set price at a
specified date in the
future.
Leverage: The use of borrowed assets to enhance return. The
expectation is
that the interest rate charged on borrowed funds will be
lower than the
return on the investment. While leverage can increase
profits, it can also
magnify losses.
Liquidity: The ease with which a financial instrument (or
product) can be
bought or sold (converted into cash) in the financial
markets.
Price/Earnings Ratio: The price of a share of stock divided
by the earnings
per share for a 12-month period.
Option: An agreement to purchase or sell something, such as
shares of stock,
by a certain time for a specified price. An option need not
be exercised.
Spread: The difference between two values; often used to
describe the
difference between "bid" and "asked" prices of a security,
or between
the yields of two similar maturity bonds.
Yankee Bond: A bond sold by a foreign company or government
in the U.S.
market and denominated in U.S. dollars.
<PAGE>
Getting The Most From Your Prudential Mutual Fund
When you invest through Prudential Mutual Funds, you receive
financial advice
through a Prudential Securities financial advisor or
Prudential/Pruco
Securities registered representative. Your advisor or
representative can
provide you with the following services:
There's No Reward Without Risk; But Is This Risk Worth It?
Your financial advisor or registered representative can help
you match the
reward you seek with the risk you can tolerate. And risk can
be difficult to
gauge--sometimes even the simplest investments bear
surprising risks. The
educated investor knows that markets seldom move in just one
direction--there
are times when a market sector or asset class will lose
value or provide
little in the way of total return. Managing your own
expectations is easier
with help from someone who understands the markets and who
knows you!
Keeping Up With The Joneses
A financial advisor or registered representative can help
you wade through
the numerous mutual funds available to find the ones that
fit your own
individual investment profile and risk tolerance. While the
newspapers and
popular magazines are full of advice about investing, they
are aimed at
generic groups of people or representative individuals, not
at you personally.
Your financial advisor or registered representative will
review your
investment objectives with you. This means you can make
financial decisions
based on the assets and liabilities in your current
portfolio and your risk
tolerance--not just based on the current investment fad.
Buy Low, Sell High
Buying at the top of a market cycle and selling at the
bottom are among the
most common investor mistakes. But sometimes it's difficult
to hold on to an
investment when it's losing value every month. Your
financial advisor or
registered representative can answer questions when you're
confused or
worried about your investment, and remind you that you're
investing for
the long haul.
<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
Delayne Dedrick Gold
Robert F. Gunia
Don G. Hoff
Robert E. LaBlanc
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Officers
Robert F. Gunia, President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
Robert C. Rosselot, 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 Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
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
PricewaterhouseCoopers 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, 1999,
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>
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
NY147541502 MF175E2
(ICON)
Cash
Accumulation
Trust
National Money
Market Fund
SEMI
ANNUAL
REPORT
March 31, 1999
(LOGO)
<PAGE>
Cash Accumulation Trust
National Money Market Fund
Performance At A Glance
During the six months ended March 31, 1999, money market
yields were volatile.
Yields plummeted as the Federal Reserve cut a key short-term
rate three times
in the autumn of 1998 to protect the U.S. economy from a
global financial
crisis. Yields later reversed course in early 1999 amid talk
that the key
rate might be increased to slow brisk U.S. economic growth.
The National
Money Market Fund benefited from attractive buying
opportunities that emerged
during this period.
Fund Facts As
of 3/31/99
<TABLE>
<CAPTION>
7-Day Net Asset
Weighted Avg. Net Assets
Current Yld. Value (NAV)
Mat. (WAM) (Millions)
<S> <C> <C>
<C> <C>
Nat'l Money Market Fund 4.32% $1.00
80 Days $387.9
IBC Financial Data
Money Fund Avg.
(General Purpose)* 4.23 $1.00
65 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
not insured or
guaranteed by the Federal Deposit Insurance Corporation or
any other
government agency. Although the Fund seeks to preserve the
value of your
investment at $1.00 per share, it is possible to lose money
by investing
in the Fund.
* IBC Financial Data reports a seven-day current yield,
NAV, and WAM on
Tuesdays. This is the data of all funds in the International
Business
Communications (IBC) Financial Data Money Fund Average
(General Purpose)
category as of March 30, 1999.
Money market fund yield comparison
(GRAPH)
How Investments Compared.
(As of 3/31/99)
(GRAPH)
U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds
Source: Lipper, Inc. 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
returns 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.
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>
Portfolio Manager's Report
(PHOTO)
Robert Browne
Fund Manager
Investment Goals and Style
The National Money Market Fund, one of two series of Cash
Accumulation Trust,
seeks current income to the extent 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
in the United
States and foreign countries. Maturities can range from one
day to 13 months.
We 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.
Performance Review
Early bargains benefited the Fund
When our six-month reporting period began in October 1998,
global financial
markets were still reeling from the Russian government's
decision in August
to devalue its currency, the ruble, and default on some of
its ruble-
denominated government bonds. Investors responded to these
volatile market
conditions by purchasing "safe haven" securities such as
U.S. Treasury bills,
and selling assets that carried more risk. This trend drove
money market
yields sharply lower, impaired market liquidity, and caused
the money market
securities of banks and corporations to cheapen relative to
Treasuries. We
took advantage of this situation in early October by
purchasing money market
securities of highly rated banks and corporations at very
attractive yields.
However, we avoided purchasing one-year securities and,
instead, bought
shorter-term money market securities which were a more
prudent buy during
that time of heightened market volatility.
Federal Reserve lends a helping hand
In order to calm world financial markets and protect the
U.S. economy from
the ravages of the global crisis, the Federal Reserve acted
very aggressively.
It cut the Federal funds rate (the rate U.S. banks charge
each other for
overnight loans) three times in the autumn by a quarter
percentage point,
leaving the key rate at 4.75%. The rate reductions were so
effective that
investors began to sell the safest securities and purchase
stocks and other
riskier assets. Although money market yields generally
lingered at low levels
in early December, we were still able to buy securities with
solid yields as
companies anxious to borrow money over year end paid
handsomely to do so. We
took advantage of this brief jump in yields by purchasing
securities of solid
corporations that matured in one to three months. Although
the turmoil in
global financial markets had died down, we still avoided
taking unnecessary
credit risk.
We bought a little too soon
Further buying opportunities emerged in the first three
months of 1999.
Continued strong economic growth in the United States led
many investors
to believe the next change in U.S. monetary policy would be
a short-term rate
increase to slow the economy and head off higher inflation.
With this in mind,
investors pushed money market yields higher. For example,
the 12-month London
Interbank Offered Rate rose from approximately 5.00% at the
beginning of 1999
to roughly 5.45% in March.
We viewed this trend as a buying opportunity, because we
expected the Federal
Reserve to keep
<PAGE>
short-term interest rates unchanged. After all, inflation
was still subdued
in the United States, and the global economy remained weak.
We, therefore,
bought mostly one-year securities in late January and
February that
significantly extended the Fund's weighted average maturity
(WAM) until it
was substantially longer than that of its competition. WAM
takes into account
the maturity level of each security held by a fund. It is a
measurement tool
that determines a fund's sensitivity to fluctuations in
interest rates.
Although buying these securities and lengthening the WAM
helped the Fund's
performance, it would have benefited even more if we had
waited to buy
securities in March when money market yields were higher. On
March 30, the
Federal Reserve policymakers met and, as we expected,
decided to leave short-
term rates unchanged.
Weighted average maturity compared to
the average money market fund
(GRAPH)
Looking Ahead
Good buying opportunities seen
Continued brisk U.S. economic growth raises the risk for
higher inflation and
lends credence to the view that the Federal Reserve might
increase the Federal
funds rate to keep the economy from overheating. The U.S.
central bank
recently announced it is considering raising short-term
interest rates.
Consequently, we believe investors will push up money market
yields in
response to any new data indicating the economy remains
robust. We stand
ready to take advantage of any attractive buying
opportunities.
- ------------------------------------------------------------
- -------------------
1
<PAGE>
A Message to Our Shareholders
May 19, 1999
(PHOTO)
Dear Shareholder:
As 1999 began, major index advances have been driven by the
stocks of a
handful of very large companies. These stocks were getting
more and more
expensive--out of proportion to their earnings expectations.
As a result,
there was a substantial disparity in value between large and
small companies,
and between growth and value stocks. In recent months,
however, that gap has
started to narrow amid news of strong economic growth.
Our current economic environment has prompted many investors
to turn to value
stocks that typically fare better in a growing economy, and
have been selling
at a significant discount to the market.
Many sectors of the bond market have also begun to rebound
from last year's
global financial crisis. Furthermore, while bonds have not
generated higher
returns than stocks in recent years, they have demonstrated
that they hold
up better during market downturns. That's a thought to keep
in mind going
forward.
Diversification is critical
History shows that the markets generally bring prices in
line with earnings
performance, sooner or later. It also shows that two
investment styles--value
and growth--typically alternate in periods of superior
performance.
What does this suggest? Instead of chasing popular market
winners, investors
should have a well-diversified asset allocation strategy in
place and keep to
it. It is also a good practice to rebalance your holdings,
when necessary, to
keep your asset allocation consistent with your long-term
objectives and risk
tolerance. A properly diversified portfolio of value- and
growth-oriented
equity funds, bond funds, and money market funds could help
you weather
inevitable market turbulence and receive more consistent
returns over time.
Prudential offers a wide range of mutual funds to help our
shareholders
diversify. We have also designed several balanced and
diversified funds to
allow one-decision diversification.
Thank you for your continued confidence in Prudential mutual
funds.
Sincerely,
John R. Strangfeld
Chief Investment Officer
Prudential Investments
- ------------------------------------------------------------
- -------------------
2
<PAGE>
Portfolio of Investments as of March 31, 1999 CASH
ACCUMULATION TRUST
(Unaudited)
NATIONAL MONEY MARKET FUND
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Bank Notes--11.2%
American Express Centurion Bank
$2,000 4.935%, 4/8/99(b) $
2,000,000
FCC National Bank
5,000 5.68%, 6/3/99
5,005,042
First Union National Bank
11,900 5.02%, 5/17/99(b)
11,900,000
4,000 4.945%, 5/19/99(b)
4,000,000
Nationsbank N. A.
3,000 5.036%, 4/1/99(b)
2,999,513
1,500 4.95%, 6/21/99(b)
1,500,167
Northern Trust
8,000 5.10%, 2/22/00
7,997,239
U.S. Bank N.A.
8,000 4.905%, 4/8/99(b)
7,999,182
--------
- ----
43,401,143
- ------------------------------------------------------------
Certificates of Deposit - Eurodollar--1.5%
Abbey National Treasury Services,
PLC
6,000 4.90%, 6/29/99
6,000,000
- ------------------------------------------------------------
Certificates of Deposit - Yankee--24.6%
Barclays Bank PLC
12,000 4.828%, 4/2/99(b)
11,998,389
Bayerische Landesbank Girozentrale
10,000 4.805%, 4/30/99(b)
9,998,027
Deutsche Bank
6,000 4.98%, 2/2/00
5,998,539
National Westminster Bank, PLC
8,800 5.048%, 2/9/00
8,797,263
Royal Bank of Canada
7,000 4.84%, 4/6/99(b)
6,998,344
10,000 4.809%, 4/15/99(b)
9,997,200
3,500 4.97%, 2/4/00
3,498,856
Swiss Bank Corp.
$11,000 5.74%, 6/11/99 $
10,998,771
Toronto Dominion Bank
7,000 4.86%, 4/19/99
7,000,000
13,000 5.02%, 2/4/00
12,996,816
UBS AG
7,100 5.18%, 2/28/00
7,098,129
--------
- ----
95,380,334
- ------------------------------------------------------------
Commercial Paper--40.1%
Abbey National North America Corp.
7,900 4.83%, 6/21/99
7,814,147
ABN-AMRO N.A. Finance, Inc.
9,000 4.77%, 7/19/99
8,870,017
Aon Corp.
5,000 4.90%, 4/27/99
4,982,306
Associates First Capital B.V.
2,000 4.84%, 6/16/99
1,979,564
Associates First Capital Corp.
2,000 4.85%, 5/19/99
1,987,067
4,100 4.80%, 5/26/99
4,069,933
Bank One Corp.
5,600 4.81%, 6/28/99
5,534,156
BBL North America Funding Corp.
5,000 4.84%, 6/14/99
4,950,256
Bradford & Bingley Building Society
1,000 4.83%, 6/28/99
988,193
Canadian Wheat Board
3,500 5.05%, 4/1/99
3,500,000
CIT Group Holdings, Inc.
3,000 4.83%, 6/17/99
2,969,008
Daimler Chrysler North America
Holdings, Inc.
1,300 4.81%, 6/25/99
1,285,236
7,000 4.85%, 6/29/99
6,916,068
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments as of March 31, 1999 CASH
ACCUMULATION TRUST
(Unaudited)
NATIONAL MONEY MARKET FUND
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Commercial Paper (cont'd.)
Diageo Capital PLC
$8,100 4.84%, 6/25/99 $
8,007,435
Ford Motor Credit Co.
10,000 4.80%, 4/23/99
9,970,667
Mont Blanc Capital Corp.
4,000 4.87%, 5/24/99
3,971,321
15,000 4.89%, 5/25/99
14,889,975
Monte Rosa Capital Corp.
3,000 4.88%, 5/21/99
2,979,667
Morgan (J.P.) & Co., Inc.
6,000 4.84%, 6/21/99
5,934,660
Morgan Stanley Dean Witter
Discover & Co.
7,000 4.85%, 5/20/99
6,953,790
Nationwide Building Society
5,000 4.84%, 6/28/99
4,940,844
Nordbanken North America, Inc.
18,500 4.87%, 5/18/99
18,382,376
Norwest Financial, Inc.
3,000 4.84%, 6/15/99
2,969,750
Petrofina Delaware Inc.
5,100 4.85%, 6/21/99
5,044,346
PNC Funding Corp.
1,000 4.89%, 6/22/99
988,862
Sears Roebuck Acceptance Corp.
2,000 4.85%, 6/10/99
1,981,139
Wood Street Funding Corp.
9,618 4.90%, 4/28/99
9,582,654
3,123 4.86%, 6/21/99
3,088,850
--------
- ----
155,532,287
Other Corporate Obligations--17.6%
Associates Corp. of North America
$5,265 6.375%, 8/15/99 $
5,289,220
Bankamerica Corp.
3,000 5.42%, 6/1/99(b)
3,011,258
2,500 5.40%, 6/16/99(b)
2,509,580
Bishops Gate Residential Mortgage
Trust
3,000 5.163%, 4/1/99(b)
3,000,000
Caterpillar Financial Services
1,000 6.16%, 4/1/99
1,005,895
Chrysler Financial Co., LLC
3,000 6.35%, 6/22/99
3,008,535
2,000 6.375%, 7/28/99
2,021,179
Ford Motor Credit Co.
2,000 7.25%, 5/15/99
2,004,818
4,000 5.27%, 6/1/99(b)
4,002,255
2,200 6.375%, 9/15/99
2,213,762
General Electric Capital Corp.
5,000 4.84%, 4/5/99(b)
4,998,955
John Hancock Mutual Life Insurance
2,000 5.14%, 4/14/99(a)(b)
(cost $2,000,000; purchased
1/12/99)
2,000,000
International Lease Finance Corp.
2,235 6.625%, 4/1/99
2,235,000
Restructured Asset Securities
11,000 4.953%, 4/2/99(b)
11,000,000
8,000 5.053%, 4/12/99(b)
8,000,000
Strategic Money Market Trust,
4,000 5.101%, 6/15/99(b)
4,000,000
8,000 5.10%, 6/16/99(b)
8,000,000
--------
- ----
68,300,457
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as of March 31, 1999 CASH
ACCUMULATION TRUST
(Unaudited)
NATIONAL MONEY MARKET FUND
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Time Deposit - Eurodollar--3.5%
Deutsche Bank
$13,400 5.125%, 4/1/99 $
13,400,000
- ------------------------------------------------------------
U.S. Government Obligations--2.0%
United States Treasury Bills
7,900 4.84%, 4/15/99
7,889,379
- ------------------------------------------------------------
Total Investments--100.5%
(amortized cost $389,903,538(c))
389,903,600
Liabilities in excess of other
assets--(0.5%)
(1,986,248)
--------
- ----
Net Assets--100%
$387,917,352
--------
- ----
--------
- ----
</TABLE>
- ---------------
(a) Indicates a restricted security; the aggregate cost and
value is $2,000,000;
approximately 0.5% of net assets.
(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) The cost for federal income tax purposes is
substantially the same as for
financial reporting purposes.
The industry classification of portfolio holdings and other
assets in excess of
liabilities shown as a percentage of net assets as of March
31, 1999 was as
follows:
<TABLE>
<S> <C>
Commercial Banks 59.3%
Asset Backed Securities 9.7
Motor Vehicle Parts 8.1
Bank Holding Companies-Domestic 4.4
Personal Credit Institutions 4.2
Short-Term Business Credit 4.1
Beverages 2.1
U.S. Government/Sovereign 2.0
Security Brokers & Dealers 1.8
Crude Petroleum & Natural Gas 1.3
Accident & Health Insurance 1.3
Canadian Government 0.9
Equipment Rental & Leasing 0.6
Life Insurance 0.5
Construction Machinery & Equipment 0.2
-----
100.5
Liabilities in excess of other assets (0.5)
-----
100.0%
-----
-----
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 5
<PAGE>
Statement of Assets and Liabilities CASH
ACCUMULATION TRUST
(Unaudited)
NATIONAL MONEY MARKET FUND
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Assets
March 31, 1999
<S>
<C>
Investments, at amortized cost which approximates market
value.............................................
$389,903,600
Receivable for Fund shares
sold........................................................
.................... 16,177,076
Receivable for investments
sold........................................................
.................... 4,521,781
Interest
receivable..................................................
...................................... 1,869,215
Prepaid expenses and other
assets......................................................
.................... 138,444
- --------------
Total
assets......................................................
...................................... 412,610,116
- --------------
Liabilities
Payable for Fund shares
reacquired..................................................
....................... 16,206,267
Payable for investments
purchased...................................................
....................... 7,889,379
Dividends
payable.....................................................
..................................... 363,972
Management fee
payable.....................................................
................................ 130,553
Accrued expenses and other
liabilities.................................................
.................... 84,509
Distribution fee
payable.....................................................
.............................. 18,084
- --------------
Total
liabilities.................................................
...................................... 24,692,764
- --------------
Net
Assets......................................................
...........................................
$387,917,352
- --------------
- --------------
Net assets were comprised of:
Shares of beneficial interest, at $.00001 par
value.....................................................
$ 3,879
Paid-in capital in excess of
par.........................................................
............... 387,913,473
- --------------
Net assets, March 31,
1999........................................................
......................... $387,917,352
- --------------
- --------------
Net asset value, offering price and redemption price per
share
($387,917,352 / 387,917,352 shares of beneficial interest
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
March 31,
Net Investment Income 1999
<S> <C>
Income
Interest....................................
$11,697,586
----------
- -
Expenses
Management fee..............................
861,773
Distribution fee............................
220,967
Transfer agent's fees and expenses..........
149,000
Registration fees...........................
68,000
Reports to shareholders.....................
50,000
Custodian's fees and expenses...............
45,000
Legal fees and expenses.....................
15,000
Audit fees and expenses.....................
13,000
Trustees' fees and expenses.................
6,000
Miscellaneous...............................
7,947
----------
- -
Total expenses...........................
1,436,687
----------
- -
Net investment income..........................
10,260,899
----------
- -
Realized Gain on Investments
Net realized gain on investment transactions...
20,581
----------
- -
Net Increase in Net Assets
Resulting from Operations......................
$10,281,480
----------
- -
----------
- -
</TABLE>
Portfolio of Investments as of March 31, 1999 CASH
ACCUMULATION TRUST
(Unaudited)
NATIONAL MONEY MARKET FUND
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ended Year
Ended
Decrease in March 31,
September 30,
Net Assets 1999
1998
<S> <C> <C>
Operations
Net investment income......... $ 10,260,899 $
27,769,453
Net realized gain on
investment transactions.... 20,581
- --
-------------- ----------
- --------
Net increase in net assets
resulting from
operations................. 10,281,480
27,769,453
-------------- ----------
- --------
Dividends and distributions to
shareholders (Note 1)...... (10,281,480)
(27,769,453)
-------------- ----------
- --------
Fund share transactions (at $1
per share)
Net proceeds from shares
sold....................... 1,893,845,109
5,056,612,846
Net asset value of shares
issued in reinvestment of
dividends and
distributions.............. 10,080,526
24,443,399
Cost of shares reacquired..... (2,023,296,083)
(5,275,771,195)(a)
-------------- ----------
- --------
Net decrease in net assets
from Fund share
transactions............... (119,370,448)
(194,714,950)
-------------- ----------
- --------
Total decrease................ (119,370,448)
(194,714,950)
Net Assets
Beginning of period........... 507,287,800
702,002,750
-------------- ----------
- --------
End of period................. $ 387,917,352 $
507,287,800
-------------- ----------
- --------
-------------- ----------
- --------
- ---------------
(a) Includes $295,683,132 that was transferred into Liquid
Assets
Fund.
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 7
<PAGE>
Notes to Financial Statements CASH
ACCUMULATION TRUST
(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 two series--the National Money Market Fund (the
'Fund') and the
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 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 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 Trust 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'); PIC furnishes investment
advisory services in
connection with the management of the Trust. PIFM pays for
the cost of the
subadviser's services, the compensation of officers of the
Trust, occupancy and
certain clerical and bookkeeping costs of the Fund. The
Trust bears all other
costs and expenses.
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 Trust has a distribution agreement with Prudential
Investment Management
Services LLC ('PIMS'). The Fund compensates PIMS 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,
regardless of expenses
actually incurred by them. The distribution fees are accrued
daily and payable
monthly.
PIFM, PIC and PIMS are indirect, 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 and during the six
months ended March 31,
1999, the Fund incurred fees of approximately $122,600 for
the services of PMFS.
As of March 31, 1999, approximately $20,400 of such fees
were due to PMFS.
Transfer agent fees and expenses in the Statement of
Operations include certain
out-of-pocket expenses paid to nonaffiliates.
- ------------------------------------------------------------
- --------------------
8
<PAGE>
Financial Highlights CASH
ACCUMULATION TRUST
(Unaudited) NATIONAL
MONEY MARKET FUND
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended September 30,
March 31, ---------------------------------------------
- --
1999 1998 1997 1996 1995
<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........................................ 0.02
0.05 0.05 0.05 0.05
Dividends and distributions to
shareholders.................. (0.02) (0.05)
(0.05) (0.05) (0.05)
- ----------- -------- -------- -------- -----
- ---
Net asset value, end of
period............................... $ 1.00 $
1.00 $ 1.00 $ 1.00 $ 1.00
- ----------- -------- -------- -------- -----
- ---
- ----------- -------- -------- -------- -----
- ---
TOTAL
RETURN(a):.............................................
2.3% 5.2% 5.0% 5.0% 5.2%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $ 387,917
$507,288 $702,003 $652,327 $685,228
Ratios to average net assets:
Expenses, including distribution
fee...................... 0.65%(b) 0.62%
0.65% 0.69% 0.69%
Expenses, excluding distribution
fee...................... 0.55%(b) 0.52%
0.55% 0.59% 0.59%
Net investment
income.....................................
4.65%(b) 5.05% 4.89% 4.86% 5.15%
<CAPTION>
1994
<S>
<C>
- --------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 1.00
Net investment
income........................................ 0.03
Dividends and distributions to
shareholders.................. (0.03)
- --------
Net asset value, end of
period............................... $ 1.00
- --------
- --------
TOTAL
RETURN(a):.............................................
3.2%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $823,343
Ratios to average net assets:
Expenses, including distribution
fee...................... 0.61%
Expenses, excluding distribution
fee...................... 0.51%
Net investment
income..................................... 3.20%
</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 return for periods
of less than a full
year are not annualized.
(b) Annualized.
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 9
<PAGE>
Getting The Most From Your Prudential Mutual Fund
Some mutual fund shareholders won't ever read this--they
don't read annual
and semi-annual reports. It's quite understandable. These
annual and semi-
annual reports are prepared to comply with Federal
regulations. They are often
written in language that is difficult to understand. So,
when most people run
into those particularly daunting sections of these reports,
they don't read
them.
We think that's a mistake.
At Prudential Mutual Funds, we've made some changes to our
report to make it
easier to understand and more pleasant to read, in hopes
you'll find it
profitable to spend a few minutes familiarizing yourself
with your investment.
Here's what you'll find in the report:
At A Glance
Since an investment's performance is often a shareholder's
primary concern,
we present performance information in two different formats.
You'll find it
first on the "At A Glance" page where we compare the Fund
and the comparable
average calculated by Lipper Analytical Services, a
nationally recognized
mutual fund rating agency. We report both the cumulative
total returns and
the average annual total returns. The cumulative total
return is the total
amount of income and appreciation the Fund has achieved in
various time
periods. The average annual total return is an annualized
representation
of the Fund's performance--it generally smoothes out returns
and gives you
an idea how much the Fund has earned in an average year, for
a given time
period. Under the performance box, you'll see legends that
explain the
performance information, whether fees and sales charges have
been included
in returns, and the inception dates for the Fund's share
classes.
See the performance comparison charts at the back of the
report for
more performance information. And keep in mind that past
perfor-mance is
not indicative of future results.
Portfolio Manager's Report
The portfolio manager who invests your money for you reports
on successful--
and not-so-successful--strategies in this section of your
report. Look for
recent purchases and sales here, as well as information
about the sectors
the portfolio manager favors and any changes that are on the
drawing board.
Portfolio Of Investments
This is where the report begins to look technical, but it's
really just a
listing of each security held at the end of the reporting
period, along
with valuations and other information. Please note that
sometimes we discuss
a security in the Portfolio Manager's Report that doesn't
appear in this
listing because it was sold before the close of the
reporting period.
<PAGE>
Statement Of Assets And Liabilities
The balance sheet shows the assets (the value of the Fund's
holdings),
liabilities (how much the Fund owes) and net assets (the
Fund's equity, or
holdings after the Fund pays its debts) as of the end of the
reporting period.
It also shows how we calculate the net asset value per share
for each class of
shares. The net asset value is reduced by payment of your
dividend, capital
gain, or other distribution, but remember that the money or
new shares are
being paid or issued to you. The net asset value fluctuates
daily along with
the value of every security in the portfolio.
Statement Of Operations
This is the income statement, which details income (mostly
interest and
dividends earned) and expenses (including what you pay us to
manage your
money). You'll also see capital gains here -- both realized
and unrealized.
Statement Of Changes In Net Assets
This schedule shows how income and expenses translate into
changes in net
assets. The Fund is required to pay out the bulk of its
income to shareholders
every year, and this statement shows you how we do it--
through dividends and
distributions--and how that affects the net assets. This
statement also shows
how money from investors flowed into and out of the Fund.
Notes To Financial Statements
This is the kind of technical material that can intimidate
readers, but it
does contain useful information. The Notes provide a brief
history and
explanation of your Fund's objectives. In addition, they
also outline how
Prudential Mutual Funds prices securities. The Notes also
explain who manages
and distributes the Fund's shares and, more importantly, how
much they are
paid for doing so. Finally, the Notes explain how many
shares are outstanding,
and the number issued and redeemed over the period.
Financial Highlights
This information contains many elements from prior pages,
but on a per share
basis. It is designed to help you understand how the Fund
performed, and to
compare this year's performance and expenses to those of
prior years.
Independent Auditor's Report
Once a year, an outside auditor looks over our books and
certifies that the
information is fairly presented and complies with generally
accepted
accounting principles.
Tax Information
This is information which we report annually about how much
of your total
return is taxable. Should you have any questions, you may
want to consult a
tax advisor.
Performance Comparison
These charts are included in the annual report and are
required by the
Securities Exchange Commission. Performance is presented
here as a
hypothetical $10,000 investment in the Fund since its
inception or for 10
years (whichever is shorter). To help you put that return in
context, we are
required to include the performance of an unmanaged, broad-
based securities
index, as well. The index does not reflect the cost of
buying the securities
it contains or the cost of managing a mutual fund. Of
course, the index
holdings do not mirror those of the fund --the index is a
broadly based
reference point commonly used by investors to measure how
well they are
doing. A definition of the selected index is also provided.
Investors
generally cannot invest directly in an index.
<PAGE>
Getting The Most From Your Prudential Mutual Fund
When you invest through Prudential Mutual Funds, you receive
financial advice
through a Prudential Securities financial advisor or
Prudential/Pruco
Securities registered representative. Your advisor or
representative can
provide you with the following services:
There's No Reward Without Risk; But Is This Risk Worth It?
Your financial advisor or registered representative can help
you match the
reward you seek with the risk you can tolerate. And risk can
be difficult to
gauge--sometimes even the simplest investments bear
surprising risks. The
educated investor knows that markets seldom move in just one
direction--there
are times when a market sector or asset class will lose
value or provide
little in the way of total return. Managing your own
expectations is easier
with help from someone who understands the markets and who
knows you!
Keeping Up With The Joneses
A financial advisor or registered representative can help
you wade through
the numerous mutual funds available to find the ones that
fit your own
individual investment profile and risk tolerance. While the
newspapers and
popular magazines are full of advice about investing, they
are aimed at
generic groups of people or representative individuals, not
at you personally.
Your financial advisor or registered representative will
review your
investment objectives with you. This means you can make
financial decisions
based on the assets and liabilities in your current
portfolio and your risk
tolerance--not just based on the current investment fad.
Buy Low, Sell High
Buying at the top of a market cycle and selling at the
bottom are among the
most common investor mistakes. But sometimes it's difficult
to hold on to an
investment when it's losing value every month. Your
financial advisor or
registered representative can answer questions when you're
confused or
worried about your investment, and remind you that you're
investing for
the long haul.
<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
Delayne Dedrick Gold
Robert F. Gunia
Don G. Hoff
Robert E. LaBlanc
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Officers
Robert F. Gunia, President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
Robert C. Rosselot, 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 Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
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
PricewaterhouseCoopers 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, 1999,
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>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
BULK RATE
U.S. POSTAGE
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