<PAGE>
ANNUAL REPORT SEPTEMBER 30, 2000
Cash Accumulation Trust/
Liquid Assets Fund
Fund Type Money market
Objective Current income to the extent consistent
with preservation of capital and liquidity
(GRAPHIC)
This report is not authorized for distribution to
prospective investors unless preceded or
accompanied by a current prospectus.
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.
(LOGO)
<PAGE>
Build on the Rock
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
of 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.
Money Market Fund Yield Comparison
(GRAPH)
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Fund Facts As of 9/30/00
<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 6.53% $1.00 57 Days $489
iMoneyNet, Inc.(1st & 2nd Tier-
General Purpose-Retail) Average* 5.91% $1.00 56 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.
*iMoneyNet, Inc. reports a seven-day current yield,
NAV, and WAM on Tuesdays. This is the data of all
funds in the iMoneyNet, Inc. (1st & 2nd Tier-
General Purpose-Retail) category as of September
26, 2000, the closest date to the end of our
reporting period.
Weighted Average Maturity Compared to the Average Money Market Fund
(GRAPH)
1
<PAGE>
(LOGO) November 15, 2000
Dear Shareholder,
Our 12-month reporting period that began on October
1, 1999 proved to be a particularly favorable
environment for investors in money market funds. A
trend toward higher short-term interest rates in
the United States, among other factors, caused
yields on money market securities to rise sharply.
This development helped some money market funds'
seven-day current yields to climb above the rarely-
crossed 6.00% threshold. Earning such an attractive
yield on a relatively conservative investment
provided a safe haven for some investors who were
discouraged by the stock market's heightened
volatility during the summer of 2000.
The Liquid Assets Fund--one of two series of Cash
Accumulation Trust--provided a better-than-average
yield throughout its fiscal year and a stable $1
net asset value. On September 30, 2000, the Fund's
seven-day current yield was 6.53% versus 5.91% for
the average comparable money market fund tracked by
iMoneyNet, Inc.
The following report takes a closer look at
developments in the money markets during our fiscal
year, and explains how the Fund was positioned
accordingly. Thank you for your continued
confidence in Prudential mutual funds.
Sincerely,
David R. Odenath, Jr., President
Cash Accumulation Trust/Liquid Assets Fund
2
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Annual Report September 30, 2000
INVESTMENT ADVISER'S REPORT
Money market yields rose during much of our fiscal
year that began on October 1, 1999, as the Federal
Reserve (the Fed) increased short-term interest
rates four times. Concern that a rapidly expanding
U.S. economy could boost inflation prompted the
central bank to act repeatedly. By lifting short-
term rates, the Fed made many loans more expensive
for businesses and consumers. It hoped that higher
borrowing costs would slow the economy's feverish
pace.
Repeated changes in U.S. monetary policy were just
one of the developments that affected the money
markets during our fiscal year. Corporate
treasurers, among others, wanted to avoid any
difficulties that might occur in the financial
markets if computers malfunctioned or shut down
while switching their internal dates from December
31, 1999 to January 1, 2000. Therefore, some banks
and corporations hurried to finish their year-end
borrowing early by issuing securities whose
interest rates adjusted periodically based on
London Interbank Offered Rates, or LIBOR. (LIBOR is
a widely quoted money market benchmark.)
These adjustable-rate securities provided generous
"yield spreads" in order to attract investors. We
began to take advantage of this investment
opportunity in the summer of 1999 by purchasing
these securities. By late 1999, adjustable-rate
securities had risen to approximately 37% of the
Fund's total investments, up from a normal exposure
of roughly 20%. After the change of year proceeded
smoothly, "yield spreads" on adjustable-rate
securities began to decline toward historical
norms. This trend enhanced the Fund's relative
performance.
Short-term rate hikes fueled investment opportunities
In January 2000, investors awaited further moves by
the Fed. (The central bank had already raised
short-term rates once during our fiscal year.) The
Fed was expected to maintain its stance of
tightening monetary policy as the
3
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Annual Report September 30, 2000
economy continued to race ahead early in 2000.
During this time, we bought shorter-term money
market securities. Proceeds from these securities
were reinvested in higher-yielding securities that
became available after the Fed hiked short-term
rates in February and March 2000.
In early spring of 2000, many participants in the
financial markets were of the firm belief that the
Fed would tighten monetary policy more aggressively
when it met in mid-May. While the previous three
rate hikes had been a quarter of a percentage point,
the next was expected to be half of a percentage point.
Fed toughened stance against inflation
We began to prepare the Fund for this unusually
large change in monetary policy by investing in
securities that would mature near the date of the
Fed's next scheduled meeting--May 16, 2000. These
purchases allowed the Fund's weighted average maturity
(WAM) to decline until it was shorter than that of
the average comparable fund as measured by iMoneyNet.
(WAM is a measurement tool that determines a portfolio's
sensitivity to changes in the level of interest
rates.) Positioning the Fund in this way would give
us better access to cash to buy any higher-yielding
money market securities that were available around
the time that the Fed was expected to increase
short-term rates.
The widely expected half-point rate hike occurred
in mid-May, marking the Fed's largest increase in
more than five years. Money market yields had
climbed sharply by this time. Therefore, we locked
in attractive yields on securities maturing in one
year, which lengthened the Fund's WAM.
4
<PAGE>
www.prudential.com (800) 225-1852
Money market securities sought amid market turmoil
Heightened stock-market volatility during the
summer and evidence that further rate hikes were
unnecessary sent many investors fleeing to one-year
money market securities, driving their prices
higher and yields lower. This development caused
yields on one-year securities to decline until they
were in line with yields on six-month securities.
Therefore, we lengthened the Fund's WAM by
purchasing five- and six-month securities that
offered good relative value compared with one-year
securities.
Looking Ahead: Short-term rate cut eyed in 2001
The economy appears to be headed for a "soft
landing." The economic expansion lost considerable
steam in the third quarter of 2000 as government
spending declined, business investment fell, and
the construction of new homes slowed. In addition,
inflationary pressures were relatively tame during
that period. Should this economic scenario persist,
there is greater likelihood that the Fed may cut
short-term interest rates in 2001.
Cash Accumulation Trust/Liquid Assets Fund Management Team
5
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Portfolio of Investments as of September 30, 2000
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------
Bank Notes 7.4%
American Express Centurion Bank
$ 7,000 6.58%, 10/30/00(b) $ 6,998,613
Bank of America NA
6,000 6.82%, 2/5/01 6,000,000
Bank One Corp. NA
10,000 6.70%, 9/6/01(b) 10,001,669
Comerica Bank
3,000 6.62%, 10/6/00(b) 3,000,129
National City Bank
10,000 6.55%, 1/31/01 9,998,412
---------------
35,998,823
-------------------------------------------------------------------------------------
Certificates of Deposit - Domestic 1.4%
First Union National Bank
3,000 7.09%, 12/22/00 3,000,000
Southtrust Bank NA
4,000 6.70%, 3/6/01 3,999,979
---------------
6,999,979
-------------------------------------------------------------------------------------
Certificates of Deposit - Yankee 12.7%
Bank of Scotland
5,000 7.13%, 6/29/01 4,998,246
Bayerische Landesbank Girozentrale
2,000 6.74%, 2/16/01 1,999,907
Canadian Imperial Bank of Commerce
5,000 6.69%, 11/27/00 5,000,000
5,000 7.30%, 5/14/01 5,000,000
Citibank NA
6,000 6.72%, 11/20/00 6,000,082
Deutsche Bank AG
5,000 6.08%, 11/24/00 4,999,471
5,000 6.75%, 2/22/01 4,999,065
National Bank of Canada
1,000 6.96%, 10/23/00 1,000,117
1,000 6.95%, 10/24/00 1,000,115
Svenska Handelsbanken
17,712 6.84%, 1/31/01 17,712,720
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
Toronto Dominion Bank
$ 3,400 6.69%, 2/7/01 $ 3,398,966
UBS AG
2,000 6.38%, 12/20/00 1,999,791
Westpac Banking Corp.
4,000 6.22%, 11/30/00 3,999,499
---------------
62,107,979
-------------------------------------------------------------------------------------
Commercial Paper 52.8%
Alliance & Leicester PLC
3,338 6.54%, 10/10/00 3,332,542
AON Corp.
3,000 6.57%, 11/2/00 2,982,480
2,000 6.57%, 11/10/00 1,985,400
Banc One Financial Corp.
5,820 6.79%, 11/27/00 5,757,430
3,000 6.51%, 2/15/01 2,925,677
BankAmerica Corp.
5,000 6.48%, 2/23/01 4,869,500
10,000 6.51%, 2/27/01 9,730,558
Barclays Bank
3,784 6.55%, 10/25/00 3,767,477
Barton Capital Corp.
15,423 6.52%, 10/13/00 15,389,481
6,000 6.52%, 11/9/00 5,957,620
Baus Funding LLC
4,000 6.50%, 10/12/00 3,992,056
BBL North America Funding Corp.
4,792 6.52%, 10/18/00 4,777,257
BCI Funding Corp.
5,000 6.50%, 2/12/01 4,879,028
BHF Finance, Inc.
2,001 6.60%, 10/20/00 1,994,030
Black Forest Funding Corp.
5,000 6.55%, 10/10/00 4,991,812
Blue Ridge Asset Funding Corp.
2,750 6.52%, 11/8/00 2,731,074
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
Bradford & Bingley Building Society
$ 2,000 6.58%, 10/5/00 $ 1,998,538
Brahms Funding Corp.
6,000 6.61%, 10/26/00 5,972,479
2,000 6.60%, 11/9/00 1,985,700
British Telecommunications PLC
2,000 6.54%, 12/12/00 1,973,840
Corporate Asset Funding Co.
846 6.54%, 10/25/00 842,311
Daimler-Chrysler NA Holding Corp.
1,800 6.52%, 11/15/00 1,785,330
Delaware Funding Corp.
6,917 6.70%, 10/4/00 6,913,138
Den Norske Bank
3,000 6.51%, 2/12/01 2,927,305
Dexia CLF Finance Co.
2,909 6.53%, 10/23/00 2,897,391
Dover Corp.
5,000 6.70%, 11/28/00(b) 5,000,000
Equitable Resources, Inc.
5,000 6.55%, 10/18/00 4,984,535
Ford Motor Credit Co.
2,500 6.58%, 10/11/00 2,495,431
2,400 6.55%, 10/18/00 2,392,577
Forrestal Funding Master Trust
1,000 6.57%, 11/14/00 991,970
Fortune Brands, Inc.
1,152 6.57%, 11/13/00 1,142,960
GE Capital International Funding
5,000 6.58%, 11/30/00 4,945,167
5,000 6.52%, 2/12/01 4,878,656
General Electric Capital Corp.
2,000 6.58%, 2/13/01 1,950,650
7,000 6.75%, 2/27/01 6,804,437
Hartford Financial Services
3,000 6.54%, 11/9/00 2,978,745
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
ING America Insurance Holdings, Inc.
$ 1,000 6.55%, 10/12/00 $ 997,999
Nordbanken North America, Inc.
6,000 6.52%, 2/15/01 5,851,127
Old Line Funding Corp.
10,089 6.53%, 10/11/00 10,070,700
Paccar Financial Corp.
5,000 6.55%, 10/18/00 4,984,535
4,800 6.60%, 10/18/00 4,785,040
PNC Funding Corp.
4,000 6.56%, 12/7/00 3,951,164
1,000 6.55%, 12/21/00 985,263
1,000 6.56%, 12/15/00 986,516
Preferred Receivables Funding Corp.
2,000 6.54%, 11/1/00 1,988,737
Salomon Smith Barney Holdings, Inc.
7,000 6.50%, 10/20/00 6,975,986
San Paolo U.S. Finance Co.
8,102 6.54%, 10/11/00 8,087,281
Santander Central Hispano Finance
5,000 6.51%, 2/12/01 4,878,842
2,000 6.48%, 2/27/01 1,946,401
Southern Co.
1,000 6.60%, 10/16/00 997,250
3,845 6.60%, 10/30/00 3,824,557
Svenska Handelsbanken, Inc.
1,321 6.52%, 12/1/00 1,306,406
Swedbank, Inc.
3,000 6.58%, 11/6/00 2,980,260
2,000 6.58%, 11/20/00 1,981,722
Sweetwater Capital Corp.
1,718 6.60%, 10/6/00 1,716,425
662 6.56%, 10/20/00 659,708
1,323 6.56%, 10/23/00 1,317,696
5,091 6.56%, 10/25/00 5,068,735
2,098 6.56%, 10/27/00 2,088,060
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
Thunder Bay Funding, Inc.
$ 3,872 6.50%, 11/13/00 $ 3,841,938
Unilever Capital Corp.
11,000 6.68%, 12/7/00(b) 11,000,000
Variable Funding Capital Corp.
1,209 6.51%, 10/20/00 1,204,846
Verizon Global Funding Corp.
3,000 6.48%, 12/4/00 2,965,440
Woolwich PLC
10,000 6.57%, 10/10/00 9,983,575
3,000 6.54%, 10/26/00 2,986,375
2,000 6.57%, 11/21/00 1,981,385
---------------
258,318,551
-------------------------------------------------------------------------------------
Loan Participations 2.5%
Axa Financial, Inc.
9,000 6.70%, 10/23/00(c) 9,000,000
Southern California Edison Co.
2,000 6.67%, 10/31/00(c) 2,000,000
1,000 6.67%, 10/31/00(c) 1,000,000
---------------
12,000,000
-------------------------------------------------------------------------------------
U.S. Treasury Obligations--Non-Discount 2.0%
Federal Home Loan Bank, M.T.N.
10,000 6.53%, 10/19/00(b) 9,997,315
-------------------------------------------------------------------------------------
Other Corporate Obligations 18.1%
Bank One Corp., M.T.N.
1,400 6.88%, 12/18/00(b) 1,402,616
Centex Home Mortgage LLC
1,000 6.76%, 10/20/00(b)(c) 1,000,000
CIT Group, Inc., M.T.N.
5,000 6.68%, 10/16/00(b) 4,994,539
Ford Motor Credit Co.
9,000 6.77%, 10/2/00, M.T.N.(b) 8,999,976
1,000 6.25%, 11/8/00 999,224
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
General Electric Capital Corp.
$ 3,000 6.67%, 10/20/00(b)(c) $ 3,000,000
Goldman, Sachs & Co., M.T.N.
17,000 6.81%, 12/15/00(b) 17,000,000
J.P. Morgan & Co., Inc., M.T.N.
4,000 6.61%, 10/16/00(b) 4,000,000
Morgan Stanley Dean Witter & Co., M.T.N.
9,000 6.65%, 10/16/00(b) 9,000,000
Restructured Asset Certificates
6,000 6.64%, 10/13/00(b) 6,000,000
Security Life Of Denver
9,000 6.80%, 10/12/00(b)(c) 9,000,000
Short Term Repack Asset Trust
4,000 6.65%, 10/18/00(b)(c) 4,000,000
Strategic Money Market Trust
8,000 6.64%, 10/13/00(b) 8,000,000
Travelers Insurance Co.
3,000 6.79%, 10/6/00(b)(c) 3,000,000
Wells Fargo & Co., M.T.N.
2,000 6.60%, 12/19/00(b) 1,999,151
Westpac Banking Corp.
6,000 6.67%, 10/4/00(b) 5,999,963
---------------
88,395,469
-----------------------------------------------------------------------------------
Total Investments 96.9%
(amortized cost $473,818,116(a)) 473,818,116
Other assets in excess of liabilities 3.1% 14,988,492
---------------
Net Assets 100% $ 488,806,608
---------------
---------------
</TABLE>
------------------------------
(a) The cost of securities for federal income tax purposes is substantially the
same as for financial reporting purposes.
(b) Variable rate instruments. The maturity date presented for these instruments
is the later of the next date on which the security can be redeemed at par
or on 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 $32,000,000. The
aggregatge value of $32,000,000 is approximately 6.5% of net assets.
M.T.N.--Medium Term Note.
See Notes to Financial Statements 11
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
The industry classification of portfolio holdings and other assets in excess of
liabilities shown as a percentage of net assets as of September 30, 2000 was as
follows:
<TABLE>
<S> <C>
Commercial Banks......................................................... 44.5%
Asset Backed Securities.................................................. 14.5
Security Brokers & Dealers............................................... 8.7
Bank Holding Companies................................................... 6.4
Personal Credit Institutions............................................. 4.9
Motor Vehicles........................................................... 3.6
Life Insurance........................................................... 3.2
Food Products............................................................ 2.3
Federal Credit Agencies.................................................. 2.1
Electric Services........................................................ 1.6
Construction Machinery and Equipment..................................... 1.1
Natural Gas Transportation............................................... 1.0
Accidental & Health Insurance............................................ 1.0
Telephone & Communications............................................... 1.0
Insurance Agencies....................................................... 0.8
Cigarettes............................................................... 0.2
-----
96.9%
Other assets in excess of liabilities.................................... 3.1
-----
100.0%
-----
-----
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
September 30, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
ASSETS
Investments, at amortized cost which approximates market
value $473,818,116
Receivable for Fund shares sold 33,839,417
Interest receivable 3,074,710
Due from manager 6,668
Prepaid expenses and other assets 2,571
------------------
Total assets 510,741,482
------------------
LIABILITIES
Payable for Fund shares reacquired 20,260,229
Payable for investments purchased 986,516
Dividends payable 495,809
Accrued expenses 192,320
------------------
Total liabilities 21,934,874
------------------
NET ASSETS $488,806,608
------------------
------------------
Net assets were comprised of:
Shares of beneficial interest, at $.00001 par value $ 4,888
Paid-in capital in excess of par 488,801,720
------------------
Net assets, September 30, 2000 $488,806,608
------------------
------------------
Net asset value, offering and redemption price per share
($488,806,608 / 488,806,608 shares of beneficial
interest issued and outstanding) $1.00
------------------
------------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
September 30, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $26,136,915
---------------------
Expenses
Management fee 285,000
Transfer agent's fees and expenses 328,000
Registration fees 177,000
Custodian's fees and expenses 83,000
Reports to shareholders 60,000
Audit fee 27,000
Legal fees and expenses 25,000
Trustees' fees and expenses 14,000
Miscellaneous 2,765
---------------------
Total expenses 1,001,765
---------------------
Net investment income 25,135,150
---------------------
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 4,468
---------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $25,139,618
---------------------
---------------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------------------
2000 1999
<S> <C> <C> <C>
------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 25,135,150 $ 19,068,883
Net realized gain on investment
transactions 4,468 10,652
------------------ ------------------
Net increase in net assets resulting
from operations 25,139,618 19,079,535
------------------ ------------------
Dividends and distributions (Note 1) (25,139,618) (19,079,535)
------------------ ------------------
Fund share transactions (at $1 per share)
Net proceeds from shares sold 5,226,968,463 4,047,261,454
Net asset value of shares issued in
reinvestment of dividends and
distributions 24,658,865 18,772,289
Cost of shares reacquired (5,157,432,481) (4,113,366,470)
------------------ ------------------
Net increase (decrease) in net assets
from Fund share transactions 94,194,847 (47,332,727)
------------------ ------------------
Total increase (decrease) 94,194,847 (47,332,727)
NET ASSETS
Beginning of year 394,611,761 441,944,488
------------------ ------------------
End of year $ 488,806,608 $ 394,611,761
------------------ ------------------
------------------ ------------------
</TABLE>
See Notes to Financial Statements 15
<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 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.
16
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Notes to Financial Statements (Unaudited) Cont'd.
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'). The subadvisory agreement provides that PIC will
furnish investment advisory services in connection with the management of the
Trust. In connection therewith, PIC is obligated to keep certain books and
records of the Fund. PIFM continues to have responsibility for all investment
advisory services pursuant to the management agreement and supervises PIC's
performance of such services. PIFM pays for the services of PIC, the cost of
compensation of officers of the Trust, occupancy and certain clerical and
bookkeeping costs of the Fund. 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 year ended September 30, 2000, 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. During the year ended September 30, 2000,
the Fund incurred fees of approximately $313,700 for the services of PMFS. As of
September 30, 2000, $29,800 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.
17
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Financial Highlights
<TABLE>
<CAPTION>
December 22,
Year Ended September 30, 1997(a) through
-------------------------------- September 30,
2000 1999 1998
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00
------------- ------------- ---------------
Net investment income and net
realized gains .06 .05 .04
Dividends and distributions to
shareholders (.06) (.05) (.04)
------------- ------------- ---------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
------------- ------------- ---------------
------------- ------------- ---------------
TOTAL RETURN:(b) 6.15% 5.05% 4.52%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $ 488,807 $ 394,612 $ 441,944
Average net assets (000) $ 417,161 $ 386,144 $ 374,141
Ratios to average net assets:
Expenses .24% .27% .21%(c)
Net investment income 6.03% 4.94% 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.
18 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Report of Independent Accountants
To the Shareholders and Board of Trustees of
Cash Accumulation Trust-- Liquid Assets Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Cash Accumulation Trust--Liquid
Assets Fund (the 'Fund', one of the portfolios constituting Cash Accumulation
Trust) at September 30, 2000, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the periods presented, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as 'financial statements') are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at September 30, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
November 22, 2000
19
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Important Notice for Certain Shareholders
We are required by Massachusetts, Missouri and Oregon to inform you that
dividends which have been derived from interest on federal obligations are not
taxable to shareholders providing the mutual fund meets certain requirements
mandated by the respective state's taxing authorities. We are pleased to report
that 2% of the dividends paid by the Cash Accumulation Trust Liquid Assets Fund
qualify for such deduction.
For more detailed information regarding your state and local taxes, you
should contact your tax advisor or the state/local taxing authorities.
20
<PAGE>
Cash Accumulation Trust Liquid Assets Fund
Annual Report September 30, 2000
When you invest through Prudential Mutual Funds,
you receive financial advice from a Prudential
Securities Financial Advisor or 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. 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 available
mutual funds to find the ones that fit your
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 should
remind you that you're investing for the long haul.
<PAGE>
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit Prudential's web site at:
http://www.prudential.com
Trustees
Delayne Dedrick Gold
Robert F. Gunia
Robert E. LaBlanc
David R. Odenath, Jr.
Judy A. Rice
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Robert C. Rosselot, Secretary
William V. Healey, 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 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 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Cusip Number 147541502
MF175E
(LOGO) Printed on Recycled Paper
<PAGE>
ANNUAL REPORT SEPTEMBER 30, 2000
Cash Accumulation Trust/
National Money Market Fund
Fund Type Money market
Objective Current income to the extent consistent
with preservation of capital and liquidity
(GRAPHIC)
This report is not authorized for distribution to
prospective investors unless preceded or
accompanied by a current prospectus.
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.
(LOGO)
<PAGE>
Build on the Rock
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
of 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.
Money Market Fund Yield Comparison
(GRAPH)
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Fund Facts As of 9/30/00
<TABLE>
<CAPTION>
7-Day Net Asset Weighted Avg. Net Assets
Current Yld. Value (NAV) Mat. (WAM) (Millions)
<S> <C> <C> <C> <C>
National Money Market Fund 6.10% $1.00 64 Days $382
iMoneyNet, Inc. (1st & 2nd Tier-
General Purpose-Retail) Average* 5.91% $1.00 56 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.
*iMoneyNet, Inc. reports a seven-day current yield,
NAV, and WAM on Tuesdays. This is the data of all
funds in the iMoneyNet, Inc. (1st & 2nd Tier--
General Purpose-Retail) category as of September
26, 2000, the closest date to the end of our
reporting period.
Weighted Average Maturity Compared to the Average Money Market Fund
(GRAPH)
1
<PAGE>
(LOGO) November 15, 2000
Dear Shareholder,
Our 12-month reporting period that began on October
1, 1999, proved to be a particularly favorable
environment for investors in money market funds. A
trend toward higher short-term interest rates in
the United States, among other factors, caused
yields on money market securities to rise sharply.
This development helped the seven-day current yield
of some money market funds to climb above the
rarely-crossed 6.00% threshold. Earning such an
attractive yield on a relatively conservative
investment provided a safe haven for some investors
who were discouraged by the stock market's
heightened volatility during the summer of 2000.
The National Money Market Fund--one of two series of
Cash Accumulation Trust--provided a competitive
yield and a stable $1 net asset value. On September
30, 2000, the Fund's seven-day current yield was
6.10% versus 5.91% for the average comparable money
market fund tracked by iMoneyNet, Inc.
The following report takes a closer look at
developments in the money markets during our fiscal
year, and explains how the Fund was positioned
accordingly. Thank you for your continued
confidence in Prudential mutual funds.
Sincerely,
David R. Odenath, Jr., President
Cash Accumulation Trust/National Money Market Fund
2
<PAGE>
Cash Accumulation Trust National Money Market Fund
Annual Report September 30, 2000
INVESTMENT ADVISER'S REPORT
Money market yields rose during much of our fiscal
year that began on October 1, 1999, as the Federal
Reserve (the Fed) increased short-term interest
rates four times. Concern that a rapidly expanding
U.S. economy could boost inflation prompted the
central bank to act repeatedly. By lifting short-
term rates, the Fed made many loans more expensive
for businesses and consumers. It hoped that higher
borrowing costs would slow the economy's feverish
pace.
The first short-term rate hike during our 12-month
review period occurred in mid-November 1999.
Afterward, money market yields continued to climb
throughout the remainder of 1999. This trend
enabled us in December 1999 to buy attractively
priced securities that matured in February and
March 2000. These purchases enhanced the Fund's
yield and allowed us to avoid investing during the
lower interest rate environment that typically
occurs in early January.
Short-term rate hikes fueled investment opportunities
We adopted a barbell strategy early in 2000 by
purchasing very short-term money market instruments
and securities maturing in one year. Yields on one-
year securities were substantially higher than
yields on securities maturing in three months or
less. This large differential reflected the fact
that many investors expected yields on one-year
securities to be much higher later in the year as
the Fed continued to boost rates.
The barbell approach allowed us much flexibility.
We locked in yields on one-year securities. We were
also able to reinvest money from very short-term
securities in the higher-yielding money market
instruments that became available after the Fed
hiked short-term rates in February and March 2000.
Fed toughened stance against inflation
In early spring of 2000, many participants in the
financial markets were of the firm belief that the
Fed would tighten monetary policy more
3
<PAGE>
Cash Accumulation Trust National Money Market Fund
Annual Report September 30, 2000
aggressively when it met in mid-May. While the
previous three rate hikes had been a quarter of a
percentage point, the next was expected to be half
of a percentage point.
We began to prepare the Fund for this unusually
large change in monetary policy by investing in
securities that would mature near the date of the Fed's
next scheduled meeting--May 16, 2000. These purchases
allowed the Fund's weighted average maturity (WAM)
to decline until it was shorter than that of the
average comparable fund as measured by iMoneyNet.
(WAM is a measurement tool that determines a portfolio's
sensitivity to changes in the level of interest
rates.) Positioning the Fund in this way would give
us better access to cash to buy any higher-yielding
money market securities that were available around
the time that the Fed was expected to increase
short-term rates.
The widely expected half-point rate hike occurred
in mid-May, marking the Fed's largest increase in
more than five years. Money market yields had
climbed sharply by this time. Therefore, we locked
in attractive yields on securities maturing in one
year, which lengthened the Fund's WAM. The
statement announcing the mid-May rate hike hinted
that the Fed would probably continue to tighten
monetary policy. With this in mind, we tempered our
purchases of one-year securities, expecting to buy
them at even higher yields if the Fed resumed
increasing short-term rates.
In hindsight, we should have bought one-year
securities more aggressively in May. Some of the
data released in early June suggested that economic
growth was beginning to slow. Because this
development fueled hope that the Fed would leave
short-term rates unchanged for the remainder of
2000, money market yields declined.
Money market securities sought amid market turmoil
We still believed there was a reasonable chance
that the Fed would move again when it met in
August. This view led us in early June to buy
securities maturing in two to three months. As the
summer continued, however, it
4
<PAGE>
www.prudential.com (800) 225-1852
became increasingly clear that the central bank
would leave rates unchanged. We therefore purchased
securities in early August that would mature just
in time to buy any bargains available at the end of
the third quarter.
Meanwhile, we also began to lengthen the Fund's WAM
by purchasing six-month securities that offered
good relative value compared with one-year
securities. Heightened volatility in the stock
market during the summer sent many investors
fleeing to the comparative safety of one-year money
market securities, thus driving their prices higher
and yields lower. This development caused yields on
one-year securities to decline until they were in
line with yields on six-month securities.
Looking Ahead: Short-term rate cut eyed in 2001
The economy appears to be headed for a "soft
landing." The economic expansion lost considerable
steam in the third quarter of 2000 as government
spending declined, business investment fell, and
the construction of new homes slowed. In addition,
inflationary pressures were relatively tame during
that period. Should this economic scenario persist,
there is greater likelihood that the Fed's next
move may be to cut short-term interest rates in
2001.
Cash Accumulation Trust/National Money Market Fund Management Team
5
<PAGE>
Cash Accumulation Trust/National Money Market Fund Management Team
Financial
Statements
<PAGE>
Cash Accumulation Trust National Money Market Fund
Portfolio of Investments as of September 30, 2000
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------
Bank Notes 7.8%
Bank of America N.A.
$ 6,700 6.82%, 2/5/01 $ 6,700,000
First Union National Bank
2,500 6.74%, 2/15/01 2,498,022
Lasalle National Bank of Chicago
13,139 6.71%, 2/1/01 13,136,931
National City Bank of Cleveland
7,400 6.55%, 1/31/01 7,398,825
--------------
29,733,778
-------------------------------------------------------------------------------------
Certificates of Deposit - Eurodollar 0.5%
Svenska Handelsbank AB
2,000 6.76%, 2/20/01 2,000,076
-------------------------------------------------------------------------------------
Certificates of Deposit - Yankee 7.8%
Bank of Nova Scotia
2,500 6.65%, 2/1/01 2,499,600
Bayerische Hypo Und Vereinsbank
1,000 6.72%, 2/14/01 999,881
Commerzbank AG
500 6.77%, 2/28/01 499,535
UBS AG
8,000 7.00%, 7/18/01 7,998,797
Westpac Banking Corp.
9,200 6.54%, 1/18/01 9,198,695
8,600 6.52%, 1/29/01 8,598,657
--------------
29,795,165
-------------------------------------------------------------------------------------
Commercial Paper 44.9%
Anz Delaware, Inc.
2,900 6.55%, 11/3/00 2,882,588
Aon Corp.
8,771 6.57%, 10/13/00 8,751,791
Axa Financial
7,000 6.70%, 10/23/00 7,000,000
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Cash Accumulation Trust National Money Market Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
B-One Australia Ltd.
$ 2,000 6.52%, 11/15/00 $ 1,983,700
Banc One Corp
1,000 6.52%, 12/13/00 986,779
BankAmerica Corp.
5,000 6.48%, 2/23/01 4,869,500
Barton Capital Corp.
3,144 6.65%, 10/12/00 3,137,612
Bear, Stearns & Co. Inc.
3,000 6.51%, 10/25/00 2,986,980
Black Forest Funding Corp.
2,000 6.54%, 10/10/00 1,996,730
3,000 6.55%, 10/10/00 2,995,087
Brahms Funding Corp.
5,000 6.605%, 10/26/00 4,977,066
1,000 6.60%, 11/9/00 992,850
British Telecommunications PLC
1,429 6.60%, 10/17/00 1,424,808
1,284 6.60%, 10/19/00 1,279,763
505 6.55%, 11/16/00 500,774
1,992 6.55%, 11/20/00 1,973,878
2,000 6.54%, 12/12/00 1,973,840
Campbell Soup Company
500 6.53%, 10/30/00 497,370
Cargill Global Funding
1,400 6.65%, 10/20/00 1,395,086
Cooper Industries, Inc.
1,363 6.80%, 10/2/00 1,362,742
Cregem North America Inc.
5,470 6.55%, 1/12/01 5,367,491
DaimlerChrysler North America Holding Corp.
1,000 6.51%, 11/22/00 990,597
3,700 6.50%, 12/7/00 3,655,240
Delaware Funding Corp.
3,300 6.59%, 10/24/00 3,286,106
Dow Chemical & Company, Inc.
1,000 6.85%, 10/4/00 999,429
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust National Money Market Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
Edison Asset Securitization, LLC
$ 1,305 6.55%, 1/31/01 $ 1,276,033
Falcon Asset Securitization Corp.
1,000 6.80%, 10/2/00 999,811
3,000 6.55%, 10/16/00 2,991,812
3,856 6.55%, 10/24/00 3,839,864
First Data Corp.
8,000 6.48%, 12/27/00 7,874,720
Forrestal Funding Master Trust
500 6.57%, 11/3/00 496,989
1,200 6.52%, 11/29/00 1,187,177
1,000 6.56%, 1/31/01 977,769
1,830 6.59%, 2/9/01 1,786,116
2,643 6.51%, 2/16/01 2,577,044
Fortune Brands, Inc.
313 6.57%, 10/10/00 312,486
1,000 6.55%, 10/13/00 997,817
GE Capital International Funding
6,000 6.52%, 2/12/01 5,854,387
General Electric Capital Corp.
600 6.57%, 10/11/00 598,905
1,100 6.50%, 11/29/00 1,088,282
1,700 6.50%, 12/6/00 1,679,742
1,000 6.51%, 12/7/00 987,884
1,700 6.52%, 1/26/01 1,663,977
3,096 6.58%, 2/13/01 3,019,606
General Motors Acceptance Corp.
5,500 6.50%, 11/27/00 5,443,396
10,000 6.52%, 2/5/01 9,769,989
Halifax PLC
2,500 6.65%, 10/11/00 2,495,382
Halliburton Co.
893 6.75%, 10/2/00 892,833
Hartford Financial Services Group, Inc.
2,000 6.54%, 11/9/00 1,985,830
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Cash Accumulation Trust National Money Market Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
International Business Machines Corp.
$ 2,400 6.50%, 11/1/00 $ 2,386,567
PNC Funding Corp.
5,552 6.56%, 10/26/00 5,526,707
Preferred Receivables Funding Corp.
1,525 6.54%, 11/1/00 1,516,412
Sweetwater Capital Corp.
939 6.53%, 10/27/00 934,572
1,965 6.52%, 10/31/00 1,954,323
5,279 6.55%, 11/28/00 5,223,292
2,420 6.51%, 12/27/00 2,381,927
1,262 6.52%, 12/27/00 1,242,115
Swedbank
8,000 6.54%, 10/12/00 7,984,013
3,300 6.60%, 10/12/00 3,293,345
Verizon Global Funding Corp.
2,400 6.55%, 10/4/00 2,398,690
1,600 6.51%, 11/1/00 1,591,031
2,734 6.49%, 11/30/00 2,704,427
Wood Street Funding Corp.
3,211 6.54%, 10/2/00 3,210,417
--------------
171,413,496
-------------------------------------------------------------------------------------
Loan Participation 0.8%
Southern California Edison Co.
3,000 6.67%, 10/31/00 3,000,000
-------------------------------------------------------------------------------------
Other Corporate Obligations 34.7%
American Express Centurion Bank
2,000 6.59063%, 10/23/00(a) 1,999,565
Bank One Corp.
3,100 6.72%, 10/6/00(a) 3,100,013
11,200 6.75%, 11/17/00(a) 11,200,388
Chrysler Financial Co., LLC, M.T.N.
2,000 6.13%, 12/11/00 1,999,763
CIT Group Inc.
5,000 6.6225%, 12/6/00(a) 4,998,346
2,000 6.67625%, 10/16/00(a) 1,997,816
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust National Money Market Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
Comerica Bank N.A.
$ 2,000 6.57%, 10/10/00(a) $ 1,999,591
3,000 6.62%, 10/6/00(a) 3,000,129
8,200 6.5825%, 10/19/00(a) 8,198,281
Dover Corp.
8,000 6.70%, 11/28/00(a) 8,000,000
First Union National Bank
12,400 6.89%, 11/13/00(a) 12,402,018
Ford Motor Credit Co.
3,800 6.77%, 10/2/00(a) 3,799,990
Ford Motor Credit Co., M.T.N.
4,400 5.99%, 2/27/01 4,387,238
General Electric Capital Corp., M.T.N.
3,000 5.92%, 4/3/01 2,987,536
Goldman, Sachs & Co.
17,000 6.81%, 12/15/00(a) 17,000,000
Morgan (J.P.) & Company, Inc.
19,300 6.6125%, 10/16/00(a) 19,300,000
Morgan Stanley Dean Witter & Co.
8,000 6.64625%, 10/16/00(a) 8,000,000
Restructured Asset Securities Enhanced Return
00-15MM-ABS
5,000 6.64%, 10/13/00(a) 5,000,000
Short-Term Repackaged Asset Trust 1998-E-ABS
3,000 6.6525%, 10/18/00(a) 3,000,000
Unilever Capital Corp.
10,000 6.68313%, 12/6/00(a) 10,000,000
--------------
132,370,674
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Cash Accumulation Trust National Money Market Fund
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. Government Agency Mortgage Backed Securities 2.6%
Federal Home Loan Banks
$ 10,000 6.528%, 10/4/00(a) $ 9,997,315
Total Investments 99.1%
(amortized cost $378,310,504(b)) 378,310,504
Other assets in excess of liabilities 0.9% 3,525,821
--------------
Net Assets 100% $ 381,836,325
--------------
--------------
</TABLE>
------------------------------
(a) 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.
(b) The cost for federal income tax purposes is substantially the same as for
financial reporting purposes.
M.T.N.--Medium Term Note.
The industry classification of portfolio holdings and other assets in excess of
liabilities shown as a percentage of net assets as of September 30, 2000 was as
follows:
<TABLE>
<S> <C> <C>
Financial Services 45.4%
Commercial Banks 29.0
Insurance 4.6
Asset-Backed Securities 3.7
Telecommunications 3.6
Consumer Products 3.1
U.S. Government Agency Mortgage Backed Securities 2.6
Oil & Gas Equipment & Services 2.3
Business Services 2.1
Electronic Components 1.0
Utilities 0.8
Computers 0.6
Chemicals 0.3
-----
99.1
Other assets in excess of liabilities 0.9
-----
100.0%
-----
-----
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust National Money Market Fund
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
September 30, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
ASSETS
Investments, at amortized cost which approximates market
value $378,310,504
Cash 668
Receivable for Fund shares sold 16,443,689
Interest receivable 2,519,031
Prepaid expenses 79,965
------------------
Total assets 397,353,857
------------------
LIABILITIES
Payable for Fund shares repurchased 12,140,363
Payable for investments purchased 2,604,739
Dividends payable 370,089
Accrued expenses 272,072
Management fee payable 114,561
Distribution fee payable 15,708
------------------
Total liabilities 15,517,532
------------------
NET ASSETS $381,836,325
------------------
------------------
Net assets were comprised of:
Shares of beneficial interest, at $.00001 par value $ 3,818
Paid-in capital in excess of par 381,832,507
------------------
Net assets, September 30, 2000 $381,836,325
------------------
------------------
Net asset value, offering price and redemption price per
share ($381,836,325 / 381,836,325 shares of beneficial
interest issued and outstanding) $1.00
------------------
------------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Cash Accumulation Trust National Money Market Fund
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
September 30, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 24,453,610
------------------
Expenses
Management fee 1,532,983
Distribution fee 393,073
Transfer agent's fees and expenses 258,000
Registration fees 257,000
Custodian's fees & expenses 77,000
Reports to shareholders 65,000
Audit fees 27,000
Legal fees and expenses 25,000
Trustees' fees 13,000
Miscellaneous 9,451
------------------
Total expenses 2,657,507
------------------
Net investment income 21,796,103
------------------
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 2,730
------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 21,798,833
------------------
------------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust National Money Market Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------------------
2000 1999
<S> <C> <C> <C>
-----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 21,796,103 $ 18,795,764
Net realized gain on investment
transactions 2,730 21,374
-------------------- ---------------
Net increase in net assets resulting
from operations 21,798,833 18,817,138
-------------------- ---------------
Dividends and distributions to shareholders
(Note 1) (21,798,833) (18,817,138)
-------------------- ---------------
Fund share transactions (at $1 per share)
Net proceeds from shares sold 3,980,580,744 3,676,378,022
Net asset value of shares issued to
shareholders in reinvestment of
dividends and distributions 21,374,486 18,433,584
Cost of shares reacquired (4,023,684,617) (3,798,533,694)
-------------------- ---------------
Net increase (decrease) in net assets from
Fund share transactions (21,729,387) (103,722,088)
-------------------- ---------------
Total increase (decrease) (21,729,387) (103,722,088)
NET ASSETS
Beginning of year 403,565,712 507,287,800
-------------------- ---------------
End of year $ 381,836,325 $ 403,565,712
-------------------- ---------------
-------------------- ---------------
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Cash Accumulation Trust National Money Market Fund
Notes to Financial Statements
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.
16
<PAGE>
Cash Accumulation Trust National Money Market Fund
Notes to Financial Statements Cont'd.
PIFM has entered into a subadvisory agreement with The Prudential Investment
Corporation ('PIC'). The subadvisory agreement provides that PIC will furnish
investment advisory services in connection with the management of the Trust. In
connection therewith, PIC is obligated to keep certain books and records of the
Fund. PIFM continues to have responsibility for all investment advisory services
pursuant to the management agreement and supervises PIC's performance of such
services. PIFM pays for the services of PIC, the cost of 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.
Effective January 1, 2000, the subadvisory fee paid to PIC by PIFM is
computed daily and payable monthly at an annual rate of .195% of the Fund's
average daily net assets up to and including $1 billion, .169% of the next $500
million, .140% of the next $500 million and .114% of the Fund's average daily
net assets in excess of $2 billion. Prior to January 1, 2000, PIC was reimbursed
by PIFM for reasonable costs and expenses incurred in furnishing investment
advisory services. The change in the subadvisory fee structure has no impact on
the management fee charged to the Fund or its shareholders.
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 wholly owned subsidiaries of The Prudential
Insurance Company of America ('the Prudential').
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 year ended September 30,
2000, the Fund incurred fees of approximately $247,000 for the services of PMFS.
As of September 30, 2000, approximately $21,000 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.
17
<PAGE>
Cash Accumulation Trust National Money Market Fund
Financial Highlights
<TABLE>
<CAPTION>
Year
Ended
September 30, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.00
----------
Net investment income 0.06
Dividends and distributions to shareholders (0.06)
----------
Net asset value, end of year $ 1.00
----------
----------
TOTAL RETURN(a) 5.7%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $381,836
Ratios to average net assets:
Expenses, including distribution and service (12b-1)
fees 0.68%
Expenses, excluding distribution and service (12b-1)
fees 0.58%
Net investment income 5.55%
</TABLE>
------------------------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
18 See Notes to Financial Statements
<PAGE>
Cash Accumulation Trust National Money Market Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Year Ended September 30,
<S> <C> <C> <C> <C>
-----------------------------------------------------
<CAPTION>
1999 1998 1997 1996
-----------------------------------------------------
<S> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
0.05 0.05 0.05 0.05
(0.05) (0.05) (0.05) (0.05)
-------- -------- -------- --------
$ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
-------- -------- -------- --------
4.6% 5.2% 5.0% 5.0%
$403,566 $507,288 $702,003 $652,327
0.68% 0.62% 0.65% 0.69%
0.58% 0.52% 0.55% 0.59%
4.56% 5.05% 4.89% 4.86%
</TABLE>
See Notes to Financial Statements 19
<PAGE>
Cash Accumulation Trust National Money Market Fund
Report of Independent Accountants
To the Shareholders and Board of Trustees of
Cash Accumulation Trust
National Money Market Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Cash Accumulation Trust--National
Money Market Fund (the 'Fund', one of the portfolios constituting Cash
Accumulation Trust) at September 30, 2000, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the four years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as 'financial statements') are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
September 30, 2000 by correspondence with the custodian and brokers, provide a
reasonable basis for our opinion. The accompanying financial highlights for the
year ended September 30, 1996 were audited by other independent accountants,
whose opinion dated October 23, 1996 was unqualified.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
November 22, 2000
20
<PAGE>
Cash Accumulation Trust National Money Market Fund
Getting the Most from Your Prudential Mutual Fund
When you invest through Prudential Mutual Funds,
you receive financial advice from a Prudential
Securities Financial Advisor or 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. 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 available
mutual funds to find the ones that fit your
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
should remind you that you're investing for the
long haul.
<PAGE>
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit Prudential's web site at:
http://www.prudential.com
Trustees
Delayne Dedrick Gold
Robert F. Gunia
Robert E. LaBlanc
David R. Odenath, Jr.
Judy A. Rice
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Robert C. Rosselot, Secretary
William V. Healey, 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 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 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Cusip Number 147541106
MF178E
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