<PAGE> 1
BT INVESTMENT FUNDS
CAPITAL
APPRECIATION
FUND
Semi-Annual Report
June 30, 1995
<PAGE> 2
CAPITAL APPRECIATION FUND 1
------------------------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
===============================================================================
<S> <C>
INTRODUCTION FROM PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . 2
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER . . . . . . . . . . . . . 3
CAPITAL APPRECIATION FUND
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . 6
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . 7
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . 8
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . 9
CAPITAL APPRECIATION PORTFOLIO
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . 10
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . 11
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . 12
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . 13
Schedule of Portfolio Investments . . . . . . . . . . . . . . . . . 14
CAPITAL APPRECIATION FUND
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . 17
CAPITAL APPRECIATION PORTFOLIO
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . 19
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Capital
Appreciation Fund may be obtained by calling or writing to Investors Fiduciary
Trust Company or Signature Broker-Dealer Services, Inc., the primary Servicing
Agent and Distributor, respectively, of BT Investment Funds:
BT INVESTMENT FUNDS
INVESTORS FIDUCIARY TRUST COMPANY
127 WEST 10TH STREET
KANSAS CITY, MO 64105
(800) 422-6577
BT INVESTMENT FUNDS
SIGNATURE BROKER-DEALER SERVICES, INC.
6 ST. JAMES AVENUE
BOSTON, MA 02116
(800) 545-1074
You may write to the Capital Appreciation Fund at the following address:
BT INVESTMENT FUNDS
6 ST. JAMES AVENUE
BOSTON, MA 02116
<PAGE> 3
CAPITAL APPRECIATION FUND 2
------------------------------------------------------
INTRODUCTION FROM PRESIDENT
===============================================================================
August, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for the BT Investment
Funds Capital Appreciation Fund. This Report provides you with an investment
overview as well as a financial summary of the Fund's operations for the six
months ended June 30, 1995. We have also included a Letter from the Investment
Adviser, detailing the factors that affected the Fund's performance and a
performance chart which illustrates your Fund's return versus a relevant
financial index. Also presented in your Report is a pie chart displaying
diversification of Portfolio investments, financial statements, financial
highlights and a listing of the Portfolio's holdings.
In addition, I would like to mention that the Board of Trustees approved a
fiscal year end change from December to September for the Capital Appreciation
Fund and Capital Appreciation Portfolio at the meeting on August 2, 1995.
As always, we will continue to closely observe the economic conditions and how
they affect the financial markets.
We appreciate your ongoing support of the Capital Appreciation Fund and look
forward to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 4
CAPITAL APPRECIATION FUND 3
------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
===============================================================================
We are pleased to report that with a return of 18.02%, the Capital Appreciation
Fund outperformed both its benchmark (S&P MidCap 400 Index), which returned
17.62%, and the Lipper Midcap Growth Fund Average, which was 16.62%, for the
semi-annual period ended June 30, 1995.
The primary factor contributing to this strong performance was the Fund's
overweighted position in the technology sector, which was the leading sector
both in the second quarter and for the first six months of the year. The Fund
also participated in the gains of the financial services sector, which trailed
only technology in its strong returns during both of these time periods.
The healthcare sector underperformed during the first half of the year. While
the Fund continues to have exposure here, we have reduced its weighting since
we last reported to you. At the same time, though, we took advantage of the
volatility in this sector to initiate positions in quality companies at
historically low market prices.
Finally, we wanted to take advantage of the fact that while the midcap stock
universe performed well toward the end of the semi-annual period, it had not
participated in the overall market rally to the extent that the large cap
stocks had. Thus, we initiated or added to positions that we believe are
undervalued by the marketplace.
These included:
- - selected companies that we feel will benefit from continued segmentation
in the financial markets like Countrywide Credit Industries, Green Tree
Financial and The PMI Group;
- - companies, such as TencorInstruments and Cirrus Logic, which we believe
will benefit from the strength in the semiconductor market;
- - Broderbund Software and Apria Healthcare Group, where we believe improving
fundamentals have not yet been recognized by the consensus.
Equally important, of course, we maintained our strict sell discipline, and so
we eliminated positions in companies that we believed were fully priced, such
as U.S. Healthcare.
Looking ahead, we believe that midcap stocks may outperform the large company
indices through the remainder of 1995, given their relative cheaper valuation
and their prospects of stronger earnings growth. To remain a leader in the
midcap growth sector and to meet the Fund's objective of capital growth over
the long-term, we will continue our thematic approach to investing, while at
the same time, stay focused on individual companies that have strong,
consistent earnings and revenue growth potential.
<PAGE> 5
CAPITAL APPRECIATION FUND 4
------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
===============================================================================
The following graph illustrates the Fund's return versus the S&P MidCap 400
Index since March 31, 1993, assuming a $10,000 initial investment:
===============================================================================
COMPARISON OF CHANGE [FIGURE 1]
IN VALUE OF A $10,000
INVESTMENT IN THE BT Investment Cap App Fund 6/30/95
CAPITAL APPRECIATION
FUND AND THE S&P BT Investment S&P
MIDCAP 400 INDEX Capital Appreciation Mid Cap 400
3/31/93 10,000 10,000
6/30/93 10,519 10,233
9/30/93 11,838 10,747
12/31/93 11,708 11,034
3/31/94 11,409 10,614
6/30/94 10,699 10,227
9/30/94 11,728 10,920
12/31/94 12,088 10,638
3/31/95 12,857 11,498
6/30/95 14,266 12,513
<TABLE>
<CAPTION>
Total Return
ended June 30, 1995
One Year Since 3/9/93*
<S> <C>
33.33% 42.80%
</TABLE>
* The Fund's inception date
Investment return and principal value may fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
===============================================================================
ABOUT THE MARY LISANTI
PORTFOLIO MANAGER Managing Director
- Manager of the Small Cap Fund, Capital
Appreciation Fund and separate aggressive growth
accounts
- 15 years of investment experience as a portfolio
manager and analyst in Small/Mid cap equities
- Joined Bankers Trust from Lieber & Company/The
Evergreen Funds, where for three years she was
Vice President of Investments and a portfolio
manager working on their $800 million small and
mid-sized company fund
- Senior Vice President at Shearson Lehman
Brothers, headed the firm's emerging growth stock
investment strategy and research effort; member
of the Investment Policy Committee
- Earned the #1 ranking in Institutional Investor's
All Star Research Team in 1989 (ranked #2 and #3
in 1987 and 1986, respectively) for her work as a
small company stock analyst
- B.A. -- Princeton University
- Member, New York Society of Security Analysts and
Financial Analyst Federation
<PAGE> 6
CAPITAL APPRECIATION FUND 5
------------------------------------------------------
===============================================================================
OBJECTIVE Seeks capital growth over the long term through
investment in medium sized companies that show
growth potential. Current income is a secondary
goal.
- -------------------------------------------------------------------------------
INVESTMENT INSTRUMENTS Primarily common stocks of growth-oriented
domestic corporations and, to a lesser extent,
foreign corporations, but may invest in any
market sectors and companies of any size; also,
may take advantage of any investment opportunity
with attractive long-term prospects.
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TEN LARGEST HOLDINGS Glenayre Technologies Boston Scientific
LSI Logic Altera
Xilinx Micron Technology
Teradyne KLA Instruments
Staples National Semiconductor
- -------------------------------------------------------------------------------
</TABLE>
DIVERSIFICATION OF PORTFOLIO
INVESTMENTS BY THEME
as of June 30, 1995 (unaudited)
(percentages are based on market value)
[FIGURE 2]
<TABLE>
<S> <C>
Special Situations 6.60%
Productivity Enhancement 23.68%
Stores of Value 6.02%
New Consumer 2.12%
Move to Outsourcing 5.78%
Life Sciences Revolution 3.38%
Client-Server Computing 9.24%
Interactive Media 4.02%
Telecommunications 13.28%
U.S. Treasury Bills 5.09%
New Health Care Paradigm 10.81%
America's Industrial Renaissance 4.71%
Other* 5.27%
</TABLE>
* No one theme represents more than 2.00% of portfolio holdings.
<PAGE> 7
CAPITAL APPRECIATION FUND 6
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
===============================================================================================================
June 30, 1995 (unaudited)
- ---------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ---------------------------------------------------------------------------------------------------------------
Investment in Capital Appreciation Portfolio, at Value $48,624,448
- ---------------------------------------------------------------------------------------------------------------
Receivable for Shares of Beneficial Interest Sold 46,187
- ---------------------------------------------------------------------------------------------------------------
Deferred Organizational Expenses 727
- ---------------------------------------------------------------------------------------------------------------
Prepaid Expenses 7,181
- ---------------------------------------------------------------------------------------------------------------
Total Assets 48,678,543
- ---------------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------------
Due to Bankers Trust 20,943
- ---------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 12,232
- ---------------------------------------------------------------------------------------------------------------
Total Liabilities 33,175
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS (Applicable to 3,406,491 Outstanding Shares of $0.001 Par Value
Per Share, Unlimited Number of Shares of Beneficial Interest Authorized) $48,645,368
===============================================================================================================
NET ASSET VALUE, Subscription and Redemption Price Per Share
($48,645,368/3,406,491 Shares) $ 14.28
===============================================================================================================
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 3,406
- ---------------------------------------------------------------------------------------------------------------
Paid-in Capital 38,295,233
- ---------------------------------------------------------------------------------------------------------------
Accumulated Net Investment (Loss) (143,993)
- ---------------------------------------------------------------------------------------------------------------
Undistributed Net Realized Gain from Securities Transactions 182,113
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 10,308,609
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $48,645,368
===============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 8
CAPITAL APPRECIATION FUND 7
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
===============================================================================================================
For the six months ended June 30, 1995 (unaudited)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME/(LOSS)
- ---------------------------------------------------------------------------------------------------------------
Investment (Loss) Allocated from Capital Appreciation Portfolio, net $ (2,603)
- ---------------------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------------------
Administration and Services Fee $141,390
- ---------------------------------------------------------------------------------------------------------------
Shareholders Reports 11,590
- ---------------------------------------------------------------------------------------------------------------
Registration Fees 10,494
- ---------------------------------------------------------------------------------------------------------------
Professional Fees 2,549
- ---------------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 1,704
- ---------------------------------------------------------------------------------------------------------------
Trustees Fees 773
- ---------------------------------------------------------------------------------------------------------------
Insurance 436
- ---------------------------------------------------------------------------------------------------------------
Miscellaneous 700
- ---------------------------------------------------------------------------------------------------------------
Total Expenses 169,636
- ---------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (28,246) 141,390
===============================================================================================================
NET INVESTMENT (LOSS) (143,993)
===============================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
- ---------------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions 2,499,381
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 5,033,634
- ---------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES 7,533,015
- ---------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 7,389,022
===============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 9
CAPITAL APPRECIATION FUND 8
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
===============================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- ---------------------------------------------------------------------------------------------------------------
Net Investment (Loss) $ (143,993) $ (145,000)
- ---------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 2,499,381 (1,488,811)
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 5,033,634 3,083,897
- ---------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 7,389,022 1,450,086
- ---------------------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
- ---------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Transactions
in Shares of Beneficial Interest (1,480,428) 23,713,884
- ---------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 5,908,594 25,163,970
===============================================================================================================
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
Beginning of Period 42,736,774 17,572,804
- ---------------------------------------------------------------------------------------------------------------
End of Period $48,645,368 $42,736,774
===============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 10
CAPITAL APPRECIATION FUND 9
------------------------------------------------------
FINANCIAL HIGHLIGHTS
===============================================================================
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of
the periods indicated for the Capital Appreciation Fund.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
For the period
For the six For the March 9, 1993
months ended year ended (Commencement
June 30, 1995 December of Operations) to
(unaudited) 31, 1994 December 31, 1993
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $ 12.10 $ 11.72 $ 10.00
------- ------- -------
Income from Investment Operations
Net Investment (Loss) (0.04) (0.04) (0.01)
Net Realized and Unrealized Gain on Securities 2.22 0.42 1.73
------- ------- -------
Total from Investment Operations 2.18 0.38 1.72
------- ------- -------
Net Asset Value, End of Period $ 14.28 $ 12.10 $ 11.72
======= ======= =======
TOTAL INVESTMENT RETURN 18.02% 3.24% 21.54%*
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment (Loss) to Average Net Assets (0.66)%* (0.57)% (0.23)%*
Ratio of Expenses to Average Net Assets, Including
Expenses of the Capital Appreciation Portfolio 1.25%* 1.25% 1.25%*
Decrease Reflected in Above Expense Ratio Due to Absorption
of Expenses by Bankers Trust 0.31%* 0.54% 0.74%*
Net Assets, End of Period (000's omitted) $48,645 $42,737 $17,573
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 11
CAPITAL APPRECIATION PORTFOLIO 10
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
===============================================================================================================
June 30, 1995 (unaudited)
- ---------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ---------------------------------------------------------------------------------------------------------------
Investments, at Value (Cost $82,343,453) $101,275,231
- ---------------------------------------------------------------------------------------------------------------
Cash 4,974
- ---------------------------------------------------------------------------------------------------------------
Receivable for Securities Sold 470,789
- ---------------------------------------------------------------------------------------------------------------
Dividends Receivable 12,298
- ---------------------------------------------------------------------------------------------------------------
Prepaid Expenses 838
- ---------------------------------------------------------------------------------------------------------------
Interest Receivable 655
- ---------------------------------------------------------------------------------------------------------------
Total Assets 101,764,785
- ---------------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------------
Due to Bankers Trust 33,690
- ---------------------------------------------------------------------------------------------------------------
Payable for Securities Purchased 568,170
- ---------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 13,103
- ---------------------------------------------------------------------------------------------------------------
Total Liabilities 614,963
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS $101,149,822
===============================================================================================================
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
Paid-in Capital $ 82,218,044
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 18,931,778
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $101,149,822
===============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 12
CAPITAL APPRECIATION PORTFOLIO 11
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
===============================================================================================================
For the six months ended June 30, 1995 (unaudited)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------------------
Dividends $ 68,673
- ---------------------------------------------------------------------------------------------------------------
Interest 176,460
- ---------------------------------------------------------------------------------------------------------------
Total Investment Income $ 245,133
- ---------------------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------------------
Advisory Fee 266,768
- ---------------------------------------------------------------------------------------------------------------
Administration and Services Fee 41,041
- ---------------------------------------------------------------------------------------------------------------
Professional Fees 10,297
- ---------------------------------------------------------------------------------------------------------------
Insurance 1,329
- ---------------------------------------------------------------------------------------------------------------
Trustees Fees 732
- ---------------------------------------------------------------------------------------------------------------
Miscellaneous 823
- ---------------------------------------------------------------------------------------------------------------
Total Expenses 320,990
- ---------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (74,627) 246,363
- ---------------------------------------------------------------------------------------------------------------
NET INVESTMENT (LOSS) (1,230)
- ---------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
- ---------------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions 4,770,058
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 10,095,431
- ---------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES 14,865,489
- ---------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $14,864,259
===============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 13
CAPITAL APPRECIATION PORTFOLIO 12
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
===============================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- ---------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) $ (1,230) $ 39,472
- ---------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 4,770,058 (3,134,504)
- ---------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 10,095,431 5,994,992
- ---------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 14,864,259 2,899,960
- ---------------------------------------------------------------------------------------------------------------
FROM CAPITAL TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 27,225,489 48,149,120
- ---------------------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (14,574,256) (14,490,487)
- ---------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Capital Transactions 12,651,233 33,658,633
- ---------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 27,515,492 36,558,593
===============================================================================================================
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
Beginning of Period 73,634,330 37,075,737
- ---------------------------------------------------------------------------------------------------------------
End of Period $101,149,822 $73,634,330
===============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 14
CAPITAL APPRECIATION PORTFOLIO 13
------------------------------------------------------
FINANCIAL HIGHLIGHTS
===============================================================================
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Capital Appreciation Portfolio.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
For the period
For the six For the March 9, 1993
months ended year ended (Commencement
June 30, 1995 December of Operations) to
(unaudited) 31, 1994 December 31, 1993
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income (Loss) to Average Net Assets (0.00)%*+ 0.08% 0.38%*
Ratio of Expenses to Average Net Assets 0.60%* 0.60% 0.60%*
Decrease Reflected in Above Ratio of Expenses to Average
Net Assets Due to Absorption of Expenses by Bankers Trust 0.18%* 0.23% 0.41%*
Portfolio Turnover Rate 112% 157% 137%
Net Assets, End of Period (000's omitted) $101,150 $73,634 $37,076
</TABLE>
* Annualized
+ Less than 0.01%
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 15
CAPITAL APPRECIATION PORTFOLIO 14
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
================================================================================
June 30, 1995 (unaudited)
SHARES DESCRIPTION VALUE
================================================================================
<S> <C> <C>
COMMON STOCKS - 95.03%
- --------------------------------------------------------------------------------
AMERICA'S CHANGING LEISURE TIME - 1.04%
- --------------------------------------------------------------------------------
27,500 La Quinta Inns $ 742,500
- --------------------------------------------------------------------------------
15,000 New World Communications (a) 313,125
- --------------------------------------------------------------------------------
1,055,625
================================================================================
AMERICA'S EDUCATIONAL CRISIS - 0.61%
- --------------------------------------------------------------------------------
9,700 Broderbund Software (a) 618,375
================================================================================
AMERICA'S INDUSTRIAL RENAISSANCE - 4.71%
- --------------------------------------------------------------------------------
22,900 American Power Conversion (a) 523,838
- --------------------------------------------------------------------------------
14,400 Input/Output (a) 518,400
- --------------------------------------------------------------------------------
18,500 KLA Instruments (a) 1,429,125
- --------------------------------------------------------------------------------
77,300 Mentor Graphics (a) 1,333,425
- --------------------------------------------------------------------------------
11,900 Vicor (a) 534,756
- --------------------------------------------------------------------------------
30,000 Westinghouse Air Brake (a) 427,500
- --------------------------------------------------------------------------------
4,767,044
================================================================================
CLIENT-SERVER COMPUTING - 9.25%
- --------------------------------------------------------------------------------
12,300 3Com Corp (a) 824,100
- --------------------------------------------------------------------------------
23,700 Bay Networks (a) 980,587
- --------------------------------------------------------------------------------
23,100 Ceridian (a) 851,812
- --------------------------------------------------------------------------------
23,900 Diamond Multimedia Systems (a) 489,950
- --------------------------------------------------------------------------------
30,200 Informix (a) 766,325
- --------------------------------------------------------------------------------
27,100 Madge NV (a) 758,800
- --------------------------------------------------------------------------------
26,500 Micron Technology 1,454,188
- --------------------------------------------------------------------------------
29,400 Oak Technology (a) 1,080,450
- --------------------------------------------------------------------------------
18,500 Symantec (a) 534,188
- --------------------------------------------------------------------------------
41,400 Uunet Technologies (a) 1,138,500
- --------------------------------------------------------------------------------
12,500 Wallace Computer Services 479,687
- --------------------------------------------------------------------------------
9,358,587
================================================================================
INTERACTIVE MEDIA - 4.03%
- --------------------------------------------------------------------------------
11,100 Clear Channel Communications (a) 714,562
- --------------------------------------------------------------------------------
12,200 Davidson & Associates (a) 484,950
- --------------------------------------------------------------------------------
17,300 Electronic Arts (a) 469,262
- --------------------------------------------------------------------------------
30,500 Katz Media Group (a) 484,188
- --------------------------------------------------------------------------------
26,300 Lin Television (a) 884,338
- --------------------------------------------------------------------------------
37,100 Sinclair Broadcasting Group (a) 1,038,800
- --------------------------------------------------------------------------------
4,076,100
================================================================================
LIFE SCIENCES REVOLUTION - 3.38%
- --------------------------------------------------------------------------------
9,000 Genzyme (a) 360,000
- --------------------------------------------------------------------------------
33,600 Idexx Laboratories (a) 873,600
- --------------------------------------------------------------------------------
14,200 Millipore 958,500
- --------------------------------------------------------------------------------
24,500 St. Jude Medical 1,228,062
- --------------------------------------------------------------------------------
3,420,162
================================================================================
MOVE TO OUTSOURCING - 5.78%
- --------------------------------------------------------------------------------
49,200 American Standard (a) 1,346,850
- --------------------------------------------------------------------------------
18,900 Avnet 914,287
- --------------------------------------------------------------------------------
17,250 Credence Systems (a) 521,813
- --------------------------------------------------------------------------------
28,200 Paychex 1,022,250
- --------------------------------------------------------------------------------
20,600 Policy Management Systems (a) 947,600
- --------------------------------------------------------------------------------
28,100 Solectron (a) 958,912
- --------------------------------------------------------------------------------
3,200 Teleflex 137,600
- --------------------------------------------------------------------------------
5,849,312
================================================================================
NEW CONSUMER - 2.13%
- --------------------------------------------------------------------------------
16,900 Blyth Industries (a) 720,362
- --------------------------------------------------------------------------------
63,900 Borders Group (a) 918,563
- --------------------------------------------------------------------------------
21,300 Revcod D.S. (a) 511,200
- --------------------------------------------------------------------------------
2,150,125
================================================================================
NEW HEALTH CARE PARADIGM - 10.83%
- --------------------------------------------------------------------------------
29,000 Apria Healthcare Group (a) 819,250
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 16
CAPITAL APPRECIATION PORTFOLIO 15
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
================================================================================
June 30, 1995 (unaudited)
SHARES DESCRIPTION VALUE
================================================================================
<S> <C> <C>
47,900 Boston Scientific (a) $ 1,526,812
- --------------------------------------------------------------------------------
14,000 CareLine (a) 115,500
- --------------------------------------------------------------------------------
21,000 Caremark International (a) 420,000
- --------------------------------------------------------------------------------
7,700 Cerner (a) 471,625
- --------------------------------------------------------------------------------
18,500 Guidant (a) 444,000
- --------------------------------------------------------------------------------
19,100 HBO & Co 1,040,950
- --------------------------------------------------------------------------------
32,000 Healthsource (a) 1,120,000
- --------------------------------------------------------------------------------
11,900 Medtronic 917,788
- --------------------------------------------------------------------------------
24,300 Mid Atlantic Medical Services (a) 449,550
- --------------------------------------------------------------------------------
11,600 Nellcor (a) 522,000
- --------------------------------------------------------------------------------
19,900 Oxford Health Plans (a) 940,275
- --------------------------------------------------------------------------------
26,600 Phycor (a) 934,325
- --------------------------------------------------------------------------------
31,500 Watson Pharmaceutical (a) 1,228,500
- --------------------------------------------------------------------------------
10,950,575
================================================================================
OTHER - 0.47%
- --------------------------------------------------------------------------------
12,000 Seagate Technology (a) 471,000
================================================================================
OUR STRENGTHENING
FINANCIAL STRUCTURE - 1.84%
- --------------------------------------------------------------------------------
23,900 Countrywide Credit Industries 501,900
- --------------------------------------------------------------------------------
8,500 Green Tree Financial 377,188
- --------------------------------------------------------------------------------
22,600 The PMI Group 980,275
- --------------------------------------------------------------------------------
1,859,363
================================================================================
PRODUCTIVITY ENHANCEMENT - 23.71%
- --------------------------------------------------------------------------------
20,600 Adobe Systems 1,194,800
- --------------------------------------------------------------------------------
20,400 Alliance Semiconductor (a) 999,600
- --------------------------------------------------------------------------------
34,300 Altera (a) 1,483,475
- --------------------------------------------------------------------------------
27,600 Analog Devices (a) 938,400
- --------------------------------------------------------------------------------
30,000 Baan Company, N.V. (a) 926,250
- --------------------------------------------------------------------------------
13,500 BMC Software (a) 1,042,875
- --------------------------------------------------------------------------------
55,600 Cheyenne Software (a) 1,028,600
- --------------------------------------------------------------------------------
18,900 Cirrus Logic (a) 1,184,794
- --------------------------------------------------------------------------------
12,500 Cypress Semiconductor (a) 506,250
- --------------------------------------------------------------------------------
36,000 Danka Business Systems - ADR 870,750
- --------------------------------------------------------------------------------
16,200 Fore Systems (a) 490,050
- --------------------------------------------------------------------------------
22,700 Komag (a) 1,180,400
- --------------------------------------------------------------------------------
15,200 Lam Research (a) 972,800
- --------------------------------------------------------------------------------
14,500 Lattice Semiconductor (a) 498,437
- --------------------------------------------------------------------------------
9,300 Linear Technology 613,800
- --------------------------------------------------------------------------------
58,300 LSI Logic (a) 2,280,987
- --------------------------------------------------------------------------------
15,000 Maxim Integrated Products 765,000
- --------------------------------------------------------------------------------
11,900 Microchip Technology (a) 432,863
- --------------------------------------------------------------------------------
50,200 National Semiconductor (a) 1,393,050
- --------------------------------------------------------------------------------
14,000 Novellus Systems (a) 948,500
- --------------------------------------------------------------------------------
25,600 Parametrics Technology (a) 1,273,600
- --------------------------------------------------------------------------------
24,200 Tencor Instruments (a) 992,200
- --------------------------------------------------------------------------------
30,100 Teradyne (a) 1,967,788
- --------------------------------------------------------------------------------
23,985,269
================================================================================
RE-ENERGIZING AMERICA - 0.51%
- --------------------------------------------------------------------------------
17,800 Petroleum Geo-Services (a) 511,750
================================================================================
SPECIAL SITUATIONS - 6.61%
- --------------------------------------------------------------------------------
35,700 Atlantic Southeast Airlines 1,075,462
- --------------------------------------------------------------------------------
34,300 Comair Holdings 1,299,113
- --------------------------------------------------------------------------------
15,400 Loewen Group 548,625
- --------------------------------------------------------------------------------
37,300 Pall 829,925
- --------------------------------------------------------------------------------
9,900 Sealed Air (a) 435,600
- --------------------------------------------------------------------------------
9,900 Sigma Aldrich 486,338
- --------------------------------------------------------------------------------
25,700 Ultratech Stepper (a) 905,925
- --------------------------------------------------------------------------------
22,200 Zilog (a) 1,107,225
- --------------------------------------------------------------------------------
6,688,213
================================================================================
STORES OF VALUE - 6.03%
- --------------------------------------------------------------------------------
13,600 Barnes & Noble (a) 462,400
- --------------------------------------------------------------------------------
40,500 Corporate Express (a) 865,687
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 17
CAPITAL APPRECIATION PORTFOLIO 16
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
================================================================================
June 30, 1995 (unaudited)
SHARES DESCRIPTION VALUE
================================================================================
<S> <C> <C>
29,000 General Nutrition (a) $ 1,018,625
- --------------------------------------------------------------------------------
37,200 Heilig-Meyers 948,600
- --------------------------------------------------------------------------------
60,650 Staples (a) 1,751,269
- --------------------------------------------------------------------------------
30,100 Sunglass Hut International (a) 1,053,500
- --------------------------------------------------------------------------------
6,100,081
================================================================================
TELECOMMUNICATIONS - 13.30%
- --------------------------------------------------------------------------------
38,000 ADC Telecommunications (a) 1,358,500
- --------------------------------------------------------------------------------
30,000 Adtran (a) 1,005,000
- --------------------------------------------------------------------------------
19,100 Andrew (a) 1,105,412
- --------------------------------------------------------------------------------
10,800 Ascend Communications (a) 545,400
- --------------------------------------------------------------------------------
10,100 Atmel (a) 559,287
- --------------------------------------------------------------------------------
24,200 Cascade Communications (a) 1,046,650
- --------------------------------------------------------------------------------
46,500 Glenayre Technologies (a) 2,371,500
- --------------------------------------------------------------------------------
16,900 LCI International (a) 517,563
- --------------------------------------------------------------------------------
34,000 National Data Corp 786,250
- --------------------------------------------------------------------------------
16,300 Nera AS - ADR (a) 458,438
- --------------------------------------------------------------------------------
25,000 Tellabs (a) 1,203,125
- --------------------------------------------------------------------------------
12,600 Worldcom (a) 340,200
- --------------------------------------------------------------------------------
22,900 Xilinx (a) 2,152,600
- --------------------------------------------------------------------------------
13,449,925
================================================================================
THE GREYING OF AMERICA - 0.80%
- --------------------------------------------------------------------------------
12,200 Cordis (a) 814,350
================================================================================
TOTAL COMMON STOCKS
(Cost $77,195,128) $ 96,125,856
================================================================================
<CAPTION>
PRINCIPAL
AMOUNT U.S. TREASURY BILLS - 5.09%
- --------------------------------------------------------------------------------
<S> <C> <C>
$ 67,000 5.65%, 7/06/95 $ 66,948
- --------------------------------------------------------------------------------
136,000 5.60%, 7/13/95 135,748
- --------------------------------------------------------------------------------
52,000 5.60%, 8/17/95 51,618
- --------------------------------------------------------------------------------
102,000 5.625%, 8/24/95 101,139
- --------------------------------------------------------------------------------
107,000 5.595%, 8/31/95 106,067
- --------------------------------------------------------------------------------
749,000 5.775%, 9/07/95 741,626
- --------------------------------------------------------------------------------
883,000 5.60%, 9/14/95 873,331
- --------------------------------------------------------------------------------
1,324,000 5.83%, 9/21/95 1,308,230
- --------------------------------------------------------------------------------
1,794,000 5.60%, 10/19/95 1,764,668
- --------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS
(Cost $5,148,325) $ 5,149,375
================================================================================
TOTAL INVESTMENTS
(Cost $82,343,453) 100.12% $101,275,231
- --------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.12%) (125,409)
- --------------------------------------------------------------------------------
NET ASSETS 100.00% $101,149,822
- --------------------------------------------------------------------------------
</TABLE>
(a) Non-Income Producing Security
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 18
CAPITAL APPRECIATION FUND 17
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on July 21, 1986, as a business trust under
the laws of the Commonwealth of Massachusetts. The Capital Appreciation Fund
(the "Fund") is one of the funds offered to investors by the Trust. The Fund
commenced operations and began offering shares of beneficial interest on March
9, 1993. The Fund invests substantially all of its assets in the Capital
Appreciation Portfolio (the "Portfolio"). The Portfolio is an open-end
management investment company registered under the Act. The Fund seeks to
achieve its investment objective by investing all of its investable assets in
the Portfolio. The value of such investment in the Portfolio reflects the
Fund's proportionate interest in the net assets of the Portfolio. At June 30,
1995, the Fund's investment was approximately 48% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained else- where in this report.
B. Investment Income
The Fund earns income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions of the Portfolio are allocated pro
rata among the investors in the Portfolio at the time of such determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
D. Dividends
It is the Fund's policy to declare and distribute dividends quarterly to
shareholders from net investment income. Distributions of net realized
short-term and long-term capital gains, if any, earned by the Fund will also be
made annually to the extent they are not offset by any capital loss
carryforwards. Dividends and distributions payable to shareholders are recorded
by the Fund on the ex-dividend date, which is the same as the declaration date.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of
the Fund. Expenses directly attributable to the Fund are charged to that Fund,
while expenses which are attributable to all of the Trust's funds are allocated
among them.
<PAGE> 19
CAPITAL APPRECIATION FUND 18
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.65 of 1% of the Fund's average daily net assets.
For the six months ended June 30, 1995, this fee aggregated $141,390.
The Trust has entered into a Distribution Agreement with Signature
Broker-Dealer Services, Inc. ("Signature"). Under the Distribution Agreement
with the Trust, pursuant to Rule 12b-1 of the 1940 Act, Signature may seek
reimbursement, at an annual rate not exceeding 0.20 of 1% of the Fund's average
daily net assets, for expenses incurred in connection with any activities
primarily intended to result in the sale of the Fund's shares. For the six
months ended June 30, 1995, there were no reimbursable expenses incurred under
this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 0.65 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio and
1.25 of 1% of the average daily net assets of the Fund, including expenses of
the Portfolio. For the six months ended June 30, 1995, expenses of the Fund
have been reduced $28,246.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Fund. Similarly, none of the Fund's
officers received compensation from the Fund.
NOTE 3 - SHARES OF BENEFICIAL INTEREST
At June 30, 1995, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
For the six months For the
ended June 30, 1995 year ended
(unaudited) December 31, 1994
---------------------------- ------------------------------
Shares Amount Shares Amount
-------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold 497,599 $ 6,371,452 2,523,927* $29,502,478*
Redeemed (623,946) (7,851,880) (490,867) (5,788,594)
-------- ----------- --------- -----------
Net Increase (126,347) $(1,480,428) 2,033,060 $23,713,884
======== =========== ========= ===========
</TABLE>
* Includes 1,026,855 shares and $12,306,701 from BT Investment Funds Capital
Growth Fund merger.
NOTE 4 - CAPITAL LOSS CARRYFORWARD
At December 31, 1994, accumulated net realized capital loss carryforwards
available as a reduction against future net realized capital gains aggregated
$1,535,422 of which $353,456 and $1,181,966 will expire in 2002 and 2003,
respectively.
On November 11, 1994, the Fund acquired capital loss carryforwards of $39,120,
as a result of acquiring all of the net assets of the BT Investment Funds
Capital Growth Fund.
This carryforward loss is subject to limitation as to their use in accordance
with the Internal Revenue Code, as amended.
<PAGE> 20
CAPITAL APPRECIATION PORTFOLIO 19
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
The Capital Appreciation Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on October 28, 1992
as an unincorporated trust under the laws of New York and commenced operations
on March 9, 1993. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
The Portfolio's investments are valued each business day by an independent
pricing service (the "Service") approved by the Board of Trustees. Securities
traded on national exchanges or traded in the NASDAQ National Market System are
valued at the last sales prices reported at the close of business.
Over-the-counter securities not included in the NASDAQ National Market System
and listed securities for which no sale was reported are valued at the mean of
the bid and asked prices. Short-term obligations with remaining maturities of
60 days or less are valued at amortized cost which with accrued interest
approximates value. Securities for which quotations are not available are
stated at fair value as determined by the Board of Trustees.
C. Security Transactions and Investment Income
Security transactions are accounted for on a trade date basis (date the order
to buy or sell is executed). Dividend income is recorded on the ex-dividend
date. Interest income is recorded on the accrual basis and includes
amortization of premium and discount on investments. Realized gains and losses
from securities transactions are recorded on the identified cost basis.
All of the net investment income and realized and unrealized gains and losses
from the security transactions of the Portfolio are allocated pro rata among
the investors in the Portfolio at the time of such determination.
D. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required.
<PAGE> 21
CAPITAL APPRECIATION PORTFOLIO 20
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.10 of 1% of the Portfolio's average daily
net assets. For the six months ended June 30, 1995, this fee aggregated
$41,041.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at an annual rate of 0.65 of 1% of the
Portfolio's average daily net assets. For the six months ended June 30, 1995,
this fee aggregated $266,768.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.60 of 1% of the
average daily net assets of the Portfolio. For the six months ended June 30,
1995, expenses of the Portfolio have been reduced $74,627.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the six months ended June 30, 1995, were
$96,095,754 and $87,068,654, respectively. The aggregate gross unrealized
appreciation for all investments was $19,310,783 and the aggregate gross
unrealized depreciation for all investments was $379,005.
<PAGE> 22
BT INVESTMENT FUNDS
Cash
Management
Fund
Semi-Annual Report
June 30, 1995
<PAGE> 23
CASH MANAGEMENT FUND 1
------------------------------------------------------
TABLE OF CONTENTS
===============================================================================
<TABLE>
<S> <C>
INTRODUCTION FROM PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . 2
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER . . . . . . . . . . . . . 3
CASH MANAGEMENT FUND . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 5
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 6
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . 7
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . 8
CASH MANAGEMENT PORTFOLIO
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 9
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 10
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . 11
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . 12
Schedule of Portfolio Investments . . . . . . . . . . . . . . . . . . 13
CASH MANAGEMENT FUND
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 17
CASH MANAGEMENT PORTFOLIO
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Cash
Management Fund may be obtained by calling or writing to Investors Fiduciary
Trust Company or Signature Broker-Dealer Services, Inc., the primary Servicing
Agent and Distributor, respectively, of BT Investment Funds:
BT INVESTMENT FUNDS
INVESTORS FIDUCIARY TRUST COMPANY
127 WEST 10TH STREET
KANSAS CITY, MO 64105
(800) 422-6577
BT INVESTMENT FUNDS
SIGNATURE BROKER-DEALER SERVICES, INC.
6 ST. JAMES AVENUE
BOSTON, MA 02116
(800) 545-1074
You may write to the Cash Management Fund at
the following address:
BT INVESTMENT FUNDS
6 ST. JAMES AVENUE
BOSTON, MA 02116
<PAGE> 24
CASH MANAGEMENT FUND 2
------------------------------------------------------
INTRODUCTION FROM PRESIDENT
===============================================================================
August, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for BT Investment Funds
Cash Management Fund. This Report provides you with an investment overview as
well as a financial summary of the Fund's operations for the six months ended
June 30, 1995. We have also included a Letter from the Investment Adviser
detailing the factors that affected the Fund's performance for the six months
ended June 30, 1995. Also presented in your Report is a pie chart displaying
diversification of Portfolio investments, financial statements, financial
highlights and a listing of the Portfolio's holdings.
Looking ahead, we will continue to closely observe the economic conditions and
how they affect the financial markets.
We appreciate your ongoing support of the Cash Management Fund and look forward
to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 25
CASH MANAGEMENT FUND 3
------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
===============================================================================
The first six months of 1995 were characterized by the Federal Reserve Board's
seeming success in slowing economic growth and in keeping a confident grip on
inflation. Although the strength of the dollar remains a concern and some
recent evidence, particularly in the interest rate sensitive housing,
materials, and auto sectors hint at modest reacceleration, other economic
indicators, including the currently inverted yield curve, support the Fed's
actions. So, too, does, constructive discourse within Congress regarding the
federal deficit. Events such as the financial stress in Mexico, which impaired
exports, and floods on the West Coast helped to contain growth as well.
While we experienced one additional Fed tightening of interest rates in
February, the lack of threat by both inflation and further rate hikes after
that led to a decline in rates without a change in monetary policy. As of
June 20, the yield spread between the 2-year Treasury and Fed Funds was 24 basis
points.
Despite all this positive evidence, we do not view the current trend as
unambiguously bullish for the short-term end of the fixed income markets. We
have, however, moved from a completely defensive posture at the end of 1994 to
a neutral position, extending maturities by selectively seeking relative value
along the yield curve. The Fund's weighted average maturity stands
approximately at the midpoint between overnight and its maximum weighted
average maturity. We have also sought to add value by increasing the proportion
of floating rate instruments in the Fund, thereby enhancing performance while
retaining liquidity and flexibility.
On July 6, 1995, the Federal Reserve Board acted to cut official interest rates
by 0.25%. Nevertheless, we intend to maintain our current strategy until we
know the outcome of the August Federal Open Market Committee meeting. If the
Fed decides against lowering rates in August, the markets are likely to express
disappointment by selling bonds and driving rates up. On the other hand, if the
Fed acts as we expect dropping the target further, the market is likely to
perform well.
At this time, we believe that extending maturity would add very little to the
Fund's yield. Moreover, because the market already expects lower rates, as
reflected in the inverted yield curve, there is little upside and substantial
risk if it is disappointed. In the meantime, we are taking advantage of daily
trading and relative value opportunities.
===============================================================================
ABOUT THE JOHN BURGESS
PORTFOLIO MANAGER Managing Director
Head of Reserve Management
- Responsible for Global Investment Management's
Reserve Management activities
- Formerly Treasurer & First Vice President at Banca
Della Svizzera Italiana (subsidiary of the Swiss
Bank Corporation Group) responsible for all
proprietary and customer trading for the Treasury
Division
- Ten years investment experience, including five
years at J.P. Morgan
- Joined Bankers Trust in 1995
- B.A. (Economics) - Wesleyan University
<PAGE> 26
CASH MANAGEMENT FUND 4
------------------------------------------------------
===============================================================================
OBJECTIVE Seeks high current income consistent with liquidity
and preservation of capital.
- -------------------------------------------------------------------------------
INVESTMENT INSTRUMENTS Bank obligations, commercial paper, U.S. Treasury
obligations and repurchase agreements collateralized
by U.S. Treasury obligations.
- -------------------------------------------------------------------------------
RATINGS S&P: AAAm
Moody's: AAA
- -------------------------------------------------------------------------------
STATUS AT Seven day effective yield: 5.47%
JUNE 30, 1995 Average maturity: 36 days
(unaudited) Net Assets: $134.5 million
- -------------------------------------------------------------------------------
DIVERSIFICATION OF PORTFOLIO
INVESTMENTS BY ASSET TYPE
as of June 30, 1995 (unaudited)
(percentages are based on market value)
[FIGURE 1]
<TABLE>
<S> <C>
Commercial Paper 43.87%
Certificates of Deposit 24.00%
U.S. Government Agency Note 0.60%
Floating Rate Notes 6.98%
Deposit Note 1.44%
Eurodollar Time Deposits 23.11%
</TABLE>
<PAGE> 27
CASH MANAGEMENT FUND 5
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
====================================================================================================================
June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- --------------------------------------------------------------------------------------------------------------------
Investment in Cash Management Portfolio, at Value $134,927,143
- --------------------------------------------------------------------------------------------------------------------
Prepaid Expenses 5,696
- --------------------------------------------------------------------------------------------------------------------
Total Assets 134,932,839
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------------
Due to Bankers Trust 56,683
- --------------------------------------------------------------------------------------------------------------------
Dividends Payable 326,288
- --------------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 1,213
- --------------------------------------------------------------------------------------------------------------------
Total Liabilities 384,184
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS (Applicable to 134,760,126 Outstanding Shares of $.001 Par Value
Per Share, Unlimited Number of Shares of Beneficial Interest Authorized) $134,548,655
====================================================================================================================
NET ASSET VALUE, Subscription and Redemption Price Per Share
($134,548,655/134,760,126 Shares) $ 1.00
====================================================================================================================
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 134,760
- --------------------------------------------------------------------------------------------------------------------
Paid-in Capital 134,625,366
- --------------------------------------------------------------------------------------------------------------------
Accumulated Net Realized (Loss) from Securities Transactions (211,471)
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $134,548,655
====================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 28
CASH MANAGEMENT FUND 6
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
====================================================================================================================
For the six months ended June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------------------------
Income Allocated from Cash Management Portfolio, net $4,593,662
- --------------------------------------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------------------------------------
Administration and Services Fee $429,310
- --------------------------------------------------------------------------------------------------------------------
Professional Fees 2,558
- --------------------------------------------------------------------------------------------------------------------
Shareholders Reports 11,089
- --------------------------------------------------------------------------------------------------------------------
Registration Fees 7,489
- --------------------------------------------------------------------------------------------------------------------
Trustees Fees 773
- --------------------------------------------------------------------------------------------------------------------
Insurance 438
- --------------------------------------------------------------------------------------------------------------------
Miscellaneous 4,299
- --------------------------------------------------------------------------------------------------------------------
Total Expenses 455,956
- --------------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (19,991) 435,965
- --------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 4,157,697
- --------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN FROM SECURITIES TRANSACTIONS 2,719
- --------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $4,160,416
====================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 29
CASH MANAGEMENT FUND 7
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
====================================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net Investment Income $ 4,157,697 $ 5,310,553
- --------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 2,719 (1,514,199)
- --------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 4,160,416 3,796,354
- --------------------------------------------------------------------------------------------------------------------
FROM DIVIDENDS
- --------------------------------------------------------------------------------------------------------------------
Net Investment Income (4,157,697) (5,310,553)
- --------------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Dividends (4,157,697) (5,310,553)
- --------------------------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
(at Net Asset Value of $1.00 per share)
- --------------------------------------------------------------------------------------------------------------------
Net Proceeds from Shares Sold 874,713,898 2,045,613,960
- --------------------------------------------------------------------------------------------------------------------
Dividends Reinvested 2,582,800 2,476,681
- --------------------------------------------------------------------------------------------------------------------
Value of Shares Redeemed (901,922,359) (1,965,282,457)
- --------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Transactions
in Shares of Beneficial Interest (24,625,661) 82,808,184
- --------------------------------------------------------------------------------------------------------------------
FROM CONTRIBUTION OF CAPITAL
- --------------------------------------------------------------------------------------------------------------------
Proceeds Contributed - 1,299,990
- --------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Contribution of Capital - 1,299,990
- --------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (24,622,942) 82,593,975
====================================================================================================================
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Beginning of Period 159,171,597 76,577,622
- --------------------------------------------------------------------------------------------------------------------
End of Period $ 134,548,655 $ 159,171,597
====================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 30
CASH MANAGEMENT FUND 8
------------------------------------------------------
FINANCIAL HIGHLIGHTS
===============================================================================
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of
the periods indicated for the Cash Management Fund.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
For the six
months ended For the year ended December 31,
June 30, 1995 ---------------------------------------------------------
(unaudited) 1994 1993 1992 1991 1990
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Income from Investment Operations
Net Investment Income 0.03 0.04 0.03 0.03 0.06 0.08
Net Realized Gain (Loss) from
Securities Transactions 0.00+ (0.01) 0.00+ 0.00+ 0.00+ -
----- ----- ----- ----- ----- -----
Total from Investment Operations 0.03 0.03 0.03 0.03 0.06 0.08
----- ----- ----- ----- ----- -----
Contribution of Capital - 0.01 - - - -
----- ----- ----- ----- ----- -----
Less Dividends and Distributions
Dividends from Net Investment Income (0.03) (0.04) (0.03) (0.03) (0.06) (0.08)
Distributions from Net Realized Gain
from Securities Transactions - - (0.00)+ (0.00)+ (0.00)+ -
----- ----- ----- ----- ----- -----
Total Dividends and Distributions (0.03) (0.04) (0.03) (0.03) (0.06) (0.08)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN 2.67% 3.67%++ 2.54% 3.05% 5.68% 7.85%
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income to
Average Net Assets 5.33%* 3.70% 2.51% 3.04% 5.53% 7.58%
Ratio of Expenses to Average Net Assets,
Including Expenses of the Cash
Management Portfolio 0.74%* 0.73% 0.75% 0.75% 0.75% 0.75%
Decrease Reflected in Above Expense
Ratio Due to Absorption of Expenses
by Bankers Trust 0.05%* 0.08% 0.05% 0.04% 0.03% 0.03%
Net Assets, End of Period
(000's omitted) $134,549 $159,172 $76,578 $99,649 $127,164 $101,892
</TABLE>
+ Less than $0.01 per share
++ Increased by 0.96% due to Contribution of Capital.
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 31
CASH MANAGEMENT PORTFOLIO 9
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
====================================================================================================================
June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- --------------------------------------------------------------------------------------------------------------------
Investments, at Value $2,430,964,069
- --------------------------------------------------------------------------------------------------------------------
Cash 4
- --------------------------------------------------------------------------------------------------------------------
Interest Receivable 5,989,132
- --------------------------------------------------------------------------------------------------------------------
Prepaid Expenses and Other Assets 2,048
- --------------------------------------------------------------------------------------------------------------------
Total Assets 2,436,955,253
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------------
Due to Bankers Trust 312,045
- --------------------------------------------------------------------------------------------------------------------
Payable for Securities Purchased 12,000,000
- --------------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 34,161
- --------------------------------------------------------------------------------------------------------------------
Total Liabilities 12,346,206
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS $2,424,609,047
====================================================================================================================
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Paid-in Capital $2,424,609,047
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $2,424,609,047
====================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 32
CASH MANAGEMENT PORTFOLIO 10
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
====================================================================================================================
For the six months ended June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------------------------
Interest $75,434,159
- --------------------------------------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------------------------------------
Advisory Fee $1,870,985
- --------------------------------------------------------------------------------------------------------------------
Administration and Services Fee 623,662
- --------------------------------------------------------------------------------------------------------------------
Professional Fees 20,022
- --------------------------------------------------------------------------------------------------------------------
Trustees Fees 732
- --------------------------------------------------------------------------------------------------------------------
Insurance 1,319
- --------------------------------------------------------------------------------------------------------------------
Miscellaneous 24,328
- --------------------------------------------------------------------------------------------------------------------
Total Expenses 2,541,048
- --------------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (295,866) 2,245,182
- --------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 73,188,977
- --------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN FROM SECURITIES TRANSACTIONS 41,908
- --------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $73,230,885
====================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 33
CASH MANAGEMENT PORTFOLIO 11
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
====================================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net Investment Income $ 73,188,977 $ 107,531,263
- --------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 41,908 (21,679,797)
- --------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 73,230,885 85,851,466
- --------------------------------------------------------------------------------------------------------------------
FROM CAPITAL TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 16,449,298,574 29,684,647,236
- --------------------------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (16,832,945,756) (28,984,267,374)
- --------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Capital Transactions (383,647,182) 700,379,862
- --------------------------------------------------------------------------------------------------------------------
FROM CONTRIBUTION OF CAPITAL
- --------------------------------------------------------------------------------------------------------------------
Proceeds Contributed - 18,718,663
- --------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Contribution of Capital - 18,718,663
- --------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (310,416,297) 804,949,991
====================================================================================================================
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Beginning of Period 2,735,025,344 1,930,075,353
- --------------------------------------------------------------------------------------------------------------------
End of Period $ 2,424,609,047 $ 2,735,025,344
====================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 34
CASH MANAGEMENT PORTFOLIO 12
------------------------------------------------------
FINANCIAL HIGHLIGHTS
===============================================================================
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Cash Management Portfolio.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
For the period
July 23, 1990
For the six (Commencement
months ended For the year ended December 31, of Operations)
June 30, 1995 --------------------------------------------------- to December
(unaudited) 1994 1993 1992 1991 31, 1990
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment
Income to Average Net Assets 5.87%* 4.24% 3.06% 3.52% 5.85% 7.90%*
Ratio of Expenses to
Average Net Assets 0.18%* 0.18% 0.20% 0.22% 0.25% 0.25%*
Decrease Reflected in Above
Ratio of Expenses to Average
Net Assets Due to Absorption
of Expenses by Bankers Trust 0.02%* 0.02% 0.00%+ 0.00%+ 0.01% 0.01%*
Net Assets, End of Period
(000's omitted) $2,424,609 $2,735,025 $1,930,075 $1,438,688 $934,402 $403,932
</TABLE>
* Annualized
+ Less than 0.01%
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 35
CASH MANAGEMENT PORTFOLIO 13
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
=====================================================================================================
June 30, 1995 (unaudited)
PRINCIPAL
AMOUNT DESCRIPTION VALUE
=====================================================================================================
<S> <C>
CERTIFICATES OF DEPOSIT - 24.07%
- -----------------------------------------------------------------------------------------------------
Abbey National Bank:
$ 21,000,000 6.15%, 7/18/95 $ 21,000,407
19,000,000 6.04%, 8/22/95 18,999,945
4,000,000 5.95%, 9/12/95 4,000,369
- -----------------------------------------------------------------------------------------------------
7,000,000 ABN Amro Bank, 6.31%, 10/10/95 7,002,787
- -----------------------------------------------------------------------------------------------------
25,000,000 Bank of America, 6.19%, 10/13/95 25,000,000
- -----------------------------------------------------------------------------------------------------
25,000,000 Bank of Nova Scotia, 6.00%, 11/14/95 25,009,446
- -----------------------------------------------------------------------------------------------------
5,000,000 Bank of Scotland, 6.01%, 10/12/95 5,001,114
- -----------------------------------------------------------------------------------------------------
Banque Nationale de Paris:
40,000,000 5.86%, 8/1/95 39,998,596
37,000,000 5.90%, 8/7/95 36,997,183
- -----------------------------------------------------------------------------------------------------
24,500,000 Canadian Imperial Bank of Commerce, 5.9375%, 9/7/95 24,500,000
- -----------------------------------------------------------------------------------------------------
Fuji Bank:
25,000,000 6.07%, 7/24/95 25,001,869
15,000,000 6.08%, 7/24/95 14,999,724
- -----------------------------------------------------------------------------------------------------
Mitsubishi Bank:
30,000,000 5.83%, 9/6/95 29,992,689
46,000,000 5.90%, 9/8/95 45,994,789
- -----------------------------------------------------------------------------------------------------
National Westminster Bank:
14,000,000 6.09%, 7/28/95 14,000,403
35,000,000 5.96%, 8/29/95 35,000,568
- -----------------------------------------------------------------------------------------------------
Sanwa Bank:
3,000,000 6.06%, 7/18/95 2,999,991
20,000,000 6.04%, 7/27/95 20,000,000
- -----------------------------------------------------------------------------------------------------
Societe Generale:
29,000,000 5.97%, 8/15/95 29,000,329
40,000,000 5.95%, 8/15/95 39,997,924
30,000,000 5.95%, 10/2/95 30,003,358
- -----------------------------------------------------------------------------------------------------
Sumitomo Bank:
17,000,000 6.07%, 7/3/95 17,000,027
23,000,000 6.075%, 7/3/95 23,000,019
20,000,000 6.07%, 7/3/95 20,000,025
29,000,000 6.03%, 8/2/95 29,002,807
- -----------------------------------------------------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT
(Amortized Cost $583,504,369) $ 583,504,369
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 36
CASH MANAGEMENT PORTFOLIO 14
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
=====================================================================================================
June 30, 1995 (unaudited)
PRINCIPAL
AMOUNT DESCRIPTION VALUE
=====================================================================================================
<S> <C> <C>
COMMERCIAL PAPER - 43.98%
- -----------------------------------------------------------------------------------------------------
$ 76,000,000 Abbey National Bank, 6.00%, 7/31/95 $ 75,620,000
- -----------------------------------------------------------------------------------------------------
ABN Amro Bank:
45,000,000 6.00%, 7/11/95 44,925,000
24,250,000 6.18%, 8/21/95 24,037,691
- -----------------------------------------------------------------------------------------------------
Asset Securitization:
25,000,000 6.00%, 8/1/95 24,870,833
23,500,000 5.97%, 8/8/95 23,351,911
25,000,000 5.88%, 9/18/95 24,677,417
- -----------------------------------------------------------------------------------------------------
1,000,000 AT&T Capital, 5.96%, 7/26/95 995,861
- -----------------------------------------------------------------------------------------------------
Banco Hispano Americano:
25,000,000 6.11%, 7/6/95 24,978,785
25,000,000 6.03%, 7/18/95 24,928,812
- -----------------------------------------------------------------------------------------------------
23,000,000 Bayerische Vereinsbank, 5.92%, 8/7/95 22,860,058
- -----------------------------------------------------------------------------------------------------
BTR Dunlop Finance:
50,000,000 6.22%, 8/15/95 49,611,250
25,456,000 5.85%, 9/19/95 25,125,072
- -----------------------------------------------------------------------------------------------------
37,300,000 Ciesco, 5.95%, 8/10/95 37,053,406
- -----------------------------------------------------------------------------------------------------
27,500,000 CS First Boston, 5.89%, 10/13/95 27,032,072
- -----------------------------------------------------------------------------------------------------
3,000,000 Daimler Benz North American, 5.73%, 12/14/95 2,920,735
- -----------------------------------------------------------------------------------------------------
29,200,000 Den Danske Bank, 6.01%, 7/31/95 29,053,757
- -----------------------------------------------------------------------------------------------------
General Electric Capital:
14,000,000 5.90%, 7/5/95 13,990,822
40,000,000 5.95%, 7/17/95 39,894,222
- -----------------------------------------------------------------------------------------------------
17,631,000 ITT Hartford Group, 5.97%, 8/3/95 17,534,514
- -----------------------------------------------------------------------------------------------------
Kingdom of Sweden:
37,450,000 5.94%, 7/28/95 37,283,160
25,000,000 5.75%, 10/2/95 24,628,646
- -----------------------------------------------------------------------------------------------------
14,750,000 Monte dei Paschi di Siena, 6.00%, 7/24/95 14,693,458
- -----------------------------------------------------------------------------------------------------
27,000,000 Morgan Stanley, 5.97%, 7/10/95 26,959,703
- -----------------------------------------------------------------------------------------------------
25,500,000 National Australia Funding, 5.60%, 11/27/95 24,908,967
- -----------------------------------------------------------------------------------------------------
National Rural Utility:
4,535,000 5.91%, 9/7/95 4,484,374
30,410,000 5.86%, 9/25/95 29,984,294
10,000,000 5.72%, 11/2/95 9,802,978
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 37
CASH MANAGEMENT PORTFOLIO 15
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
=====================================================================================================
June 30, 1995 (unaudited)
PRINCIPAL
AMOUNT DESCRIPTION VALUE
=====================================================================================================
<S> <C>
New South Wales Treasury:
$ 9,000,000 6.03%, 10/2/95 $ 8,859,803
44,000,000 5.98%, 10/3/95 43,312,964
1,000,000 6.01%, 10/3/95 984,307
20,000,000 6.02%, 10/3/95 19,685,622
9,000,000 5.92%, 10/4/95 8,859,400
- -----------------------------------------------------------------------------------------------------
Norwest:
8,500,000 6.00%, 8/7/9 5 8,447,583
15,000,000 6.00%, 8/8/95 14,905,000
- -----------------------------------------------------------------------------------------------------
10,000,000 Ontario Hydro, 5.72%, 8/21/95 9,918,967
- -----------------------------------------------------------------------------------------------------
Philip Morris:
2,265,000 5.91%, 9/5/95 2,240,459
10,000,000 5.91%, 9/19/95 9,868,667
8,350,000 5.91%, 9/20/95 8,238,966
- -----------------------------------------------------------------------------------------------------
10,000,000 Prudential Funding, 6.30%, 7/3/95 9,996,500
- -----------------------------------------------------------------------------------------------------
Receivables Capital:
18,088,000 5.98%, 7/13/95 18,051,945
8,500,000 6.00%, 7/18/95 8,475,917
- -----------------------------------------------------------------------------------------------------
10,500,000 Riverwoods Funding, 5.95%, 7/27/95 10,454,879
- -----------------------------------------------------------------------------------------------------
Sheffield Receivables:
29,000,000 5.97%, 7/17/95 28,923,053
16,000,000 5.97%, 7/20/95 15,949,587
- -----------------------------------------------------------------------------------------------------
29,000,000 Siemens, 6.20%, 7/3/95 28,990,011
- -----------------------------------------------------------------------------------------------------
Swedish Export Credit:
17,500,000 6.05%, 7/6/95 17,485,295
27,000,000 6.01%, 7/24/95 26,896,328
- -----------------------------------------------------------------------------------------------------
15,000,000 Toyota Motor Credit, 5.92%, 8/4/95 14,916,133
- -----------------------------------------------------------------------------------------------------
25,000,000 Wool International, 6.18%, 8/16/95 24,802,583
- -----------------------------------------------------------------------------------------------------
Xerox:
10,000,000 5.99%, 8/3/95 9,945,092
7,000,000 5.95%, 8/9/95 6,954,879
3,000,000 5.93%, 8/11/95 2,979,739
- -----------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Amortized Cost $1,066,351,477) $1,066,351,477
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 38
CASH MANAGEMENT PORTFOLIO 16
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
=====================================================================================================
June 30, 1995 (unaudited)
PRINCIPAL
AMOUNT DESCRIPTION VALUE
=====================================================================================================
<S> <C>
DEPOSIT NOTE - 1.44%
- -----------------------------------------------------------------------------------------------------
$ 35,000,000 Wachovia Bank, 5.95%, 7/28/95 (Amortized Cost $34,998,618) $ 34,998,618
=====================================================================================================
EURODOLLAR TIME DEPOSITS - 23.17%
- -----------------------------------------------------------------------------------------------------
$ 25,000,000 Bank of America, 6.07%, 7/5/95 $ 25,000,000
- -----------------------------------------------------------------------------------------------------
80,000,000 Bank of Montreal, 6.125%, 8/2/95 80,000,000
- -----------------------------------------------------------------------------------------------------
18,000,000 Bank of Nova Scotia, 6.1875%, 7/10/95 18,000,000
- -----------------------------------------------------------------------------------------------------
100,000,000 Canadian Imperial Bank of Commerce, 6.125%, 7/6/95 100,000,000
- -----------------------------------------------------------------------------------------------------
Commerz Bank:
61,767,458 5.875%, 7/3/95 61,767,458
40,000,000 6.09375%, 7/14/95 40,000,000
- -----------------------------------------------------------------------------------------------------
25,000,000 Fuji Bank, 6.00%, 7/10/95 25,000,000
- -----------------------------------------------------------------------------------------------------
12,000,000 Mitsubishi Bank, 6.0625%, 9/5/95 12,000,000
- -----------------------------------------------------------------------------------------------------
100,000,000 National Australia Bank, 6.125%, 7/6/95 100,000,000
- -----------------------------------------------------------------------------------------------------
100,000,000 Royal Bank of Canada, 6.25%, 7/5/95 100,000,000
- -----------------------------------------------------------------------------------------------------
TOTAL EURODOLLAR TIME DEPOSITS
(Amortized Cost $561,767,458) $ 561,767,458
=====================================================================================================
FLOATING RATE NOTES - 7.00%
- -----------------------------------------------------------------------------------------------------
$ 50,000,000 J P Morgan, Variable Rate Weekly, 5.55%, 7/18/95 $ 49,998,603
- -----------------------------------------------------------------------------------------------------
Student Loan Marketing Association, Variable Rate Weekly:
15,930,000 5.68%, 10/14/97 15,885,060
29,000,000 5.72%, 10/17/97 28,942,874
50,000,000 5.68%, 11/24/97 49,854,472
25,000,000 5.70%, 9/28/98 24,991,888
- -----------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE NOTES
(Amortized Cost $169,672,897) $ 169,672,897
=====================================================================================================
U.S. GOVERNMENT AGENCY NOTE - 0.60%
- -----------------------------------------------------------------------------------------------------
$ 15,000,000 Federal National Mortgage Association, 5.88%, 11/13/95
(Amortized Cost $14,669,250) $ 14,669,250
=====================================================================================================
TOTAL INVESTMENTS
(Amortized Cost $2,430,964,069) 100.26% $2,430,964,069
- -----------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.26%) (6,355,022)
- -----------------------------------------------------------------------------------------------------
NET ASSETS 100.00% $2,424,609,047
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 39
CASH MANAGEMENT FUND 17
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on July 21, 1986, as a business trust under
the laws of the Commonwealth of Massachusetts. The Cash Management Fund (the
"Fund") is one of the funds offered to investors by the Trust. The Fund
commenced operations and began offering shares of beneficial interest on
October 5, 1988. Through July 22, 1990, the Fund invested directly in
securities. After that date, the Fund began investing substantially all of its
investable assets in the Cash Management Portfolio (the "Portfolio"). The
Portfolio is an open-end management investment company registered under the
Act. The Fund seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio. The value of such investment in the
Portfolio reflects the Fund's proportionate interest in the net assets of the
Portfolio. At June 30, 1995, the Fund's investment was approximately 6% of the
Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns interest income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized gains and losses from
the security transactions of the Portfolio are allocated pro rata among the
investors in the Portfolio at the time of such determination.
C. Dividends
It is the Fund's policy to declare dividends daily, payable to shareholders of
record as of 12:00 noon (E.S.T.) from net investment income. Dividends from net
investment income are paid monthly. Dividends payable to shareholders are
recorded by the Fund on the ex-dividend date, which is the same as the
declaration date. Distributions of net realized short-term and long-term
capital gains, if any, earned by the Fund will be made annually to the extent
they are not offset by any capital loss carryforwards.
D. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
E. Other
The Trust accounts separately for the assets, liabilities, and operations of
the Fund. Expenses directly attributable to the Fund are charged to the Fund,
while expenses which are attributable to all of the Trust's funds are allocated
among them.
<PAGE> 40
CASH MANAGEMENT FUND 18
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.55 of 1% of the Fund's average daily net assets.
For the six months ended June 30, 1995, this fee aggregated $429,310.
The Trust has entered into a Distribution Agreement with Signature
Broker-Dealer Services, Inc. ("Signature"). Under the Distribution Agreement
with the Trust, pursuant to Rule 12b-1 of the 1940 Act, Signature may seek
reimbursement, at an annual rate not exceeding 0.20 of 1% of the Fund's average
daily net assets, for expenses incurred in connection with any activities
primarily intended to result in the sale of the Fund's shares. For the six
months ended June 30, 1995, there were no reimbursable expenses incurred under
this agreement.
For the period January 1, 1995 to April 10, 1995 Bankers Trust had voluntarily
undertaken to waive and reimburse expenses of the Fund, to the extent
necessary, to limit all expenses to 0.55 of 1% of the average daily net assets
of the Fund, excluding expenses of the Portfolio and 0.73 of 1% of the average
daily net assets of the Fund, including expenses of the Portfolio. For the
period April 11, 1995 to June 30, 1995 Bankers Trust has voluntarily undertaken
to waive and reimburse the expenses of the Fund, to the extent necessary, to
limit all expenses to 0.57 of 1% of the average daily net assets of the Fund,
excluding expenses of the Portfolio and 0.75 of 1% of the average daily net
assets of the Fund, including expenses of the Portfolio. For the six months
ended June 30, 1995, expenses of the Fund have been reduced $19,991.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
The Portfolio sold certain structured notes carried at par to an unrelated
third party financial institution at par plus accrued interest pursuant to a
put agreement and that third party financial institution immediately resold
such securities to Bankers Trust New York Corporation, the parent of the
Adviser, at the same price, also pursuant to a put agreement. As a result of
these transactions the Fund's Statement of Changes in Net Assets for the year
ended December 31, 1994 reflects its pro rata share of the Portfolio's realized
loss on the sale of these securities and a capital contribution in the amount
of $1,299,990.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Fund. Similarly, none of the Fund's
officers received compensation from the Fund.
NOTE 3 - CAPITAL LOSS CARRYFORWARD
At December 31, 1994, accumulated net realized capital loss carryforwards
available as a reduction against future net realized capital gains aggregated
$214,209, which will expire in 2003.
<PAGE> 41
CASH MANAGEMENT PORTFOLIO 19
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
The Cash Management Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on March 26, 1990 as
an unincorporated trust under the laws of New York, and commenced operations on
July 23, 1990. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
Investments are stated at value, as that term is defined in the Act and the
published rules and regulations thereunder. Pursuant to Rule 2a-7 of the Act,
the Portfolio utilizes the amortized cost method to determine 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 the
difference between the principal amount due at maturity and cost. In the event
that a deviation of 1/2 of 1% or more exists between the Portfolio's net asset
value on the basis of amortized cost and the net asset value calculated by
using available market quotations or an appropriate substitute, the Trustees
will promptly consider what action, if any, should be initiated, and where the
Trustees believe the extent of deviation may result in material dilution or
other unfair results to investors or shareholders, the Trustees shall take such
action to eliminate or reduce, to the extent reasonably practicable, such
dilution or unfair results.
C. Security Transactions and Investment Income
Security transactions are accounted for on a trade date basis (date the order
to buy or sell is executed). Interest income is recorded on the accrual basis
and includes amortization of premium and discount on investments. Realized
gains and losses from securities transactions are recorded on the identified
cost basis.
The Portfolio may enter into repurchase agreements with financial institutions
deemed to be creditworthy by the Portfolio's Investment Adviser, subject to the
seller's agreement to repurchase and the Portfolio's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Portfolio's custodian, and
pursuant to the terms of the repurchase agreement must have an aggregate market
value greater than or equal to the repurchase price plus accrued interest at
all times. If the value of the underlying securities falls below the value of
the repurchase price plus accrued interest, the Portfolio will require the
seller to deposit additional collateral by the next business day. If the
request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Portfolio maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller.
<PAGE> 42
CASH MANAGEMENT PORTFOLIO 20
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
D. Investment Income
The Portfolio determines its net investment income (i.e., income other than net
realized long-term and short-term capital gains) on each valuation day and
allocates all such income as well as any realized gains and losses from
security transactions pro rata among the investors in the Portfolio at the time
of such determination.
E. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required. The cost of securities in the Portfolio for federal income tax
purposes is the same as for financial reporting purposes.
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.05 of 1% of the Portfolio's average daily
net assets. For the six months ended June 30, 1995, this fee aggregated
$623,662.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at the annual rate of 0.15 of 1% of the
Portfolio's average daily net assets. For the six months ended June 30, 1995,
this fee aggregated $1,870,985.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.18 of 1% of the
average daily net assets of the Portfolio. For the six months ended June 30,
1995, expenses of the Portfolio have been reduced $295,866.
The Portfolio sold certain structured notes carried at par to an unrelated
third party financial institution at par plus accrued interest pursuant to a
put agreement and that third party financial institution immediately resold
such securities to Bankers Trust New York Corporation, the parent of the
Adviser, at the same price, also pursuant to a put agreement. As a result of
these transactions the Portfolio's Statement of Changes in Net Assets for the
year ended December 31, 1994 reflects a realized loss on the sale of these
securities and a capital contribution in the amount of $18,718,663.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
<PAGE> 43
BT INVESTMENT FUNDS
Treasury
Money
Fund
Semi-Annual Report
June 30, 1995
<PAGE> 44
TREASURY MONEY FUND 1
-----------------------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
======================================================================
<S> <C>
INTRODUCTION FROM PRESIDENT . . . . . . . . . . . . . . . . . . 2
LETTER TO SHAREHOLDERS FROM
INVESTMENT ADVISER . . . . . . . . . . . . . . . . . . . . . 3
TREASURY MONEY FUND
Statement of Assets and Liabilities . . . . . . . . . . . 5
Statement of Operations . . . . . . . . . . . . . . . . . 6
Statement of Changes in Net Assets . . . . . . . . . . . 7
Financial Highlights . . . . . . . . . . . . . . . . . . 8
TREASURY MONEY PORTFOLIO
Statement of Assets and Liabilities . . . . . . . . . . . 9
Statement of Operations . . . . . . . . . . . . . . . . . 10
Statement of Changes in Net Assets . . . . . . . . . . . 11
Financial Highlights . . . . . . . . . . . . . . . . . . 12
Schedule of Portfolio Investments . . . . . . . . . . . . 13
TREASURY MONEY FUND
Notes to Financial Statements . . . . . . . . . . . . . . 15
TREASURY MONEY PORTFOLIO
Notes to Financial Statements . . . . . . . . . . . . . . 17
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Treasury Money
Fund may be obtained by calling or writing to Investors Fiduciary Trust Company
or Signature Broker-Dealer Services, Inc., the primary Servicing Agent and
Distributor, respectively, of BT Investment Funds:
BT INVESTMENT FUNDS
INVESTORS FIDUCIARY TRUST COMPANY
127 WEST 10TH STREET
KANSAS CITY, MO 64105
(800) 422-6577
BT INVESTMENT FUNDS
SIGNATURE BROKER-DEALER SERVICES, INC.
6 ST. JAMES AVENUE
BOSTON, MA 02116
(800) 545-1074
You may write to the Treasury Money Fund at the following address:
BT INVESTMENT FUNDS
6 ST. JAMES AVENUE
BOSTON, MA 02116
<PAGE> 45
TREASURY MONEY FUND 2
-----------------------------------------------------
INTRODUCTION FROM PRESIDENT
==============================================================================
August, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for the BT
Investment Treasury Money Fund. This Report provides you with an
investment overview as well as a financial summary of the Fund's
operations for the six months ended June 30, 1995. In addition, the Report
contains a Letter from the Investment Adviser detailing the factors that
affected the Fund's performance. Also presented in your Report is a pie
chart displaying diversification of Portfolio investments, financial
statements, financial highlights and a listing of the Portfolio's
holdings.
Looking ahead, we will continue to closely observe the economic conditions
and how they affect the financial markets.
We appreciate your ongoing support of the Treasury Money Fund and look
forward to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 46
TREASURY MONEY FUND 3
-----------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
==============================================================================
The first six months of 1995 were characterized by the Federal Reserve
Board's seeming success in slowing economic growth and in keeping a
confident grip on inflation. Although the strength of the dollar remains a
concern and some recent evidence, particularly in the interest rate
sensitive housing, materials, and auto sectors hint at modest
reacceleration, other economic indicators, including the currently
inverted yield curve, support the Fed's actions. So, too, does,
constructive discourse within Congress regarding the Federal deficit.
Events such as the financial stress in Mexico, which impaired exports, and
floods on the West Coast helped to contain growth as well.
While we experienced one additional Fed tightening of interest rates in
February, the lack of threat by both inflation and further rate hikes
after that led to a decline in rates without a change in monetary policy.
As of June 20, the yield spread between the 2-year Treasury and Fed Funds
was 24 basis points.
Despite all this positive evidence, we do not view the current trend as
unambiguously bullish for the short-term end of the fixed income markets.
We have, however, moved from a completely defensive posture at the end of
1994 to a neutral position, extending maturities by selectively seeking
relative value along the yield curve. The Fund's weighted average maturity
stands at 49 days.
On July 6, 1995, the Federal Reserve Board acted to cut official interest
rates by 0.25%. Nevertheless, we intend to maintain our current strategy
until we know the outcome of the August Federal Open Market Committee
meeting. If the Fed decides against lowering rates in August, the markets
are likely to express disappointment by selling bonds and driving rates
up. On the other hand, if the Fed acts as we expect, dropping the target
further, the market is likely to perform well.
At this time, we believe that extending maturity would add very little to
the Fund's yield. Moreover, because the market already expects lower
rates, as reflected in the inverted yield curve, there is little upside
and substantial risk if it is disappointed. In the meantime, we are taking
advantage of daily trading and relative value opportunities.
==============================================================================
ABOUT THE JOHN BURGESS
PORTFOLIO MANAGER Managing Director
Head of Reserve Management
- Responsible for Global Investment Management's
Reserve Management activities
- Formerly Treasurer & First Vice President at
Banca Della Svizzera Italiana (subsidiary of the
Swiss Bank Corporation Group) responsible for all
proprietary and customer trading for the Treasury
Division
- Ten years investment experience, including five
years at J.P. Morgan
- Joined Bankers Trust in 1995
- B.A. (Economics) -- Wesleyan University
<PAGE> 47
TREASURY MONEY FUND 4
-----------------------------------------------------
<TABLE>
<S> <C>
===========================================================================================
OBJECTIVE Seeks high current income consistent with liquidity
and preservation of capital.
- -------------------------------------------------------------------------------------------
INVESTMENT INSTRUMENTS Direct obligations of U.S. Treasury and repurchase
agreements collateralized by U.S. Treasury
obligations.
- -------------------------------------------------------------------------------------------
RATINGS S&P: AAAm
Moody's: Aaa
- -------------------------------------------------------------------------------------------
STATUS AT Seven day effective yield: 5.34%
JUNE 30, 1995 Average maturity: 49 days
Net Assets: $541.5 million
- -------------------------------------------------------------------------------------------
</TABLE>
DIVERSIFICATION OF PORTFOLIO
INVESTMENTS BY ASSET TYPE
as of June 30, 1995 (unaudited)
(percentages are based on market value)
[FIGURE 1]
Repurchase Agreements 46.05%
U.S. Treasury Bills 43.95%
U.S. Treasury Notes 10.00%
<PAGE> 48
TREASURY MONEY FUND 5
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
==============================================================================================================
June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- --------------------------------------------------------------------------------------------------------------
Investment in Treasury Money Portfolio, at Value $542,067,229
- --------------------------------------------------------------------------------------------------------------
Prepaid Expenses 5,646
- --------------------------------------------------------------------------------------------------------------
Total Assets 542,072,875
- --------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------
Due to Bankers Trust 265,767
- --------------------------------------------------------------------------------------------------------------
Dividends Payable 280,160
- --------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 10,230
- --------------------------------------------------------------------------------------------------------------
Total Liabilities 556,157
- --------------------------------------------------------------------------------------------------------------
NET ASSETS (Applicable to 541,470,473 Outstanding Shares of $0.001 Par Value
Per Share, Unlimited Number of Shares of Beneficial Interest Authorized) $541,516,718
==============================================================================================================
NET ASSET VALUE, Subscription and Redemption Price Per Share
($541,516,718/541,470,473 Shares) $ 1.00
==============================================================================================================
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 541,470
- --------------------------------------------------------------------------------------------------------------
Paid-in Capital 540,929,003
- --------------------------------------------------------------------------------------------------------------
Accumulated Net Realized Gain from Securities Transactions 46,245
- --------------------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $541,516,718
==============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 49
TREASURY MONEY FUND 6
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
==============================================================================================================
For the six months ended June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------------------
Income Allocated from Treasury Money Portfolio, net $17,063,263
- --------------------------------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------------------------------
Administration and Services Fee $1,660,824
- --------------------------------------------------------------------------------------------------------------
Professional Fees 2,658
- --------------------------------------------------------------------------------------------------------------
Shareholders Reports 11,534
- --------------------------------------------------------------------------------------------------------------
Registration Fees 7,362
- --------------------------------------------------------------------------------------------------------------
Trustees Fees 773
- --------------------------------------------------------------------------------------------------------------
Insurance 438
- --------------------------------------------------------------------------------------------------------------
Miscellaneous 4,129
- --------------------------------------------------------------------------------------------------------------
Total Expenses 1,687,718
- --------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (26,894) 1,660,824
- --------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 15,402,439
- --------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN FROM SECURITIES TRANSACTIONS 144,605
- --------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $15,547,044
==============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 50
TREASURY MONEY FUND 7
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
==============================================================================================================
For the six For the
months ended year ended
June 30 1995 December
(unaudited) 31, 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- --------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Net Investment Income $ 15,402,439 $ 21,320,179
- --------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 144,605 (101,079)
- --------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 15,547,044 21,219,100
- --------------------------------------------------------------------------------------------------------------
FROM DIVIDENDS
- --------------------------------------------------------------------------------------------------------------
Net Investment Income (15,402,439) (21,320,179)
- --------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Dividends (15,402,439) (21,320,179)
- --------------------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
(at Net Asset Value of $1.00 per share)
- --------------------------------------------------------------------------------------------------------------
Net Proceeds from Shares Sold 3,101,714,112 5,595,560,110
- --------------------------------------------------------------------------------------------------------------
Dividends Reinvested 15,386,998 17,890,608
- --------------------------------------------------------------------------------------------------------------
Value of Shares Redeemed (3,272,644,256) (5,559,579,511)
- --------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Transactions in
Shares of Beneficial Interest (155,543,146) 53,871,207
- --------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (155,398,541) 53,770,128
==============================================================================================================
NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Beginning of Period 696,915,259 643,145,131
- --------------------------------------------------------------------------------------------------------------
End of Period $ 541,516,718 $ 696,915,259
==============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 51
TREASURY MONEY FUND 8
-----------------------------------------------------
FINANCIAL HIGHLIGHTS
==============================================================================
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of
the periods indicated for the Treasury Money Fund.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
For the six
months ended For the year ended December 31,
June 30, 1995 --------------------------------------------------------------------
(unaudited) 1994 1993 1992 1991 1990
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Income from Investment Operations
Net Investment Income 0.03 0.03 0.02 0.03 0.05 0.07
Net Realized Gain (Loss) on Securities 0.00+ (0.00)+ 0.00+ 0.00+ 0.00+ 0.00+
----- ----- ----- ----- ----- -----
Total from Investment Operations 0.03 0.03 0.02 0.03 0.05 0.07
----- ----- ----- ----- ----- -----
Less Dividends and Distributions
Dividends from Net Investment Income (0.03) (0.03) (0.02) (0.03) (0.05) (0.07)
Distributions from Net Realized Gain
from Securities Transactions -- -- (0.00)+ (0.00)+ (0.00)+ (0.00)+
----- ----- ----- ----- ----- -----
Total Dividends and Distributions (0.03) (0.03) (0.02) (0.03) (0.05) (0.07)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN 2.56% 3.40% 2.43% 3.10% 5.30% 7.61%
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income
to Average Net Assets 5.10%* 3.36% 2.39% 2.90% 5.11% 7.30%
Ratio of Expenses to Average Net
Assets, Including Expenses of the
Treasury Money Portfolio 0.75%* 0.75% 0.75% 0.75% 0.75% 0.75%
Decrease Reflected in Above Expense Ratio
Due to Absorption of Expenses
by Bankers Trust 0.02%* 0.02% 0.01% 0.05% 0.00% 0.01%
Net Assets, End of Period (000's omitted) $541,517 $696,915 $643,145 $1,302,365 $539,260 $473,913
</TABLE>
+ Less than $0.01 per share
* Annualized
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 52
TREASURY MONEY PORTFOLIO 9
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
==============================================================================================================
June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- --------------------------------------------------------------------------------------------------------------
Investments, at Value (including Repurchase Agreements amounting to $344,367,347) $747,833,393
- --------------------------------------------------------------------------------------------------------------
Interest Receivable 1,140,937
- --------------------------------------------------------------------------------------------------------------
Prepaid Expenses 12,377
- --------------------------------------------------------------------------------------------------------------
Total Assets 748,986,707
- --------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------
Due to Bankers Trust 117,041
- --------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 34,164
- --------------------------------------------------------------------------------------------------------------
Total Liabilities 151,205
- --------------------------------------------------------------------------------------------------------------
NET ASSETS $748,835,502
==============================================================================================================
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Paid-in Capital $748,835,502
- --------------------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $748,835,502
==============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 53
TREASURY MONEY PORTFOLIO 10
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
==============================================================================================================
For the six months ended June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------------------
Interest $22,752,157
- --------------------------------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------------------------------
Advisory Fee $584,232
- --------------------------------------------------------------------------------------------------------------
Administration and Services Fee 194,744
- --------------------------------------------------------------------------------------------------------------
Professional Fees 18,022
- --------------------------------------------------------------------------------------------------------------
Trustees Fees 732
- --------------------------------------------------------------------------------------------------------------
Insurance 1,318
- --------------------------------------------------------------------------------------------------------------
Miscellaneous 20,483
- --------------------------------------------------------------------------------------------------------------
Total Expenses 819,531
- --------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (40,555) 778,976
- --------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 21,973,181
- --------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN FROM SECURITIES TRANSACTIONS 186,095
- --------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $22,159,276
==============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 54
TREASURY MONEY PORTFOLIO 11
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
==============================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- --------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Net Investment Income $ 21,973,181 $ 30,804,929
- --------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 186,095 (124,833)
- --------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 22,159,276 30,680,096
- --------------------------------------------------------------------------------------------------------------
FROM CAPITAL TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 4,048,962,541 6,929,406,671
- --------------------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (4,205,060,907) (6,866,790,869)
- --------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Capital Transactions (156,098,366) 62,615,802
- --------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (133,939,090) 93,295,898
==============================================================================================================
NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Beginning of Period 882,774,592 789,478,694
- --------------------------------------------------------------------------------------------------------------
End of Period $ 748,835,502 $ 882,774,592
==============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 55
TREASURY MONEY PORTFOLIO 12
-----------------------------------------------------
FINANCIAL HIGHLIGHTS
==============================================================================
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Treasury Money Portfolio.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
For the period
July 23, 1990
For the six (Commencement
months ended For the year ended December 31, of Operations)
June 30, 1995 ------------------------------------------------- to December
(unaudited) 1994 1993 1992 1991 31, 1990
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income to
Average Net Assets 5.64%* 3.93% 2.93% 3.44% 5.58% 7.53%*
Ratio of Expenses to Average Net Assets 0.20%* 0.20% 0.20% 0.22% 0.25% 0.25%*
Decrease Reflected in Above Ratio of
Expenses to Average Net Assets
Due to Absorption of Expenses
by Bankers Trust 0.01%* 0.01% 0.01% 0.01% 0.01% 0.01%*
Net Assets, End of Period (000's omitted) $748,836 $882,775 $789,479 $1,408,114 $671,138 $531,713
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 56
TREASURY MONEY PORTFOLIO 13
-----------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
==================================================================================================================================
June 30, 1995 (unaudited)
PRINCIPAL
AMOUNT DESCRIPTION VALUE
==================================================================================================================================
<S> <C>
UNITED STATES TREASURY BILLS - 43.89%
- ----------------------------------------------------------------------------------------------------------------------------------
$ 25,000,000 5.72%, 7/6/95 $ 24,980,139
- ----------------------------------------------------------------------------------------------------------------------------------
30,000,000 6.06%, 8/10/95 29,798,167
- ----------------------------------------------------------------------------------------------------------------------------------
20,000,000 5.78%, 8/31/95 19,804,122
- ----------------------------------------------------------------------------------------------------------------------------------
93,500,000 5.38%, 9/28/95 92,255,628
- ----------------------------------------------------------------------------------------------------------------------------------
65,000,000 5.42%, 10/19/95 63,924,063
- ----------------------------------------------------------------------------------------------------------------------------------
25,000,000 5.67%, 11/2/95 24,511,750
- ----------------------------------------------------------------------------------------------------------------------------------
45,000,000 5.75%, 11/9/95 44,059,165
- ----------------------------------------------------------------------------------------------------------------------------------
30,000,000 5.47%, 11/24/95 29,334,584
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL UNITED STATES TREASURY BILLS (COST $328,667,618) $328,667,618
==================================================================================================================================
UNITED STATES TREASURY NOTES - 9.99%
- ----------------------------------------------------------------------------------------------------------------------------------
$ 25,000,000 4.625%, 8/15/95 $ 24,950,562
- ----------------------------------------------------------------------------------------------------------------------------------
50,000,000 3.875%, 8/31/95 49,847,866
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL UNITED STATES TREASURY NOTES (COST $74,798,428) $ 74,798,428
==================================================================================================================================
REPURCHASE AGREEMENTS - 45.99%
- ----------------------------------------------------------------------------------------------------------------------------------
$ 80,000,000 Repurchase Agreement with First Boston, Dated 6/30/95, 6.15%,
Principal and Interest in the Amount of $80,013,677, Due 7/3/95,
(Collateralized by U.S. Treasury Bills, Par Value of $82,975,000,
Due 10/12/95, Value of $83,947,508) $ 80,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
75,000,000 Repurchase Agreement with Fuji Bank Ltd., Dated 6/30/95, 6.20%,
Principal and Interest in the Amount of $75,012,917, Due 7/3/95,
(Collateralized by U.S. Treasury Strips, Par Value of $47,910,000,
Due 2/15/96, Value of $47,187,519 and $37,531,000, Due 2/15/99,
Value of $30,213,098) 75,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
100,000,000 Repurchase Agreement with Swiss Bank, Dated 6/30/95, 6.15%,
Principal and Interest in the Amount of $100,017,083, Due 7/3/95,
(Collateralized by U.S. Treasury Notes, Par Value $25,000,000, 9.00%,
Due 5/15/98, Value of $27,308,594, $25,000,000, 5.125%, Due 4/30/98,
Value of $24,728,006, $24,220,000, 5.625%, Due 1/31/98, Value of $24,644,498
and $24,475,000, 6.00%, Due 6/30/96, Value of $25,274,262) 100,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 57
TREASURY MONEY PORTFOLIO 14
-----------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
==================================================================================================================================
June 30, 1995 (unaudited)
PRINCIPAL
AMOUNT DESCRIPTION VALUE
==================================================================================================================================
<S> <C> <C>
$ 80,000,000 Repurchase Agreement with Union Bank of Switzerland, Dated 6/30/95,
6.10%, Principal and Interest in the Amount of $80,013,556, Due 7/3/95,
(Collateralized by U.S. Treasury Notes, Par Value of $50,000,000, 7.875%,
Due 8/15/01, Value of $56,069,967 and $25,660,000, 5.50%, Due 4/30/96,
Value of $25,841,816) $ 80,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
9,367,347 Repurchase Agreement with Union Bank of Switzerland, Dated 6/30/95,
6.00%, Principal and Interest in the Amount of $9,368,908, Due 7/3/95,
(Collateralized by U.S. Treasury Note, Par Value of $6,965,000, 11.875%,
Due 11/15/03, Value of $9,577,549) 9,367,347
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS (Cost $344,367,347) $344,367,347
==================================================================================================================================
TOTAL INVESTMENTS (Cost $747,833,393) 99.87% $747,833,393
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets in Excess of Liabilities 0.13% 1,002,109
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS 100.00% $748,835,502
==================================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 58
TREASURY MONEY FUND 15
-----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
==============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on July 21, 1986, as an unincorporated
business trust under the laws of the Commonwealth of Massachusetts. The
Treasury Money Fund (the "Fund") is one of the investment funds offered to
investors by the Trust. The Fund commenced operations and began offering shares
of beneficial interest on November 1, 1988. Through July 22, 1990, the Fund
invested directly in securities. After that date, the Fund began investing
substantially all of its investable assets in the Treasury Money Portfolio (the
"Portfolio"). The Portfolio is an open-end management investment company
registered under the Act. The Fund seeks to achieve its investment objectives
by investing all of its investable assets in the Portfolio. The value of such
investment in the Portfolio reflects the Fund's proportionate interest in the
net assets of the Portfolio. At June 30, 1995, the Fund's investment was
approximately 72% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns interest income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions of the Portfolio are allocated pro
rata among the investors in the Portfolio at the time of such determination.
C. Dividends
It is the Fund's policy to declare dividends daily, payable to shareholders of
record as of 12:00 noon (E.S.T.) from net investment income, and to pay these
dividends monthly. Dividends payable to shareholders are recorded by the Fund
on the ex-dividend date, which is the same as the declaration date.
Distributions of net realized short-term and long-term capital gains, if any,
earned by the Fund will be made annually to the extent they are not offset by
any capital loss carryforwards.
D. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
E. Other
The Trust accounts separately for the assets, liabilities, and operations of
the Fund. Expenses directly attributable to the Fund are charged to that Fund,
while expenses which are attributable to all of the Trust's funds are allocated
among them.
<PAGE> 59
TREASURY MONEY FUND 16
-----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
==============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.55 of 1% of the Fund's average daily net assets.
For the six months ended June 30, 1995, this fee aggregated $1,660,824.
The Trust has entered into a Distribution Agreement with Signature
Broker-Dealer Services, Inc. ("Signature"). Under the Distribution Agreement
with the Trust, pursuant to Rule 12b-1 of the 1940 Act, Signature may seek
reimbursement, at an annual rate not exceeding 0.20 of 1% of the Fund's average
daily net assets, for expenses incurred in connection with any activities
primarily intended to result in the sale of the Fund's shares. For the six
months ended June 30, 1995, there were no reimbursable expenses incurred under
this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 0.55 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio and
0.75 of 1% of the average daily net assets of the Fund, including expenses of
the Portfolio. For the six months ended June 30, 1995, expenses of the Fund
have been reduced $26,894.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Fund. Similarly, none of the Fund's
officers received compensation from the Fund.
NOTE 3 - CAPITAL LOSS CARRYFORWARD
At December 31, 1994, accumulated net realized capital loss carryforwards
available as a reduction against future net realized capital gains aggregated
$101,079, which will expire in 2003.
<PAGE> 60
TREASURY MONEY PORTFOLIO 17
-----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
==============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. Organization
The Treasury Money Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on March 26, 1990,
as an unincorporated trust under the laws of New York and commenced operations
on July 23, 1990. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
Investments are stated at value, as that term is defined in the Act and the
published rules and regulations thereunder. Pursuant to Rule 2a-7 of the Act,
the Portfolio utilizes the amortized cost method to determine 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 the
difference between the principal amount due at maturity and cost. In the event
that a deviation of 1/2 of 1% or more exists between the Portfolio's net asset
value on the basis of amortized cost and the net asset value calculated by
using available market quotations or an appropriate substitute, the Trustees
will promptly consider what action, if any, should be initiated, and where the
Trustees believe the extent of deviation may result in material dilution or
other unfair results to investors and shareholders, the Trustees shall take
such action to eliminate or reduce, to the extent reasonably practicable such
dilution or unfair results.
C. Security Transactions and Investment Income
Security transactions are accounted for on a trade date basis (date the order
to buy or sell is executed). Interest income is recorded on the accrual basis
and includes amortization of premium and discount on investments. Realized
gains and losses from securities transactions are recorded on the identified
cost basis.
The Portfolio may enter into repurchase agreements with financial institutions
deemed to be creditworthy by the Portfolio's Investment Adviser, subject to the
seller's agreement to repurchase and the Portfolio's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Portfolio's custodian, and
pursuant to the terms of the repurchase agreement must have an aggregate market
value greater than or equal to the repurchase price plus accrued interest at
all times. If the value of the underlying securities falls below the value of
the repurchase price plus accrued interest, the Portfolio will require the
seller to deposit additional collateral by the next business day. If the
request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Portfolio maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller.
<PAGE> 61
TREASURY MONEY PORTFOLIO 18
-----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
=============================================================================
D. Investment Income
The Portfolio determines its net investment income (i.e., income other than net
realized long-term and short-term capital gains) on each valuation day and
allocates all such income as well as realized gains and losses from security
transactions pro rata among the investors in the Portfolio at the time of such
determination.
E. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required. The cost of securities in the Portfolio for federal income tax
purposes is the same as for financial reporting purposes.
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.05 of 1% of the Portfolio's average daily
net assets. For the six months ended June 30, 1995, this fee aggregated
$194,744.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at the annual rate of 0.15 of 1% of the
Portfolio's average daily net assets. For the six months ended June 30, 1995,
this fee aggregated $584,232.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.20 of 1% of the
average daily net assets of the Portfolio. For the six months ended June 30,
1995, expenses of the Portfolio have been reduced $40,555.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
<PAGE> 62
[This Page Intentionally Left Blank]
<PAGE> 63
BT INVESTMENT FUNDS
TAX FREE
MONEY
FUND
SEMI-ANNUAL REPORT
JUNE 30, 1995
<PAGE> 64
TAX FREE MONEY FUND 1
-----------------------------------------------------
TABLE OF CONTENTS
===============================================================================
<TABLE>
<S> <C>
INTRODUCTION FROM PRESIDENT . . . . . . . . . . . . . 2
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER . . . 3
TAX FREE MONEY FUND . . . . . . . . . . . . . . . . .
Statement of Assets and Liabilities . . . . . . . 5
Statement of Operations . . . . . . . . . . . . . 6
Statement of Changes in Net Assets . . . . . . . 7
Financial Highlights . . . . . . . . . . . . . . 8
TAX FREE MONEY PORTFOLIO
Statement of Assets and Liabilities . . . . . . . 9
Statement of Operations . . . . . . . . . . . . . 10
Statement of Changes in Net Assets . . . . . . . 11
Financial Highlights . . . . . . . . . . . . . . 12
Schedule of Portfolio Investments . . . . . . . . 13
TAX FREE MONEY FUND
Notes to Financial Statements . . . . . . . . . . 19
TAX FREE MONEY PORTFOLIO
Notes to Financial Statements . . . . . . . . . . 21
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Tax Free Money
Fund may be obtained by calling or writing to Investors Fiduciary Trust Company
or Signature Broker-Dealer Services, Inc., the primary Servicing Agent and
Distributor, respectively, of BT Investment Funds:
BT INVESTMENT FUNDS
INVESTORS FIDUCIARY TRUST COMPANY
127 WEST 10TH STREET
KANSAS CITY, MO 64105
(800) 422-6577
BT INVESTMENT FUNDS
SIGNATURE BROKER-DEALER SERVICES, INC.
6 ST. JAMES AVENUE
BOSTON, MA 02116
(800) 545-1074
You may write to the Tax Free Money Fund at the following address:
BT INVESTMENT FUNDS
6 ST. JAMES AVENUE
BOSTON, MA 02116
<PAGE> 65
TAX FREE MONEY FUND 2
-----------------------------------------------------
INTRODUCTION FROM PRESIDENT
===============================================================================
August, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for BT
Investment Funds Tax Free Money Fund. This Report provides you with an
investment overview as well as a financial summary of the Fund's operations
for the six months ended June 30, 1995. In addition, the report contains a
Letter from the Investment Adviser detailing the factors that affected the
Fund's performance. Also presented in your Report is a pie chart displaying
diversification of Portfolio investments, financial statements, financial
highlights and a listing of the Portfolio's holdings.
Looking ahead, we will continue to closely observe the economic conditions
and how they affect the financial markets.
We appreciate your ongoing support of the Tax Free Money Fund and look
forward to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 66
TAX FREE MONEY FUND 3
------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
===============================================================================
The Tax Free Money Fund tightly tracked its benchmark, the Donoghue Tax
Free Money Index, throughout the semi-annual period ended June 30, 1995,
even outperforming it for the second quarter.
Throughout most of the first six months of 1995, the yield curve at the
short-term end was flat, due to a reduced supply of short-term municipal
paper. In fact, the spread between 3-month and 1-year paper was only 10
basis points, or 0.10%.
When the Federal Reserve Board raised interest rates in February, we
took advantage by extending the Fund's average maturity from approximately
50 days to approximately 56 days. Then, during the comparatively steady but
flat yield curve of the next several months, we slightly shortened the
Fund's average maturity to 48 days, in part through short daily floaters,
which, for most of the period, remained cheaper than longer-term notes. Cash
flows into the Fund were relatively stable throughout.
On July 6, 1995, the Federal Reserve Board cut official interest rates
by 0.25%. We anticipate continued easing in the Board's monetary policy and
lower interest rates. The yield curve should also steepen as we move into
the second half of the year due to a large issuance of one-year municipal
paper. Once spreads widen to 30 to 40 basis points, we anticipate beginning
to extend the Fund's average maturity.
We intend to continue our conservative strategies designed to provide
high current income exempt from Federal taxes to the extent consistent with
liquidity and capital preservation.
===============================================================================
ABOUT THE JERRY SAMET
PORTFOLIO MANAGER Assistant Treasurer
- Six years of investment experience
- Joined Bankers Trust in 1988
- B.A.--Queens College of New York
<PAGE> 67
TAX FREE MONEY FUND 4
------------------------------------------------------
===============================================================================
OBJECTIVE Seeks high current income exempt from Federal taxes
consistent with liquidity and preservation of
capital.
- -------------------------------------------------------------------------------
INVESTMENT Wide range of securities issued by states and their
INSTRUMENTS political subdivisions, authorities, agencies and
instrumentalities providing income free of Federal
income taxes.
- -------------------------------------------------------------------------------
STATUS AT Seven day effective yield: 3.64%
JUNE 30, 1995 Average maturity: 53 days
(unaudited) Net Assets: $107.7 million
- -------------------------------------------------------------------------------
DIVERSIFICATION OF PORTFOLIO
INVESTMENTS BY ASSET TYPE
as of June 30, 1995 (unaudited)
(percentages are based on market value)
[FIGURE 1]
Variable Rate Demand Notes 66.42%
Revenue Notes and Bonds 8.65%
General Obligation Bonds 5.74%
General Obligation Notes 16.00%
Tax-Exempt Commercial Paper 3.19%
<PAGE> 68
TAX FREE MONEY FUND 5
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
=====================================================================================================
June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------
Investment in Tax Free Money Portfolio, at Value $107,746,798
- -----------------------------------------------------------------------------------------------------
Prepaid Expenses 5,234
- -----------------------------------------------------------------------------------------------------
Total Assets 107,752,032
- -----------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------
Due to Bankers Trust 20,790
- -----------------------------------------------------------------------------------------------------
Dividends Payable 231,056
- -----------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 15,562
- -----------------------------------------------------------------------------------------------------
Total Liabilities 267,408
- -----------------------------------------------------------------------------------------------------
NET ASSETS (Applicable to 107,526,924 Outstanding Shares of $0.001 Par Value
Per Share, Unlimited Number of Shares of Beneficial Interest Authorized) $107,484,624
=====================================================================================================
NET ASSET VALUE, Subscription and Redemption Price Per Share
($107,484,624/107,526,924 Shares) $ 1.00
=====================================================================================================
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 107,527
- -----------------------------------------------------------------------------------------------------
Paid-in Capital 107,419,397
- -----------------------------------------------------------------------------------------------------
Accumulated Net Realized (Loss) from Securities Transactions (42,300)
- -----------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $107,484,624
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 69
TAX FREE MONEY FUND 6
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
=====================================================================================================
For the six months ended June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------
Income Allocated from Tax Free Money Portfolio, net $2,222,096
- -----------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------
Administration and Services Fee $313,941
- -----------------------------------------------------------------------------------------------------
Shareholders Reports 12,374
- -----------------------------------------------------------------------------------------------------
Registration Fees 7,550
- -----------------------------------------------------------------------------------------------------
Professional Fees 2,108
- -----------------------------------------------------------------------------------------------------
Trustees Fees 773
- -----------------------------------------------------------------------------------------------------
Insurance 438
- -----------------------------------------------------------------------------------------------------
Miscellaneous 415
- -----------------------------------------------------------------------------------------------------
Total Expenses 337,599
- -----------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (23,658) 313,941
- -----------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,908,155
- -----------------------------------------------------------------------------------------------------
NET REALIZED (LOSS) FROM SECURITIES TRANSACTIONS (26,536)
- -----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,881,619
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 70
TAX FREE MONEY FUND 7
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
=====================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- -----------------------------------------------------------------------------------------------------
FROM OPERATIONS
- -----------------------------------------------------------------------------------------------------
Net Investment Income $ 1,908,155 $ 2,696,576
- -----------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (26,536) (12,896)
- -----------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 1,881,619 2,683,680
- -----------------------------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS
- -----------------------------------------------------------------------------------------------------
Net Investment Income (1,908,155) (2,696,576)
- -----------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions -- (2,198)
- -----------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Dividends and Distributions (1,908,155) (2,698,774)
- -----------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
(at Net Asset Value of $1.00 per share)
- -----------------------------------------------------------------------------------------------------
Net Proceeds from Shares Sold 347,694,923 641,985,691
- -----------------------------------------------------------------------------------------------------
Dividends and Distributions Reinvested 455,157 662,604
- -----------------------------------------------------------------------------------------------------
Value of Shares Redeemed (350,682,344) (643,875,272)
- -----------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Transactions in
Shares of Beneficial Interest (2,532,264) (1,226,977)
- -----------------------------------------------------------------------------------------------------
TOTAL (DECREASE) IN NET ASSETS (2,558,800) (1,242,071)
=====================================================================================================
NET ASSETS
- -----------------------------------------------------------------------------------------------------
Beginning of Period 110,043,424 111,285,495
- -----------------------------------------------------------------------------------------------------
End of Period $ 107,484,624 $ 110,043,424
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 71
TAX FREE MONEY FUND 8
-----------------------------------------------------
FINANCIAL HIGHLIGHTS
===============================================================================
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of
the periods indicated for the Tax Free Money Fund.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
For the six
months ended For the year ended December 31,
June 30, 1995 -------------------------------------------------------
(unaudited) 1994 1993 1992 1991 1990
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Income from Investment Operations
Net Investment Income 0.02 0.02 0.02 0.03 0.04 0.05
Net Realized Gain (Loss) from Securities
Transactions (0.00)+ (0.00)+ 0.00+ (0.00)+ (0.00)+ --
----- ----- ----- ----- ----- -----
Total from Investment Operations 0.02 0.02 0.02 0.03 0.04 0.05
----- ----- ----- ----- ----- -----
Less Dividends and Distributions
Dividends from Net Investment Income (0.02) (0.02) (0.02) (0.03) (0.04) (0.05)
Distributions from Net Realized Gain
from Securities Transactions -- (0.00)+ -- -- -- --
----- ----- ----- ----- ----- -----
Total Dividends and Distributions (0.02) (0.02) (0.02) (0.03) (0.04) (0.05)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN 1.67% 2.27% 1.97% 2.69% 4.29% 5.59%
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income to
Average Net Assets 3.34%* 2.21% 1.95% 2.66% 4.20% 5.45%
Ratio of Expenses to Average Net Assets,
Including Expenses of the Tax Free
Money Portfolio 0.75%* 0.75% 0.75% 0.75% 0.75% 0.75%(1)
Decrease Reflected in Above Expense Ratio
Due to Absorption of Expenses by
Bankers Trust 0.07%* 0.08% 0.05% 0.05% 0.03% 0.04%(1)
Net Assets, End of Period (000's omitted) $107,485 $110,043 $111,285 $151,473 $143,559 $142,199
</TABLE>
* Annualized
+ Less than $0.01 per share.
(1) For the indicated year, ratios did not include any Tax Free Money Portfolio
expenses and any voluntary absorption of the Portfolio's expenses by Bankers
Trust, since the Fund did not begin investing its investable assets in the
Tax Free Money Portfolio until February 19, 1991.
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 72
TAX FREE MONEY PORTFOLIO 9
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
=====================================================================================================
June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------
Investments, at Value $109,794,180
- -----------------------------------------------------------------------------------------------------
Receivable for Securities Sold 4,289,724
- -----------------------------------------------------------------------------------------------------
Interest Receivable 951,441
- -----------------------------------------------------------------------------------------------------
Prepaid Expenses and Other Assets 1,188
- -----------------------------------------------------------------------------------------------------
Due from Bankers Trust 1,454
- -----------------------------------------------------------------------------------------------------
Total Assets 115,037,987
- -----------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------
Due to Custodian 47,033
- -----------------------------------------------------------------------------------------------------
Payable for Securities Purchased 7,228,790
- -----------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 15,253
- -----------------------------------------------------------------------------------------------------
Total Liabilities 7,291,076
- -----------------------------------------------------------------------------------------------------
NET ASSETS $107,746,911
=====================================================================================================
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------
Paid-in Capital $107,746,911
- -----------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $107,746,911
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 21 and 22
<PAGE> 73
TAX FREE MONEY PORTFOLIO 10
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
=====================================================================================================
For the six months ended June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------
Interest $2,336,678
- -----------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------
Advisory Fee $ 85,794
- -----------------------------------------------------------------------------------------------------
Administration and Services Fee 28,598
- -----------------------------------------------------------------------------------------------------
Professional Fees 14,494
- -----------------------------------------------------------------------------------------------------
Insurance 1,318
- -----------------------------------------------------------------------------------------------------
Trustees Fees 732
- -----------------------------------------------------------------------------------------------------
Miscellaneous 583
- -----------------------------------------------------------------------------------------------------
Total Expenses 131,519
- -----------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (17,127) 114,392
- -----------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,222,286
- -----------------------------------------------------------------------------------------------------
NET REALIZED (LOSS) FROM SECURITIES TRANSACTIONS (26,541)
- -----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $2,195,745
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 21 and 22
<PAGE> 74
TAX FREE MONEY PORTFOLIO 11
-----------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
=====================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- -----------------------------------------------------------------------------------------------------
FROM OPERATIONS
- -----------------------------------------------------------------------------------------------------
Net Investment Income $ 2,222,286 $ 3,366,308
- -----------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (26,541) (12,897)
- -----------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 2,195,745 3,353,411
- -----------------------------------------------------------------------------------------------------
FROM CAPITAL TRANSACTIONS
- -----------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 347,694,923 642,000,791
- -----------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (352,551,411) (646,550,579)
- -----------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Capital Transactions (4,856,488) (4,549,788)
- -----------------------------------------------------------------------------------------------------
TOTAL (DECREASE) IN NET ASSETS (2,660,743) (1,196,377)
=====================================================================================================
NET ASSETS
- -----------------------------------------------------------------------------------------------------
Beginning of Period 110,407,654 111,604,031
- -----------------------------------------------------------------------------------------------------
End of Period $ 107,746,911 $ 110,407,654
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 21 and 22
<PAGE> 75
TAX FREE MONEY PORTFOLIO 12
-----------------------------------------------------
FINANCIAL HIGHLIGHTS
==============================================================================
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Tax Free Money Portfolio.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
For the period
For the six For the year ended February 19, 1991
months ended December 31, (Commencement
June 30, 1995 ------------------------------- of Operations) to
(unaudited) 1994 1993 1992 December 31, 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income
to Average Net Assets 3.89%* 2.76% 2.50% 3.18% 4.59%*
Ratio of Expenses to Average Net Assets 0.20%* 0.20% 0.20% 0.22% 0.25%*
Decrease Reflected in Above Ratio of
Expenses to Average Net Assets Due to
Absorption of Expenses by Bankers Trust 0.03%* 0.03% 0.02% 0.02% 0.02%*
Net Assets, End of Period (000's omitted) $107,747 $110,408 $111,604 $157,634 $143,942
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 21 and 22
<PAGE> 76
TAX FREE MONEY PORTFOLIO 13
-----------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
===================================================================================================================================
June 30, 1995 (unaudited)
RATING (c)
- ------------------------- PRINCIPAL
S&P / MOODY / FITCH AMOUNT DESCRIPTION (b) VALUE
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
ARIZONA - 3.53%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ $2,000,000 Chandler, Arizona, I.D.A., (LOC: National Westminster),
Variable Rate Monthly Demand Note, 3.60%, 12/15/09 (a) $2,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ P1 1,800,000 Pinal County, Arizona, I.D.A., P.C.R., (LOC: National Westminster),
Variable Rate Daily Demand Note, 4.20%, 12/1/09 (a) 1,800,000
- -----------------------------------------------------------------------------------------------------------------------------------
3,800,000
===================================================================================================================================
CALIFORNIA - 3.92%
- -----------------------------------------------------------------------------------------------------------------------------------
VMIG1 4,200,000 Los Angeles County, California, TRANS, (LOC: Credit
Suisse, Morgan Guaranty, Union Bank of Switzerland,
Swiss Bank, West Deutsche Bank), 4.50%, 7/1/96 4,228,140
===================================================================================================================================
COLORADO - 4.08%
- -----------------------------------------------------------------------------------------------------------------------------------
SP1+ 2,500,000 Arapahoe County, Colorado, Highway Revenue, (LOC: Union
Bank of Switzerland), 4.45%, 8/31/26, Optional Put 8/31/95 2,500,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ P1 1,900,000 Lakewood, Colorado, Moritz and Diamond Head, (LOC: Dai-Ichi
Kangyo), Variable Rate Monthly Demand Note, 4.25%, 10/1/07 1,900,000
- -----------------------------------------------------------------------------------------------------------------------------------
4,400,000
===================================================================================================================================
CONNECTICUT - 3.25%
- -----------------------------------------------------------------------------------------------------------------------------------
AA- Aa AA 500,000 Connecticut State G.O., Economic Recovery Notes,
5.40%, 12/15/95 502,080
- -----------------------------------------------------------------------------------------------------------------------------------
SP1+ VMIG1 3,000,000 Connecticut Unemployment Compensation Revenue
Bonds, (FGIC Insured), 3.90%, 11/15/01, Mandatory Put 7/1/96 3,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
3,502,080
===================================================================================================================================
DISTRICT OF COLUMBIA - 9.00%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 4,600,000 District of Columbia, G.O., (LOC: Landesbank Hessen),
Variable Rate Daily Demand Note, 4.85%, 6/1/03 (a) 4,600,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 3,400,000 District of Columbia, G.O., (LOC: Sanwa Bank)
Variable Rate Daily Demand Note, 4.85%, 6/1/03 (a) 3,400,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 1,700,000 District of Columbia, G.O., (LOC: Westdeutsche Landesbank),
Variable Rate Daily Demand Note, 4.85%, 6/1/03 (a) 1,700,000
- -----------------------------------------------------------------------------------------------------------------------------------
9,700,000
===================================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 21 and 22
<PAGE> 77
TAX FREE MONEY PORTFOLIO 14
-----------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
===================================================================================================================================
June 30, 1995 (unaudited)
RATING (c)
- ------------------------- PRINCIPAL
S&P / MOODY / FITCH AMOUNT DESCRIPTION (b) VALUE
===================================================================================================================================
<S> <C> <C> <C> <C>
FLORIDA - 5.29%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ $ 200,000 Dade County, Florida, Housing Finance Authority, Bermuda Villas,
Series K, (LOC: John Hancock Insurance), Variable Rate Weekly
Demand Note, 4.45%, 2/1/05 (a) $ 200,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ 600,000 Dade County, Florida, Housing Finance Authority, Cutler Club
Apartments, Series J, (LOC: John Hancock Insurance), Variable
Rate Weekly Demand Note, 4.45%, 2/1/05 (a) 600,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ 3,000,000 Dade County, Florida, Housing Finance Authority, Nob Hill
Project, Series 1, (LOC: John Hancock Insurance), Variable Rate
Weekly Demand Note, 4.45%, 8/1/05 (a) 3,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,100,000 Florida Housing Finance Agency, Lakes of Northdale, (MBIA
Insured), Variable Rate Monthly Demand Note, 4.00%, 6/1/07 (a) 1,100,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1 300,000 Florida Housing Finance Agency, (LOC: Wells Fargo),
Variable Rate Monthly Demand Note, 4.10%, 4/1/07 (a) 300,000
- -----------------------------------------------------------------------------------------------------------------------------------
VMIG1 500,000 Palm Beach County, Florida, Water and Sewer Revenue, (LOC:
Sanwa Bank), Variable Rate Daily Demand Note, 4.20%, 10/1/11 (a) 500,000
- -----------------------------------------------------------------------------------------------------------------------------------
5,700,000
===================================================================================================================================
GEORGIA - 0.93%
- -----------------------------------------------------------------------------------------------------------------------------------
A1 VMIG1 1,000,000 Fulton County, Georgia, (LOC: Sumitomo Bank), Variable
Rate Weekly Demand Note, 4.45%, 8/1/16 (a) 1,000,000
===================================================================================================================================
ILLINOIS - 4.96%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ 1,300,000 Burbank, Illinois, I.D.R., (LOC: Canadian Imperial Bank),
Variable Rate Monthly Demand Note, 4.00%, 9/15/24 (a) 1,300,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 1,500,000 Chicago, Illinois, G.O., Tax Exempt Commercial Paper, (LOC:
Union Bank of Switzerland), 4.15%, 10/31/95, Mandatory Put 7/19/95 1,500,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ MIG1 2,540,000 Chicago, Illinois, G.O., Tender Notes, (LOC: Morgan Guaranty),
4.60%, 10/31/96, Mandatory Put 10/31/95 2,540,000
- -----------------------------------------------------------------------------------------------------------------------------------
5,340,000
===================================================================================================================================
IOWA - 6.58%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ 2,700,000 Des Moines, Iowa, C.D.A., East Grand Office Park Project,
(Guaranteed by Principal Financial Group), Variable Rate Monthly
Demand Note, 4.25%, 4/1/15 (a) 2,700,000
- -----------------------------------------------------------------------------------------------------------------------------------
VMIG1 1,500,000 Osceola, Iowa, Babson Brothers Company Project, (LOC: Bank of New
York), Variable Rate Weekly Demand Note, 4.45%, 12/1/96 (a) 1,500,000
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 21 and 22
<PAGE> 78
TAX FREE MONEY PORTFOLIO 15
-----------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
===================================================================================================================================
June 30, 1995 (unaudited)
RATING (c)
- ------------------------- PRINCIPAL
S&P / MOODY / FITCH AMOUNT DESCRIPTION (b) VALUE
===================================================================================================================================
<S> <C> <C> <C> <C>
A1+ $2,895,000 Urbandale, Iowa, Meredith Drive Associates, (Guaranteed
by Principal Financial Group), Variable Rate Monthly Demand
Note, 4.25%, 11/1/15 (a) $2,895,000
- -----------------------------------------------------------------------------------------------------------------------------------
7,095,000
===================================================================================================================================
KANSAS - 2.51%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ 1,400,000 Fairway, Kansas, I.D.R., J.C. Nichols Project, (Guaranteed by
Principal Financial Group), Variable Rate Monthly Demand
Note, 4.25%, 11/1/14 (a) 1,400,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ 1,300,000 Prairie Village, Kansas, Multi-Family Revenue, J.C. Nichols Project,
(Guaranteed by Bankers Life), Variable Rate
Monthly Demand Note, 4.25%, 12/1/15 (a) 1,300,000
- -----------------------------------------------------------------------------------------------------------------------------------
2,700,000
===================================================================================================================================
LOUISIANA - 0.93%
- -----------------------------------------------------------------------------------------------------------------------------------
A1 1,000,000 Jefferson Parish, Louisiana, Hospital Revenue, West Jefferson
Medical Center, (LOC: Citibank), Variable Rate Weekly
Demand Note, 4.45%, 1/1/26 (a) 1,000,000
===================================================================================================================================
MINNESOTA - 2.04%
- -----------------------------------------------------------------------------------------------------------------------------------
A1 2,200,000 St. Paul, Minnesota, Housing and Redevelopment Agency,
(LOC: Sumitomo Bank), Variable Rate Monthly Demand Note,
3.95%, 12/1/12 (a) 2,200,000
===================================================================================================================================
MISSOURI - 3.25%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ 2,200,000 Kansas City, Missouri, I.D.A., Coach House Project, (Guaranteed
by Principal Financial Group), Variable Rate Monthly Demand
Note, 4.25%, 12/1/15 (a) 2,200,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ 1,300,000 St. Louis, Missouri, I.D.A., Cedar Run Apartments Project, (LOC:
John Hancock Insurance), Variable Rate Weekly Demand Note,
4.55%, 2/1/07 (a) 1,300,000
- -----------------------------------------------------------------------------------------------------------------------------------
3,500,000
===================================================================================================================================
NEVADA - 4.45%
- -----------------------------------------------------------------------------------------------------------------------------------
A1 P1 4,800,000 Clark County, Nevada, Nevada Power Company, I.D.R., (LOC:
Fuji Bank), Variable Rate Weekly Demand Note, 4.85%, 12/1/15 (a) 4,800,000
===================================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 21 and 22
<PAGE> 79
TAX FREE MONEY PORTFOLIO 16
-----------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
===================================================================================================================================
June 30, 1995 (unaudited)
RATING (c)
- ------------------------- PRINCIPAL
S&P / MOODY / FITCH AMOUNT DESCRIPTION (b) VALUE
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
NEW HAMPSHIRE - 0.28%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ $ 300,000 New Hampshire State, I.D.A., (LOC: Union Bank of Switzerland),
Variable Rate Monthly Demand Note, 4.00%, 7/1/13 (a) $ 300,000
===================================================================================================================================
NEW YORK - 15.56%
- -----------------------------------------------------------------------------------------------------------------------------------
MIG1 2,500,000 Erie County, New York, G.O., RANS, (LOC: Union Bank of
Switzerland), 4.75%, 8/15/95 2,500,297
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 AAA 600,000 Great Neck, New York, North New York Water Authority, (FGIC
Insured), Variable Rate Weekly Demand Note, 4.00%, 1/1/20 (a) 600,000
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 2,055,000 Nassau County, New York, G.O., (FGIC Insured), 6.30%, 11/1/95 2,068,064
- -----------------------------------------------------------------------------------------------------------------------------------
AAA VMIG1 AAA 2,400,000 New York City, New York, City Municipal Water Finance Authority,
(FGIC Insured),Variable Rate Daily Demand Note, 4.50%, 6/15/25 (a) 2,400,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 AAA 700,000 New York City, New York, G.O., (FGIC Insured), Variable
Rate Daily Demand Note, 4.50%, 10/1/20 (a) 700,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 A- 600,000 New York City, New York, G.O., (LOC: Dai-Ichi Kangyo),
Variable Rate Daily Demand Note, 4.55%, 8/15/21 (a) 600,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1 VMIG1 1,000,000 New York City, New York, G.O., (LOC: Krediet Bank), Variable Rate
Daily Demand Note, 4.25%, 8/1/16 (a) 1,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 A- 500,000 New York City, New York, G.O., (LOC: Norinchukin Bank),
Variable Rate Daily Demand Note, 4.55%, 10/1/23 (a) 500,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 A- 1,000,000 New York City, New York, G.O., (LOC: Sanwa Bank), Variable Rate
Daily Demand Note, 4.55%, 8/15/18 (a) 1,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ 5,400,000 New York State Energy Research and Development Authority, P.C.R.,
(LOC: Toronto Dominion), Variable Rate Daily Demand Note,
4.55%, 7/1/15 (a) 5,400,000
- -----------------------------------------------------------------------------------------------------------------------------------
16,768,361
===================================================================================================================================
NORTH CAROLINA - 1.86%
- -----------------------------------------------------------------------------------------------------------------------------------
P1 2,000,000 North Carolina Eastern Municipal Power, Tax-Exempt
Commercial Paper, (LOC: Morgan Guaranty), 3.05%, 9/6/95 2,000,000
===================================================================================================================================
OHIO - 2.41%
- -----------------------------------------------------------------------------------------------------------------------------------
SP1+ MIG1 2,600,000 University of Cincinnati, Ohio, BANS, 4.75%, 8/30/95 2,600,746
===================================================================================================================================
PENNSYLVANIA - 4.38%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ 700,000 Lehigh County, Pennsylvania, I.D.R., Allegheny Electric,
(LOC: Nederland Bank), Variable Rate Monthly Demand Note,
4.00%, 6/1/14 (a) 700,000
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 21 and 22
<PAGE> 80
TAX FREE MONEY PORTFOLIO 17
-----------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
===================================================================================================================================
June 30, 1995 (unaudited)
RATING (c)
- ------------------------- PRINCIPAL
S&P / MOODY / FITCH AMOUNT DESCRIPTION (b) VALUE
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
MIG1 $4,000,000 Pennsylvania State University, G.O., 5.50%, 12/21/95 $4,015,271
- -----------------------------------------------------------------------------------------------------------------------------------
4,715,271
===================================================================================================================================
SOUTH CAROLINA - 2.78%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ MIG1 3,000,000 York County, South Carolina, P.C.R., (Guaranteed by National
Rural), 4.30%, 9/15/14, Optional Put 9/15/95 3,000,000
===================================================================================================================================
TEXAS - 8.83%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 1,900,000 Harris County, Texas, Health Facility Development-Texas Medical
Center Project, (MBIA Insured), Variable Rate Daily Demand Note,
4.20%, 2/15/22 (a) 1,900,000
- -----------------------------------------------------------------------------------------------------------------------------------
VMIG1 800,000 Harris County, Texas, Health Facility Development-Tirr Project,
(LOC: Texas Commerce Bank), Variable Rate Daily Demand Note,
4.20%, 10/1/17 (a) 800,000
- -----------------------------------------------------------------------------------------------------------------------------------
AA- AA 1,400,000 Houston, Texas, G.O., 5.50%, 3/1/96 1,406,769
- -----------------------------------------------------------------------------------------------------------------------------------
VMIG1 1,400,000 Texas Small Business, I.D.R., (LOC: Credit Suisse), Variable
Rate Weekly Demand Note, 5.05%, 7/1/26 (a) 1,400,000
- -----------------------------------------------------------------------------------------------------------------------------------
SP1+ MIG1 F1+ 4,000,000 Texas State, TRANS, 5.00%, 8/31/95 4,002,813
- -----------------------------------------------------------------------------------------------------------------------------------
9,509,582
===================================================================================================================================
VERMONT - 4.39%
- -----------------------------------------------------------------------------------------------------------------------------------
VMIG1 4,735,000 Vermont, I.D.A., Central Vermont Public Service, (LOC: Citibank),
Variable Rate Monthly Demand Note, 3.60%, 12/1/13 (a) 4,735,000
===================================================================================================================================
VIRGINIA - 0.93%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 1,000,000 Virginia State Housing Development Authority, Series A,
4.25%, 7/1/17, Mandatory Put 7/12/95 1,000,000
===================================================================================================================================
WASHINGTON - 0.93%
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1 1,000,000 Chelan County, Washington, Public Utility District 1,
(LOC: Credit Suisse), Variable Rate Weekly Demand Note,
4.25%, 6/1/15 (a) 1,000,000
===================================================================================================================================
WYOMING - 4.83%
- -----------------------------------------------------------------------------------------------------------------------------------
A1 400,000 Lincoln County, Wyoming, P.C.R., Champlin Petroleum Company,
(Union Pacific Guarantee), Variable Rate Monthly Demand
Note, 4.05%, 11/1/12 (a) 400,000
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 21 and 22
<PAGE> 81
TAX FREE MONEY PORTFOLIO 18
-----------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
===================================================================================================================================
June 30, 1995 (unaudited)
RATING (c)
- ------------------------- PRINCIPAL
S&P / MOODY / FITCH AMOUNT DESCRIPTION (b) VALUE
===================================================================================================================================
<S> <C> <C>
A1 $4,800,000 Uintah County, Wyoming, P.C.R., Champlin Petroleum Company,
(Union Pacific Guarantee), Variable Rate Monthly Demand
Note, 4.05%, 11/1/12 (a) $4,800,000
- -----------------------------------------------------------------------------------------------------------------------------------
5,200,000
===================================================================================================================================
TOTAL INVESTMENTS
(Amortized Cost $109,794,180) 101.90% $109,794,180
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (1.90%) (2,047,269)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS 100.00% $107,746,911
===================================================================================================================================
</TABLE>
(a) Securities payable on demand, secured by bank Letters of Credit or other
bank credit agreements. This interest rate, which will change periodically,
is based on bank prime rates or an index of market interest rates.
(b) The following abbreviations are used in portfolio descriptions:
BANS -- Bond Anticipation Notes
C.D.A. -- Community Development Authority
FGIC -- Financial Guaranty Insurance Corporation
G.O. -- General Obligation
l.D.A. -- Industrial Development Authority
l.D.R. -- Industrial Development Revenue
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
P.C.R. -- Pollution Control Revenue
RANS -- Revenue Anticipation Notes
TRANS -- Tax Revenue Anticipation Notes
(c) Bond ratings by Moody Investors Services, Inc., Standard & Poor's
Corporation and Fitch Investors Service were obtained from sources believed
to be reliable, but were not verified by Coopers & Lybrand L.L.P.
See Notes to Financial Statements on Pages 21 and 22
<PAGE> 82
TAX FREE MONEY FUND 19
-----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
==============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on July 21, 1986, as an unincorporated
business trust under the laws of the Commonwealth of Massachusetts. The Tax
Free Money Fund (the "Fund") is one of the funds offered to investors by the
Trust. The Fund commenced operations and began offering shares of beneficial
interest on June 10, 1987. Through February 18, 1991, the Fund invested
directly in securities. After that date, the Fund began investing
substantially all of its investable assets in the Tax Free Money Portfolio
(the "Portfolio"). The Portfolio is an open-end management investment company
registered under the Act. The Fund seeks to achieve its investment objective
by investing all of its investable assets in the Portfolio. The value of such
investment in the Portfolio reflects the Fund's proportionate interest in the
net assets of the Portfolio. At June 30, 1995, the Fund's investment was
approximately 100% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns interest income, net of expenses, daily on its investment in
the Portfolio. All of the net investment income and realized gains and losses
from the security transactions of the Portfolio are allocated pro rata among
the investors in the Portfolio at the time of such determination.
C. Dividends
It is the Fund's policy to declare dividends daily, payable to shareholders of
record as of 12:00 noon (E.S.T.) from net investment income, and to pay these
dividends monthly. Dividends payable to shareholders are recorded by the Fund
on the ex-dividend date, which is the same as the declaration date.
Distributions of net realized short-term and long-term capital gains, if any,
earned by the Fund will be made annually to the extent they are not offset by
any capital loss carryforwards.
D. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income to shareholders. Therefore, no federal income tax
provision is required.
E. Other
The Trust accounts separately for the assets, liabilities, and operations of
the Fund. Expenses directly attributable to the Fund are charged to that Fund,
while expenses which are attributable to all of the Trust's funds are
allocated among them.
<PAGE> 83
TAX FREE MONEY FUND 20
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and
Services Agreement, Bankers Trust provides administrative, custody, transfer
agency and shareholder services to the Fund in return for a fee computed daily
and paid monthly at an annual rate of 0.55 of 1% of the Fund's average daily
net assets. For the six months ended June 30, 1995, this fee aggregated
$313,941.
The Trust has entered into a Distribution Agreement with Signature
Broker-Dealer Services, Inc. ("Signature"). Under the Distribution Agreement
with the Trust, pursuant to Rule 12b-1 of the 1940 Act, Signature may seek
reimbursement, at an annual rate not exceeding 0.20 of 1% of the Fund's average
daily net assets, for expenses incurred in connection with any activities
primarily intended to result in the sale of the Fund's shares. For the six
months ended June 30, 1995, there were no reimbursable expenses incurred under
this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of
the Fund, to the extent necessary, to limit all expenses to 0.55 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio and
0.75 of 1% of the average daily net assets of the Fund, including expenses of
the Portfolio. For the six months ended June 30, 1995, expenses of the Fund
have been reduced $23,658.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Fund. Similarly, none of the
Fund's officers received compensation from the Fund.
NOTE 3 - CAPITAL LOSS CARRYFORWARD
At December 31, 1994, accumulated net realized capital loss carryforwards
available as a reduction against future net realized capital gains aggregated
$12,896 which will expire in 2003.
<PAGE> 84
TAX FREE MONEY PORTFOLIO 21
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
The Tax Free Money Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on March 26, 1990,
as an unincorporated trust under the laws of New York and commenced operations
on February 19, 1991. The Declaration of Trust permits the Board of Trustees
(the "Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
Investments are stated at value, as that term is defined in the Act and the
published rules and regulations there-under. Pursuant to Rule 2a-7 of the Act,
the Portfolio utilizes the amortized cost method to determine 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 the
difference between the principal amount due at maturity and cost. In the event
that a deviation of 1/2 of 1% or more exists between the Portfolio's net asset
value on the basis of amortized cost and the net asset value calculated by
using available market quotations or an appropriate substitute, the Trustees
will promptly consider what action, if any, should be initiated, and where the
Trustees believe the extent of deviation may result in material dilution or
other unfair results to investors or shareholders, the Trustees shall take
such action to eliminate or reduce, to the extent reasonably practicable, such
dilution or unfair results.
C. Security Transactions and Interest Income
Security transactions are accounted for on a trade date basis (date the order
to buy or sell is executed). Interest income is recorded on the accrual basis
and includes amortization of premium and discount on investments. Realized
gains and losses from securities transactions are recorded on the identified
cost basis.
D. Investment Income
The Portfolio determines its net investment income (i.e., income other than
net realized long-term and short-term capital gains) on each valuation day and
allocates all such income as well as any realized gains and losses from
security transactions pro rata among the investors in the Portfolio at the
time of such determination.
E. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required.
<PAGE> 85
TAX FREE MONEY PORTFOLIO 22
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and
Services Agreement, Bankers Trust provides administrative, custody, transfer
agency and shareholder services to the Portfolio in return for a fee computed
daily and paid monthly at an annual rate of 0.05 of 1% of the Portfolio's
average daily net assets. For the six months ended June 30, 1995, this fee
aggregated $28,598.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at the annual rate of 0.15 of 1% of the
Portfolio's average daily net assets. For the six months ended June 30, 1995,
this fee aggregated $85,794.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of
the Portfolio, to the extent necessary, to limit all expenses to 0.20 of 1% of
the average daily net assets of the Portfolio. For the six months ended June
30, 1995, expenses of the Portfolio have been reduced $17,127.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
<PAGE> 86
[This Page Intentionally Left Blank]
<PAGE> 87
BT INVESTMENT FUNDS
NY Tax Free
Money
Fund
Semi-Annual Report
June 30, 1995
<PAGE> 88
[COVER]
<PAGE> 89
NY TAX FREE MONEY FUND 1
------------------------------------------------------
TABLE OF CONTENTS
===============================================================================
<TABLE>
<S> <C>
INTRODUCTION FROM PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . 2
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER . . . . . . . . . . . . . 3
NY TAX FREE MONEY FUND
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 5
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 6
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . 7
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . 8
NY TAX FREE MONEY PORTFOLIO
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 9
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 10
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . 11
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . 12
Schedule of Portfolio Investments . . . . . . . . . . . . . . . . . . 13
NY TAX FREE MONEY FUND
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 17
NY TAX FREE MONEY PORTFOLIO
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the NY Tax Free
Money Fund may be obtained by calling or writing to Investors Fiduciary Trust
Company or Signature Broker-Dealer Services, Inc., the primary Servicing Agent
and Distributor, respectively, of BT Investment Funds:
BT INVESTMENT FUNDS
INVESTORS FIDUCIARY TRUST COMPANY
127 WEST 10TH STREET
KANSAS CITY, MO 64105
(800) 422-6577
BT INVESTMENT FUNDS
SIGNATURE BROKER-DEALER SERVICES, INC.
6 ST. JAMES AVENUE
BOSTON, MA 02116
(800) 545-1074
You may write to the NY Tax Free Money Fund
at the following address:
BT INVESTMENT FUNDS
6 ST. JAMES AVENUE
BOSTON, MA 02116
<PAGE> 90
NY TAX FREE MONEY FUND 2
------------------------------------------------------
INTRODUCTION FROM PRESIDENT
===============================================================================
August, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for BT Investment Funds
NY Tax Free Money Fund. This Report provides you with an investment overview as
well as a financial summary of the Fund's operations for the six months ended
June 30, 1995. We have also included a Letter from the Investment Adviser
detailing the factors that affected the Fund's performance and the investment
outlook for the remainder of 1995.
Looking ahead, we will continue to closely observe the economic conditions and
how they affect the financial markets.
We appreciate your ongoing support of the NY Tax Free Money Fund and look
forward to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 91
NY TAX FREE MONEY FUND 3
------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
===============================================================================
Throughout most of the first six months of 1995, the yield curve at the
short-term end was flat, due to a drastically reduced supply of New York
tax-exempt short-term securities. As a result, the Fund remained relatively
neutral, beginning the period with an average maturity of 60 days, moving to 57
days during the first quarter, and then ending the period at 60 days. Cash
flows into the Fund were relatively stable throughout.
On July 6, 1995, the Federal Reserve Board cut official interest rates by
0.25%. We anticipate continued easing in the Board's monetary policy and lower
interest rates. The yield curve should also steepen as we move into the second
half of the year due to a large issuance of one-year municipal paper.
During most of the semi-annual period, the spread between 3-month and 1-year
paper was only 10 basis points, or 0.10%. Once spreads widen to 30 to 40 basis
points, we anticipate beginning to extend the Fund's average maturity.
We intend to continue our conservative strategies designed to provide current
income exempt from Federal, New York State, and New York City income taxes to
the extent consistent with liquidity and capital preservation.
===============================================================================
ABOUT THE JERRY SAMET
PORTFOLIO MANAGER Assistant Treasurer
- Six years of investment experience
- Joined Bankers Trust in 1988
- B.A.--Queens College of New York
<PAGE> 92
NY TAX FREE MONEY FUND 4
------------------------------------------------------
===============================================================================
OBJECTIVE Seeks high current income exempt from
Federal, New York State and New York City
taxes consistent with liquidity and
preservation of capital.
- -------------------------------------------------------------------------------
INVESTMENT Wide range of securities primarily issued by
INSTRUMENTS New York State and its authorities, agencies,
instrumentalities and political subdivisions
providing income free of Federal, New York
State and New York City income taxes.
- -------------------------------------------------------------------------------
STATUS AT Seven day effective yield: 3.45%
JUNE 30, 1995 Average maturity: 60 days
(unaudited) Net Assets: $77.9 million
- -------------------------------------------------------------------------------
DIVERSIFICATION OF PORTFOLIO
INVESTMENTS BY ASSET TYPE
as of June 30, 1995 (unaudited)
(percentages are based on market value)
[FIGURE 1]
Floating Rate Demand Notes 62.5%
- -------------------------------------------
General Obligation Notes 17.4%
- -------------------------------------------
Tax Exempt Commercial Paper 9.5%
- -------------------------------------------
Revenue Bonds 6.7%
- -------------------------------------------
General Obligation Bonds 3.9%
- -------------------------------------------
<PAGE> 93
NY TAX FREE MONEY FUND 5
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
=====================================================================================================
June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------
Investment in NY Tax Free Money Portfolio, at Value $78,105,630
- -----------------------------------------------------------------------------------------------------
Prepaid Expenses 622
- -----------------------------------------------------------------------------------------------------
Total Assets 78,106,252
- -----------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------
Due to Bankers Trust 8,374
- -----------------------------------------------------------------------------------------------------
Dividends Payable 151,281
- -----------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 15,854
- -----------------------------------------------------------------------------------------------------
Total Liabilities 175,509
- -----------------------------------------------------------------------------------------------------
NET ASSETS (Applicable to 77,959,289 Outstanding Shares of $.001 Par Value
Per Share, Unlimited Number of Shares of Beneficial Interest Authorized) $77,930,743
=====================================================================================================
NET ASSET VALUE, Subscription and Redemption Price Per Share
($77,930,743/77,959,289 Shares) $ 1.00
=====================================================================================================
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 77,959
- -----------------------------------------------------------------------------------------------------
Paid-in Capital 77,881,330
- -----------------------------------------------------------------------------------------------------
Accumulated Net Realized (Loss) from Securities Transactions (28,546)
- -----------------------------------------------------------------------------------------------------
Net Assets, June 30, 1995 $77,930,743
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 94
NY TAX FREE MONEY FUND 6
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
=====================================================================================================
For the six months ended June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------
Income Allocated from NY Tax Free Money Portfolio, net $1,511,534
- -----------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------
Administration and Services Fee $225,978
- -----------------------------------------------------------------------------------------------------
Shareholders Reports 10,119
- -----------------------------------------------------------------------------------------------------
Professional Fees 2,158
- -----------------------------------------------------------------------------------------------------
Trustees Fees 773
- -----------------------------------------------------------------------------------------------------
Insurance 438
- -----------------------------------------------------------------------------------------------------
Registration Fees 604
- -----------------------------------------------------------------------------------------------------
Miscellaneous 482
- -----------------------------------------------------------------------------------------------------
Total Expenses 240,552
- -----------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (14,574) 225,978
- -----------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,285,556
- -----------------------------------------------------------------------------------------------------
NET REALIZED (LOSS) FROM SECURITIES TRANSACTIONS (1,746)
- -----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,283,810
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 95
NY TAX FREE MONEY FUND 7
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
=====================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- -----------------------------------------------------------------------------------------------------
FROM OPERATIONS
- -----------------------------------------------------------------------------------------------------
Net Investment Income $ 1,285,556 $ 1,923,406
- -----------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (1,746) (2,075)
- -----------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 1,283,810 1,921,331
- -----------------------------------------------------------------------------------------------------
FROM DIVIDENDS
- -----------------------------------------------------------------------------------------------------
Net Investment Income (1,285,556) (1,923,406)
- -----------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Dividends (1,285,556) (1,923,406)
- -----------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
(at Net Asset Value of $1.00 per share)
- -----------------------------------------------------------------------------------------------------
Net Proceeds from Shares Sold 266,128,430 563,055,553
- -----------------------------------------------------------------------------------------------------
Dividends Reinvested 414,423 444,797
- -----------------------------------------------------------------------------------------------------
Value of Shares Redeemed (267,711,110) (588,335,386)
- -----------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Transactions in
Shares of Beneficial Interest (1,168,257) (24,835,036)
- -----------------------------------------------------------------------------------------------------
TOTAL (DECREASE) IN NET ASSETS (1,170,003) (24,837,111)
=====================================================================================================
NET ASSETS
- -----------------------------------------------------------------------------------------------------
Beginning of Period 79,100,746 103,937,857
- -----------------------------------------------------------------------------------------------------
End of Period $ 77,930,743 $ 79,100,746
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 96
NY TAX FREE MONEY FUND 8
------------------------------------------------------
FINANCIAL HIGHLIGHTS
===============================================================================
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of
the periods indicated for the NY Tax Free Money Fund.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
For the six
months ended For the year ended December 31,
June 30, 1995 -------------------------------------------------------
(unaudited) 1994 1993 1992 1991 1990
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Income from Investment Operations
Net Investment Income 0.02 0.02 0.02 0.02 0.04 0.05
----- ----- ----- ----- ----- -----
Less Dividends
Dividends from Net Investment Income (0.02) (0.02) (0.02) (0.02) (0.04) (0.05)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN 1.56% 2.11% 1.68% 2.38% 4.07% 5.17%
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income
to Average Net Assets 3.13%* 2.05% 1.66% 2.38% 4.00% 5.06%
Ratio of Expenses to Average Net Assets,
Including Expenses of the NY Tax Free
Money Portfolio 0.75%* 0.75% 0.75% 0.75% 0.75% 0.75%(1)
Decrease Reflected in Above Expense Ratio
Due to Absorption of Expenses
by Bankers Trust 0.07%* 0.08% 0.06% 0.05% 0.03% 0.03%(1)
Net Assets, End of Period (000's omitted) $77,931 $79,101 $103,938 $101,196 $98,905 $70,122
</TABLE>
* Annualized
(1) For the indicated year, ratios did not include any NY Tax Free Money
Portfolio expenses and any voluntary absorption of the Portfolio's
expenses by Bankers Trust, since the Fund did not begin investing its
investable assets in the NY Tax Free Money Portfolio until February 19,
1991.
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 97
NY TAX FREE MONEY PORTFOLIO 9
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
=====================================================================================================
June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------
Investments, at Value $78,567,869
- -----------------------------------------------------------------------------------------------------
Interest Receivable 605,772
- -----------------------------------------------------------------------------------------------------
Prepaid Expenses 860
- -----------------------------------------------------------------------------------------------------
Due from Bankers Trust 5,681
- -----------------------------------------------------------------------------------------------------
Total Assets 79,180,182
- -----------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------
Due to Custodian 55,698
- -----------------------------------------------------------------------------------------------------
Payable for Securities Purchased 1,005,170
- -----------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 13,571
- -----------------------------------------------------------------------------------------------------
Total Liabilities 1,074,439
- -----------------------------------------------------------------------------------------------------
NET ASSETS $78,105,743
=====================================================================================================
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------
Paid-in Capital $78,105,743
- -----------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $78,105,743
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 98
NY TAX FREE MONEY PORTFOLIO 10
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
=====================================================================================================
For the six months ended June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------
Interest $1,593,858
- -----------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------
Advisory Fee $ 61,742
- -----------------------------------------------------------------------------------------------------
Administration and Services Fee 20,581
- -----------------------------------------------------------------------------------------------------
Professional Fees 12,365
- -----------------------------------------------------------------------------------------------------
Insurance 1,319
- -----------------------------------------------------------------------------------------------------
Trustees Fees 732
- -----------------------------------------------------------------------------------------------------
Miscellaneous 583
- -----------------------------------------------------------------------------------------------------
Total Expenses 97,322
- -----------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (15,000) 82,322
- -----------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,511,536
- -----------------------------------------------------------------------------------------------------
NET REALIZED (LOSS) FROM SECURITIES TRANSACTIONS (1,746)
- -----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,509,790
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 99
NY TAX FREE MONEY PORTFOLIO 11
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
=====================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- -----------------------------------------------------------------------------------------------------
FROM OPERATIONS
- -----------------------------------------------------------------------------------------------------
Net Investment Income $ 1,511,536 $ 2,439,419
- -----------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (1,746) (2,075)
- -----------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 1,509,790 2,437,344
- -----------------------------------------------------------------------------------------------------
FROM CAPITAL TRANSACTIONS
- -----------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 266,128,430 563,055,553
- -----------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (268,866,845) (590,346,393)
- -----------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Capital Transactions (2,738,415) (27,290,840)
- -----------------------------------------------------------------------------------------------------
TOTAL (DECREASE) IN NET ASSETS (1,228,625) (24,853,496)
=====================================================================================================
NET ASSETS
- -----------------------------------------------------------------------------------------------------
Beginning of Period 79,334,368 104,187,864
- -----------------------------------------------------------------------------------------------------
End of Period $ 78,105,743 $ 79,334,368
=====================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 100
NY TAX FREE MONEY PORTFOLIO 12
------------------------------------------------------
FINANCIAL HIGHLIGHTS
===============================================================================
Contained below are selected ratios and supplemental data for each of the
periods indicated for the NY Tax Free Money Portfolio.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
For the period
For the six For the year ended February 19, 1991
months ended December 31, (Commencement
June 30, 1995 ----------------------------- of Operations) to
(unaudited) 1994 1993 1992 December 31, 1991
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment
Income to Average Net Assets 3.67%* 2.60% 2.21% 2.90% 4.41%*
Ratio of Expenses to Average Net Assets 0.20%* 0.20% 0.20% 0.22% 0.25%*
Decrease Reflected in Above Ratio
of Expenses to Average Net Assets Due to
Absorption of Expenses by Bankers Trust 0.04%* 0.03% 0.03% 0.03% 0.03%*
Net Assets, End of Period (000's omitted) $78,106 $79,334 $104,188 $101,419 $98,968
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 101
NY TAX FREE MONEY PORTFOLIO 13
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
==============================================================================================================================
June 30, 1995 (unaudited)
RATING (c)
- ------------------------- PRINCIPAL
S&P / MOODY'S / FITCH AMOUNT DESCRIPTION (b) VALUE
==============================================================================================================================
<S> <C> <C> <C> <C> <C>
NEW YORK - 95.60%
- ------------------------------------------------------------------------------------------------------------------------------
MIG-1 $1,915,000 Elmira City, New York G.O., BANS, 4.50%, 8/11/95 $ 1,914,843
- ------------------------------------------------------------------------------------------------------------------------------
MIG-1 1,000,000 Erie County, New York G.O., RANS, (LOC: Union Bank of
Switzerland), 4.75%, 8/15/95 1,000,539
- ------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG-1 AAA 2,400,000 Great Neck, New York, (FGIC Insured), Variable Rate
Weekly Demand Note, 4.00%, 1/1/20 (a) 2,400,000
- ------------------------------------------------------------------------------------------------------------------------------
MIG-1 2,500,000 Monroe County, New York G.O., BANS,
Series A, 4.50%, 6/7/96 2,513,469
- ------------------------------------------------------------------------------------------------------------------------------
A1 VMIG-1 1,600,000 Montgomery County, New York, I.D.A., Service Merchandise,
(LOC: Industrial Bank of Japan), Variable Rate Monthly
Demand Note, 4.00%, 12/31/24 (a) 1,600,000
- ------------------------------------------------------------------------------------------------------------------------------
A1 VMIG-1 200,000 New York City, New York G.O., (LOC: Chemical Bank), Variable
Rate Daily Demand Note, 4.10%, 8/1/22 (a) 200,000
- ------------------------------------------------------------------------------------------------------------------------------
A1 VMIG-1 3,000,000 New York City, New York G.O., (LOC: Chemical Bank), Variable
Rate Daily Demand Note, 4.10%, 8/1/23 (a) 3,000,000
- ------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG-1 1,300,000 New York City, New York G.O., (LOC: Dai-Ichi Kangyo),
Variable Rate Daily Demand Note, 4.55%, 8/15/20 (a) 1,300,000
- ------------------------------------------------------------------------------------------------------------------------------
A1 VMIG-1 2,900,000 New York City, New York G.O., (LOC: Kredietbank),
Variable Rate Daily Demand Note, 4.25%, 8/1/16 (a) 2,900,000
- ------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG-1 2,600,000 New York City, New York G.O., (LOC: Landesbank Hessen),
Variable Rate Weekly Demand Note, 4.00%, 8/1/19 (a) 2,600,000
- ------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG-1 600,000 New York City, New York G.O., (LOC: Norinchukin Bank),
Variable Rate Daily Demand Note, 4.55%, 10/1/23 (a) 600,000
- ------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG-1 1,785,000 New York City, New York G.O., (LOC: Sanwa Bank), Variable
Rate Daily Demand Note, 4.30%, 8/1/18 (a) 1,785,000
- ------------------------------------------------------------------------------------------------------------------------------
A1 VMIG-1 2,265,000 New York City, New York G.O., (LOC: Sumitomo Bank), Variable
Rate Daily Demand Note, 4.10%, 8/1/16 (a) 2,265,000
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 102
NY TAX FREE MONEY PORTFOLIO 14
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
===============================================================================================================================
June 30, 1995 (unaudited)
RATING (c)
- ------------------------- PRINCIPAL
S&P / MOODY'S / FITCH AMOUNT DESCRIPTION (b) VALUE
===============================================================================================================================
<S> <C> <C> <C> <C>
A1 VMIG-1 $1,700,000 New York City, New York G.O., (LOC: Sumitomo Bank), Variable
Rate Daily Demand Note, 4.10%, 8/1/17 (a) $ 1,700,000
- -------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG-1 1,900,000 New York City, New York G.O., (LOC: Union Bank of Switzerland),
Variable Rate Daily Demand Note, 4.50%, 8/15/23 (a) 1,900,000
- -------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG-1 AAA 3,500,000 New York, New York City Municipal Water Finance Authority,
Series G, (FGIC Insured), Variable Rate Daily Demand Note,
4.10%, 6/15/11 (a) 3,500,000
- -------------------------------------------------------------------------------------------------------------------------------
A1+ P1 3,000,000 New York, New York City Municipal Water Finance Authority, Tax
Exempt Commercial Paper, (LOC: Canadian Imperial Bank
of Commerce), 4.15%, 8/15/95 3,000,000
- -------------------------------------------------------------------------------------------------------------------------------
AAA Aaa A 250,000 New York State Dormitory Authority Revenue, State University
Educational Facility, 6.30%, 11/1/95 251,546
- -------------------------------------------------------------------------------------------------------------------------------
VMIG-1 3,100,000 New York State Energy Research & Development Authority, P.C.R.,
Lilco Project, (LOC: Deutsche Bank), 4.70%, 3/1/16,
Mandatory Put, 3/1/96 3,100,000
- -------------------------------------------------------------------------------------------------------------------------------
A1+ 1,700,000 New York State Energy Research & Development Authority, P.C.R.,
Niagra Mohawk Power, Series A, (LOC: Toronto Dominion), Variable
Rate Daily Demand Note, 4.55%, 7/1/15 (a) 1,700,000
- -------------------------------------------------------------------------------------------------------------------------------
P1 3,000,000 New York State Energy Research & Development Authority,
Rochester Gas and Electric, (LOC: Bank of New York), Variable Rate
Monthly Demand Bond, 3.80%, 10/1/14 (a) 3,000,000
- -------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 725,000 New York State Environmental Facilities, P.C.R., 3.70%, 5/15/96 725,000
- -------------------------------------------------------------------------------------------------------------------------------
A1 P1 2,000,000 New York State G.O., Series R, Tax Exempt Commercial Paper, 3.75%,
8/7/95 2,000,000
- -------------------------------------------------------------------------------------------------------------------------------
VMIG-1 2,180,000 New York State Housing Finance Agency, (LOC:Chemical Bank),
Variable Rate Weekly Demand Note, 4.00%, 11/1/10 (a) 2,180,000
- -------------------------------------------------------------------------------------------------------------------------------
VMIG-1 1,400,000 New York State Housing Finance Agency, (LOC: Sanwa Bank),
Variable Rate Weekly Demand Note, 4.00%, 11/1/14 (a) 1,400,000
- -------------------------------------------------------------------------------------------------------------------------------
A1 VMIG-1 765,000 New York State Job Development Authority, (LOC: Sumitomo Bank),
Variable Rate Monthly Demand Bond, 3.60%, 3/1/99 (a) 765,000
- -------------------------------------------------------------------------------------------------------------------------------
A1 VMIG-1 1,685,000 New York State Job Development Authority, (LOC: Sumitomo Bank),
Variable Rate Monthly Demand Bond, 3.65%, 3/1/00 (a) 1,685,000
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 103
NY TAX FREE MONEY PORTFOLIO 15
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
===============================================================================================================================
June 30, 1995 (unaudited)
RATING (c)
- ------------------------- PRINCIPAL
S&P / MOODY'S / FITCH AMOUNT DESCRIPTION (b) VALUE
===============================================================================================================================
<S> <C> <C> <C>
A1+ VMIG-1 $2,000,000 New York State Local Government Assistance, (LOC: Credit Suisse),
Variable Rate Weekly Demand Bond, 3.70%, 4/1/22 (a) $ 2,000,000
- -------------------------------------------------------------------------------------------------------------------------------
A1 VMIG-1 2,200,000 New York State Power Authority, Revenue and General Purpose,
4.40%, 3/1/20, Optional Put Date, 9/1/95 2,200,000
- -------------------------------------------------------------------------------------------------------------------------------
AAA 2,000,000 New York State Urban Development Correction Facility, 8.00%,
1/1/15, Optional Put Date, 1/1/96 2,074,573
- -------------------------------------------------------------------------------------------------------------------------------
A1+ 1,800,000 Onondaga County, New York, I.D.A., (LOC: Banque Nationale
De Paris), Variable Rate Monthly Demand Bond, 3.30%, 11/13/98 (a) 1,800,000
- -------------------------------------------------------------------------------------------------------------------------------
A1+ P1 2,485,000 Port Authority of New York and New Jersey, Tax Exempt
Commercial Paper, 3.10%, 7/19/95 2,485,000
- -------------------------------------------------------------------------------------------------------------------------------
MIG-1 1,000,000 Sayville, New York UFSD, TANS, 4.25%, 6/27/96 1,005,170
- -------------------------------------------------------------------------------------------------------------------------------
A1+ 2,900,000 Seneca County, New York, I.D.A., (LOC: Barclays Bank),
Variable Rate Weekly Demand Bond, 4.05%, 10/1/21 (a) 2,900,000
- -------------------------------------------------------------------------------------------------------------------------------
MIG-1 2,200,000 Smithtown, New York, Central School District, TANS, 4.50%,
6/28/96 2,211,530
- -------------------------------------------------------------------------------------------------------------------------------
SP1+ MIG-1 3,000,000 Suffolk County, New York G.O., TANS, (LOC: Westdeutsche
Landesbank), 5.25%, 8/15/95 3,001,798
- -------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000,000 Triborough Bridge and Tunnel Authority, New York Revenue,
(FGIC Insured), Variable Rate Weekly Demand Note, 4.05%,
1/1/05 (a) 2,000,000
- -------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000,000 Westchester County, New York, TANS, 5.00%, 12/14/95 2,004,401
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL NEW YORK OBLIGATIONS $74,667,869
===============================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 104
NY TAX FREE MONEY PORTFOLIO 16
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
==============================================================================================================================
June 30, 1995 (unaudited)
RATING (c)
- ------------------------- PRINCIPAL
S&P / MOODY'S / FITCH AMOUNT DESCRIPTION (b) VALUE
==============================================================================================================================
<S> <C> <C>
PUERTO RICO - 4.99%
- ------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG-1 $2,000,000 Puerto Rico Government Development Bank, (LOC: Credit
Suisse), Variable Rate Weekly Demand Bond, 3.80%, 12/1/15 (a) $ 2,000,000
- ------------------------------------------------------------------------------------------------------------------------------
A1+ 1,900,000 Puerto Rico Industrial, Medical and Environmental, P.C.R.,
Ana G. Mendez Education Foundation Project, (LOC: Bank of
Tokyo), Variable Rate Weekly Demand Bond, 4.05%, 12/1/15 (a) 1,900,000
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL PUERTO RICO OBLIGATIONS $ 3,900,000
==============================================================================================================================
TOTAL INVESTMENTS
(Amortized Cost $78,567,869) 100.59% $78,567,869
- ------------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.59%) (462,126)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS 100.00% $78,105,743
==============================================================================================================================
</TABLE>
(a) Securities payable on demand, secured by bank Letters of Credit or other
bank credit agreements. This interest rate, which will change
periodically, is based on bank prime rates or an index of market interest
rates.
(b) The following abbreviations are used in descriptions:
BANS -- Bond Anticipation Notes
FGIC -- Financial Guaranty Insurance Corporation
G.O. -- General Obligation
I.D.A. -- Industrial Development Authority
LOC -- Letter of Credit
P.C.R. -- Pollution Control Revenue
RANS -- Revenue Anticipation Notes
TANS -- Tax Anticipation Notes
UFSD -- Union Free School District
(c) Bond ratings by Moody's Investors Services, Inc., Standard & Poor's
Corporation and Fitch Investors Service were obtained from sources
believed to be reliable, but were not verified by Coopers & Lybrand L.L.P.
See Notes to Financial Statements on Pages 19 and 20
<PAGE> 105
NY TAX FREE MONEY FUND 17
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on July 21, 1986, as an unincorporated
business trust under the laws of the Commonwealth of Massachusetts. The NY Tax
Free Money Fund (the "Fund") is one of the funds offered to investors by the
Trust. The Fund commenced operations and began offering shares of beneficial
interest on September 27, 1988. Through February 18, 1991, the Fund invested
directly in securities. After that date, the NY Tax Free Money Fund began
investing substantially all of its investable assets in the NY Tax Free Money
Portfolio. The NY Tax Free Money Portfolio (the "Portfolio") is an open-end
management investment company registered under the Act. The Fund seeks to
achieve its investment objective by investing all of its investable assets in
the Portfolio. The value of such investment in the Portfolio reflects the
Fund's proportionate interest in the net assets of the Portfolio. At June 30,
1995, the NY Tax Free Money Fund's investment was approximately 100% of the NY
Tax Free Money Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns interest income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized gains and losses from
the security transactions of the Portfolio are allocated pro rata among the
investors in the Portfolio at the time of such determination.
C. Dividends
It is the Fund's policy to declare dividends daily, payable to shareholders of
record as of 12:00 noon (E.S.T.) from net investment income, and to pay these
dividends monthly. Dividends payable to shareholders are recorded by the Fund
on the ex-dividend date, which is the same as the declaration date.
Distributions of net realized short-term and long-term capital gains, if any,
earned by the Fund will be made annually to the extent they are not offset by
any capital loss carryforwards.
D. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no Federal income tax provision is
required.
E. Other
The Trust accounts separately for the assets, liabilities, and operations of
the Fund. Expenses directly attributable to the Fund are charged to the Fund,
while expenses which are attributable to all of the Trust's funds are allocated
among them.
<PAGE> 106
NY TAX FREE MONEY FUND 18
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.55 of 1% of the Fund's average daily net assets.
For the six months ended June 30, 1995, this fee aggregated $225,978.
The Trust has entered into a Distribution Agreement with Signature
Broker-Dealer Services, Inc. ("Signature"). Under the Distribution Agreement
with the Trust, pursuant to Rule 12b-1 of the 1940 Act, Signature may seek
reimbursement, at an annual rate not exceeding 0.20 of 1% of the Fund's average
daily net assets, for expenses incurred in connection with any activities
primarily intended to result in the sale of the Fund's shares. For the six
months ended June 30, 1995, there were no reimbursable expenses incurred under
this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 0.55 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio, and
0.75 of 1% of the average daily net assets of the Fund, including the expenses
of the Portfolio. For the six months ended June 30, 1995, expenses of the Fund
have been reduced $14,574.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Fund. Similarly, none of the Fund's
officers received compensation from the Fund.
NOTE 3 - CAPITAL LOSS CARRYFORWARD
At December 31, 1994, the NY Tax Free Money Fund had accumulated net realized
capital loss carryforwards available as a reduction against future net realized
capital gains aggregating $13,154, of which $10,340, $739 and $2,075 will
expire in 2001, 2002 and 2003, respectively.
<PAGE> 107
NY TAX FREE MONEY PORTFOLIO 19
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
The NY Tax Free Money Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on March 26, 1990
and commenced operations on February 19, 1991 as an unincorporated trust under
the laws of New York. The Declaration of Trust permits the Board of Trustees
(the "Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
Investments are stated at value, as that term is defined in the Act and the
published rules and regulations thereunder. Pursuant to Rule 2a-7 of the Act,
the Portfolio utilizes the amortized cost method to determine 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 the
difference between the principal amount due at maturity and cost. In the event
that a deviation of 1/2 of 1% or more exists between the Portfolio's net asset
value on the basis of amortized cost and the net asset value calculated by
using available market quotations or an appropriate substitute, the Trustees
will promptly consider what action, if any, should be initiated, and where the
Trustees believe the extent of deviation may result in material dilution or
other unfair results to investors or shareholders, the Trustees shall take such
action to eliminate or reduce, to the extent reasonably practicable, such
dilution or unfair results.
C. Security Transactions and Interest Income
Security transactions are accounted for on a trade date basis (date the order
to buy or sell is executed). Interest income is recorded on the accrual basis
and includes amortization of premium and discount on investments. Realized
gains and losses from security transactions are recorded on the identified cost
basis.
D. Investment Income
The Portfolio determines its net investment income (i.e., income other than net
realized long-term and short-term capital gains) on each valuation day and
allocates all such income as well as any realized gains and losses from
security transactions, pro rata among the investors in the Portfolio at the
time of such determination.
E. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no Federal income tax provision is
required. The cost of securities in the Portfolio for Federal income tax
purposes is the same as for financial reporting purposes.
<PAGE> 108
NY TAX FREE MONEY PORTFOLIO 20
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.05 of 1% of the Portfolio's average daily
net assets. For the six months ended June 30, 1995, this fee aggregated
$20,581.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at the annual rate of 0.15 of 1% of the
Portfolio's average daily net assets. For the six months ended June 30, 1995,
this fee aggregated $61,742.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.20 of 1% of the
average daily net assets of the Portfolio. For the six months ended June 30,
1995, expenses of the Portfolio have been reduced $15,000.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
<PAGE> 109
[COVER]
<PAGE> 110
[COVER]
<PAGE> 111
- --------------------------------------------------------------------------------
BT INVESTMENT FUNDS
- --------------------------------------------------------------------------------
International
Equity
Fund
Semi-Annual Report
June 30, 1995
<PAGE> 112
INTERNATIONAL EQUITY FUND 1
------------------------------------------------------------------------
Table of Contents
- --------------------------------------------------------------------------------
Introduction from President.................................................. 2
Letter to Shareholders from Investment Adviser............................... 3
International Equity Fund
Statement of Assets and Liabilities.................................... 6
Statement of Operations................................................ 7
Statement of Changes in Net Assets..................................... 8
Financial Highlights................................................... 9
International Equity Portfolio
Statement of Assets and Liabilities.................................... 10
Statement of Operations................................................ 11
Statement of Changes in Net Assets..................................... 12
Financial Highlights................................................... 13
Schedule of Portfolio Investments...................................... 14
International Equity Fund
Notes to Financial Statements.......................................... 16
International Equity Portfolio
Notes to Financial Statements.......................................... 18
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the International
Equity Fund may be obtained by calling or writing to Investors Fiduciary Trust
Company or Signature Broker-Dealer Services, Inc., the primary Servicing Agent
and Distributor, respectively, of BT Investment Funds:
BT Investment Funds
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105
(800) 422-6577
BT Investment Funds
Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, MA 02116
(800) 545-1074
You may write to the International Equity Fund at the
following address:
BT Investment Funds
6 St. James Avenue
Boston, MA 02116
<PAGE> 113
INTERNATIONAL EQUITY FUND 2
------------------------------------------------------------------------
Introduction from President
- --------------------------------------------------------------------------------
August, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for the BT Investment
Funds International Equity Fund. This Report provides you with an investment
overview as well as a financial summary of the Fund's operations for the six
months ended June 30, 1995. We have also included a Letter from the
Investment Adviser detailing the factors that affected the Fund's
performance and a performance chart which illustrates your Fund's return
versus a relevant financial index. Also presented in your Report is a pie
chart displaying diversification of Portfolio investments, financial
statements, financial highlights and a listing of the Portfolio's holdings.
In addition, I would like to mention that the Board of Trustees approved a
year end change from December to September for the Fund at the Trustee's
meeting on August 2, 1995. As a result of the change you will receive the
annual report as of September 30, 1995.
As always, we will continue to closely observe the economic conditions and
how they affect the financial markets.
We appreciate your ongoing support of the International Equity Fund and look
forward to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 114
INTERNATIONAL EQUITY FUND 3
------------------------------------------------------------------------
Letter to Shareholders from Investment Adviser
- --------------------------------------------------------------------------------
The International Equity Fund returned 8.90% for the semi-annual period
ending June 30, 1995, well ahead of the Morgan Stanley Capital International
("MSCI") EAFE Index's return of 2.60% and far outpacing the Lipper
International Equity Funds Average of 2.30%.
As anticipated in the 1994 Annual Report, while the renewed decline in the
dollar helped holders of foreign assets during the early months of 1995,
overall, the difficult conditions of 1994 continued into the first quarter,
as many countries experienced a serious equity bear market in contrast to
the United States. However, with the exception of Japan, the second quarter
was a positive one for the international equity markets.
In Europe, the surprise move by Germany's Bundesbank to cut interest rates
at the end of the first quarter, combined with the victory of Jacques Chirac
in the French Presidential elections, led to a more constructive backdrop
for those markets. Emerging markets, also, rallied strongly as fears of
local interest rate hikes turned to anticipation of some possible easing
with the U.S. cycle appearing to be near a peak. In contrast, the economic
relapse following the Kobe earthquake, the yen's continued rise, and the
implied tightening of Japan's monetary policy heightened deflationary fears
there. The Japanese authorities have seemed reluctant to address these
fears, as each successive fiscal package has proved equally anemic, but the
Bank of Japan has added liquidity aggressively, recently, and this has
cheered financial markets since the end of June.
The Fund was well ahead of the MSCI EAFE Index and its Lipper category
average throughout the semi-annual period primarily because of its low
allocation to Japan, but returns were also enhanced by new positions in the
Pacific Basin emerging markets. To the extent possible, we have tried to
focus these acquisitions on stocks that will benefit from the continued
growth of South East Asia, rather than China or Hong Kong, where the future
is still somewhat cloudy. We also trimmed our European exposure and added a
new holding in Japan, but this activity was based more on stock specific
reasons than on our market outlook.
In fact, looking ahead in Europe and particularly in Japan, we see further
scope for reflationary measures through interest rate cuts especially after
the lead recently taken by the U.S. Federal Reserve Board. If so, this
should help international markets make even further progress, given that
several economies are still operating very much below their economic
potential and equity valuations are not excessive. This should provide
plentiful opportunities for long-term capital appreciation.
<PAGE> 115
INTERNATIONAL EQUITY FUND 4
------------------------------------------------------------------------
Letter to Shareholders from Investment Adviser
- --------------------------------------------------------------------------------
The following graph illustrates the Fund's return versus the Morgan Stanley
Capital International EAFE Index since August 31, 1992, assuming a $10,000
initial investment:
- --------------------------------------------------------------------------------
Comparison of Change in
Value of a $10,000 International Morgan Stanley
Investment in the Equity Fund EAFE
International Equity Fund
and the Morgan Stanley 8/31/92 10000 10000
Capital International 9/30/92 9665 9803
EAFE Index 12/31/92 9606 9424
3/31/93 10424 10554
- ------------------------------------------- 6/30/93 11084 11615
Total Return 9/30/93 11944 12386
ended June 30, 1995 12/31/93 13196 12493
3/31/94 13717 12930
One Year Since 8/4/92* 6/30/94 13266 13590
12.77% 51.85% 9/30/94 13977 13603
12/31/94 13738 13465
* The Fund's inception date 3/31/95 14046 13715
6/30/95 14961 13815
Investment return and principal value may
fluctuate so that shares, when redeemed,
may be worth more or less than their
original cost.
- -------------------------------------------
- --------------------------------------------------------------------------------
About the
Portfolio Manager Francis J.K. Ledwidge
Managing Director, Global Investment Management
. Senior Officer for Bankers Trust's active Global and
International Equity, Balanced and Fixed Income
groups in New York and Switzerland
. Chairman, Global Strategy Process
. Manager, International Equity Fund (SEC registered
version)
. Joined Bankers Trust in 1989 in New York
. 22 years of investment experience; 13 years with
Robert Fleming in London and New York
<PAGE> 116
INTERNATIONAL EQUITY FUND 5
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Objective Seeks long term capital appreciation from investments
in foreign equity securities or other securities with
equity characteristics.
- --------------------------------------------------------------------------------
Investment Instruments Equity securities of foreign issuers, consisting of
common stock and other securities with equity
characteristics; the investments are diversified among
several regions.
- --------------------------------------------------------------------------------
Ten Largest Holdings Philips Electronics
Kymmene
International Nederlanden Group
Kyocera
KLM Royal Dutch Airlines
Storehouse
Hutchison Whampoa
National Australia Bank
BBC Brown Boveri Cie, Cl.A
Hitachi
- --------------------------------------------------------------------------------
Diversification of Portfolio
Equity Investments by Country
as of June 30, 1995 (unaudited)
(percentages are based on market value)
[PIE CHART APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C>
Finland 3.30%
France 10.83%
Spain 5.49%
Canada 2.68%
Italy 4.18%
Australia 6.83%
Sweden 2.53%
Venezuela 2.02%
Denmark 2.06%
Japan 11.85%
Norway 2.36%
Latin America 0.67%
Hong Kong 3.76%
Thailand 0.67%
Austria 2.22%
Malaysia 0.75%
United Kingdom 9.34%
Singapore 1.48%
Netherlands 14.22%
Switzerland 2.66%
Indonesia 2.30%
Germany 7.14%
Taiwan 0.66%
</TABLE>
<PAGE> 117
INTERNATIONAL EQUITY FUND 6
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
========================================================================================================
June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------
<S> <C>
Assets
- --------------------------------------------------------------------------------------------------------
Investment in International Equity Portfolio, at Value $68,329,621
- --------------------------------------------------------------------------------------------------------
Receivable for Shares of Beneficial Interest Sold 44,351
- --------------------------------------------------------------------------------------------------------
Deferred Organizational Expenses 15
- --------------------------------------------------------------------------------------------------------
Prepaid Expenses 4,964
- --------------------------------------------------------------------------------------------------------
Total Assets 68,378,951
- --------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------
Due to Bankers Trust 27,121
- --------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 14,165
- --------------------------------------------------------------------------------------------------------
Total Liabilities 41,286
- --------------------------------------------------------------------------------------------------------
Net Assets (Applicable to 4,693,055 Outstanding Shares
of $.001 Par Value Per Share, Unlimited Number of Shares of Beneficial Interest Authorized) $68,337,665
========================================================================================================
Net Asset Value, Subscription and Redemption Price Per Share
($68,337,665/4,693,055 Shares) $ 14.56
========================================================================================================
Composition of Net Assets
- --------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 4,693
- --------------------------------------------------------------------------------------------------------
Paid-in Capital 58,305,596
- --------------------------------------------------------------------------------------------------------
Undistributed Net Investment Income 664,379
- --------------------------------------------------------------------------------------------------------
Accumulated Net Realized Gain from Securities and Foreign Currency Transactions 898,655
- --------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 8,484,767
- --------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Forward Foreign Currency Contracts (30,053)
- --------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Foreign Currency Translation 9,628
- --------------------------------------------------------------------------------------------------------
Net Assets, June 30, 1995 $68,337,665
========================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 118
INTERNATIONAL EQUITY FUND 7
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Operations
========================================================================================================
For the six months ended June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
- --------------------------------------------------------------------------------------------------------
Income Allocated from International Equity Portfolio, net $ 868,720
- --------------------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------------------
Administration and Services Fee $253,268
- --------------------------------------------------------------------------------------------------------
Professional Fees 3,623
- --------------------------------------------------------------------------------------------------------
Shareholders Reports 16,277
- --------------------------------------------------------------------------------------------------------
Registration Fees 1,710
- --------------------------------------------------------------------------------------------------------
Trustees Fees 758
- --------------------------------------------------------------------------------------------------------
Insurance 438
- --------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 1,709
- --------------------------------------------------------------------------------------------------------
Miscellaneous 224
- --------------------------------------------------------------------------------------------------------
Total Expenses 278,007
- --------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (24,739) 253,268
- --------------------------------------------------------------------------------------------------------
Net Investment Income 615,452
- --------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Securities and Foreign Currency
- --------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions 1,385,511
- --------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Foreign Currency Transactions (518,094)
- --------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 3,584,902
- --------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Forward Foreign Currency Contracts 67,871
- --------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Foreign Currency Translation (649)
- --------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Securities and Foreign Currency 4,519,541
- --------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations $ 5,134,993
========================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 119
INTERNATIONAL EQUITY FUND 8
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
==================================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
- -----------------------------------------------------------------------------------------------------------------
From Operations
- -----------------------------------------------------------------------------------------------------------------
Net Investment Income $ 615,452 $ 418,381
- -----------------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities and Foreign Currency Transactions 867,417 1,178,391
- -----------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on Securities and
Foreign Currency 3,652,124 (402,631)
- -----------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 5,134,993 1,194,141
- -----------------------------------------------------------------------------------------------------------------
From Dividends and Distributions
- -----------------------------------------------------------------------------------------------------------------
Net Investment Income -- (369,454)
- -----------------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions -- (1,074,988)
- -----------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Dividends and Distributions -- (1,444,442)
- -----------------------------------------------------------------------------------------------------------------
From Transactions in Shares of Beneficial Interest
- -----------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Transactions in Shares
of Beneficial Interest 7,182,293 22,401,859
- -----------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 12,317,286 22,151,558
=================================================================================================================
Net Assets
- ------------------------------------------------------------------------------------------------------------------
Beginning of Period 56,020,379 33,868,821
- ------------------------------------------------------------------------------------------------------------------
End of Period [including Undistributed Net Investment
Income of $664,379 and $48,927 for 1995 and 1994, respectively] $68,337,665 $56,020,379
==================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 120
INTERNATIONAL EQUITY FUND 9
------------------------------------------------------------------------
Financial Highlights
================================================================================
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of the
periods indicated for the International Equity Fund.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
For the period
For the six August 4, 1992
months ended For the year ended (Commencement
June 30, 1995 December 31, of Operations) to
(unaudited) 1994 1993 December 31, 1992
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net Asset Value, Beginning of Period $13.37 $13.18 $ 9.75 $10.00
------ ------ ------- ------
Income from Investment Operations
Net Investment Income 0.13 0.10 0.05 0.03
Net Realized and Unrealized Gain (Loss) on Securities and
Foreign Currency 1.06 0.44 3.60 (0.28)
------ ------ ------- ------
Total from Investment Operations 1.19 0.54 3.65 (0.25)
------ ------ ------- ------
Less Dividends and Distributions
Dividends from Net Investment Income -- (0.09) (0.15) --
Distributions from Net Realized Gain from Securities
Transactions -- (0.26) (0.07) --
------ ------ ------- ------
Total Dividends and Distributions -- (0.35) (0.22) --
------ ------ ------- ------
Net Asset Value, End of Period $14.56 $13.37 $ 13.18 $ 9.75
====== ====== ======= ======
Total Investment Return 8.90% 4.12% 37.38% (6.01)%*
Ratios and Supplemental Data
Ratio of Net Investment Income to Average Net Assets 2.07%* 0.84% 0.79% 0.97%*
Ratio of Expenses to Average Net Assets, Including
Expenses of the International Equity Portfolio 1.50%* 1.50% 1.50% 1.50%*
Decrease Reflected in Above Expense Ratio
Due to Absorption of Expenses by Bankers Trust 0.29%* 0.37% 0.62% 1.36%*
Net Assets, End of Period (000's omitted) $68,338 $56,020 $33,869 $8,218
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 121
INTERNATIONAL EQUITY PORTFOLIO 10
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
================================================================================================
June 30, 1995 (unaudited)
- ------------------------------------------------------------------------------------------------
<S> <C>
Assets
- ------------------------------------------------------------------------------------------------
Investments, at Value (Cost $59,543,254) $68,027,650
- ------------------------------------------------------------------------------------------------
Foreign Cash (Cost $404,201) 406,687
- ------------------------------------------------------------------------------------------------
Cash 1,856
- ------------------------------------------------------------------------------------------------
Dividends Receivable 367,747
- ------------------------------------------------------------------------------------------------
Prepaid Expenses 859
- ------------------------------------------------------------------------------------------------
Total Assets 68,804,799
- ------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------
Due to Bankers Trust 22,500
- ------------------------------------------------------------------------------------------------
Payable for Securities Purchased 406,088
- ------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 16,381
- ------------------------------------------------------------------------------------------------
Net Unrealized Depreciation on Forward Foreign Currency Contracts 30,053
- ------------------------------------------------------------------------------------------------
Total Liabilities 475,022
- ------------------------------------------------------------------------------------------------
Net Assets $68,329,777
================================================================================================
Composition of Net Assets
- ------------------------------------------------------------------------------------------------
Paid-in Capital $59,865,806
- ------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 8,484,396
- ------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Forward Foreign Currency Contracts (30,053)
- ------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Foreign Currency Translation 9,628
- ------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $68,329,777
================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 122
INTERNATIONAL EQUITY PORTFOLIO 11
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Operations
================================================================================================================
For the six months ended June 30, 1995 (unaudited)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
- ----------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding tax of $122,774) $977,996
- ----------------------------------------------------------------------------------------------------------------
Interest 84,624
- ----------------------------------------------------------------------------------------------------------------
Total Investment Income $1,062,620
- ----------------------------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------------------------
Advisory Fee 193,899
- ----------------------------------------------------------------------------------------------------------------
Administration and Services Fee 44,746
- ----------------------------------------------------------------------------------------------------------------
Professional Fees 14,894
- ----------------------------------------------------------------------------------------------------------------
Trustees Fees 732
- ----------------------------------------------------------------------------------------------------------------
Insurance 1,318
- ----------------------------------------------------------------------------------------------------------------
Miscellaneous 646
- ----------------------------------------------------------------------------------------------------------------
Total Expenses 256,235
- ----------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (62,336) 193,899
- ----------------------------------------------------------------------------------------------------------------
Net Investment Income 868,721
- ----------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Securities and Foreign Currency
- ----------------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions 1,385,515
- ----------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Foreign Currency Transactions (518,096)
- ----------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 3,584,501
- ----------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Forward Foreign Currency Contracts 67,871
- ----------------------------------------------------------------------------------------------------------------
Net Unrealized (Depreciation) on Foreign Currency Translation (238)
- ----------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Securities and Foreign Currency 4,519,553
- ----------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations $5,388,274
================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 123
INTERNATIONAL EQUITY PORTFOLIO 12
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
========================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
- --------------------------------------------------------------------------------------------------------
From Operations
- --------------------------------------------------------------------------------------------------------
Net Investment Income $ 868,721 $ 839,522
- --------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities and
Foreign Currency Transactions 867,419 1,178,394
- --------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on
Securities and Foreign Currency 3,652,134 (402,629)
- --------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 5,388,274 1,615,287
- --------------------------------------------------------------------------------------------------------
From Capital Transactions
- --------------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 18,810,696 26,018,869
- --------------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (11,911,336) (5,499,175)
- --------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Capital Transactions 6,899,360 20,519,694
- --------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 12,287,634 22,134,981
========================================================================================================
Net Assets
- --------------------------------------------------------------------------------------------------------
Beginning of Period 56,042,143 33,907,162
- --------------------------------------------------------------------------------------------------------
End of Period $68,329,777 $56,042,143
========================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 124
INTERNATIONAL EQUITY PORTFOLIO 13
------------------------------------------------------------------------
Financial Highlights
================================================================================
Contained below are selected ratios and supplemental data for each of the
periods indicated for the International Equity Portfolio.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
For the period
For the six August 4, 1992
months ended For the year ended (Commencement
June 30, 1995 December 31, of Operations) to
(unaudited) ------------------ December 31, 1992
1994 1993
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios and Supplemental Data
Ratio of Net Investment Income to Average Net Assets 2.91%* 1.69% 1.64% 1.87%*
Ratio of Expenses to Average Net Assets 0.65%* 0.65% 0.65% 0.60%*
Decrease Reflected in Above Ratio of Expenses to Average
Net Assets Due to Absorption of Expenses by Bankers Trust 0.21%* 0.24% 0.39% 0.93%*
Portfolio Turnover Rate 18% 15% 17% 7%
Net Assets, End of Period (000's omitted) $68,330 $56,042 $33,907 $8,225
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 125
INTERNATIONAL EQUITY PORTFOLIO 14
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schedule of Portfolio Investments
===============================================================================
June 30, 1995 (unaudited)
Shares Description Value
===============================================================================
<S> <C> <C>
COMMON STOCKS - 96.05%
- -------------------------------------------------------------------------------
Australia - 6.01%
- -------------------------------------------------------------------------------
554,200 Burns Philip & Company
(Consumer Goods) $ 1,157,407
- -------------------------------------------------------------------------------
227,000 National Australia Bank
(Finance) 1,793,094
- -------------------------------------------------------------------------------
206,500 News Corp. (Consumer
Services) 1,152,962
- -------------------------------------------------------------------------------
4,103,463
===============================================================================
Austria - 2.15%
- -------------------------------------------------------------------------------
25,400 Mayr-Melnhof Karton
(Materials) 1,468,193
===============================================================================
Canada - 2.59%
- -------------------------------------------------------------------------------
77,800 TELUS (Utilities) 942,214
- -------------------------------------------------------------------------------
25,500 Westcoast Energy (Utilities) 378,483
- -------------------------------------------------------------------------------
30,300 Westcoast Energy, ADR (Utilities) 446,925
- -------------------------------------------------------------------------------
1,767,622
===============================================================================
Denmark - 1.99%
- -------------------------------------------------------------------------------
24,400 Teledanmark, Cl.B (Utilities) 1,358,695
===============================================================================
Finland - 3.19%
- -------------------------------------------------------------------------------
69,900 Kymmene (Materials) 2,177,213
===============================================================================
France - 10.47%
- -------------------------------------------------------------------------------
14,300 Club Mediterranee (Consumer
Services)(a) 1,459,816
- -------------------------------------------------------------------------------
20,500 Elf Aquitaine (Energy) 1,517,186
- -------------------------------------------------------------------------------
13,400 Lyonnaise des Eaux
Dumez (Conglomerates) 1,269,183
- -------------------------------------------------------------------------------
3,460 Taittinger (Consumer Goods) 1,592,857
- -------------------------------------------------------------------------------
21,800 Total, Cl.B (Energy) 1,314,121
- -------------------------------------------------------------------------------
7,153,163
===============================================================================
Germany - 6.90%
- -------------------------------------------------------------------------------
6,600 Bayer (Materials) 1,640,810
- -------------------------------------------------------------------------------
6,500 Berliner Kraft & Light
(Utilities) 1,600,904
- -------------------------------------------------------------------------------
5,100 Volkswagen (Consumer Goods) 1,470,055
- -------------------------------------------------------------------------------
4,711,769
===============================================================================
Hong Kong - 3.64%
- -------------------------------------------------------------------------------
147,000 Guoco Group
(Emerging Markets) 685,824
- -------------------------------------------------------------------------------
372,000 Hutchison Whampoa
(Conglomerates) $ 1,798,054
- -------------------------------------------------------------------------------
2,483,878
===============================================================================
Indonesia - 2.22%
- -------------------------------------------------------------------------------
67,500 Hanjaya Mandala Sampoerna
(Emerging Markets) 530,422
- -------------------------------------------------------------------------------
112,000 Indofood Sukses Makmur
(Emerging Markets)(a) 482,802
- -------------------------------------------------------------------------------
479,000 SMART (Emerging Markets) 505,456
- -------------------------------------------------------------------------------
1,518,680
===============================================================================
Italy - 4.04%
- -------------------------------------------------------------------------------
1,220,000 Credito Italiano (Finance) 1,415,932
- -------------------------------------------------------------------------------
486,700 Societa Finanziaria Telefonica
(Utilities) 1,347,395
- -------------------------------------------------------------------------------
2,763,327
===============================================================================
Japan - 11.45%
- -------------------------------------------------------------------------------
175,000 Hitachi (Capital Equipment) 1,745,765
- -------------------------------------------------------------------------------
58,000 Jusco (Consumer Services) 1,205,124
- -------------------------------------------------------------------------------
23,000 Kyocera (Capital Equipment) 1,895,283
- -------------------------------------------------------------------------------
63,000 Sankyo (Consumer Goods) 1,465,203
- -------------------------------------------------------------------------------
239,000 Toshiba (Capital Equipment) 1,515,176
- -------------------------------------------------------------------------------
7,826,551
===============================================================================
Latin America - 0.64%
- -------------------------------------------------------------------------------
31,500 Latin American Equity Fund
(Emerging Markets) 441,000
===============================================================================
Malaysia - 0.72%
- -------------------------------------------------------------------------------
69,000 Oyl Industries Berhad (Emerging
Markets) 492,453
===============================================================================
Netherlands - 13.75%
- -------------------------------------------------------------------------------
13,700 AKZO Nobel (Consumer Goods) 1,638,726
- -------------------------------------------------------------------------------
37,100 International Nederlanden
Group (Finance) 2,053,523
- -------------------------------------------------------------------------------
57,200 KLM Royal Dutch Airlines
(Transportation)(a) 1,858,270
- -------------------------------------------------------------------------------
58,100 Philips Electronics (Consumer
Goods) 2,461,642
- -------------------------------------------------------------------------------
11,300 Royal Dutch Petroleum (Energy) 1,380,844
- -------------------------------------------------------------------------------
9,393,005
===============================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 126
INTERNATIONAL EQUITY PORTFOLIO 15
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schedule of Portfolio Investments
===============================================================================
June 30, 1995 (unaudited)
Shares Description Value
===============================================================================
<S> <C> <C>
Norway - 2.28%
- -------------------------------------------------------------------------------
37,200 Norsk Hydro (Energy) $ 1,561,198
===============================================================================
Singapore - 1.43%
- -------------------------------------------------------------------------------
133,000 Jardine Matheson Holdings
(Conglomerates) 977,550
===============================================================================
Spain - 5.31%
- -------------------------------------------------------------------------------
9,635 Banco Popular Espanol (Finance) 1,435,382
- -------------------------------------------------------------------------------
21,700 Empresa Nacional de Electricidad
(Utilities) 1,073,999
- -------------------------------------------------------------------------------
13,124 Fomento de Construcciones
y Contratas (Conglomerates) 1,118,785
- -------------------------------------------------------------------------------
3,628,166
===============================================================================
Sweden - 2.44%
- -------------------------------------------------------------------------------
54,100 Astra AB, Series A
(Consumer Goods) 1,670,821
===============================================================================
Switzerland - 2.57%
- -------------------------------------------------------------------------------
1,693 BBC Brown Boveri & Cie, Cl.A
(Capital Equipment) 1,755,060
===============================================================================
Taiwan - 0.64%
- -------------------------------------------------------------------------------
29,250 Yageo, GDR (Emerging Markets)(a) 438,750
===============================================================================
Thailand - 0.65%
- -------------------------------------------------------------------------------
41,000 PTT Exploration & Production
(Emerging Markets)(a) 441,807
===============================================================================
United Kingdom - 9.02%
- -------------------------------------------------------------------------------
407,000 Iceland Group (Consumer Services) 1,168,131
- -------------------------------------------------------------------------------
560,700 Lonrho (Conglomerates) 1,323,174
- -------------------------------------------------------------------------------
110,100 Manweb (Utilities) 1,158,659
- -------------------------------------------------------------------------------
124,100 National Power Partially Paid
(Utilities) 341,339
- -------------------------------------------------------------------------------
116,300 Powergen (Installment Shares)
(Utilities) 355,118
- -------------------------------------------------------------------------------
427,100 Storehouse (Consumer Services) 1,818,299
- -------------------------------------------------------------------------------
6,164,720
===============================================================================
Venezuela - 1.95%
- -------------------------------------------------------------------------------
51,700 Coriman SACA, ADR
(Emerging Markets) 336,050
- -------------------------------------------------------------------------------
608,500 Electricidad de Caracas
(Emerging Markets) (b) 635,612
- -------------------------------------------------------------------------------
$ 103,935 Mavesa, ADR (Emerging
Markets)(b) $ 361,164
- -------------------------------------------------------------------------------
1,332,826
===============================================================================
Total Common Stocks
(Cost $57,220,164) $65,629,910
===============================================================================
PREFERRED STOCKS - 0.59%
- -------------------------------------------------------------------------------
Australia - 0.59%
- -------------------------------------------------------------------------------
82,050 News Corp. Preferred
(Consumer Services) $ 406,241
- -------------------------------------------------------------------------------
Total Preferred Stocks
(Cost $331,591) $ 406,241
===============================================================================
Principal
Amount
===============================================================================
U.S. TREASURY BILLS - 2.92%
- -------------------------------------------------------------------------------
$1,995,000 5.264%, 7/13/95 $ 1,991,499
- -------------------------------------------------------------------------------
Total U.S. Treasury Bills
(Amortized Cost $1,991,499) $ 1,991,499
===============================================================================
Total Investments
(Cost $59,543,254) 99.56% $68,027,650
- -------------------------------------------------------------------------------
Other Assets in Excess
of Liabilities 0.44% 302,127
- -------------------------------------------------------------------------------
Net Assets 100.00% $68,329,777
===============================================================================
</TABLE>
(a) Non-Income Producing Securities
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At the period end, the value of
this security amounted to $361,164 or 0.53% of net assets.
(c) Industry Diversification (as a percentage of Total Value of Investments):
Capital Equipment................................................. 10.16%
Conglomerates..................................................... 9.54%
Consumer Goods.................................................... 16.84%
Consumer Services................................................. 10.60%
Emerging Markets.................................................. 7.87%
Energy............................................................ 8.49%
Finance........................................................... 9.84%
Materials......................................................... 7.77%
Transportation.................................................... 2.73%
Utilities......................................................... 13.23%
U.S. Treasury Bills............................................... 2.93%
------
100.00%
======
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 127
INTERNATIONAL EQUITY FUND 16
------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
- --------------------------------------------------------------------------------
Note 1 -- Organization and Significant Accounting Policies
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company Act
of 1940 (the "Act"), as amended, as an open-end management investment company.
The Trust was organized on July 21, 1986, as a business trust under the laws of
the Commonwealth of Massachusetts. The International Equity Fund (the "Fund") is
one of the funds offered to investors by the Trust. The Fund commenced
operations and began offering shares of beneficial interest on August 4, 1992.
The Fund invests substantially all of its assets in the International Equity
Portfolio (the "Portfolio"). The Portfolio is an open-end management investment
company registered under the Act. The Fund seeks to achieve its investment
objective by investing all of its investable assets in the Portfolio. The value
of such investment in the Portfolio reflects the Fund's proportionate interest
in the net assets of the Portfolio. At June 30, 1995, the Fund's investment was
approximately 100% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions and foreign currency of the Portfolio
are allocated pro rata among the investors in the Portfolio at the time of such
determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
D. Dividends
It is the Fund's policy to declare and distribute dividends annually to
shareholders from net investment income. Dividends payable to shareholders are
recorded by the Fund on the ex-dividend date, which is the same as the
declaration date. Distributions of net realized short-term and long-term capital
gains, if any, earned by the Fund will be made annually to the extent they are
not offset by any capital loss carryforwards.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of the
Fund. Expenses directly attributable to the Fund are charged to that Fund, while
expenses which are attributable to all of the Trust's funds are allocated among
them.
<PAGE> 128
INTERNATIONAL EQUITY FUND 17
------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
- --------------------------------------------------------------------------------
Note 2 -- Fees and Transactions with Affiliates
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.85 of 1% of the Fund's average daily net assets.
For the six months ended June 30, 1995, this fee aggregated $253,268.
The Trust has entered into a Distribution Agreement with Signature Broker-Dealer
Services, Inc. ("Signature"). Under the Distribution Agreement with the Trust,
pursuant to Rule 12b-1 of the 1940 Act, Signature may seek reimbursement, at an
annual rate not exceeding 0.20 of 1% of the Fund's average daily net assets, for
expenses incurred in connection with any activities primarily intended to result
in the sale of the Fund's shares. For the six months ended June 30, 1995, there
were no reimbursable expenses incurred under this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 0.85 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio and
1.50 of 1% of the average daily net assets of the Fund, including expenses of
the Portfolio. For the six months ended June 30, 1995, expenses of the Fund have
been reduced $24,739.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received compensation
for services as trustee of the Fund. Similarly, none of the Fund's officers
received compensation from the Fund.
Note 3 -- Shares of Beneficial Interest
At June 30, 1995, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
For the six
months ended
June 30, 1995 For the year ended
(unaudited) December 31, 1994
------------------------ ----------------------------
Shares Amount Shares Amount
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Sold 1,346,142 $ 18,839,900 1,879,250 $ 26,034,015
Reinvested -- -- 46,910 627,191
Redeemed (841,809) (11,657,607) (307,219) (4,259,347)
--------- ------------ --------- ------------
Net Increase 504,333 $ 7,182,293 1,618,941 $ 22,401,859
========= ============ ========= ============
</TABLE>
<PAGE> 129
INTERNATIONAL EQUITY PORTFOLIO 18
------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
- --------------------------------------------------------------------------------
Note 1 -- Organization and Significant Accounting Policies
A. Organization
The International Equity Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on December 11, 1991
as an unincorporated trust under the laws of New York and commenced operations
on August 4, 1992. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
The Portfolio's investments are valued each business day by an independent
pricing service (the "Service") approved by the Trustees. Securities traded
primarily on a principal securities exchange (domestic or foreign) are valued at
their last reported sale price on that exchange. If no sale is reported, or if
local custom or regulation so provides, the mean of the latest bid and asked
price is used. Securities traded over-the-counter are valued using either the
mean between the bid and asked price or, where local custom or regulations so
provide, the last sales price. Short-term obligations with remaining maturities
of 60 days or less are valued at amortized cost which with accrued interest
approximates value. Securities for which quotations are not available are stated
at fair value as determined by the Trustees.
C. Foreign Currency Transactions
The books and records of the Portfolio are maintained in U.S. dollars. All
assets and liabilities initially expressed in foreign currencies are converted
into U.S. dollars at prevailing exchange rates. Purchases and sales of
investment securities, dividend and interest income, and certain expenses are
translated at the rates of exchange prevailing on the respective dates of such
transactions. The Portfolio does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments from
the fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
securities.
D. Forward Foreign Currency Contracts
The Portfolio may enter into forward foreign currency contracts for the purpose
of settling specific purchases or sales of securities denominated in a foreign
currency or with respect to the Portfolio's investments generally. The net U.S.
dollar value of foreign currency underlying all contractual commitments held by
the Portfolio and the resulting unrealized appreciation or depreciation are
determined using prevailing exchange rates. With respect to forward foreign
currency contracts, losses in excess of amounts recognized in the Statement of
Assets and Liabilities may arise due to changes in the value of the foreign
currency or if the counterparty does not perform under the contract.
E. Security Transactions and Investment Income
Security transactions are accounted for on a trade date basis (date the order to
buy or sell is executed). Dividend income, less foreign taxes withheld (if any),
is recorded on the ex-dividend date or upon receipt of ex-dividend notification
in the case of certain foreign securities. Interest income is recorded on the
accrual basis and includes amortization of premium and discount on investments.
Realized gains and losses from security transactions are recorded on the
identified cost basis.
All of the net investment income and realized and unrealized gains and losses
from security and foreign currency transactions of the Portfolio are allocated
pro rata among the investors of the Portfolio at the time of such determination.
<PAGE> 130
INTERNATIONAL EQUITY PORTFOLIO 19
------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
- --------------------------------------------------------------------------------
F. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required.
Note 2 -- Fees and Transactions with Affiliates
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.15 of 1% of the Portfolio's average daily
net assets. For the six months ended June 30, 1995, this fee aggregated $44,746.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at an annual rate of 0.65 of 1% of the
Portfolio's average daily net assets. For the six months ended June 30, 1995,
this fee aggregated $193,899.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.65 of 1% of the
average daily net assets of the Portfolio. For the six months ended June 30,
1995, expenses of the Portfolio have been reduced $62,336.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
Note 3 -- Purchases and Sales of Investment Securities
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the six months ended, were $16,521,666 and
$10,173,378, respectively. The aggregate gross unrealized appreciation for all
investments was $10,324,942 and the aggregate gross unrealized depreciation for
all investments was $1,840,546.
Note 4 -- Open Forward Foreign Currency Contracts
As of June 30, 1995, the Portfolio has entered into the following open forward
foreign currency contracts:
<TABLE>
<CAPTION>
Net Unrealized
Contracts In Settle- Appreciation
to Exchange ment Value (Depreciation)
Deliver For Date (US $) (US $)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales
- ------------------------------------------------------------------------------------------------
DEM 8,433,480 USD 6,000,000 7/03/95 6,101,490 (101,490)
- ------------------------------------------------------------------------------------------------
DEM 8,433,480 USD 6,085,947 8/03/95 6,114,378 (28,431)
- ------------------------------------------------------------------------------------------------
JPY 507,378,000 USD 6,083,669 7/17/95 6,009,157 74,512
================================================================================================
$ 18,169,616 $18,225,025 $ (55,409)
================================================================================================
Purchases
- ------------------------------------------------------------------------------------------------
USD $ 6,078,183 DEM 8,433,480 7/03/95 6,101,490 23,307
- ------------------------------------------------------------------------------------------------
USD 297,717 GBP 188,000 7/03/95 299,766 2,049
================================================================================================
$ 6,375,900 $ 6,401,256 25,356
================================================================================================
$ (30,053)
=========
</TABLE>
<PAGE> 131
[This page intentionally left blank]
<PAGE> 132
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 133
BT INVESTMENT FUNDS
UTILITY
FUND
SEMI-ANNUAL REPORT
JUNE 30, 1995
<PAGE> 134
UTILITY FUND 1
------------------------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
=====================================================================================
<S> <C>
INTRODUCTION FROM PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . . . 2
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER . . . . . . . . . . . . . . . 3
UTILITY FUND
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . . 6
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . 7
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . . 8
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . 9
UTILITY PORTFOLIO
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . . 10
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . 11
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . . 12
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . 13
Schedule of Portfolio Investments . . . . . . . . . . . . . . . . . . . 14
UTILITY FUND
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . 16
UTILITY PORTFOLIO
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Utility Fund
may be obtained by calling or writing to Investors Fiduciary Trust Company or
Signature Broker-Dealer Services, Inc., the primary Servicing Agent and
Distributor, respectively, of BT Investment Funds:
BT INVESTMENT FUNDS
INVESTORS FIDUCIARY TRUST COMPANY
127 WEST 10TH STREET
KANSAS CITY, MO 64105
(800) 422-6577
BT INVESTMENT FUNDS
SIGNATURE BROKER-DEALER SERVICES, INC.
6 ST. JAMES AVENUE
BOSTON, MA 02116
(800) 545-1074
You may write to the Utility Fund at the following address:
BT INVESTMENT FUNDS
6 ST. JAMES AVENUE
BOSTON, MA 02116
<PAGE> 135
UTILITY FUND 2
------------------------------------------------------
INTRODUCTION FROM PRESIDENT
===============================================================================
August, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for the BT Investment
Funds Utility Fund. This Report provides you with an investment overview as
well as a financial summary of the Fund's operations for the six months ended
June 30, 1995. We have also included a Letter from the Investment Adviser
detailing the factors that affected the Fund's performance and a performance
chart which illustrates your Fund's return versus a relevant financial index.
Also presented in your Report is a pie chart displaying diversification of
Portfolio investments, financial statements, financial highlights and a listing
of the Portfolio's holdings.
Looking ahead, we will continue to closely observe the economic conditions and
how they affect the financial markets.
We appreciate your ongoing support of the Utility Fund and look forward to
continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 136
UTILITY FUND 3
------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
===============================================================================
The Utility Fund produced a positive return of 4.07% for the second quarter and
of 8.18% for the first six months of 1995. Nevertheless, the Fund still lagged
its benchmark, the S&P Utility Index and the Lipper Utility Fund Average year
to date, primarily because of its underweighting in telecommunications stocks.
This sector made the greatest contribution to the S&P Utility Index during the
period.
In response, we increased the Fund's telecommunications holdings from 24% at
the beginning of the year to 39% by the end of the semi-annual period. While
this is still slightly less than the benchmark's weighting of 51%, we believe
that the Fund's current holdings should meet or exceed benchmark returns going
forward. This is because we have shifted our focus to the stronger companies
within the sector, companies such as BellSouth, SBC Communications, Ameritech
and Bell Atlantic.
In order to increase our exposure to telecommunications, the Fund eliminated
its Canadian exposure where performance is likely to continue to be poor. The
water industry holdings were virtually eliminated and the natural gas sector
was reduced to slightly above a neutral position.
Looking ahead, we anticipate continuing to align the Fund's weightings to more
closely reflect the S&P Utility Index while maintaining an underweighted
position in the electrics. We expect utility stock performance to improve
during the second half of 1995 as a result of the current declining interest
rate environment. Also, as the equities market in general has reached very high
valuations, investors may begin to search out sectors of the market, like
utilities, which have lagged of late. We believe the kind of stocks in the
Fund's portfolio (i.e. high quality stocks offering healthy dividends) will, as
a result of this, become increasingly attractive.
<PAGE> 137
UTILITY FUND 4
------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
===============================================================================
The following graph illustrates the Fund's return versus the S&P Utility Index,
since August 31, 1992, assuming a $10,000 initial investment:
===============================================================================
COMPARISON OF CHANGE [FIGURE 1]
IN VALUE OF A $10,000 Past performance is not indicative
INVESTMENT IN THE of future performance
UTILITY FUND AND THE
S&P UTILITY INDEX
<TABLE>
<CAPTION>
FUND INDEX
---- -----
<S> <C> <C>
8/31/92 10,000 10,000
9/30/92 9,970 10,072
12/31/92 10,215 10,327
3/31/93 11,004 11,441
6/30/93 11,239 11,712
9/30/93 11,784 12,532
12/31/93 11,343 11,818
3/31/94 10,526 10,842
6/30/94 10,059 10,839
9/30/94 10,223 10,890
12/31/94 10,019 10,879
3/31/95 10,415 11,630
6/30/95 10,839 12,494
</TABLE>
<TABLE>
<CAPTION>
TOTAL RETURN
ENDED JUNE 30, 1995
One Year Since 8/3/92*
<S> <C>
7.76% 8.72%
</TABLE>
* The Fund's inception date
Investment return and principal
value may fluctuate so that shares,
when redeemed, may be worth
more or less than their original
cost.
===============================================================================
<TABLE>
<S> <C>
ABOUT THE
PORTFOLIO MANAGER SARAH BLAIR
Vice President
- Fourteen years previous experience with Equitable
Capital Management in New York and London, and
Chemical Bank
- Broad experience in major global equity markets
analyzing numerous diverse industry groups including
media, cellular and cable
- Joined Bankers Trust in 1994
- B.A., Fordham University
- M.B.A., Columbia University
</TABLE>
<PAGE> 138
UTILITY FUND 5
------------------------------------------------------
===============================================================================
<TABLE>
<S> <C>
OBJECTIVE Seeks high level of current income with the
preservation of capital. Also seeks to achieve
growth of income and capital appreciation, but only
when consistent with the primary objective.
- -------------------------------------------------------------------------------
INVESTMENT INSTRUMENTS Equity securities of public utility companies
including the electric, natural gas, water,
telephone, telegraph and other public communication
sectors.
- -------------------------------------------------------------------------------
TEN LARGEST HOLDINGS SBC Communications Southern
BellSouth Duke Power
Ameritech MCN
Bell Atlantic FPL Group
GTE Southern New England
Telecommunications
===============================================================================
</TABLE>
DIVERSIFICATION OF PORTFOLIO
INVESTMENTS BY INDUSTRY
as of June 30, 1995 (unaudited)
(percentages are based on market value)
[FIGURE 2]
<TABLE>
<S> <C>
Telecommunications 38.65%
Utility - Gas 17.51%
U.S. Treasury Bills 3.74%
Utility - Electric 39.17%
Utility - Water 0.93%
</TABLE>
<PAGE> 139
UTILITY FUND 6
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
====================================================================================================================
June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- --------------------------------------------------------------------------------------------------------------------
Investment in Utility Portfolio, at Value $15,023,465
- --------------------------------------------------------------------------------------------------------------------
Receivable for Shares of Beneficial Interest Sold 1,384
- --------------------------------------------------------------------------------------------------------------------
Prepaid Expenses 4,815
- --------------------------------------------------------------------------------------------------------------------
Due from Bankers Trust 11,373
- --------------------------------------------------------------------------------------------------------------------
Total Assets 15,041,037
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 18,593
- --------------------------------------------------------------------------------------------------------------------
Total Liabilities 18,593
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS (Applicable to 1,544,726 Outstanding Shares of $.001 Par Value
Per Share, Unlimited Number of Shares of Beneficial Interest Authorized) $15,022,444
====================================================================================================================
NET ASSET VALUE, Subscription and Redemption Price Per Share
($15,022,444/1,544,726 Shares) $ 9.72
====================================================================================================================
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 1,545
- --------------------------------------------------------------------------------------------------------------------
Paid-in Capital 18,444,031
- --------------------------------------------------------------------------------------------------------------------
Undistributed Net Investment Income 146,222
- --------------------------------------------------------------------------------------------------------------------
Accumulated Net Realized (Loss) from Securities Transactions (4,202,992)
- --------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 633,638
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $15,022,444
====================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 140
UTILITY FUND 7
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
=============================================================================================================
For the six months ended June 30, 1995 (unaudited)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------------
Income Allocated from Utility Portfolio, net $ 387,330
- -------------------------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------------------------
Administration and Services Fee $ 52,344
- -------------------------------------------------------------------------------------------------------------
Professional Fees 2,183
- -------------------------------------------------------------------------------------------------------------
Shareholders Reports 11,896
- -------------------------------------------------------------------------------------------------------------
Registration Fees 6,918
- -------------------------------------------------------------------------------------------------------------
Trustees Fees 773
- -------------------------------------------------------------------------------------------------------------
Insurance 436
- -------------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 1,670
- -------------------------------------------------------------------------------------------------------------
Miscellaneous 409
- -------------------------------------------------------------------------------------------------------------
Total Expenses 76,629
- -------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (24,285) 52,344
- -------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 334,986
- -------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
- -------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (1,298,572)
- -------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 2,246,457
- -------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES 947,885
- -------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,282,871
=============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 141
UTILITY FUND 8
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
=====================================================================================================================
For the
For the six months year ended
ended June 30, 1995 December
(unaudited) 31, 1994
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------
Net Investment Income $ 334,986 $ 1,389,860
- ---------------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (1,298,572) (2,904,432)
- ---------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on Securities 2,246,457 (2,717,782)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations 1,282,871 (4,232,354)
- ---------------------------------------------------------------------------------------------------------------------
FROM DIVIDENDS
- ---------------------------------------------------------------------------------------------------------------------
Net Investment Income (205,818) (1,391,368)
- ---------------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Dividends (205,818) (1,391,368)
- ---------------------------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
- ---------------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Transactions in
Shares of Beneficial Interest (2,958,096) (15,030,493)
- ---------------------------------------------------------------------------------------------------------------------
TOTAL (DECREASE) IN NET ASSETS (1,881,043) (20,654,215)
=====================================================================================================================
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------
Beginning of Period 16,903,487 37,557,702
- ---------------------------------------------------------------------------------------------------------------------
End of Period (including Undistributed Net Investment Income of
$146,222 and $17,054 for 1995 and 1994, respectively) $15,022,444 $ 16,903,487
=====================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 142
UTILITY FUND 9
------------------------------------------------------
FINANCIAL HIGHLIGHTS
===============================================================================
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of
the periods indicated for the Utility Fund.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
For the period
August 3, 1992
For the For the (Commencement
For the six months year ended year ended of Operations)
ended June 30, 1995 December December to December
(unaudited) 31, 1994 31, 1993 31, 1992
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $ 9.10 $ 10.83 $ 10.10 $ 10.00
------- ------- ------- -------
Income from Investment Operations
Net Investment Income 0.21 0.48 0.39 0.15
Net Realized and Unrealized Gain (Loss)
on Securities 0.53 (1.74) 0.73 0.10
------- ------- ------- -------
Total from Investment Operations 0.74 (1.26) 1.12 0.25
------- ------- ------- -------
Less Dividends
Dividends from Net Investment Income (0.12) (0.47) (0.39) (0.15)
------- ------- ------- -------
Net Asset Value, End of Period $ 9.72 $ 9.10 $ 10.83 $ 10.10
======= ======= ======= =======
TOTAL INVESTMENT RETURN 8.18% (11.67%) 11.04% 6.09%*
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income to Average
Net Assets 4.16%* 4.57% 3.95% 4.55%*
Ratio of Expenses to Average Net Assets, Including
Expenses of the Utility Portfolio 1.25%* 1.25% 1.25% 1.25%*
Decrease Reflected in Above Expense Ratio Due to
Absorption of Expenses by Bankers Trust 0.58%* 0.48% 0.39% 0.96%*
Net Assets, End of Period (000's omitted) $15,022 $16,903 $37,558 $15,997
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 143
UTILITY PORTFOLIO 10
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
==========================================================================================================
June 30, 1995 (unaudited)
- ----------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ----------------------------------------------------------------------------------------------------------
Investments, at Value (Cost $13,570,048) $14,203,694
- ----------------------------------------------------------------------------------------------------------
Cash 591
- ----------------------------------------------------------------------------------------------------------
Receivable for Securities Sold 768,268
- ----------------------------------------------------------------------------------------------------------
Dividends Receivable 60,490
- ----------------------------------------------------------------------------------------------------------
Prepaid Expenses 861
- ----------------------------------------------------------------------------------------------------------
Due from Bankers Trust 2,714
- ----------------------------------------------------------------------------------------------------------
Total Assets 15,036,618
- ----------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 13,045
- ----------------------------------------------------------------------------------------------------------
Total Liabilities 13,045
- ----------------------------------------------------------------------------------------------------------
NET ASSETS $15,023,573
==========================================================================================================
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------
Paid-in Capital $14,389,927
- ----------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 633,646
- ----------------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $15,023,573
==========================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 144
UTILITY PORTFOLIO 11
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
====================================================================================================================
For the six months ended June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding tax of $5,932) $416,029
- --------------------------------------------------------------------------------------------------------------------
Interest 19,768
- --------------------------------------------------------------------------------------------------------------------
Total Investment Income $ 435,797
- --------------------------------------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------------------------------------
Advisory Fee 52,503
- --------------------------------------------------------------------------------------------------------------------
Administration and Services Fee 8,077
- --------------------------------------------------------------------------------------------------------------------
Professional Fees 8,142
- --------------------------------------------------------------------------------------------------------------------
Trustees Fees 732
- --------------------------------------------------------------------------------------------------------------------
Insurance 1,314
- --------------------------------------------------------------------------------------------------------------------
Miscellaneous 583
- --------------------------------------------------------------------------------------------------------------------
Total Expenses 71,351
- --------------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (22,887) 48,464
- --------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 387,333
- --------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
- --------------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (1,298,580)
- --------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 2,246,471
- --------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES 947,891
- --------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,335,224
====================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 145
UTILITY PORTFOLIO 12
------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
=============================================================================================================
For the
For the six months year ended
ended June 30, 1995 December
(unaudited) 31, 1994
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- -------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- -------------------------------------------------------------------------------------------------------------
Net Investment Income $ 387,333 $ 1,587,451
- -------------------------------------------------------------------------------------------------------------
Net Realized (Loss) from Securities Transactions (1,298,580) (2,904,443)
- -------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on Securities 2,246,471 (2,717,788)
- -------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations 1,335,224 (4,034,780)
- -------------------------------------------------------------------------------------------------------------
FROM CAPITAL TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 319,357 5,634,667
- -------------------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (5,364,080) (20,456,949)
- -------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Capital Transactions (5,044,723) (14,822,282)
- -------------------------------------------------------------------------------------------------------------
TOTAL (DECREASE) IN NET ASSETS (3,709,499) (18,857,062)
=============================================================================================================
NET ASSETS
- ------------------------------------------------------------------------------------------------------------
Beginning of Period 18,733,072 37,590,134
- -------------------------------------------------------------------------------------------------------------
End of Period $15,023,573 $18,733,072
=============================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 146
UTILITY PORTFOLIO 13
------------------------------------------------------
FINANCIAL HIGHLIGHTS
===============================================================================
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Utility Portfolio.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
For the period
August 3, 1992
For the For the (Commencement
For the six months year ended year ended of Operations)
ended June 30, 1995 December December to December
(unaudited) 31, 1994 31, 1993 31, 1992
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income to Average
Net Assets 4.80%* 5.21% 4.60% 5.20%*
Ratio of Expenses to Average Net Assets 0.60%* 0.60% 0.60% 0.60%*
Decrease Reflected in Above Ratio of Expenses to
Average Net Assets Due to Absorption of
Expenses by Bankers Trust 0.28%* 0.27% 0.26% 0.57%*
Portfolio Turnover Rate 33.30% 11.43% 0.00% 0.00%
Net Assets, End of Period (000's omitted) $15,024 $18,733 $37,590 $16,002
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 147
UTILITY PORTFOLIO 14
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
============================================================================
June 30, 1995 (unaudited)
SHARES DESCRIPTION VALUE
============================================================================
<S> <C> <C>
COMMON STOCKS - 90.71%
- ----------------------------------------------------------------------------
TELECOMMUNICATIONS - 36.53%
- ----------------------------------------------------------------------------
6,300 AirTouch Communications (a) $ 179,550
- ----------------------------------------------------------------------------
7,500 ALLTEL 190,313
- ----------------------------------------------------------------------------
17,000 Ameritech 748,000
- ----------------------------------------------------------------------------
10,000 Bell Atlantic 560,000
- ----------------------------------------------------------------------------
18,000 BellSouth 1,143,000
- ----------------------------------------------------------------------------
9,000 Frontier 216,000
- ----------------------------------------------------------------------------
16,250 GTE 554,531
- ----------------------------------------------------------------------------
2,600 MCI Communications 57,200
- ----------------------------------------------------------------------------
25,000 SBC Communications 1,190,625
- ----------------------------------------------------------------------------
8,100 Southern New England
Telecommunications 285,525
- ----------------------------------------------------------------------------
2,750 Telecom Corporation of
New Zealand, ADR 166,719
- ----------------------------------------------------------------------------
1,600 Telefonica de Espana, ADS 62,000
- ----------------------------------------------------------------------------
3,250 US West 135,281
- ----------------------------------------------------------------------------
5,488,744
============================================================================
UTILITY-ELECTRIC - 37.03%
- ----------------------------------------------------------------------------
10,700 Allegheny Power System 251,450
- ----------------------------------------------------------------------------
7,750 American Electric Power 272,219
- ----------------------------------------------------------------------------
7,500 Carolina Power & Light 226,875
- ----------------------------------------------------------------------------
5,200 CILCORP 189,150
- ----------------------------------------------------------------------------
6,035 CINergy 158,419
- ----------------------------------------------------------------------------
7,500 CIPSCO 224,062
- ----------------------------------------------------------------------------
7,000 CMS Energy 172,375
- ----------------------------------------------------------------------------
7,000 Detroit Edison 206,500
- ----------------------------------------------------------------------------
10,700 DPL 236,738
- ----------------------------------------------------------------------------
8,600 Duke Power 356,900
- ----------------------------------------------------------------------------
7,000 Eastern Utilities 158,375
- ----------------------------------------------------------------------------
6,850 Entergy 165,256
- ----------------------------------------------------------------------------
8,000 FPL Group 309,000
- ----------------------------------------------------------------------------
4,900 Illinova 124,338
- ----------------------------------------------------------------------------
5,500 KU Energy 153,312
- ----------------------------------------------------------------------------
5,500 LG&E Energy 214,500
- ----------------------------------------------------------------------------
10,950 PacifiCorp 205,313
- ----------------------------------------------------------------------------
8,000 PECO Energy 221,000
- ----------------------------------------------------------------------------
11,400 Pinnacle West Capital 279,300
- ----------------------------------------------------------------------------
7,100 Puget Sound Power & Light 162,413
- ----------------------------------------------------------------------------
9,000 San Diego Gas & Electric 186,750
- ----------------------------------------------------------------------------
17,700 Southern 396,037
- ----------------------------------------------------------------------------
7,750 Texas Utilities 266,406
- ----------------------------------------------------------------------------
9,000 Western Resources 277,875
- ----------------------------------------------------------------------------
5,100 WPS Resources 149,175
- ----------------------------------------------------------------------------
5,563,738
============================================================================
UTILITY-GAS - 16.56%
- ----------------------------------------------------------------------------
7,500 Brooklyn Union Gas 196,875
- ----------------------------------------------------------------------------
3,200 Coastal 97,200
- ----------------------------------------------------------------------------
8,000 Connecticut Natural Gas 176,000
- ----------------------------------------------------------------------------
6,750 Delta Natural Gas 116,437
- ----------------------------------------------------------------------------
5,700 Energen 122,550
- ----------------------------------------------------------------------------
6,000 Enron 210,750
- ----------------------------------------------------------------------------
6,400 Equitable Resources 184,800
- ----------------------------------------------------------------------------
16,100 MCN 317,975
- ----------------------------------------------------------------------------
5,500 MDU Resources Group 163,625
- ----------------------------------------------------------------------------
6,500 Pacific Enterprises 159,250
- ----------------------------------------------------------------------------
11,900 Public Service Company of
North Carolina 194,862
- ----------------------------------------------------------------------------
7,000 Questar 201,250
- ----------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 148
UTILITY PORTFOLIO 15
------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
============================================================================
June 30, 1995 (unaudited)
SHARES DESCRIPTION VALUE
============================================================================
<S> <C>
5,900 Sonat $ 179,950
- ----------------------------------------------------------------------------
5,900 WICOR 165,938
- ----------------------------------------------------------------------------
2,487,462
============================================================================
UTILITY-WATER - 0.59%
- ----------------------------------------------------------------------------
5,250 Consumers Water 88,594
============================================================================
TOTAL COMMON STOCKS
(Cost $12,984,324) $13,628,538
============================================================================
PREFERRED STOCK - 0.29%
- ----------------------------------------------------------------------------
3,996 United Water Resources, 5.0%, Conv.
Series A (Cost $54,787) $ 44,105
============================================================================
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
============================================================================
<S> <C> <C>
SHORT-TERM INVESTMENTS - 3.54%
- ----------------------------------------------------------------------------
U.S. TREASURY BILLS - 3.54%
- ----------------------------------------------------------------------------
$ 19,000 5.65%, 7/6/95 $ 18,985
- ----------------------------------------------------------------------------
18,000 5.60%, 7/13/95 17,967
- ----------------------------------------------------------------------------
12,000 5.60%, 8/17/95 11,912
- ----------------------------------------------------------------------------
488,000 5.83%, 9/21/95 482,187
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Amortized Cost $530,937) $ 531,051
============================================================================
TOTAL INVESTMENTS
(Cost $13,570,048) 94.54% $14,203,694
- ----------------------------------------------------------------------------
Other Assets in Excess of Liabilities 5.46% 819,879
- ----------------------------------------------------------------------------
NET ASSETS 100.00% $15,023,573
============================================================================
</TABLE>
(a) Non-Income Producing Security
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 149
UTILITY FUND 16
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on July 21, 1986 as a business trust under the
laws of the Commonwealth of Massachusetts. The Utility Fund (the "Fund") is one
of the funds offered to investors by the Trust. The Fund commenced operations
and began offering shares of beneficial interest on August 3, 1992. The Fund
invests substantially all of its assets in the Utility Portfolio (the
"Portfolio"). The Portfolio is an open-end management investment company
registered under the Act. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio. The value of such
investment in the Portfolio reflects the Fund's proportionate interest in the
net assets of the Portfolio. At June 30, 1995, the Fund's investment was
approximately 100% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions of the Portfolio are allocated pro
rata among the investors in the Portfolio at the time of such determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
D. Dividends
It is the Fund's policy to declare and distribute dividends quarterly to
shareholders from net investment income. Dividends payable to shareholders are
recorded by the Fund on the ex-dividend date, which is the same as the
declaration date. Distributions of net realized short-term and long-term
capital gains, if any, earned by the Fund will be made annually to the extent
they are not offset by any capital loss carryforwards.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of
the Fund. Expenses directly attributable to the Fund are charged to the Fund,
while expenses which are attributable to all of the Trust's funds are allocated
among them.
<PAGE> 150
UTILITY FUND 17
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.65 of 1% of the Fund's average daily net assets.
For the six months ended June 30, 1995, this fee aggregated $52,344.
The Trust has entered into a Distribution Agreement with Signature
Broker-Dealer Services, Inc. ("Signature"). Under the Distribution Agreement
with the Trust, pursuant to Rule 12b-1 of the 1940 Act, Signature may seek
reimbursement, at an annual rate not exceeding 0.20 of 1% of the Fund's average
daily net assets for expenses incurred in connection with any activities
primarily intended to result in the sale of the Fund's shares. For the six
months ended June 30, 1995, there were no reimbursable expenses incurred under
this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 0.65 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio, and
1.25 of 1% of the average daily net assets of the Fund, including expenses of
the Portfolio. For the six months ended June 30, 1995, expenses of the Fund
have been reduced $24,285.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Fund. Similarly, none of the Fund's
officers received compensation from the Fund.
NOTE 3 - SHARES OF BENEFICIAL INTEREST
At June 30, 1995, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
For the six months For the year
ended June 30, 1995 ended
(unaudited) December 31, 1994
----------------------------- ------------------------------------
Shares Amount Shares Amount
-------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Sold 32,062 $ 299,981 552,277 $ 5,655,427
Reinvested 14,918 139,481 84,987 801,750
Redeemed (359,129) (3,397,558) (2,249,914) (21,487,670)
-------- ---------- ---------- -----------
Net (Decrease) (312,149) $(2,958,096) (1,612,650) $(15,030,493)
======== =========== ========== ============
</TABLE>
NOTE 4 - CAPITAL LOSS CARRYFORWARD
At December 31, 1994, accumulated net realized capital loss carryforward
available as a reduction against future net realized capital gains aggregated
$2,813,323, which will expire in 2003.
<PAGE> 151
UTILITY PORTFOLIO 18
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
The Utility Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940 (the "Act"), as amended, as an open-end management
investment company. The Portfolio was organized on December 11, 1991 as an
unincorporated trust under the laws of New York and commenced operations on
August 3, 1992. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
The Portfolio's investments are valued each business day by an independent
pricing service approved by the Trustees. Securities traded on national
exchanges or traded in the NASDAQ National Market System are valued at the last
sales prices reported at the close of business each day. Over-the-counter
securities not included in the NASDAQ National Market System and listed
securities for which no sale was reported are valued at the mean of the bid and
asked prices. Short-term obligations with remaining maturities of 60 days or
less, are valued at amortized cost which with accrued interest approximates
value. Securities for which quotations are not available are stated at fair
value as determined by the Trustees.
C. Security Transactions and Investment Income
Security transactions are accounted for on a trade date basis (date the order
to buy or sell is executed). Dividend income is recorded on the ex-dividend
date. Interest income is recorded on the accrual basis and includes
amortization of premium and discount on investments. Realized gains and losses
from securities transactions are recorded on the identified cost basis.
All of the net investment income and realized and unrealized gains and losses
from the security transactions of the Portfolio are allocated pro rata among
the investors in the Portfolio at the time of such determination.
D. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required.
<PAGE> 152
UTILITY PORTFOLIO 19
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at annual rate of 0.10 of 1% of the Portfolio's average daily net
assets. For the six months ended June 30, 1995, this fee aggregated $8,077.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at an annual rate of 0.65 of 1% of the
Portfolio's average daily net assets. For the six months ended June 30, 1995,
this fee aggregated $52,503.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.60 of 1% of the
average daily net assets of the Portfolio. For the six months ended June 30,
1995, expenses of the Portfolio have been reduced $22,887.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the six months ended June 30, 1995 were
$5,291,784 and $11,200,801, respectively. The aggregate gross unrealized
appreciation for all investments was $939,000, and the aggregate gross
unrealized depreciation for all investments was $305,354.
<PAGE> 153
[This Page Intentionally Left Blank]
<PAGE> 154
BT INVESTMENT FUNDS
Short/
Intermediate
U.S.
Government
Securities
Fund
Semi-Annual Report
June 30, 1995
<PAGE> 155
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 1
--------------------------------------------------------------
TABLE OF CONTENTS
===============================================================================
<TABLE>
<S> <C>
INTRODUCTION FROM PRESIDENT . . . . . . . . . . . . . . . . . . . . . . 2
LETTER TO SHAREHOLDERS FROM INVESTMENT
ADVISER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SHORT/INTERMEDIATE U.S. GOVERNMENT
SECURITIES FUND
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 6
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 7
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . 8
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . 9
SHORT/INTERMEDIATE U.S. GOVERNMENT
SECURITIES PORTFOLIO
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 10
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 11
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . 12
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . 13
Schedule of Portfolio Investments . . . . . . . . . . . . . . . . . . 14
SHORT/INTERMEDIATE U.S. GOVERNMENT
SECURITIES FUND
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 15
SHORT/INTERMEDIATE U.S. GOVERNMENT
SECURITIES PORTFOLIO
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the
Short/Intermediate U.S. Government Securities Fund may be obtained by calling
or writing to Investors Fiduciary Trust Company or Signature Broker-Dealer
Services, Inc., the primary Servicing Agent and Distributor, respectively, of
BT Investment Funds:
BT INVESTMENT FUNDS
INVESTORS FIDUCIARY TRUST COMPANY
127 WEST 10TH STREET
KANSAS CITY, MO 64105
(800) 422-6577
BT INVESTMENT FUNDS
SIGNATURE BROKER-DEALER SERVICES, INC.
6 ST. JAMES AVENUE
BOSTON, MA 02116
(800) 545-1074
You may write to the Short/Intermediate U.S. Government Securities Fund at the
following address:
BT INVESTMENT FUNDS
6 ST. JAMES AVENUE
BOSTON, MA 02116
<PAGE> 156
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 2
--------------------------------------------------------------
INTRODUCTION FROM PRESIDENT
===============================================================================
August, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for the BT
Investment Funds Short/Intermediate U.S. Government Securities Fund. This
Report provides you with an investment overview as well as a financial
summary of the Fund's operations for the six months ended June 30, 1995.
We have also included a Letter from the Investment Adviser detailing the
factors that affected the Fund's performance and a performance chart which
illustrates your Fund's return versus a relevant financial index. Also
presented in your Report is a pie chart displaying diversification of
Portfolio investments, financial statements, financial highlights and a
listing of the Portfolio's holdings.
Looking ahead, we will continue to closely observe the economic conditions
and how they affect the financial markets.
We appreciate your ongoing support of the BT Investment Funds
Short/Intermediate U.S. Government Securities Fund and look forward to
continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 157
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 3
--------------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
===============================================================================
The Short/Intermediate U.S. Government Securities Fund (the "Fund")
underperformed its benchmark for the semi-annual period ended June 30,
1995, returning 5.96% versus the Lehman 1-3 Year Government Index return
of 6.60%.
In general, the first six months of 1995 for the short/intermediate
government securities market -- and for the Fund -- were dominated by the
changing shape of the yield curve. Early in the year, the Fund was
positioned with a shorter than average maturity, and in anticipation of
the yield curve flattening, in a "barbell" position. This means holding
more in cash and 4-year securities and less with maturities in between.
The yield curve steepened instead. By the end of March, the Fund was
returned to a neutral to slightly long maturity position and the "barbell"
was removed.
As the second quarter progressed, the yield curve at the short end, i.e.
between zero and two years, inverted as the market anticipated an easing
in the Federal Reserve Board's Funds Rate. This inverted yield curve
rewards shorter maturity positioning. We then shifted the Fund's maturity
from longer than average to a neutral position.
The Federal Reserve Board did, in fact, act to cut official interest rates
by 0.25% on July 6, 1995, and the yield curve remains inverted in
anticipation of further cuts. Though we feel that the Fed will ease again
before year-end, the timing of the cut depends on as yet unreleased
economic data. Until that information becomes available, we anticipate
little more than sideways trading in the short-term markets. As a result,
we expect to keep the Fund's maturity in line with its benchmark,
maintaining a conservative, defensive posture, until the market's
direction becomes more clear.
<PAGE> 158
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 4
--------------------------------------------------------------
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
==============================================================================
The following graph illustrates the Fund's return versus the Lehman 1-3
Year Government Index since August 31, 1992, assuming a $10,000 initial
investment:
==============================================================================
COMPARISON OF CHANGE
IN VALUE OF A $10,000
INVESTMENT IN THE
SHORT/INTERMEDIATE
U.S. GOVERNMENT
SECURITIES FUND AND
THE LEHMAN 1-3 YEAR
GOVERNMENT INDEX
<TABLE>
<CAPTION>
SHORT/INTERMEDIATE
U.S. GOVERNMENT THE LEHMAN 1-3 YEAR
SECURITIES FUND GOVERNMENT INDEX
------------------ -------------------
<S> <C> <C>
8/31/92 $10,000 $10,000
9/30/92 $10,111 $10,094
12/31/92 $10,026 $10,115
3/31/93 $10,286 $10,333
6/30/93 $10,383 $10,448
9/30/93 $10,585 $10,592
12/31/93 $10,636 $10,659
3/31/94 $10,551 $10,607
6/30/94 $10,561 $10,607
9/30/94 $10,582 $10,714
12/31/94 $10,592 $10,714
3/31/95 $10,895 $11,070
6/30/95 $11,223 $11,421
</TABLE>
Past performance is not indicative of future performance
TOTAL RETURN
ENDED JUNE 30, 1995
One Year Since 8/24/92*
6.26% 12.53%
* The Fund's inception date
Investment return and principal
value may fluctuate so that shares,
when redeemed, may be worth
more or less than their original cost.
==============================================================================
ABOUT THE LOU HUDSON
PORTFOLIO MANAGER Vice President
- Thirty-two years of investment experience
- Specializes in short-intermediate fixed income securities
- BA -- City College of New York
<PAGE> 159
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 5
--------------------------------------------------------------
==============================================================================
OBJECTIVE Seeks high level of current income with the
preservation of capital.
- ------------------------------------------------------------------------------
INVESTMENT INSTRUMENTS Direct obligations issued or guaranteed by the
U.S. Government, or its agencies and
instrumentalities, including repurchase
agreements secured by U.S. Government
obligations. The average weighted maturity
of securities will range from two to five years.
- ------------------------------------------------------------------------------
DIVERSIFICATION OF PORTFOLIO
INVESTMENTS BY ASSET TYPE
as of June 30, 1995 (unaudited)
(percentages are based on market value)
[FIGURE 1]
90.44% U.S. Treasury Notes
6.93% U.S. Government Agencies
2.63% Repurchase Agreement
<PAGE> 160
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 6
--------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
=================================================================================================================================
June 30, 1995 (unaudited)
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
Investment in Short/Intermediate U.S. Government Securities Portfolio, at Value $22,110,561
- ---------------------------------------------------------------------------------------------------------------------------------
Receivable for Shares of Beneficial Interest Sold 2,510
- ---------------------------------------------------------------------------------------------------------------------------------
Prepaid Expenses 4,851
- ---------------------------------------------------------------------------------------------------------------------------------
Due from Bankers Trust 10,951
- ---------------------------------------------------------------------------------------------------------------------------------
Total Assets 22,128,873
- ---------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends Payable 7,930
- ---------------------------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 17,005
- ---------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 24,935
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (Applicable to 2,232,514 Outstanding Shares of $.001 Par Value
Per Share, Unlimited Number of Shares of Beneficial Interest Authorized) $22,103,938
=================================================================================================================================
NET ASSET VALUE, Subscription and Redemption Price Per Share
($22,103,938/2,232,514 Shares) $ 9.90
=================================================================================================================================
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 2,232
- ---------------------------------------------------------------------------------------------------------------------------------
Paid-in Capital 22,228,832
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulated Net Realized (Loss) from Securities Transactions (230,049)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 102,923
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $22,103,938
=================================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 161
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 7
--------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
=================================================================================================================================
For the six months ended June 30, 1995 (unaudited)
<S> <C> <C>
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------------------------------------
Income Allocated from Short/Intermediate U.S. Government Securities Portfolio, net $532,471
- ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------------------------------------
Administration and Services Fee $ 46,716
- ---------------------------------------------------------------------------------------------------------------------------------
Shareholders Reports 8,833
- ---------------------------------------------------------------------------------------------------------------------------------
Registration Fees 7,430
- ---------------------------------------------------------------------------------------------------------------------------------
Professional Fees 3,058
- ---------------------------------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 1,164
- ---------------------------------------------------------------------------------------------------------------------------------
Trustees Fees 773
- ---------------------------------------------------------------------------------------------------------------------------------
Insurance 436
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 258
- ---------------------------------------------------------------------------------------------------------------------------------
Total Expenses 68,668
- ---------------------------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (21,952) 46,716
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 485,755
- ---------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions 51,355
- ---------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 451,093
- ---------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES 502,448
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $988,203
=================================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 162
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 8
--------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
=================================================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income $ 485,755 $ 590,680
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 51,355 (296,803)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on Securities 451,093 (337,589)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations 988,203 (43,712)
- ----------------------------------------------------------------------------------------------------------------------------------
FROM DIVIDENDS
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (485,761) (590,674)
- ----------------------------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Dividends (485,761) (590,674)
- ----------------------------------------------------------------------------------------------------------------------------------
FROM TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Transactions in
Shares of Beneficial Interest 7,513,339 579,998
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 8,015,781 (54,388)
==================================================================================================================================
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
Beginning of Period 14,088,157 14,142,545
- ---------------------------------------------------------------------------------------------------------------------------------
End of Period $22,103,938 $14,088,157
=================================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 163
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 9
--------------------------------------------------------------
FINANCIAL HIGHLIGHTS
================================================================================
Contained below are selected data for a share outstanding, total
investment return, ratios to average net assets and other supplemental data for
each of the periods indicated for the Short/Intermediate U.S. Government
Securities Fund.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
For the period
For the six For the For the August 24, 1992
months ended year ended year ended (Commencement
June 30, 1995 December December of Operations) to
(unaudited) 31, 1994 31, 1993 December 31, 1992
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $ 9.61 $10.07 $ 9.92 $10.00
------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.28 0.42 0.39 0.13
Net Realized and Unrealized Gain
(Loss) on Securities 0.29 (0.46) 0.21 (0.08)
------ ------ ------ ------
Total from Investment Operations 0.57 (0.04) 0.60 0.05
------ ------ ------ ------
Less Dividends and Distributions
Dividends from Net Investment Income (0.28) (0.42) (0.39) (0.13)
Distributions from Net Realized Gain
from Securities Transactions - - (0.06) -
------ ------ ------ ------
Total Dividends and Distributions (0.28) (0.42) (0.45) (0.13)
------ ------ ------ ------
Net Asset Value, End of Period $ 9.90 $ 9.61 $10.07 $ 9.92
====== ====== ====== ======
TOTAL INVESTMENT RETURN 5.96% (0.42%) 6.09% 1.48%*
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income to Average Net Assets 5.72%* 4.28% 3.68% 3.80%*
Ratio of Expenses to Average Net Assets, Including
Expenses of the Short/Intermediate U.S.
Government Securities Portfolio 0.85%* 0.85% 0.85% 0.85%*
Decrease Reflected in Above Expense Ratio
Due to Absorption of Expenses by Bankers Trust 0.30%* 0.53% 0.57% 3.29%*
Net Assets, End of Period (000's omitted) $22,104 $14,088 $14,143 $1,812
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 164
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES PORTFOLIO 10
---------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
===========================================================================================================================
June 30, 1995 (unaudited)
<S> <C>
ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
Investments, at Value (Cost $51,342,118, including Repurchase Agreement
amounting to $1,365,224) $51,869,119
- ---------------------------------------------------------------------------------------------------------------------------
Interest Receivable 925,677
- ---------------------------------------------------------------------------------------------------------------------------
Prepaid Expenses and Other Assets 24,041
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets 52,818,837
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------------------------
Due to Bankers Trust 3,281
- ---------------------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 13,571
- ---------------------------------------------------------------------------------------------------------------------------
Total Liabilities 16,852
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS $52,801,985
===========================================================================================================================
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
Paid-in Capital $52,274,984
- ---------------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 527,001
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS, JUNE 30, 1995 $52,801,985
===========================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 165
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES PORTFOLIO 11
---------------------------------------------------------------------
<TABLE>
<S> <C> <C>
STATEMENT OF OPERATIONS
===========================================================================================================================
For the six months ended June 30, 1995 (unaudited)
- ---------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------------------------------
Interest $1,619,829
- ---------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------------------------------
Advisory Fee $ 61,909
- ---------------------------------------------------------------------------------------------------------------------------
Administration and Services Fee 12,382
- ---------------------------------------------------------------------------------------------------------------------------
Professional Fees 8,272
- ---------------------------------------------------------------------------------------------------------------------------
Insurance 1,314
- ---------------------------------------------------------------------------------------------------------------------------
Trustees Fees 731
- ---------------------------------------------------------------------------------------------------------------------------
Miscellaneous 583
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses 85,191
- ---------------------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (10,901) 74,290
- ---------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,545,539
- ---------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions 153,193
- ---------------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 1,317,941
- ---------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES 1,471,134
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $3,016,673
===========================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 166
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES PORTFOLIO 12
---------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
===========================================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income $ 1,545,539 $ 1,768,139
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 153,193 (765,789)
- ----------------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on Securities 1,317,941 (800,099)
- ----------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 3,016,673 202,251
- ---------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 11,443,035 45,632,673
- ---------------------------------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (8,928,261) (16,293,202)
- ----------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Capital Transactions 2,514,774 29,339,471
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 5,531,447 29,541,722
===========================================================================================================================
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
Beginning of Period 47,270,538 17,728,816
- ---------------------------------------------------------------------------------------------------------------------------
End of Period $52,801,985 $ 47,270,538
===========================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 167
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES PORTFOLIO 13
---------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
================================================================================
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Short/Intermediate U.S. Government Securities
Portfolio.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
For the period
For the six For the For the August 24, 1992
months ended year ended year ended (Commencement
June 30, 1995 December December of Operations) to
(unaudited) 31, 1994 31, 1993 December 31, 1992
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RATIOS AND SUPPLEMENTAL DATA
Ratio of Net Investment Income to Average
Net Assets 6.24%* 4.91% 4.25% 4.36%*
Ratio of Expenses to Average Net Assets 0.30%* 0.30% 0.30% 0.30%*
Decrease Reflected in Above Ratio of Expenses
to Average Net Assets Due to Absorption of
Expenses by Bankers Trust 0.04%* 0.09% 0.25% 1.41%*
Portfolio Turnover Rate 22% 202% 267% 75%
Net Assets, End of Period (000's omitted) $52,802 $47,271 $17,729 $4,999
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 168
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES PORTFOLIO 14
---------------------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO INVESTMENTS
===========================================================================
June 30, 1995 (unaudited)
PRINCIPAL
AMOUNT DESCRIPTION VALUE
===========================================================================
<S> <C>
U.S. GOVERNMENT
AGENCIES & OBLIGATIONS - 95.65%
- ---------------------------------------------------------------------------
U.S. TREASURY NOTES - 88.84%
- ---------------------------------------------------------------------------
$ 5,000,000 7.875%, 2/15/96 $ 5,062,500
- ---------------------------------------------------------------------------
1,000,000 4.25%, 5/15/96 987,030
- ---------------------------------------------------------------------------
4,000,000 5.875%, 5/31/96 4,005,640
- ---------------------------------------------------------------------------
5,000,000 6.00%, 6/30/96 5,012,500
- ---------------------------------------------------------------------------
6,000,000 7.50%, 12/31/96 6,140,640
- ---------------------------------------------------------------------------
5,000,000 6.75%, 2/28/97 5,071,100
- ---------------------------------------------------------------------------
5,000,000 6.625%, 3/31/97 5,064,850
- ---------------------------------------------------------------------------
3,000,000 5.50%, 9/30/97 2,977,020
- ---------------------------------------------------------------------------
7,500,000 5.125%, 11/30/98 7,307,775
- ---------------------------------------------------------------------------
5,000,000 7.50%, 10/31/99 5,280,450
- ---------------------------------------------------------------------------
46,909,505
===========================================================================
U.S. GOVERNMENT AGENCIES - 6.81%
- ---------------------------------------------------------------------------
2,000,000 Student Loan Marketing
Association, 8.29%, 12/22/97 2,098,140
- ---------------------------------------------------------------------------
1,500,000 Tennessee Valley Authority,
6.00%, 1/15/97 1,496,250
- ---------------------------------------------------------------------------
3,594,390
===========================================================================
TOTAL U.S. GOVERNMENT AGENCIES & OBLIGATIONS
(Cost $49,976,894) $50,503,895
===========================================================================
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
===========================================================================
<S> <C>
SHORT-TERM INVESTMENT - 2.58%
- ---------------------------------------------------------------------------
Repurchase Agreement - 2.58%
- ---------------------------------------------------------------------------
$ 1,365,224 Repurchase Agreement with Sanwa Bank,
Dated 6/30/95, 6.05%, Principal and
Interest in the Amount of $1,365,453
due 7/3/95, (Collateralized by U.S.
Treasury Notes, Par Value $1,355,000,
6.125%, due 7/31/96) $ 1,365,224
===========================================================================
Total Short-Term Investment
(Amortized Cost $1,365,224) $ 1,365,224
===========================================================================
Total Investments
(Cost $51,342,118) 98.23% $51,869,119
- ---------------------------------------------------------------------------
Other Assets in Excess of Liabilities 1.77% 932,866
- ---------------------------------------------------------------------------
Net Assets 100.00% $52,801,985
===========================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 169
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 15
---------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on July 21, 1986, as a business trust under
the laws of the Commonwealth of Massachusetts. The Short/Intermediate U.S.
Government Securities Fund (the "Fund") is one of the funds offered to
investors by the Trust. The Fund commenced operations and began offering shares
of beneficial interest on August 24, 1992. The Fund invests substantially all
of its assets in the Short/Intermediate U.S. Government Securities Portfolio
(the "Portfolio"). The Portfolio is an open-end management investment company
registered under the Act. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio. The value of such
investment in the Portfolio reflects the Fund's proportionate interest in the
net assets of the Portfolio. At June 30, 1995, the Fund's investment was
approximately 42% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns interest income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions of the Portfolio are allocated pro
rata among the investors in the Portfolio at the time of such determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
D. Dividends
It is the Fund's policy to declare dividends daily, payable to shareholders of
record as of 4:00 p.m. (E.S.T.) from net investment income and to pay these
dividends monthly. Dividends payable to shareholders are recorded by the Fund
on the ex-dividend date, which is the same as the declaration date.
Distributions of net realized short-term and long-term capital gains, if any,
earned by the Fund will be made annually to the extent they are not offset by
any capital loss carryforwards.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of
the Fund. Expenses directly attributable to the Fund are charged to the Fund,
while expenses which are attributable to all of the Trust's funds are allocated
among them.
<PAGE> 170
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 16
---------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.55 of 1% of the Fund's average daily net assets.
For the six months ended June 30, 1995, this fee aggregated $46,716.
The Trust has entered into a Distribution Agreement with Signature
Broker-Dealer Services, Inc. ("Signature"). Under the Distribution Agreement
with the Trust, pursuant to Rule 12b-1 of the 1940 Act, Signature may seek
reimbursement, at an annual rate not exceeding 0.20 of 1% of the Fund's average
daily net assets, for expenses incurred in connection with any activities
primarily intended to result in the sale of the Fund's shares. For the six
months ended June 30, 1995, there were no reimbursable expenses incurred under
this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 0.55 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio, and
0.85 of 1% of the average daily net assets of the Fund, including expenses of
the Portfolio. For the six months ended June 30, 1995, expenses of the Fund
have been reduced $21,952.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Fund. Similarly, none of the Fund's
officers received compensation from the Fund.
NOTE 3 - SHARES OF BENEFICIAL INTEREST
At June 30, 1995, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
For the six
months ended
June 30, 1995 For the year ended
(unaudited) December 31, 1994
----------------------------- ----------------------------
Shares Amount Shares Amount
---------- -------------- --------- ------------
<S> <C> <C> <C> <C>
Sold 893,357 $ 8,651,324 967,064 $ 9,406,195
Reinvested 36,268 448,881 43,948 549,453
Redeemed (162,508) (1,586,866) (950,701) (9,375,650)
-------- ----------- -------- -----------
Net Increase 767,117 $ 7,513,339 60,311 $ 579,998
======== =========== ======== ===========
</TABLE>
NOTE 4 - CAPITAL LOSS CARRYFORWARD
At December 31, 1994, accumulated net realized capital loss carryforward
available as a reduction against future net realized capital gains aggregated
$334,660, which will expire in 2003.
<PAGE> 171
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 17
---------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 1 - ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. Organization
The Short/Intermediate U.S. Government Securities Portfolio (the "Portfolio")
is registered under the Investment Company Act of 1940 (the "Act"), as amended,
as an open-end management investment company. The Portfolio was organized on
December 11, 1991, as an unincorporated trust under the laws of New York and
commenced operations on August 24, 1992. The Declaration of Trust permits the
Board of Trustees (the "Trustees") to issue beneficial interests in the
Portfolio.
B. Security Valuation
The Portfolio's investments are valued each business day by an independent
pricing service (the "Service") approved by the Trustees. Investments for
which quoted bid prices in the judgment of the Service are readily available
and are representative of the bid side of the market are valued at the mean
between the quoted bid prices (as obtained by the Service from dealers in such
securities) and asked prices (as calculated by the Service based upon its
evaluation of the market for such securities). Other investments (which
constitute a majority of the portfolio securities) are carried at fair value as
determined by the Service, based on methods which include consideration of:
yields or prices of government securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Short-term obligations with remaining maturities of 60 days or
less, are valued at amortized cost which with accrued interest approximates
value. Securities for which quotations are not available are stated at fair
value as determined by the Board of Trustees.
C. Security Transactions and Interest Income
Security transactions are accounted for on a trade date basis (date the order
to buy or sell is executed). Interest income is recorded on the accrual basis
and includes amortization of premium and discount on investments. Realized
gains and losses from security transactions are recorded on the identified cost
basis.
The Portfolio may enter into repurchase agreements with financial institutions
deemed to be creditworthy by the Portfolio's Investment Adviser, subject to the
seller's agreement to repurchase and the Portfolio's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Portfolio's custodian, and
pursuant to the terms of the repurchase agreement must have an aggregate market
value greater than or equal to the repurchase price plus accrued interest at
all times. If the value of the underlying securities falls below the value of
the repurchase price plus accrued interest, the Portfolio will require the
seller to deposit additional collateral by the next business day. If the
request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Portfolio maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller.
All of the net investment income and realized and unrealized gains and losses
from the security transactions of the Portfolio are allocated pro rata among
the investors in the Portfolio at the time of such determination.
D. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required.
<PAGE> 172
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND 18
---------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
===============================================================================
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.05 of 1% of the Portfolio's average daily
net assets. For the six months ended June 30, 1995, this fee aggregated
$12,382.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at an annual rate of 0.25 of 1% of the
Portfolio's average daily net assets. For the six months ended June 30, 1995,
this fee aggregated $61,909.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.30 of 1% of the
average daily net assets of the Portfolio. For the six months ended June 30,
1995, expenses of the Portfolio have been reduced $10,901.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments of
long-term U.S. Government obligations, for the six months ended June 30, 1995,
were $34,871,133 and $8,141,895, respectively. The net unrealized appreciation
of investments amounted to $527,001, consisting of gross unrealized
appreciation of $647,443 and gross unrealized depreciation of $120,442.
<PAGE> 173
- --------------------------------------------------------------------------------
BT INVESTMENT FUNDS
- --------------------------------------------------------------------------------
Intermediate
Tax Free
Fund
Semi-Annual Report
June 30, 1995
<PAGE> 174
INTERMEDIATE TAX FREE FUND 1
------------------------------------------------------------------------
Table of Contents
================================================================================
Introduction from President................................................ 2
Letter to Shareholders from Investment Adviser............................. 3
Intermediate Tax Free Fund
Statement of Assets and Liabilities................................... 6
Statement of Operations............................................... 7
Statement of Changes in Net Assets.................................... 8
Financial Highlights.................................................. 9
Intermediate Tax Free Portfolio
Statement of Assets and Liabilities................................... 10
Statement of Operations............................................... 11
Statement of Changes in Net Assets.................................... 12
Financial Highlights.................................................. 13
Schedule of Portfolio Investments..................................... 14
Intermediate Tax Free Fund
Notes to Financial Statements......................................... 16
Intermediate Tax Free Portfolio
Notes to Financial Statements......................................... 18
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Intermediate
Tax Free Fund may be obtained by calling or writing to Investors Fiduciary Trust
Company or Signature Broker-Dealer Services, Inc., the primary Servicing Agent
and Distributor, respectively, of BT Investment Funds:
BT Investment Funds
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105
(800) 422-6577
BT Investment Funds
Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, MA 02116
(800) 545-1074
You may write to the Intermediate Tax Free Fund at the following address:
BT Investment Funds
6 St. James Avenue
Boston, MA 02116
<PAGE> 175
INTERMEDIATE TAX FREE FUND 2
------------------------------------------------------------------------
Introduction from President
================================================================================
August, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for the BT Investment
Funds Intermediate Tax Free Fund. This Report provides you with an
investment overview as well as a financial summary of the Fund's operations
for the six months ended June 30, 1995. We have also included a Letter from
the Investment Adviser, detailing the factors that affected the Fund's
performance and a performance chart which illustrates your Fund's return
versus a relevant financial index. Also presented in your Report is a pie
chart displaying diversification of Portfolio investments, financial
statements, financial highlights and a listing of the Portfolio's holdings.
Looking ahead, we will continue to closely observe the economic conditions
and how they affect the financial markets.
We appreciate your ongoing support of the Intermediate Tax Free Fund and
look forward to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 176
INTERMEDIATE TAX FREE FUND 3
------------------------------------------------------------------------
Letter to Shareholders from Investment Adviser
================================================================================
The Intermediate Tax Free Fund returned 8.11% for the semi-annual period
ending June 30, 1995. It just slightly underperformed the Lehman 7 Year
Government Obligation Bond Index, which returned 8.25%, but significantly
outperformed the Lipper Intermediate Municipal Debt Average, which returned
7.33%.
The tax-exempt sector had a mixed six months. During the first quarter, it
rallied, benefiting, like other sectors of the fixed income markets, from
slower economic growth, moderate inflation and a growing belief that the
Federal Reserve Board had reached the end of its tightening phase. In
addition, municipal bond prices were supported by an exceptionally good
supply/demand relationship. For example, in the first quarter, municipal
issuance was down 25% from its level of the same period last year and
represented the lowest first quarter volume since 1990.
During the second quarter, interest rates did, in fact, begin to fall, but
municipal bonds underperformed other fixed income categories, as the
possibility both of changes in the tax structure and of an increasing supply
in the municipal market, which would, in turn, limit upward potential,
loomed.
Throughout, the Fund maintained its conservative, high quality investment
strategy. Its strong performance is primarily attributable to its duration
positioning of about three to four months longer than its benchmark, which
helped maintain higher yields as interest rates declined. Three other
factors positively contributed as well.
. During the first quarter, the Fund held a large position in market
discount bonds, a sector which rallied more than the market as a whole.
. During the second quarter, the Fund held a larger-than-normal cash
position, due to concerns about redemptions caused by fears of tax
structure changes.
. Finally, the Fund benefited from a large and timely trade out of Los
Angeles County securities. Specifically, the Fund eliminated a one million
unit position, representing 4% of assets, in April, two months before the
County's credit rating was downgraded.
Based on the Federal Reserve Board's interest rate cut in early July and our
outlook for economic growth, we are moderately positive about the fixed
income market for the remainder of 1995. Thus, we anticipate keeping the
Fund's duration about one-third of a year longer than the index and moving
to a more fully invested position in the tax-exempt sector, reducing our
cash position to a more normal holding range.
<PAGE> 177
INTERMEDIATE TAX FREE FUND 4
------------------------------------------------------------------------
Letter to Shareholders from Investment Adviser
================================================================================
The following graph illustrates the Fund's return versus the Lehman 7 Year
G.O. Bond Index since July 31, 1992, assuming a $10,000 initial investment:
================================================================================
Comparison of
Change in Value of a $10,000
Investment in the Intermediate
Tax Free Fund and
the Lehman 7 Year G.O.
Bond Index
<TABLE>
<CAPTION>
Measurement period INTERMEDIATE LEHMAN 7 YEAR
(Fiscal year Covered) TAX FREE FUND G.O. BOND INDEX
- --------------------- ------------- ---------------
<S> <C> <C>
Measurement PT -
07/31/92 $10,000.00 $10,000.00
FYE 09/30/92 $ 9,936.83 $10,276.00
FYE 12/31/92 $10,086.31 $10,449.66
FYE 03/31/93 $10,376.73 $10,781.96
FYE 06/30/93 $10,656.26 $11,089.25
FYE 09/30/93 $10,960.37 $11,414.16
FYE 12/31/93 $11,088.99 $11,569.40
FYE 03/31/94 $10,667.00 $11,068.44
FYE 06/30/94 $10,725.34 $11,221.19
FYE 09/30/94 $10,786.50 $11,307.59
FYE 12/31/94 $10,666.48 $11,194.51
FYE 03/31/95 $11,255.35 $11,807.26
FYE 06/30/95 $11,532.90 $12,117.32
</TABLE>
- --------------------------------------------------------------------------------
Total Return ended
June 30, 1995
One Year Since 7/20/92*
7.52% 16.07%
* The Fund's inception date
Investment return and principal value may fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
================================================================================
About the Gary Pollack
Portfolio Manager Vice President
. Heads the Municipal Bond Team for Bankers Trust's
Global Investment Management Group
. 15 years of investment experience including tax-
exempt portfolio management and credit analysis
. B.A. and M.A. from the State University of New York
at Albany
<PAGE> 178
INTERMEDIATE TAX FREE FUND 5
------------------------------------------------------------------------
================================================================================
Objective Seeks high current income exempt from Federal taxes
with moderate risk to capital.
- --------------------------------------------------------------------------------
Investment Instruments Diversified range of high grade intermediate term
securities issued by states and their political
subdivisions, authorities, agencies and
instrumentalities, providing income exempt from
Federal income taxes. The weighted average maturity of
securities will range from three to eight years.
- --------------------------------------------------------------------------------
Diversification of Portfolio
Investments by State
as of June 30, 1995 (unaudited)
(percentages are based on market value)
[PIE CHART APPEARS HERE]
32.90% Other*
11.86% Texas
4.66% Ohio
5.04% Arizona
13.86% California
7.56% Illinois
4.27% Kansas
19.85% New York
* No one state represents more than 4.00% of portfolio holdings.
<PAGE> 179
INTERMEDIATE TAX FREE FUND 6
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
=========================================================================================================
June 30, 1995 (unaudited)
<S> <C>
- ---------------------------------------------------------------------------------------------------------
Assets
- ---------------------------------------------------------------------------------------------------------
Investment in Intermediate Tax Free Portfolio, at Value $23,826,261
- ---------------------------------------------------------------------------------------------------------
Prepaid Expenses 5,000
- ---------------------------------------------------------------------------------------------------------
Due from Bankers Trust 11,614
- ---------------------------------------------------------------------------------------------------------
Total Assets 23,842,875
- ---------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------
Dividends Payable 18,986
- ---------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 17,856
- ---------------------------------------------------------------------------------------------------------
Total Liabilities 36,842
- ---------------------------------------------------------------------------------------------------------
Net Assets (Applicable to 2,316,936 Outstanding Shares of $0.001 Par Value
Per Share, Unlimited Number of Shares of Beneficial Interest Authorized) $23,806,033
=========================================================================================================
Net Asset Value, Subscription and Redemption Price Per Share
($23,806,033/2,316,936 Shares) $ 10.27
=========================================================================================================
Composition of Net Assets
- ---------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 2,317
- ---------------------------------------------------------------------------------------------------------
Paid-in Capital 23,940,578
- ---------------------------------------------------------------------------------------------------------
Accumulated Net Realized (Loss) from Securities Transactions (1,237,454)
- ---------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 1,100,592
- ---------------------------------------------------------------------------------------------------------
Net Assets, June 30, 1995 $23,806,033
=========================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 180
INTERMEDIATE TAX FREE FUND 7
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Operations
==========================================================================================================
For the six months ended June 30, 1995 (unaudited)
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Investment Income
- ----------------------------------------------------------------------------------------------------------
Income Allocated from Intermediate Tax Free Portfolio, net $ 634,861
- ----------------------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------------------
Administration and Services Fee $ 50,248
- ----------------------------------------------------------------------------------------------------------
Shareholders Reports 10,330
- ----------------------------------------------------------------------------------------------------------
Registration Fees 7,676
- ----------------------------------------------------------------------------------------------------------
Professional Fees 2,183
- ----------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 793
- ----------------------------------------------------------------------------------------------------------
Trustees Fees 773
- ----------------------------------------------------------------------------------------------------------
Insurance 438
- ----------------------------------------------------------------------------------------------------------
Miscellaneous 495
- ----------------------------------------------------------------------------------------------------------
Total Expenses 72,936
- ----------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (22,688) 50,248
- ----------------------------------------------------------------------------------------------------------
Net Investment Income 584,613
- ----------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Securities
- ----------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions 116,631
- ----------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 1,296,741
- ----------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Securities 1,413,372
- ----------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations $ 1,997,985
==========================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 181
INTERMEDIATE TAX FREE FUND 8
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
==================================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
- ------------------------------------------------------------------------------------------------------------------
From Operations
- ------------------------------------------------------------------------------------------------------------------
Net Investment Income $ 584,613 $ 1,229,998
- ------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 116,631 (1,317,897)
- ------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on Securities 1,296,741 (1,188,163)
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations 1,997,985 (1,276,062)
- ------------------------------------------------------------------------------------------------------------------
From Dividends and Distributions
- ------------------------------------------------------------------------------------------------------------------
Net Investment Income (584,613) (1,229,998)
- ------------------------------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions - (955)
- ------------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Dividends and Distributions (584,613) (1,230,953)
- ------------------------------------------------------------------------------------------------------------------
From Transactions in Shares of Beneficial Interest
- ------------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Transactions in Shares of
Beneficial Interest (2,910,365) (3,898,488)
- ------------------------------------------------------------------------------------------------------------------
Total (Decrease) in Net Assets (1,496,993) (6,405,503)
==================================================================================================================
Net Assets
- ------------------------------------------------------------------------------------------------------------------
Beginning of Period 25,303,026 31,708,529
- ------------------------------------------------------------------------------------------------------------------
End of Period $23,806,033 $25,303,026
==================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 182
INTERMEDIATE TAX FREE FUND 9
------------------------------------------------------------------------
Financial Highlights
================================================================================
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of the
periods indicated for the Intermediate Tax Free Fund.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
For the period
For the six For the For the July 20, 1992
months ended year ended year ended (Commencement
June 30, 1995 December December of Operations) to
(unaudited) 31, 1994 31, 1993 December 31, 1992
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net Asset Value, Beginning of Period $ 9.72 $10.54 $ 9.99 $10.00
------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.23 0.42 0.41 0.16
Net Realized and Unrealized Gain (Loss)
on Securities 0.55 (0.82) 0.57 (0.01)
------ ------ ------ ------
Total from Investment Operations 0.78 (0.40) 0.98 0.15
------ ------ ------ ------
Less Dividends and Distributions
Dividends from Net Investment Income (0.23) (0.42) (0.41) (0.16)
Distributions from Net Realized Gain from
Securities Transactions -- -- (0.02) --
------ ------ ------ ------
Total Dividends and Distributions (0.23) (0.42) (0.43) (0.16)
------ ------ ------ ------
Net Asset Value, End of Period $10.27 $ 9.72 $10.54 $ 9.99
====== ====== ====== ======
Total Investment Return 8.11% (3.81)% 9.94% 3.42%*
Ratios and Supplemental Data
Ratio of Net Investment Income to Average Net Assets 4.65%* 4.20% 3.88% 3.72%*
Ratio of Expenses to Average Net Assets, Including
Expenses of the Intermediate Tax Free Portfolio 0.85%* 0.85% 0.85% 0.85%*
Decrease Reflected in Above Expense Ratio
Due to Absorption of Expenses by Bankers Trust 0.26%* 0.36% 0.35% 0.80%*
Net Assets, End of Period (000's omitted) $23,806 $25,303 $31,709 $ 9,992
</TABLE>
*Annualized
See Notes to Financial Statements on Pages 16 and 17
<PAGE> 183
INTERMEDIATE TAX FREE FUND 10
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
================================================================================
June 30, 1995 (unaudited)
<S> <C>
- --------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------
Investments, at Value (Cost $22,296,245) $23,397,256
- --------------------------------------------------------------------------------
Cash 88,648
- --------------------------------------------------------------------------------
Interest and Other Receivables 351,527
- --------------------------------------------------------------------------------
Prepaid Expenses 859
- --------------------------------------------------------------------------------
Due from Bankers Trust 322
- --------------------------------------------------------------------------------
Total Assets 23,838,612
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 12,228
- --------------------------------------------------------------------------------
Total Liabilities 12,228
- --------------------------------------------------------------------------------
Net Assets $23,826,384
================================================================================
Composition of Net Assets
- --------------------------------------------------------------------------------
Paid-in Capital $22,725,373
- --------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 1,101,011
- --------------------------------------------------------------------------------
Net Assets, June 30, 1995 $23,826,384
================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 184
INTERMEDIATE TAX FREE PORTFOLIO 11
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Operations
===============================================================================================
For the six months ended June 30, 1995 (unaudited)
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
Investment Income
- -----------------------------------------------------------------------------------------------
Interest $ 691,790
- -----------------------------------------------------------------------------------------------
Expenses
- -----------------------------------------------------------------------------------------------
Advisory Fee $ 50,370
- -----------------------------------------------------------------------------------------------
Administration and Services Fee 6,296
- -----------------------------------------------------------------------------------------------
Professional Fees 7,523
- -----------------------------------------------------------------------------------------------
Insurance 1,318
- -----------------------------------------------------------------------------------------------
Trustees Fees 732
- -----------------------------------------------------------------------------------------------
Miscellaneous 583
- -----------------------------------------------------------------------------------------------
Total Expenses 66,822
- -----------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (10,156) 56,666
- -----------------------------------------------------------------------------------------------
Net Investment Income 635,124
===============================================================================================
Net Realized and Unrealized Gain (Loss) on Securities
- -----------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions 116,661
- -----------------------------------------------------------------------------------------------
Net Unrealized Appreciation on Securities 1,297,317
===============================================================================================
Net Realized and Unrealized Gain on Securities 1,413,978
===============================================================================================
Net Increase in Net Assets from Operations $2,049,102
===============================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 185
INTERMEDIATE TAX FREE PORTFOLIO 12
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
=========================================================================================================
For the six For the
months ended year ended
June 30, 1995 December
(unaudited) 31, 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
- ---------------------------------------------------------------------------------------------------------
From Operations
- ---------------------------------------------------------------------------------------------------------
Net Investment Income $ 635,124 $ 1,347,292
- ---------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 116,661 (1,317,949)
- ---------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation) on Securities 1,297,317 (1,188,059)
- ---------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations 2,049,102 (1,158,716)
- ---------------------------------------------------------------------------------------------------------
From Capital Transactions
- ---------------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 2,674,577 11,949,297
- ---------------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (6,223,512) (17,209,743)
- ---------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Capital Transactions (3,548,935) (5,260,446)
- ---------------------------------------------------------------------------------------------------------
Total (Decrease) in Net Assets (1,499,833) (6,419,162)
=========================================================================================================
Net Assets
- ---------------------------------------------------------------------------------------------------------
Beginning of Period 25,326,217 31,745,379
- ---------------------------------------------------------------------------------------------------------
End of Period $23,826,384 $25,326,217
=========================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 186
INTERMEDIATE TAX FREE PORTFOLIO 13
------------------------------------------------------------------------
Financial Highlights
================================================================================
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Intermediate Tax Free Portfolio.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
For the period
For the For the For the July 20, 1992
six months ended year ended year ended (Commencement
June 30, 1995 December December of Operations) to
(unaudited) 31, 1994 31, 1993 December 31, 1992
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios and Supplemental Data
Ratio of Net Investment Income to Average Net Assets 5.04% * 4.58% 4.29% 4.11% *
Ratio of Expenses to Average Net Assets 0.45% * 0.45% 0.45% 0.45% *
Decrease Reflected in Above Ratio of Expenses to Average
Net Assets Due to Absorption of Expenses by
Bankers Trust 0.08% * 0.14% 0.18% 0.43% *
Portfolio Turnover Rate 67% 118% 40% 132%
Net Assets, End of Period (000's omitted) $23,826 $25,326 $31,745 $9,995
</TABLE>
* Annualized
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 187
INTERMEDIATE TAX FREE PORTFOLIO 14
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schedule of Portfolio Investments
================================================================================
June 30, 1995 (unaudited)
Principal
Amount Description Value
================================================================================
<C> <S> <C>
Arizona - 4.95%
- --------------------------------------------------------------------------------
$1,080,000 Phoenix, Arizona Series C,
6.375%, 7/1/02 $ 1,179,479
================================================================================
California - 13.61%
- --------------------------------------------------------------------------------
1,000,000 California State, 6.20%, 11/1/02 1,070,320
- --------------------------------------------------------------------------------
1,000,000 California State Department
Water Series L, 5.50%, 12/01/09 971,850
- --------------------------------------------------------------------------------
205,000 California State Maturities,
5.90%, 9/1/02 215,482
- --------------------------------------------------------------------------------
500,000 California State Public Works
Board, 5.50%, 11/1/01 505,280
- --------------------------------------------------------------------------------
500,000 Los Angeles, California Water &
Power Revenue, 5.00%, 11/15/06 479,440
- --------------------------------------------------------------------------------
3,242,372
================================================================================
Colorado - 2.10%
- --------------------------------------------------------------------------------
500,000 Colorado Water Resources Power
Development Authority,
Clean Water Revenue
Series A, 5.15%, 9/1/04 500,325
================================================================================
Connecticut - 3.45%
- --------------------------------------------------------------------------------
500,000 Connecticut State Special
Tax Obligatory Revenue,
Transportation Infrastructure
Series B, 5.90%, 9/1/05 526,520
- --------------------------------------------------------------------------------
275,000 Connecticut State Special
Tax Obligatory Revenue,
Transportation Series A,
6.75%, 2/15/99 295,317
- --------------------------------------------------------------------------------
821,837
================================================================================
Delaware - 2.32%
- --------------------------------------------------------------------------------
520,000 Delaware Transportation Authority,
6.10%, 7/1/02 553,758
================================================================================
Florida - 0.84%
- --------------------------------------------------------------------------------
200,000 Palm Beach County, Florida
Water and Sewer Revenue,
Variable Rate, 10/1/11 200,000
================================================================================
Illinois - 7.42%
- --------------------------------------------------------------------------------
$ 700,000 Illinois State, 5.60%, 10/1/99 $ 726,978
- --------------------------------------------------------------------------------
1,000,000 Illinois State Sales Tax Series Q,
6.00%, 6/15/12 1,040,700
- --------------------------------------------------------------------------------
1,767,678
================================================================================
Indiana - 1.37%
- --------------------------------------------------------------------------------
300,000 Indiana University Revenue,
Student Fees Series H,
6.60%, 8/1/01 326,376
================================================================================
Kansas - 4.19%
- --------------------------------------------------------------------------------
1,000,000 Kansas State Department of
Transportation Highway Revenue,
5.10%, 3/1/05 998,040
================================================================================
Kentucky - 2.50%
- --------------------------------------------------------------------------------
600,000 Kentucky State Turnpike Authority
Economic Development Road
Revenue, 5.625%, 7/1/10 596,094
================================================================================
Massachusetts - 1.86%
- --------------------------------------------------------------------------------
460,000 Massachusetts State Water Pollution
Control Revenue
Series B, 4.95%, 8/1/06 442,133
================================================================================
Michigan - 3.11%
- --------------------------------------------------------------------------------
500,000 Michigan State Building Authority
(Ambac Insured) Series I,
6.00%, 10/1/02 532,560
- --------------------------------------------------------------------------------
200,000 Michigan State Housing
Development Authority Single
Family Meeting Revenue
Series B, 6.30%, 12/1/03 207,924
- --------------------------------------------------------------------------------
740,484
================================================================================
Missouri - 2.24%
- --------------------------------------------------------------------------------
500,000 Missouri Environmental
Improvement Authority Series B,
6.15%, 7/1/01 534,035
================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 188
INTERMEDIATE TAX FREE PORTFOLIO 15
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schedule of Portfolio Investments
================================================================================
June 30, 1995 (unaudited)
Principal
Amount Description Value
================================================================================
<C> <S> <C>
Nebraska - 1.32%
- --------------------------------------------------------------------------------
$ 300,000 Nebraska Public Power District
Revenue 5.70%, 1/1/05 $ 315,000
================================================================================
Nevada - 2.18%
- --------------------------------------------------------------------------------
500,000 Clark County, Nevada (Ambac
Insured), 5.70%, 7/1/03 518,675
================================================================================
New Jersey - 0.99%
- --------------------------------------------------------------------------------
225,000 New Jersey State Turnpike
Authority Series A, 6.00%, 1/1/05 236,140
================================================================================
New York - 19.49%
- --------------------------------------------------------------------------------
500,000 New York City, New York G.O.,
Series A, 5.625%, 8/1/01 502,355
- --------------------------------------------------------------------------------
700,000 New York City, New York G.O.,
Series A, Variable Rate, 10/1/20 700,000
- --------------------------------------------------------------------------------
800,000 New York City, New York G.O.,
Series A, Variable Rate, 8/15/23 800,000
- --------------------------------------------------------------------------------
300,000 New York City, New York G.O.,
Series B, 5.50 %, 10/1/97 307,140
- --------------------------------------------------------------------------------
1,000,000 New York State Environmental
Facility Corporation Pollution
Control Revenue, 5.75%, 6/15/10 995,010
- --------------------------------------------------------------------------------
1,000,000 New York State G.O., Series B
5.50%, 8/15/06 1,009,870
- --------------------------------------------------------------------------------
300,000 Triborough Bridge & Tunnel
Authority Series V, 7.00%, 1/1/06 329,925
- --------------------------------------------------------------------------------
4,644,300
================================================================================
Ohio - 4.58%
- --------------------------------------------------------------------------------
1,000,000 Ohio State Building Authority
Series A, 6.50%, 10/1/01 1,090,800
================================================================================
Oklahoma - 1.30%
- --------------------------------------------------------------------------------
300,000 Grand River Dam, OK Dam
Authority, 5.50%, 6/1/03 309,102
================================================================================
South Carolina - 1.31%
- --------------------------------------------------------------------------------
$ 300,000 South Carolina State Public
Service Authority Revenue,
Series A, 5.70%, 7/1/01 $ 312,192
================================================================================
Texas - 11.64%
- --------------------------------------------------------------------------------
1,000,000 Austin, Texas Utility System
Revenue Series A,
6.00%, 11/15/04 1,063,270
- --------------------------------------------------------------------------------
300,000 Garland, Texas Independent
School District, Series A,
6.40%, 2/15/98 310,308
- --------------------------------------------------------------------------------
500,000 Texas State, G.O., Series A,
6.00%, 10/1/06 532,385
- --------------------------------------------------------------------------------
300,000 Texas Water Reserve Finance
Authority Revenue,
7.30%, 8/15/04 324,132
- --------------------------------------------------------------------------------
500,000 University of Texas,
6.50%, 8/15/01 544,610
- --------------------------------------------------------------------------------
2,774,705
================================================================================
Washington - 2.23%
- --------------------------------------------------------------------------------
500,000 Washington State Series B,
6.00%, 5/1/02 531,880
================================================================================
Wisconsin - 3.20%
- --------------------------------------------------------------------------------
500,000 Milwaukee, Wisconsin Metropolitan
Sewer District Series A, 6.70%,
10/1/01 550,745
- --------------------------------------------------------------------------------
200,000 Wisconsin State Transportation
Revenue Series A, 6.00%, 7/1/00 211,106
- --------------------------------------------------------------------------------
761,851
================================================================================
Total Investments
(Cost $22,296,245) 98.20% $23,397,256
- --------------------------------------------------------------------------------
Other Assets in Excess of Liabilities 1.80% 429,128
- --------------------------------------------------------------------------------
Net Assets 100.00% $23,826,384
================================================================================
</TABLE>
See Notes to Financial Statements on Pages 18 and 19
<PAGE> 189
INTERMEDIATE TAX FREE FUND 16
------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
===============================================================================-
Note 1 -- Organization and Significant Accounting Policies
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company Act
of 1940 (the "Act"), as amended, as an open-end management investment company.
The Trust was organized on July 21, 1986, as a business trust under the laws of
the Commonwealth of Massachusetts. The Intermediate Tax Free Fund (the "Fund")
is one of the funds offered to investors by the Trust. The Fund commenced
operations and began offering shares of beneficial interest on July 20, 1992.
The Fund invests substantially all of its assets in the Intermediate Tax Free
Portfolio (the "Portfolio"). The Portfolio is an open-end management investment
company registered under the Act. The Fund seeks to achieve its investment
objective by investing all of its investable assets in the Portfolio. The value
of such investment in the Portfolio reflects the Fund's proportionate interest
in the net assets of the Portfolio. At June 30, 1995, the Fund's investment was
approximately 100% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns interest income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions of the Portfolio are allocated pro
rata among the investors in the Portfolio at the time of such determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized over a five year period.
D. Dividends
It is the Fund's policy to declare dividends daily payable to shareholders of
record as of 4:00 p.m. (E.S.T.) from net investment income, and to pay these
dividends monthly. Dividends payable to shareholders are recorded by the Fund on
the ex-dividend date, which is the same as the declaration date. Distributions
of net realized short-term and long-term capital gains, if any, earned by the
Fund will be made annually to the extent they are not offset by any capital loss
carryforwards.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no Federal income tax provision is
required.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of the
Fund. Expenses directly attributable to the Fund are charged to that Fund, while
expenses which are attributable to all of the Trust's funds are allocated among
them.
<PAGE> 190
INTERMEDIATE TAX FREE FUND 17
------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
===============================================================================-
Note 2 -- Fees and Transactions with Affiliates
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.40 of 1% of the Fund's average daily net assets.
For the six months ended June 30, 1995, this fee aggregated $50,248.
The Trust has entered into a Distribution Agreement with Signature Broker-Dealer
Services, Inc. ("Signature"). Under the Distribution Agreement with the Trust,
pursuant to Rule 12b-1 of the 1940 Act, Signature may seek reimbursement, at an
annual rate not exceeding 0.20 of 1% of the Fund's average daily net assets, for
expenses incurred in connection with any activities primarily intended to result
in the sale of the Fund's shares. For the six months ended June 30, 1995, there
were no reimbursable expenses incurred under this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund, to the extent necessary, to limit all expenses to 0.40 of 1% of the
average daily net assets of the Fund, excluding expenses of the Portfolio and
0.85 of 1% of the average daily net assets, including expenses of the Portfolio.
For the six months ended June 30, 1995, expenses of the Fund have been reduced
$22,688.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received compensation
for services as trustee of the Fund. Similarly, none of the Fund's officers
received compensation from the Fund.
Note 3 -- Capital Share Transactions
At June 30, 1995, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
For the six
months ended
June 30, 1995 For the year ended
(unaudited) December 31, 1994
------------------------- -----------------------------
Shares Amount Shares Amount
-------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Sold 265,768 $ 2,674,577 1,162,275 $ 11,934,197
Reinvested 47,101 477,713 108,383 1,087,379
Redeemed (597,855) (6,062,655) (1,675,824) (16,920,064)
-------- ----------- ---------- ------------
Net (Decrease) (284,986) $(2,910,365) (405,166) $ (3,898,488)
======== =========== ========== ============
</TABLE>
Note 4 -- Capital Loss Carryforward
At December 31, 1994, accumulated net realized capital loss carryforwards
available as a reduction against future net realized capital gains aggregated
$1,317,897, which will expire in 2003.
<PAGE> 191
INTERMEDIATE TAX FREE PORTFOLIO 18
------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
================================================================================
Note 1 -- Organization and Significant Accounting Policies
A. Organization
The Intermediate Tax Free Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on December 11, 1991,
as an unincorporated trust under the laws of New York and commenced operations
on July 20, 1992. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
The Portfolio's investments are valued each business day by an independent
pricing service (the "Service") approved by the Board of Trustees. Investments
for which quoted bid prices in the judgment of the Service are readily available
and are representative of the bid side of the market are valued at the mean
between the quoted bid prices (as obtained by the Service from dealers in such
securities) and asked prices (as calculated by the Service based upon its
evaluation of the market for such securities). Other investments (which
constitute a majority of the portfolio securities) are carried at fair value as
determined by the Service, based on methods which include consideration of:
yields or prices of government securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Short-term obligations are valued at amortized cost which with
accrued interest approximates value. Securities for which quotations are not
available are stated at fair value as determined by the Board of Trustees.
C. Security Transactions and Interest Income
Security transactions are accounted for on a trade date basis (date the order to
buy or sell is executed). Interest income is recorded on the accrual basis and
includes amortization of premium and discount on investments. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
All of the net investment income and realized and unrealized gains and losses
from the security transactions of the Portfolio are allocated pro rata among the
investors in the Portfolio at the time of such determination.
D. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no Federal income tax provision is
required.
<PAGE> 192
INTERMEDIATE TAX FREE PORTFOLIO 19
------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
================================================================================
Note 2 -- Fees and Transactions with Affiliates
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.05 of 1% of the Portfolio's average daily
net assets. For the six months ended June 30, 1995, this fee aggregated $6,296.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at an annual rate of 0.40 of 1% of the
Portfolio's average daily net assets. For the six months ended June 30, 1995,
this fee aggregated $50,370.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.45 of 1% of the
average daily net assets of the Portfolio. For the six months ended June 30,
1995, expenses of the Portfolio have been reduced $10,156.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
Note 3 -- Purchases and Sales of
Investment Securities
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the six months ended June 30, 1995, were
$14,734,085 and $14,852,684, respectively. The aggregate gross unrealized
appreciation for all investments was $1,101,011.
<PAGE> 193
[This Page Intentionally Left Blank]
<PAGE> 194
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 195
- --------------------------------------------------------------------------------
BT INVESTMENT FUNDS
- --------------------------------------------------------------------------------
Liquid
Assets
Fund
Semi-Annual Report
June 30, 1995
<PAGE> 196
LIQUID ASSETS FUND 1
------------------------------------------------------------------------
Table of Contents
- --------------------------------------------------------------------------------
Introduction from President................................................ 2
Letter to Shareholders from Investment Adviser............................. 3
Liquid Assets Fund
Statement of Assets and Liabilities.................................... 5
Statement of Operations................................................ 6
Statement of Changes in Net Assets..................................... 7
Financial Highlights................................................... 8
Liquid Assets Portfolio
Statement of Assets and Liabilities.................................... 9
Statement of Operations................................................ 10
Statement of Changes in Net Assets..................................... 11
Financial Highlights................................................... 12
Schedule of Portfolio Investments...................................... 13
Liquid Assets Fund
Notes to Financial Statements.......................................... 15
Liquid Assets Portfolio
Notes to Financial Statements.......................................... 17
For shareholder account information and current price and yield quotations,
shareholders may call their relationship manager or servicing agent.
Prospectuses containing more extensive information regarding the Liquid Assets
Fund may be obtained by calling or writing to Investors Fiduciary Trust Company
or Signature Broker-Dealer Services, Inc., the primary Servicing Agent and
Distributor, respectively, of BT Investment Funds:
BT Investment Funds
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105
(800) 422-6577
BT Investment Funds
Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, MA 02116
(800) 545-1074
You may write to the Liquid Assets Fund at the following address:
BT Investment Funds
6 St. James Avenue
Boston, MA 02116
<PAGE> 197
LIQUID ASSETS FUND 2
------------------------------------------------------------------------
Introduction from President
- --------------------------------------------------------------------------------
August, 1995
Dear Shareholders:
We are pleased to present your 1995 Semi-Annual Report for BT investment
Funds Liquid Assets Fund. This Report provides you with an investment
overview as well as a financial summary of the Fund's operations for the six
months ended June 30, 1995. In addition, the Report contains a Letter from
the Investment Adviser detailing the factors that affected the Fund's
performance. Also presented in your Report is a pie chart displaying
diversification of Portfolio investments, financial statements, financial
highlights and a listing of the Portfolio's holdings.
Looking ahead, we will continue to closely observe economic conditions and
how they affect the financial markets.
We appreciate your ongoing support of the Liquid Assets Fund and look
forward to continuing to serve your investment needs.
Philip W. Coolidge
President
<PAGE> 198
LIQUID ASSETS FUND 3
------------------------------------------------------------------------
Letter to Shareholders from Investment Adviser
- --------------------------------------------------------------------------------
The first six months of 1995 were characterized by the Federal Reserve
Board's seeming success in slowing economic growth and in keeping a
confident grip on inflation. Although the strength of the dollar remains a
concern and some recent evidence, particularly in the interest rate
sensitive housing, materials, and auto sectors hint at modest
reacceleration, other economic indicators, including the currently inverted
yield curve, support the Fed's actions. So, too, does, constructive
discourse within Congress regarding the federal deficit. Events such as the
financial stress in Mexico, which impaired exports, and floods on the West
Coast helped to contain growth as well.
While we experienced one additional Fed tightening of interest rates in
February, the lack of threat by both inflation and further rate hikes after
that led to a decline in rates without a change in monetary policy. As of
June 20, the yield spread between the 2-year Treasury and Fed Funds was 24
basis points.
Despite all this positive evidence, we do not view the current trend as
unambiguously bullish for the short-term end of the fixed income markets.
We have, however, moved from a completely defensive posture at the end of
1994 to a neutral position, extending maturities by selectively seeking
relative value along the yield curve. The Fund's weighted average maturity
stands at 39 days. We have also sought to add value by increasing the
proportion of floating-rate instruments in the Fund, thereby enhancing
performance while retaining liquidity and flexibility.
On July 6, 1995, the Federal Reserve Board acted to cut official interest
rates by 0.25%. Nevertheless, we intend to maintain our current strategy
until we know the outcome of the August Federal Open Market Committee
meeting. If the Fed decides against lowering rates in August, the markets
are likely to express disappointment by selling bonds and driving rates up.
On the other hand, if the Fed acts as we expect, dropping the target
further, the market is likely to perform well.
At this time, we believe that extending maturity would add very little to
the Fund's yield. Moreover, because the market already expects lower rates,
as reflected in the inverted yield curve, there is little upside and
substantial risk if it is disappointed. In the meantime, we are taking
advantage of daily trading and relative value opportunities.
- --------------------------------------------------------------------------------
About the John Burgess
Portfolio Manager Managing Director
Head of Reserve Management
. Responsible for Global Investment Management's
Reserve Management activities
. Formerly Treasurer & First Vice President at Banca
Della Svizzera Italiana (subsidiary of the Swiss
Bank Corporation Group) responsible for all
proprietary and customer trading for the Treasury
Division
. Ten years investment experience, including five
years at J.P. Morgan
. Joined Bankers Trust in 1995
. B.A. (Economics) -- Wesleyan University
<PAGE> 199
LIQUID ASSETS FUND 4
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Objective Seeks high level of current income to the extent
consistent with liquidity and preservation of capital.
- --------------------------------------------------------------------------------
Investment Instruments Bank obligations, commercial paper, U.S. Treasury
obligations and repurchase agreements.
- --------------------------------------------------------------------------------
Status at June 30, 1995 Seven day effective yield: 5.80%
Average maturity: 39 days
Net Assets: $12.3 million
- --------------------------------------------------------------------------------
Diversification of Portfolio
Investments by Asset Type
as of June 30, 1995 (unaudited)
(percentages are based on market value)
[PIE CHART APPEARS HERE]
66.03% Commercial Paper
6.06% U.S. Government Agency Note
4.07% Certificate of Deposit
17.75% Repurchase Agreements
6.09% Floating Rate Note
<PAGE> 200
LIQUID ASSETS FUND 5
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
=======================================================================================================
June 30, 1995 (unaudited)
<S> <C>
- -------------------------------------------------------------------------------------------------------
Assets
- -------------------------------------------------------------------------------------------------------
Investment in Liquid Assets Portfolio, at Value $12,291,858
- -------------------------------------------------------------------------------------------------------
Deferred Organizational Expenses 1,329
- -------------------------------------------------------------------------------------------------------
Prepaid Expenses 9,065
- -------------------------------------------------------------------------------------------------------
Due from Bankers Trust 23,144
- -------------------------------------------------------------------------------------------------------
Total Assets 12,325,396
=======================================================================================================
Liabilities
- -------------------------------------------------------------------------------------------------------
Dividends Payable 3,803
- -------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 14,794
- -------------------------------------------------------------------------------------------------------
Total Liabilities 18,597
=======================================================================================================
Net Assets (Applicable to 12,305,494 Outstanding Shares of $.001 Par Value Per Share,
Unlimited Number of Shares of Beneficial Interest Authorized) $12,306,799
=======================================================================================================
Net Asset Value, Subscription and Redemption Price Per Share
($12,306,799/12,305,494 Shares) $ 1.00
=======================================================================================================
Composition of Net Assets
- -------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest, at Par $ 12,305
- -------------------------------------------------------------------------------------------------------
Paid-in Capital 12,293,215
- -------------------------------------------------------------------------------------------------------
Accumulated Net Realized Gain from Securities Transactions 1,279
- -------------------------------------------------------------------------------------------------------
Net Assets, June 30, 1995 $12,306,799
=======================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 201
LIQUID ASSETS FUND 6
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Operations
============================================================================================
For the six months ended June 30, 1995(unaudited)
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Investment Income
- --------------------------------------------------------------------------------------------
Income Allocated from Liquid Assets Portfolio, net $380,453
- --------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------
Administration and Services Fee $ 34,651
- --------------------------------------------------------------------------------------------
Professional Fees 2,182
- --------------------------------------------------------------------------------------------
Shareholders Reports 8,737
- --------------------------------------------------------------------------------------------
Insurance 438
- --------------------------------------------------------------------------------------------
Registration Fees 5,578
- --------------------------------------------------------------------------------------------
Trustees Fees 773
- --------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 1,721
- --------------------------------------------------------------------------------------------
Miscellaneous 260
- --------------------------------------------------------------------------------------------
Total Expenses 54,340
- --------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (32,289) 22,051
============================================================================================
Net Investment Income 358,402
- --------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions 1,279
- --------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations $359,681
============================================================================================
</TABLE>
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 202
LIQUID ASSETS FUND 7
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
======================================================================================================================
For the six months
ended June 30, 1995 For the year ended
(unaudited) December 31, 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
- ----------------------------------------------------------------------------------------------------------------------
From Operations
- ----------------------------------------------------------------------------------------------------------------------
Net Investment Income $ 358,402 $585,369
- ----------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 1,279 (27,641)
- ----------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 359,681 557,728
======================================================================================================================
From Dividends
- ----------------------------------------------------------------------------------------------------------------------
Net Investment Income (358,402) (585,369)
- ----------------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets from Dividends (358,402) (585,369)
======================================================================================================================
From Transactions in Shares of Beneficial Interest
(at Net Asset Value of $1.00 per share)
- ----------------------------------------------------------------------------------------------------------------------
Net Proceeds from Shares Sold 19,087,954 61,244,746
- ----------------------------------------------------------------------------------------------------------------------
Dividends Reinvested 389,181 520,981
- ----------------------------------------------------------------------------------------------------------------------
Value of Shares Redeemed (20,523,117) (56,522,627)
- ----------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Transactions in
Shares of Beneficial Interest (1,045,982) 5,243,100
======================================================================================================================
From Contribution of Capital
- ----------------------------------------------------------------------------------------------------------------------
Proceeds Contributed -- 27,663
- ----------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Contribution of Capital -- 27,663
- ----------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (1,044,703) 5,243,122
======================================================================================================================
Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of Period 13,351,502 8,108,380
- ----------------------------------------------------------------------------------------------------------------------
End of Period $ 12,306,799 $ 13,351,502
======================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 203
LIQUID ASSETS FUND 8
------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of the
periods indicated for the Liquid Assets Fund.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
For the period
June 7, 1993
For the six months (Commencement
ended June 30, 1995 For the year ended of Operations) to
(unaudited) December 31, 1994 December 31, 1993
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Selected Per Share Data
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00
------- ------- -------
Income from Investment Operations
Net Investment Income 0.03 0.04 0.02
Net Realized Gain (Loss) on Securities 0.00+ (0.00)+ 0.00+
------- ------- -------
Total from Investment Operations 0.03 0.04 0.02
------- ------- -------
Contribution of Capital -- 0.00+ --
------- ------- -------
Less Dividends
Dividends from Net Investment Income (0.03) (0.04) (0.02)
------- ------- -------
Total Dividends (0.03) (0.04) (0.02)
------- ------- -------
Net Asset Value, End of Period $1.00 $1.00 $1.00
======= ======= =======
Total Investment Return 2.86% 3.88% 2.82%*
Ratios and Supplemental Data
Ratio of Net Investment Income to
Average Net Assets 5.69%* 3.93% 2.78%*
Ratio of Expenses to Average Net Assets,
Including Expenses of the
Liquid Assets Portfolio 0.45%* 0.45% 0.45%*
Decrease Reflected in Above Expense Ratio
Due to Absorption of Expenses
by Bankers Trust 0.72%* 1.08% 0.99%*
Net Assets, End of Period (000's omitted) $12,307 $13,352 $8,108
</TABLE>
*Annualized
+Less than $0.01 per share
See Notes to Financial Statements on Pages 15 and 16
<PAGE> 204
LIQUID ASSETS PORTFOLIO 9
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
===========================================================================================================
June 30, 1995 (unaudited)
<S> <C>
- -----------------------------------------------------------------------------------------------------------
Assets
- -----------------------------------------------------------------------------------------------------------
Investments, at Value (including Repurchase Agreements amounting to $2,181,253) $12,284,712
- -----------------------------------------------------------------------------------------------------------
Cash 120
- -----------------------------------------------------------------------------------------------------------
Interest Receivable 11,809
- -----------------------------------------------------------------------------------------------------------
Prepaid Expenses 860
- -----------------------------------------------------------------------------------------------------------
Due from Bankers Trust 5,350
- -----------------------------------------------------------------------------------------------------------
Total Assets 12,302,851
===========================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 10,946
- -----------------------------------------------------------------------------------------------------------
Total Liabilities 10,946
===========================================================================================================
Net Assets $12,291,905
===========================================================================================================
Composition of Net Assets
- -----------------------------------------------------------------------------------------------------------
Paid-in Capital $12,291,905
- -----------------------------------------------------------------------------------------------------------
Net Assets, June 30, 1995 $12,291,905
===========================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 205
LIQUID ASSETS PORTFOLIO 10
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Operations
=============================================================================================
For the six months ended June 30, 1995 (unaudited)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Investment Income
- ---------------------------------------------------------------------------------------------
Interest $386,767
- ---------------------------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------------------------
Advisory Fee $ 9,468
- ---------------------------------------------------------------------------------------------
Administration and Services Fee 3,156
- ---------------------------------------------------------------------------------------------
Professional Fees 4,541
- ---------------------------------------------------------------------------------------------
Insurance 1,319
- ---------------------------------------------------------------------------------------------
Trustees Fees 732
- ---------------------------------------------------------------------------------------------
Miscellaneous 583
- ---------------------------------------------------------------------------------------------
Total Expenses 19,799
- ---------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (13,487) 6,312
- ---------------------------------------------------------------------------------------------
Net Investment Income 380,455
- ---------------------------------------------------------------------------------------------
Net Realized Gain from Securities Transactions 1,279
- ---------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations $381,734
=============================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 206
LIQUID ASSETS PORTFOLIO 11
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
==========================================================================================================================
For the six months
ended June 30, 1995 For the year ended
(unaudited) December 31, 1994
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
- --------------------------------------------------------------------------------------------------------------------------
From Operations
- --------------------------------------------------------------------------------------------------------------------------
Net Investment Income $ 380,455 $ 637,521
- --------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Securities Transactions 1,279 (27,641)
- --------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations 381,734 609,880
- --------------------------------------------------------------------------------------------------------------------------
From Capital Transactions
- --------------------------------------------------------------------------------------------------------------------------
Proceeds from Capital Invested 19,087,954 61,272,350
- --------------------------------------------------------------------------------------------------------------------------
Value of Capital Withdrawn (20,581,931) (56,615,492)
- --------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Capital Transactions (1,493,977) 4,656,858
- --------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (1,112,243) 5,266,738
==========================================================================================================================
Net Assets
- --------------------------------------------------------------------------------------------------------------------------
Beginning of Period 13,404,148 8,137,410
- --------------------------------------------------------------------------------------------------------------------------
End of Period $ 12,291,905 $ 13,404,148
==========================================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 207
LIQUID ASSETS PORTFOLIO 12
------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Contained below are selected ratios and supplemental data for each of the
periods indicated for the Liquid Assets Portfolio.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
For the period
June 7, 1993
For the six months (Commencement
ended June 30, 1995 For the year ended of Operations) to
(unaudited) December 31, 1994 December 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ratios and Supplemental Data
Ratio of Net Investment Income to
Average Net Assets 6.03%* 4.28% 3.12%*
Ratio of Expenses to Average Net Assets 0.10%* 0.10% 0.10%*
Decrease Reflected in Above Ratio of Expenses
to Average Net Assets Due to Absorption
of Expenses by Bankers Trust 0.21%* 0.30% 0.57%*
Net Assets, End of Period (000's omitted) $12,292 $13,404 $8,137
</TABLE>
*Annualized
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 208
LIQUID ASSETS PORTFOLIO 13
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schedule of Portfolio Investments
=======================================================================================================
June 30, 1995 (unaudited)
Principal
Amount Description Value
- -------------------------------------------------------------------------------------------------------
<C> <S> <C>
Certificate of Deposit - 4.07%
- -------------------------------------------------------------------------------------------------------
$ 500,000 Canadian Imperial, 5.9375%, 9/7/95 (Amortized Cost $500,000) $ 500,000
=======================================================================================================
Commercial Paper - 65.99%
- -------------------------------------------------------------------------------------------------------
$ 500,000 Abbey National, 6.00%, 7/31/95 $ 497,500
- -------------------------------------------------------------------------------------------------------
750,000 ABN Amro Bank, 6.18%, 8/21/95 743,434
- -------------------------------------------------------------------------------------------------------
425,000 Commerz Bank, 6.00%, 7/31/95 422,875
- -------------------------------------------------------------------------------------------------------
500,000 Dean Witter, 5.97%, 7/28/95 497,761
- -------------------------------------------------------------------------------------------------------
500,000 First Boston, 5.89%, 10/13/95 491,492
- -------------------------------------------------------------------------------------------------------
500,000 KFW International Finance Inc., 6.00%, 7/6/95 499,583
- -------------------------------------------------------------------------------------------------------
500,000 Kingdom of Sweden, 5.94%, 7/28/95 497,773
- -------------------------------------------------------------------------------------------------------
500,000 National Australia Funding, 5.60%, 11/27/95 488,411
- -------------------------------------------------------------------------------------------------------
500,000 National Rural Utility, 5.72%, 11/2/95 490,149
- -------------------------------------------------------------------------------------------------------
600,000 New South Wales Treasury, 5.96%, 7/18/95 598,312
- -------------------------------------------------------------------------------------------------------
500,000 Norwest Minnesota, 6.00%, 8/7/95 496,917
- -------------------------------------------------------------------------------------------------------
400,000 Philip Morris Capital Corp., 5.91%, 9/20/95 394,681
- -------------------------------------------------------------------------------------------------------
500,000 REC Capital Corp., 6.00%, 7/21/95 498,333
- -------------------------------------------------------------------------------------------------------
500,000 Riverwoods Funding, 5.95%, 7/18/95 498,595
- -------------------------------------------------------------------------------------------------------
500,000 Sheffield Corp., 5.97%, 7/17/95 498,673
- -------------------------------------------------------------------------------------------------------
500,000 Xerox, 5.95%, 8/9/95 496,777
- -------------------------------------------------------------------------------------------------------
Total Commercial Paper (Amortized Cost $8,111,266) $ 8,111,266
=======================================================================================================
Floating Rate Note - 6.08%
- -------------------------------------------------------------------------------------------------------
$ 750,000 Student Loan Marketing Association, Variable Rate, 5.68%, 10/14/97
(Amortized Cost $747,885) $ 747,885
=======================================================================================================
United States Government Agency Note - 6.06%
- -------------------------------------------------------------------------------------------------------
$ 750,000 Federal National Mortgage Association, 6.21%, 8/14/95
(Amortized Cost $744,308) $ 744,308
=======================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 209
LIQUID ASSETS PORTFOLIO 14
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schedule of Portfolio Investments
=======================================================================================================
June 30, 1995 (unaudited)
Principal
Amount Description Value
- -------------------------------------------------------------------------------------------------------
<C> <S> <C>
Repurchase Agreements - 17.74%
- -------------------------------------------------------------------------------------------------------
$1,000,000 Repurchase Agreement with Goldman Sachs, Dated 6/30/95, 6.05%, Principal
and Interest in the Amount of $1,000,168, due 7/3/95, (Collateralized by
U.S. Treasury Note, Par Value of $1,015,000, 6.00%, 11/30/97,
Value of $1,022,846) $ 1,000,000
- -------------------------------------------------------------------------------------------------------
1,181,253 Repurchase Agreement with Swiss Bank, Dated 6/30/95, 6.15%, Principal
and Interest in the Amount of $1,181,455, due 7/3/95, (Collateralized by
U.S. Treasury Note, Par Value of $1,205,000, 6.00%, 6/30/96,
Value of $1,208,201) 1,181,253
- -------------------------------------------------------------------------------------------------------
Total Repurchase Agreements (Amortized Cost $2,181,253) $ 2,181,253
=======================================================================================================
Total Investments (Amortized Cost $12,284,712) 99.94% $ 12,284,712
- -------------------------------------------------------------------------------------------------------
Other Assets in Excess of Liabilities 0.06% 7,193
- -------------------------------------------------------------------------------------------------------
Net Assets 100.00% $ 12,291,905
=======================================================================================================
</TABLE>
See Notes to Financial Statements on Pages 17 and 18
<PAGE> 210
LIQUID ASSETS FUND 15
------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
- --------------------------------------------------------------------------------
Note 1 -- Organization and Significant Accounting Policies
A. Organization
BT Investment Funds (the "Trust") is registered under the Investment Company Act
of 1940 (the "Act"), as amended, as an open-end management investment company.
The Trust was organized on July 21, 1986, as a business trust under the laws of
the Commonwealth of Massachusetts. The Liquid Assets Fund (the "Fund") is one of
the funds offered to investors by the Trust. The Fund commenced operations and
began offering shares of beneficial interest on June 7, 1993. The Fund invests
substantially all of its assets in the Liquid Assets Portfolio (the
"Portfolio"). The Portfolio is an open-end management investment company
registered under the Act. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio. The value of such
investment in the Portfolio reflects the Fund's proportionate interest in the
net assets of the Portfolio. At June 30, 1995, the Fund's investment was
approximately 100% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns interest income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized gains and losses from
the security transactions of the Portfolio are allocated pro rata among the
investors in the Portfolio at the time of such determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized over a five year period on a straight-line
basis.
D. Dividends
It is the Fund's policy to declare dividends daily, payable to shareholders of
record as of 12:00 noon (E.S.T.) from net investment income and to pay these
dividends monthly. Dividends payable to shareholders are recorded by the Fund on
the ex-dividend date, which is the same as the declaration date. Distributions
of net realized short-term and long-term capital gains, if any, earned by the
Fund will be made annually to the extent they are not offset by any capital loss
carryforwards.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
F. Other
The Trust accounts separately for the assets, liabilities, and operations of the
Fund. Expenses directly attributable to the Fund are charged to that Fund, while
expenses which are attributable to all the Trust's funds are allocated among
them.
<PAGE> 211
LIQUID ASSETS FUND 16
------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
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Note 2 -- Fees and Transactions with Affiliates
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.55 of 1% of the Fund's average daily net assets.
For the six months ended June 30, 1995, this fee aggregated $34,651.
The Trust has entered into a Distribution Agreement with Signature Broker-Dealer
Services, Inc. ("Signature"). Under the Distribution Agreement with the Trust,
pursuant to Rule 12b-1 of the 1940 Act, Signature may seek reimbursement, at an
annual rate not exceeding 0.20 of 1% of the Fund's average daily net assets, for
expenses incurred in connection with any activities primarily intended to result
in the sale of the Fund's shares. For the six months ended June 30, 1995, there
were no reimbursable expenses incurred under this agreement.
In 1994, Bankers Trust contributed $27,663 to reimburse the Fund for realized
losses from securities transactions.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Fund to the extent necessary to limit all expenses to 0.35 of 1% of the average
daily net assets of the Fund, excluding the Portfolio's expenses and 0.45 of 1%
of average daily net assets of the Fund, including the Portfolio's expenses.
For the six months ended June 30, 1995, expenses of the Fund have been reduced
$32,289.
The Fund is subject to such limitations as may from time to time be imposed by
the Blue Sky laws of states in which the Fund sells its shares. Currently, the
most restrictive jurisdiction imposes expense limitations of 2.5% of the first
$30,000,000 of the average daily net assets, 2.0% of the next $70,000,000, and
1.5% of any excess over $100,000,000.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of Signature. None of the trustees so affiliated received compensation
for services as trustee of the Fund. Similarly, none of the Fund's officers
received compensation from the Fund.
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LIQUID ASSETS PORTFOLIO 17
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Notes To Financial Statements (unaudited)
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Note 1 -- Organization and Significant Accounting Policies
A. Organization
The Liquid Assets Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940 (the "Act"), as amended, as an open-end management
investment company. The Portfolio commenced operations on June 7, 1993, as an
unincorporated trust under the laws of New York. The Declaration of Trust
permits the Board of Trustees (the "Trustees") to issue beneficial interests in
the Portfolio.
B. Security Valuation
Investments are stated at value, as that term is defined in the Act and the
published rules and regulations thereunder. Pursuant to Rule 2a-7 of the Act,
the Portfolio utilizes the amortized cost method to determine 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 the
difference between the principal amount due at maturity and cost. In the event
that a deviation of 1/2 of 1% or more exists between the Portfolio's net asset
value on the basis of amortized cost and the net asset value calculated by using
available market quotations or an appropriate substitute, the Trustees will
promptly consider what action, if any, should be initiated, and where the
Trustees believe the extent of deviation may result in material dilution or
other unfair results to investors or shareholders, the Trustees shall take such
action to eliminate or reduce, to the extent reasonably practicable, such
dilution or unfair results.
C. Security Transactions and Interest Income
Security transactions are accounted for on a trade date basis (date the order to
buy or sell is executed). Interest income is recorded on the accrual basis and
includes amortization of premium and discount on investments. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
The Portfolio may enter into repurchase agreements with financial institutions
deemed to be creditworthy by the Portfolio's Investment Adviser, subject to the
seller's agreement to repurchase and the Portfolio's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Portfolio's custodian, and pursuant
to the terms of the repurchase agreements must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Portfolio will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Portfolio maintains the right to sell the underlying securities
at market value and may claim any resulting loss against the seller.
D. Investment Income
The Portfolio determines its net investment income (i.e., income other than net
realized long-term and short-term capital gains) on each valuation day and
allocates all such income as well as any realized gains and losses from security
transactions pro rata among the investors in the Portfolio at the time of such
determination.
<PAGE> 213
LIQUID ASSETS PORTFOLIO 18
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Notes To Financial Statements (unaudited)
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E. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to it. Therefore, no federal income tax provision is
required. The cost of securities in the Portfolio for federal income tax
purposes is the same as for financial reporting purposes.
Note 2 -- Fees and Transactions with Affiliates
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.05 of 1% of the Portfolio's average daily
net assets. For the six months ended June 30, 1995, this fee aggregated $3,156.
The Portfolio has entered into an Advisory Agreement with Bankers Trust.
Under this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at an annual rate of 0.15 of 1% of the
Portfolio's average daily net assets. For the six months ended June 30, 1995,
this fee aggregated $9,468.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of the
Portfolio, to the extent necessary, to limit all expenses to 0.10 of 1% of the
average daily net assets of the Portfolio. For the six months ended June 30,
1995, expenses of the Portfolio have been reduced $13,487.
Certain trustees and officers of the Portfolio are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for services as trustee of the Portfolio. Similarly, none of the
Portfolio's officers received compensation from the Portfolio.
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