[GRAPHIC OMITTED]
Mutual Fund
Semi-Annual Report
March 31, 2000
Mid Cap
Formerly BT Investment Capital Appreciation Fund
[LOGO OMITTED]
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS 3
MID CAP
Statement of Assets and Liabilities 7
Statement of Operations 8
Statements of Changes in Net Assets 9
Financial Highlights 10
Notes to Financial Statements 11
CAPITAL APPRECIATION PORTFOLIO
Schedule of Portfolio Investments 13
Statement of Assets and Liabilities 15
Statement of Operations 16
Statements of Changes in Net Assets 17
Financial Highlights 18
Notes to Financial Statements 19
-------------------
The Fund is not insured by the FDIC and is not a deposit, obligation
of or guaranteed byDeutsche Bank. The Fund is subject to investment
risks, including possible loss of principal amount invested.
-------------------
--------------------------------------------------------------------------------
2
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
We are pleased to present you with this semi-annual report for Mid Cap (the
"Fund"), providing a review of the markets, the Portfolio, and our outlook as
well as a complete financial summary of the Fund's operations and a listing of
the Portfolio's holdings.
The name of the Fund has changed to Deutsche Mid Cap, to reflect the acquisition
of Bankers Trust by Deutsche Bank. The Fund's investment objectives, policies
and strategies remain the same.
MARKET ACTIVITY
MID CAPITALIZATION GROWTH STOCKS SIGNIFICANTLY OUTPERFORMED BOTH THEIR LARGE CAP
AND SMALL CAP BRETHREN DURING THE SIX MONTHS ENDED MARCH 31, 2000. The S&P 400
Mid Cap Index returned 32.06% for the semi-annual period as compared to the
large cap return of the S&P 500 of 17.51% and the small cap return of the
Russell 2000 Index of 26.83%.
A THEME OF "VOLATILITY AND REVERSAL" CONTINUED TO DOMINATE THE MID CAP EQUITY
MARKET AS WELL AS THE BROADER EQUITY MARKETS.
o In October the U.S. equity markets were buffeted between fears that the
economy may be overheating and hopes that the strong growth/low inflation
scenario would continue. There was slight moderation in some of the more
interest-sensitive, cyclical sectors such as housing and autos, but domestic
demand still had considerable momentum and the export sector began to revive,
buoyed by the pickup in global demand. By mid-October, the equity markets
gained strength, as investors set aside concerns of higher interest rates and
focused on the positive aspects of growth.
o Overall, the fourth calendar quarter of 1999 experienced significant strength
in the equity markets, as the U.S. economy remained robust with few signs of
inflation. There continued to be tight labor markets, but productivity stayed
strong. Economic momentum also continued to build around the world. However,
this equity market strength was relatively narrow and confined primarily to
the technology and telecommunications sectors across all market
capitalizations.
o January began with weakness in the broader markets as investors looked toward
a number of possible Federal Reserve Board interest rate increases in the
first half of the year 2000 following a robust fourth quarter and holiday
selling season. Following this short-lived early weakness, the mid cap market
as well as the broader equity markets resumed strength, narrowly confined to
technology, telecommunications and select biotechnology issues where growth
was expected to continue despite rising interest rates.
o In February, there was a sell off of such "Old Economy" sectors as
manufacturing and other cyclical industries on fears of higher interest rates.
However, such "New Economy" sectors as technology and biotechnology
continued to do well, helping to boost the S&P 400 Mid Cap Index overall.
o Market volatility intensified in March on fears of further interest rate
increases as well as valuation concerns in the technology and biotechnology
areas.
THROUGHOUT THE SEMI-ANNUAL PERIOD, MID CAP COMPANIES EXHIBITED STRONG EARNINGS
GROWTH AND VERY ATTRACTIVE RELATIVE VALUATIONS. Growth outperformed value within
the mid cap sector. Communications services, mostly driven by the cellular and
wireless industries, health care and technology were among the best performing
sectors for the semi-annual period. The utilities sector and the energy sector
performed particularly well in the first quarter of 2000, the latter benefiting
from rising oil prices.
TEN LARGEST STOCK HOLDINGS
(percentages are based on market value of total investments)
Maxim Integrated Product 3.14%
PE Corp. - PE Biosystems 3.11
Network Appliance, Inc. 2.75
Immunex Corp. 2.60
Flextronics International 2.49
BJ Service Co. 2.42
Citrix Systems, Inc. 2.40
Ivax Corp. 2.38
Scientific-Atlanta, Inc. 2.33
Dynegy, Inc. 2.28
--------------------------------------------------------------------------------
3
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
INVESTMENT REVIEW
The Fund significantly outperformed its benchmark for the six month period,
particularly well worth noting given the extremely high volatility in the mid
cap equity market during this semi-annual period. Specific stock selection and
sector positioning bolstered Fund performance.
For example, among the Fund's largest holdings within the top performing sectors
were Network Appliance Inc., PE Corp.-PE Biosystems, Ivax Corp., Citrix Systems,
Maxim Integrated Product, Univision Communications, BEA Systems Inc.,
InfoSpace.com Inc., and Immunex Corp. Given the narrowness of mid cap
outperformance, our team's stock-picking skills became ever more critical to the
Fund's success. So, too, did our extensive research into sectors.
In the fourth quarter of 1999, the Fund was overweight in the three best
performing sectors-technology, communications services and health care. Also
having a positive impact on relative performance were underweight positions in
three of the poorer performing sectors-utilities, financials and basic
materials. Detracting from performance was an underweight position in capital
goods and an overweight position in consumer staples.
The energy sector was a top performer in the first quarter of 2000, and the
Fund's overweight position boosted the portfolio's return. Technology continued
to be a winning sector in the first quarter of 2000, and the Fund remained
overweight there as well. Performance was also aided during these months by
underweight positions in financials, basic materials and consumer cyclicals,
three of the poorer performing sectors.
MANAGER OUTLOOK
Our outlook for the equity markets in general is favorable. The U.S. economy
continues to benefit from strong productivity-led growth without an apparent
rise in inflation. In addition, synchronized worldwide growth is not expected to
cause inflationary pressure due to excess economic capacity. However, we expect
the Federal Reserve Board to remain vigilant on the inflation front and believe
the likelihood exists that the Federal Reserve Board may well raise interest
rates several more times during the remainder of the year 2000. There is also
the risk that Presidential campaign rhetoric and elections may cause market
volatility to increase.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
Periods ended Past 6 Past 1 Past 3 Past 5 Since Past 1 Past 3 Past 5 Since
March 31, 2000 months year years years inception year years years inception
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid Cap(1)
(inception 3/9/93) 58.20% 70.48% 180.31% 247.07% 346.67% 70.48% 41.00% 28.26% 23.61%
S&P Midcap 400
Index(2)
(since 3/31/93) 32.06% 38.08% 106.72% 194.10% 238.17% 38.08% 27.39% 24.08% 19.01%
Lipper Multicap
Growth Average(3)
(since 3/31/93) 55.62% 65.13% 182.02% 284.12% 342.67% 65.13% 40.24% 30.23% 23.12%
<FN>
--------------------------------------------------------------------------------
(1) Past performance is not indicative of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Performance figures
assume the reinvestment of dividends and capital gain distributions. During
the period the Fund waived certain fees and expenses. Had these fees and
expenses not been waived, the Fund's return would have been lower.
(2) Indices are unmanaged, and investments cannot be made in an index. The S&P
Mid Cap 400 Index consists of 400 domestic stocks chosen for market size,
liquidity and industry group representation.
(3) Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper, Inc. as falling into the respective
categories indicated. These figures do not reflect sales charges. During the
six months ended March 31, 2000, Lipper changed the way it classifies mutual
funds. As a result of this reclassification, Mid Cap is now part of the
Lipper Multi Cap Growth Average. Previously, Mid Cap was part of the Lipper
Mid Cap Growth Average.
</FN>
</TABLE>
--------------------------------------------------------------------------------
4
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
PORTFOLIO DIVERSIFICATION
By Theme as of March 31, 2000
(percentages are based on market value of total investments)
Energizing the Globe 13.6%
Client Server Computing 12.5
The Ubiquitous Semiconductor 11.8
Telecommunications 10.5
Life Sciences Revolution 9.6
Managing the Information Age 7.9
America's Changing Leisure Time 4.9
Interactive Media 3.6
Life on the Net 3.4
Special Situations 2.9
New Consumer 2.5
New Healthcare Paradigm 2.4
Stores of Value 2.3
Our Strengthening Financial Structure 1.6
Miscellaneous(1) 2.0
Cash 8.5
--------------------------------------------------------------------------------
(1) Includes themes with weightings of less than 1.5%.
Although we anticipate future periods of volatility in the marketplace while
global and domestic economic and political events run their course, we remain
optimistic regarding mid cap stocks in general. The outlook for profit growth in
this segment remains strong and relative valuations continue to be attractive.
Company earnings reports continue to be generally positive to date.
Given the recent high volatility in the stock market, it is important to keep in
mind that we remain disciplined in our process, and we continue to:
o focus on companies that offer compelling valuations relative to their growth
rates
o focus on companies that historically have strong, consistent earnings and
revenue growth
o use extensive fundamental research to identify attractive investment
opportunities in unrecognized growth companies and sectors
o strictly adhere to our sell discipline seeking to help mitigate risk, and
o seek to use the volatility of the marketplace to our investors' advantage by
initiating or adding to positions on weakness.
It is important to remember that investors should take a long-term view when
investing in this segment of the market, as returns can be volatile in the short
term.
We will continue to monitor economic conditions and their effect on financial
markets as we seek capital growth over the long term.
/s/ MARY P. DUGAN
Mary P. Dugan
Portfolio Manager of the CAPITAL APPRECIATION PORTFOLIO
March 31, 2000
--------------------------------------------------------------------------------
5
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
PERFORMANCE COMPARISON
[GRAPHIC OMITTED]
Mid Cap S&P MidCap 400
Mar-93 10,000 10,000
Sep-93 11,838 10,747
Mar-94 11,409 10,614
Sep-94 11,728 10,920
Mar-95 12,857 11,498
Sep-95 16,813 13,734
Mar-96 16,786 14,788
Sep-96 18,890 15,657
Mar-97 15,919 16,358
Sep-97 21,655 21,779
Mar-98 23,318 24,380
Sep-98 19,201 20,460
Mar-99 26,202 24,379
Sep-99 28,235 25,492
Mar-00 44,667 33,817
Average Annual Total Return for the Periods Ended March 31, 2000(2)
One Year 70.48% Five Years 28.26% Since 3/9/931 23.61%
--------------------------------------------------------------------------------
(1) The Fund's inception date.
(2) Unaudited.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. Performance figures assume the reinvestment of
dividends and capital gain distributions. During the period the Fund waived
certain fees and expenses.
Benchmark return is for the period beginning March 31, 1993.
--------------------------------------------------------------------------------
6
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
<TABLE>
<CAPTION>
As of
March 31, 2000
--------------
<S> <C>
ASSETS
Investment in Capital Appreciation Portfolio, at Value $44,413,470
Receivable for Shares of Beneficial Interest Subscribed 20,500
Prepaid Expenses and Other 23,560
-----------
Total Assets 44,457,530
-----------
LIABILITIES
Due to Bankers Trust 26,723
Accrued Expenses and Other 23,113
-----------
Total Liabilities 49,836
-----------
NET ASSETS $44,407,694
===========
COMPOSITION OF NET ASSETS
Paid-in Capital $23,993,030
Accumulated Net Realized Gain from Investment Transactions 5,195,683
Net Unrealized Appreciation on Investments 15,218,981
-----------
Net Assets $44,407,694
===========
SHARES OUTSTANDING ($0.001 par value per share, unlimited number of shares of
beneficial interest authorized) 2,456,004
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(net assets divided by shares outstanding) $18.08
===========
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
7
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
MARCH 31, 2000
--------------
<S> <C>
INVESTMENT INCOME
Net Investment Income Allocated from Capital Appreciation Portfolio $ 30,258
-----------
EXPENSES
Administration and Services Fees 116,061
Printing and Shareholder Reports 8,835
Professional Fees 6,881
Trustees Fees 1,995
Registration Fees 1,382
Miscellaneous Expenses 1,772
-----------
Total Expenses 136,926
Less: Fee Waivers or Expense Reimbursements (20,865)
-----------
Net Expenses 116,061
-----------
EXPENSES IN EXCESS OF INVESTMENT INCOME (85,803)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENT
Net Realized Gain from Investment Transactions 5,319,828
Net Change in Unrealized Appreciation/Depreciation on Investment 10,271,756
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENT 15,591,584
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $15,505,781
===========
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
8
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
MARCH 31, 2000(1) SEPTEMBER 30, 1999
----------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Expenses in Excess of Investment Income $ (85,803) $ (144,859)
Net Realized Gain from Investment Transactions 5,319,828 8,027,605
Net Change in Unrealized Appreciation/Depreciation
on Investment 10,271,756 1,426,125
------------ ------------
Net Increase in Net Assets from Operations 15,505,781 9,308,871
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain from Investment Transactions (7,759,652) (3,057,167)
------------ ------------
CAPITAL TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Proceeds from Sales of Shares 10,999,970 9,866,222
Dividend Reinvestments 5,252,658 1,940,215
Cost of Shares Redeemed (8,323,066) (14,822,874)
------------ ------------
Net Increase (Decrease) from Capital Transactions in
Shares of Beneficial Interest 7,929,562 (3,016,437)
------------ ------------
TOTAL INCREASE IN NET ASSETS 15,675,691 3,235,267
NET ASSETS
Beginning of Period 28,732,003 25,496,736
------------ ------------
End of Period $ 44,407,694 $ 28,732,003
============ ============
<FN>
--------------------------------------------------------------------------------
(1) Unaudited.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
9
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for the periods
indicated for Mid Cap.
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JAN. 1, 1995
MONTHS ENDED FOR THE YEARS ENDED SEPTEMBER 30, TO SEPT. 30,
MARCH 31, 2000(3) 1999 1998 1997 1996 1995(2)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $14.77 $11.38 $15.72 $16.79 $16.83 $12.10
------ ------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS
Expenses in Excess of Investment
Income (0.03) (0.07) (0.12) (0.13) (0.10) (0.07)
Net Realized and Unrealized Gain (Loss)
from Investment Transactions 7.27 4.99 (1.58) 2.13 1.89 4.80
------ ------ ------ ------ ------ ------
Total Income (Loss) from Investment
Operations 7.24 4.92 (1.70) 2.00 1.79 4.73
------ ------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain from Investment
Transactions (3.93) (1.53) (2.64) (3.07) (1.83) --
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $18.08 $14.77 $11.38 $15.72 $16.79 $16.83
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 58.20% 47.05% (11.42)% 14.64% 12.35% 39.09%
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Period (000s
omitted) $44,408 $28,732 $25,497 $49,002 $67,385 $57,380
Ratios to Average Net Assets:
Expenses in Excess of Investment
Income (0.48)%(1) (0.58)% (0.70)% (0.77)% (0.66)% (0.65)%(1)
Expenses After Waivers, Including
Expenses of the Capital
Appreciation Portfolio 1.25%(1) 1.25% 1.25% 1.25% 1.25% 1.25%(1)
Expenses Before Waivers, Including
Expenses of the Capital
Appreciation Portfolio 1.62%(1) 1.88% 1.64% 1.54% 1.51% 1.57%(1)
<FN>
--------------------------------------------------------------------------------
(1) Annualized.
(2) Board of Trustees approved the change of the fiscal year end from
December 31 to September 30.
(3) Unaudited.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
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. Mid Cap (the "Fund") is one of the funds
offered to investors by the Trust. The Fund began operations on March 9, 1993.
The Fund seeks to achieve its investment objective by investing 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 value of the investment in the Portfolio reflects the Fund's proportionate
interest in the net assets of the Portfolio. At March 31, 2000, the Fund's
investment was approximately 100% of the Portfolio.
The financial statements of the Portfolio, including a list of assets held, are
contained elsewhere in this report and should be read in conjunction with the
Fund's financial statements.
B. VALUATION
Valuation of securities by the Portfolio is discussed in Note 1B of the
Portfolio's Notes to Financial Statements, which are included elsewhere in this
report.
C. 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.
D. DISTRIBUTIONS
It is the Fund's policy to declare and distribute dividends quarterly to
shareholders from net investment income, if any. Dividends and distributions
payable to shareholders are recorded by the Fund on the ex-dividend date.
Distributions of net realized short-term and long-term capital gains, if any,
earned by the Fund are made annually to the extent they exceed 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 distribute substantially
all of its taxable income to shareholders. Therefore, no federal income tax
provision is required. The Fund may periodically make reclassifications among
certain of its capital accounts as a result of the differences in the
characterization and allocation of certain income and capital gains
distributions determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles.
F. OTHER
The Trust accounts separately for the assets, liabilities, and operations of
each of its funds. Expenses directly attributable to a fund are charged to that
fund, while expenses which are attributable to the Trust are allocated among the
funds in the Trust.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts in the financial statements.
Actual results could differ from those estimates.
NOTE 2--FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust") an indirect wholly owned subsidiary of Deutsche
Bank A.G. Under this 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 .65% of the Fund's average
daily net assets.
Bankers Trust has contractually agreed to waive its fees through January 31,
2001, and reimburse expenses of the Fund, to the extent necessary, to limit all
expenses to .65% of the average daily net assets of the Fund, excluding expenses
of the Portfolio, and 1.25% of the average daily net assets of the Fund,
including expenses of the Portfolio.
ICC Distributors, Inc. provides distribution services to the Fund.
--------------------------------------------------------------------------------
11
<PAGE>
Mid Cap
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 3--SHARES OF BENEFICIAL INTEREST
At March 31, 2000, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
MARCH 31, 2000(1) SEPTEMBER 30, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
------------ ----------- ----------- -------------
Sold 691,776 $10,999,970 707,455 $ 9,866,222
Reinvested 383,966 5,252,658 173,543 1,940,215
Redeemed (564,980) (8,323,066) (1,175,938) (14,822,874)
----------- ----------- ---------- ------------
Net Increase
(Decrease) 510,762 $(7,929,562) (294,940) $ (3,016,437)
=========== =========== ========== ============
--------------------------------------------------------------------------------
(1) Unaudited.
NOTE 4--FUND NAME CHANGE
On January 31, 2000, the Fund changed its name from BT Investment Capital
Appreciation Fund to Mid Cap.
NOTE 5--FUND MERGER
On September 8, 1999, the Board of Trustees voted to recommend that Equity
Appreciation merge into Mid Cap. The Board has determined that this proposal is
in the best interest of shareholders. The merger will take place on August 31,
2000.
--------------------------------------------------------------------------------
12
<PAGE>
Capital Appreciation Portfolio
--------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS March 31, 2000 (Unaudited)
SHARES DESCRIPTION VALUE
------ ----------- -----
COMMON STOCKS - 92.0%
AMERICA'S CHANGING LEISURE TIME - 4.9%
9,600 Harley-Davidson, Inc. $ 762,000
4,600 Hispanic Broadcasting Corp.(1) 520,950
8,100 Univision Communications, Inc.(1) 915,300
-----------
2,198,250
-----------
AMERICA'S INDUSTRIAL RENAISSANCE - 1.2%
4,500 SPX Corp. 512,719
-----------
CLIENT SERVER COMPUTING - 12.5%
11,400 BEA Systems, Inc.(1) 836,475
16,200 Citrix Systems, Inc.(1) 1,073,250
15,800 Flextronics International Ltd.(1) 1,112,912
8,200 Mercury Interactive Corp.(1) 649,850
14,800 Network Appliance, Inc.(1) 1,224,700
8,600 Rational Software Corp.(1) 657,900
-----------
5,555,087
-----------
ENERGIZING THE GLOBE - 13.7%
11,070 Apache Corp. 550,732
14,600 BJ Services Co.(1) 1,078,575
8,900 Cooper Cameron Corp.(1) 595,187
7,200 Devon Energy Corp. 349,650
16,204 Dynegy, Inc. 1,016,801
11,400 Montana Power Co.(1) 729,600
16,490 Noble Drilling Corp.(1) 683,304
13,600 Sante Fe International Corp. 503,200
7,400 Smith International, Inc.(1) 573,500
-----------
6,080,549
-----------
INTERACTIVE MEDIA - 3.6%
8,000 Charter Communications(1) 114,625
16,400 Scientific-Atlanta, Inc. 1,040,375
19,300 USA Networks, Inc.(1) 435,456
-----------
1,590,456
-----------
LIFE ON THE NET - 3.4%
3,200 Art Technology Group(1) 210,200
5,300 Broadvision, Inc.(1) 237,837
6,500 Infospace.com, Inc.(1) 945,344
800 Vignette Corp.(1) 128,200
-----------
1,521,581
-----------
LIFE SCIENCES REVOLUTION - 9.6%
600 Abgenix, Inc.(1) 82,875
1,900 Alkermes, Inc.(1) 175,750
18,300 Immunex Corp.(1) 1,160,906
5,000 Invitrogen Corp.(1) 290,312
4,000 Medimmune, Inc.(1) 696,500
2,500 Nanogen, Inc.(1) 85,000
14,400 Pe Corp. - Pe Biosystems Group 1,389,600
1,500 Qiagen NV(1) 204,000
2,900 Techne Corp.(1) 200,100
-----------
4,285,043
-----------
SHARES DESCRIPTION VALUE
------ ----------- -----
MANAGING THE INFORMATION AGE - 8.0%
700 Aether Systems, Inc.(1) $ 127,050
5,500 Alteon Websystems, Inc.(1) 451,000
4,900 Brocade Communications(1) 878,631
2,100 Cobalt Networks, Inc.(1) 98,700
3,300 OTG Software, Inc.(1) 133,031
13,000 Portal Software, Inc.(1) 740,187
3,200 Redback Networks(1) 959,800
1,000 Verisign, Inc.(1) 149,500
-----------
3,537,899
-----------
NEW CONSUMER - 2.5%
7,200 Circuit City Stores, Inc. 438,300
1,765 Gucci Group NV 156,975
11,300 Zale Corp.(1) 533,219
-----------
1,128,494
-----------
NEW HEALTH PARADIGM - 2.4%
39,000 IVAX Corp.(1) 1,062,750
-----------
OUR STRENGTHENING FINANCIAL STRUCTURE - 1.6%
4,200 AMBAC Financial Group 211,575
10,175 Charter One Financial, Inc. 213,675
16,400 North Fork Bancorp 293,150
-----------
718,400
-----------
PRODUCTIVITY ENHANCEMENT - 0.8%
3,300 Caliper Technologies 266,888
1,800 Palm, Inc.(1) 80,775
-----------
347,663
-----------
SPECIAL SITUATIONS - 3.0%
5,200 Bowater, Inc. 277,550
11,500 Energy East Corp. 227,844
37,600 Northeast Utilities Corp.(1) 808,400
-----------
1,313,794
-----------
STORES OF VALUE - 2.4%
14,700 BJ's Wholesale Club(1) 567,788
22,900 Family Dollar Stores, Inc. 476,607
-----------
1,044,395
-----------
TELECOMMUNICATIONS - 10.5%
7,600 Allegiance Telecom, Inc.(1) 612,750
12,500 American Tower Corp. - Class A 617,188
2,300 Avanex Corp.(1) 349,025
7,700 Clarent Corp.(1) 694,444
2,800 Micromuse, Inc.(1) 388,675
3,200 Netro Corp.(1) 208,050
5,600 Nextlink Communications, Inc.(1) 692,650
2,800 SDL, Inc.(1) 596,050
4,000 Voicestream Wireless Corp.(1) 515,250
-----------
4,674,082
-----------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
13
<PAGE>
Capital Appreciation Portfolio
--------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS March 31, 2000 (Unaudited)
SHARES DESCRIPTION VALUE
------ ----------- -----
THE UBIQUITOUS SEMICONDUCTOR - 11.9%
5,700 Altera Corp.(1) $ 508,725
3,300 EMCORE Corp.(1) 379,706
9,840 LSI Logic Corp.(1) 714,630
19,700 Maxim Integrated Products, Inc.(1) 1,399,931
11,750 Microchip Technology, Inc.(1) 772,563
8,700 National Semiconductor Corp.(1) 527,438
11,800 Teradyne, Inc.(1) 970,550
-----------
5,273,543
-----------
TOTAL COMMON STOCKS
(Cost $25,259,804) 40,844,705
-----------
SHARES DESCRIPTION VALUE
------ ----------- -----
SHORT-TERM INSTRUMENT - 8.5%
MUTUAL FUND - 8.5%
3,770,096 Institutional Cash Management Fund $ 3,770,096
-----------
TOTAL SHORT-TERM INSTRUMENT
(Cost $3,770,096) 3,770,096
-----------
TOTAL INVESTMENTS
(Cost $29,029,900) 100.5% $44,614,801
LIABILITIES IN EXCESS OF OTHER ASSETS (0.5) (201,288)
----- -----------
NET ASSETS 100.0% $44,413,513
===== ===========
--------------------------------------------------------------------------------
(1) Non-income producing security for the six month period ended March 31, 2000.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14
<PAGE>
Capital Appreciation Portfolio
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
AS OF
MARCH 31, 2000
--------------
ASSETS
Investments, at Value (Cost of $29,029,900) $44,614,801
Receivable for Shares of Beneficial Interest Subscribed 70,000
Receivable for Securities Sold 139,722
Dividends and Interest Receivable1 24,950
Prepaid Expenses and Other 313
-----------
Total Assets 44,849,786
-----------
LIABILITIES
Payable for Securities Purchased 395,539
Due to Bankers Trust 20,327
Accrued Expenses and Other 20,407
-----------
Total Liabilities 436,273
-----------
NET ASSETS $44,413,513
===========
COMPOSITION OF NET ASSETS
Paid-in Capital $28,828,612
Net Unrealized Appreciation on Investments 15,584,901
-----------
NET ASSETS $44,413,513
===========
--------------------------------------------------------------------------------
(1) Includes $20,863 from the Portfolio's investment in the Institutional Cash
Management Fund.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
15
<PAGE>
Capital Appreciation Portfolio
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
MARCH 31, 2000
--------------
<S> <C>
INVESTMENT INCOME
Dividends $15,136,482
-----------
EXPENSES
Advisory Fees 114,560
Administration and Services Fees 17,892
Professional Fees 16,948
Trustees Fees 1,631
Miscellaneous 823
-----------
Total Expenses 151,854
Less: Fee Waivers or Expense Reimbursements (45,630)
-----------
Net Expenses 106,224
-----------
NET INVESTMENT INCOME 30,258
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net Realized Gain from Investment Transactions 5,319,833
Net Change in Unrealized Appreciation/Depreciation on Investments 10,271,766
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 15,591,599
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $15,621,857
===========
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16
<PAGE>
Capital Appreciation Portfolio
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
MARCH 31, 2000(1) SEPTEMBER 30, 1999
----------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net Investment Income $ 30,258 $ 17,564
Net Realized Gain from Investment Transactions 5,319,833 8,027,612
Net Change in Unrealized Appreciation/Depreciation
on Investments 10,271,766 1,426,127
----------- -----------
Net Increase in Net Assets from Operations 15,621,857 9,471,303
----------- -----------
CAPITAL TRANSACTIONS
Proceeds from Capital Invested 10,979,471 10,983,175
Value of Capital Withdrawn (10,928,387) (17,403,228)
----------- -----------
Net Increase (Decrease) in Net Assets from Capital
Transactions 51,084 (6,420,053)
----------- -----------
TOTAL INCREASE IN NET ASSETS 15,672,941 3,051,250
NET ASSETS
Beginning of Period 28,740,572 25,689,322
----------- -----------
End of Period $44,413,513 $28,740,572
=========== ===========
<FN>
--------------------------------------------------------------------------------
(1) Unaudited.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
17
<PAGE>
Capital Appreciation Portfolio
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below are selected supplemental data and ratios to average net assets
for the periods indicated for the Capital Appreciation Portfolio.
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JAN. 1, 1995
MONTHS ENDED FOR THE YEARS ENDED SEPTEMBER 30, TO SEPT. 30,
MARCH 31, 2000(3) 1999 1998 1997 1996 1995(2)
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Period
(000s omitted) $44,414 $28,741 $25,689 $48,972 $68,385 $149,888
Ratios to Average Net Assets:
Net Investment Income
(Expenses in Excess
of Income) 0.17%(1) 0.07% (0.05)% (0.12)% (0.01)% 0.01%(1)
Expenses After Waivers 0.60%(1) 0.60% 0.60% 0.60% 0.60% 0.60%(1)
Expenses Before Waivers 0.85%(1) 0.91% 0.86% 0.81% 0.77% 0.78%(1)
Portfolio Turnover Rate 64% 155% 145% 167% 271% 125%
<FN>
--------------------------------------------------------------------------------
(1) Annualized.
(2) The Board of Trustees approved the change of the fiscal year end from
December 31 to September 30.
(3) Unaudited.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
18
<PAGE>
Capital Appreciation Portfolio
--------------------------------------------------------------------------------
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 began 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 listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on their closing price.
Short-term debt securities are valued at market value until such time as they
reach a remaining maturity of 60 days, whereupon they are valued at amortized
cost using their value on the 61st day. All other securities and other assets
are valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Trustees.
C. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on the accrual
basis and includes amortization of premium and accretion of discount on
investments. Expenses are recorded as incurred. 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 securities transactions of the Portfolio are allocated pro rata among
the investors in the Portfolio at the time of such determination.
D. FEDERAL INCOME TAXES
The Portfolio is considered a Partnership under the Internal Revenue Code.
Therefore, no federal income tax provision is necessary.
E. OTHER
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts in the financial statements.
Actual results could differ from those estimates.
NOTE 2--FEES AND TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"), an indirect wholly owned subsidiary of
Deutsche Bank A.G. Under this 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 .10% of the
Portfolio's average daily net assets.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this agreement, the Portfolio pays Bankers Trust a fee computed daily and paid
monthly at an annual rate of .65% of the Portfolio's average daily net assets.
Bankers Trust has contractually agreed to waive its fees through January 31,
2001 and reimburse expenses of the Portfolio, to the extent necessary, to limit
all expenses to .60% of the average daily net assets of the Portfolio.
The Portfolio may invest in the Institutional Cash Management Fund (the "Cash
Management Fund"), an open-end management investment company managed by Bankers
Trust Company. The Cash Management Fund is offered as a cash management option
to the Portfolio and other accounts managed by Bankers Trust. Distributions from
the Cash Management Fund to the Portfolio for the six months ended March 31,
2000 amounted to $79,327 and are included in dividend income.
At March 31, 2000, the Portfolio was a participant with other affiliated
entities in a revolving credit facility in the amount of $150,000,000, which
expires April 29, 2000. A commitment fee on the average daily amount of the
available commitment is payable on a quarterly basis and apportioned among all
participants, based on net assets. No amounts were drawn down or outstanding for
this Portfolio under the credit facility for the six month period ended March
31, 2000. Subsequent to March 31, 2000, the revolving credit facility was
renewed and increased to $200,000,000, which expires April 27, 2001.
--------------------------------------------------------------------------------
19
<PAGE>
Capital Appreciation Portfolio
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 month period ended March 31, 2000 were
$21,097,031 and $21,561,141, respectively.
For federal income tax purposes, the tax basis of investments held at March 31,
2000, was $29,029,900. The aggregate gross unrealized appreciation for all
investments was $17,125,507 and the aggregate gross unrealized depreciation for
all investments was $1,540,606.
NOTE 4--PORTFOLIO MANAGER CHANGE
Effective May 11, 2000, Doris Klug replaces Mary Dugan as portfolio manager.
--------------------------------------------------------------------------------
20
<PAGE>
(This page intentionally left blank)
<PAGE>
(This page intentionally left blank)
<PAGE>
<PAGE>
For information on how to invest, shareholder account information and current
price and yield information, please contact your relationship manager or write
to us at:
DEUTSCHE ASSET MANAGEMENT SERVICE CENTER
P.O. BOX 219210
KANSAS CITY, MO 64121-9210
or call our toll-free number: 1-800-730-1313
This report must be preceded or accompanied by a current prospectus for the
Fund.
Mid Cap CUSIP #055922819
BT INVESTMENT FUNDS 1665SA (3/00)
Distributed by:
ICC Distributors, Inc.
