Deutsche Asset Management
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Mutual Fund
Semi-Annual Report
March 31, 2000
Small Cap
Formerly BTInvestment Small Cap Fund
Deutsche Bank Group
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Small Cap
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TABLE OF CONTENTS
LETTER TO SHAREHOLDERS 3
SMALL 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
SMALL CAP 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
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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.
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Small Cap
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LETTER TO SHAREHOLDERS
We are pleased to present you with this semi-annual report for Small 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 SmallCap, to reflect the
acquisition of Bankers Trust by Deutsche Bank. The Fund's investment objectives,
policies and strategies, as well as its portfolio managers, remain the same.
MARKET ACTIVITY
SMALL CAPITALIZATION GROWTH STOCKS SIGNIFICANTLY OUTPERFORMED THEIR LARGE CAP
BRETHREN DURING THE SIX MONTHS ENDED MARCH 31, 2000. The Russell 2000 Index
returned 26.83% for the semi-annual period as compared to the S&P 500 return of
17.51%. As measured by the Russell 2000 Growth Index, which returned 45.77% for
the semi-annual period, small capitalization growth stocks were the best
performing U.S. equity sector for the semi-annual period.
STILL, A THEME OF "VOLATILITY AND REVERSAL" CONTINUED TO DOMINATE THE SMALL 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 disregarded concerns of higher interest rates
and focused on the positives 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 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 small cap
market resumed its strength, narrowly confined to technology,
telecommunications and select biotechnology issues where revenue and earnings
growth were 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, the "New Economy" sectors-technology, telecommunications and
biotechnology-continued to do well, boosting the Index overall.
o The small cap market pulled back in March, ending the month down 6.6%, as the
mid and large cap markets reasserted themselves. Even technology and health
care, especially biotechnology, which had led the first calendar quarter's
performance charge, ended the month down over 11% and 31%, respectively.
Despite poor March performance, technology ended the quarter up over 21% and
health care ended up over 15%.
Throughout the semi-annual period, small cap growth companies exhibited strong
earnings growth and very attractive relative valuations. Growth outperformed
value within the small cap sector, with communications services, mostly driven
by the cellular and wireless industries, health care and technology the best
performing sectors for the semi-annual period. Energy also did particularly well
in the first quarter of 2000, as
TEN LARGEST STOCK HOLDINGS
(percentages are based on market value of total investments)
Pinnacle Systems,Inc. 3.57%
Tech Data Corp. 3.01
Saga Systems, Inc. 2.64
Resmed, Inc. 2.49
BJServiceCo. 2.44
Asyst Technologies, Inc. 2.29
TrigonHealthcare 2.26
Pacific Sunwear of CA 2.21
Accredo Health,Inc. 2.12
Atmi, Inc. 2.12
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Small Cap
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LETTER TO SHAREHOLDERS
PORTFOLIO DIVERSIFICATION
By Theme as of March 31,2000 (percentages are based on market value
of total investments)
Technology 39.8%
Healthcare 14.3
Consumer 13.0
Energy 9.6
CreditSensitive 6.4
Service Companies 5.4
Transportation 4.6
Process Industries 1.5
Cash 5.4
oil prices rose. It is important to note that since its rebalancing in June
1999, the Russell 2000 Index's performance has been driven by a very narrow list
of stocks.
INVESTMENT REVIEW
The Fund significantly outperformed its benchmarks for the six month period,
particularly well worth noting given the extremely high volatility in the small
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 Credence Systems, Pinnacle Systems, Inc., Medical Manager Corp., Enzon
Inc., Titan Corp., and Alkermes. Each of these stocks contributed positively to
Fund performance. Given the narrowness of small cap market outperformance
overall, our management 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 two of the best
performing sectors, i.e. technology and health care. Also having a positive
impact on relative performance were underweight positions in three of the
poorer performing sectors, i.e. consumer staples, financials and materials &
processing.
The energy sector was a top performer in the first quarter of 2000, and the
Fund's overweight position there boosted portfolio returns. Technology and
health care continued to be winning sectors 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, consumer discretionary and
basic industries, 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. Fundamentals for corporate profits also remain solid across
most sectors of the small cap market, as consumer spending remains robust and
economic growth continues at a strong pace. Thus, the rest of the year 2000
should bring moderately higher stock prices, in our view, as well as
significantly improved market breadth. The small cap universe, representing well
over 90% of all publicly traded domestic companies, continues to provide an
excellent source for corporate America and venture capitalists to recognize
value in those companies with solid fundamentals early in their growth cycle. We
believe restructuring and consolidation will continue to create opportunities
for small cap investors.
Still, there are several risks to the equity markets in general, including the
small cap market, over the rest of the year. These include:
o valuation risk, especially in NASDAQ stocks. The NASDAQ Composite has been
extremely volatile, experiencing four declines of 10% or more in the first
quarter of 2000 alone;
o a rise in margin debt, which at the end of the first quarter stood at a record
high with an increase of margin debt of over 9% in February alone;
o rising interest rates, as the Federal Reserve Board may well tighten several
more times during the remainder of the year 2000; and
o Presidential campaign rhetoric and elections may cause volatility to increase.
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LETTER TO SHAREHOLDERS
<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>
Small Cap(1)
(inception
10/21/93) 50.84% 63.96% 145.93% 205.38% 336.39% 63.96% 34.98% 25.02% 25.70%
Russell 2000 Index(2)
(since 10/31/93) 26.83% 37.29% 63.28% 121.47% 127.51% 37.29% 17.75% 17.24% 13.67%
Russell 2000
Growth Index(2)
(since 10/31/93) 45.77% 59.04% 99.74% 147.12% 153.68% 59.04% 25.94% 19.83% 15.61%
Lipper Mid Cap
Growth Average(3)
(since 10/31/93) 70.02% 97.82% 201.89% 275.46% 300.32% 97.82% 43.06% 29.56% 23.42%
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</TABLE>
Earnings disappointments continue to present the primary investment risk.
However, company earnings reports continue to be generally positive to date and
we expect superior earnings growth to be the key driver of smaller companies'
outperformance ahead.
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 long-term capital growth.
/S/ MARY P. DUGAN /S/ AUDREY M.T. JONES
__________________ _____________________
/S/ JOHN P. CALLAGHAN
_____________________
Mary P. Dugan, Audrey M.T. Jones, and John P. Callaghan
Portfolio Managers of the
SMALL CAP PORTFOLIO
March 31, 2000
(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
Russell 2000 Index is a capitalization weighted index which is comprised of
2000 of the smallest stocks in the Russell 3000 Index. The Russell 2000
Growth Index is comprised of securities in the Russell 2000 Index with a
greater than average growth orientation.
(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, Small Cap is now part of the
Lipper Mid Cap Growth Average. Previously, Small Cap was part of the Lipper
Small Cap Growth Average.
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Small Cap
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PERFORMANCE COMPARISON
SMALL CAP AND THE RUSSELL 2000 INDEX
GROWTH OF A $10,000 INVESTMENT (SINCE OCTOBER 31, 1993)
[GRAPH OMITTED]
PLOT POINTS FOLLOW:
Small Cap Russell 2000
Fund - $43,639 Index - $22,751
Oct-93 10,000 10,000
Mar-94 10,375 9,735
Sep-94 11,451 10,004
Mar-95 14,107 10,272
Sep-95 18,263 12,345
Mar-96 21,049 13,256
Sep-96 23,074 13,967
Mar-97 17,517 13,933
Sep-97 27,217 18,602
Mar-98 26,987 19,788
Sep-98 19,745 15,063
Mar-99 26,616 16,570
Sep 99 28,931 17,936
Mar-00 43,639 22,751
Average Annual Total Return for the Period Ended March 31, 2000(2)
One Year 63.96% Five Years 25.02% Since 10/21/931 25.70%
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(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 October 31, 1993.
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STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
<TABLE>
<CAPTION>
AS OF
MARCH 31, 2000
--------------
<S> <C>
ASSETS
Investment in Small Cap Portfolio, at Value $317,912,275
Receivable for Shares of Beneficial Interest Subscribed 16,884,312
Prepaid Expenses and Other 32,836
------------
Total Assets 334,829,423
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LIABILITIES
Payable for Shares of Beneficial Interest Redeemed 1,351,632
Due to Bankers Trust 176,777
Accrued Expenses and Other 39,519
------------
Total Liabilities 1,567,928
------------
NET ASSETS $333,261,495
============
COMPOSITION OF NET ASSETS
Paid-in Capital $186,755,675
Accumulated Net Realized Gain from Investment Transactions 84,570,820
Net Unrealized Appreciation on Investment 61,935,000
------------
NET ASSETS $333,261,495
============
SHARES OUTSTANDING ($0.001 par value per share, unlimited number of shares
of beneficial interest authorized) 11,610,478
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(net assets divided by shares outstanding) $ 28.70
============
</TABLE>
See Notes to Financial Statements.
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Small Cap
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STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
MARCH 31, 2000
--------------
<S> <C>
INVESTMENT INCOME
Income Allocated from Small Cap Portfolio, net $ 241,404
------------
EXPENSES
Administration and Services Fees 853,792
Registration Fees 9,569
Printing and Shareholder Reports 8,835
Professional Fees 6,881
Trustees Fees 1,995
Miscellaneous 1,771
------------
Total Expenses 882,843
Less: Fee Waivers or Expense Reimbursements (29,051)
------------
Net Expenses 853,792
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EXPENSES IN EXCESS OF INVESTMENT INCOME (612,388)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net Realized Gain from Investment Transactions 85,747,159
Net Change in Unrealized Appreciation/Depreciation on Investment 22,969,577
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NET REALIZED AND UNREALIZED GAIN ON INVESTMENT 108,716,736
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $108,104,348
============
</TABLE>
See Notes to Financial Statements.
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STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
MARCH 31, 2000(1) SEPT. 30,1999
----------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Expenses in Excess of Investment Income $ (612,388) $ (1,521,097)
Net Realized Gain from Investment Transactions 85,747,159 49,022,740
Net Change in Unrealized Appreciation/Depreciation
on Investment 22,969,577 30,229,250
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Net Increase in Net Assets from Operations 108,104,348 77,730,893
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain from Investment Transactions (32,546,077) (593,090)
------------- -------------
CAPITAL TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Proceeds from Sales of Shares 287,133,558 162,501,561
Dividend Reinvestments 22,153,759 422,175
Cost of Shares Redeemed (267,856,393) (196,099,298)
------------- -------------
Net Increase (Decrease) from Capital Transactions in Shares of
Beneficial Interest 41,430,924 (33,175,562)
------------- -------------
TOTAL INCREASE IN NET ASSETS 116,989,195 43,962,241
NET ASSETS
Beginning of Period 216,272,300 172,310,059
------------- -------------
End of Period $ 333,261,495 $ 216,272,300
============= =============
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<FN>
(1) Unaudited.
</FN>
</TABLE>
See Notes to Financial Statements.
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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 Small Cap.
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED SEPT. 30,
MARCH 31, 2000(1) 1999 1998 1997 1996 1995
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $21.89 $14.96 $23.68 $21.66 $18.50 $11.60
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Expenses in Excess of Investment Income (0.05) (0.15) (0.18) (0.14) (0.12) (0.04)
Net Realized and Unrealized Gain (Loss)
on Investment 10.18 7.13 (6.24) 3.58 4.65 6.94
------ ------ ------ ------ ------ ------
Total from Investment Operations 10.13 6.98 (6.42) 3.44 4.53 6.90
------ ------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain from Investment
Transactions (3.32) (0.05) (1.04) (1.42) (1.37) --
In Excess of Net Realized Gains -- -- (1.26) -- -- --
------ ------ ------ ------ ------ ------
Total Distributions (3.32) (0.05) (2.30) (1.42) (1.37) --
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $28.70 $21.89 $14.96 $23.68 $21.66 $18.50
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 50.84% 46.52% (28.38)% 17.90% 26.41% 59.48%
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Period (000s omitted) $333,261 $216,272 $172,310 $286,322 $242,236 $122,935
Ratios to Average Net Assets:
Expenses in Excess of Investment Income (0.46)%(2) (0.74)% (0.87)% (0.89)% (0.70)% (0.46)%
Expenses After Waivers, Including Expenses
of the Small Cap Portfolio 1.25%(2) 1.25% 1.25% 1.25% 1.25% 1.25%
Expenses Before Waivers, Including Expenses
of the Small Cap Portfolio 1.43%(2) 1.46% 1.44% 1.28% 1.47% 1.59%
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<FN>
(1) Unaudited.
(2) Annualized
</FN>
</TABLE>
See Notes to Financial Statements.
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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. Small Cap (the "Fund") is one of the funds
offered to investors by the Trust. The Fund began operations on October 21,
1993. The Fund seeks to achieve its investment objective by investing
substantially all of its assets in the Small Cap Portfolio, a series of BT
Investment Portfolios (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. 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 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 that 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 UnitedStates 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.
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Small Cap
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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 MONTHS ENDED FOR THE YEAR ENDED
MARCH 31, 20001 SEPTEMBER 30, 1999
--------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
Sold 11,164,209 $ 287,133,558 8,607,904 $ 162,501,561
Reinvested 994,334 22,153,759 24,817 422,175
Redeemed (10,429,240) (267,856,393) (10,266,076) (196,099,298)
------------ -------------- ------------ -------------
Net Increase
(Decrease) 1,729,303 $ 41,430,924 (1,633,355) $ (33,175,562)
============ ============== ============ =============
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(1) Unaudited.
NOTE 4--FUND NAME CHANGE
On January 31, 2000, the Fund changed its name from BT Investment Small Cap Fund
to Small Cap.
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Small Cap Portfolio
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SCHEDULE OF PORTFOLIO INVESTMENTS MARCH 31, 2000 (Unaudited)
SHARES DESCRIPTION VALUE
------ ----------- -----
COMMON STOCKS - 93.3%
CONSUMER - 12.8%
70,533 99 Cents Only Stores(1) $ 2,768,433
4,000 Agency.com Ltd.(1) 106,750
65,300 American Eagle Outfitters(1) 2,477,319
107,700 BJ's Wholesale Club, Inc.(1) 4,159,912
83,700 Championship Auto Racing(1) 1,841,400
58,700 Furniture Brands International, Inc.(1) 1,104,294
34,100 Hispanic Broadcasting Corp.(1) 3,861,825
53,900 Mohawk Industries, Inc.(1) 1,206,012
180,100 Pacific Sunwear of California(1) 6,933,850
67,400 Radio Unica Communications(1) 796,162
110,700 Spanish Broadcasting System(1) 2,596,261
27,500 Talbots, Inc. 1,619,063
126,075 T-HQ, Inc.(1) 2,253,591
111,500 Too, Inc.(1) 3,519,219
96,300 Universal Foods Corp.(1) 2,058,412
75,100 Zale Corp.(1) 3,543,781
------------
40,846,284
------------
CREDIT SENSITIVE - 6.3%
94,900 Annuity and Life Re (Holdings)(1) 2,467,400
91,600 Banks United Corp., - Class A 2,891,125
20,900 BISYS Group, Inc.(1) 1,389,850
56,100 Bottomline Technologies, Inc.(1) 2,044,144
90,200 D.R. Horton, Inc. 1,178,237
84,600 Golden State Bancorp, Inc.(1) 1,263,712
21,100 Investment Technology Group, Inc.(1) 743,775
130,200 Labranche & Company(1) 1,643,775
80,366 Legg Mason, Inc.(1) 3,475,829
84,900 LNR Property Corporation(1) 1,618,406
164,200 Sovereign Bancorp, Inc.(1) 1,241,762
------------
19,958,015
------------
ENERGY - 9.5%
103,800 BJ Services Co.(1) 7,668,225
44,000 Cooper Cameron Corp.(1) 2,942,500
65,900 Devon Energy Corp. 3,200,269
362,400 Global Industries, Ltd.(1) 5,300,100
94,700 Marine Drilling Co., Inc.(1) 2,598,331
113,300 Sante Fe International 4,192,100
54,700 Smith International, Inc.(1) 4,239,250
------------
30,140,775
------------
HEALTH CARE - 14.1%
200,700 Accredo Health, Inc.(1) 6,648,188
142,000 Cell Genesys, Inc.(1) 3,026,375
169,650 Dendrite International(1) 3,552,047
101,000 Enzon, Inc.(1) 3,806,438
111,300 Priority Healthcare Corp. - Class B1 5,592,825
131,800 Province Healthcare Co.(1) 3,772,776
SHARES DESCRIPTION VALUE
------ ----------- -----
109,300 Resmed, Inc.(1) 7,801,288
105,500 Sonosight, Inc.(1) 3,507,875
198,000 Trigon Healthcare, Inc.(1) 7,078,500
------------
44,786,312
------------
PROCESS INDUSTRIES - 1.5%
56,500 Bowater, Inc. 3,015,688
34,100 Rayonier, Inc. 1,662,375
------------
4,678,063
------------
SERVICE COMPANIES - 5.3%
85,400 Alamosa PCS Holdings, Inc.(1) 3,223,850
50,300 Dobson Communications(1) 1,156,900
48,500 GT Group Telecom(1) 1,012,437
93,500 Insight Communications(1) 1,928,438
97,900 Pac-West Telecomm, Inc.(1) 3,059,375
63,600 SBA Communications Corp.(1) 2,798,400
20,100 Triton PCS Holdings, Inc.(1) 1,200,975
49,900 Viatel, Inc.(1) 2,504,356
------------
16,884,731
------------
TECHNOLOGY - 39.3%
163,800 Allied Riser Communications(1) 5,692,050
56,800 Alpha Industries, Inc.(1) 5,396,000
123,000 Asyst Technologies, Inc.(1) 7,195,500
139,000 ATMI, Inc.(1) 6,637,250
109,800 Cognex Corp.(1) 6,334,088
130,000 Computer Network Technology Corp.(1) 2,275,000
50,200 Credence Systems Corp.(1) 6,281,275
64,700 Documentum, Inc.(1) 5,046,600
87,800 FileNet Corp.(1) 2,612,050
35,900 Intranet Solutions, Inc.(1) 1,651,400
502,600 Maxtor Corp.(1) 6,502,387
60,800 Net2000 Communications(1) 1,444,000
82,800 Netpliance, Inc.(1) 1,200,600
236,800 Pairgain Technologies(1) 4,425,200
26,000 PC-Tel, Inc.(1) 1,956,500
62,850 Pegasus Systems, Inc.(1) 993,816
19,300 Photon Dynamics, Inc.(1) 1,331,700
336,500 Pinnacle Systems, Inc.(1) 11,188,625
72,000 Polycom Corp.(1) 5,701,500
188,600 S3, Inc.(1) 3,960,600
231,600 Saga Systems, Inc.(1) 8,279,700
164,900 Sagent Technology(1) 4,751,181
101,800 Sportsline.com, Inc.(1) 2,996,738
287,400 Tech Data Corp.(1) 9,448,275
46,600 Therma-Wave, Inc.(1) 1,584,400
107,100 Titan Corp.(1) 5,462,100
2,600 Websense, Inc.(1) 124,962
79,900 Zoran Corp.(1) 4,499,369
------------
124,972,866
------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
13
<PAGE>
Small Cap Portfolio
--------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS March 31, 2000 (Unaudited)
SHARES DESCRIPTION VALUE
------ ----------- -----
TRANSPORTATION - 4.5%
119,400 Airborne Freight Corp.(1) $ 2,865,600
121,200 Atlantic Coast Airlines, Inc.(1) 3,136,050
32,250 EGL, Inc.(1) 753,844
83,300 Tidewater, Inc. 2,649,981
131,000 US Freightways Corp. 4,904,312
------------
14,309,787
------------
TOTAL COMMON STOCKS
(Cost $236,410,287) $296,576,833
------------
SHARES DESCRIPTION VALUE
------ ----------- -----
SHORT-TERM INSTRUMENT - 5.4%
$17,191,046 Institutional Cash Management
Fund $ 17,191,046
------------
TOTAL INVESTMENTS
(Cost $253,601,333)
98.7% $313,767,879
------------
OTHER ASSETS IN EXCESS OF LIABILITIES 1.3 4,144,436
----- ------------
NET ASSETS 100.0% $317,912,315
===== ============
--------------------------------------------------------------------------------
(1) Non-income producing security during the six month period ended March 31,
2000.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14
<PAGE>
Small Cap Portfolio
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
AS OF
MARCH 31, 2000
--------------
ASSETS
Investments, at Value (Cost of $253,601,333) $313,767,879
Receivable for Fund Shares Sold 92,194
Receivable for Securities Sold 6,661,113
Dividends and Interest Receivable1 186,457
Cash 1,483,065
------------
Total Assets 322,190,708
------------
LIABILITIES
Payable for Securities Purchased 4,087,966
Due to Bankers Trust 165,824
Accrued Expenses and Other 24,603
------------
Total Liabilities 4,278,393
------------
NET ASSETS $317,912,315
============
COMPOSITION OF NET ASSETS
Paid-in Capital $257,745,769
Net Unrealized Appreciation on Investments 60,166,546
------------
Net Assets $317,912,315
============
--------------------------------------------------------------------------------
(1) Includes $164,118 from the Portfolio's investment in the Institutional Cash
Management Fund.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
15
<PAGE>
Small Cap Portfolio
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
MARCH 31, 2000
--------------
<S> <C>
INVESTMENT INCOME
Dividends $ 1,021,784
------------
EXPENSES
Advisory Fees 836,066
Administration and Services Fees 131,539
Professional Fees 16,395
Trustees Fees 1,631
Miscellaneous 824
------------
Total Expenses 986,455
Less: Fee Waivers or Expense Reimbursements (206,075)
------------
Net Expenses 780,380
------------
NET INVESTMENT INCOME 241,404
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net Realized Gain from Investment Transactions 85,747,170
Net Change in Unrealized Appreciation/Depreciation on Investments 22,969,579
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 108,716,749
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $108,958,153
============
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16
<PAGE>
Small Cap Portfolio
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
MARCH 31, 2000(1) SEPT. 30,1999
----------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net (Expenses in Excess of) Investment Income $ 241,404 $ (188,887)
Net Realized Gain from Investment Transactions 85,747,170 49,022,746
Net Change in Unrealized Appreciation/Depreciation
on Investments 22,969,579 30,229,254
------------ ------------
Net Increase in Net Assets from Operations 108,958,153 79,063,113
------------ ------------
CAPITAL TRANSACTIONS
Proceeds from Capital Invested 293,767,926 160,986,273
Value of Capital Withdrawn (300,118,774) (198,015,755)
------------ ------------
Net Decrease in Net Assets from Capital Transactions (6,350,848) (37,029,482)
------------ ------------
TOTAL INCREASE IN NET ASSETS 102,607,305 42,033,631
NET ASSETS
Beginning of Period 215,305,010 173,271,379
------------ ------------
End of Period $317,912,315 $215,305,010
============ ============
--------------------------------------------------------------------------------
<FN>
(1) Unaudited.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
17
<PAGE>
Small Cap Portfolio
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below are selected supplemental data and ratios to average net assets
for the periods indicated for the Small Cap Portfolio.
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED SEPT. 30,
MARCH 31, 2000(1) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Period (000s omitted) $317,912 $215,305 $173,271 $285,878 $245,615 $123,828
Ratios to Average Net Assets:
Net Investment Income (Expenses in
Excess of Investment Income) 0.18%(2) (0.09)% (0.22)% (0.24)% (0.05)% 0.19%
Expenses After Waivers 0.60%(2) 0.60% 0.60% 0.60% 0.60% 0.60%
Expenses Before Waivers 0.76%(2) 0.75% 0.77% 0.77% 0.77% 0.79%
Portfolio Turnover Rate 78% 159% 182% 188% 159% 161%
--------------------------------------------------------------------------------
<FN>
(1) Unaudited.
(2) Annualized.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
18
<PAGE>
Small Cap Portfolio
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES
A. ORGANIZATION
BT Investment Portfolios (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 August 6, 1993 as an
unincorporated Trust under the laws of New York and began operations on October
21, 1993. Small Cap Portfolio is a series of that Trust. 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 and 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. 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 $822,762 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>
Small Cap 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
$184,304,527 and $181,551,740, respectively.
For federal income tax purposes, the tax basis of investments held at March 31,
2000 was $253,601,333. The aggregate gross unrealized appreciation for all
investments was $73,579,880 and the aggregate gross unrealized depreciation for
all investments was $13,413,334.
NOTE 4--PORTFOLIO MANAGER CHANGE
Effective May 11, 2000, Doris Klug replaces Mary Dugan as one of the portfolio
managers.
--------------------------------------------------------------------------------
20
<PAGE>
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<PAGE>
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<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: 1-800-368-4031
This report must be preceded or accompanied by a current prospectus for the
Fund.
Small Cap CUSIP #055922769
BT INVESTMENT FUNDS 1698SA (3/00)
Distributed by:
ICC Distributors, Inc.
