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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 6
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SIGNATURE TRACIE RITCHER
TITLE ASST. TREASURER & VP
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<PAGE>
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<PAGE>
The Board of Trustees of
Morgan Grenfell SMALLCap Fund:
In planning and performing our audit of the financial statements of
Morgan Grenfell SMALLCap Fund for the year ended December 31, 1998,
we considered its internal control, including control activities for
safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of
Form N-SAR, not to provide assurance on the internal control.
The management of Morgan Grenfell SMALLCap Fund is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required
to assess the expected benefits and related costs of controls.
Generally, controls that are relevant to an audit pertain to the
entity's objective of preparing financial statements for external
purposes that are fairly presented in conformity with generally
accepted accounting principles. Those control include the
safeguarding of assets against unauthorized acquisition, use, or
disposition.
Because of inherent limitations in internal control, error or fraud
may occur and not be detected. Also, projection of any evaluation
of internal control to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of internal control would not necessarily disclose
all matters in internal control that might be material weaknesses
under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the
design or operation of one or more of the internal control
components does not reduce to a relative low level the risk that
misstatements caused by error or fraud in amounts that would be
material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we
noted no matters involving internal control and its operation,
including controls for safeguarding securities, that we consider to
be material weaknesses as defined above as of December 31, 1998.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
KPMG LLP
New York, New York
February 17, 1999
