o BT INSTITUTIONAL FUNDS o
INSTITUTIONAL
CASH RESERVES
SEMI-ANNUAL REPORT
JUNE o 1998
<PAGE>
Institutional Cash Reserves Fund
Table of Contents
Letter to Shareholders 3
Institutional Cash Reserves Fund
Statement of Assets and Liabilities 4
Statement of Operations 4
Statements of Changes in Net Assets 5
Financial Highlights 6
Notes to Financial Statements 7
Cash Management Portfolio
Statement of Net Assets 8
Statement of Operations 13
Statements of Changes in Net Assets 14
Financial Highlights 14
Notes to Financial Statements 15
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The Fund is not insured by the FDIC and is not a deposit,
obligation of or guaranteed by Bankers Trust Company. The
Fund is subject to investment risks, including possible
loss of principal amount invested.
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2
<PAGE>
Institutional Cash Reserves Fund
Letter to Shareholders
We are pleased to present you with this semi-annual report for the Institutional
Cash Reserves Fund (the "Fund"), providing a detailed review of the market, the
Portfolio, and our outlook. Included are a complete financial summary of the
Fund's operations and a listing of the Portfolio's holdings.
MARKET ACTIVITY
Money markets were dominated by foreign activity rather than U.S. economic
factors or Federal Reserve Board policy in the first six months of 1998.
o The hangover effects of the Asian financial crises, which began in Korea,
Indonesia, and Thailand, spread to China and Japan. This both focused the
U.S. markets on that region and also continued to support a flight to quality
and, in turn, a U.S. Treasury rally.
--------------
Investment Instruments
Bank obligations, commercial paper, U.S. Treasury obligations and repurchase
agreements collateralized by U.S. Treasury obligations.
--------------
o Domestically, the manufacturing sector of the U.S. economy weakened due to the
impact of the Asian turmoil. However, the service sector, which currently
constitutes approximately two-thirds of the U.S. economy, was extremely
strong. The service sector was supported by a 21 year low in unemployment, by
the wealth effect of the stock market, by an improving real estate market, and
by a low interest rate environment. The bottom line-more disposable income for
consumers.
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Objective
Seeks high current income consistent with liquidity and preservation of capital.
--------------
Overall, the money markets were rather quiet, with the yield curve reasonably
flat. A strong dollar, propelled by a deepening Asian crisis, served as a
positive backdrop for continued low inflation. A combination of low inflation
plus first quarter GDP growth of over 5% supported the markets' perception that
the Federal Reserve Board was on hold. It was. In turn, interest rates remained
relatively stable throughout the period, and price volatility within the money
markets was at an all-time low.
--------------
Ratings
S&P: AAAm
Moody's: AAA
--------------
INVESTMENT REVIEW
By staying disciplined to the purchase of high quality instruments and actively
adjusting sector allocation as market conditions changed, we were able to
produce competitive yields in the Institutional Cash Reserves Fund.
ANNUALIZED 7 DAY ANNUALIZED 7 DAY
Periods ended June 30, 1998 CURRENT YIELD EFFECTIVE YIELD
- --------------------------------------------------------------------------------
Institutional
Cash Reserves Fund(1) 5.48% 5.63%
IBC First Tier-Institutional Only
Money Funds Average 5.31% 5.45%
We maintained a neutral, close-to-the benchmark weighted average maturity
position throughout most of the semi-annual period. This strategy was based on
the uncertainty surrounding the impact of the Asian financial turmoil on the
U.S. financial markets as well as on the Federal Reserve Board's decision to
keep interest rates on hold. Also, the flat yield curve gave us few
opportunities to extend maturities to increase yield. Instead, we sought to add
value by increasing the Fund's holdings in floating rate securities, which
proved to be effective in producing competitive Fund returns.
Diversification of Portfolio Investments
By Asset Type as of June 30, 1998
(percentages are based on market value)
[PIE CHART APPEARS HERE - PERCENTAGES BELOW]
Certificates of Deposit 1% Repurchase Agreement 2%
Eurodollar Certificates Eurodollar Time
of Deposit 14% Deposits 12%
Yankee Certificates Floating Rate Notes 19%
of Deposit 4% Commercial Paper 48%
--------------
Status at June 30, 1998
Seven day effective yield: 5.63%
Average maturity: 40 days
Net assets: 2,163.7 million
--------------
MANAGER OUTLOOK
We believe the money markets should remain fairly positive throughout the second
half of the year for several reasons:
o The Asian crisis continues to loom and the U.S. dollar remains strong-a
positive backdrop for inflation to stay low.
o U.S. economic growth remains solid, the labor market tight, interest rates
stable and volatility low.
o While the Federal Reserve Board reinstituted its tightening bias earlier in
the year, it still seems likely that it will be on hold for a while.
o Japan is facing serious financial troubles, which could impact China and Latin
America in turn. Thus, we expect a continued flight to quality, with U.S.
Treasuries the major beneficiary.
We intend to maintain a relatively neutral average maturity for the near term.
At the same time, we will look to take advantage of any spike in yields or any
issue-specific attractive value opportunities to extend duration, given our
view of slower but still positive economic growth in the future.
We will, of course, continue to closely observe economic conditions and how they
affect the financial markets, as we seek to provide high current income
consistent with liquidity and capital preservation.
As always, we appreciate your ongoing support of the Institutional Cash Reserves
Fund, and we look forward to continuing to serve your investment needs for many
years ahead.
/s/ Darlene M. Rasel
____________________
Darlene M. Rasel
Portfolio Manager of the Cash Management Portfolio
June 30, 1998
- --------------
(1) Past performance is not indicative of future results. Yields will vary.
Yields quote for money market funds most closely reflect the fund's current
earnings. Although money market funds seek to maintain a share value of
$1.00, there is no guarantee that they will be able to do so. Mutual funds
are not bank deposits or obligations of any bank, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
3
<PAGE>
Institutional Cash Reserves Fund
Statement of Assets and Liabilities June 30, 1998 (unaudited)
<TABLE>
<S><C>
Assets
Investment in Cash Management Portfolio, at Value $ 2,173,751,828
Prepaid Expenses 15,341
Due from Bankers Trust, net 180,019
---------------
Total Assets 2,173,947,188
---------------
Liabilities
Dividends Payable 10,046,394
Accrued Expenses 194,048
---------------
Total Liabilities 10,240,442
---------------
Net Assets $ 2,163,706,746
---------------
Shares Outstanding ($0.001 par value per share, unlimited number of shares of beneficial interest authorized) 2,164,148,595
===============
Net Asset Value, Offering and Redemption Price Per Share (net assets divided by shares outstanding) $ 1.00
===============
Composition of Net Assets
Paid-in Capital $ 2,164,148,595
Accumulated Net Realized Loss from Investment Transactions (441,849)
---------------
Net Assets $ 2,163,706,746
===============
</TABLE>
Statement of Operations For the six month period ended June 30, 1998 (unaudited)
<TABLE>
<S><C>
Investment Income
Income Allocated from Cash Management Portfolio, net $ 61,713,108
------------
Expenses
Administration and Services Fees 563,775
Registration Fees 162,569
Printing and Shareholder Reports 7,157
Professional Fees 6,533
Trustees Fees 624
Miscellaneous 25,166
------------
Total Expenses 765,824
Less: Expenses Absorbed by Bankers Trust (765,824)
------------
Net Expenses --
------------
Net Investment Income 61,713,108
Realized Gain from Investment Transactions 37,011
------------
Net Increase in Net Assets from Operations $ 61,750,119
============
</TABLE>
See Notes to Financial Statements on Page 7
4
<PAGE>
Institutional Cash Reserves Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
six months ended year ended
June 30, 1998(1) December 31, 1997
------------------- --------------------
<S><C>
Increase (Decrease) in Net Assets from:
Operations
Net Investment Income $ 61,713,108 $ 104,590,234
Net Realized Gain (Loss) from Investment Transactions 37,011 (17,779)
------------------ ------------------
Net Increase in Net Assets from Operations 61,750,119 104,572,455
------------------ ------------------
Distributions to Shareholders
Net Investment Income (61,713,108) (104,590,234)
------------------ ------------------
Capital Transactions in Shares of Beneficial Interest
(at Net Asset Value of $1.00 per share)
Proceeds from Sales of Shares 17,526,475,000 28,929,762,962
Dividend Reinvestments 48,431,567 96,038,020
Cost of Shares Redeemed (16,960,101,327) (28,763,655,824)
------------------ ------------------
Net Increase from Capital Transactions in Shares of Beneficial Interest 614,805,240 262,145,158
------------------ ------------------
Total Increase in Net Assets 614,842,251 262,127,379
Net Assets
Beginning of Period 1,548,864,495 1,286,737,116
------------------ ------------------
End of Period $ 2,163,706,746 $ 1,548,864,495
================== ==================
</TABLE>
- --------------
(1)Unaudited
See Notes to Financial Statements on Page 7
5
<PAGE>
Institutional Cash Reserves Fund
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 Institutional Cash Reserves.
<TABLE>
<CAPTION>
For the For the period
six months January 25, 1994
ended (Commencement of
June 30, For the years ended December 31, Operations) to
1998(1) 1997 1996 1995 December 31, 1994
------ ------- ------- ------- -----------------
<S><C>
Per Share Operating Performance:
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------- ------- ------- --------
Income from Investment Operations
Net Investment Income 0.03 0.05 0.05 0.06 0.04
Net Realized Gain (Loss) from Investment
Transactions (0.00)(2) (0.00)(2) 0.00(2) 0.00(2) (0.01)
------ ------- ------- ------- --------
Total from Investment Operations 0.03 0.05 0.05 0.06 0.03
------ ------- ------- ------- --------
Contributions of Capital -- -- 0.00(2) -- 0.01
------ ------- ------- ------- --------
Distributions to Shareholders
Net Investment Income (0.03) (0.05) (0.05) (0.06) (0.04)
------ ------- ------- ------- --------
Net Asset Value, End of Period $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ======= ======= ======= ========
Total Investment Return 2.75% 5.58% 5.42%(3) 5.94% 4.32%(3,4)
Supplemental Data and Ratios:
Net Assets, End of Period (000s omitted) $2,163,707 $1,548,864 $1,286,737 $820,973 $ 920,722
Ratios to Average Net Assets:
Net Investment Income 5.47%(4) 5.45% 5.28% 5.80% 4.32%(4)
Expenses, Including Expenses of the
Cash Management Portfolio 0.18%(4) 0.18% 0.18% 0.18% 0.18%(4)
Decrease Reflected in Above Expense
Ratio Due to Absorption of Expenses
by Bankers Trust 0.09%(4) 0.08% 0.08% 0.07% 0.08%(4)
</TABLE>
- --------------
(1) Unaudited
(2) Less than $0.01 per share.
(3) Increased by approximately 0.03% and 0.81% due to Contributions of Capital
for the years ended December 31, 1996 and 1994, respectively.
(4) Annualized.
See Notes to Financial Statements on Page 7
6
<PAGE>
Institutional Cash Reserves Fund
Notes to Financial Statements (unaudited)
Note 1--Organization and Significant Accounting Policies
A. Organization
BT Institutional 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 March 26, 1990, as an unincorporated
business trust under the laws of the Commonwealth of Massachusetts. The
Institutional Cash Reserves (the "Fund") is one the institutional funds offered
to "accredited investors" as defined under the Securities Act of 1933. The Fund
commenced operations and began offering shares of beneficial interest January
25, 1994. The Fund invests substantially all of its 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, 1998, the Fund's
investment was approximately 45% of the Portfolio.
The financial statements of the Portfolio, including the Statement of Net
Assets, are contained elsewhere in the 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. Organization Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized evenly over a five-year period.
D. Dividends
It is the Fund's policy to declare dividends daily and pay monthly to
shareholders from net investment income. Dividends payable to shareholders
are recorded by the Fund on the ex-dividend date. Distributions of net capital
gains, if any, earned by the Fund will be made annually.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code and distribute substantially all of its 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 that are attributable to all of the Trust's funds are allocated among
them.
The preparation of financial statements in conformity with generally accepted
accounting principles 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"). 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 .05% of the Fund's average daily net assets. The
Fund was owed $80,940 in relation to waived fees and reimbursed expenses at June
30, 1998, net of Administration and Service Fees of $96,297.
On September 30, 1996, the Trust entered into a Distribution Agreement with
Edgewood Services, Inc. ("Edgewood"). Under the Distribution Agreement with the
Trust, pursuant to Rule 12b-1 of the Act, Edgewood may seek reimbursement at an
annual rate not exceeding 0.18% 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 month period ended June 30, 1998,
there were no reimbursable expenses incurred under this agreement. The Fund does
not intend to charge 12b-1 fees in the future.
Certain officers of the Fund are also directors, officers and employees of
Edgewood. None of the officers so affiliated received compensation for services
as officers of the Fund.
Effective August 11, 1998, ICCDistributors, Inc. will replace Edgewood as
distributor of the Trust.
Bankers Trust has voluntarily undertaken to waive its fees and reimburse
expenses of the Fund, to the extent necessary, to limit all expenses to 0.18%
of the average daily net assets of the Fund, including expenses of the
Portfolio. For the six-month period ended June 30, 1998, expenses of the Fund
have been reduced by $765,824.
In 1994, 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 security to Bankers Trust New York Corporation, the
parent of the Advisor, at the same price, also pursuant to a put agreement. As a
result of these transactions the Fund's Financial Highlights for the period
January 25, 1994 (commencement of operations) to 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 $5,865,995. In 1996, Bankers Trust
contributed capital in the amount of $348,087 to reimburse the Fund for capital
losses incurred in prior years.
Notes 3--Capital Loss Carryforward
At June 30, 1998, accumulated net realized capital loss carryforward available
as a reduction against future net realized capital gains consisted of $461,081,
which will expire in 2002 and $17,779, which will expire in 2005.
7
<PAGE>
Cash Management Portfolio
Statement of Net Assets June 30, 1998 (unaudited)
Principal
Amount Security Value
- --------- -------- -----
CERTIFICATES OF DEPOSIT - 1.23%
NationsBank Corp.
$ 15,000,000 5.58%, 9/8/98 $ 15,000,000
45,000,000 5.58%, 8/7/98 45,000,438
--------------
Total Certificates of Deposit
(Amortized Cost $60,000,438) 60,000,438
--------------
COMMERCIAL PAPER - 48.08%*
7,000,000 Alcatel Alsthom,
5.52%, 8/20/98 6,946,333
Asset Securitization:
10,000,000 5.53%, 8/25/98 9,915,514
31,000,000 5.53%, 8/28/98 30,723,807
32,000,000 5.54%, 9/2/98 31,689,760
15,000,000 5.54%, 9/22/98 14,808,408
Associates Corp.:
30,000,000 5.52%, 8/17/98 29,783,800
39,400,000 5.51%, 8/21/98 39,092,450
35,000,000 5.51%, 8/17/98 34,748,224
14,000,000 BBL North America,
5.53%, 8/25/98 13,881,719
3,000,000 British Gas Capital,
5.5%, 8/24/98 2,975,250
CAFCO:
17,000,000 5.5%, 8/12/98 16,890,917
21,500,000 5.52%, 9/25/98 21,216,487
15,000,000 5.52%, 9/9/98 14,839,000
35,000,000 5.52%, 8/14/98 34,763,867
15,000,000 5.61%, 7/30/98 14,932,213
60,000,000 5.49%, 7/10/98 59,917,650
10,000,000 5.55%, 8/20/98 9,922,917
4,700,000 Caterpillar Financial,
5.48%, 12/7/98 4,586,244
30,000,000 CIT Group,
5.51%, 9/22/98 29,618,892
Commonwealth Bank of Australia:
25,000,000 5.49%, 11/23/98 24,447,188
25,000,000 5.5%, 8/5/98 24,866,319
Credit Suisse:
13,000,000 5.5%, 8/10/98 12,920,556
13,000,000 5.475%, 7/16/98 12,970,344
10,000,000 5.5%, 7/10/98 9,986,250
Principal
Amount Security Value
- --------- -------- -----
Daimler Benz:
$ 27,975,000 5.5%, 9/11/98 $ 27,667,275
30,000,000 5.5%, 7/15/98 29,935,833
10,000,000 5.5%, 9/25/98 9,868,611
Delaware Funding Corp.:
17,667,000 5.53%, 7/8/98 17,648,003
20,000,000 5.58%, 7/23/98 19,931,800
34,379,000 5.61%, 7/30/98 34,223,636
Deutsche Bank:
10,800,000 5.51%, 7/23/98 10,763,634
60,000,000 5.49%, 7/15/98 59,871,900
Diageo Capital:
40,000,000 5.53%, 7/6/98 39,969,278
15,000,000 5.51%, 9/29/98 14,793,375
32,000,000 5.51%, 7/15/98 31,931,431
17,000,000 5.5%, 9/14/98 16,805,208
Eksportfinans:
19,285,000 5.65%, 7/14/98 19,245,653
15,600,000 5.52%, 7/27/98 15,537,808
11,000,000 5.54%, 8/10/98 10,932,289
Ford Motor Credit:
33,000,000 5.48%, 7/8/98 32,964,837
20,000,000 5.52%, 7/17/98 19,950,933
55,000,000 5.52%, 7/24/98 54,806,033
87,000,000 5.47%, 7/10/98 86,881,028
General Electric Capital Corp.:
20,000,000 5.5%, 10/7/98 19,700,556
25,000,000 5.49%, 11/20/98 24,458,625
18,000,000 5.5%, 10/8/98 17,727,750
17,000,000 5.51%, 9/11/98 16,812,660
25,000,000 5.43%, 9/4/98 24,754,896
7,000,000 5.52%, 8/17/98 6,949,553
13,000,000 5.51%, 7/24/98 12,954,236
21,000,000 5.5%, 10/19/98 20,647,083
30,000,000 5.49%, 7/8/98 29,967,975
10,000,000 General Electric Co.,
5.51%, 8/12/98 9,935,717
13,000,000 General Motors Accept. Corp.,
5.51%, 8/24/98 12,892,555
10,000,000 Generale Bank,
5.49%, 12/3/98 9,763,625
See Notes to Financial Statements on Page 15
8
<PAGE>
Cash Management Portfolio
Statement of Net Assets June 30, 1998 (unaudited)
Principal
Amount Security Value
- --------- -------- -----
Goldman Sachs:
$ 35,000,000 5.52%, 8/10/98 $ 34,785,333
35,000,000 5.5%, 10/14/98 34,438,542
30,000,000 5.52%, 8/26/98 29,742,400
30,000,000 5.52%, 8/28/98 29,733,200
2,500,000 Hitachi America,
5.54%, 7/21/98 2,492,306
8,000,000 J.P. Morgan,
5.5%, 11/10/98 7,838,667
10,000,000 Manitoba Hydro Electric,
5.506%, 8/27/98 9,912,822
Merrill Lynch & Co.:
23,000,000 5.52%, 10/16/98 22,622,647
20,000,000 5.52%, 7/15/98 19,957,067
32,000,000 5.5%, 7/27/98 31,872,889
10,500,000 5.51%, 8/3/98 10,446,966
23,000,000 5.53%, 9/11/98 22,745,620
Metropolitan Life:
10,908,000 5.53%, 9/10/98 10,789,033
35,884,000 5.54%, 9/9/98 35,497,450
Monsanto Co.:
15,000,000 5.505%, 9/18/98 14,818,794
15,000,000 5.51%, 9/24/98 14,804,854
Morgan Stanley Group Inc.:
13,000,000 5.5%, 7/10/98 12,982,120
100,000,000 6.25%, 7/1/98 100,000,000
24,000,000 5.53%, 8/12/98 23,845,160
40,000,000 5.52%, 8/27/98 39,650,400
18,500,000 National Australia Funding,
5.5%, 8/3/98 18,406,729
28,000,000 National Rural Utility Cooperative
Financial Corp.,
5.5%, 9/25/98 27,632,111
40,000,000 Norwest,
5.55%, 8/14/98 39,728,667
Panasonic Finance:
15,000,000 5.51%, 10/20/98 14,745,163
5,000,000 5.52%, 11/3/98 4,904,167
Paribas Finance,
20,000,000 5.51%, 7/21/98 19,938,778
Principal
Amount Security Value
- --------- -------- -----
Province Of Quebec:
$ 11,000,000 5.5%, 10/16/98 $ 10,820,181
24,500,000 5.5%, 11/9/98 24,009,660
20,000,000 5.52%, 10/27/98 19,638,133
2,400,000 5.52%, 10/15/98 2,360,992
10,000,000 5.505%, 11/5/98 9,805,796
Receivables Capital Corp.:
30,000,000 5.53%, 8/14/98 29,797,233
12,239,000 5.53%, 7/17/98 12,208,919
50,000,000 5.53%, 8/26/98 49,569,889
12,949,000 5.55%, 8/21/98 12,847,188
10,000,000 5.53%, 8/3/98 9,949,308
15,000,000 5.59%, 7/29/98 14,934,783
20,000,000 5.57%, 7/27/98 19,919,544
10,000,000 5.531%, 7/17/98 9,975,418
13,000,000 5.61%, 7/10/98 12,981,768
15,000,000 5.57%, 7/23/98 14,948,942
Smith Barney Shearson:
20,000,000 5.52%, 10/7/98 19,699,467
20,000,000 5.355%, 7/8/98 19,979,175
25,000,000 5.5%, 7/10/98 24,965,625
15,000,000 5.4%, 8/7/98 14,916,750
35,000,000 5.49%, 7/21/98 34,893,250
19,000,000 5.54%, 8/20/98 18,853,806
14,000,000 5.53%, 9/15/98 13,836,558
22,000,000 5.4%, 8/10/98 21,868,000
10,000,000 Svenska Handelsbanken,
5.51%, 9/10/98 9,891,331
8,000,000 Westpac Capitol Corp.,
5.49%, 10/1/98 7,887,760
--------------
Total Commercial Paper
(Amortized Cost $2,341,629,266) 2,341,629,266
--------------
EURODOLLAR CERTIFICATES OF DEPOSIT - 13.51%
Abbey National:
15,000,000 5.59%, 9/8/98 14,999,951
20,000,000 5.58%, 8/21/98 19,999,831
40,000,000 5.55%, 7/14/98 40,000,000
50,000,000 5.55%, 7/9/98 50,000,000
30,000,000 5.59%, 8/14/98 30,000,000
50,000,000 Bank Of Scotland,
5.59%, 9/25/98 50,000,000
Bank Of Tokyo-Mitsubishi,
25,000,000 5.7%, 7/6/98 25,000,000
See Notes to Financial Statements on Page 15
9
<PAGE>
Cash Management Portfolio
Statement of Net Assets June 30, 1998 (unaudited)
Principal
Amount Security Value
- --------- -------- -----
$ 19,000,000 Banque Bruxelles,
5.59%, 8/24/98 $ 18,999,874
15,000,000 Banque Nationale de Paris,
5.61%, 7/31/98 15,000,306
39,000,000 Barclays Bank,
5.57%, 7/24/98 38,999,597
20,000,000 Bayerisch Vereinbank,
5.595%, 9/24/98 20,000,466
8,000,000 Bayerisch Vereinbank,
5.6%, 12/7/98 7,997,195
10,000,000 Canadian Imperial Bank,
5.635%, 11/5/98 10,000,315
11,000,000 Credit Agricole,
5.8%, 7/31/98 11,000,129
10,000,000 Creditanstalt Bankverein,
5.59%, 7/6/98 10,000,014
10,000,000 Credito Italiano,
5.59%, 9/1/98 9,999,941
75,000,000 Deutsche Bank:
5.57%, 7/6/98 74,999,938
30,000,000 Halifax Building Society
5.59%, 9/22/98 29,999,763
KBC Bank:
50,000,000 5.5725%, 7/7/98 50,000,021
20,000,000 5.58%, 8/26/98 19,999,920
Nordeutsche Landesbank:
10,000,000 5.66%, 12/10/98 10,000,798
23,000,000 5.58%, 7/29/98 22,999,863
24,000,000 5.57%, 7/24/98 23,999,752
19,000,000 5.66%, 11/16/98 19,000,354
35,000,000 Rabobank,
5.565%, 7/16/98 35,000,072
--------------
Total Eurodollar Certificates of Deposit
(Amortized Cost $657,998,100) 657,998,100
--------------
EURODOLLAR TIME DEPOSITS - 12.30%
25,000,000 Banco Bilbao Vizcaya,
5.64%, 10/7/98 25,000,000
Principal
Amount Security Value
- --------- -------- -----
$ 20,000,000 Bank Of America,
5.5313%, 7/13/98 $ 20,000,000
22,000,000 Bank Of Austria,
5.78%, 11/18/98 22,000,000
Bank Of Nova Scotia:
20,000,000 5.625%, 9/4/98 20,000,000
50,000,000 6.125%, 7/1/98 50,000,000
60,000,000 Bank Of Tokyo-Mitsubishi,
5.9375%, 7/14/98 60,000,000
20,000,000 Barclays Bank,
5.67%, 12/3/98 20,000,000
25,000,000 Bayerische Landesbank,
5.5625%, 7/9/98 25,000,000
25,000,000 Deutsche Bank,
6.5%, 7/1/98 25,000,000
40,000,000 International Nederlander Funding,
5.75%, 7/6/98 40,000,000
50,000,000 Toronto Dominion Bank,
6.25%, 7/1/98 50,000,000
132,148,756 Union Bank of Switzerland,
5.75%, 7/1/98 132,148,756
West Deutsche Landesbank:
50,000,000 5.61%, 9/29/98 50,000,000
35,000,000 5.5313%, 7/6/98 35,000,000
25,000,000 5.625%, 8/6/98 25,000,000
--------------
Total Eurodollar Time Deposits
(Amortized Cost $599,148,756) 599,148,756
--------------
FLOATING RATE NOTES - 18.99%
20,000,000 American Express Centurion Bank:
Monthly Variable Rate,
5.616%, 9/25/98 20,000,000
Associates Corp.:
Daily Variable Rate,
25,000,000 5.70%, 4/23/99 24,980,157
20,000,000 5.71%, 6/29/99 19,984,468
25,000,000 5.79%, 1/4/99 24,993,798
Bank Of Nova Scotia:
Monthly Variable Rate,
35,000,000 5.5123%, 6/10/99 34,975,009
See Notes to Financial Statements on Page 15
10
<PAGE>
Cash Management Portfolio
Statement of Net Assets June 30, 1998 (unaudited)
Principal
Amount Security Value
- --------- -------- -----
$ 40,000,000 Banque Nationale de Paris:
Monthly Variable Rate,
5.5323%, 6/1/99 $ 39,977,973
40,000,000 Bayerische Hypotheka:
Monthly Variable Rate,
5.5162%, 5/28/99 39,971,410
Bayerische Landesbank:
MONTHLY VARIABLE RATE,
25,000,000 5.521%, 6/29/99 24,981,671
20,000,000 5.5262%, 2/25/99 19,992,415
10,000,000 Bear Stearns Co.:
Monthly Variable Rate,
5.6262%, 6/4/99 10,000,000
Chase Manhattan Bank:
Quarterly Variable Rate,
5,000,000 5.7875%, 11/10/98 5,003,189
5,000,000 5.6562%, 10/15/98 5,000,888
30,000,000 Commerz Bank:
Monthly Variable Rate,
5.5162%, 5/28/99 29,978,558
30,000,000 CoreStates Bank:
Monthly Variable Rate,
5.6012%, 3/5/99 30,000,000
20,000,000 Creditanstalt Bankverein:
Monthly Variable Rate,
5.5145%, 6/3/99 19,987,294
40,000,000 Deutsche Bank:
Quarterly Variable Rate,
5.5275%, 6/1/99 39,971,181
General Electric Capital Corporation:
Quarterly Variable Rate,
15,000,000 5.607%, 1/15/99 15,000,000
10,000,000 5.6075%, 11/6/98 10,000,000
55,000,000 J.P. Morgan:
Monthly Variable Rate,
5.5273%, 2/24/99 54,973,723
10,000,000 Key Bank:
Daily Variable Rate,
5.54%, 1/29/99 9,996,916
KBC Bank:
Quarterly Variable Rate,
25,000,000 5.5375%, 6/1/99 24,984,239
Principal
Amount Security Value
- --------- -------- -----
$ 15,000,000 Mellon Bank:
Quarterly Variable Rate,
5.7792%, 11/17/98 $ 15,000,000
Merrill Lynch & Co.:
MONTHLY VARIABLE RATE,
20,000,000 5.606%, 4/13/99 19,998,433
Daily Variable Rate,
12,000,000 5.90%, 4/7/99 12,006,831
35,000,000 5.80%, 2/17/99 34,996,713
35,000,000 Morgan Stanley Group Inc.:
Monthly Variable Rate,
5.6162%, 11/6/98 35,000,000
15,000,000 National City Bank of Cleveland:
Monthly Variable Rate,
5.5462%, 3/5/99 14,996,030
25,000,000 NationsBank Corp.:
Daily Variable Rate,
5.89%, 3/18/99 25,015,517
Nordeutsche Landesbank:
Monthly Variable Rate,
17,000,000 5.5562%, 2/2/99 16,995,145
20,000,000 5.5362%, 2/25/99 19,993,596
Societe Generale:
Daily Variable Rate,
10,000,000 5.77%, 3/2/99 9,996,738
40,000,000 5.78%, 2/9/99 39,986,808
15,000,000 5.76%, 8/28/98 14,998,353
Monthly Variable Rate,
25,000,000 5.5712%, 5/7/99 24,986,393
10,000,000 5.5545%, 6/1/99 9,992,877
25,000,000 Student Loan Marketing Association:
5.321%, 9/28/98 24,999,391
20,000,000 Svenska Handelsbanken:
Monthly Variable Rate,
5.5362%, 6/2/99 19,986,311
10,000,000 US Bank:
Monthly Variable Rate,
5.55323%, 9/17/98 9,999,039
Wachovia Bank:
Monthly Variable Rate,
21,000,000 5.5162%, 5/12/99 20,987,497
25,000,000 5.5362%, 2/9/99 24,991,141
See Notes to Financial Statements on Page 15
11
<PAGE>
Cash Management Portfolio
Statement of Net Assets June 30, 1998 (unaudited)
Principal
Amount Security Value
- --------- -------- -----
$ 20,000,000 Walt Disney Co.:
Quarterly Variable Rate,
5.5175%, 2/26/99 $ 19,988,824
5,000,000 Westpac Capitol Corp.:
QUARTERLY VARIABLE RATE,
5.544%, 4/9/99 4,998,107
--------------
Total Floating Rate Notes
(Amortized Cost $924,666,633) 924,666,633
--------------
REPURCHASE AGREEMENT - 1.54%
75,000,000 Tri-party Repurchase Agreement
with Goldman Sachs & Co.,
Dated 6/30/98, 6.25%,
Principal & Interest in the
amount of $75,013,021,
Due 7/01/98,
(Collateralized by FHLMC
Bonds, Par Value of $37,630,062,
Coupon Rates of 6.000% to
7.00%, Due from 5/1/03 to
2/1/12, Value of $36,017,383);
Federal National Mortgage
Association Bonds,
Par Value of $190,562,931
Coupon rate of 7.00%, Due 8/1/26,
Value of $40,879,505 75,000,000
Total Repurchase Agreements
(Amortized Cost $75,000,000) 75,000,000
--------------
YANKEE CERTIFICATES OF DEPOSIT - 4.01%
11,000,000 Bank Of Montreal,
5.56%, 7/14/98 10,999,974
12,000,000 Bank Of Nova Scotia,
5.55%, 7/6/98 12,000,000
Principal
Amount Security Value
- --------- -------- -----
Banque Nationale de Paris:
$ 5,000,000 5.59%, 8/21/98 $ 4,999,994
11,000,000 5.58%, 9/11/98 10,999,557
13,000,000 5.8%, 10/5/98 13,000,786
Deutsche Bank:
6,000,000 5.55%, 7/20/98 5,999,848
22,000,000 5.58%, 8/6/98 21,999,981
2,000,000 5.705%, 4/16/99 1,998,517
40,000,000 Paribas Finance,
5.585%, 9/17/98 40,000,000
10,000,000 Royal Bank Of Canada,
5.56%, 2/26/99 9,996,846
2,000,000 Societe Generale Bank,
5.97%, 10/26/98 2,000,626
10,000,000 Swiss Bank,
5.75%, 5/7/99 9,998,351
31,000,000 Toronto Dominion,
5.58%, 9/25/98 30,998,222
20,000,000 Westpac Capitol Corp.,
5.67%, 3/23/99 19,991,652
Total Yankee Certificates of Deposit
(Amortized Cost $194,984,354) 194,984,354
--------------
Total Investments
(Amortized Cost $4,853,427,547) 99.66% $4,853,427,547
Other Assets Less Liabilities 0.34% 16,726,455
------ --------------
Net Assets 100.00% $4,870,154,002
====== ==============
- --------------
* Interest rates for Commercial paper represent discount rates at the time of
purchase.
See Notes to Financial Statements on Page 15
12
<PAGE>
Cash Management Portfolio
Statement of Operations For the six month period ended June 30, 1998 (unaudited)
Investment Income
Interest $ 140,067,522
--------------
Expenses
Advisory Fees 3,724,519
Administration and Services Fees 1,241,506
Professional Fees 15,425
Trustees Fees 1,037
Miscellaneous 9,244
--------------
Total Expenses 4,991,731
Less: Expenses Absorbed by Bankers Trust (522,308)
--------------
Net Expenses 4,469,423
--------------
Net Investment Income 135,598,099
--------------
Net Realized Gain from Investment Transactions 83,981
--------------
Net Increase in Net Assets from Operations $ 135,682,080
==============
See Notes to Financial Statements on Page 15
13
<PAGE>
Cash Management Portfolio
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
six months ended year ended
June 30, 1998(1) December 31, 1997
---------------- -----------------
<S><C>
Increase (Decrease) in Net Assets from:
Operations
Net Investment Income $ 135,598,099 $ 237,022,519
Net Realized Gain (Loss) from Investment Transactions 83,981 (41,207)
---------------- ----------------
Net Increase in Net Assets from Operations 135,682,080 236,981,312
---------------- ----------------
Capital Transactions
Proceeds from Capital Invested 16,108,662,027 25,687,643,529
Value of Capital Withdrawn (15,413,915,080) (25,146,809,558)
---------------- ----------------
Net Increase in Net Assets from Capital Transactions 694,746,947 540,833,971
---------------- ----------------
Total Increase in Net Assets 830,429,027 777,815,283
Net Assets
Beginning of Period 4,039,724,975 3,261,909,692
---------------- ----------------
End of Period $ 4,870,154,002 $ 4,039,724,975
================ ================
</TABLE>
- --------------
(1)Unaudited
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
six months
ended For the years ended December 31,
June 30, -----------------------------------------------------------
1998(1) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S><C>
Supplemental Data and Ratios:
Net Assets, End of Period (000s omitted) $4,870,154 $4,039,725 $3,261,910 $2,615,932 $2,735,025 $1,930,075
Ratios to Average Net Assets:
Net Investment Income 5.46%(3) 5.43% 5.27% 5.77% 4.24% 3.06%
Expenses 0.18%(3) 0.18% 0.18% 0.18% 0.18% 0.20%
Decrease Reflected in Above Expense Ratio
Due to Absorption of Expenses by
Bankers Trust 0.02%(3) 0.02% 0.02% 0.02% 0.02% 0.00%(2)
</TABLE>
(1) Unaudited
(2) Less than 0.01%.
(3) Annualized
See Notes to Financial Statements on Page 15
14
<PAGE>
Cash Management Portfolio
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 valued at amortized cost, which is in accordance with Rule 2a-7
of the Investment Company Act of 1940 and represents the fair value of the
Portfolio's investments.
C. Security Transactions and Interest Income
Security transactions are accounted for on a trade date basis. 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. Repurchase Agreements
The Portfolio may enter into repurchase agreements with financial institutions
deemed to be creditworthy by the Portfolios' Investment Advisor, subject to the
seller's agreement to repurchase 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 must have
an aggregate market value greater than or equal to the repurchase price plus all
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. However, in the event of a default or bankruptcy by the seller,
realization and/or retention of the collateral may be subject to legal
proceedings.
E. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code. Therefore, no federal income tax provision is required.
F. Other
The preparation of financial statements in conformity with generally accepted
accounting principles 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"). 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 .05% of the Portfolio's average daily net
assets. At June 30, 1998, amounts owed under the Administration and Services
Agreement amounted to $189,913, net of waived fees of $18,952.
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 .15% of the Portfolio's
average daily net assets. At June 30, 1998, amounts owed under the Advisory
Agreement amounted to $557,741, net of waived fees of $68,855.
Bankers Trust has voluntarily undertaken to waive its fees and reimburse
expenses of the Portfolio, to the extent necessary, to limit all expenses to
.18% of the average daily net assets of the Portfolio. For the six-month period
ended June 30, 1998, expenses of the Portfolio have been reduced by $522,308.
In 1994, the Portfolio sold certain structured notes carried at par to an
unrelated third party financial institution at par plus accrued interest to a
put agreement and that third party financial institution immediately resold such
security to Bankers Trust New York Corporation, the parent of the Advisor, at
the same price, also pursuant to a put agreement. As a result of these
transactions the Portfolio's Financial Highlights for the year ended December
31, 1994, reflects the Portfolio's realized loss on the sale of these securities
and a capital contribution in the amount of $18,718,663. In 1996, Bankers Trust
contributed capital in the amount of $1,113,488 to reimburse the Cash Management
Portfolio for capital losses incurred in prior years.
The Cash Management Portfolio is a participant with other affiliated entities in
a revolving credit facility ("the revolver") and a discretionary demand line of
credit facility ("collectively the credit facilities") in the amounts of
$50,000,000 and $100,000,000, respectively. A commitment fee of .07% per annum
on the average daily amount of the available commitment is payable on a
quarterly basis and apportioned equally among all participants. Amounts borrowed
under the credit facilities will bear interest at a rate per annum equal to the
Federal Funds Rate plus .45%. No amounts were drawn down or outstanding under
the credit facilities as of and for the period ended June 30, 1998.
Certain officers of the Portfolio are also directors, officers, and/or employees
of Edgewood Services Inc., distributor of the BT Pyramid Funds. None of the
officers so affiliated received compensation for services as officers of the
Portfolio.
Effective August 11, 1998, ICCDistributors, Inc. will replace Edgewood as
distributor of the Trust.
Note 3--Net Assets
At June 30, 1998:
Paid-in-Capital $4,870,154,002
==============
15
<PAGE>
BT INSTITUTIONAL FUNDS
BT INSTITUTIONAL CASH RESERVES FUND
Investment Advisor and Administrator of the Fund
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
Distributor
ICC DISTRIBUTORS, INC.
P.O. Box 7558
Portland, ME 04112-9892
Custodian and Transfer Agent
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
Independent Accountants
PRICEWATERHOUSECOOPERS LLP
250 West Pratt Street
Baltimore, MD 21201
Counsel
WILLKIE FARR & GALLAGHER
787 7th Avenue
New York, NY 10019
--------------
For information on how to invest, shareholder account
information and current price and yield information,
please contact your relationship manager or the BT Mutual
Fund Service Center at (800) 368-4031. This report must be
preceded or accompanied by a current prospectus for the Fund.
--------------
Cusip #055924872
STA487100 (6/98)
