BT INSTITUTIONAL FUNDS, 485BPOS, 1998-05-01

BT INSTITUTIONAL FUNDS
485BPOS, 1998-05-01

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1933 Act File No. 33-34079
1940 Act File No. 811-6071

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X

Pre-Effective Amendment No. ....................

Post-Effective Amendment No. 23 ..................... X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 30 ................................... X

BT INSTITUTIONAL FUNDS
(Exact Name of Registrant as Specified in Charter)

5800 Corporate Drive
Pittsburgh, PA 115237-7010
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

Jay S. Neuman, Esquire Copies to: Burton M. Leibert, Esq.
Federated Investors Tower Willkie Farr & Gallagher
Pittsburgh, Pennsylvania 15222-3779 One Citicorp Center
(Name and Address of Agent for Service) 153 East 53rd Street
New York, New York 10022

It is proposed that this filing will become effective
(check appropriate box)

[X] immediately upon filing pursuant to paragraph (b) [ ] on pursuant to
paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [ ] on
(date) pursuant to paragraph (a)(1) [ ] 75 days after filing pursuant to
paragraph (a)(2) [ ] on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Cash Management Portfolio, Treasury Money Portfolio, Equity 500 Index Portfolio
and BT Investment Portfolios have also executed this Registration Statement.

<PAGE>

CROSS-REFERENCE SHEET

This Amendment to the Registration Statement of BT INSTITUTIONAL FUNDS,
which is comprised of ten funds, relates only to the Institutional Cash
Management Fund, Institutional Cash Reserves, Institutional Treasury Money Fund,
Equity 500 Index Fund, Institutional Liquid Assets Fund and Institutional
Treasury Assets Fund and is comprised of the following:

PART A INFORMATION REQUIRED IN A PROSPECTUS.

Prospectus Heading
(Rule 404(c) Cross Reference)

Item 1. Cover Page....................Cover Page.
Item 2. Synopsis......................Summary of Fund Expenses.
Item 3. Condensed Financial
Information...................Financial Highlights; Performance
Information and Reports.
Item 4. General Description of
Registrant....................The Fund; Who May Invest; Investment
Objectives and Policies; Risk
Factors: Matching the Fund to Your
Investment Needs; Special Information
Concerning Master-Feeder Fund
Structure; Additional Information.
Item 5. Management of the Fund........Management of the Trust and Portfolio.
Item 6. Capital Stock and Other
Securities Dividends, Distributions and Taxes.
Item 7. Purchase of Securities Being
Offered.......................Net Asset Value; Purchase and
Redemption of Shares.
Item 8. Redemption or Repurchase......Purchase and Redemption of Shares.
Item 9. Legal Proceedings None.

<PAGE>

PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.

Item 10. Cover Page....................Cover Page.
Item 11. Table of Contents.............Table of Contents.
Item 12. General Information and
History Organization of the Trusts.
Item 13. Investment Objectives and
Policies Investment Objectives and Policies.
Item 14. Management of the Fund........Management of the Trusts and
Portfolio.
Item 15. Control Persons and Principal
Holders of Securities.........Management of the Trusts and
Portfolio, Trustee Compensation
Table.
Item 16. Investment Advisory and Other
Services Investment Adviser; Administrator.
Item 17. Brokerage Allocation..........Portfolio Transactions and Brokerage
Commissions.
Item 18. Capital Stock and Other
Securities Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered.......................Net Asset Value; Valuation of
Securities; Redemption in Kind.
Item 20. Tax Status....................Taxation.
Item 21. Underwriters Not applicable.
Item 22. Calculation of Performance
Data Performance Information.
Item 23. Financial Statements..........Incorporate by reference the Annual
Reports of BT Institutional Funds
dated December 31, 1997 (File Nos.
33-34079 and 811-6071).

<PAGE>
(BULLET) BT INSTITUTIONAL FUNDS (BULLET)

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INSTITUTIONAL CASH MANAGEMENT FUND

A money market fund that seeks high current income to the extent consistent with
liquidity and capital preservation.

PROSPECTUS
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APRIL 30, 1998

BT Institutional Funds (the "Trust") is an open-end, management investment
company (mutual fund) which consists of a number of separate investment funds.

Please read this Prospectus carefully before investing and retain it for future
reference. It contains important information about the Institutional Cash
Management Fund (the "Fund") that you should know and can refer to in deciding
whether the Fund's goals match your own.

A Statement of Additional Information ("SAI") with the same date has been filed
with the Securities and Exchange Commission ("SEC"), and is incorporated herein
by reference. You may request a free copy of the SAI or a paper copy of this
prospectus, if you have received your prospectus electronically, free of charge
by calling the Fund's Service Agent at 1-800-368-4031. The SAI, material
incorporated by reference into this document, and other information regarding
the Trust is maintained electronically with the SEC at Internet Web site
(http://www.sec.gov).

UNLIKE OTHER MUTUAL FUNDS, THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY
INVESTING ALL OF ITS INVESTABLE ASSETS ("ASSETS") IN THE CASH MANAGEMENT
PORTFOLIO (THE "PORTFOLIO"), A SEPARATE INVESTMENT COMPANY WITH AN IDENTICAL
INVESTMENT OBJECTIVE. THE INVESTMENT PERFORMANCE OF THE FUND WILL CORRESPOND
DIRECTLY TO THE INVESTMENT PERFORMANCE OF THE PORTFOLIO. SEE "SPECIAL
INFORMATION CONCERNING MASTER-FEEDER FUND STRUCTURE" HEREIN.

BANKERS TRUST COMPANY ("BANKERS TRUST") IS THE INVESTMENT ADVISER (THE
"ADVISER") OF THE PORTFOLIO. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED OR ENDORSED BY, BANKERS TRUST OR ANY OTHER BANKING OR
DEPOSITORY INSTITUTION. SHARES ARE NOT FEDERALLY GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE U.S. GOVERNMENT, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. THE FUND INTENDS TO MAINTAIN A
CONSTANT $1.00 PER SHARE NET ASSET VALUE ("NAV"), ALTHOUGH THERE CAN BE NO
ASSURANCE THAT IT WILL BE ABLE TO DO SO.

LIKE SHARES OF ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

EDGEWOOD SERVICES, INC.
5800 Corporate Drive (Bullet) Pittsburgh, Pennsylvania (Bullet) 15237-5829

<PAGE>
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TABLE OF CONTENTS
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PAGE

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The Fund...................................................................... 3

Who May Invest................................................................ 3

Summary of Fund Expenses...................................................... 4

Financial Highlights.......................................................... 5

Investment Objective and Policies............................................. 6

Risk Factors: Matching the Fund to Your Investment Needs......................10

Net Asset Value...............................................................11

Purchase and Redemption of Shares.............................................11

Dividends, Distributions and Taxes............................................13

Performance Information and Reports...........................................13

Management of the Trust and Portfolio.........................................14

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<PAGE>
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THE FUND
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The Fund seeks a high level of current income consistent with liquidity and the
preservation of capital through investment in high quality money market
instruments.

The Trust seeks to achieve the investment objective of the Fund by investing all
the Assets of the Fund in the Portfolio, which has the same investment objective
as the Fund.

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WHO MAY INVEST

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The Fund is designed for conservative investors looking for high current income
approximating money market rates while remaining conveniently liquid with a
stable NAV.

The Fund is not in itself a balanced investment plan. Investors should consider
their investment objective and tolerance for risk when making an investment
decision. When investors sell their Fund shares, they may be worth more or less
than what they originally paid for them. See "Risk Factors: Matching the Fund to
Your Investment Needs" herein.

<PAGE>
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SUMMARY OF FUND EXPENSES
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The following table provides (i) a summary of expenses relating to purchases and
sales of shares of the Fund and the aggregate annual operating expenses of the
Fund and the expenses of the Portfolio as a percentage of average net assets of
the Fund and (ii) an example illustrating the dollar cost of such expenses on a
$1,000 investment in the Fund. THE TRUSTEES OF THE BT INSTITUTIONAL FUNDS
BELIEVE THAT THE AGGREGATE PER SHARE EXPENSES OF THE FUND AND THE PORTFOLIO WILL
BE LESS THAN OR APPROXIMATELY EQUAL TO THE EXPENSES WHICH THE FUND WOULD INCUR
IF THE TRUST RETAINED THE SERVICES OF AN INVESTMENT ADVISER AND THE ASSETS OF
THE FUND WERE INVESTED DIRECTLY IN THE TYPE OF SECURITIES BEING HELD BY THE
PORTFOLIO.

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ANNUAL OPERATING EXPENSES
(as a percentage of the average daily net assets of the Fund)
<TABLE>
<S> <C> <C> <C> <C>
Investment advisory fee..................................................................................... 0.13%
12b-1 fees.................................................................................................. None
Other expenses (after reimbursements or waivers)............................................................ 0.10%
Total operating expenses (after reimbursements or waivers).................................................. 0.23%
EXAMPLE: 1 year 3 years 5 years 10 years
------- -------- -------- --------
You would pay the following expenses on a
$1,000 investment, assuming: (1) 5% annual return
and (2) redemption at the end of each time period....................... $2 $7 $13 $29
</TABLE>

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The expense table and the example above show the costs and expenses that an
investor will bear directly or indirectly as a shareholder of the Fund. The
expense table and the example reflect a voluntary undertaking by Bankers Trust
to waive or reimburse expenses such that the total operating expenses will not
exceed 0.23% of the Fund's average net assets annually. In the absence of this
undertaking, for the fiscal year ended December 31, 1997 the total operating
expenses would have been equal to 0.26% of the Fund's average net assets
annually. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
Moreover, while each example assumes a 5% annual return, actual performance will
vary and may result in a return greater or less than 5%.

The Fund is distributed by Edgewood Services, Inc. ("Edgewood," or the
"Distributor") to customers of Bankers Trust or to customers of another bank or
a dealer or other institution that has a sub-shareholder servicing agreement
with Bankers Trust (along with Bankers Trust, a "Service Agent"). Some Service
Agents may impose certain conditions on their customers in addition to or
different from those imposed by the Fund and may charge their customers a direct
fee for their services. Each Service Agent has agreed to transmit to
shareholders who are its customers appropriate disclosures of any fees that it
may charge them directly.

For more information with respect to the expenses of the Fund and the Portfolio
see "Management of the Trust and Portfolio" herein.

<PAGE>
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FINANCIAL HIGHLIGHTS
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The following table shows selected data for a share outstanding, total
investment return, ratios to average net assets and other supplemental data for
the Fund for each period indicated and has been audited by Coopers & Lybrand
L.L.P., the Fund's independent accountants, whose report thereon appears in the
Fund's Annual Report which is incorporated by reference.

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<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income...................................... 0.05 0.05 0.06 0.04 0.03
Net Realized Gain (Loss) from Investment Transactions...... (0.00)+ 0.00+ 0.00+ (0.01) 0.00+
---------- ---------- ---------- ---------- ----------
Total from Investment Operations............................. 0.05 0.05 0.06 0.03 0.03
---------- ---------- ---------- ---------- ----------
CONTRIBUTIONS OF CAPITAL..................................... -- 0.00+ -- 0.01 --
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income...................................... (0.05) (0.05) (0.06) (0.04) (0.03)
Net Realized Gain from Investment Transactions............. -- -- -- -- (0.00)+
---------- ---------- ---------- ---------- ----------
Total Distributions.......................................... (0.05) (0.05) (0.06) (0.04) (0.03)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
TOTAL INVESTMENT RETURN...................................... 5.52% 5.36%++ 5.89% 4.18%++ 3.05%
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Year (000s omitted)..................... $1,921,925 $1,438,546 $1,010,874 $ 664,149 $1,850,222
Ratios to Average Net Assets:
Net Investment Income.................................... 5.40% 5.24% 5.72% 3.98% 3.01%
Expenses, Including Expenses of the Cash Management
Portfolio.............................................. 0.23% 0.23% 0.23% 0.23% 0.25%
Decrease Reflected in Above Expense Ratio Due to
Absorption of Expenses by Bankers Trust................ 0.03% 0.04% 0.04% 0.03% 0.02%
</TABLE>

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, FOR THE PERIOD JULY 25, 1990
---------------------- (COMMENCEMENT OF OPERATIONS)
1992 1991 TO DECEMBER 31, 1990
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR.................................. $ 1.00 $ 1.00 $ 1.00
---------- -------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................................. 0.04 0.06 0.03
Net Realized Gain (Loss) from Investment Transactions............. 0.00+ 0.00+ --
---------- -------- -------
Total from Investment Operations.................................... 0.04 0.06 0.03
---------- -------- -------
CONTRIBUTIONS OF CAPITAL............................................ -- -- --
---------- -------- -------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income............................................. (0.04) (0.06) (0.03)
Net Realized Gain from Investment Transactions.................... (0.00)+ (0.00)+ --
---------- -------- -------
Total Distributions................................................. (0.04) (0.06) (0.03)
---------- -------- -------
NET ASSET VALUE, END OF YEAR........................................ $ 1.00 $ 1.00 $ 1.00
---------- -------- -------
---------- -------- -------
TOTAL INVESTMENT RETURN............................................. 3.58% 6.20% 8.29%*
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Year (000s omitted)............................ $1,334,517 $806,690 $301,546
Ratios to Average Net Assets:
Net Investment Income........................................... 3.48% 5.82% 7.90%
Expenses, including expenses of the Cash Management Portfolio... 0.25% 0.25% 0.25%*
Decrease Reflected in Above Expense Ratio Due to Absorption of
Expenses by Bankers Trust..................................... 0.04% 0.09% 0.21%
</TABLE>

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* Annualized.

+ Less than $0.01 per share.

++Increased by approximately 0.01% and 0.91% due to Contributions of Capital for
the years ended December 31, 1996 and 1994, respectively.

Further information about the Fund is contained in the Fund's Annual Report
dated December 31, 1997, which can be obtained free of charge.

<PAGE>
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INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------

The Fund seeks a high level of current income consistent with liquidity and the
preservation of capital through investment in high quality money market
instruments.

The Trust seeks to achieve the investment objective of the Fund by investing all
the Assets of the Fund in the Portfolio, which has the same investment objective
as the Fund. There can be no assurances that the investment objective of either
the Fund or the Portfolio will be achieved. The investment objective of the Fund
and the Portfolio is a fundamental policy and may not be changed without the
approval of the Fund's shareholders or the Portfolio's investors, respectively.
See "Special Information Concerning Master-Feeder Fund Structure" herein.

Since the investment characteristics of the Fund will correspond directly to
those of the Portfolio, the following is a discussion of the various investments
and investment policies of the Portfolio. Additional information about the
investment policies of the Portfolio appears in the SAI.

CASH MANAGEMENT PORTFOLIO

The Portfolio, in pursuing its investment objective, will comply with Rule 2a-7
under the 1940 Act ("Rule 2a-7"). Thus, descriptions of investment techniques
and portfolio instruments are qualified by the provisions and limitations of
Rule 2a-7.

The Portfolio will attempt to achieve its investment objective by investing in
the following money market instruments:

OBLIGATIONS OF BANKS AND OTHER FINANCIAL INSTITUTIONS. The Portfolio may invest
in U.S. dollar-denominated fixed rate or variable rate obligations of U.S. or
foreign financial institutions, including banks, which are rated in the highest
short-term rating category by any two nationally recognized statistical rating
organizations ("NRSROs") (or one NRSRO if that NRSRO is the only such NRSRO
which rates such obligations) or, if not so rated, are believed by Bankers
Trust, acting under the supervision of the Board of Trustees of the Portfolio,
to be of comparable quality. Obligations of domestic and foreign financial
institutions in which the Portfolio may invest include, but are not limited to,
certificates of deposit, bankers' acceptances, bank time deposits, commercial
paper, and other U.S. dollar-denominated instruments issued or supported by the
credit of U.S. or foreign financial institutions, including banks.

If Bankers Trust, acting under the supervision of the Board of Trustees of the
Portfolio, deems the instruments to present minimal credit risk, the Portfolio
may invest in obligations of foreign banks or foreign branches and subsidiaries
of U.S. and foreign financial institutions, including banks. Investments in
these obligations may entail risks that are different from those of investments
in obligations of U.S. financial institutions, including banks, because of
differences in political, regulatory and economic systems and conditions. These
risks include future political and economic developments, currency blockage, the
possible imposition of withholding taxes on interest payments, differing reserve
requirements, reporting and recordkeeping requirements and accounting standards,
possible seizure or nationalization of deposits, difficulty or inability of
pursuing legal remedies and obtaining judgments in foreign courts, possible
establishment of exchange controls or the adoption of other foreign governmental
restrictions that might affect adversely the payment of principal and interest
on financial institution obligations. Under normal market conditions, the
Portfolio will invest more than 25% of its assets in the bank and other
financial institution obligations described above. The Portfolio's concentration
of its investments in the obligations of banks and other financial institutions
will cause the Portfolio to be subject to the risks peculiar to these industries
to a greater extent than if its investments were not so concentrated.

COMMERCIAL PAPER. The Portfolio may invest in fixed rate or variable rate
commercial paper, issued by U.S. or foreign entities. Commercial paper when
purchased by the Portfolio must be rated in the highest short-term category by
any two NRSROs (or one NRSRO if that NRSRO is the only such NRSRO which rates
such security) or, if not rated, must be believed by Bankers Trust, acting under
the supervision of the Board of Trustees of the Portfolio, to be of comparable
quality. Any commercial paper issued by a foreign corporation and purchased by
the Portfolio must be U.S. dollar-denominated and must not be subject to foreign
withholding tax at the time of purchase. Investing in foreign commercial paper
generally involves risks similar to those described above relating to
obligations of foreign banks or foreign branches and subsidiaries of U.S. and
foreign banks.

VARIABLE RATE MASTER DEMAND NOTES. Variable rate master demand notes are
unsecured instruments that permit the indebtedness thereunder to vary and
provide for

<PAGE>
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periodic adjustments in the interest rate. Because variable rate master demand
notes are direct lending arrangements between the Portfolio and the issuer, they
are not normally traded. Although no active secondary market may exist for these
notes, the Portfolio will purchase only those notes under which it may demand
and receive payment of principal and accrued interest daily or may resell the
note to a third party. While the notes are not typically rated by credit rating
agencies, issuers of variable rate master demand notes must satisfy Bankers
Trust, acting under the supervision of the Board of Trustees of the Portfolio,
that the same criteria as set forth above for issuers of commercial paper are
met. In the event an issuer of a variable rate master demand note defaulted on
its payment obligation, the Portfolio might be unable to dispose of the note
because of the absence of a secondary market and could, for this or other
reasons, suffer a loss to the extent of the default. The face maturities of
variable rate notes subject to a demand feature may exceed 397 days in certain
circumstances. (See "Quality and Maturity of the Portfolio's Securities"
herein.)

U.S. GOVERNMENT OBLIGATIONS. The Portfolio may invest in fixed or variable rate
obligations issued or guaranteed by the U.S. Treasury or by agencies or
instrumentalities of the U.S. government ("U.S. Government Obligations").
Obligations of certain agencies and instrumentalities of the U.S. government,
such as the Government National Mortgage Association, are supported by the "full
faith and credit" of the U.S. government; others, such as those of the
Export-Import Bank of the U.S., are supported by the right of the issuer to
borrow from the U.S. Treasury; others, such as those of the Federal National
Mortgage Association, are supported by the discretionary authority of the U.S.
government to purchase the agency's obligations; and still others, such as those
of the Student Loan Marketing Association, are supported only by the credit of
the instrumentality. No assurance can be given that the U.S. government would
provide financial support to U.S. government-sponsored instrumentalities if it
is not obligated to do so by law.

OTHER DEBT OBLIGATIONS. The Portfolio may invest in deposits, bonds, notes and
debentures and other debt obligations that at the time of purchase have, or are
comparable in priority and security to other securities of such issuer which
have, outstanding short-term ratings meeting the above short-term rating
requirements, or if there are no such short-term ratings, are determined by
Bankers Trust, acting under the supervision of the Board of Trustees of the
Portfolio, to be of comparable quality and are rated in the top three highest
long-term rating categories by the NRSROs rating such security.

ASSET-BACKED SECURITIES. The Fund may also invest in securities generally
referred to as asset-backed securities, which directly or indirectly represent a
participation interest in, or are secured by and payable from, a stream of
payments generated by particular assets such as motor vehicle or credit card
receivables. Asset-backed securities provide periodic payments that generally
consist of interest and/or principal payments. Consequently, the life of an
asset-backed security varies with the prepayment and loss experience of the
underlying assets.

REPURCHASE AGREEMENTS. The Portfolio may engage in repurchase agreement
transactions with banks and governmental securities dealers approved by the
Board of Trustees of the Portfolio. Under the terms of a typical repurchase
agreement, the Portfolio would acquire U.S. Government Obligations (or any other
securities permitted by Rule 2a-7) regardless of maturity subject to an
obligation of the seller to repurchase, and the Portfolio to resell, the
obligation at an agreed price and time, thereby determining the yield during the
Portfolio's holding period. This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the Portfolio's holding
period. The value of the underlying securities will be at least equal at all
times to the total amount of the repurchase obligations, including interest. The
Portfolio bears a risk of loss in the event that the other party to a repurchase
agreement defaults on its obligations and the Portfolio is delayed in or
prevented from exercising its rights to dispose of the collateral securities,
including the risk of a possible decline in the value of the underlying
securities during the period in which the Portfolio seeks to assert these
rights. Bankers Trust, acting under the supervision of the Board of Trustees of
the Portfolio, reviews the creditworthiness of those counterparties with which
the Portfolio enters into repurchase agreements and monitors on an ongoing basis
the value of the securities subject to repurchase agreements to ensure that the
value is maintained at the required level.

<PAGE>
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into a reverse repurchase agreement it will earmark cash, U.S. Government
Obligations or other high grade, liquid debt instruments having a value equal to
the repurchase price, including accrued interest. Reverse repurchase agreements
involve the risk that the market value of the securities sold by the Portfolio
may decline below the repurchase price of the securities. Reverse repurchase
agreements are considered to be borrowings by the Fund for purposes of the
limitations described in "Additional Investment Limitations" below and in the
SAI. The Fund may only enter into reverse repurchase agreements for temporary
purposes and not for leverage.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. To secure prices deemed
advantageous at a particular time, the Portfolio may purchase securities on a
when-issued or delayed delivery basis, in which case delivery of the securities
occurs beyond the normal settlement period; payment for or delivery of the
securities would be made prior to the reciprocal delivery or payment by the
other party to the transaction. The Portfolio will enter into when-issued or
delayed delivery transactions for the purpose of acquiring securities and not
for the purpose of leverage. When-issued securities purchased by the Portfolio
may include securities purchased on a "when, as and if issued" basis under which
the issuance of the securities depends on the occurrence of a subsequent event.

Securities purchased on a when-issued or delayed delivery basis may expose the
Portfolio to risk because the securities may experience fluctuations in value
prior to their actual delivery. The Portfolio does not accrue income with
respect to a when-issued or delayed delivery security prior to its stated
delivery date. Purchasing securities on a when-issued or delayed delivery basis
can involve the additional risk that the yield available in the market when the
delivery takes place may be higher than that obtained in the transaction itself.
Upon purchasing a security on a when-issued or delayed delivery basis, the
Portfolio will earmark cash, U.S. Government Obligations or other liquid debt
instruments in an amount at least equal to the when-issued or delayed delivery
commitment.

INVESTMENT IN OTHER INVESTMENT COMPANIES. In accordance with applicable law, the
Fund may invest its assets in other money market funds with comparable
investment objectives. In general, the Fund may not (1) purchase more than 3% of
any other money market fund's voting stock; (2) invest more than 5% of its
assets in any single money market fund; and (3) invest more that 10% of its
assets in other money market funds unless permitted to exceed these limitations
by an exemptive order of the SEC.

ILLIQUID SECURITIES. The Portfolio may not invest more than 10% of its net
assets in securities which are illiquid or otherwise not readily marketable
(such securities may include securities which are subject to legal or
contractual restrictions or repurchase agreements with maturities over seven
days). If a security becomes illiquid after purchase by the Portfolio, the
Portfolio will normally sell the security as soon as is reasonably practicable
unless if to do so would not be in the best interests of shareholders.

CREDIT ENHANCEMENT. Certain of the Portfolio's acceptable investments may be
credit-enhanced by a guaranty, letter of credit, or insurance from a third
party. Any bankruptcy, receivership, default, or change in the credit quality of
the party providing the credit enhancement will adversely affect the quality and
marketability of the underlying security and could cause losses to the Portfolio
and affect the Fund's share price. Subject to the diversification limits
contained in Rule 2a-7, the Portfolio may have more than 25% of its total assets
invested in securities credit-enhanced by banks or other financial institutions.

SECURITIES LENDING. The Portfolio is permitted to lend up to 33 1/3% of the
total value of its securities. These loans must be secured continuously by cash
or securities issued or guaranteed by the United States government, its agencies
or instrumentalities or by a letter of credit at least equal to the market value
of the securities loaned plus accrued income. By lending its securities, the
Portfolio may increase its income by continuing to receive income on the loaned
securities as well as by the opportunity to receive interest on the collateral.
During the term of the loan, a Portfolio continues to bear the risk of
fluctuations in the price of the loaned securities. In lending securities to
brokers, dealers and other organizations, the Portfolio is subject to risks
which, like those associated with other extensions of credit, include delays in
receiving additional collateral, in recovery should the borrower fail
financially and possible loss of the collateral. Upon receipt of appropriate
regulatory approval, cash collateral may be invested in a money market fund
managed by Bankers Trust (or its affiliate) and Bankers Trust may serve as the
Portfolio's lending agent and

<PAGE>
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may share in revenue received from securities lending transactions as
compensation for this service.

QUALITY AND MATURITY OF THE PORTFOLIO'S SECURITIES

The Portfolio will maintain a dollar-weighted average maturity of 90 days or
less. All securities in which the Portfolio invests will have, or be deemed to
have, remaining maturities of 397 days or less on the date of their purchase,
will be denominated in U.S. dollars and will have been granted the required
ratings established herein by two NRSROs (or one such NRSRO if that NRSRO is the
only such NRSRO which rates the security), or if unrated, are believed by
Bankers Trust, under the supervision of the Portfolio's Board of Trustees, to be
of comparable quality. Currently, there are five rating agencies which have been
designated by the SEC as an NRSRO. These organizations and their highest
short-term rating category (which also may be modified by a "+") are: Duff and
Phelps Credit Rating Co., D-1; Fitch IBCA, Inc. F1; Moody's Investors Service
Inc., Prime-1; Standard & Poor's, A-1 and Thomson BankWatch, Inc., T-1. A
description of such ratings is provided in the Appendix to the SAI. Bankers
Trust, acting under the supervision of and procedures adopted by the Board of
Trustees of the Portfolio, will also determine that all securities purchased by
the Portfolio present minimal credit risks. Bankers Trust will cause the
Portfolio to dispose of any security as soon as practicable if the security is
no longer of the requisite quality, unless such action would not be in the best
interest of the Portfolio. High-quality, short-term instruments may result in a
lower yield than instruments with a lower quality or longer term.

ADDITIONAL INVESTMENT LIMITATIONS

The Fund has the same investment restrictions as the Portfolio, except that the
Fund may invest all of its Assets in another open-end investment company with
the same investment objective, such as the Portfolio. The Portfolio may not
invest more than 25% of its total assets in the securities of issuers in any
single industry (excluding U.S. Government Obligations and repurchase agreements
collateralized by U.S. Government Obligations), except that, under normal market
conditions, more than 25% of the total assets of the Portfolio will be invested
in obligations of banks and other financial institutions. As an operating
policy, the Portfolio may not invest more than 5% of its total assets in the
obligations of any one issuer except: (1) as may be permitted by Rule 2a-7; and
(2) for U.S. Government Obligations and repurchase agreements collateralized
fully thereby, which may be purchased without limitation. The Portfolio is also
authorized to borrow for temporary purposes to meet redemptions, including
entering into reverse repurchase transactions, in an amount up to 5% of its
total assets for and to pledge its assets to the same extent in connection with
these borrowings. At the time of an investment, the Portfolio's aggregate
holdings of repurchase agreements having a remaining maturity of more than seven
calendar days (or which may not be terminated within seven calendar days upon
notice by the Portfolio), time deposits having remaining maturities of more than
seven calendar days, and other illiquid securities will not exceed 10% of the
Portfolio's net assets. If changes in the liquidity of certain securities cause
the Portfolio to exceed such 10% limit, the Portfolio will take steps to bring
the aggregate amount of its illiquid securities back below 10% of its net assets
as soon as practicable, unless such action would not be in the best interest of
the Portfolio. The Fund's and the Portfolio's limitations on investment in a
single industry and on borrowing may not be changed without the approval of the
shareholders of the Fund or the investors in the Portfolio, as the case may be.
All other investment policies and limitations described in this prospectus may
be changed by a vote of the Trustees of the Trust or Portfolio Trust, as
applicable.

The SAI contains further information on the Fund's and the Portfolio's
investment restrictions.

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RISK FACTORS: MATCHING THE FUND TO YOUR INVESTMENT NEEDS
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The Fund is designed for conservative investors looking for high current income
approximating money market rates while remaining conveniently liquid with a
stable share price. The Portfolio adheres to the following practices which
enable the Fund to attempt to maintain a $1.00 share price: limiting average
maturity of the securities held by the Portfolio to 90 days or less; buying
securities which mature, or are deemed to mature, in 397 days or less; and
buying only high quality securities with minimal credit risks. The Fund cannot
guarantee a $1.00 share price, but these practices help to minimize any price
fluctuations that might result from rising or declining interest rates. While
the Portfolio invests in high-quality money market securities, investors should
be aware that an investment in the Fund is not without risk. All money market
instruments, including U.S. Government Obligations, can change in value when
interest rates or an issuer's creditworthiness changes.

SPECIAL INFORMATION CONCERNING MASTER-FEEDER FUND STRUCTURE

Unlike other open-end management investment companies (mutual funds) which
directly acquire and manage their own portfolio securities, the Fund seeks to
achieve its investment objective by investing all of its Assets in the
Portfolio, a separate registered investment company with the same investment
objective as the Fund. Therefore, an investor's interest in the Portfolio's
securities is indirect. In addition to selling a beneficial interest to the
Fund, the Portfolio may sell beneficial interests to other mutual funds or
institutional investors. Such investors will invest in the Portfolio on the same
terms and conditions and will pay a proportionate share of the Portfolio's
expenses. However, the other investors investing in the Portfolio are not
required to sell their shares at the same public offering price as the Fund due
to variations in sales commissions and other operating expenses. Therefore,
investors in the Fund should be aware that these differences may result in
differences in returns experienced by investors in the different funds that
invest in the Portfolio. Such differences in returns are also present in other
mutual fund structures. Information concerning other holders of interests in the
Portfolio is available from Bankers Trust at 1-800-368-4031.

The master-feeder fund structure is relatively complex, so shareholders should
carefully consider this investment approach.

Smaller funds investing in the Portfolio may be materially affected by the
actions of larger funds investing in the Portfolio. For example, if a large fund
withdraws from the Portfolio, the remaining funds may experience higher pro rata
operating expenses, thereby producing lower returns (however, this possibility
exists as well for traditionally structured funds which have large institutional
investors). Additionally, the Portfolio may become less diverse, resulting in
increased portfolio risk. Also, funds with a greater pro rata ownership in the
Portfolio could have effective voting control of the operations of the
Portfolio. Except as permitted by the SEC, whenever the Trust is requested to
vote on matters pertaining to the Portfolio, the Trust will hold a meeting of
shareholders of the Fund and will cast all of its votes in the same proportion
as the votes of the Fund's shareholders. Fund shareholders who do not vote will
not affect the Trust's votes at the Portfolio meeting. The percentage of the
Trust's votes representing the Fund's shareholders not voting will be voted by
the Trustees or officers of the Trust in the same proportion as the Fund
shareholders who do, in fact, vote.

Certain changes in the Portfolio's investment objective, policies or
restrictions may require the Fund to withdraw its interest in the Portfolio. Any
such withdrawal could result in a distribution "in kind" of portfolio securities
(as opposed to a cash distribution from the Portfolio). If securities are
distributed, the Fund could incur brokerage, tax or other charges in converting
the securities to cash. In addition, the distribution in kind may result in a
less diversified portfolio of investments or adversely affect the liquidity of
the Fund. Notwithstanding the above, there are other means for meeting
redemption requests, such as borrowing.

The Fund may withdraw its investment from the Portfolio at any time, if the
Board of Trustees of the Trust determines that it is in the best interests of
the shareholders of the Fund to do so. Upon any such withdrawal, the Board of
Trustees of the Trust would consider what action might be taken, including the
investment of all the Assets of the Fund in another pooled investment entity
having the same investment objective as the Fund or the retaining of an
investment adviser to manage the Fund's assets in accordance with the investment
policies described below with respect to the Portfolio.

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For descriptions of the investment objective, policies and restrictions of the
Portfolio, see "Investment Objective and Policies" in the SAI. For descriptions
of the management and expenses of the Portfolio, see "Management of the Trust
and Portfolio(s)" herein and in the SAI.

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NET ASSET VALUE
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The NAV per share of the Fund is calculated on each day on which the Fund is
open (each such day being a "Valuation Day"). The Fund is currently open on each
day, Monday through Friday, except (a) January 1st, Martin Luther King, Jr.'s
Birthday (the third Monday in January); Presidents' Day (the third Monday in
February), Good Friday, Memorial Day (the last Monday in May), July 4th, Labor
Day (the first Monday in September), Columbus Day (the second Monday in
October), Veteran's Day (November 11th), Thanksgiving Day (the last Thursday in
November) and December 25th; and (b) the preceding Friday or the subsequent
Monday when one of the calendar determined holidays falls on a Saturday or
Sunday, respectively.

The NAV per share of the Fund is calculated on each Valuation Day as of the
close of regular trading on the New York Stock Exchange Inc. (the "NYSE"), which
is currently 4:00 p.m., Eastern time or in the event that the NYSE closes early,
at the time of such early closing. The NAV per share of the Fund is computed by
dividing the value of the Fund's assets (i.e., the value of its investment in
the Portfolio and other assets), less all liabilities, by the total number of
its shares outstanding. The Fund's NAV per share will normally be $1.00.

The assets of the Portfolio are valued by using the amortized cost method of
valuation. This method involves valuing each security held by the Portfolio at
its cost at the time of its purchase and thereafter assuming a constant
amortization to maturity of any discount or premium. Accordingly, immaterial
fluctuations in the market value of the securities held by the Portfolio will
not be reflected in the Fund's NAV. The Board of Trustees of the Portfolio will
monitor the valuation of assets by this method and will make such changes as it
deems necessary to assure that the assets of the Portfolio are valued fairly and
in good faith.

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PURCHASE AND REDEMPTION OF SHARES
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PURCHASE OF SHARES

The Trust accepts purchase orders for shares of the Fund at the NAV per share of
the Fund next determined on each Valuation Day. See "Net Asset Value" above.
There is no sales charge on the purchase of shares, but costs of distributing
shares of the Fund may be reimbursed from its assets, as described herein.
Excluding retirement plans, the minimum initial investment in the Trust is
$1,000,000 which may be allocated in amounts not less than $100,000 per fund in
certain funds in the BT Family of Funds. The subsequent minimum investment in
the Fund is $100,000 (excluding retirement plans). Service Agents may impose
initial and subsequent investment minimums that differ from these amounts.
Shares of the Fund may be purchased in only those states where they may be
lawfully sold.

Purchase orders for shares of the Fund will receive, on any Valuation Day, the
NAV next determined following receipt by the Service Agent and transmission to
Bankers Trust, as the Trust's transfer agent (the "Transfer Agent") of such
order. If the purchase order is received by the Service Agent and transmitted to
the Transfer Agent prior to 4:00 p.m. (Eastern time or earlier, should the NYSE
close earlier), and if payment in the form of federal funds is received on that
day by Bankers Trust, as the Trust's custodian (the "Custodian"), the
shareholder will receive the dividend declared on that day. The Trust and
Transfer Agent reserve the right to reject any purchase order.

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or her entitlement to an effective purchase or redemption order as of a
particular time. Because Bankers Trust is the Custodian and Transfer Agent of
the Trust, funds may be transferred directly from or to a customer's account
with Bankers Trust to or from the Fund without incurring the additional costs or
delays associated with the wiring of federal funds.

Certificates for shares will not be issued. Each shareholder's account will be
maintained by a Service Agent or the Transfer Agent.

AUTOMATIC INVESTMENT PLAN. The Fund may offer shareholders an automatic
investment plan under which shareholders may authorize some Service Agents to
place a purchase order each month or quarter for Fund shares. For further
information regarding the automatic investment plan, shareholder should contact
their Service Agent.

REDEMPTION OF SHARES

Service Agents may allow redemptions or exchanges by telephone and may disclaim
liability for following instructions communicated by telephone that the Service
Agent reasonably believes to be genuine. The Service Agent must provide the
investor with an opportunity to choose whether or not to utilize the telephone
redemption or exchange privilege. The Service Agent must employ reasonable
procedures to confirm that instructions communicated by telephone are genuine.
If the Service Agent does not do so, it may be liable for any losses due to
unauthorized or fraudulent instructions. Such procedures may include, among
others, requiring some form of personal identification prior to acting upon
instructions received by telephone, providing written confirmation of such
transactions and/or tape recording of telephone instructions.

Redemption orders are processed without charge by the Trust. A Service Agent may
on at least 30 days' notice involuntarily redeem a shareholder's account with
the Fund having a current value of less than $100,000 (excluding retirement
plans).

AUTOMATIC CASH WITHDRAWAL PLAN. The Fund may offer shareholders an automatic
cash withdrawal plan, under which shareholders who own shares of the Fund may
elect to receive periodic cash payments. Retirement plan accounts are eligible
for automatic cash withdrawal plans only where the shareholder is eligible to
receive qualified distributions. For further information regarding the automatic
cash withdrawal plan, shareholders should contact their Service Agent.

CHECKWRITING. Shareholders of the Fund may redeem shares by check. Checks may
not be used to close an account. Shareholders will continue to earn dividends on
shares to be redeemed until the check clears. Checks will be returned to
shareholders at the end of the month. There is no charge for redemption of
shares by check. Additional information regarding the checkwriting privilege may
be obtained from a Service Agent.

EXCHANGE PRIVILEGE

Shareholders may exchange their shares for shares of certain other funds in the
BT Family of Funds registered in their state. The Fund reserves the right to
terminate or modify the exchange privilege in the future. To make an exchange,
follow the procedures indicated in "Purchase of Shares" and "Redemption of
Shares." Before making an exchange, please note the following: (Bullet) Call
your Service Agent for information and a prospectus. Read the
prospectus for relevant information.
(Bullet) Complete and sign an application, taking care to register your new
account in the same name, address and taxpayer identification number as
your existing account(s).

(Bullet) Each exchange represents the sale of shares of one fund and the
purchase of shares of another, which may produce a gain or loss for tax
purposes. Your Service Agent will send a written confirmation of each
exchange transaction.

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DIVIDENDS, DISTRIBUTIONS AND TAXES
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The Portfolio determines its net income and realized capital gains, if any, on
each Valuation Day and allocates all such income and gain pro rata among the
Fund and the other investors in the Portfolio at the time of such determination.
The Fund declares dividends from its net income daily and pays dividends
monthly. The Fund reserves the right to include realized short-term gains, if
any, in such daily dividends. Distributions of the Fund's pro rata share of the
Portfolio's net realized long-term capital gains, if any, and any undistributed
net realized short-term capital gains are normally declared and paid annually at
the end of the fiscal year in which they were earned to the extent they are not
offset by any capital loss carryforwards. Unless a shareholder instructs the
Fund to pay dividends or capital gains distributions in cash, dividends and
distributions will automatically be reinvested at NAV in additional shares of
the Fund.

The Fund intends to qualify as a regulated investment company, as defined in the
Internal Revenue Code of 1986, as amended (the "Code". ) Provided the Fund meets
the requirements imposed by the Code, the Fund will not pay any Federal income
or excise taxes. The Portfolio will also not be required to pay any Federal
income or excise taxes. Dividends paid by the Fund from its taxable net
investment income and distributions by the Fund of its net realized short-term
capital gains are taxable to shareholders as ordinary income, whether received
in cash or reinvested in additional shares of the Fund. The Fund's dividends and
distributions will not qualify for the dividends-received deduction for
corporations.

Statements as to the tax status of each shareholder's dividends and
distributions, if any, are mailed annually. Each shareholder will also receive,
if appropriate, various written notices after the end of the Fund's prior
taxable year as to the Federal income tax status of his or her dividends and
distributions which were received from the Fund during that year. Shareholders
should consult their tax advisers to assess the consequences of investing in the
Fund under state and local laws and to determine whether dividends paid by the
Fund that represent interest derived from U.S. Government Obligations are exempt
from any applicable state or local income taxes.

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PERFORMANCE INFORMATION AND REPORTS
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From time to time, the Trust may advertise "current yield" and/or "effective
yield" for the Fund. All yield figures are based on historical earnings and are
not intended to indicate future performance. The "current yield" of the Fund
refers to the income generated by an investment in the Fund over a seven-day
period (which period will be stated in the advertisement). This income is then
"annualized;'" that is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "current yield" because of the compounding effect of this assumed
reinvestment. The Trust may include this information in sales material and
advertisements for the Fund.

Yield is a function of the quality, composition and maturity of the securities
held by the Portfolio and operating expenses of the Fund and the Portfolio. In
particular, the Fund's yield will rise and fall with short-term interest rates,
which can change frequently and sharply. In periods of rising interest rates,
the yield of the Fund will tend to be somewhat lower than prevailing market
rates, and in periods of declining interest rates, the yield will tend to be
somewhat higher. In addition, when interest rates are rising, the inflow of net
new money to the Fund from the continuous sale of its shares will likely be
invested by the Portfolio in instruments producing higher yields than the
balance of the Portfolio's securities, thereby increasing the current yield of
the Fund. In periods of falling interest rates, the opposite can be expected to
occur. Accordingly, yields will fluctuate and do not necessarily indicate future
results. While yield information may be useful in reviewing the performance of
the Fund, it may not provide a basis for comparison with bank deposits, other
fixed rate investments, or other investment companies that may use a different
method of calculating yield. Any fees charged by Service Agents for processing
purchase and/or redemption transactions will effectively reduce the yield for
those shareholders.

<PAGE>
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From time to time, advertisements or reports to shareholders may compare the
yield of the Fund to that of other mutual funds with similar investment
objectives or to that of a particular index. The yield of the Fund might be
compared with, for example, the IBC First Tier Institutions Only All Taxable
Money Fund Average which is an average compiled by IBC Money Fund Report, a
widely recognized, independent publication that monitors the performance of
money market mutual funds. Similarly, the yield of the Fund might be compared
with rankings prepared by Micropal Limited and/or Lipper Analytical Services,
Inc., which are widely recognized, independent services that monitor the
investment performance of mutual funds. The yield of the Fund might also be
compared with the average yield reported by the Bank Rate Monitor for money
market deposit accounts offered by the 50 leading banks and thrift institutions
in the top five standard metropolitan areas. Shareholders may make inquiries
regarding the Fund, including current yield quotations and performance
information, by contacting any Service Agent.

Shareholders will receive financial reports semi-annually that include the
Portfolio's financial statements, including a listing of investment securities
held by the Portfolio at those dates. Annual reports are audited by independent
accountants.

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MANAGEMENT OF THE TRUST AND PORTFOLIO
- --------------------------------------------------------------------------------

BOARD OF TRUSTEES

The affairs of the Trust and Portfolio are managed under the supervision of
their respective Board of Trustees. By virtue of the responsibilities assumed by
Bankers Trust, the administrator of the Trust and Portfolio, neither the Trust
nor Portfolio require employees other than its executive officers. None of the
executive officers of the Trust or Portfolio devotes full time to the affairs of
the Trust or Portfolio.

The Trustees of the Trust who are not "interested persons" (as defined in the
1940 Act) (the "Independent Trustees") of the Trust or of the Portfolio, as the
case may be, have adopted written procedures reasonably appropriate to deal with
potential conflicts of interest, up to and including creating separate boards of
trustees, arising from the fact that several of the same individuals are
Trustees of the Trust and the Portfolio. For more information with respect to
the Trustees of both the Trust and the Portfolio, see "Management of the Trust
and Portfolios" in the SAI.

INVESTMENT ADVISER

The Trust has not retained the services of an investment adviser since the Trust
seeks to achieve the investment objective of the Fund by investing all the
Assets of the Fund in the Portfolio. The Portfolio has retained the services of
Bankers Trust as investment adviser.

BANKERS TRUST COMPANY AND ITS AFFILIATES

Bankers Trust Company, a New York banking corporation with principal offices at
130 Liberty Street (One Bankers Trust Plaza), New York, New York 10006, is a
wholly-owned subsidiary of Bankers Trust Corporation. Bankers Trust conducts a
variety of general banking and trust activities and is a major wholesale
supplier of financial services to the international and domestic institutional
markets. As of December 31, 1997, Bankers Trust Corporation was the seventh
largest bank holding company in the United States with total assets of over $100
billion. Bankers Trust is dedicated to servicing the needs of corporations,
governments, financial institutions and private clients through a global network
of over 90 offices in more than 50 countries. Investment management is a core
business of Bankers Trust, built on a tradition of excellence from its roots as
a trust bank founded in 1903. The scope of Bankers Trust's investment management
capability is unique due to its leadership positions in both active and passive
quantitative management and its presence in major equity and fixed income
markets around the world. Bankers Trust is one of the nation's largest and most
experienced investment managers, with over $300 billion in assets under
management globally. Of that total, approximately $69.3 billion are in cash
assets alone. This makes Bankers Trust one of the nation's leading managers of
cash funds.

Bankers Trust has more than 50 years of experience managing retirement assets
for the nation's largest corporations and institutions. In the past, these
clients have

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been serviced through separate account and commingled fund structures. Bankers
Trust's officers have had extensive experience in managing investment portfolios
having objectives similar to those of the Portfolio.

Bankers Trust, subject to the supervision and direction of the Board of Trustees
of the Portfolio, manages the Portfolio in accordance with the Portfolio's
investment objective and stated investment policies, makes investment decisions
for the Portfolio, places orders to purchase and sell securities and other
financial instruments on behalf of the Portfolio and employs professional
investment managers and securities analysts who provide research services to the
Portfolio. All orders for investment transactions on behalf of the Portfolio are
placed by Bankers Trust with broker-dealers and other financial intermediaries
that it selects, including those affiliated with Bankers Trust. A Bankers Trust
affiliate will be used in connection with a purchase or sale of an investment
for the Portfolio only if Bankers Trust believes that the affiliate's charge for
the transaction does not exceed usual and customary levels. The Portfolio will
not invest in obligations for which Bankers Trust or any of its affiliates is
the ultimate obligor or accepting bank. The Portfolio may, however, invest in
the obligations of correspondents and customers of Bankers Trust.

Under its Investment Advisory Agreement, Bankers Trust receives a fee from the
Portfolio, computed daily and paid monthly, at the annual rate of 0.15% of the
average daily net assets of the Portfolio.

Bankers Trust has been advised by its counsel that, in counsel's opinion,
Bankers Trust currently may perform the services for the Trust and the Portfolio
described in this Prospectus and the SAI without violation of the Glass-Steagall
Act or other applicable banking laws or regulations.

ADMINISTRATOR

Under its Administration and Services Agreement with the Trust, Bankers Trust
calculates the NAV of the Fund and generally assists the Board of Trustees of
the Trust in all aspects of the administration and operation of the Trust. The
Administration and Services Agreement provides for the Trust to pay Bankers
Trust a fee, computed daily and paid monthly, at the annual rate of 0.05% of the
average daily net assets of the Fund.

Under an Administration and Services Agreement with the Portfolio, Bankers Trust
calculates the value of the assets of the Portfolio and generally assists the
Board of Trustees of the Portfolio in all aspects of the administration and
operation of the Portfolio. The Administration and Services Agreement provides
for the Portfolio to pay Bankers Trust a fee, computed daily and paid monthly,
at the annual rate of 0.05% of the average daily net assets of the Portfolio.
Under each Administration and Services Agreement, Bankers Trust may delegate one
or more of its responsibilities to others, including affiliates of Edgewood, at
Bankers Trust's expense. For more information, see the SAI.

DISTRIBUTOR

Edgewood Services, Inc. is the principal distributor for shares of the Fund. In
addition, Edgewood and its affiliates provide the Trust with office facilities
and currently provide administration and distribution services for other
registered investment companies. The principal business address of Edgewood and
its affiliates is 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-5829.

SERVICE AGENT

All shareholders must be represented by a Service Agent. Bankers Trust acts as a
Service Agent pursuant to its Administration and Services Agreement with the
Trust and receives no additional compensation from the Fund for such shareholder
services. The service fees of any other Service Agent, including broker-dealers,
will be paid by Bankers Trust from its fees. The services provided by a Service
Agent may include establishing and maintaining shareholder accounts, processing
purchase and redemption transactions, arranging for bank wires, performing
shareholder sub-accounting, answering client inquiries regarding the Trust,
assisting clients in changing dividend options, account designations and
addresses, providing periodic statements showing the client's account balance,
transmitting proxy statements, periodic reports, updated prospectuses and other
communications to shareholders and, with respect to meetings of shareholders,
collecting, tabulating and forwarding to the Trust executed proxies and
obtaining such other information and performing such other services as the
Administrator or the Service Agent's clients may reasonably request and agree
upon with the Service Agent. Service Agents may separately charge their clients
additional fees only to cover provision of additional or more comprehensive
services not already provided under the Administration and Services Agreement
with Bankers Trust, or of the type or scope not generally

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offered by a mutual fund, such as cash management services or enhanced
retirement or trust reporting. In addition, investors may be charged a
transaction fee if they effect transactions in Fund shares through a broker or
agent. Each Service Agent has agreed to transmit to shareholders, who are its
customers, appropriate disclosures of any fees that it may charge them directly.

CUSTODIAN AND TRANSFER AGENT

Bankers Trust acts as Custodian of the Assets of the Trust and the Portfolio and
serves as the Transfer Agent for the Trust and the Portfolio under the
respective Administration and Services Agreement with the Trust and the
Portfolio.

ORGANIZATION OF THE TRUST

The Trust was organized on March 26, 1990 under the laws of the Commonwealth of
Massachusetts. The Fund is a separate series of the Trust. The Trust offers
shares of beneficial interest of separate series, par value $0.001 per share.
The shares of the other series of the Trust are offered through separate
prospectuses. No series of shares has any preference over any other series.

The Trust is an entity commonly known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a business trust may, under certain
circumstances, be held personally liable as partners for its obligations.
However, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.

When matters are submitted for shareholder vote, shareholders of the Fund will
have one vote for each full share held and proportionate, fractional votes for
fractional shares held. A separate vote of the Fund is required on any matter
affecting the Fund on which shareholders are entitled to vote. Shareholders of
the Fund are not entitled to vote on Trust matters that do not affect the Fund.
There normally will be no meetings of shareholders for the purpose of electing
Trustees unless and until such time as less than a majority of Trustees holding
office have been elected by shareholders, at which time the Trustees then in
office will call a shareholders' meeting for the election of Trustees. Any
Trustee may be removed from office upon the vote of shareholders holding at
least two-thirds of the Trust's outstanding shares at a meeting called for that
purpose. The Trustees are required to call such a meeting upon the written
request of shareholders holding at least 10% of the Trust's outstanding shares.

The Portfolio, in which all the Assets of the Fund will be invested, is
organized as a trust under the laws of the State of New York. The Portfolio's
Declaration of Trust provides that the Fund and other entities investing in the
Portfolio (e.g., other investment companies, insurance company separate accounts
and common and commingled trust funds) will each be liable for all obligations
of the Portfolio. However, the risk of the Fund incurring financial loss on
account of such liability is limited to circumstances in which both inadequate
insurance existed and the Portfolio itself was unable to meet its obligations.
Accordingly, the Trustees of the Trust believe that neither the Fund nor its
shareholders will be adversely affected by reason of the Fund's investing in the
Portfolio.

Each series in the Trust will not be involved in any vote involving a Portfolio
in which it does not invest its Assets. Shareholders of all the series of the
Trust will, however, vote together to elect Trustees of the Trust and for
certain other matters. Under certain circumstances, the shareholders of one or
more series could control the outcome of these votes.

EXPENSES OF THE FUND AND PORTFOLIO

The Fund bears its own expenses. Operating expenses for the Fund generally
consist of all costs not specifically borne by Bankers Trust or Edgewood,
including administration and services fees, fees for necessary professional
services, the costs of regulatory compliance and costs associated with
maintaining legal existence and shareholder relations. Bankers Trust has agreed
to reimburse the Fund to the extent required by applicable state law for certain
expenses that are described in the SAI. The Portfolio bears its own expenses.
Operating expenses for the Portfolio generally consist of all costs not
specifically borne by Bankers Trust or Edgewood, including investment advisory
and administration and services fees, fees for necessary professional services,
amortization of organizational expenses, the costs associated with regulatory
compliance and maintaining legal existence and investor relations.

16
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BT INSTITUTIONAL FUNDS
INSTITUTIONAL CASH MANAGEMENT FUND

INVESTMENT ADVISER OF THE PORTFOLIO AND ADMINISTRATOR
BANKERS TRUST COMPANY
130 Liberty Street
(One Bankers Trust Plaza)
New York, NY 10006

DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 Corporate Drive
Pittsburgh, PA 15237-5829

CUSTODIAN AND TRANSFER AGENT BANKERS TRUST COMPANY 130 Liberty Street (One
Bankers Trust Plaza)
New York, NY 10006

INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
1100 Main Street
Suite 900
Kansas City, MO 64105

COUNSEL
WILLKIE FARR & GALLAGHER
153 East 53rd Street
New York, NY 10022

No person has been authorized to give any information or to make any
representations other than those contained in the Trust's Prospectuses, its
Statement of Additional Information or the Trust's official sales literature in
connection with the offering of the Trust's shares and, if given or made, such
other information or representations must not be relied on as having been
authorized by the Trust. This Prospectus does not constitute an offer in any
state in which, or to any person to whom, such offer may not lawfully be made.

Cusip #055924104
STA479300 (4/98)

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(BULLET) BT INSTITUTIONAL FUNDS (BULLET)

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INSTITUTIONAL CASH RESERVES

A money market fund that seeks high current income to the extent consistent with
liquidity and capital preservation.

PROSPECTUS
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APRIL 30, 1998

BT Institutional Funds (the "Trust") is an open-end, management investment
company (mutual fund) which consists of a number of separate investment funds.

Please read this Prospectus carefully before investing and retain it for future
reference. It contains important information about Institutional Cash Reserves
(the "Fund") that you should know and can refer to in deciding whether the
Fund's goals match your own.

A Statement of Additional Information ("SAI") with the same date has been filed
with the Securities and Exchange Commission ("SEC"), and is incorporated herein
by reference. You may request a free copy of the SAI or paper copy of this
prospectus, if you have received your prospectus electronically, free of charge
by calling the Fund's Service Agent at 1-800-368-4031. The SAI, material
incorporated by reference into this document, and other information regarding
the Trust is maintained electronically with the SEC at Internet Web site
(http://www.sec.gov).

BANKERS TRUST COMPANY ("BANKERS TRUST") IS THE INVESTMENT ADVISER (THE
"ADVISER") OF THE PORTFOLIO. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED OR ENDORSED BY, BANKERS TRUST OR ANY OTHER BANKING OR
DEPOSITORY INSTITUTION. SHARES ARE NOT GUARANTEED OR FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE U.S. GOVERNMENT, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. THE FUND INTENDS TO MAINTAIN A
CONSTANT $1.00 PER SHARE NET ASSET VALUE ("NAV"), ALTHOUGH THERE CAN BE NO
ASSURANCE THAT IT WILL BE ABLE TO DO SO.

EDGEWOOD SERVICES, INC.
5800 Corporate Drive (Bullet) Pittsburgh, Pennsylvania (Bullet) 15237-5829

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TABLE OF CONTENTS

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The Fund.......................................................................3

Who May Invest.................................................................3

Summary of Fund Expenses.......................................................4

Financial Highlights...........................................................5

Investment Objective and Policies..............................................6