o BT INSTITUTIONAL FUNDS o
INSTITUTIONAL
DAILY ASSETS FUND
ANNUAL REPORT
JUNE o 1998
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Institutional Daily Assets Fund
Table of Contents
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Letter to Shareholders 3
Institutional Daily Assets Fund
Statement of Net Assets 5
Statement of Operations 10
Statements of Changes in Net Assets 11
Financial Highlights 12
Notes to Financial Statements 13
Report of Independent Accountants 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
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Institutional Daily Assets Fund
Letter to Shareholders
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We are pleased to present you with this annual report for the BT Institutional
Daily Assets Fund (the "Fund"), providing a detailed review of the market, the
Fund, and our outlook. Included are a complete financial summary of the Fund's
operations and a listing of the Portfolio's holdings.
MARKET ACTIVITY
Overall, the money market has been rather quiet, with its yield curve reasonably
flat. Interest rates remained relatively stable throughout the annual period,
and price volatility within the money markets was at an all-time low.
During the first half of the Fund's fiscal year, the pace of economic growth
remained above-trend and inflation was low. Unemployment continued to fall,
putting pressure on labor costs, but productivity improvement was strong enough
to more than offset the rising costs.
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Investment Instruments
Commercial paper, certificates of deposit, floating rate notes, repurchase
agreements and other money market instruments.
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In the second half of the Fund's fiscal year, the money markets were dominated
by foreign activity rather than U.S. economic factors or Federal Reserve Board
policy.
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.
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 levels of current income consistent with liquidity and preservation
of capital.
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o A strong U.S. dollar, propelled by a deepening Asian crisis, served as a
positive backdrop for continued low inflation at home. A combination of low
inflation plus first calendar quarter GDP growth of over 5% supported the
markets' perception that the Federal Reserve Board was on hold. It was.
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 Daily Assets Fund.
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Annualized 7 Day Annualized 7 Day
Periods ended June 30, 1998 Current Yield Effective Yield
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IBT Institutional
Daily Assets Fund* 5.54% 5.70%
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IBC First Tier-Institutional Only
Money Funds Average 5.31% 5.45%
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We maintained a neutral, close-to-the benchmark weighted average maturity
position throughout most of the 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.
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Status at June 30, 1998
Average maturity: 40 days
Net assets: $5,729 million
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MANAGER OUTLOOK
We believe the money markets should remain fairly positive throughout the second
half of the year for several reasons:
o 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.
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* 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
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Institutional Daily Assets Fund
Letter to Shareholders (concluded)
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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.
We appreciate your support of the BT Institutional Daily Assets Fund and look
forward to continuing to serve your investment needs for many years ahead.
/s/ Darlene M. Rasel
____________________
Darlene M. Rasel
Portfolio Manager of the
Institutional Daily Assets Fund
June 30, 1998
DIVERSIFICATION OF PORTFOLIO INVESTMENTS
By Asset Type as of June 30, 1998
(percentages are based on amortized cost)
[CHART appears here - plot points below]
Other 1%
Floating Rate Notes 18%
Eurodollar Time Deposits 10%
Eurodollar Certificates of Deposit 12%
Repurchase Agreements 4%
Yankee Certificates of Deposit 6%
Commercial Paper 49%
4
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Institutional Daily Assets Fund
Statement of Net Assets June 30, 1998
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Principal
Amount Description Value
- --------- ----------- -----
CERTIFICATES OF DEPOSIT - 0.96%
$55,000,000 J.P. Morgan, 5.50%, 2/24/99
(Amortized Cost $54,973,723) $ 54,973,723
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COMMERCIAL PAPER* - 48.89%
Asset Securitization Cooperative Corp.:
27,000,000 5.52%, 8/12/98 26,826,120
37,000,000 5.51%, 8/17/98 36,733,836
24,000,000 5.52%, 8/17/98 23,827,040
40,600,000 5.51%, 8/21/98 40,283,083
25,000,000 5.53%, 8/25/98 24,788,785
11,000,000 5.53%, 8/28/98 10,901,996
20,000,000 5.54%, 9/22/98 19,744,544
40,000,000 Bank Of Nova Scotia,
5.50%, 8/18/98 39,706,667
BBL North America:
35,000,000 5.53%, 8/25/98 34,704,298
30,000,000 5.50%, 9/14/98 29,656,250
Cafco:
38,000,000 5.49%, 7/10/98 37,947,845
27,000,000 5.49%, 7/23/98 26,909,415
23,000,000 5.53%, 7/24/98 22,918,740
15,000,000 5.61%, 7/30/98 14,932,213
33,000,000 5.51%, 8/7/98 32,813,119
17,000,000 5.50%, 8/12/98 16,890,917
20,000,000 5.52%, 8/14/98 19,865,067
25,000,000 5.52%, 9/9/98 24,731,667
20,000,000 5.52%, 9/25/98 19,736,267
5,000,000 Canadian Imperial Bank,
5.535%, 7/08/98 4,994,619
25,000,000 Ciesco, 5.53%, 7/13/98 24,953,917
30,000,000 CIT Group,
5.51%,9/22/98 29,618,892
Commonwealth Bank of Australia:
30,000,000 5.50%, 8/5/98 29,839,583
24,000,000 5.49%, 11/23/98 23,469,300
Credit Suisse:
10,000,000 5.50%, 7/10/98 9,986,250
18,000,000 5.48%, 7/16/98 17,958,937
12,000,000 5.50%, 8/10/98 11,926,666
25,000,000 5.51%, 9/17/98 24,701,541
Daimler Benz North American:
35,000,000 5.50%, 7/15/98 34,925,139
3,570,000 5.52%, 7/22/98 3,558,505
34,000,000 5.49%, 7/23/98 33,885,930
Principal
Amount Description Value
- --------- ----------- -----
$30,000,000 5.50%, 8/28/98 $ 29,734,167
13,000,000 5.50%, 9/11/98 12,857,000
14,000,000 5.50%, 9/11/98 13,846,000
22,000,000 5.50%, 9/25/98 21,710,944
27,418,000 5.50%, 9/25/98 27,057,758
Delaware Fund Corp:
30,000,000 5.53%, 7/8/98 29,967,742
30,000,000 5.58%, 7/23/98 29,897,700
35,000,000 5.54%, 7/27/98 34,859,961
10,000,000 5.52%, 8/20/98 9,923,333
Deutsche Bank:
60,000,000 5.49%, 7/15/98 59,871,900
35,000,000 5.52%, 8/14/98 34,764,080
Diageo Capital:
15,000,000 5.53%, 7/6/98 14,988,479
25,000,000 5.51%, 7/15/98 24,946,431
5,000,000 5.47%, 9/2/98 4,952,137
35,000,000 5.50%, 9/14/98 34,598,958
7,000,000 5.51%, 9/29/98 6,903,575
Eksportfinans:
25,000,000 5.52%, 7/27/98 24,900,333
12,394,000 5.54%, 8/10/98 12,317,708
Ford Motor Credit:
22,000,000 5.52%, 7/2/98 21,996,627
33,000,000 5.48%, 7/8/98 32,964,837
38,000,000 5.47%, 7/10/98 37,948,035
50,000,000 5.47%, 7/10/98 49,931,625
20,000,000 5.52%, 7/17/98 19,950,933
55,000,000 5.52%, 7/24/98 54,806,033
General Electric Capital Corp.:
25,000,000 5.49%, 7/8/98 24,973,313
20,000,000 5.51%, 7/24/98 19,929,594
10,000,000 5.51%, 8/12/98 9,935,717
20,000,000 5.52%, 8/17/98 19,855,867
15,000,000 5.51%, 8/24/98 14,876,025
25,000,000 5.43%, 9/4/98 24,754,896
17,000,000 5.51%, 9/11/98 16,812,660
25,000,000 5.50%, 9/14/98 24,713,542
25,000,000 5.50%, 10/7/98 24,625,694
16,000,000 5.50%, 10/8/98 15,758,000
12,000,000 5.50%, 10/19/98 11,798,333
25,000,000 5.49%, 11/20/98 24,458,625
Goldman Sachs:
37,000,000 5.52%, 8/10/98 36,773,067
40,000,000 5.52%, 8/26/98 39,656,533
45,000,000 5.52%, 8/28/98 44,599,800
45,000,000 5.50%, 10/14/98 44,278,125
See Notes to Financial Statements on Page 13
5
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Institutional Daily Assets Fund
Statement of Net Assets June 30, 1998
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Principal
Amount Description Value
- --------- ----------- -----
$ 8,000,000 J.P. Morgan, 5.50%, 11/10/98 $ 7,838,667
10,400,000 KFW International Financial Inc.,
5.50%, 7/21/98 10,368,222
7,000,000 Lucent Technologies, 5.49%, 8/27/98 6,939,153
10,000,000 Manitoba Hydro Electric,
5.506%, 8/27/98 9,912,822
Merrill Lynch & Co.:
45,000,000 5.50%, 7/27/98 44,821,250
25,000,000 5.52%, 8/19/98 24,812,167
10,000,000 5.52%, 8/26/98 9,914,133
25,000,000 5.53%, 9/11/98 24,723,500
24,000,000 5.52%, 10/16/98 23,606,240
Monsanto Co.:
5,000,000 5.50%, 9/3/98 4,951,111
16,000,000 5.50%, 9/10/98 15,826,444
6,000,000 5.51%, 9/16/98 5,929,353
Morgan Stanley:
50,000,000 6.25%, 7/1/98 50,000,000
17,000,000 5.50%, 7/10/98 16,976,625
24,000,000 5.53%, 8/12/98 23,845,160
20,000,000 National Australia, 5.50%, 8/03/98 19,899,167
40,000,000 Norwest, 5.55%, 8/14/98 39,728,667
14,200,000 Panasonic Finance, 5.51%, 10/20/98 13,958,754
22,000,000 Paribas Finance, 5.51%, 7/21/98 21,932,656
Province of Quebec:
10,600,000 5.50%, 10/16/98 10,426,719
10,000,000 5.50%, 11/5/98 9,805,796
40,000,000 5.50%, 11/9/98 39,199,444
23,000,000 Queensland Alumina,
5.52%, 10/27/98 22,583,853
Receivables Capital Corp.:
25,000,000 5.53%, 7/10/98 24,965,438
15,000,000 5.53%, 7/17/98 14,963,133
25,000,000 5.53%, 7/17/98 24,938,544
35,000,000 5.57%, 7/23/98 34,880,864
20,000,000 5.57%, 7/27/98 19,919,544
25,000,000 5.53%, 8/3/98 24,873,271
40,000,000 5.53%, 8/14/98 39,729,644
25,000,000 5.53%, 8/26/98 24,784,944
20,000,000 5.51%, 9/15/98 19,767,356
Principal
Amount Description Value
- --------- ----------- -----
Salomon Smith Barney:
$25,000,000 5.51%, 7/7/98 $ 24,977,042
15,000,000 5.36%, 7/8/98 14,984,381
40,000,000 5.49%, 7/14/98 39,920,628
50,000,000 5.49%, 7/21/98 49,847,500
17,000,000 5.40%, 8/7/98 16,905,650
28,000,000 5.40%, 8/10/98 27,832,000
21,000,000 5.54%, 8/20/98 20,838,417
16,000,000 5.53%, 9/15/98 15,813,209
20,000,000 5.52%, 10/7/98 19,699,467
35,000,000 San Paolo U.S. Financial,
5.53%, 7/7/98 34,967,742
Svenska Handelsbanke:
35,000,000 5.51%, 9/10/98 34,619,657
8,142,000 5.51%, 9/10/98 8,053,521
9,000,000 Westpac Capital Corp.,
5.49%, 10/1/98 8,873,730
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Total Commercial Paper
(Amortized Cost $2,801,388,820) 2,801,388,820
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EURODOLLAR CERTIFICATES OF
DEPOSIT - 11.90%
Abbey National:
50,000,000 5.55%, 7/9/98 50,000,000
40,000,000 5.55%, 7/14/98 40,000,000
25,000,000 5.59%, 8/14/98 25,000,000
20,000,000 5.58%, 8/21/98 19,999,831
20,000,000 5.59%, 9/8/98 19,999,934
10,000,000 5.63%, 10/27/98 9,999,371
8,000,000 Bank of Montreal, 5.56%, 7/14/98 7,999,823
50,000,000 Bank of Scotland, 5.59%, 9/25/98 50,000,000
22,000,000 Banque Bruxelles, 5.59%, 8/24/98 21,999,859
41,000,000 Barclays Bank, 5.57%, 7/27/98 40,999,540
20,000,000 Bayerische Vereinsbank,
5.60%, 9/24/98 20,000,466
15,000,000 Canadian Imperial Bank,
5.64%, 11/5/98 15,000,472
20,000,000 Creditanstalt Bankverein,
5.59%, 7/6/98 20,000,027
10,000,000 Credit Agricole, 5.80%, 7/31/98 10,000,117
8,000,000 Credito Italiano, 5.59%, 7/22/98 7,999,944
See Notes to Financial Statements on Page 13
6
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Institutional Daily Assets Fund
Statement of Net Assets June 30, 1998
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Principal
Amount Description Value
- --------- ----------- -----
$82,000,000 Deutsche Bank, 5.57%, 7/6/98 $ 81,999,934
25,000,000 KBC Bank, 5.58%, 8/26/98 24,999,900
NationsBank Corp.:
25,000,000 5.58%, 8/7/98 25,000,253
11,000,000 5.58%, 9/8/98 11,000,000
Nordeutsche Landesbank:
26,000,000 5.57%, 7/24/98 25,999,731
34,000,000 5.66%, 11/16/98 34,000,913
15,000,000 5.66%, 12/10/98 15,001,196
Rabobank:
2,000,000 5.55%, 7/15/98 1,999,955
35,000,000 5.56%, 7/16/98 35,000,072
25,000,000 5.57%, 7/16/98 25,000,050
West Deutsche Landesbank:
18,000,000 5.82%, 8/3/98 17,999,448
25,000,000 5.58%, 8/3/98 25,000,000
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Total Eurodollar Certificates of Deposit
(Amortized Cost $682,000,836) 682,000,836
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EURODOLLAR TIME DEPOSIT - 9.58%
27,000,000 Bank of America,
5.53%, 7/13/98 27,000,000
Bank of Austria:
40,400,000 5.62%, 10/16/98 40,400,000
22,000,000 5.78%, 11/18/98 22,000,000
49,325,446 Bank of Montreal,
5.625%, 7/1/98 49,325,446
Bank of Nova Scotia:
50,000,000 6.13%, 7/1/98 50,000,000
20,000,000 5.63%, 9/4/98 20,000,000
20,000,000 Barclays Bank, 5.67%, 12/3/98 20,000,000
25,000,000 Bayerische Landesbank,
5.56%, 7/9/98 25,000,000
25,000,000 Deutsche Bank, 6.50%, 7/1/98 25,000,000
50,000,000 International Nederlander Bank,
5.60%, 9/29/98 50,000,000
40,000,000 International Nederlander Funding,
5.75%, 7/6/98 40,000,000
Principal
Amount Description Value
- --------- ----------- -----
$40,000,000 Societe Generale,
5.65%, 8/5/98 $ 40,000,000
25,000,000 Toronto Dominion,
6.25%, 7/1/98 25,000,000
35,000,000 Union Bank of Switzerland,
5.60%, 9/28/98 35,000,000
West Deutsche Landesbank:
30,000,000 5.53%, 7/6/98 30,000,000
50,000,000 5.63%, 8/5/98 50,000,000
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Total Eurodollar Time Deposits
(Amortized Cost $548,725,446) 548,725,446
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FLOATING RATE NOTES - 17.55%
American Express Centurion Bank:
25,000,000 Monthly Variable Rate,
5.62%, 9/15/98 25,000,000
Associates Corp:
Daily Variable Rate,
30,000,000 5.65%, 1/4/99 29,992,558
25,000,000 5.51%, 4/23/99 24,980,157
30,000,000 5.52%, 6/29/99 29,976,701
Bank Of Nova Scotia:
35,000,000 Monthly Variable Rate,
5.51%, 6/10/99 34,975,009
Banque National de Paris:
45,000,000 Monthly Variable Rate,
5.52%, 6/1/99 44,975,219
Bayerische Hypotheka:
45,000,000 Monthly Variable Rate,
5.50%, 5/28/99 44,967,837
Bayerische Landesbank:
25,000,000 Monthly Variable Rate,
5.52%, 6/29/99 24,981,671
Bear Stearns Co.:
10,000,000 Monthly Variable Rate,
5.63%, 6/4/99 10,000,000
Chase Manhattan:
5,000,000 Quarterly Variable Rate,
5.82%, 11/10/98 5,003,189
Commerz Bank:
50,000,000 Monthly Variable Rate,
5.50%, 5/28/99 49,964,263
See Notes to Financial Statements on Page 13
7
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Institutional Daily Assets Fund
Statement of Net Assets June 30, 1998
- --------------------------------------------------------------------------------
Principal
Amount Description Value
- --------- ----------- -----
Corestates Bank:
Monthly Variable Rate,
$25,000,000 5.60%, 9/10/98 $ 25,000,000
20,000,000 5.61%, 3/5/99 20,000,000
Creditanstalt Bankverein:
30,000,000 Monthly Variable Rate,
5.51%, 6/3/99 29,980,941
Dean Witter Discover:
10,000,000 Monthly Variable Rate,
6.16%, 7/6/98 10,000,476
Deutsche Bank:
40,000,000 Quarterly Variable Rate,
5.53%, 6/1/99 39,971,181
First National Bank Of Chicago:
25,000,000 Daily Variable Rate,
5.64%, 5/27/99 24,983,455
First Union Bank:
25,000,000 Quarterly Variable Rate,
5.60%, 4/30/99 25,000,000
General Electric Capital Corp:
Quarterly Variable Rate,
5,000,000 5.51%, 11/6/98 4,999,643
10,000,000 5.51%, 11/6/98 10,000,000
15,000,000 5.51%, 11/16/98 15,000,000
10,000,000 5.51%, 11/16/98 10,000,000
Key Bank:
10,000,000 Daily Variable Rate,
5.54%, 1/29/99 9,996,916
KBC Bank:
35,000,000 Quarterly Variable Rate,
5.54%, 6/1/99 34,977,935
Mellon Bank:
20,000,000 Quarterly Variable Rate,
5.80%, 11/17/98 20,000,000
Merrill Lynch & Co.:
Daily Variable Rate,
25,000,000 5.63%, 10/30/98 24,999,174
35,000,000 5.63%, 2/17/99 34,996,713
Monthly Variable Rate,
20,000,000 5.61%, 4/13/99 19,998,433
Morgan Stanley:
35,000,000 Monthly Variable Rate,
5.59%, 11/6/98 35,000,000
Principal
Amount Description Value
- --------- ----------- -----
National City Cleveland:
$20,000,000 Monthly Variable Rate,
5.58%, 3/5/99 $ 19,994,707
Nationsbank Corp:
25,000,000 Daily Variable Rate,
5.70%, 3/18/99 25,015,514
15,000,000 Nordeutsche Landesbank:
Daily Variable Rate,
5.53%, 2/2/99 14,995,716
Societe Generale:
Daily Variable Rate,
14,000,000 5.40%, 8/28/98 13,998,463
40,000,000 5.59%, 2/9/99 39,986,808
10,000,000 5.58%, 3/2/99 9,996,738
Monthly Variable Rate,
30,000,000 5.57%, 5/7/99 29,983,671
Svenska Handelsbanke:
Monthly Variable Rate,
40,000,000 5.53%, 6/1/99 39,974,742
26,000,000 5.53%, 6/2/99 25,982,204
US Bank:
10,000,000 Monthly Variable Rate,
5.57%, 9/17/98 9,999,039
Wachovia Bank:
Monthly Variable Rate,
20,000,000 5.51%, 2/9/99 19,992,913
21,000,000 5.51%, 5/12/99 20,987,497
Walt Disney:
10,000,000 Quarterly Variable Rate,
5.46%, 2/26/99 9,994,412
Westpac Capital Corp.:
5,000,000 Quarterly Variable Rate,
5.54%, 4/9/99 4,998,107
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Total Floating Rate Notes
(Amortized Cost $1,005,622,002) 1,005,622,002
--------------
MEDIUM-TERM NOTES - 1.13%
15,000,000 Bank Of Scotland,
5.62%, 9/22/98 14,998,679
50,000,000 KBC Bank, 5.57%, 7/7/98 50,000,021
--------------
Total Medium-Term Notes
(Amortized Cost $64,998,700) 64,998,700
--------------
See Notes to Financial Statements on Page 13
8
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- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Statement of Net Assets June 30, 1998
- --------------------------------------------------------------------------------
Principal
Amount Description Value
- --------- ----------- -----
REPURCHASE AGREEMENTS - 4.00%
$25,000,000 Tri-Party Repurchase Agreement
with Goldman Sachs, Dated 6/30/98,
6.25%, Principal & Interest in the
amount of $25,004,340, Due 7/1/98,
(Collaterized by FHLMC Bonds,
Par Value of $26,453,110, Coupon rates
of 7.00% to 7.125%, Due from 8/1/08
to 8/1/27, Value of $25,500,000) $ 25,000,000
54,437,500 Tri-Party Repurchase Agreement
with J.P. Morgan, Dated 6/29/98, 5.6%,
Principal & Interest in the amount of
$54,877,839, Due 8/20/98,
(Collaterized by Government National
Mortgage Association Bonds, Par Value
of $143,031,244, Coupon rates of 8.500%
to 9.000%,Due from 11/15/08 to
8/15/27, Value of $55,540,262) 54,437,500
50,000,000 Tri-Party Repurchase Agreement with
NationsBank, Dated 6/11/98, 5.56%,
Principal & Interest in the amount of
$50,247,111, Due 7/13/98,
(Collaterized by Freddie Mac Bonds,
Par Value of $12,057,821, Coupon rates
of 5.5000% to 7.5000%, Due from
12/1/26 to 6/1/28, Value of $11,634,619;
Federal National Mortgage Association
Bonds, Par Value of $40,761,434,
Coupon rates of 5.5000% to 7.5000%,
Due from 9/1/07 to 7/1/13,
Value of $39,522,461) 50,000,000
100,000,000 Open Tri-Party Repurchase Agreement
with Nomura, Dated 6/29/98, 5.55%,
Daily Variable Rate, Principal in the
amount of $100,000,000, Interest
amount varies dependent on rate,
Due 7/1/98, (Collaterized by Government
National Mortgage Association Bonds,
Par Value of $128,705,937, Coupon
rates of 5.5000% to 10.2500%,
Due from 7/15/12 to 6/20/28,
Value of $102,000,000) 100,000,000
--------------
Total Repurchase Agreements
(Amortized Cost $229,437,500) 229,437,500
--------------
YANKEE CERTIFICATES OF DEPOSIT - 6.08%
4,000,000 Australia and New Zealand
Bank Group, 5.58%, 7/23/98 3,999,929
11,000,000 Bank of Montreal,
5.56%, 7/14/98 10,999,976
Bank of Nova Scotia:
7,000,000 5.55%, 7/6/98 6,999,938
35,000,000 5.55%, 7/6/98 35,000,000
Principal
Amount Description Value
- --------- ----------- -----
$20,000,000 Bank of Tokyo-Mitsubishi,
5.73%, 8/10/98 $ 20,000,000
Banque Nationale de Paris:
12,000,000 5.58%, 9/11/98 11,999,517
15,000,000 5.59%, 9/23/98 15,000,000
13,000,000 5.80%, 10/5/98 13,000,786
2,000,000 Barclays Bank,
5.65%, 2/18/99 1,997,651
8,000,000 Bayerische Landesbank,
5.54%, 7/15/98 7,999,867
15,000,000 Canadian Imperial Bank,
5.54%, 7/7/98 14,999,935
2,000,000 Credit Agricole,
5.74%, 4/26/99 1,999,132
Deutsche Bank:
20,000,000 5.58%, 7/28/98 20,000,000
24,000,000 5.58%, 8/6/98 23,999,980
Paribas Finance:
45,000,000 5.59%, 9/17/98 45,000,000
25,000,000 5.59%, 9/24/98 25,000,000
5,000,000 Royal Bank of Canada,
5.56%, 2/26/99 4,998,423
Societe Generale:
7,000,000 5.88%, 7/22/98 7,000,148
5,000,000 5.83%, 7/23/98 4,999,969
35,000,000 Svenska Handelsbanke,
5.59%,9/24/98 35,000,000
5,000,000 Swiss Bank, 5.75%, 5/7/99 4,999,175
8,500,000 Toronto Dominion, 5.57%, 9/3/98 8,499,200
25,000,000 West Deutsche Bank,
5.58%, 7/24/98 25,000,000
--------------
Total Yankee Certificates of Deposit
(Amortized Cost $348,493,626) 348,493,626
--------------
Total Investments
(Amortized Cost $5,735,640,653) 100.11% $5,735,640,653
Liabilities in Excess of Other Assets (0.11)% (6,373 380)
------ --------------
Net Assets 100.00% $5,729,267,273
====== ==============
Shares Outstanding ($0.001 par value per share,
unlimited number of shares of beneficial interest
authorized) 5,729,227,671
==============
Net Asset Value, Offering and Redemption Price
Per Share (net assets divided by shares outstanding) $1.00
=====
- ----------
* Interest rates for commercial paper represent discount rates at the time of
purchase.
See Notes to Financial Statements on Page 13
9
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Statement of Operations For the year ended June 30, 1998
- --------------------------------------------------------------------------------
Investment Income
Interest Income $ 241,732,036
---------------
Expenses
Advisory Fees 4,260,363
Administration and Services Fees 852,019
Printing and Shareholder Reports 10,300
Professional Fees 25,000
Trustees Fees 5,496
Amortization of Organization Expenses 26,400
Miscellaneous Expense 8,685
---------------
Total Expenses 5,188,263
Less: Expenses Absorbed by Bankers Trust (75,882)
---------------
Net Expenses 5,112,381
---------------
Net Investment Income 236,619,655
Realized Gain from Investment Transactions, Net 32,822
---------------
Net Increase in Net Assets from Operations $ 236,652,477
===============
See Notes to Financial Statements on Page 13
10
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period
November 13, 1996
For the (Commencement of
year ended Operations) to
June 30, 1998 June 30, 1997
--------------- ----------------
<S><C>
Increase (Decrease) in Net Assets from:
Operations
Net Investment Income $ 236,619,655 $ 70,228,383
Net Realized Gain from Investment Transactions 32,822 6,780
-------------- ---------------
Net Increase in Net Assets from Operations 236,652,477 70,235,163
-------------- ---------------
Distributions to Shareholders
Net Investment Income (236,612,066) (70,235,972)
-------------- ---------------
Capital Transactions in Shares of Beneficial Interest
(at net asset value of $1.00 per share)
Proceeds from Sales of Shares 11,426,703,500 6,414,724,407
Cost of Shares Redeemed (8,445,532,909) (3,666,667,337)
-------------- ---------------
Net Increase from Capital Transactions in Shares of
Beneficial Interest 2,981,170,591 2,748,057,070
-------------- ---------------
Total Increase in Net Assets 2,981,211,002 2,748,056,261
Net Assets
Beginning of Period 2,748,056,271 10
-------------- ---------------
End of Period (includes undistributed net investment income of
$6,779 for the year ended June 30, 1998 and
overdistributed net investment income of $809 for the
period ended June 30, 1997 $5,729,267,273 $ 2,748,056,271
============== ===============
</TABLE>
See Notes to Financial Statements on Page 13
11
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Financial Highlights
- --------------------------------------------------------------------------------
Contained below are selected data for a share of beneficial interest
outstanding, total investment return, ratios to average net assets and other
supplemental data for the periods indicated for the Institutional Daily Assets
Fund.
<TABLE>
<CAPTION>
For the period
November 13, 1996
For the (Commencement of
year ended Operations) to
June 30, 1998 June 30, 1997
-------------- ----------------
<S><C>
Per Share Operating Performance:
Net Asset Value, Beginning of Period $ 1.00 $ 1.00
---------- ----------
Income from Investment Operations
Net Investment Income 0.06 0.03
Net Realized Gain from Investment Transactions 0.00(2) 0.00(2)
---------- ----------
Total from Investment Operations 0.06 0.03
---------- ----------
Distributions to Shareholders
Net Investment Income (0.06) (0.03)
---------- ----------
Net Asset Value, End of Period $ 1.00 $ 1.00
========== ==========
Total Investment Return 5.71% 3.46%
Supplemental Data and Ratios:
Net Assets, End of Period (000s omitted) $ 5,729,267 $ 2,748,056
Ratios to Average Net Assets:
Net Investment Income 5.55% 5.43%(1)
Expenses 0.12% 0.12%(1)
Decrease Reflected in Above Expense Ratio Due
to Absorption of Expenses by Bankers Trust 0.002% 0.01%
</TABLE>
- ----------
(1) Annualized.
(2) Less than $0.01 per share.
See Notes to Financial Statements on Page 13
12
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 Daily Assets Fund (the "Fund") is one of the institutional funds
offered to "accredited investors" as defined under the Securities Act of 1933
and to institutional investors by the Trust. The Fund commenced operations and
began offering shares of beneficial interest on November 13, 1996. The
Declaration of Trust permits the Board of Trustees (the "Trustees") to issue
beneficial interests in the Fund. The following summarizes the significant
accounting policies of the Fund:
B. Security Valuation
Investments are valued at amortized cost, which is in accordance to rule 2A-7 of
the Investment Company Act of 1940 and approximates the fair value of the Fund'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.
D. Organizational Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized evenly over a five-year period.
E. Dividends
It is the Fund's policy to declare dividends daily and pay them monthly to
shareholders from net investment income. Dividends payable to shareholders are
recorded by the Fund on the ex-dividend date. Distributions of net realized
short-term and long-term capital gains, if any, earned by the Fund will be made
annually.
F. Repurchase Agreements
The Fund may enter into repurchase agreements with financial institutions deemed
to be creditworthy by the Fund's 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
Fund's custodian and pursuant to the terms of the repurchase agreement, 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 security
falls below the value of the repurchase price plus accrued interest, the Fund
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 Fund 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 default or bankruptcy by the seller,
realization and/or retention of the collateral may be subject to legal
proceedings.
G. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code and distribute its income to shareholders. Therefore, no federal income tax
provision is required. The Fund may periodically make reclassifications among
certain of its capital accounts as a result of the timing and characterization
of certain income and capital gains distributions determined annually in
accordance with Federal tax regulations which may differ from generally accepted
accounting principles.
H. 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 Fund has entered in 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
shareholders services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of .02% of the Fund's average daily net assets.
Amounts owed under the Administration and Services Agreement amounted to $98,887
at June 30, 1998, net of waived expenses of $1,002.
The Fund has entered into an Advisory Agreement with Bankers Trust. Under this
Advisory Agreement, the Fund pays Bankers Trust an advisory fee computed daily
and paid monthly at an annual rate of .10% of average daily net assets. At June
30, 1998, amounts owed under the Advisory Agreement amounted to $494,563, net of
waived expenses of $5,008.
The Trust has entered into a Distribution Agreement with Edgewood Services Inc.
("Edgewood"). Under the Distribution Agreement with the Trust, pursuant to Rule
12b-1 of the 1940 Act, Edgewood may seek reimbursement at an annual rate not
exceeding .10% 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 year ended June 30, 1998, there were no reimbursable
expenses incurred under this agreement.
Bankers Trust has voluntarily undertaken to waive its fees and reimburse
expenses of the Fund, to the extent necessary, to limit all expenses to .12% of
the average daily net assets of the Fund. For the year ended June 30, 1998,
expenses of the Fund have been reduced by $75,882.
13
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
The Fund 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 year ended June 30, 1998.
Certain trustees and officers of the Fund are also directors, officers and
employees of Edgewood. None of the trustees so affiliated received compensation
for services as trustees of the Fund. Similarly, none of the Fund's officers
received compensation from the Fund.
Effective August 11, 1998, ICC Distributors, Inc. will replace Edgewood as
distributor of the Trust.
Note 3--Net Assets
Composition of Net Assets
Paid-in Capital $5,729,227,671
Undistributed Net Investment Income 6,780
Undistributed Net Realized Gain from
Investment Transactions 32,822
--------------
Net Assets, June 30, 1998 $5,729,267,273
==============
14
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Trustees of the BT Institutional Funds and Shareholders of Institutional
Daily Assets Fund:
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Institutional Daily Assets Fund (one of the funds comprising BT
Institutional Funds) at June 30, 1998, the results of its operations for the
year then ended, and the changes in its net assets and the financial highlights
for each of the periods presented, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Institutional Daily Assets Fund's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at June 30, 1998 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
July 31, 1998
15
<PAGE>
BT INSTITUTIONAL FUNDS
INSTITUTIONAL DAILY ASSETS FUND
Investment Advisor and Administrator of the Fund
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
Placement Agency
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 the Fund's current prospectus.
----------
STA814200 (6/98)
