JUNE 30, 1999
[LOGO] BT Mutual Funds
Institutional
Daily Assets Fund
Annual Report
Trust: BT Institutional Funds
Investment Advisor: Bankers Trust Company
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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
Portfolio, and our outlook. Included are a complete financial summary of the
Fund's operations and a listing of the Portfolio's holdings.
MARKET ACTIVITY
The major force that dominated the money markets throughout the first half of
the Fund's fiscal year was the global financial crisis that began in Southeast
Asia and spread to countries around the world.
o During the third calendar quarter of 1998, investors focused not only on the
Asian crisis, but also on the political problems in the Clinton
administration.
o This uncertainty was followed by high volatility in the money markets, as
Russia defaulted on its debt, and concerns regarding other foreign nations'
potential problems, in Latin America in particular, surfaced.
o The Federal Reserve Board effectively battled illiquidity and growing risk
aversion with three rapid moves, lowering interest rates a total of 0.75%.
In many ways, the second half of the Fund's fiscal year was an after-shock from
the global financial crisis that had dominated the money markets throughout
1998.
o As the financial markets began to settle down in the first quarter of 1999
and foreign economies, such as Japan, stabilized and showed signs of
recovery, market participants shifted their focus to the strength in the U.S.
economy. Although the economic numbers continued to support the strong
economy/low inflation scenario, such indicators as robust job growth, low
unemployment, and healthy retail sales were perceived as negative for the
markets.
o The economy in the second quarter remained very strong. The Federal Reserve
Board continued to monitor economic indicators but still did not act, though
on May 18th, it adopted a policy bias tilted towards higher interest rates.
Market expectations of Fed tightening, consumer optimism and spending, above
trend economic growth, and reduced concerns over international turmoil
combined to push yields on short-term money market securities significantly
higher.
o Over the semi-annual period, the money market yield curve steepened.
The only real relief to the pressures put on the money markets came in March, as
developments in Kosovo, treasury paydowns and softer data supported the short
end of the market.
o Market participants exhibited steady demand for short-term U.S. securities as
the crisis in Kosovo continued to escalate.
o The budget surplus and expectations of strong April tax receipts also pushed
short-end yields lower.
o Strong performance from oil and other commodities kept market participants
from buying long-term securities, as inflation fears began to heighten.
As generally expected, at their June 30 meeting, the Federal Reserve Board voted
to raise the targeted federal funds rate by 0.25% to 5.00%, on concerns that a
strong economy would rekindle inflation.
o This action reversed the trend of monetary policy easing through a series of
cuts in the second half of 1998.
o While there is still little evidence of inflation, this monetary policy
tightening was intended to make sure the economy does not get derailed by a
spiral of rising wages and prices.
o The Federal Reserve Board changed its bias to neutral, which helped the U.S.
fixed income markets stage a small rally on the last day of June.
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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As of Annualized 7 Day Annualized 7 Day
June 30, 1999 Current Yield Effective Yield
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Institutional
Daily Assets Fund(1) 4.93% 5.05%
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IBC First Tier-Institutional
Only Money Funds
Average 4.69% 4.80%
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During the first half of the fiscal year, we began to anticipate the Federal
Reserve Board's interest rate cuts by extending the Fund's average maturity. We
were careful to add exposure to high quality counterparties, while limiting
exposure to those we felt might experience difficulties in the worsening Asian
crisis.
For most of the second half of the fiscal year, we maintained a slightly long to
the benchmark weighted average maturity position, taking advantage of the
steeper yield curve and neutral Federal Reserve Board. Since the money markets
had already priced in at least one interest rate hike by the time the Fed
actually raised rates at the end of June, we were able to take advantage of the
higher rates and extend the portfolio at that time.
(1) Past performance is not indicative of future results. Yields will vary.
Yield quotes 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
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Diversification of Portfolio Investments
By Asset Type as of June 30, 1999
(percentages are based on net assets)
[GRAPHIC]
In the printed version of the document, a pie chart appears which depicts the
following plot points:
Eurodollar Time Eurodollar Certificates
Deposits 24% of Deposit 11%
Floating Rate Commercial
Notes 14% Paper 41%
Yankee
Certificates of
Deposit 8% Other 2%
We also began to implement our strategy for year-end 1999 by taking advantage of
the steep yield curve caused by issuers extending their maturities into next
year to avoid potential Y2K problems.
MANAGER OUTLOOK
Looking ahead for the near term, the U.S. economy looks very healthy indeed.
However, while inflation appears to remain dormant, we should recognize that
there have been numerous indicators released that are frequently considered
harbingers of future inflation. For example:
o unemployment remains at a thirty-year low
o economic growth has been inordinately robust in historical terms
o oil prices are rebounding, and
o troubled Pacific Rim and other emerging market economies appear to have
recovered from recent turmoil.
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Status at June 30, 1999
Seven day effective yield: 5.05%
Average maturity: 43 days
Net assets: $7,805 million
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The Federal Reserve Board itself has suggested that its outlook on interest
rates has changed from a bias toward higher rates to neutral. Of course, given
the tight labor market and this other economic and price data, the policy makers
also said they must "be especially alert." Thus, we, as many analysts do,
believe that there may be further interest rate increases on the horizon.
Clearly, the degree of tightening and the timing of the Federal Reserve Board's
next moves, if any, will be key to U.S. money market performance during the
second half of 1999, however supply and demand factors will likely be even more
significant.
For example, we believe issuance of short-term paper may be quite light in the
latter part of December and early January. Thus, we intend to continue to
implement a barbell strategy within the Daily Assets Fund by purchasing fixed
and floating rate securities maturing in the first quarter of 2000 as
opportunities present themselves.
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
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Darlene M. Rasel
Portfolio Manager of the Institutional Daily Assets Fund
June 30, 1999
4
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Institutional Daily Assets Fund
Statement of Net Assets June 30, 1999
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Principal
Amount Description Value
- ---------- ----------- -----
EURODOLLAR CERTIFICATES
OF DEPOSIT - 11.53%
Abbey National PLC:
$15,000,000 4.92%, 07/15/99 ......... $ 15,000,000
25,000,000 4.93%, 10/26/99 ......... 25,000,000
18,000,000 5.44%, 03/13/00 ......... 18,000,000
Bank of Austria:
10,000,000 4.88%, 07/22/99 ......... 10,000,035
25,000,000 5.01%, 01/10/00 ......... 24,913,892
Bank of Scotland:
15,000,000 4.94%, 08/11/99 ......... 14,999,318
50,000,000 4.95%, 08/25/99 ......... 50,000,000
Barclays Bank PLC,
40,000,000 4.875%, 08/16/99 ......... 40,000,252
Bayerische Landesbank,
15,000,000 4.99%, 01/07/00 ......... 14,952,856
Cariplo,
50,000,000 4.89%, 07/12/99 ......... 50,000,000
Commerzbank,
15,000,000 5.21%, 02/18/00 ......... 14,976,914
Credit Agricole,
20,000,000 4.95%, 10/12/99 ......... 20,000,558
Halifax PLC,
45,000,000 5.48%, 01/14/00 ......... 45,002,379
Internationale Nederlanden
U.S. Funding Corp:
50,000,000 4.92%, 07/30/99 ......... 50,000,581
30,000,000 5.219%, 07/30/99 ......... 30,000,000
27,000,000 4.94%, 08/16/99 ......... 26,999,526
15,000,000 4.965%, 08/23/99 ......... 15,000,215
30,000,000 5.01%, 08/31/99 ......... 30,000,496
35,000,000 4.975%, 09/17/99 ......... 35,000,689
45,000,000 4.975%, 09/22/99 ......... 44,999,285
8,000,000 4.975%, 11/10/99 ......... 8,000,429
Morgan Guaranty,
33,000,000 4.95%, 11/10/99 ......... 32,998,739
National Australia Bank,
30,000,000 4.96%, 11/12/99 ......... 30,000,000
Norddeutsche Landesbank:
25,000,000 5.01%, 09/08/99 ......... 25,000,473
25,000,000 4.975%, 11/10/99 ......... 25,000,000
Principal
Amount Description Value
- ---------- ----------- -----
Rabobank Nederland:
$20,000,000 4.87%, 07/26/99 ......... $ 20,000,136
5,000,000 5.14%, 03/20/00 ......... 4,998,612
Westdeutsche Landesbank:
30,000,000 4.895%, 07/08/99 ......... 30,000,000
9,000,000 4.88%, 07/26/99 ......... 9,000,054
40,000,000 4.89%, 07/26/99 ......... 40,000,000
25,000,000 4.92%, 08/09/99 ......... 24,998,393
40,000,000 4.885%, 08/16/99 ......... 40,000,000
35,000,000 4.96%, 08/25/99 ......... 35,000,000
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Total Eurodollar Certificates of Deposit
(Amortized Cost $899,843,832) ......... 899,843,832
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YANKEE CERTIFICATES
OF DEPOSIT - 8.29%
Bank of Austria,
20,000,000 5.21%, 05/11/00 ......... 19,991,694
Banque Nationale de Paris:
30,000,000 4.88%, 07/02/99 ......... 29,999,986
45,000,000 4.88%, 07/02/99 ......... 44,999,994
Barclays Bank PLC,
25,000,000 4.87%, 07/06/99 ......... 25,000,017
Bayerische Hypotheka
Vereinsbank AG:
15,000,000 5.10%, 04/12/00 ......... 14,990,353
5,000,000 5.15%, 04/28/00 ......... 4,998,406
Bayerische Landesbank,
75,000,000 4.88%, 07/26/99 ......... 74,995,757
Canadian Imperial Bank,
24,000,000 5.27%, 03/03/00 ......... 23,986,003
Commerzbank:
11,000,000 5.01%, 01/10/00 ......... 10,999,439
10,000,000 4.99%, 02/02/00 ......... 9,988,680
25,000,000 5.16%, 02/25/00 ......... 24,993,694
25,000,000 5.20%, 03/15/00 ......... 24,998,170
Credit Agricole,
20,000,000 5.285%, 03/01/00 ......... 20,010,589
Credit Commercial de France,
55,000,000 4.85%, 07/12/99 ......... 55,000,000
Lloyds Bank PLC,
37,000,000 4.94%, 07/12/99 ......... 37,000,000
See Notes to Financial Statements.
5
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Institutional Daily Assets Fund
Statement of Net Assets June 30, 1999
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Principal
Amount Description Value
- ---------- ----------- -----
National Westminister Bank PLC,
$10,000,000 5.50%, 01/14/00 ......... $ 10,000,000
Norddeutsche Landesbank:
20,000,000 5.66%, 07/27/99 ......... 20,008,078
10,000,000 5.35%, 05/24/00 ......... 9,994,821
Paribas SA,
25,000,000 4.95%, 08/24/99 ......... 25,000,000
Royal Bank of Canada,
20,000,000 5.70%, 07/03/00 ......... 19,990,345
Societe Generale,
50,000,000 5.32%, 10/04/99 ......... 50,001,288
Toronto Dominion Bank:
20,000,000 5.10%, 02/22/00 ......... 19,994,393
25,000,000 5.14%, 04/26/00 ......... 24,988,128
Union Bank of Switzerland:
25,000,000 5.15%, 02/25/00 ......... 24,993,693
20,000,000 5.18%, 03/15/00 ......... 19,989,115
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Total Yankee Certificates of Deposit
(Amortized Cost $646,912,643)......... 646,912,643
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CERTIFICATE OF DEPOSIT - 0.13%
Wachovia Bank,
4.90%, 01/10/00
10,000,000 (Amortized Cost $9,993,056) 9,993,056
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FLOATING RATE NOTES - 14.17%
American Express Centurion Bank:
Monthly Variable Rate,
10,000,000 4.93%, 02/14/00 ......... 10,003,555
20,000,000 4.90%, 03/15/00 ......... 20,000,000
Asset Securitization:
Quarterly Variable Rate,
35,000,000 5.06%, 03/06/00 ......... 35,000,000
40,000,000 5.095%, 03/10/00 ......... 39,997,264
Bank of Austria:
Monthly Variable Rate,
25,000,000 5.547%, 07/27/99 ......... 24,998,951
50,000,000 4.839%, 03/15/00 ......... 49,975,592
Bank of Scotland:
Monthly Variable Rate,
13,000,000 4.811%, 05/10/00 ......... 12,992,299
50,000,000 4.811%, 05/11/00 ......... 49,974,451
Banque Nationale de Paris:
Monthly Variable Rate,
35,000,000 5.541%, 07/29/99 ......... 34,998,409
Principal
Amount Description Value
- ---------- ----------- -----
Bayerische Hypotheka Vereinsbank, AG:
Monthly Variable Rate,
$50,000,000 4.834%, 04/13/00 ......... $ 49,972,555
25,000,000 4.848%, 04/20/00 ......... 24,989,104
25,000,000 4.846%, 04/25/00 ......... 24,989,925
25,000,000 4.813%, 05/15/00 ......... 24,984,830
10,000,000 4.823%, 05/15/00 ......... 9,994,394
Bayerische Landesbank:
Monthly Variable Rate,
50,000,000 4.821%, 04/10/00 ......... 49,972,916
Chase Manhattan Bank:
Quarterly Variable Rate,
20,000,000 5.204%, 02/28/00 ......... 20,032,984
Colgate-Palmolive:
Quarterly Variable Rate,
30,000,000 5.528%, 08/25/99 ......... 29,996,451
Comerica Bank:
Monthly Variable Rate,
25,000,000 5.536%, 07/13/99 ......... 24,999,514
Corporate Receivable:
Quarterly Variable Rate,
20,000,000 5.065%, 02/16/00 ......... 20,000,000
Credit Agricole:
Monthly Variable Rate,
20,000,000 4.90%, 03/16/00 ......... 19,990,199
First Union Corp.:
Quarterly Variable Rate,
10,000,000 5.688%, 08/18/99 ......... 10,000,955
10,000,000 5.208%, 10/20/99 ......... 10,000,000
General Electric Capital Corp.:
Quarterly Variable Rate,
20,000,000 5.554%, 09/08/99 ......... 20,000,000
50,000,000 4.95%, 04/12/00 ......... 50,000,000
38,000,000 4.95%, 05/12/00 ......... 38,000,000
J.P. Morgan Securities Inc:
Daily Variable Rate,
20,000,000 4.976%, 03/02/00 ......... 20,000,769
40,000,000 4.87%, 06/23/00 ......... 40,000,000
Key Bank:
Monthly Variable Rate,
25,000,000 5.03%, 06/26/00 ......... 24,985,420
Morgan Guaranty Trust Co. of N.Y.:
Monthly Variable Rate,
15,000,000 5.544%, 09/27/99 ......... 14,998,596
See Notes to Financial Statements.
6
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Institutional Daily Assets Fund
Statement of Net Assets June 30, 1999
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Principal
Amount Description Value
- ---------- ----------- -----
Northern Trust Co.:
Monthly Variable Rate,
$37,000,000 5.515%, 09/08/99......... $ 36,995,803
Norwest Corp.:
Quarterly Variable Rate,
28,000,000 5.45%, 09/20/99 ......... 27,999,711
PNC Bank:
Monthly Variable Rate,
10,000,000 4.869%, 01/31/00 ......... 9,997,685
Royal Bank of Canada:
Monthly Variable Rate,
40,000,000 5.52%, 07/14/99 ......... 39,999,003
Societe Generale:
Monthly Variable Rate,
50,000,000 4.895%, 03/03/00 ......... 49,978,791
35,000,000 4.825%, 05/15/00 ......... 34,981,747
25,000,000 4.828%, 05/15/00 ......... 24,990,428
US Bank:
Monthly Variable Rate,
20,000,000 5.606%, 09/15/99 ......... 19,999,590
Wells Fargo Bank:
Quarterly Variable Rate,
25,000,000 4.88%, 04/26/00 ......... 24,984,189
Westpac Capital Corp.:
Quarterly Variable Rate,
30,000,000 4.816%, 04/17/00 ......... 29,985,728
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Total Floating Rate - Notes
(Amortized Cost $1,105,761,808)....... 1,105,761,808
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EURODOLLAR TIME
DEPOSITS - 24.36%
ABN Amro:
25,000,000 5.01%, 07/14/99 ......... 25,000,000
50,000,000 4.98%, 11/12/99 ......... 50,000,000
Banque Bruxelles Lambert,
35,000,000 5.00%, 10/06/99 ......... 35,000,000
Bayerische Landesbank:
35,000,000 4.96%, 10/12/99 ......... 35,000,000
40,000,000 4.95%, 10/29/99 ......... 40,000,000
Caisse des Depots,
300,000,000 5.75%, 07/01/99 ......... 300,000,000
Commerzbank,
50,000,000 4.92%, 07/08/99 ......... 50,000,000
Principal
Amount Description Value
- ---------- ----------- -----
Credit Commercial de France,
$30,000,000 4.94%, 08/31/99 ......... $ 30,000,000
Credit Suisse First Boston,
250,000,000 6.125%, 07/01/99 ......... 250,000,000
Den Danske Bank,
40,000,000 4.955%, 08/27/99 ......... 40,000,000
Dresdner Bank AG,
200,000,000 5.75%, 07/01/99 ......... 200,000,000
Key Bank:
100,000,000 5.00%, 07/01/99 ......... 100,000,000
100,000,000 5.50%, 07/01/99 ......... 100,000,000
Landesbank Hessen Thuringen,
40,000,000 4.95%, 07/12/99 ......... 40,000,000
National Australia Bank Ltd,
200,000,000 5.75%, 07/01/99 ......... 200,000,000
Norddeutsche Landesbank:
25,000,000 4.938%, 09/14/99 ......... 25,000,000
30,000,000 4.938%, 09/30/99 ......... 30,000,000
Societe Generale,
91,382,809 4.75%, 07/01/99 ......... 91,382,809
Toronto Dominion Bank,
75,000,000 5.75%, 07/01/99 ......... 75,000,000
Westdeutsche Landesbank:
150,000,000 5.875%, 07/01/99 ......... 150,000,000
35,000,000 4.93%, 07/22/99 ......... 35,000,000
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Total Eurodollar Time Deposits
(Amortized Cost $1,901,382,809)....... 1,901,382,809
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COMMERCIAL PAPER - 41.15%(1)
Abbey National Treasury Services PLC:
10,000,000 4.82%, 07/08/99 ......... 9,990,628
16,000,000 5.20%, 08/23/99 ......... 15,877,511
Alcatel Alsthom, Inc.,
15,000,000 4.86%, 09/08/99 ......... 14,860,275
AlliedSignal Inc.,
15,000,000 5.30%, 02/01/00 ......... 14,525,208
American General Finance Corp.,
15,000,000 4.83%, 07/26/99 ......... 14,949,687
American Home Products Corp.,
20,000,000 4.85%, 07/19/99 ......... 19,951,500
See Notes to Financial Statements.
7
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Institutional Daily Assets Fund
Statement of Net Assets June 30, 1999
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Principal
Amount Description Value
- ---------- ----------- -----
Asset Securitization:
$17,000,000 4.94%, 07/12/99 ......... $ 16,974,339
39,000,000 5.20%, 07/14/99 ......... 38,926,767
67,000,000 5.05%, 08/16/99 ......... 66,567,664
22,000,000 5.25%, 08/31/99 ......... 21,804,292
Associates Corp.:
20,000,000 4.86%, 07/27/99 ......... 19,929,800
50,000,000 5.08%, 09/23/99 ......... 49,407,333
AT&T Corp.,
20,000,000 4.82%, 07/16/99 ......... 19,959,833
Bank of America:
8,000,000 4.75%, 07/27/99 ......... 7,972,556
25,000,000 4.82%, 08/16/99 ......... 24,846,028
27,000,000 4.83%, 11/09/99 ......... 26,525,452
10,000,000 4.84%, 11/17/99 ......... 9,813,122
Bank of New York,
10,000,000 5.05%, 09/02/99 ......... 9,911,625
BBL North America Inc.:
19,000,000 4.84%, 07/09/99 ......... 18,979,611
15,000,000 4.83%, 07/12/99 ......... 14,977,862
10,000,000 5.20%, 07/28/99 ......... 9,961,000
BP America,
105,000,000 5.80%, 07/01/99 ......... 105,000,000
British Gas Capital Corp.,
10,000,000 4.88%, 07/07/99 ......... 9,991,867
BTR Dunlop Finance, Inc.,
25,000,000 5.035%, 08/13/99 ......... 24,849,649
Corporate Assets Funding Co., Inc.:
30,000,000 4.82%, 07/21/99 ......... 29,919,667
25,000,000 4.82%, 07/22/99 ......... 24,929,708
15,000,000 4.86%, 07/26/99 ......... 14,949,375
40,000,000 5.12%, 08/02/99 ......... 39,817,956
75,000,000 5.05%, 08/16/99 ......... 74,504,094
38,000,000 4.82%, 08/23/99 ......... 37,726,814
Caterpillar Finance,
30,000,000 5.30%, 07/13/99 ......... 29,947,000
Chase Manhattan Bank,
28,000,000 4.83%, 09/08/99 ......... 27,740,790
Ciesco LP.,
30,000,000 5.22%, 08/20/99 ......... 29,782,500
Clorox Co.,
47,000,000 5.75%, 07/01/99 ......... 47,000,000
Corporate Receivables Corp.:
35,000,000 5.00%, 07/15/99 ......... 34,931,944
20,000,000 4.86%, 07/16/99 ......... 19,959,500
28,000,000 4.93%, 08/12/99 ......... 27,835,033
Principal
Amount Description Value
- ---------- ----------- -----
$12,000,000 5.05%, 08/13/99 ......... $ 11,927,617
15,000,000 4.88%, 08/16/99 ......... 14,906,467
30,000,000 5.24%, 08/17/99 ......... 29,794,767
83,000,000 5.06%, 08/24/99 ......... 82,359,530
Credit Suisse First Boston,
17,000,000 5.07%, 09/13/99 ......... 16,822,832
Cregem:
15,000,000 4.80%, 07/13/99 ......... 14,976,000
33,000,000 4.84%, 09/10/99 ......... 32,684,997
Delaware Funding Corp.:
40,000,000 5.05%, 07/23/99 ......... 39,876,556
40,000,000 5.05%, 07/30/99 ......... 39,837,278
Diageo Capital PLC:
75,000,000 5.75%, 07/01/99 ......... 75,000,000
28,000,000 4.85%, 07/06/99 ......... 27,981,139
20,000,000 4.81%, 08/16/99 ......... 19,877,078
27,000,000 4.84%, 09/24/99 ......... 26,691,686
Ford Motor Credit:
50,000,000 5.65%, 07/01/99 ......... 50,000,000
25,000,000 4.82%, 07/09/99 ......... 24,973,222
30,000,000 4.98%, 07/19/99 ......... 29,925,300
30,000,000 5.03%, 08/17/99 ......... 29,802,992
General Electric Capital Corp.:
35,000,000 4.88%, 07/06/99 ......... 34,976,278
10,000,000 4.89%, 07/22/99 ......... 9,971,475
20,000,000 4.82%, 07/23/99 ......... 19,941,089
10,000,000 4.83%, 07/28/99 ......... 9,963,775
14,000,000 4.78%, 08/02/99 ......... 13,940,516
25,000,000 4.83%, 09/30/99 ......... 24,694,771
33,000,000 4.95%, 02/07/00 ......... 31,997,212
General Electric Capital Corp.:
International Fund,
10,000,000 5.33%, 01/26/00 ......... 9,690,564
40,000,000 5.31%, 02/15/00 ......... 38,648,900
General Motors Acceptance
Corp.:
20,000,000 4.88%, 07/08/99 ......... 19,981,022
45,000,000 4.97%, 07/16/99 ......... 44,906,812
45,000,000 4.87%, 07/29/99 ......... 44,829,550
13,000,000 4.87%, 08/04/99 ......... 12,940,207
17,000,000 4.94%, 08/16/99 ......... 16,892,692
20,000,000 5.22%, 01/31/00 ......... 19,379,400
Generale Funding:
33,000,000 4.83%, 07/30/99 ......... 32,871,602
40,000,000 5.20%, 08/02/99 ......... 39,815,111
45,000,000 4.82%, 08/05/99 ......... 44,789,125
25,000,000 4.88%, 08/17/99 ......... 24,840,722
45,000,000 5.07%, 09/13/99 ......... 44,524,447
10,000,000 5.25%, 01/14/00 ......... 9,712,708
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Statement of Net Assets June 30, 1999
- --------------------------------------------------------------------------------
Principal
Amount Description Value
- ---------- ----------- -----
Glaxo Wellcome PLC:
$36,000,000 4.80%, 07/29/99 ......... $ 35,865,600
14,000,000 4.82%, 08/10/99 ......... 13,925,022
Internationale Nederlanden
U.S. Funding Corp.,
45,000,000 4.84%, 07/06/99 ......... 44,969,750
J.P. Morgan, Inc.:
35,000,000 4.82%, 07/06/99 ......... 34,976,569
10,000,000 4.82%, 07/15/99 ......... 9,981,256
42,000,000 5.03%, 08/16/99 ......... 41,730,057
23,000,000 4.90%, 09/15/99 ......... 22,762,078
25,000,000 4.83%, 10/08/99 ......... 24,667,937
Merrill Lynch & Co.,
17,000,000 4.815%, 07/23/99 ......... 16,949,978
MetLife Funding, Inc.,
25,000,000 4.87%, 07/06/99 ......... 24,983,090
Motorola, Inc.,
26,200,000 5.20%, 08/05/99 ......... 26,067,544
National Rural Utilities CFC.,
17,000,000 4.82%, 07/23/99 ......... 16,949,926
Paccar Financial Corp.,
8,441,000 5.17%, 09/24/99 ......... 8,337,961
Panasonic Finance, Inc.,
60,000,000 5.80%, 07/01/99 ......... 60,000,000
Pfizer, Inc.:
66,650,000 4.95%, 07/12/99 ......... 66,549,192
45,000,000 4.98%, 07/19/99 ......... 44,887,950
30,000,000 4.98%, 07/22/99 ......... 29,912,850
Quincy Capital Corp.:
24,276,000 4.87%, 07/08/99 ......... 24,253,012
21,245,000 4.87%, 07/09/99 ......... 21,222,008
25,000,000 4.86%, 07/23/99 ......... 24,925,750
20,000,000 5.06%, 08/11/99 ......... 19,884,744
16,000,000 5.08%, 08/17/99 ......... 15,893,884
Receivables Capital Corp.:
28,000,000 4.91%, 07/06/99 ......... 27,980,906
23,120,000 5.34%, 07/06/99 ......... 23,102,853
15,000,000 4.82%, 07/09/99 ......... 14,983,933
Repsol International Finance B.V.,
30,000,000 4.87%, 07/07/99 ......... 29,975,650
Union Bank of Switzerland,
200,000,000 5.75%, 07/01/99 ......... 200,000,000
Vermont America,
13,947,000 5.20%, 07/26/99 ......... 13,896,636
Principal
Amount Description Value
- ---------- ----------- -----
Windmill Funding Corp.:
$ 20,000,000 4.89%, 07/01/99 ......... $ 20,000,000
10,000,000 4.88%, 07/09/99 ......... 9,989,156
12,000,000 4.90%, 07/12/99 ......... 11,981,960
28,000,000 4.93%, 07/13/99 ......... 27,953,987
35,000,000 4.82%, 07/14/99 ......... 34,939,081
25,000,000 5.03%, 07/28/99 ......... 24,905,688
--------------
TOTAL COMMERCIAL PAPER
(Amortized Cost $3,211,749,437)....... $3,211,749,437
--------------
FUNDING AGREEMENTS - 1.60%
First Allmerica Financial Life Insurance Co.:
Monthly Variable Rate,
45,000,000 4.956%, 04/17/00(2)....... 45,000,000
General Electric Life & Annuity:
Monthly Variable Rate,
25,000,000 4.968%, 06/01/00(2)....... 25,000,000
Transamerica Life:
Daily Variable Rate,
25,000,000 5.28%, 03/02/00 ......... 25,000,000
Travelers Insurance:
Monthly Variable Rate,
30,000,000 4.978%, 02/23/00 ......... 30,000,000
--------------
Total Funding Agreements
(Amortized Cost $125,000,000) $ 125,000,000
--------------
SYNTHETIC TRUST
STRUCTURE - 0.40%
31,574,976 Steers Synthetic Trust Structure,
4.939%, 03/27/00(2) 144A(3)
(Amortized Cost $31,574,976) 31,574,976
--------------
Total Investments
(Amortized Cost $7,932,218,562) 101.64% $7,932,218,562
Liabilities in Excess of
Other Assets ...................(1.64)% (127,643,680)
------ --------------
Net Assets ........................100.00% $7,804,574,882
====== ==============
Shares Outstanding ($0.001 par value
per share, unlimited number of shares
of beneficial interest authorized) ....... 7,804,431,950
==============
Net Asset Value Offering and Redemption
Price Per Share
(Net assets divided by shares outstanding) ....... $1.00
=====
- ------------
(1) Interest rates for commercial paper represent discount rates at the time of
purchase.
(2) Illiquid security.
(3) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registrations,
normally to qualified Institutional buyers. Total of security at period end
amounts to .40% of net assets.
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Statement of Operations For the year ended June 30, 1999
- --------------------------------------------------------------------------------
Investment Income
Interest Income ....................................... $ 332,802,620
-------------
Expenses
Advisory Fees ......................................... 6,368,995
Administration and Services Fees ...................... 1,273,799
Amortization of Organization Expenses ................. 27,964
Professional Fees ..................................... 23,803
Printing and Shareholder Reports ...................... 15,182
Trustees Fees ......................................... 7,401
Miscellaneous ......................................... 41,244
-------------
Total Expenses ........................................ 7,758,388
Less: Fees Waived by Bankers Trust .................... (115,594)
-------------
Net Expenses ....................................... 7,642,794
-------------
Net Investment Income .................................... 325,159,826
Realized Gain from Investment Transactions ............... 59,458
-------------
Net Increase in Assets from Operations ................... $ 325,219,284
=============
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the For the
year ended year ended
June 30, 1999 June 30, 1998
---------------- ----------------
<S> <C> <C>
Increase (Decrease) in Net Assets from:
Operations
Net Investment Income ........................................................... $ 325,159,826 $ 236,619,655
Net Realized Gain from Investment Transactions .................................. 59,458 32,822
---------------- ----------------
Net Increase in Net Assets from Operations ......................................... 325,219,284 236,652,477
---------------- ----------------
Distributions to Shareholders
Net Investment Income ........................................................... (325,115,954) (236,612,066)
---------------- ----------------
Capital Transactions in Shares of Beneficial Interest
(at net asset value of $1.00 per share)
Proceeds from Sales of Shares ................................................... 17,445,099,092 11,426,703,500
----------------
Cost of Shares Sold ............................................................. (15,369,894,813) (8,445,532,909)
---------------- ----------------
Net Increase from Capital Transactions in Shares of
Beneficial Interest ............................................................. 2,075,204,279 2,981,170,591
---------------- ----------------
Total Increase in Net Assets ....................................................... 2,075,307,609 2,981,211,002
Net Assets
Beginning of Year .................................................................. 5,729,267,273 2,748,056,271
---------------- ----------------
End of Year (includes undistributed net investment income of $83,474 and
$6,779 at June 30, 1999 and 1998, respectively) ................................ $ 7,804,574,882 $ 5,729,267,273
================ ================
</TABLE>
See Notes to Financial Statements.
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
For the For the November 13, 1996(1)
year ended year ended to
June 30, 1999 June 30, 1998 June 30, 1997
------------- ------------- --------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value, Beginning of Period ............................. $ 1.00 $ 1.00 $ 1.00
---------- ---------- ----------
Income from Investment Operations
Net Investment Income ......................................... 0.05 0.06 0.03
Net Realized Gain
from Investment Transactions ................................ 0.00(2) 0.00(2) 0.00(2)
---------- ---------- ----------
Total from Investment Operations ................................. 0.05 0.06 0.03
---------- ---------- ----------
Distributions to Shareholders
Net Investment Income ......................................... (0.05) (0.06) (0.03)
---------- ---------- ----------
Net Asset Value, End of Period ................................... $ 1.00 $ 1.00 $ 1.00
========== ========== ==========
Total Investment Return .......................................... 5.25% 5.71% 3.46%
Supplemental Data and Ratios:
Net Assets, End of Period (000's omitted) ..................... $7,804,575 $5,729,267 $2,748,056
Ratios to Average Net Assets:
Net Investment Income ...................................... 5.11% 5.55% 5.43%(3)
Expenses ................................................... 0.12% 0.12% 0.12%(3)
Decrease Reflected in Above Expense Ratios Due
to Reimbursed Expenses and/or Fees Waived
by Bankers Trust ........................................ 0.002% 0.002% 0.01%
</TABLE>
- ----------------
(1) Commencement of operations.
(2) Less than $0.01 per share.
(3) Annualized.
See Notes to Financial Statements.
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 with 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
accretion of discount on investments. Realized gains and losses from securities
transactions are recorded on the identified cost basis.
D. Organization Expenses
Costs incurred by the Fund in connection with its organization and initial
registration are being amortized evenly over a five-year period.
E. Distributions
It is the Fund's policy to declare dividends daily and distribute them monthly
to shareholders from net investment income. Dividends and distributions payable
to shareholders are recorded by the Fund on the ex-dividend date. Distributions
of net realized short-term and long-term capital gains, if any, earned by the
Fund are made annually to the extent they exceed capital loss carryforwards.
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 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.
The Fund may enter into tri-party repurchase agreements with broker-dealers and
domestic banks. A repurchase agreement is a short-term investment in which the
Fund buys a debt security that the broker agrees to purchase at a set time and
price. The third party, which is the broker's custodial bank, holds the
collateral in a separate account until the repurchase agreement matures. The
agreement ensures that the collateral's market value, including any accrued
interest, is sufficient if the broker defaults.
G. Federal Income Taxes
It is the Fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and
distribute all of its taxable income to shareholders. Therefore, no federal
income tax provision is required.
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 into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of .02% of the Fund's average daily net assets. For
the year ended June 30, 1999, Administrative and Service fees amounted to
$1,273,799, of which $113,315 were payable at the end of the year.
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. For the
year ended June 30, 1999, advisory fees amounted to $6,368,995, of which
$485,131 was payable at the end of the year.
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.
The Fund is a participant with other affiliated entities in a revolving credit
facility in the amount of $100,000,000 which expires April 29, 2000. A
commitment fee of .10% per annum
13
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 facility will bear interest at a rate per annum equal to the
Federal Funds Rate plus .50%. No amounts were drawn down or outstanding under
the credit facility as of and for the year ended June 30, 1999.
Bankers Trust Company is a wholly owned subsidiary of Bankers Trust Corporation.
In November 1998 Bankers Trust Corporation ("BT Corp.") and Deutsche Bank AG
("Deutsche Bank") entered into an Agreement and Plan of Merger which was
consummated on June 4, 1999. As a result of the transaction, BT Corp. became a
wholly-owned subsidiary of Deutsche Bank.
Note 3--Net Assets
Composition of Net Assets
Paid-in Capital $7,804,431,950
Undistributed Net Investment Income 83,474
Accumulated Net Realized Gain from
Investment Transactions 59,458
--------------
Net Assets, June 30, 1999 $7,804,574,882
==============
14
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Trustees of 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, hereafter referred to as the "Fund") at June 30, 1999, and
the results of its operations, the changes in its net assets and the financial
highlights for each of the fiscal 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 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, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed herein.
PricewaterhouseCoopers LLP
Baltimore, Maryland
July 30, 1999
15
<PAGE>
Investment Advisor and Administrator of the Portfolio
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
Distributor
ICC DISTRIBUTORS, INC.
Two Portland Square
Portland, ME 04101
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
[LOGO OF BANKERS TRUST]
For information on how to invest, shareholder account information and current
price and yield information, please contact your relationship manager or write
to us at: BT Service Center
P.O. Box 419210
Kansas City, MO 64141-6210
or call our toll-free number: 1-800-368-4031
This report must be preceded or accompanied by a current prospectus for the
Fund.
Institutional Daily Assets Fund
BT Institutional Funds 814ANN (6/99)
Distributed by:
ICC Distributors, Inc.
Two Portland Square
Portland, ME 04101
