o BT INSTITUTIONAL FUNDS o
INSTITUTIONAL
DAILY ASSETS FUND
SEMI-ANNUAL REPORT
------------------
DECEMBER 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
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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 semi-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 MONEY MARKETS WERE DOMINATED THROUGH THE SEMI-ANNUAL PERIOD BY THE GLOBAL
FINANCIAL CRISIS, WHICH BEGAN IN SOUTHEAST ASIA AND SPREAD TO COUNTRIES AROUND
THE WORLD. Russia devalued its currency and defaulted on its domestic debt,
despite an International Monetary Fund (IMF) bailout attempt; weak commodity
prices dampened the economic outlook for Latin America in general and Brazil in
particular; and economic instability in Asia was ongoing. All of this buoyed a
U.S. Treasury rally.
CONCERNS OVER THE IMPACT OF FOREIGN TURMOIL ON U.S. ECONOMIC GROWTH ALSO
SURFACED DURING THE SECOND HALF OF 1998. Investors began to focus more heavily
on the Asian contagion and on the political problems in the Clinton
administration. In addition, a major leveraged hedge fund went bankrupt,
requiring a bailout by a consortium of Wall Street firms. The announcement of
this Fed-orchestrated bailout package forced corporate credit spreads to widen
significantly and liquidity to decrease. This led, in turn, to a further rally
in U.S. Treasuries plus significant buying of high quality domestic paper.
CITING BOTH GLOBAL AND U.S. DEVELOPMENTS AND THEIR PROSPECTS ON THE U.S.
ECONOMY, THE FEDERAL RESERVE BOARD EFFECTIVELY BATTLED INVESTORS' GROWING RISK
AVERSION AND ESCALATING ILLIQUIDITY WITH THREE RAPID CUTS OF INTEREST RATES.
These easing moves of 0.25% each--on September 29, October 15, and November
17--restored the financial markets to a more peaceful state and allowed the
money markets, in particular, to finish out the year on a relatively calm note.
Money markets also benefited from volatility in the equity markets. This
volatility buoyed a rally in the U.S. fixed income market in general and strong
cash inflows into the money markets in particular. Investors moved assets from
equity funds, both domestic and foreign, seeking both the greater liquidity and
the perceived safety of the money markets. Also fueling positive fixed income
market sentiment toward the end of the year was a plunge in oil prices and other
commodities to their lowest level in decades.
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 highly competitive yields in the Institutional Daily Assets Fund.
PERIOD ENDED ANNUALIZED 7 DAY ANNUALIZED 7 DAY
DECEMBER 31, 1998 CURRENT YIELD EFFECTIVE YIELD
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Institutional
Daily Assets Fund* 5.11% 5.24%
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IBC First Tier-Institutional
Only Money Funds Average 4.87% 4.99%
In anticipation of Federal Reserve Board interest rate cuts, we began extending
the Fund's average maturity in the third quarter. 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.
MANAGER OUTLOOK
Economic and financial market performance have run on virtually parallel tracks
in 1998, and that pattern seems likely to persist into 1999. Looking ahead for
the near term, we believe the money markets should remain fairly positive,
though largely range-bound, without the dramatic rally of the year 1998.
STATUS AT DECEMBER 31, 1998
Seven day effective yield: 5.24%
Average maturity: 31 days
Net assets: $5,571.9 million
o Strong momentum in the U.S. economy--in terms of consumer spending,
employment, housing, and business investment--should carry into early 1999,
before weakening later in the year.
o The global economic crisis continues to loom and we anticipate GDP growth
of around 2.5% in 1999--a positive backdrop for inflation to stay low and for
the safe haven status of U.S. Treasuries to continue.
o We believe Federal Reserve Board monetary policy is likely on hold, not
changing interest rates for the foreseeable future in the face of solid
economic growth, healthy financial markets, and the recent softening of the
dollar.
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*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 per share,
it is possible to lose money by investing in the Fund. "Current yield" refers to
the income generated by an investment in the Fund over a 7-day period. This
income is then "annualized." 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. 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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Given this scenario and the slightly positive yield curve, we intend to stay
slightly longer than our benchmark 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 when they arise.
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
December 31, 1998
DIVERSIFICATION OF PORTFOLIO INVESTMENTS
By Asset Type as of December 31, 1998
(percentages are based on net assets)
Floating Rate Notes 22%
Eurodollar Time Deposits 25%
Eurodollar Certificates of Deposit 7%
Yankee Certificates of Deposit 9%
Medium term Notes 1%
Funding Agreement 1%
Commercial Paper 35%
4
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Institutional Daily Assets Fund
Statement of Net Assets December 31, 1998 (unaudited)
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Principal
Amount Description Value
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<S> <C> <C>
EURODOLLAR CERTIFICATES
OF DEPOSIT - 7.2%
Abbey National Treasury:
$ 16,000,000 5.20%, 2/9/99 ............................ $ 16,000,000
35,000,000 4.92%, 3/23/99 ........................... 35,000,000
30,000,000 4.85%, 4/20/99 ........................... 30,000,000
Barclays Bank:
24,000,000 5.37%, 2/24/99 ........................... 24,000,676
10,000,000 5.70%, 3/5/99 ............................ 9,998,321
25,000,000 4.88%, 4/27/99 ........................... 24,998,428
Bayerische Hypotheka Vereinbank:
20,000,000 5.60%, 2/25/99 ........................... 20,000,543
40,000,000 5.17%, 2/26/99 ........................... 40,000,614
Bayerische Landesbank,
13,000,000 6.40%, 5/5/99, ........................... 13,054,211
Cariplo,
27,000,000 5.61%, 1/29/99 ........................... 27,000,209
Halifax PLC:
15,000,000 5.16%, 2/5/99 ............................ 15,000,112
45,000,000 5.60%, 2/22/99 ........................... 45,000,000
International Nederlander Bank,
25,000,000 5.08%, 5/27/99 ........................... 25,002,968
KBC Bank,
25,000,000 5.53%, 1/15/99 ........................... 25,000,097
Rabobank,
25,000,000 5.53%, 1/4/99 ............................ 25,000,000
Societe Generale Bank,
25,000,000 5.10%, 2/19/99 ........................... 25,000,000
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TOTAL EURODOLLAR CERTIFICATES OF DEPOSIT
(Amortized Cost $400,056,179) .............................. 400,056,179
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FLOATING RATE - NOTES - 22.6%
Associates Corp.:
Daily Variable Rate,
30,000,000 5.65%, 1/4/99 ............................ 29,999,881
25,000,000 5.51%, 4/23/99 ........................... 24,992,492
30,000,000 5.52%, 6/29/99 ........................... 29,988,511
Bank of Austria:
Quarterly Variable Rate,
25,000,000 5.5475%, 7/27/99 ......................... 24,991,652
Bank of Nova Scotia:
Monthly Variable Rate,
35,000,000 5.5125%, 6/10/99 ......................... 34,988,376
Principal
Amount Description Value
------ ----------- -----
Banque Nationale de Paris:
Monthly Variable Rate,
$45,000,000 5.525%, 6/1/99................................ $44,988,830
35,000,000 5.541%, 7/29/99............................... 34,988,126
Bayerische Hypotheka Vereinbank:
Monthly Variable Rate,
45,000,000 5.505%, 5/28/99............................... 44,985,715
Bayerische Landesbank:
Monthly Variable Rate,
25,000,000 5.00%, 2/12/99................................ 25,000,285
50,000,000 5.395%, 2/16/99............................... 50,000,946
25,000,000 5.521%, 6/29/99............................... 24,990,962
Bear Stearns Co.:
Monthly Variable Rate,
10,000,000 5.626%, 6/4/99................................ 10,000,000
20,000,000 5.626%, 6/11/99............................... 20,000,822
Colgate-Palmolive:
Quarterly Variable Rate,
30,000,000 5.528%, 8/25/99............................... 29,984,773
Comerica Bank:
Monthly Variable Rate,
25,000,000 5.536%, 7/13/99............................... 24,992,184
Commerz Bank:
Monthly Variable Rate,
50,000,000 5.505%, 5/28/99............................... 49,984,129
Corestates Bank:
Monthly Variable Rate,
20,000,000 5.607%, 3/5/99................................ 20,000,000
Creditanstalt Bankverein:
Monthly Variable Rate,
30,000,000 5.515%, 6/3/99................................ 29,991,347
Deutsche Bank:
Quarterly Variable Rate,
40,000,000 5.528%, 6/1/99................................ 39,987,010
First National Bank of Chicago:
Daily Variable Rate,
25,000,000 5.64%, 5/27/99................................ 24,992,680
First Union:
Quarterly Variable Rate,
25,000,000 5.60%, 4/30/99................................ 25,000,000
10,000,000 5.688%, 8/18/99............................... 10,004,555
10,000,000 5.208%, 10/20/99.............................. 10,000,000
See Notes to Financial Statements.
5
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Institutional Daily Assets Fund
Statement of Net Assets December 31, 1998 (unaudited)
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Principal
Amount Description Value
------ ----------- -----
General Electric Corp.:
Quarterly Variable Rate,
$ 10,000,000 5.607%, 1/15/99................................ $ 10,000,000
20,000,000 5.554%, 9/8/99................................. 20,000,000
International Business Machines:
Quarterly Variable Rate,
7,000,000 5.558%, 3/1/99................................. 6,999,740
J.P. Morgan:
Monthly Variable Rate,
55,000,000 5.50%, 2/24/99................................. 54,994,038
Key Bank:
Daily Variable Rate,
10,000,000 5.54%, 1/29/99................................. 9,999,592
Kreditbank:
Quarterly Variable Rate,
35,000,000 5.538%, 6/1/99................................. 34,990,054
Merrill Lynch & Co.:
Daily Variable Rate,
35,000,000 5.625%, 2/17/99................................. 34,999,331
Quarterly Variable Rate,
20,000,000 5.606%, 4/13/99................................. 19,999,442
Morgan Guaranty:
Monthly Variable Rate,
15,000,000 5.544%, 9/27/99................................. 14,995,707
National City Cleveland:
Monthly Variable Rate,
20,000,000 5.578%, 3/5/99................................. 19,998,650
NationsBank:
Daily Variable Rate,
25,000,000 5.70%, 3/18/99................................. 25,004,535
Nordeutsche Landesbank:
Monthly Variable Rate,
15,000,000 5.525%, 2/2/99................................. 14,999,366
Northern Trust Co.:
Monthly Variable Rate,
37,000,000 5.515%, 9/8/99................................. 36,984,795
Norwest Corp.:
Quarterly Variable Rate,
28,000,000 5.45%, 9/20/99................................. 27,999,064
Royal Bank of Canada:
Monthly Variable Rate,
40,000,000 5.52%, 7/14/99................................. 39,985,118
Principal
Amount Description Value
------ ----------- -----
Societe Generale:
Daily Variable Rate,
$ 40,000,000 5.59%, 2/9/99.................................. $ 39,997,693
10,000,000 5.58%, 3/2/99.................................. 9,999,198
Monthly Variable Rate,
30,000,000 5.567%, 5/7/99................................. 29,993,363
Svenska Handelsbanken:
Monthly Variable Rate,
40,000,000 5.532%, 6/1/99................................. 39,988,615
26,000,000 5.53%, 6/2/99.................................. 25,991,950
U.S Bank:
Monthly Variable Rate,
20,000,000 5.606%, 9/15/99................................. 19,998,613
Wachovia Bank:
Monthly Variable Rate,
20,000,000 5.505%, 2/9/99.................................. 19,998,761
21,000,000 5.512%, 5/12/99................................. 20,994,800
Walt Disney:
Quarterly Variable Rate,
10,000,000 5.455%, 2/26/99................................. 9,998,696
Westpac Capital Corp.:
Quarterly Variable Rate,
5,000,000 5.544%, 4/9/99.................................. 4,999,342
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TOTAL FLOATING RATE - NOTES
(Amortized Cost $1,258,763,736)............................... 1,258,763,736
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EURO TIME DEPOSITS - 24.6%
Abbey National Treasury,
50,000,000 5.48%, 2/10/99.................................. 50,000,000
Bank of America,
25,000,000 5.45%, 2/11/99.................................. 25,000,000
Bank of Austria,
50,000,000 5.15%, 1/20/99.................................. 50,000,000
Bank of Montreal,
20,000,000 5.35%, 2/9/99................................... 20,000,000
Bank of Nova Scotia,
25,000,000 5.594%, 1/8/99.................................. 25,000,000
Bayerische Hypotheka Vereinbank:
100,000,000 5.75%, 1/4/99................................... 100,000,000
10,000,000 5.36%, 2/22/99.................................. 10,002,454
Bayerische Landesbank,
30,000,000 4.938%, 4/28/99................................. 30,000,000
See Notes to Financial Statements.
6
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Institutional Daily Assets Fund
Statement of Net Assets December 31, 1998 (unaudited)
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Principal
Amount Description Value
------ ----------- -----
Caisse Des Depots,
$200,000,000 5.25%, 1/4/99................................. $ 200,000,000
Canadian Imperial Bank,
100,000,000 5.25%, 1/4/99................................. 100,000,000
Dresdner Bank,
200,000,000 5.12%, 1/4/99................................. 200,000,000
International Nederlander Bank,
30,000,000 5.60%, 2/26/99................................ 30,000,000
National Australian Bank,
100,000,000 5.75%, 1/4/99................................. 100,000,000
Nordeutsche Landesbank,
25,000,000 5.67%, 1/19/99................................ 25,000,000
Paribas SA,
25,000,000 5.156%, 3/15/99............................... 25,000,000
Republic Bank of NY,
50,000,000 5.50%, 1/4/99................................. 50,000,000
Societe Generale Bank,
150,000,000 5.25%, 1/4/99................................. 150,000,000
Suntrust Bank,
81,875,331 4.00%, 1/4/99................................. 81,875,331
West Deutsche Landesbank,
100,000,000 5.25%, 1/4/99................................. 100,000,000
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TOTAL EURO TIME DEPOSITS
(Amortized Cost $1,371,877,785)............................. 1,371,877,785
----------------
FUNDING AGREEMENT - 0.4%
First Allmerica,
4.75%, 12/23/99
20,000,000 (Amortized Cost $20,000,000).................. 20,000,000
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MEDIUM TERM NOTES - 1.3%
Chase Manhattan Bank,
15,000,000 4.87%, 4/21/99................................ 15,000,000
NationsBank,
55,000,000 5.20%, 2/5/99................................. 55,000,000
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TOTAL MEDIUM TERM NOTES
(Amortized Cost $70,000,000)................................ 70,000,000
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YANKEE CERTIFICATES OF DEPOSIT - 8.9%
Bank of Austria,
25,000,000 5.74%, 4/26/99................................ 25,041,181
Principal
Amount Description Value
------ ----------- -----
Bank of Montreal:
$ 15,000,000 5.20%, 1/19/99................................ $ 15,000,000
15,000,000 5.57%, 2/26/99................................ 15,000,000
Banque Nationale de Paris,
50,000,000 5.545%, 1/4/99................................ 50,000,000
Barclays Bank,
14,000,000 5.70%, 3/30/99................................ 13,997,703
Bayerische Hypotheka Vereinbank:
20,000,000 5.55%, 1/4/99................................. 20,000,017
25,000,000 5.25%, 1/25/99................................ 25,000,000
Canadian Imperial Bank,
25,000,000 5.71%, 6/23/99................................ 25,066,300
Commerz Bank:
20,000,000 5.37%, 2/24/99................................ 20,006,372
15,000,000 5.32%, 3/23/99................................ 15,002,199
Credit Agricole,
2,000,000 5.74%, 4/26/99................................ 1,999,666
Credit Suisse First Boston,
1,000,000 5.87%, 5/4/99................................. 1,000,853
Cregem,
13,000,000 5.51%, 1/11/99................................ 13,000,036
Deutsche Bank,
1,000,000 5.70%, 3/5/99................................. 1,000,072
Dresdner Bank,
16,000,000 5.20%, 3/11/99................................ 16,002,366
National Westminster Bank:
25,000,000 5.53%, 1/4/99................................. 25,000,000
40,000,000 5.485%, 1/19/99............................... 40,000,100
Nordeutsche Landesbank,
10,000,000 5.66%, 7/27/99................................ 10,031,653
Rabobank,
18,000,000 5.60%, 3/17/99................................ 17,998,905
Royal Bank of Canada,
5,000,000 5.56%, 2/26/99................................ 4,999,632
Svenska Handelsbanken,
25,000,000 5.52%, 1/19/99................................ 25,001,519
Swiss Bank,
5,000,000 5.65%, 3/24/99................................ 4,998,418
See Notes to Financial Statements.
7
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Institutional Daily Assets Fund
Statement of Net Assets December 31, 1998 (unaudited)
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Principal
Amount Description Value
------ ----------- -----
Toronto Dominion Bank,
$25,000,000 5.16%, 2/23/99................................ $ 25,000,000
Union Bank of Switzerland:
30,000,000 5.10%, 2/19/99................................ 30,000,000
15,000,000 5.74%, 6/11/99................................ 15,039,900
West Deutsche Landesbank,
40,000,000 5.54%, 1/13/99................................ 40,000,000
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TOTAL YANKEE CERTIFICATES OF DEPOSIT
(Amortized Cost $495,186,892)............................... 495,186,892
----------------
COMMERCIAL PAPER - 35.1%*
ABB Treasury Center,
15,000,000 5.20%, 2/18/99................................ 14,896,000
Alcatel Alsthom Inc.:
22,000,000 5.08%, 2/22/99................................ 21,838,569
5,100,000 4.90%, 3/31/99................................ 5,038,220
Asset Securitization:
25,000,000 5.40%, 1/22/99................................ 24,921,250
30,000,000 5.18%, 2/18/99................................ 29,792,800
41,000,000 5.27%, 2/19/99................................ 40,705,905
20,000,000 5.10%, 3/12/99................................ 19,801,667
Associates Corp.,
30,000,000 5.04%, 2/3/99................................. 29,861,400
Bank of America Corp.,
10,000,000 4.93%, 6/2/99................................ 9,791,845
Bank of Scotland,
20,000,000 4.89%, 6/4/99................................ 19,581,633
Barclays,
30,000,000 5.90%, 1/4/99................................ 29,985,250
BBL North America:
14,000,000 5.52%, 1/12/99................................ 13,976,387
25,000,000 5.80%, 1/12/99............................... 24,955,695
35,000,000 5.14%, 1/25/99............................... 34,880,066
25,000,000 5.50%, 1/26/99............................... 24,904,514
Bellsouth Capital Funding,
20,000,000 5.05%, 1/4/99................................ 19,991,583
British Columbia Province,
10,000,000 4.805%, 3/8/99............................... 9,911,908
British Gas Capitol Corp.,
10,000,000 5.28%, 3/2/99................................ 9,912,000
Principal
Amount Description Value
------ ----------- -----
CAFCO:
$12,000,000 5.60%, 1/19/99............................... $ 11,966,400
38,000,000 5.32%, 1/29/99............................... 37,842,764
24,000,000 5.33%, 1/29/99............................... 23,900,507
25,000,000 5.30%, 2/3/99................................ 24,878,541
10,000,000 5.25%, 2/5/99................................ 9,948,958
20,000,000 5.29%, 2/9/99................................ 19,885,383
45,000,000 5.32%, 2/25/99............................... 44,634,250
Carnival PLC UK,
30,000,000 5.25%, 2/5/99................................ 29,846,875
Chase Manhattan Corp.,
35,000,000 4.80%, 3/23/99............................... 34,622,000
Commonwealth Bank Australia,
30,000,000 5.75%, 1/11/99............................... 29,952,083
Corporate Receivables:
20,000,000 5.55%, 1/15/99............................... 19,956,833
8,000,000 5.42%, 2/3/99................................ 7,960,254
20,000,000 5.19%, 2/4/99................................ 19,901,967
30,000,000 5.18%, 2/11/99............................... 29,823,017
34,000,000 5.20%, 2/12/99............................... 33,793,734
Credit Suisse First Boston:
15,000,000 5.29%, 1/7/99................................ 14,986,775
12,000,000 5.27%, 1/15/99............................... 11,975,407
30,000,000 5.15%, 1/22/99............................... 29,909,875
Cregem,
15,000,000 4.99%, 4/1/99................................ 14,812,875
Daimler Benz North American:
13,000,000 5.03%, 1/29/99............................... 12,949,141
7,000,000 5.22%, 2/23/99............................... 6,946,205
5,000,000 5.03%, 4/15/99............................... 4,927,344
Delaware Funding Corp.:
23,023,000 5.25%, 1/6/99................................ 23,006,212
8,172,000 5.40%, 1/8/99................................ 8,163,420
30,000,000 5.35%, 1/22/99............................... 29,906,375
5,000,000 5.40%, 1/26/99............................... 4,981,250
12,558,000 5.25%, 2/5/99................................ 12,493,902
20,000,000 5.19%, 2/18/99............................... 19,861,600
Diageo Capital:
45,000,000 5.35%, 1/4/99................................ 44,979,938
30,000,000 5.23%, 2/12/99............................... 29,816,950
Dresdner Bank,
8,000,000 5.19%, 3/15/99............................... 7,915,807
See Notes to Financial Statements.
8
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Institutional Daily Assets Fund
Statement of Net Assets December 31, 1998 (unaudited)
- --------------------------------------------------------------------------------
Principal
Amount Description Value
------ ----------- -----
General Electric Capital Corp.:
$10,000,000 5.24%, 2/9/99............................... $ 9,943,233
30,000,000 5.22%, 2/17/99.............................. 29,795,550
10,000,000 5.33%, 2/17/99.............................. 9,930,414
35,000,000 4.95%, 2/19/99.............................. 34,764,188
25,000,000 5.07%, 2/26/99.............................. 24,802,833
25,000,000 5.37%, 2/26/99.............................. 24,791,167
30,000,000 5.44%, 3/9/99............................... 29,696,267
10,000,000 4.93%, 3/15/99.............................. 9,900,031
15,000,000 4.98%, 3/24/99.............................. 14,829,850
20,000,000 5.01%, 3/26/99.............................. 19,766,200
General Motors Acceptance Corp.:
6,000,000 5.48%, 1/13/99.............................. 5,989,040
5,000,000 5.49%, 1/26/99.............................. 4,980,938
80,000,000 5.06%, 1/29/99.............................. 79,685,156
35,000,000 5.24%, 2/5/99............................... 34,821,695
30,000,000 5.24%, 2/17/99.............................. 29,794,767
Glaxo Wellcome,
10,000,000 5.17%, 2/8/99............................... 9,945,428
H.J. Heinz,
10,000,000 5.30%, 1/12/99.............................. 9,983,805
KFW International Finance,
30,000,000 4.87%, 2/19/99.............................. 29,801,142
Merrill Lynch &Co.:
15,000,000 5.50%, 1/13/99.............................. 14,972,500
16,000,000 5.50%, 1/15/99.............................. 15,965,778
National Rural Utility Corp.:
12,000,000 5.08%, 3/5/99............................... 11,893,320
10,000,000 4.97%, 4/26/99.............................. 9,841,236
Norwest Corp.,
15,000,000 5.03%, 1/29/99.............................. 14,941,316
Panasonic Finance,
50,000,000 5.35%, 1/4/99............................... 49,977,708
Pitney Bowes Credit,
61,000,000 5.15%, 1/4/99............................... 60,973,821
Province of Quebec,
30,000,000 5.14%, 2/8/99............................... 29,837,233
Principal
Amount Description Value
------ ----------- -----
Quincy Capital Corp.,
$60,000,000 5.42%, 2/5/99............................... $ 59,683,833
Receivables Capital Corp.:
10,000,000 5.35%, 1/26/99.............................. 9,962,848
46,528,000 5.35%, 1/27/99.............................. 46,348,221
10,000,000 5.36%, 1/28/99.............................. 9,959,800
Repsol International Finance:
25,000,000 4.92%, 3/15/99.............................. 24,750,583
5,000,000 4.85%, 6/28/99.............................. 14,640,292
Swedish Export Credit,
25,000,000 5.02%, 2/24/99.............................. 24,811,750
Union Bank of Switzerland,
20,000,000 5.219%, 1/15/99............................. 19,959,408
USAA Capital Corp.,
7,000,000 5.50%, 1/21/99.............................. 6,978,611
Walt Disney Co.,
15,000,000 4.98%, 3/26/99.............................. 14,825,700
Wells Fargo,
20,000,000 5.25%, 1/29/99.............................. 19,918,333
Westpac Capitol,
29,000,000 5.05%, 3/22/99.............................. 28,674,556
XEROX CORP.,
15,000,000 5.10%, 3/25/99.............................. 14,823,626
--------------
TOTAL COMMERCIAL PAPER
(Amortized Cost $1,958,255,506)........................... 1,958,255,506
--------------
TOTAL INVESTMENTS
(Amortized Cost $5,574,140,096)..........................100.1% 5,574,140,096
OTHER LIABILITIES IN EXCESS
of Other Assets.......................................... (0.1%) (2,291,506)
------- ---------------
NET ASSETS................................................100.0% $5,571,848,590
======= ===============
SHARES OUTSTANDING ($0.001 par value
per share, unlimited number of shares
of beneficial interest authorized)......................... 5,571,775,828
===============
NET ASSET VALUE OFFERING AND REDEMPTION
PRICE PER SHARE
(Net assets divided by shares outstanding)................. $1.00
=====
</TABLE>
- ------------
*Interest rates for commercial paper represent discount rates at the time of
purchase.
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Statement of Operations for the Six Months Ended December 31, 1998 (unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest Income ....................................... $ 160,814,833
-------------
EXPENSES
Advisory Fees ......................................... 2,954,443
Administration and Services Fees ...................... 565,889
Professional Fees ..................................... 34,811
Amortization of Organization Expenses ................. 13,164
Printing and Shareholder Reports ...................... 16,510
Trustees Fees ......................................... 5,307
Miscellaneous ......................................... 5,375
-------------
Total Expenses ........................................ 3,595,499
-------------
Less: Expenses absorbed by Bankers Trust .............. (12,344)
-------------
Net Expenses ....................................... 3,583,155
-------------
NET INVESTMENT INCOME .................................... 157,231,678
REALIZED GAIN FROM INVESTMENT TRANSACTIONS ............... 46,720
-------------
NET INCREASE IN ASSETS FROM OPERATIONS ................... $ 157,278,398
=============
See Notes to Financial Statements.
10
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Institutional Daily Assets Fund
Statements of Changes in Net Assets
- -----------------------------------------------------------------------------------------------------------------------
For the six- For the
months ended year ended
December 31, 1998 1 June 30, 1998
------------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net Investment Income ....................................................... $ 157,231,678 $ 236,619,655
Net Realized Gain from Investment Transactions .............................. 46,720 32,822
---------------- ----------------
Net Increase in Net Assets from Operations ..................................... 157,278,398 236,652,477
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income .......................................................... (157,238,678) (236,612,066)
---------------- ----------------
CAPITAL TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
(at net asset value of $1.00 per share)
Proceeds from Sales of Shares ............................................... 6,813,769,557 11,426,703,500
Cost of Shares Sold ......................................................... (6,971,221,399) (8,445,532,909)
---------------- ----------------
Net Increase (Decrease) from Capital Transactions in Shares of
Beneficial Interest ......................................................... (157,451,842) 2,981,170,591
---------------- ----------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ........................................ (157,418,901) 2,981,211,002
NET ASSETS
Beginning of Period ............................................................ 5,729,267,273 2,748,056,271
---------------- ----------------
End of Period (includes distribution in-excess of net investment income of
$6,780 for the six-month period ended December 31, 1998 and undistributed net
investment income of $6,779 for the year ended June 30, 1998) ............... $ 5,571,848,590 $ 5,729,267,273
================ ================
</TABLE>
- -------
1 Unaudited.
See Notes to Financial Statements.
11
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
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.
For the period
November 13, 1996
For the six- For the (Commencement of
months ended year ended Operations) to
December 31, 19982 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 ................... 0.03 0.06 0.03
Net Realized Gain
from Investment Transactions .......... 0.00 0.003 0.003
-------------- ------------- -------------
Total from Investment Operations ........... 0.03 0.06 0.03
-------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income ................... (0.03) (0.06) (0.03)
-------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD ............. $ 1.00 $ 1.00 $ 1.00
============== ============= =============
TOTAL INVESTMENT RETURN .................... 2.74% 5.71% 3.46%
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Period ............... $ 5,571,849 $ 5,729,267 $ 2,748,056
Ratios to Average Net Assets:
Net Investment Income ................ 5.47%1 5.55% 5.43%1
Expenses ............................. 0.12%1 0.12% 0.12%1
Decrease Reflected in Above Expense
Ratio Due to Absorption of Expenses
by Bankers Trust .................. 0.005%1 0.002 0.01%
</TABLE>
- -------------
1 Annualized.
2 Unaudited.
3 Less than $0.01 per share.
See Notes to Financial Statements.
12
<PAGE>
- --------------------------------------------------------------------------------
Institutional Daily Assets Fund
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
NOTE 1--ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION
BT Institutional Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on March 26, 1990, as an unincorporated
business trust under the laws of the Commonwealth of Massachusetts. The
Institutional 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.
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 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. For
the six month period ended December 31, 1998, Administrative and Service fee's
amounted to $565,889, of which $99,459 were payable at the end of the period.
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
six month period ended December 31, 1998, advisory fee's amounted to $2,954,443,
of which $497,298 was payable at the end of the period.
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.
ICC Distributors, Inc., a member of the Forum Group of Companies, provides
distribution services to the Fund. For the period ended December 31, 1998, there
were no reimbursable expenses incurred under this agreement.
The Fund is a participant with other affiliated entities in a revolving credit
facility and a discretionary demand line of credit facility (collectively the
"credit facilities") in the amounts of $50,000,000 and $100,000,000,
respectively. A commitment fee of .07% per annum on the average daily amount of
the available commitment is payable on a quarterly basis and apportioned equally
among all participants. Amounts borrowed under the credit facilities will bear
interest at a rate per annum equal to the Federal Funds Rate plus .45%. No
amounts were drawn down or outstanding under the credit facilities as of and for
the period ended December 31, 1998.
NOTE 3--NET ASSETS
Composition of Net Assets
Paid-in Capital $5,571,775,829
Distribution in Excess of Net Investment Income (6,780)
Undistributed Net Realized Gain from
Investment Transactions 79,541
-------------
NET ASSETS, DECEMBER 31, 1998 $5,571,848,590
=============
13
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<PAGE>
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<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
DISTRIBUTOR
ICC DISTRIBUTORS, INC.
P.O. Box 7558
Portland, ME 04112-9892
CUSTODIAN AND TRANSFER AGENT
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
250 West Pratt Street
Baltimore, MD 21201
COUNSEL
WILLKIE FARR & GALLAGHER
787 7th Avenue
New York, NY 10019
------------------
For information on how to invest, shareholder account information and current
price and yield information, please contact your relationship manager or the BT
Mutual Fund Service Center at (800) 368-4031. This report must be preceded or
accompanied by the Fund's current prospectus.
------------------
STA814100 (12/98)
