Deutsche Asset Management
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Mutual Fund
Annual Report
June 30, 2000
Institutional Daily Assets Fund
A Member of the
Deutsche Bank Group
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X
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Institutional Daily Assets Fund
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TABLE OF CONTENTS
LETTER TO SHAREHOLDERS ....................................... 3
INSTITUTIONAL DAILY ASSETS
Schedule of Investments ................................... 6
Statement of Assets and Liabilities ....................... 11
Statement of Operations ................................... 12
Statements of Changes in Net Assets ....................... 13
Financial Highlights ...................................... 14
Notes to Financial Statements ............................. 15
Report of Independent Accountants ......................... 17
Tax Information ........................................... 17
Proxy Results ............................................. 18
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The Fund is not insured by the FDIC and is not a
deposit, obligation of or guaranteed by Deutsche
Bank. The Fund is subject to investment risks,
including possible loss of principal amount
invested.
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Institutional Daily Assets Fund
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LETTER TO SHAREHOLDERS
We are pleased to present you with this annual report for the BT Institutional
Daily Assets Fund (the "Fund"), pro- viding 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
Three major factors impacted the money markets over the annual period ended June
30, 2000 -- liquidity concerns surrounding Y2K, ongoing strength of the U.S.
economy, and actions of the Federal Reserve Board. These factors combined to
push yields on short-term money market securities significantly higher.
MUCH OF THE FIRST HALF OF THE FISCAL YEAR WAS FOCUSED ON POTENTIAL Y2K SCARES,
AS MONEY MARKET INVESTORS AND ISSUERS ALIKE BELIEVED LIQUIDITY WOULD BE SCARCE
OVER YEAR-END.
o Issuers flooded the market with paper early in the fourth calendar quarter,
hoping to secure their year-end financing. Approximately 85% of this financing
was completed by November 1, with much of the issuance taking place in the
asset-backed commercial paper market.
o To calm the markets, the Federal Reserve Board announced in October that it
would provide the market with several liquidity programs, including a
repurchase agreement facility with expanded collateral guidelines and a
Standby Financing Facility.
o As with most other secular Y2K fears, the money markets' liquidity concerns
also turned out to be for naught. The Federal Reserve Board had done its job
in providing liquidity to the markets, and none of the dealers needed to
exercise any of the liquidity options they had purchased from the Federal
Reserve Board.
DURING THE SECOND HALF OF THE FISCAL YEAR, THE U.S. ECONOMY CONTINUED TO EXPAND,
CAUSING ALARM AMONG THE FINANCIAL MARKETS THAT INFLATION MAY BE IMMINENT AND
THAT THE FEDERAL RESERVE BOARD MAY CONTINUE ITS TIGHTENING CYCLE.
o Existing home sales in the U.S. soared through the first half of 2000, as did
durable goods orders and retail sales. o At the same time, productivity
improvements and competitive pressures held prices steady. Both the Consumer
Price Index and Producer Price Index reflected these steady prices, providing
a glimmer of hope to the financial markets that perhaps the Federal Reserve
Board would remain on the sidelines.
o Nominal GDP, however, continued to surge, pushing the year-over-year growth
rate to 7%. These numbers put the financial markets on notice that the Federal
Reserve Board was probably not done raising interest rates.
IN FACT, THE FEDERAL RESERVE BOARD FOLLOWED UP ITS 0.75% RATE INCREASE IN 1999
WITH THREE ADDITIONAL INTEREST RATE HIKES, TOTALING ANOTHER 1.00%, IN THE FIRST
HALF OF 2000 -- ON FEBRUARY 2, MARCH 21, AND MAY 16.
o The Federal Reserve Board continued to take a hard stance against inflation
and argued that labor force growth and productivity could not indefinitely
support the pace of the economy.
o Following its June meeting, the Federal Reserve Board explained that the
slowing of domestic demand was the reason for its holding the federal funds
rate steady that month, but it made a point that core inflation was rising.
Thus, the Federal Reserve Board warned such a neutral stance, based on signs
of the economy cooling, was "tentative and preliminary."
o On June 30, 2000, the targeted federal funds rate stood at 6.50%.
INVESTMENT REVIEW
By staying disciplined to the purchase of high quality instruments and actively
adjusting duration as market conditions changed, we were able to produce
competitive yields in the Institutional Daily Assets Fund for the period.
Our purchases for the Fund during the annual period continued to be in high
quality, liquid instruments. Prior to year-end 1999, we were particularly astute
in managing liquidity in the Fund, as potential Y2K concerns loomed over the
market. We "barbelled" the portfolio with an abundance of overnight liquidity
and with issues maturing past the year end. After these fears subsided, we
navigated through a market consumed with fears of an aggressive tightening
policy by the Federal Reserve
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Institutional Daily Assets Fund
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LETTER TO SHAREHOLDERS
PORTFOLIO DIVERSIFICATION
By Asset Type as of June 30, 2000 (percentages are based on net assets)
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Floating Rate Notes 29%
Cash and Other Assets 2%
Eurodollar Time Deposits 14%
Eurodollar Certificates of Deposit 1%
Commercial Paper 49%
Yankee Certificates ofDeposit 5%
Board. To position accordingly, we maintained sufficient overnight liquidity,
with maturities laddered -- i.e. maturities staggered so that securities in the
Portfolio came due periodically -- around the Federal Reserve Board meetings.
This strategy proved effective, as higher yields became available after each
meeting. Additionally, we continued to add floating rate notes to the portfolio,
which enabled us to successfully lock in the comparatively higher yields these
securities offered. The result was a slightly longer-than-benchmark weighted
average maturity through much of the annual period.
MANAGER OUTLOOK
Looking ahead to the second half of this year, we expect that the "soft landing"
scenario -- slower economic growth without inflation -- should play out. Signs
of an economic slowdown are already emerging, with a weaker National Purchasing
Manager's report and a cooler labor market, as reported in weekly jobless
claims. The larger question for the Federal Reserve Board may be whether or not
this slowdown is temporary or if it is a longer lasting downturn. One key
indicator to monitor will be oil prices, as the current higher prices are
noticeably diminishing consumer purchasing power and slowing demand in the
economy. A moderation of energy prices would reduce these pressures. Although
the economy is bracing for a "soft landing," we are not convinced that the
Federal Reserve Board has completed its cycle of interest rate increases.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL AVERAGE ANNUAL
RETURNS TOTAL RETURNS ANNUALIZED
7 day 7 day
Periods ended Past 1 Past 3 Since Past 1 Past 3 Since current effective
June 30, 2000 year years inception year years inception yield yield
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Institutional Daily Assets Fund 1
(inception 11/13/96) 5.84% 17.75% 21.83% 5.84% 5.60% 5.59% 6.56% 6.77%
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iMoneyNet -- First Tier
Institutional Money
Funds Average 2 5.55% 16.87% 20.48%* 5.55% 5.33% 5.34%* 6.21% 6.41%
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<FN>
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1 Past performance is not indicative of future results. Yields and total return
will fluctuate. Yields quoted for money market funds most closely reflect the
fund's current earnings."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.
2 The iMoneyNet, Inc. Money Fund Report Averages, a service of iMoneyNet, Inc.
(formerly the IBC Financial Data,Inc.), are averages for categories of similar
money market funds. Performance figures assume the reinvestment of dividends.
During the period the Fund waived certain fees and expenses. Had these fees
and expenses not been waived, theFund's return would have been lower.
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund.
* Benchmark returns are for the period beginning November 30, 1996.
</FN>
</TABLE>
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Institutional Daily Assets Fund
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LETTER TO SHAREHOLDERS
Given this view, we intend to place a higher emphasis in the Fund's portfolio on
floating rate note paper. Historically, floating rate notes have outperformed
other money market securities in times of economic uncertainty. Floating rate
note coupon rates equate to market levels much quicker than fixed rate
investments.
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 Institutional Daily Assets Fund and look
forward to continuing to serve your investment needs for many years ahead.
/S/ SIGNATURE CHRISTINE C.HADDAD
Christine C. Haddad
Portfolio Manager of the INSTITUTIONAL DAILY ASSETS FUND
June 30, 2000
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Institutional Daily Assets Fund
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SCHEDULE OF INVESTMENTS June 30, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
EURODOLLAR CERTIFICATES OF
DEPOSIT -- 1.1%
Abbey National Treasury
Services, PLC,
$ 50,000,000 6.12%, 7/17/00 .......... $ 50,000,000
Landesbank Hessen--
Thuringen Girozentrale,
50,000,000 6.27%, 7/25/00 .......... 50,000,000
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TOTAL EURODOLLAR CERTIFICATES OF DEPOSIT
(Amortized Cost $100,000,000) ....... 100,000,000
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YANKEE CERTIFICATES OF
DEPOSIT -- 4.8%
Bank of Nova Scotia:
25,000,000 6.78%, 2/22/01 .......... 24,993,869
25,000,000 6.76%, 4/20/01 .......... 24,994,289
Canadian Imperial Bank of
Commerce:
50,000,000 6.32%, 7/26/00 .......... 50,000,000
65,000,000 6.64%, 8/23/00 .......... 65,000,000
Commerzbank A.G.,
14,000,000 6.85%, 4/27/01 .......... 13,997,818
Royal Bank of Canada,
20,000,000 5.70%, 7/3/00 ........... 19,999,948
Societe Generale:
50,000,000 6.25%, 7/31/00 .......... 50,000,000
50,000,000 6.65%, 7/26/00 .......... 50,000,000
50,000,000 6.28%, 9/6/00 ........... 50,000,000
25,000,000 6.55%, 1/31/01 .......... 24,993,037
25,000,000 6.81%, 4/17/01 .......... 25,005,172
Svenska Handelsbanken A.G.,
25,000,000 6.67%, 3/2/01 ........... 24,995,240
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TOTAL YANKEE CERTIFICATES OF DEPOSIT
(Amortized Cost $423,979,373) ....... 423,979,373
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CERTIFICATES OF DEPOSIT -- 1.0%
First Union National Bank,
50,000,000 6.05%, 9/25/00 .......... 49,947,982
Lasalle National Bank,
35,000,000 6.24%, 8/8/00 ........... 35,000,000
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TOTAL CERTIFICATES OF DEPOSIT
(Amortized Cost $84,947,982) ........ 84,947,982
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PRINCIPAL
AMOUNT SECURITY VALUE
FLOATING RATE NOTES-- 29.0%
American Express Centurion Bank,
Monthly Variable Rate,
$ 60,000,000 6.62%, 5/23/01 .......... $ 60,000,000
American Home Products Corp.,
Monthly Variable Rate,
25,000,000 6.649%, 7/10/00 ......... 25,000,000
Asset Securitization Cooperative
Corp.,
Monthly Variable Rate,
50,000,000 6.60%, 1/12/01 .......... 49,994,183
Associates Corp. of North America,
Quarterly Variable Rate,
69,000,000 6.91%, 6/14/01 .......... 69,069,966
AT&T Corp.,
Monthly Variable Rate,
20,000,000 6.566%, 3/8/01 .......... 19,997,339
50,000,000 6.639%, 6/14/013 ........ 50,000,000
Quarterly Variable Rate:
40,000,000 6.24%, 7/13/00 .......... 39,999,476
16,950,000 6.971%, 12/1/00 ......... 16,996,795
Bank of America Corp.,
Quarterly Variable Rate:
5,000,000 6.96%, 2/9/01 ............ 5,006,288
5,000,000 6.523%, 5/3/01 ........... 5,001,510
Bank of Scotland,
Monthly Variable Rate,
50,000,000 6.583%, 3/2/01 ........... 49,983,164
Bayerische Landesbank
Girozentrale,
Monthly Variable Rate:
50,000,000 6.576%, 12/15/00 ......... 49,978,326
25,000,000 6.585%, 2/28/01 .......... 24,991,908
25,000,000 6.594%, 3/1/01 ........... 24,991,860
Bayerische Hypo-und
Vereinsbank A.G.,
Monthly Variable Rate,
50,000,000 6.566%, 2/26/01 ......... 49,983,910
Bear Stearns and Co., Inc.,
Monthly Variable Rate,
50,000,000 6.635%, 12/12/00 ........ 50,000,000
Canadian Imperial Bank of
Commerce,
Monthly Variable Rate,
75,000,000 6.531%, 5/31/01 ......... 74,966,453
See Notes to Financial Statements
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Institutional Daily Assets Fund
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SCHEDULE OF INVESTMENTS June 30, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
Citigroup, Inc.
Monthly Variable Rate,
$ 50,000,000 6.605%, 6/6/01 .......... $ 50,000,000
Comerica Bank,
Monthly Variable Rate:
20,000,000 6.661%, 9/1/00 .......... 19,997,619
28,000,000 6.585%, 1/12/01 ......... 27,993,682
25,000,000 6.581%, 4/20/01 ......... 24,992,119
Commerzbank A.G.,
Monthly Variable Rate:
75,000,000 6.569%, 3/19/01 ......... 74,968,403
50,000,000 6.591%, 4/20/01 ......... 49,988,183
50,000,000 6.625%, 7/5/01 .......... 49,982,500
Compass Securitizaton LLC,
Monthly Variable Rate,
50,000,000 6.74%, 10/16/00 ......... 49,997,840
Credit Communal De Beligue,
Monthly Variable Rate,
75,000,000 6.578%, 3/5/01 .......... 74,972,894
Credit Suisse First Boston, Inc.,
Daily Variable Rate,3
60,000,000 7.305%, 2/20/01 ......... 59,996,195
First Union National Bank,
Daily Variable Rate:
25,000,000 7.475%, 10/27/00 ........ 25,019,426
25,000,000 7.425%, 11/15/00 ........ 25,000,000
75,000,000 7.235%, 1/29/01 ......... 75,000,000
75,000,000 7.275%, 6/26/01 ......... 75,000,000
Quarterly Variable Rate:
5,000,000 6.78%, 2/13/01 .......... 5,003,248
General Motors Acceptance Corp.,
Monthly Variable Rate,
25,000,000 6.621%, 7/24/00 ......... 25,000,292
Quarterly Variable Rate:
5,000,000 7.119%, 11/20/00 ........ 5,004,195
25,000,000 6.72%, 12/14/00 ......... 24,990,044
Goldman Sachs and Co.,
Daily Variable Rate:
25,000,000 7.475%, 8/21/00 ......... 25,000,000
50,000,000 7.495%, 9/18/00 ......... 50,000,000
Quarterly Variable Rate:3
17,000,000 6.435%, 7/31/00 ......... 16,999,925
70,000,000 6.451%, 1/9/01 .......... 70,030,952
Household Finance Corp.,
Quarterly Variable Rate:
50,000,000 6.745%, 3/29/01 ......... 50,000,000
20,000,000 6.899%, 5/21/01 ......... 20,014,106
12,500,000 6.892%, 6/21/01 ......... 12,509,543
8,000,000 6.881%, 6/22/01 ......... 8,005,391
PRINCIPAL
AMOUNT SECURITY VALUE
J.P. Morgan Securities Inc.,
Monthly Variable Rate:
$ 60,000,000 6.64%, 3/16/01 .......... $ 60,000,000
40,000,000 6.63%, 6/6/01 ........... 40,000,000
KeyBank NA,
Quarterly Monthly Rate,
73,000,000 6.76%, 5/25/01 .......... 72,975,331
Merrill Lynch and Co., Inc.,
Monthly Variable Rate,
50,000,000 6.629%, 4/19/01 ......... 49,996,000
Morgan Stanley, Dean Witter
and Co.,
Daily Variable Rate:
50,000,000 7.275%, 7/13/00 ......... 50,000,000
70,000,000 7.265%, 11/24/00 ........ 70,000,000
Monthly Variable Rate:
75,000,000 6.834%, 1/29/01 ......... 75,000,000
76,000,000 6.63%, 3/16/01 .......... 76,000,000
PNC Bank Corp.,
Monthly Variable Rate:
25,000,000 6.585%, 7/12/00 ......... 24,999,703
Royal Bank of Scotland PLC,
Monthly Variable Rate,
75,000,000 6.604%, 5/31/01 ......... 74,966,453
SBC Communications Inc.,
Quarterly Variable Rate,
50,000,000 6.325%, 5/1/01 .......... 50,000,000
Societe Generale,
Monthly Variable Rate:
50,000,000 6.60%, 12/18/00 ......... 49,970,090
50,000,000 6.594%, 1/19/01 ......... 49,983,589
75,000,000 6.625%, 6/29/01 ......... 74,955,124
Toyota Motor Credit Corp.,
Quarterly Variable Rate,
25,000,000 6.844%, 1/12/01 ......... 24,989,631
US Bank NA,
Monthly Variable Rate,
8,000,000 6.848%, 11/15/00 ........ 8,006,402
Westdeutsche Landesbank
Girozentrale,
Monthly Variable Rate,
50,000,000 6.571%, 2/26/01 ......... 49,983,910
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TOTAL FLOATING RATE NOTES
(Amortized Cost $2,563,253,968) ..... 2,563,253,968
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See Notes to Financial Statements
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Institutional Daily Assets Fund
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SCHEDULE OF INVESTMENTS June 30, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
EURODOLLAR TIME DEPOSITS -- 13.9%
Banca Commerciale Italiana,
$100,000,000 6.64%, 7/27/002 ......... $100,000,000
Bank of Nova Scotia,
40,000,000 6.58%, 7/19/002 ......... 40,000,000
Banque Bruxelles Lambert,
25,000,000 6.27%, 8/18/002 ......... 25,000,000
Barclays Bank PLC,
100,000,000 7.00%, 7/3/00 ........... 100,000,000
50,000,000 6.85%, 7/5/00 ........... 50,000,000
Caisse Nationale De Credit
Agricole,
50,000,000 6.31%, 9/6/002 .......... 50,000,000
Canadian Imperial Bank of
Commerce,
25,000,000 6.875%, 7/3/00 .......... 23,578,745
Commerzbank A.G.:
50,000,000 6.90%, 11/15/002 ........ 50,000,000
25,000,000 7.04%, 11/20/002 ........ 25,000,000
Dresdner Bank,
200,000,000 7.125%, 7/3/00 .......... 200,000,000
First Union National Bank,
Quarterly Variable Rate:
25,000,000 6.875%, 9/19/002 ........ 25,000,000
90,000,000 7.04%, 11/27/002 ........ 90,000,000
Landesbank Baden Wurttemberg:
50,000,000 6.26%, 8/11/002 ......... 50,000,000
50,000,000 5.313%, 9/5/002 ......... 50,000,000
Lloyd's TSB Bank PLC,
25,000,000 7.02%, 11/20/002 ........ 25,000,000
Norddeutsche Landesbank
Girozentrale,
50,000,000 6.89%, 11/15/002 ........ 50,000,000
Norwest Corp.,
Monthly Variable Rate,
50,000,000 6.906%, 7/5/00 .......... 50,000,000
Rabobank Nederland N.V.,
149,925,580 7.125%, 7/3/00 .......... 149,925,580
Svenska Handelbanken A.b.,
75,000,000 6.70%, 7/10/002 .......... 75,000,000
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TOTAL EURODOLLAR TIME DEPOSITS
(Amortized Cost $1,228,504,325) ..... 1,228,504,325
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PRINCIPAL
AMOUNT SECURITY VALUE
MEDIUM-TERM NOTES-- 0.4%
General Electric Capital Corp.,
$ 37,000,000 7.38%, 5/23/01 .......... $ 37,000,000
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TOTAL MEDIUM-TERM NOTES
(Amortized Cost $37,000,000) ......... 37,000,000
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COMMERCIAL PAPER1 -- 49.4%
Aegon Funding Corp.,
40,000,000 6.10%, 9/11/00 .......... 39,512,001
Asset Portfolio Funding Corp.,
100,000,000 6.57%, 7/17/00 .......... 99,708,445
Asset Securitization Cooperative
Corp.,
75,000,000 6.67%, 7/12/00 .......... 74,847,681
Associates First Capital Corp.,
50,000,000 6.65%, 8/21/00 .......... 49,528,959
BAE System Holdings, Inc.:
25,000,000 6.60%, 8/10/00 .......... 24,816,665
60,000,000 6.66%, 8/21/00 .......... 59,433,900
Bank of America Corp.:
50,000,000 6.06%, 8/9/00 ........... 49,671,750
20,000,000 6.66%, 11/17/00 ......... 19,485,700
Beta Finance Corp.:
40,000,000 6.63%, 9/8/00 ........... 39,491,700
25,000,000 6.63%, 9/14/00 .......... 24,654,688
158,000,000 6.63%, 9/20/00 .......... 155,644,723
British Telecommunications PLC:
40,000,000 6.17%, 7/11/00 .......... 39,931,445
25,000,000 6.05%, 8/14/00 .......... 24,815,139
25,000,000 6.05%, 8/15/00 .......... 24,810,937
50,000,000 6.10%, 8/22/00 .......... 49,559,445
50,000,000 6.24%, 9/14/00 .......... 49,350,000
46,000,000 6.25%, 10/11/00 ......... 45,185,417
50,000,000 6.81%, 11/9/00 .......... 48,760,958
20,000,000 6.69%, 11/13/00 ......... 19,498,250
15,000,000 6.81%, 11/13/00 ......... 14,616,938
25,000,000 6.22%, 12/1/00 .......... 24,339,125
Citicorp, Inc.,
35,000,000 6.61%, 8/7/00 ........... 34,762,223
Compass Securitization LLC:
120,000,000 6.55%, 7/13/00 .......... 119,738,001
42,000,000 6.57%, 7/13/00 .......... 41,908,020
35,000,000 6.57%, 8/9/00 ........... 34,750,888
Corporate Asset Funding Co.,Inc.:
24,500,000 6.57%, 8/4/00 ........... 24,347,977
30,000,000 6.64%, 8/22/00 .......... 29,712,266
See Notes to Financial Statements
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Institutional Daily Assets Fund
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SCHEDULE OF INVESTMENTS June 30, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
Corporate Receivables Corp.:
$ 90,000,000 6.57%, 8/8/00 ........... $ 89,375,850
50,000,000 6.65%, 8/21/00 .......... 49,528,959
50,000,000 6.66%, 8/24/00 .......... 49,500,500
Credit Suisse First Boston Inc.,
25,000,000 6.59%, 8/22/00 .......... 24,762,028
Delaware Funding Corp.:
90,094,000 6.60%, 7/21/00 .......... 89,763,656
50,000,000 6.60%, 9/20/00 .......... 49,257,500
Dorada Finance Corp.:
36,000,000 6.60%, 8/11/00 .......... 35,729,400
14,000,000 6.60%, 8/14/00 .......... 13,887,067
30,000,000 6.60%, 8/15/00 .......... 29,752,500
25,000,000 6.63%, 9/8/00 ........... 24,682,313
Edison Asset Securization LLC:
100,000,000 6.56%, 7/18/00 .......... 99,690,223
25,000,000 6.59%, 7/25/00 .......... 24,890,166
75,000,000 6.57%, 8/15/00 .......... 74,384,062
40,475,000 6.56%, 8/18/00 .......... 40,120,979
Fortis Bank,
25,000,000 5.98%, 7/6/00 ........... 24,979,236
France Telecom S.A.:
50,000,000 6.65%, 8/1/00 ........... 49,713,681
40,544,000 6.56%, 8/16/00 .......... 40,204,151
50,000,000 6.63%, 9/5/00 ........... 49,392,250
50,000,000 6.62%, 9/11/00 .......... 49,338,000
GE Financial Assurance
Holdings Inc.,
75,000,000 6.84%, 7/6/00 ........... 74,928,750
Giro Funding US Corp.,
65,000,000 6.61%, 8/2/00 ........... 64,618,089
Goldman Sachs and Co.:
150,000,000 6.57%, 8/8/00 ........... 148,959,750
75,000,000 6.57%, 8/18/00 .......... 74,343,000
65,000,000 6.09%, 8/22/00 .......... 64,428,216
Greyhawk Funding LLC,
35,000,000 6.22%, 7/28/00 .......... 34,836,725
Halifax PLC,
155,000,000 6.54%, 7/13/00 .......... 154,662,100
Honeywell International Inc.,
25,000,000 6.67%, 12/27/00 ......... 24,170,882
Invensys PLC:
50,000,000 6.60%, 8/7/00 ........... 49,660,834
19,000,000 6.64%, 8/14/00 .......... 18,845,804
Merrill Lynch & Co., Inc.,
126,000,000 6.15%, 7/10/00 .......... 125,806,275
PRINCIPAL
AMOUNT SECURITY VALUE
Moriarty Ltd:
$ 100,000,000 6.54%, 7/13/00 .......... $ 99,782,000
65,000,000 6.60%, 7/24/00 .......... 64,725,917
75,000,000 6.57%, 8/14/00 .......... 74,397,750
17,263,000 6.12%, 8/22/00 .......... 17,110,396
50,000,000 6.60%, 9/12/00 .......... 49,330,834
National Rural Utilities CFC:
25,000,000 6.665%, 8/25/00 ......... 24,745,434
35,000,000 6.08%, 9/11/00 .......... 34,574,400
25,000,000 6.145%, 9/19/00 ......... 24,658,611
25,000,000 6.09%, 9/21/00 .......... 24,653,209
Old Line Funding Corp.,
23,700,000 6.55%, 7/7/00 ........... 23,674,128
PNC Bank Corp.,
Monthly Variable Rate:
75,000,000 6.625%, 6/29/01 ......... 74,978,750
Province of Quebec,
25,000,000 6.09%, 8/16/00 .......... 24,805,459
Quincy Capital Corp.,
65,000,000 6.60%, 8/3/00 ........... 64,606,750
Receivables Capital Corp.:
100,000,000 6.62%, 7/27/00 .......... 99,521,889
42,423,000 6.63%, 8/23/00 .......... 42,008,916
Salomon Smith Barney, Inc.,
40,000,000 6.60%, 9/19/00 .......... 39,413,333
Sheffield Receivables Corp.:
50,000,000 6.70%, 7/20/00 .......... 49,823,195
50,000,000 6.62%, 7/25/00 .......... 49,779,333
41,400,000 6.60%, 8/7/00 ........... 41,119,170
50,000,000 6.60%, 8/16/00 .......... 49,578,334
Thames Asset Global
Securitization N.O. 1:
25,253,000 6.55%, 7/10/00 .......... 25,211,648
50,000,000 6.56%, 7/17/00 .......... 49,854,222
34,560,000 6.22%, 7/24/00 .......... 34,422,663
29,652,000 6.62%, 7/24/00 .......... 29,526,589
17,381,000 6.57%, 8/1/00 ........... 17,282,667
Tulip Funding Corp.:
60,000,000 6.56%, 7/11/00 .......... 59,890,666
32,000,000 6.21%, 7/20/00 .......... 31,895,120
Windmill Funding Corp.:
50,000,000 6.60%, 7/21/00 .......... 49,816,667
40,000,000 6.58%, 7/28/00 .......... 39,802,600
25,000,000 6.57%, 8/7/00 ........... 24,831,181
25,000,000 6.63%, 8/24/00 .......... 24,751,375
--------------
TOTAL COMMERCIAL PAPER
(Amortized Cost $4,367,669,393) ..... 4,367,669,393
--------------
See Notes to Financial Statements
--------------------------------------------------------------------------------
9
<PAGE>
Institutional Daily Assets Fund
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS June 30, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
COMMERCIAL PAPER-INTEREST BEARING -- 0.4%
AT&T Corp.,
$ 35,000,000 5.67%, 3/8/01 ........... $ 35,000,000
------------
TOTAL COMMERCIAL PAPER-INTEREST BEARING
(Amortized Cost $35,000,000) ........ 35,000,000
------------
FUNDING AGREEMENTS -- 1.6%
First Allmerica Financial Life
Insurance Co.,
Quarterly Variable Rate,2
50,000,000 6.91%, 1/29/01 .......... 50,000,000
GE Life & Annuity Assurance Co.,
Monthly Variable Rate,
25,000,000 6.722%, 6/1/01 .......... 25,000,000
Securities Life of Denver
Insurance Co.,
Monthly Variable Rate,2
40,000,000 6.745%, 8/25/00 ......... 40,000,000
PRINCIPAL
AMOUNT SECURITY VALUE
Travelers Insurance Co.,
Quartely Variable Rate,
$ 30,000,000 6.84%, 2/23/01 .......... $ 30,000,000
--------------
TOTAL FUNDING AGREEMENTS
(Amortized Cost $145,000,000) ....... 145,000,000
--------------
TOTAL INVESTMENTS
(Amortized Cost
$8,985,355,041)4 ............ 101.6% $8,985,355,041
LIABILITIES IN EXCESS OF
OTHER ASSETS ................ (1.6) (140,101,008)
---- --------------
NET ASSETS ..................... 100.0% $8,845,254,033
===== ==============
--------------------------------------------------------------------------------
1 Interest rates for commercial paper represent discount rates at the time of
purchase.
2 Illiquid securities.
3 Security exempt from registration under 144A of the Security Act of 1933.These
securities may be resold in transactions exempt from registrations, normally
to qualified institutional buyers. 4 Aggregate cost for federal tax purposes
was $8,985,355,041.
See Notes to Financial Statements
--------------------------------------------------------------------------------
10
<PAGE>
Institutional Daily Assets Fund
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
ASSETS
Investments at Value (Amortized Cost of $8,985,355,041) ... $8,985,355,041
Interest Receivable ....................................... 30,031,235
Prepaid Expenses and Other ................................ 39,014
--------------
Total Assets ................................................. 9,015,425,290
--------------
LIABILITIES
Payable for Securities Purchased .......................... 119,304,105
Dividends Payable ......................................... 50,037,134
Due to Bankers Trust ...................................... 813,099
Accrued Expenses and Other ................................ 16,919
--------------
Total Liabilities ............................................ 170,171,257
--------------
NET ASSETS ................................................... $8,845,254,033
==============
COMPOSITION OF NET ASSETS
Paid-in Capital ........................................... $8,845,101,288
Undistributed Net Investment Income ....................... 126,626
Accumulated Net Realized Gain from
Investment Transactions ............................... 26,119
--------------
NET ASSETS ................................................... $8,845,254,033
==============
SHARES OUTSTANDING ($0.001 par value per share,
unlimited number of shares
of beneficial interest authorized) ........................ 8,845,101,287
==============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(net assets divided by shares outstanding) ................ $ 1.00
==============
See Notes to Financial Statements
--------------------------------------------------------------------------------
11
<PAGE>
Institutional Daily Assets Fund
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
JUNE 30, 2000
INVESTMENT INCOME
Interest Income ........................................ $ 452,895,618
-------------
EXPENSES
Advisory Fees .......................................... 7,719,290
Administration and Services Fees ....................... 1,543,858
Professional Fees ...................................... 38,341
Amortization of Organization Expenses .................. 26,473
Printing and Shareholder Reports ....................... 16,115
Trustees Fees .......................................... 3,827
Miscellaneous .......................................... 55,504
-------------
Total Expenses ............................................ 9,403,408
Less:Fee Waivers orReimbursements ......................... (140,260)
-------------
Net Expenses .............................................. 9,263,148
-------------
NET INVESTMENT INCOME ..................................... 443,632,470
NET REALIZED GAIN FROM INVESTMENT TRANSACTIONS ............ 26,119
-------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ................ $ 443,658,589
==============
See Notes to Financial Statements
--------------------------------------------------------------------------------
12
<PAGE>
Institutional Daily Assets Fund
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JUNE 30,
2000 1999
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net Investment Income ............................ $ 443,632,470 $ 325,159,826
Net Realized Gain from Investment Transactions ... 26,119 59,458
---------------- ----------------
Net Increase in Net Assets from Operations .......... 443,658,589 325,219,284
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income ............................ (443,648,775) (325,115,954)
---------------- ----------------
CAPITAL TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
(at net asset value of $1.00 per share)
Proceeds from Sales of Shares .................... 23,418,459,592 17,445,099,092
Cost of Shares Redeemed .......................... (22,377,790,255) (15,369,894,813)
---------------- ----------------
Net Increase from Capital Transactions in Shares of
Beneficial Interest .............................. 1,040,669,337 2,075,204,279
---------------- ----------------
TOTAL INCREASE IN NET ASSETS ........................ 1,040,679,151 2,075,307,609
NET ASSETS
Beginning of Year ................................ 7,804,574,882 5,729,267,273
---------------- ----------------
End of Year ...................................... $ 8,845,254,033 $ 7,804,574,882
================ ================
</TABLE>
See Notes to Financial Statements
--------------------------------------------------------------------------------
13
<PAGE>
Institutional Daily Assets Fund
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each period
indicated for Institutional Daily Assets Fund.
<TABLE>
<CAPTION>
FOR THE PERIOD
NOV. 13, 1996 1
FOR THE YEARS ENDED JUNE 30, THROUGH
2000 1999 1998 JUNE 30, 1997
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------
INCOME FROMINVESTMENT OPERATIONS
Net Investment Income ............................ 0.06 0.05 0.06 0.03
Net Realized Gain from
Investment Transactions ........................ 0.00 2 0.00 2 0.00 2 0.00 2
------ ------ ------ ------
Total from Investment Operations .................... 0.06 0.05 0.06 0.03
------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income ............................ (0.06) (0.05) (0.06) (0.03)
------ ------ ------ ------
NET ASSET VALUE, END OF YEAR ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======
TOTAL INVESTMENT RETURN ............................. 5.84% 5.25% 5.71% 3.46%
SUPPLEMENTAL DATA AND RATIOS:
Net Assets, End of Year (000s omitted) ........... $8,845,254 $7,804,575 $5,729,267 $2,748,056
Ratios to Average Net Assets:
Net Investment Income .......................... 5.75% 5.11% 5.55% 5.43%3
Expenses After Waivers ......................... 0.12% 0.12% 0.12% 0.12%3
Expenses Before Waivers ........................ 0.12% 0.12% 0.12% 0.13%3
<FN>
--------------------------------------------------------------------------------
1 Commencement of operations.
2 Less than $0.01 per share.
3 Annualized.
</FN>
</TABLE>
See Notes to Financial Statements
--------------------------------------------------------------------------------
14
<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 Declaration of Trust permits
the Board of Trustees (the "Trustees") to issue beneficial interests in the
Fund. The Fund began offering shares of beneficial interest on November 13,
1996. The following summarizes the significant accounting policies of the Fund.
B. VALUATION OF SECURITIES
Investments are valued at amortized cost, which is in accordance with Rule 2a-7
of the Investment Company Act of 1940.
C. SECURITIES TRANSACTIONS AND INTEREST INCOME
Securities 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. Expenses are recorded as incurred.
Realized gains and losses from securities transactions are recorded on the
identified cost basis.
D. DISTRIBUTIONS
It is the Fund's policy to declare dividends daily and pay 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 at least annually to the extent they exceed capital loss carryforwards.
E. REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with financial institutions deemed
to be creditworthy by the Fund's Investment Adviser, 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. 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 adequate to cover the agreement if the broker defaults.
F. FEDERAL INCOME TAXES
It is the Fund's policy 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.
G. OTHER
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts in the financial statements.
Actual results could differ from those estimates.
--------------------------------------------------------------------------------
15
<PAGE>
Institutional Daily Assets Fund
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 2 -- FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"), an indirect wholly owned subsidiary of Deutsche
Bank A.G. Under this 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.
The Fund has entered into an Advisory Agreement with Bankers Trust. Under this
agreement, the Fund pays Bankers Trust a fee computed daily and paid monthly at
an annual rate of .10% of average daily net assets.
Bankers Trust has contractually agreed to waive its fees and reimburse expenses
of the Fund through October 31, 2001, to the extent necessary, to limit all
expenses to .12% of the average daily net assets of the Fund.
At June 30, 2000, the Fund was a participant with other affiliated entities in a
revolving credit facility in the amount of $200,000,000, which expires April 27,
2001. A commitment fee on the average daily amount of the available commitment
is payable on a quarterly basis and apportioned among all participants based on
net assets. No amounts were drawn down or outstanding for this fund under the
credit facility for the six months ended June 30, 2000.
NOTE 3 -- FUND REORGANIZATION
OnDecember 8, 1999, the Board of Trustees approved a resolution to convert the
Fund from a stand alone fund to a master-feeder fund. The Fund's shareholders
approved the conversion on April 3, 2000. Management anticipates compliance with
this resolution no later than January 2001.
NOTE 4 -- FUND NAMECHANGE
On October 31, 2000 theFund will change its name from BTInstitutional Daily
Assets Fund to Daily Assets Institutional.
--------------------------------------------------------------------------------
16
<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 assets and liabilities, including
the schedule of investments, 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, 2000, 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 accounting principles generally accepted in the
United States of America. 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 auditing standards generally accepted in
the United States of America, 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, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
July 31, 2000
--------------------------------------------------------------------------------
17
<PAGE>
Institutional Daily Assets Fund
--------------------------------------------------------------------------------
PROXY RESULTS (Unaudited)
Institutional Daily Assets Fund shareholders voted on the following proposals at
a special meeting of shareholders on April 3, 2000, or as adjourned. The
description of each proposal and number of shares voted are as follows:
1. To approve the conversion of the Fund's structure from a stand-alone fund
structure to a master-feeder structure whereby the Fund would invest all of
its investable assets in the Daily Assets Portfolio.
For Against Abstain
-------- ------- --------
5,197,361,023 2,780,372 --
2. To approve a New Investment Advisory Agreement between the Portfolio and
Bankers Trust Company.
For Against Abstain
-------- ------- --------
5,197,361,023 2,780,372 --
3. To approve a New Investment Advisory Agreement between the Portfolio and
Deutsche Asset Management,Inc.
For Against Abstain
-------- ------- --------
5,197,361,023 -- 2,780,372
4. To approve a New Investment Sub-Advisory Agreement among the Portfolio,
Deutsche Asset Management,Inc., and Bankers Trust Company.
For Against Abstain
-------- ------- --------
5,197,361,023 -- 2,780,372
5. To ratify the selection of PricewaterhouseCoopers LLP as the independent
accountants of the Fund and its corresponding Portfolio.
For Against Abstain
-------- ------- --------
5,200,141,395 -- --
--------------------------------------------------------------------------------
18
<PAGE>
<PAGE>
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:
DEUTSCHE ASSET MANAGEMENT SERVICE CENTER
P.O. BOX 219210
KANSAS CITY, MO 64121-9210
or call our toll-free number: 1-800-730-1313
This report must be preceded or accompanied by a current prospectus for the
Fund.
Deutsche Asset Management is the marketing name for the asset management
activities ofDeutsche Bank AG, Deutsche Fund Management, Inc., Bankers Trust
Company, DBAlex. Brown LLC, Deutsche Asset Management,Inc. andDeutsche Asset
Management Investment Services Limited.
Institutional Daily Assets Fund CUSIP #055924781
814ANN (06/00)
Exclusive Placement Agents:
ICC Distributors, Inc.
