<PAGE> 1
INVESTORS CASH TRUST
ANNUAL REPORT TO SHAREHOLDERS
MARCH 31, 1996
<PAGE> 2
DEAR SHAREHOLDERS:
We are pleased to provide you with the Investors Cash Trust annual report for
the year ended March 31, 1996. Each of the Fund's Portfolios, Government
Securities and Treasury, registered solid performance during this period.
Please take a moment to review the Portfolio results on page 2.
ECONOMIC REVIEW AND OUTLOOK
Recent developments in the U.S. economy and statements by Federal Reserve Board
chairman Alan Greenspan have indicated that interest rates are not headed any
lower. We feel that the economy's growth path, while moderate, has become more
stable than at the beginning of the year. The trend for inflation in the near
future appears to remain subdued.
Your Fund has continued to meet its investment objective by owning high quality
investments that provide stability of principal, especially during periods of
market uncertainty, and competitive money market yields.
We look forward to meeting the challenges which the economy and the financial
markets may present in the months ahead. As always, we are dedicated to
providing our shareholders with excellent investment results.
Thank you for your investment in Investors Cash Trust. We look forward to
continuing to serve your investment needs in the years to come.
Sincerely,
/s/ Frank J. Rachwalski
Frank J. Rachwalski
Vice President and Portfolio Manager
April 8, 1996
Frank Rachwalski is Senior Vice President of Zurich Kemper Investments, Inc.
and Vice President and Portfolio Manager of Investors Cash Trust. Mr.
Rachwalski holds a B.B.A. and a M.B.A. degree from Loyola University.
(1)
<PAGE> 3
PORTFOLIO RESULTS
For the year ended March 31, 1996, the Fund's two Portfolios had the following
net annualized yields:
The Government Securities Portfolio had a net annualized yield of 5.58%.
The Treasury Portfolio had a net annualized yield of 5.51%.
NOTES
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government, and there can be no assurance that a Portfolio will be able to
maintain a stable net asset value of $1.00 per share.
Each Portfolio's net annualized yield for the year ended March 31, 1996 is the
annualized sum of the daily dividend rates for the period. Yields are
historical and do not represent future yields, which will fluctuate.
The views expressed in this report reflect those of the portfolio manager only
through the end of the period of the report as stated above. The manager's
views are subject to change at any time, based on market and other conditions.
(2)
<PAGE> 4
<TABLE>
<CAPTION>
Investors Cash Trust
- -----------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
March 31, 1996
(Value in thousands)
- -----------------------------------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO
VALUE
<S> <C>
U.S. TREASURY NOTES - 7.2%
5.05% - 5.75%, 5/15/96 - 1/31/97
(average maturity: 186 days) $ 16,653
- -----------------------------------------------------------------------------------
SHORT-TERM NOTES
Federal Farm Credit Banks
5.81%, 8/1/96 3,799
- -----------------------------------------------------------------------------------
Federal Home Loan Bank
(a) 5.33%, 5/2/96 3,101
5.06% - 5.99%, 5/7/96 - 5/15/96 14,376
- -----------------------------------------------------------------------------------
Federal National Mortgage Association
(a) 5.17% - 5.85%, 4/1/96 - 4/2/96 10,021
5.77%, 6/21/96 3,998
- -----------------------------------------------------------------------------------
TOTAL SHORT-TERM NOTES - 15.3%
(average maturity: 42 days) 35,295
- -----------------------------------------------------------------------------------
(b) REPURCHASE AGREEMENTS
(Dated 1/96-3/96, collateralized by Federal Home Loan
Mortgage Corporation, Federal National Mortgage
Association and U.S. Treasury securities)
- -----------------------------------------------------------------------------------
Bear, Stearns & Co. Inc.
5.65%, 4/3/96 10,000
- -----------------------------------------------------------------------------------
CS First Boston Inc.
5.45%, 4/1/96 11,100
- -----------------------------------------------------------------------------------
Chase Securities, Inc.
5.45%, 4/1/96 11,100
- -----------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette Securities Corporation
5.40% - 5.55%, 4/1/96 - 4/4/96 11,100
- -----------------------------------------------------------------------------------
Dresdner Security (USA) Inc.
5.40%, 4/1/96 11,100
- -----------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Investors Cash Trust
- ---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
March 31, 1996
(Value in thousands)
- ---------------------------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO
VALUE
<S> <C>
Goldman, Sachs & Co.
5.43%, 4/8/96 $ 27,000
- ---------------------------------------------------------------------------
Lehman Government Securities Inc.
5.20%-5.50%, 4/1/96-6/10/96 17,200
- ---------------------------------------------------------------------------
Merrill Lynch Government Securities, Inc.
(held at Chemical Bank)
5.25%-5.40%, 4/1/96-4/30/96 11,100
- ---------------------------------------------------------------------------
Morgan Stanley & Co. Incorporated
5.20%-5.44%, 4/1/96-4/15/96 32,700
- ---------------------------------------------------------------------------
Nikko Securities Co. International, Inc.
5.41%, 4/1/96 10,000
- ---------------------------------------------------------------------------
Nomura Securities International, Inc.
5.50%, 4/8/96 12,000
- ---------------------------------------------------------------------------
PaineWebber Incorporated
5.55%, 4/1/96 10,000
- ---------------------------------------------------------------------------
Prudential Securities Incorporated
5.40%, 4/1/96 3,800
- ---------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS - 77.2%
(average maturity: 7 days) 178,200
- ---------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.7%
(average maturity: 25 days) 230,148
- ---------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES - .3% 796
- ---------------------------------------------------------------------------
NET ASSETS - 100% $230,944
===========================================================================
</TABLE>
See accompanying Notes to Portfolios of Investments.
(4)
<PAGE> 6
<TABLE>
<CAPTION>
Investors Cash Trust
- ----------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
March 31, 1996
(Value in thousands)
- ----------------------------------------------------------------------------------
TREASURY PORTFOLIO
VALUE
<S> <C>
U.S. TREASURY NOTES - 21.3%
5.05% - 5.75%, 5/15/96-1/31/97
(average maturity: 130 days) $21,609
-------------------------------------------------------------------------------
(B)REPURCHASE AGREEMENTS
(Dated 1/96-3/96, collateralized by U.S. Treasury securities)
-------------------------------------------------------------------------------
Chase Securities, Inc.
5.15%, 4/1/96 4,400
-------------------------------------------------------------------------------
CS First Boston Inc.
5.20%-5.24%, 4/1/96-4/24/96 4,400
-------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette Securities Corporation
5.35%, 4/1/96 4,400
-------------------------------------------------------------------------------
Dresdner Security (USA) Inc.
5.38%, 4/1/96 12,800
-------------------------------------------------------------------------------
Goldman, Sachs & Co.
5.18%-5.28%, 4/1/96-4/29/96 4,500
-------------------------------------------------------------------------------
J. P. Morgan Securities Inc.
5.38%, 4/2/96 4,000
-------------------------------------------------------------------------------
Lehman Government Securities Inc.
5.17%-5.45%, 4/1/96-5/13/96 4,200
-------------------------------------------------------------------------------
Merrill Lynch Government Securities, Inc.
(held at Chemical Bank)
5.30%, 4/1/96 14,500
-------------------------------------------------------------------------------
Morgan Stanley & Co. Incorporated
5.16%-5.40%, 4/1/96-4/12/96 14,300
-------------------------------------------------------------------------------
Nikko Securities Co. International, Inc.
5.40%, 4/1/96 4,000
-------------------------------------------------------------------------------
Nomura Securities International, Inc.
5.35%, 4/1/96 4,500
-------------------------------------------------------------------------------
Prudential Securities Incorporated
5.25%, 4/1/96 4,000
-------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS - 78.7%
(average maturity: 4 days) 80,000
-------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100%
(average maturity: 31 days) 101,609
-------------------------------------------------------------------------------
LIABILITIES, LESS OTHER ASSETS (33)
-------------------------------------------------------------------------------
NET ASSETS - 100% $101,576
===============================================================================
</TABLE>
See accompanying Notes to Portfolios of Investments.
(5)
<PAGE> 7
Investors Cash Trust
NOTES TO PORTFOLIOS OF INVESTMENTS
Interest rates represent annualized yield to date of maturity, except
for variable rate securities described in Note (a). For each security,
cost (for financial reporting and federal income tax purposes) and
carrying value are the same. Likewise, carrying value approximates
principal amount.
(a) Variable rate securities. The rates shown are the current rates at
March 31, 1996. The dates shown represent the demand date or
next interest rate change date.
(b) Repurchase agreements are fully collateralized by U.S. Government
securities. All collateral is held at the Fund's custodian
bank, Investors Fiduciary Trust Company, or at subcustodian banks,
as indicated. The collateral is monitored daily by the Fund so that
its market value exceeds the carrying value of the repurchase
agreement.
See accompanying Notes to Financial Statements.
(6)
<PAGE> 8
Investors Cash Trust
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF TRUSTEES AND SHAREHOLDERS
INVESTORS CASH TRUST
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of the Government Securities and the Treasury
Portfolios, comprising Investors Cash Trust, as of March 31, 1996, and the
related statements of operations for the year then ended and changes in net
assets for each of the two years in the period then ended, and the financial
highlights for each of the fiscal periods since 1992. These financial
statements and financial highlights ar the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of March 31, 1996, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Portfolios comprising Investors Cash Trust at March 31, 1996, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended, and the financial
highlights for each of the fiscal periods referred to above, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 16, 1996
(7)
<PAGE> 9
<TABLE>
<CAPTION>
Investors Cash Trust
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1996
(in thousands)
- --------------------------------------------------------------------------------
GOVERNMENT
SECURITIES TREASURY
ASSETS PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------
<S> <C> <C>
Investments, at amortized cost:
Short-term securities $ 51,948 21,609
- --------------------------------------------------------------------------------
Repurchase agreements 178,200 80,000
- --------------------------------------------------------------------------------
Cash 346 -
- --------------------------------------------------------------------------------
Interest receivable 1,499 567
- --------------------------------------------------------------------------------
Total assets 231,993 102,176
- --------------------------------------------------------------------------------
LIABILITIES AND NET ASSETS
- --------------------------------------------------------------------------------
Cash overdraft - 127
- --------------------------------------------------------------------------------
Payable for:
Dividends 982 435
Shares of the Fund redeemed 5 -
- --------------------------------------------------------------------------------
Management fee 18 4
- --------------------------------------------------------------------------------
Administrative services fee 19 9
- --------------------------------------------------------------------------------
Other 25 25
- --------------------------------------------------------------------------------
Total liabilities 1,049 600
- --------------------------------------------------------------------------------
Net assets applicable to shares
outstanding $230,944 101,576
================================================================================
THE PRICING OF SHARES
- --------------------------------------------------------------------------------
Shares outstanding 230,944 101,576
- --------------------------------------------------------------------------------
Net asset value and
redemption price per share $1.00 1.00
================================================================================
</TABLE>
See accompanying Notes to Financial Statements.
(8)
<PAGE> 10
<TABLE>
<CAPTION>
Investors Cash Trust
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Year ended March 31, 1996
(in thousands)
- -----------------------------------------------------------------------------
GOVERNMENT
SECURITIES TREASURY
PORTFOLIO PORTFOLIO
---------- ---------
<S> <C> <C>
Interest income $12,333 4,610
- -----------------------------------------------------------------------------
Expenses:
Management fee 317 120
- -----------------------------------------------------------------------------
Administrative services fee 211 80
- -----------------------------------------------------------------------------
Custodian and transfer agent
fees and related expenses 24 10
- -----------------------------------------------------------------------------
Registration costs 51 62
- -----------------------------------------------------------------------------
Professional fees 28 11
- -----------------------------------------------------------------------------
Reports to shareholders 9 3
- -----------------------------------------------------------------------------
Trustees' fees and other 43 15
- -----------------------------------------------------------------------------
683 301
- -----------------------------------------------------------------------------
Less expenses waived by
the investment manager (154) (100)
- -----------------------------------------------------------------------------
Total expenses absorbed
by the Portfolio 529 201
- -----------------------------------------------------------------------------
Net investment income $11,804 4,409
=============================================================================
</TABLE>
See accompanying Notes to Financial Statements.
(9)
<PAGE> 11
<TABLE>
<CAPTION>
INVESTORS CASH TRUST
- ---------------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Years ended March 31, 1996 and 1995
(in thousands)
- ---------------------------------------------------------------------------------------------------------------------
GOVERNMENT SECURITIES TREASURY
PORTFOLIO PORTFOLIO
-----------------------------------------------------
1996 1995 1996 1995
-----------------------------------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income $ 11,804 6,514 4,409 1,810
- -------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from net
investment income (11,804) (6,514) (4,409) (1,810)
- -------------------------------------------------------------------------------------------------------------------
Capital share transactions (dollar amounts and number
of shares are the same):
Shares sold 400,548 142,655 206,789 139,626
- -------------------------------------------------------------------------------------------------------------------
Shares issued in reinvestment of dividends 11,349 5,997 4,279 1,560
- -------------------------------------------------------------------------------------------------------------------
411,897 148,652 211,068 141,186
Less shares redeemed 356,977 102,239 174,881 104,480
- -------------------------------------------------------------------------------------------------------------------
Net increase from capital share transactions
and total increase in net assets 54,920 46,413 36,187 36,706
- -------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year 176,024 129,611 65,389 28,683
- -------------------------------------------------------------------------------------------------------------------
End of year $230,944 176,024 101,576 65,389
===================================================================================================================
</TABLE>
See accompanying Notes to Financial Statements.
(9)
<PAGE> 12
Investors Cash Trust
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE FUND
Investors Cash Trust is an open-end management investment company
organized as a business trust under the laws of Massachusetts. The
Fund currently offers two series of shares (Portfolios)-the
Government Securities Portfolio and the Treasury Portfolio.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION
Investments are stated at amortized cost, which approximates market value.
In the event that a deviation of 1/2 of 1% or more exists between a
Portfolio's $1.00 per share net asset value calculated at amortized cost,
and the net asset value calculated by reference to market-based
values, or if there is any other deviation that the Board of Trustees
believes would result in a material dilution to shareholders or purchasers,
the Board of Trustees will promptly consider what action should be initiated.
INVESTMENT TRANSACTIONS AND INTEREST INCOME
Investment transactions are accounted for on the trade date (date the
order to buy or sell is executed). Interest income is recorded on the
accrual basis and includes amortization of premium and discount on investments.
EXPENSES
Expenses arising in connection with a Portfolio are allocated to that Portfolio.
Other Fund expenses are allocated between the Portfolios in
proportion to their relative net assets.
FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS
Fund shares are sold and redeemed on a continuous basis at net asset
value. On each day that the New York Stock Exchange is open for trading,
each Portfolio determines its net asset value per share at 11:00 a.m.,
1:00 p.m. and 3:00 p.m. Chicago time by dividing the total value of
the Portfolio's investments and other assets, less liabilities, by the
number of Portfolio shares outstanding. Each Portfolio declares a
daily dividend, equal to its net investment income for that day,
payable monthly. Net investment income consists of all interest
income plus (minus) all realized gains (losses) on portfolio
securities, minus all expenses of the Portfolio.
FEDERAL INCOME TAXES
Each Portfolio has complied with the special provisions of the
Internal Revenue Code available to investment companies and therefore
no federal income tax provision is required.
3. TRANSACTIONS WITH AFFILIATES
MANAGEMENT AGREEMENT
The Fund has a management agreement with Zurich Kemper Investments,
Inc. (ZKI) (formerly known as Kemper Financial Services, Inc.) and
pays a management fee at an annual rate of .15 of 1% of average daily
net assets. During the year ended March 31, 1996, the Fund incurred management
fees of $437,000.
ADMINISTRATIVE SERVICES AGREEMENT
The Fund also has an administrative services agreement with Kemper
Distributors, Inc. (KDI). For its services as primary administrator,
the Fund pays KDI an annual fee of .10% of average daily net assets.
For the year ended March 31, 1996, the Fund incurred administrative
services fees of $291,000. KDI has related service agreements with various
firms to provide cash management and other services for Fund
shareholders. KDI pays these firms at an annual rate ranging between
.05% and .10% of average daily net assets. During the year ended
March 31, 1996, KDI paid fees of $145,000 to various firms pursuant
to service agreements, including $47,000 paid to affiliated dealers.
SHAREHOLDER SERVICES AGREEMENT
Pursuant to a services agreement with the Fund's transfer agent,
Kemper Service Company (KSvC) is the shareholder service agent of the
Fund. Under the agreement, KSvC received shareholder services fees of
$5,000 for the year ended March 31, 1996.
(11)
<PAGE> 13
Investors Cash Trust
OFFICERS AND TRUSTEES
Certain officers or trustees of the Fund are also officers or directors of ZKI.
During the year ended March 31, 1996, the Fund made no payments to its officers
and incurred trustees' fees of $20,000 to independent trustees.
EXPENSE WAIVER
ZKI has agreed to temporarily waive its management fee and reimburse or pay
operating expenses of each Portfolio to the extent that they exceed .25% of
average daily net assets of such Portfolio on an annual basis. Under this
agreement, ZKI waived $254,000 of expenses during the year ended March 31,
1996.
(12)
<PAGE> 14
<TABLE>
<CAPTION>
Investors Cash Trust
- ---------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO
YEAR ENDED MARCH 31,
1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income and dividends declared .06 .05 .03 .03 .05
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.74% 4.74 3.00 3.12 5.11
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
Expenses after expense absorption .25% .25 .25 .38 .40
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income 5.57% 4.72 2.96 3.13 4.74
- ---------------------------------------------------------------------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS
Expenses .32% .33 .43 .56 .51
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income 5.50% 4.64 2.78 2.95 4.63
- ---------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of year (in thousands) $ 230,944 176,024 129,611 129,025 104,959
=================================================================================================================================
</TABLE>
TREASURY PORTFOLIO
<TABLE>
<CAPTION>
DEC. 17, 1991
YEAR ENDED MARCH 31, TO
1996 1995 1994 1993 MARCH 31, 1992
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 1.00 1.00 1.00 1.00 1.00
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income and dividends declared .05 .05 .03 .03 .01
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00 1.00 1.00 1.00
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.66% 4.69 2.96 3.09 1.10 (a)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
Expenses after expense absorption .25% .25 .23 .37 .40
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income 5.48% 4.76 2.92 2.97 3.76
- -------------------------------------------------------------------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS
Expenses .37% .39 .61 .78 .70
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income 5.36% 4.62 2.54 2.56 3.46
- -------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $ 101,576 65,389 28,683 20,275 4,723
===============================================================================================================================
</TABLE>
NOTES:
(a) Not annualized.
ZKI has agreed to temporarily waive its management fee and reimburse or pay
certain operating expenses. The Other Ratios to Average Net Assets are
computed without this expense waiver or reimbursement.
(13)
<PAGE> 15
INVESTMENT MANAGER
Zurich Kemper Investments, Inc.
PRINCIPAL UNDERWRITER
Kemper Distributors, Inc.
120 South LaSalle Street
Chicago, IL 60603
This report is not to be distributed unless preceded or accompanied by a
prospectus. 1013830 4/96
