<PAGE> 1
INVESTORS CASH TRUST
ANNUAL REPORT TO SHAREHOLDERS
MARCH 31, 1997
<PAGE> 2
DEAR SHAREHOLDERS:
We are pleased to provide you with the Investors Cash Trust annual report for
the year ended March 31, 1997.
Your fund's management greatly appreciates your decision to invest in Investors
Cash Trust. During the past year, each of the fund's Portfolios, Government
Securities and Treasury, registered solid performance and achieved its
objective of providing maximum current income from high quality money market
securities while maintaining stability of principal.
ECONOMIC REVIEW AND OUTLOOK
The economic recovery is continuing, and based on recent statistics its
momentum appears to be strengthening. Labor markets have firmed, consumer
confidence is high and quarterly measures of the Gross Domestic Product are
above trend for a non-inflationary expansion. In fact, the Federal Reserve
System tightened monetary conditions in March for the first time since February
1995. Looking forward, we anticipate uninterrupted, moderate economic growth,
coupled with subdued but rising inflationary pressures. In this context, we
expect upward interest rate trends.
Money market funds, such as Investors Cash Trust, should offer the opportunity
for attractive yields and should continue to be an excellent place to invest
your money.
Your fund's management thanks you for the vote of confidence you have shown
through your investment, and continues its dedication to performance. We look
forward to serving your investment needs for years to come.
Sincerely,
Frank Rachwalski
Frank Rachwalski
Vice President and Portfolio Manager
April 3,1997
Frank Rachwalski is Senior Vice President of Zurich Kemper Investments, Inc.
and Vice President and Portfolio Manager of Investors Cash Trust. Mr.
Rachwalski holds B.B.A. and M.B.A. degrees from Loyola University.
PORTFOLIO RESULTS
For the year ended March 31, 1997, the fund's two Portfolios had the following
net yields:
The Government Securities Portfolio had a net yield of 5.17%.
The Treasury Portfolio had a net yield of 5.03%.
(1)
<PAGE> 3
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 yield for the year ended March 31, 1997, is the 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, 1997
(Value in thousands)
============================================================================
Government Securities Portfolio
Value
<S> <C>
U.S. Treasury Securities
----------------------------------------------------------------------------
U.S. Treasury Bills
5.31%, 4/17/97 $17,958
----------------------------------------------------------------------------
U.S. Treasury Notes
5.74%, 4/30/97 500
----------------------------------------------------------------------------
TOTAL U.S. TREASURY SECURITIES - 10.9%
(average maturity: 16 days) 18,458
----------------------------------------------------------------------------
Short-Term Notes
----------------------------------------------------------------------------
(a) Federal Farm Credit Banks
5.25%, 4/17/97 4,997
----------------------------------------------------------------------------
Federal Home Loan Bank
(a) 5.35% - 5.51%, 4/24/97 - 5/2/97 4,100
6.02% - 6.05%, 6/2/97 - 9/18/97 1,600
----------------------------------------------------------------------------
(a) Federal Home Loan Mortgage Corporation
5.90%, 4/1/97 1,604
----------------------------------------------------------------------------
Federal National Mortgage Association
(a) 5.28% - 5.55%, 4/1/97 - 4/3/97 11,544
5.76%, 7/25/97 6,559
----------------------------------------------------------------------------
Total Short-Term Notes - 18.0%
(average maturity: 39 days) 30,404
----------------------------------------------------------------------------
(b) Repurchase Agreements
(Dated 2/97 - 3/97, collateralized by Federal Home Loan Mortgage
Corporation, Federal National Mortgage Association and
U.S. Treasury securities)
----------------------------------------------------------------------------
Bear, Stearns & Co. Inc.
5.40% - 5.42%, 4/2/97 - 4/9/97 7,000
----------------------------------------------------------------------------
CS First Boston Inc.
5.34%, 4/2/97 7,700
----------------------------------------------------------------------------
Chase Chemical Securities, Inc.
5.30% - 5.53%, 4/9/97 - 4/25/97 7,500
----------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette Securities Corporation
5.40% - 5.55%, 4/23/97 - 4/28/97 7,500
----------------------------------------------------------------------------
</TABLE>
(3)
<PAGE> 5
<TABLE>
<CAPTION>
Investors Cash Trust
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
March 31, 1997
(Value in thousands)
================================================================================
GOVERNMENT SECURITIES PORTFOLIO
VALUE
<S> <C>
Dresdner Security (USA) Inc.
5.45%, 4/2/97 $ 7,700
- -----------------------------------------------------------------------------
Goldman, Sachs & Co.
5.47%, 4/25/97 7,700
- -----------------------------------------------------------------------------
Lehman Government Securities Inc.
5.36% - 5.51%, 4/23/97 - 5/21/97 7,500
- -----------------------------------------------------------------------------
Merrill Lynch Government Securities, Inc.
(held at The Chase Manhattan Bank)
5.28% - 6.50%, 4/1/97 - 4/16/97 15,500
- -----------------------------------------------------------------------------
J. P. Morgan Securities Inc.
5.21% - 6.10%, 4/1/97 - 4/2/97 15,500
- -----------------------------------------------------------------------------
Morgan Stanley & Co. Incorporated
5.31% - 5.67%, 4/2/97 - 4/23/97 15,600
- -----------------------------------------------------------------------------
Nomura Securities International, Inc.
5.41%, 4/16/97 8,800
- -----------------------------------------------------------------------------
UBS Securities, Inc.
5.27%, 4/14/97 7,500
- -----------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS - 68.4%
(average maturity: 11 days) 115,500
- -----------------------------------------------------------------------------
Total Investments - 97.3%
(average maturity: 16 days) 164,362
- -----------------------------------------------------------------------------
Cash and Other Assets, less Liabilities - 2.7% 4,571
- -----------------------------------------------------------------------------
Net Assets - 100% $168,933
=============================================================================
</TABLE>
See accompanying Notes to Portfolios of Investments.
(4)
<PAGE> 6
<TABLE>
<CAPTION>
Investors Cash Trust
--------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
March 31, 1997
(Value in thousands)
==========================================================================
TREASURY PORTFOLIO
Value
<S> <C>
U.S. TREASURY SECURITIES
--------------------------------------------------------------------------
U.S. Treasury Bills
5.29%, 4/17/97 $15,963
--------------------------------------------------------------------------
U.S. Treasury Notes
5.75%, 4/30/97 500
--------------------------------------------------------------------------
TOTAL U.S. TREASURY SECURITIES - 26.0%
(average maturity: 16 days) 16,463
--------------------------------------------------------------------------
(b) Repurchase Agreements
(Dated 2/97 - 3/97, collateralized by U.S. Treasury securities)
--------------------------------------------------------------------------
Bear, Stearns & Co. Inc.
5.40%, 4/2/97 3,000
--------------------------------------------------------------------------
CS First Boston Inc.
5.15% - 6.30%, 4/1/97 - 4/16/97 6,300
--------------------------------------------------------------------------
Chase Chemical Securities, Inc.
5.20%, 4/2/97 3,000
--------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette Securities Corporation
5.20%, 4/9/97 3,000
--------------------------------------------------------------------------
Dresdner Security (USA) Inc.
5.23% - 6.32%, 4/1/97 - 4/16/97 6,300
--------------------------------------------------------------------------
Goldman, Sachs & Co.
5.20%, 4/16/97 3,000
--------------------------------------------------------------------------
Lehman Government Securities Inc.
5.33% - 5.43%, 4/23/97 - 5/21/97 3,200
--------------------------------------------------------------------------
Merrill Lynch Government Securities, Inc.
(held at The Chase Manhattan Bank)
5.20% - 5.40%, 4/16/97 - 4/24/97 3,200
--------------------------------------------------------------------------
J. P. Morgan Securities Inc.
5.22%, 4/16/97 3,200
--------------------------------------------------------------------------
Morgan Stanley & Co. Incorporated
5.20% - 5.23%, 4/2/97 - 4/9/97 6,400
--------------------------------------------------------------------------
Nomura Securities International, Inc.
5.25%, 4/2/97 3,000
--------------------------------------------------------------------------
UBS Securities, Inc.
5.20%, 4/9/97 3,300
--------------------------------------------------------------------------
Total Repurchase Agreements - 74.0%
(average maturity: 10 days) 46,900
--------------------------------------------------------------------------
Total Investments - 100.0%
(average maturity: 11 days) 63,363
--------------------------------------------------------------------------
Liabilities, less Cash and Other Assets (16)
--------------------------------------------------------------------------
Net Assets - 100% $63,347
==========================================================================
</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, 1997. 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, 1997, 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 years since 1993. These financial statements
and financial highlights are 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, 1997, by correspon- dence 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, 1997, 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 years since 1993, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 16, 1997
(7)
<PAGE> 9
Investors Cash Trust
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
(in thousands)
================================================================================
<TABLE>
<CAPTION>
GOVERNMENT
SECURITIES TREASURY
ASSETS PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------
<S> <C> <C>
Investments, at amortized cost:
Short-term securities $ 48,862 16,463
- --------------------------------------------------------------------------------
Repurchase agreements 115,500 46,900
- --------------------------------------------------------------------------------
Cash 5,212 98
- --------------------------------------------------------------------------------
Receivable for:
Fund shares sold 4 -
- --------------------------------------------------------------------------------
Interest 581 174
- --------------------------------------------------------------------------------
Total assets 170,159 63,635
- --------------------------------------------------------------------------------
LIABILITIES AND NET ASSETS
- --------------------------------------------------------------------------------
Payable for:
Dividends 663 260
- --------------------------------------------------------------------------------
Fund shares redeemed 515 -
- --------------------------------------------------------------------------------
Management fee 7 -
- --------------------------------------------------------------------------------
Administrative services fee 14 5
- --------------------------------------------------------------------------------
Trustees' fees and other 27 23
- --------------------------------------------------------------------------------
Total liabilities 1,226 288
- --------------------------------------------------------------------------------
Net assets applicable to shares
outstanding $168,933 63,347
================================================================================
THE PRICING OF SHARES
- --------------------------------------------------------------------------------
Shares outstanding 168,933 63,347
- --------------------------------------------------------------------------------
Net asset value and
redemption price per share $ 1.00 1.00
================================================================================
</TABLE>
See accompanying Notes to Financial Statements.
(8)
<PAGE> 10
Investors Cash Trust
- -------------------------------------------------------------------
STATEMENT OF OPERATIONS
Year ended March 31, 1997
(in thousands)
===================================================================
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
GOVERNMENT
SECURITIES TREASURY
PORTFOLIO PORTFOLIO
----------- -----------
<S> <C> <C>
Interest income $11,558 4,298
- ----------------------------------------------------------------
Expenses:
Management fee 320 122
- ----------------------------------------------------------------
Administrative services fee 213 81
- ----------------------------------------------------------------
Custodian and transfer agent
fees and related expenses 36 12
- ----------------------------------------------------------------
Registration costs 67 59
- ----------------------------------------------------------------
Professional fees 25 12
- ----------------------------------------------------------------
Reports to shareholders 4 2
- ----------------------------------------------------------------
Trustees' fees and other 18 13
- ----------------------------------------------------------------
Total expenses before
expense waiver 683 301
- ----------------------------------------------------------------
Less expenses waived by
the investment manager (150) (98)
- ----------------------------------------------------------------
Total expenses absorbed
by the Portfolio 533 203
- ----------------------------------------------------------------
Net investment income $11,025 4,095
================================================================
</TABLE>
See accompanying Notes to Financial Statements.
(9)
<PAGE> 11
Investors Cash Trust
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Years ended March 31, 1997 and 1996
(in thousands)
================================================================================
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES TREASURY
PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------
1997 1996 1997 1996
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income $ 11,025 11,804 4,095 4,409
- -----------------------------------------------------------------------------------------------------------
Dividends to shareholders from net
investment income (11,025) (11,804) (4,095) (4,409)
- -----------------------------------------------------------------------------------------------------------
Capital share transactions (dollar amounts and number
of shares are the same):
Shares sold 581,656 400,548 129,964 206,789
- -----------------------------------------------------------------------------------------------------------
Shares issued in reinvestment of dividends 10,426 11,349 4,148 4,279
- -----------------------------------------------------------------------------------------------------------
592,082 411,897 134,112 211,068
Shares redeemed (654,093) (356,977) (172,341) (174,881)
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease) from capital share transactions
and total increase (decrease) in net assets (62,011) 54,920 (38,229) 36,187
- -----------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year 230,944 176,024 101,576 65,389
- -----------------------------------------------------------------------------------------------------------
End of year $168,933 230,944 63,347 101,576
===========================================================================================================
</TABLE>
See accompanying Notes to Financial Statements.
(10)
<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)
and pays a management fee at an annual rate of .15% of average daily net
assets. During the year ended March 31, 1997, the Fund paid management fees of
$194,000 after an expense waiver by ZKI.
ADMINISTRATIVE SERVICES AGREEMENT
The Fund has an administrative services agreement with Zurich Kemper
Distributors, Inc. (ZKDI) (formerly known as Kemper Distributors, Inc.). For
its services as primary administrator, the Fund pays ZKDI an annual fee of .10%
of average daily net assets. For the year ended March 31, 1997, the Fund
incurred administrative services fees of $294,000. ZKDI has related service
agreements with various firms to provide cash management and other services for
Fund shareholders. ZKDI pays these firms at an annual rate ranging between
.05% and .10% of average daily net assets. During the year ended March 31,
1997, ZKDI paid fees of $147,000 to various firms pursuant to service
agreements.
(11)
<PAGE> 13
Investors Cash Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
================================================================================
SHAREHOLDER SERVICES AGREEMENT
Pursuant to a services agreement with the Fund's transfer agent, Zurich Kemper
Service Company (ZKSvC) (formerly known as Kemper Service Company) is the
shareholder service agent of the Fund. Under the agreement, ZKSvC received
shareholder services fees of $13,000 for the year ended March 31, 1997.
OFFICERS AND TRUSTEES
Certain officers or trustees of the Fund are also officers or directors of ZKI.
During the year ended March 31, 1997, the Fund made no payments to
its officers and incurred trustees' fees of $19,000 to independent trustees.
EXPENSE WAIVER
ZKI has agreed to temporarily waive its management fee and absorb 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 $248,000 of expenses during the year ended March 31, 1997.
(12)
<PAGE> 14
<TABLE>
<CAPTION>
Investors Cash Trust
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
===================================================================================================================================
GOVERNMENT SECURITIES PORTFOLIO
Year ended March 31,
1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<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 .05 .06 .05 .03 .03
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.30% 5.74 4.74 3.00 3.12
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AFTER EXPENSE ABSORPTION:
Expenses .25% .25 .25 .25 .38
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 5.17% 5.57 4.72 2.96 3.13
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS BEFORE EXPENSE ABSORPTION:
Expenses .32% .32 .33 .43 .56
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 5.10% 5.50 4.64 2.78 2.95
- -----------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of year (in thousands) $168,933 230,944 176,024 129,611 129,025
===================================================================================================================================
</TABLE>
TREASURY PORTFOLIO
<TABLE>
<CAPTION>
Year ended March 31,
1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<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 .05 .05 .05 .03 .03
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.15% 5.66 4.69 2.96 3.09
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AFTER EXPENSE ABSORPTION:
Expenses .25% .25 .25 .23 .37
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 5.03% 5.48 4.76 2.92 2.97
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS BEFORE EXPENSE ABSORPTION:
Expenses .37% .37 .39 .61 .78
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 4.91% 5.36 4.62 2.54 2.56
- -----------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of year (in thousands) $ 63,347 101,576 65,389 28,683 20,275
===================================================================================================================================
</TABLE>
NOTE: ZKI has agreed to temporarily waive its management fee and absorb
certain operating expenses of the Portfolios.
(13)
<PAGE> 15
Investment Manager
Zurich Kemper Investments, Inc.
Principal Underwriter
Zurich Kemper Distributors, Inc.
222 S. Riverside Plaza
Chicago, IL 60606
This report is not to be distributed unless preceded or accompanied by a
prospectus.
1031430 4/97
