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1
Investors Cash Trust
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DEAR SHAREHOLDERS:
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We are pleased to provide you with the Investors Cash Trust
semiannual report for the six month period ended September 30, 1998.
Your fund's management greatly appreciates your decision to invest in Investors
Cash Trust. During the period, the fund registered solid performance and
achieved its objective of providing maximum current income consistent with
stability of principal.
ECONOMIC REVIEW AND OUTLOOK
The log jam for Federal Funds set at 5.50% since March 1997 was broken on
September 29th when the Fed lowered its trading target by 25 basis points. The
predominant reasons were the much-publicized, adverse economic developments,
which are reflected in our volatile stock market, the associated stresses placed
on the credit worthiness of many of our financial institutions and the
likelihood of a slowing pace of economic growth in the months ahead.
Our investment strategy still favors lengthening the maturities in the
portfolios. The reason is our expectation that the Fed will err on the side of
ease until signs of financial stress abate and prospects for economic growth
brighten.
Money market funds such as Investors Cash Trust offer the opportunity for
attractive yields, especially during times of uncertainty, 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
October 22, 1998
Frank Rachwalski is a Managing Director of Scudder Kemper Investments, Inc. and
Vice President and Lead Portfolio Manager of Investors Cash Trust. Mr.
Rachwalski holds B.B.A. and M.B.A. degrees from Loyola University.
PORTFOLIO RESULTS
For the six month period ended September 30, 1998, the fund's two Portfolios had
the following net annualized yields:
The Government Securities Portfolio had a net annualized yield of 5.33%.
The Treasury Portfolio had a net annualized yield of 5.22%.
NOTES
Like all money funds, an investment in the fund is neither insured nor
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.
Each Portfolio's net annualized yield for the six month period ended September
30, 1998, 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.
<PAGE> 2
Investors Cash Trust 2
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GOVERNMENT SECURITIES PORTFOLIO
Investments at September 30, 1998 (unaudited)
(Value in thousands)
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<TABLE>
<CAPTION>
Value
<S> <C>
SHORT-TERM NOTES
(Issued or guaranteed by U.S. government
agencies or instrumentalities)
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(a)Federal Farm Credit Banks
5.61%, 10/1/98 $ 5,000
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Federal Home Loan Bank
5.12% - 5.34%, 10/1/98 - 12/23/98 16,756
(a) 4.89% - 5.64%, 10/1/98 - 11/2/98 20,597
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Federal Home Loan Mortgage Corp.
5.16% - 5.51%, 10/2/98 - 1/19/99 49,522
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Federal National Mortgage Association
(a) 4.62%, 10/6/98 13,070
5.28% - 5.52%, 10/9/98 - 2/26/99 72,804
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TOTAL SHORT-TERM NOTES--53.8%
(average maturity: 30 days) 177,749
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(b)REPURCHASE AGREEMENTS
(Dated 6/98 - 9/98, collateralized by Federal Home
Loan Mortgage Corporation, Federal National
Mortgage Association and U.S. Treasury securities)
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Bear, Stearns & Co., Inc.
5.58% - 5.59%, 10/1/98 - 10/28/98 31,000
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CS First Boston, Inc.
5.05% - 5.50%, 10/21/98 - 12/28/98 32,000
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</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
Chase Securities, Inc.
5.18%, 12/16/98 $ 8,000
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Goldman, Sachs & Co.
5.35% - 5.48%, 11/9/98 - 11/18/98 32,000
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Lehman Government Securities, Inc.
5.14%, 11/30/98 9,600
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Merrill Lynch Government Securities, Inc.
(held at The Chase Manhattan Bank)
5.40% - 5.53%, 10/14/98 - 11/30/98 32,000
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Morgan Stanley Dean Witter & Co.
5.52%, 10/26/98 2,000
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Nomura Securities International, Inc.
5.58%, 10/5/98 7,000
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TOTAL REPURCHASE AGREEMENTS--46.5%
(average maturity: 38 days) 153,600
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TOTAL INVESTMENTS--100.3%
(average maturity: 34 days) 331,349
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LIABILITIES, LESS OTHER ASSETS--(.3%) (1,115)
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NET ASSETS--100% $330,234
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</TABLE>
See accompanying Notes to Portfolios of Investments.
<PAGE> 3
Investors Cash Trust 3
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TREASURY PORTFOLIO
Investments at September 30, 1998 (unaudited)
(Value in thousands)
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<TABLE>
<CAPTION>
Value
<S> <C>
SHORT-TERM NOTES
(Issued or guaranteed by U.S. government
agencies or instrumentalities)
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(a)Overseas Private Investment Corp.
5.60%, 10/2/98 $12,000
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U.S. Treasury Bills
4.44% - 4.61%, 10/15/98 5,631
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TOTAL SHORT-TERM NOTES--34.7%
(average maturity: 33 days) 17,631
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(b)REPURCHASE AGREEMENTS
(Dated 8/98 - 9/98, collateralized by U.S. Treasury
securities)
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Bear, Stearns & Co., Inc.
5.15%, 11/24/98 2,300
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CS First Boston, Inc.
5.20%, 11/19/98 2,300
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Dresdner Security (USA), Inc.
5.00% - 5.25%, 10/1/98 - 11/18/98 6,500
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Goldman Sachs & Co.
5.00% - 5.40%, 11/10/98 - 11/25/98 5,000
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Lehman Government Securities, Inc.
5.35%, 11/9/98 2,200
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</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
Merrill Lynch Government Securities, Inc.
5.20% - 5.35%, 10/26/98 - 12/21/98 $ 4,900
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J. P. Morgan Securities, Inc.
5.25% - 5.42%, 10/1/98 - 10/14/98 4,900
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Morgan Stanley Dean Witter & Co.
5.44%, 10/31/98 2,400
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Nomura Securities International, Inc.
5.15%, 10/8/98 2,300
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(c)UBS Securities, Inc.
5.02%, 11/30/98 2,300
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TOTAL REPURCHASE AGREEMENTS--69.1%
(average maturity: 32 days) 35,100
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TOTAL INVESTMENTS--103.8%
(average maturity: 32 days) 52,731
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LIABILITIES, LESS OTHER ASSETS--(3.8%) (1,942)
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NET ASSETS--100% $50,789
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</TABLE>
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 September
30, 1998. 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.
(c) Illiquid security which represented 4.5% of the Treasury Portfolio's net
assets at September 30, 1998.
See accompanying Notes to Financial Statements.
<PAGE> 4
Investors Cash Trust 4
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STATEMENT OF ASSETS AND LIABILITIES
September 30, 1998 (unaudited)
(in thousands)
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<TABLE>
<CAPTION>
GOVERNMENT SECURITIES TREASURY
ASSETS PORTFOLIO PORTFOLIO
<S> <C> <C>
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Investments, at amortized cost:
Short-term securities $177,749 17,631
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Repurchase agreements 153,600 35,100
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Interest receivable 1,178 291
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Total assets 332,527 53,022
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LIABILITIES AND NET ASSETS
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Cash overdraft 862 2,002
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Payable for:
Dividends 1,255 211
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Management fee 4 1
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Administrative services fee 27 4
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Trustees' fees and other 145 15
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Total liabilities 2,293 2,233
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Net assets applicable to shares outstanding $330,234 50,789
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THE PRICING OF SHARES
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Shares outstanding 330,234 50,789
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Net asset value and redemption price per share $1.00 1.00
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</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 5
Investors Cash Trust 5
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STATEMENT OF OPERATIONS
Six months ended September 30, 1998 (unaudited)
(in thousands)
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<TABLE>
<CAPTION>
GOVERNMENT SECURITIES TREASURY
PORTFOLIO PORTFOLIO
--------------------- ---------
<S> <C> <C>
INTEREST INCOME $9,059 1,672
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EXPENSES:
Management fee 267 45
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Administrative services fee 136 30
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Custodian and transfer agent fees and related expenses 37 5
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Reports to shareholders 4 3
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Registration costs 50 21
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Professional fees 13 4
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Trustees' fees and other 30 9
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Total expenses before expense waiver 537 117
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Less expenses waived by the investment manager (131) (40)
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Total expenses absorbed by the Fund 406 77
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Net investment income $8,653 1,595
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</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
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<TABLE>
<CAPTION>
GOVERNMENT SECURITIES TREASURY
PORTFOLIO PORTFOLIO
------------------------- -------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPTEMBER 30, ENDED SEPTEMBER 30, ENDED
1998 MARCH 31, 1998 MARCH 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
------------- --------- ------------- ---------
<S> <C> <C> <C> <C>
OPERATIONS, DIVIDENDS AND
CAPITAL SHARE ACTIVITY
Net investment income $ 8,653 12,241 1,595 3,147
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Dividends to shareholders from net investment income (8,653) (12,241) (1,595) (3,147)
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CAPITAL SHARE TRANSACTIONS (DOLLAR AMOUNTS AND NUMBER OF
SHARES
ARE THE SAME):
Shares sold 548,301 811,717 42,111 141,213
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Shares issued in reinvestment of dividends 7,365 10,466 1,675 3,091
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555,666 822,183 43,786 144,304
Shares redeemed (537,626) (678,922) (67,287) (133,361)
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Net increase (decrease) from capital share transactions and
total increase (decrease) in net assets 18,040 143,261 (23,501) 10,943
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NET ASSETS:
Beginning of period 312,194 168,933 74,290 63,347
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End of period $ 330,234 312,194 50,789 74,290
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</TABLE>
<PAGE> 6
Investors Cash Trust 6
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NOTES TO FINANCIAL STATEMENTS
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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. 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
The Fund's policy is to comply with the requirements of the Internal Revenue
Code, as amended, which are applicable to regulated investment companies, and to
distribute all of its taxable income to its shareholders. Accordingly, the Fund
paid no federal income taxes and no federal income tax provision was required.
3. TRANSACTIONS WITH AFFILIATES
MANAGEMENT AGREEMENT
The Fund has a management agreement with Scudder Kemper Investments, Inc.
(Scudder Kemper) and pays a monthly investment management fee of 1/12 of the
annual rate of .15% of average daily net assets. During the six months ended
September 30, 1998, the Fund incurred management fees of $144,000 after an
expense waiver by Scudder Kemper.
ZURICH/B.A.T MERGER
On September 7, 1998, Zurich Insurance Company (Zurich), majority owner of
Scudder Kemper, entered into an agreement with B.A.T Industries p.l.c. (B.A.T)
pursuant to which the financial services businesses of B.A.T were combined with
Zurich's businesses to form a new global insurance and financial services
company known as Zurich Financial Services. Upon consummation of the
transaction, the Fund's investment management agreement with Scudder Kemper was
deemed to have been assigned and, therefore, terminated. The Board of Trustees
of the Fund has approved a new investment management agreement with Scudder
Kemper, which is substantially identical to the
<PAGE> 7
Investors Cash Trust 7
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NOTES TO FINANCIAL STATEMENTS
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former investment management agreement, except for the dates of execution and
termination. The Board of Trustees of the Fund will seek shareholder approval of
the new investment management agreement through a proxy solicitation that is
currently scheduled to conclude in mid-December.
ADMINISTRATIVE SERVICES AGREEMENT
The Fund 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 six months ended September 30,
1998, the Fund incurred administrative services fees of $165,000 after an
expense waiver by Scudder Kemper. 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 six months ended September 30,
1998, KDI paid fees of $97,000 to various firms pursuant to service agreements.
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 $19,000 for the six months
ended September 30, 1998.
OFFICERS AND TRUSTEES
Certain officers or trustees of the Fund are also officers or directors of
Scudder Kemper. During the six months ended September 30, 1998, the Fund made no
payments to its officers and incurred trustees' fees of $11,000 to independent
trustees.
EXPENSE WAIVER
Scudder Kemper has agreed to temporarily waive a portion of 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, Scudder Kemper waived $171,000 of expenses during the six months
ended September 30, 1998.
<PAGE> 8
Investors Cash Trust 8
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FINANCIAL HIGHLIGHTS
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<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, -------------------------------------
GOVERNMENT SECURITIES PORTFOLIO 1998 1998 1997 1996 1995
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<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
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Net investment income .03 .05 .05 .06 .05
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Less dividends declared .03 .05 .05 .06 .05
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Net asset value, end of period $ 1.00 1.00 1.00 1.00 1.00
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TOTAL RETURN (NOT ANNUALIZED) 2.70% 5.50 5.30 5.74 4.74
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RATIOS TO AVERAGE NET ASSETS AFTER EXPENSE ABSORPTION
(ANNUALIZED):
Expenses .25% .25 .25 .25 .25
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Net investment income 5.33% 5.37 5.17 5.57 4.72
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RATIOS TO AVERAGE NET ASSETS BEFORE EXPENSE ABSORPTION
(ANNUALIZED):
Expenses .33% .38 .32 .32 .33
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Net investment income 5.25% 5.24 5.10 5.50 4.64
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SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $330,234 312,194 168,933 230,944 176,024
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</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, -------------------------------------
TREASURY PORTFOLIO 1998 1998 1997 1996 1995
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<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
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Net investment income .03 .05 .05 .05 .05
- -------------------------------------------------------------------------------------------------------------------
Less dividends declared .03 .05 .05 .05 .05
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Net asset value, end of period $ 1.00 1.00 1.00 1.00 1.00
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TOTAL RETURN (NOT ANNUALIZED) 2.64% 5.34 5.15 5.66 4.69
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RATIOS TO AVERAGE NET ASSETS AFTER EXPENSE ABSORPTION
(ANNUALIZED):
Expenses .25% .25 .25 .25 .25
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Net investment income 5.21% 5.21 5.03 5.48 4.76
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RATIOS TO AVERAGE NET ASSETS BEFORE EXPENSE ABSORPTION
(ANNUALIZED):
Expenses .38% .38 .37 .37 .39
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Net investment income 5.08% 5.08 4.91 5.36 4.62
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SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $50,789 74,290 63,347 101,576 65,389
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</TABLE>
NOTE:Scudder Kemper has agreed to temporarily waive a portion of its management
fee and absorb certain operating expenses of the Portfolios. Data for the
period ended September 30, 1998 is unaudited.
<PAGE> 9
Investors
Cash Trust
Semiannual Report
September 30, 1998
PRINCIPAL UNDERWRITER:
KEMPER DISTRIBUTORS, INC.
222 South Riverside Plaza, Chicago, IL 60606
This report is not to be distributed unless preceded
or accompanied by an Investors Cash Trust prospectus.
ICT-3 1059010 10/98 (LOGO)printed on recycled paper
